Description
We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
CONSOLIDATED FINANCIAL STATEMENTS OF
SAMSUNG ELECTRONICS CO., LTD. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Auditors................................................................................. 1
Consolidated Financial Statements
ConsolidatedStatementsof Financial Position............................................................... 2- 4
ConsolidatedStatementsof Income................................................................................ 5
ConsolidatedStatementsof ComprehensiveIncome.................................................... 6
ConsolidatedStatementsof ChangesinEquity............................................................... 7- 10
ConsolidatedStatementsof CashFlows......................................................................... 11- 12
NotestotheConsolidatedFinancial Statements ....................................................... 13- 88
1
REPORT OF INDEPENDENT AUDITORS
TotheBoardof DirectorsandShareholdersof
SamsungElectronicsCo., Ltd.
Wehaveauditedtheaccompanyingconsolidatedfinancial statementsof SamsungElectronicsCo., Ltd.
and its subsidiaries (collectively referred to as the “Company”), which comprise the consolidated
statements of financial position as of December 31, 2013 and 2012, and the related consolidated
statements of income, comprehensive income, changes in equity and cash flow for the years then
ended. These financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion ontheseconsolidated financial statements basedon our audit.
Wedidnot audit thefinancial statementsof certainsubsidiaries, whosefinancial statementsrepresents
6.8%and7.2%of theconsolidatedtotal assets as of December 31, 2013and2012, respectively, and
25.6%and22.1%of theconsolidatedrevenues for theyear thenended, respectively. Thosefinancial
statements wereaudited by other auditors whosereports thereon havebeen furnished to us, and our
opinionexpressedherein, insofar as it relates to theamounts includedfor thosesubsidiaries, is based
solelyonthereportsof theother auditors.
Weconductedour auditsinaccordancewithauditingstandards generally acceptedintheRepublic of
Korea. Those standards require that we plan and performthe audit to obtain reasonable assurance
about whether thefinancial statementsarefreeof material misstatement. Anaudit includesexamining,
onatest basis, evidencesupportingtheamounts anddisclosures inthefinancial statements. Anaudit
alsoincludesassessingtheaccountingprinciplesusedandsignificant estimatesmadebymanagement,
as well as evaluatingtheoverall financial statement presentation. Webelievethat our audits and the
reportsof theother auditorsprovideareasonablebasisfor our opinion.
In our opinion, based on our audits, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Samsung Electronics Co., Ltd. and its
subsidiariesasof December 31, 2013and2012, andtheir financial performanceandcashflowsfor the
years then ended, in accordancewith International Financial Reporting Standards as adopted by the
Republicof Korea.
Seoul, Korea
February11, 2014
This report is effective as of February 11, 2014, the audit report date. Certain subsequent events or
circumstances, whichmay occur betweentheaudit report dateandthetimeof readingthis report, couldhavea
material impact on the accompanying financial statements and notes thereto. Accordingly, the readers of the
audit report should understand that thereis apossibility that theaboveaudit report may haveto berevised to
reflect theimpact of suchsubsequent eventsor circumstances, if any.
2
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions of Korean won, in thousands of US dollars (Note 2.28))
December 31, December 31, December 31, December 31,
Notes 2013 2012 2013 2012
KRW KRW USD USD
Assets
Current assets
Cashandcashequivalents 4, 6, 7 16,284,780 18,791,460 15,431,422 17,806,747
Short-termfinancial instruments 5, 6, 7 36,722,702 17,397,937 34,798,353 16,486,248
Available-for-salefinancial assets 6, 9 1,488,527 1,258,874 1,410,525 1,192,906
Tradeandother receivables 6, 7, 10 27,875,934 26,674,596 26,415,175 25,276,790
Advances 1,928,188 1,674,428 1,827,147 1,586,684
Prepaidexpenses 2,472,950 2,262,234 2,343,362 2,143,688
Inventories 11 19,134,868 17,747,413 18,132,160 16,817,410
Other current assets 2,135,589 1,462,075 2,023,680 1,385,459
Assetsheldfor sale 12, 37 2,716,733 - 2,574,370 -
Total current assets 110,760,271 87,269,017 104,956,194 82,695,932
Non-current assets
Available-for-salefinancial assets 6,9 6,238,380 5,229,175 5,911,475 4,955,155
Associatesandjoint ventures 12 6,422,292 8,785,489 6,085,750 8,325,110
Property, plant andequipment 13 75,496,388 68,484,743 71,540,214 64,895,995
Intangibleassets 14 3,980,600 3,729,705 3,772,008 3,534,260
Long-termprepaidexpenses 3,465,783 3,515,479 3,284,168 3,331,260
Deferredincometaxassets 29 4,621,780 2,516,080 4,379,589 2,384,232
Other non-current assets 3,089,524 1,541,882 2,927,627 1,461,085
Total assets 214,075,018 181,071,570 202,857,025 171,583,029
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
3
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions of Korean won, in thousands of US dollars (Note 2.28))
December 31, December 31, December 31, December 31,
Notes 2013 2012 2013 2012
KRW KRW USD USD
Liabilities and Equity
Current liabilities
Tradeandother payables 6 17,633,705 16,889,350 16,709,661 16,004,312
Short-termborrowings 6, 15 6,438,517 8,443,752 6,101,125 8,001,281
Advancesreceived 1,706,313 1,517,672 1,616,899 1,438,143
Withholdings 1,176,046 966,374 1,114,419 915,734
Accruedexpenses 6 11,344,530 9,495,156 10,750,052 8,997,589
Incometaxpayable 3,386,018 3,222,934 3,208,583 3,054,045
Current portionof long-term
borrowingsanddebentures 6, 15, 16 2,425,831 999,010 2,298,712 946,660
Provisions 18 6,736,476 5,054,853 6,383,470 4,789,968
Other current liabilities 467,973 343,951 443,450 325,927
Total current liabilities 51,315,409 46,933,052 48,626,371 44,473,659
Non-current liabilities
Long-termtradeandother payables 6 1,053,756 1,165,881 998,537 1,104,786
Debentures 6, 16 1,311,068 1,829,374 1,242,365 1,733,511
Long-termborrowings 6, 15 985,117 3,623,028 933,495 3,433,174
Net definedbenefit liabilities 17 1,854,902 1,729,939 1,757,701 1,639,286
Deferredincometaxliabilities 29 6,012,371 3,429,467 5,697,310 3,249,756
Provisions 18 460,924 408,529 436,771 387,121
Other non-current liabilities 1,065,461 472,094 1,009,628 447,355
Total liabilities 64,059,008 59,591,364 60,702,178 56,468,648
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
4
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions of Korean won, in thousands of US dollars (Note 2.28))
Notes
December 31, December 31, December 31, December 31,
2013 2012 2013 2012
KRW KRW USD USD
Equity attributable to owners
of the parent
Preferredstock 20 119,467 119,467 113,207 113,207
Commonstock 20 778,047 778,047 737,276 737,276
Sharepremium 4,403,893 4,403,893 4,173,119 4,173,119
Retainedearnings 21 148,600,282 119,985,689 140,813,307 113,698,180
Other componentsof equity 23 (9,459,073) (8,193,044) (8,963,398) (7,763,711)
Non-controlling interests 5,573,394 4,386,154 5,281,336 4,156,310
Total equity 150,016,010 121,480,206 142,154,847 115,114,381
Total liabilities and equity 214,075,018 181,071,570 202,857,025 171,583,029
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
5
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(In millions of Korean won, in thousands of US dollars (Note 2.28))
For the year ended December 31,
Notes 2013 2012 2013 2012
KRW KRW USD USD
Revenue 228,692,667 201,103,613 216,708,677 190,565,349
Cost of sales 25 137,696,309 126,651,931 130,480,725 120,015,096
Gross profit
90,996,358 74,451,682 86,227,952 70,550,253
Sellingandadministrativeexpenses 25, 26 54,211,345 45,402,344 51,370,553 43,023,163
Operating profit 36,785,013 29,049,338 34,857,399 27,527,090
Other non-operatingincome 27 2,429,551 1,552,989 2,302,237 1,471,609
Other non-operatingexpense 27 1,614,048 1,576,025 1,529,468 1,493,438
Shareof profit of
associatesandjoint ventures 12 504,063 986,611 477,649 934,910
Financeincome 28 8,014,672 7,836,554 7,594,686 7,425,902
Financecosts 28 7,754,972 7,934,450 7,348,595 7,518,667
Profit before income tax 38,364,279 29,915,017 36,353,908 28,347,406
Incometaxexpense 29 7,889,515 6,069,732 7,476,087 5,751,665
Profit for the year 30,474,764 23,845,285 28,877,821 22,595,741
Profit attributabletoownersof the
parent 29,821,215 23,185,375 28,258,519 21,970,411
Profit attributabletonon-controlling
interests 653,549 659,910 619,302 625,330
Earningsper sharefor profit
attributabletoownersof theparent
(inKoreanWon, in1/1000US
dollars) 30
- Basic 197,841 154,020 187,474 145,949
- Diluted 197,800 153,950 187,435 145,883
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
6
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions of Korean won, in thousands of US dollars (Note 2.28))
For the year ended December 31,
Notes 2013 2012 2013 2012
KRW KRW USD USD
Profit for the year 30,474,764 23,845,285 28,877,821 22,595,741
Other comprehensive income
Items not to be reclassified subsequently to
profit or loss :
Remeasurement of net definedbenefit
liabilities, net of tax 17, 23 (213,113) (504,120) (201,946) (477,703)
Items to be reclassified subsequently to
profit or loss :
Changesinvalueof available-for-sale
financial assets, net of tax 23 186,480 962,184 176,708 911,763
Shareof other comprehensiveincome(loss)
of associatesandjoint ventures, net of tax 23 20,756 (350,491) 19,668 (332,125)
Foreigncurrencytranslation, net of tax 23 (1,000,961) (1,824,653) (948,508) (1,729,037)
Other comprehensive loss for the year, net
of tax (1,006,838) (1,717,080) (954,078) (1,627,102)
Total comprehensive income for the year 29,467,926 22,128,205 27,923,743 20,968,639
Comprehensive income attributable to :
Ownersof theparent 28,837,590 21,499,343 27,326,438 20,372,732
Non-controllinginterests 630,336 628,862 597,305 595,907
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
7
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In millions of Korean won)
2012 KRW
Preferred
stock
Common
stock
Share
premium
Retained
earnings
Other
components
of equity
Equity
attributable
to owners of
the parent
Non-
controlling
interests Total Notes
Balance at January 1, 2012 119,467 778,047 4,403,893 97,622,872 (5,833,896) 97,090,383 4,223,247 101,313,630
Profit for theyear - - - 23,185,375 - 23,185,375 659,910 23,845,285
Changesinvalueof available-for-sale
financial assets, net of tax 9, 23 - - - - 960,688 960,688 1,496 962,184
Shareof other comprehensivelossof
associatesandjoint ventures, net of
tax 12 - - - - (350,491) (350,491) - (350,491)
Foreigncurrencytranslation, net of tax - - - - (1,789,877) (1,789,877) (34,776) (1,824,653)
Remeasurement of net definedbenefit
liabilities, net of tax 17 - - - - (506,351) (506,351) 2,231 (504,120)
Total comprehensive income (loss) - - - 23,185,375 (1,686,031) 21,499,344 628,861 22,128,205
Dividends 22 - - - (827,501) - (827,501) (373,632) (1,201,133)
Capital transactionunder common
control - - - - (1,089,835) (1,089,835) (104,395) (1,194,230)
Changesinconsolidatedentities - - - - - - 12,844 12,844
Disposal of treasurystock 23 - - - - 455,377 455,377 - 455,377
Stockoptionactivities 24 - - - - (33,071) (33,071) - (33,071)
Others - - - 4,943 (5,588) (645) (771) (1,416)
Total transactions with owners - - - (822,558) (673,117) (1,495,675) (465,954) (1,961,629)
Balance at December 31, 2012 119,467 778,047 4,403,893 119,985,689 (8,193,044) 117,094,052 4,386,154 121,480,206
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
8
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands of US dollars (Note 2.28))
2012 USD
Preferred
stock
Common
stock
Share
premium
Retained
earnings
Other
components
of equity
Equity
attributable
to owners of
the parent
Non-
controlling
interests Total Notes
Balance at January 1, 2012 113,207 737,276 4,173,119 92,507,223 (5,528,187) 92,002,638 4,001,940 96,004,578
Profit for theyear - - - 21,970,411 - 21,970,411 625,330 22,595,741
Changesinvalueof available-for-sale
financial assets, net of tax 9, 23 - - - - 910,345 910,345 1,418 911,763
Shareof other comprehensivelossof
associatesandjoint ventures, net of
tax 12 - - - - (332,125) (332,125) - (332,125)
Foreigncurrencytranslation, net of tax - - - - (1,696,083) (1,696,083) (32,954) (1,729,037)
Remeasurement of net definedbenefit
liabilities, net of tax 17 - - - - (479,816) (479,816) 2,113 (477,703)
Total comprehensive income (loss) - - - 21,970,411 (1,597,679) 20,372,732 595,907 20,968,639
Dividends 22 - - - (784,138) - (784,138) (354,053) (1,138,191)
Capital transactionunder common
control - - - - (1,032,725) (1,032,725) (98,924) (1,131,649)
Changesinconsolidatedentities - - - - - - 12,171 12,171
Disposal of treasurystock 23 - - - - 431,514 431,514 - 431,514
Stockoptionactivities 24 - - - - (31,338) (31,338) - (31,338)
Others - - - 4,684 (5,296) (612) (731) (1,343)
Total transactions with owners - - - (779,454) (637,845) (1,417,299) (441,537) (1,858,836)
Balance at December 31, 2012 113,207 737,276 4,173,119 113,698,180 (7,763,711) 110,958,071 4,156,310 115,114,381
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
9
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In millions of Korean won)
2013 KRW
Preferred
stock
Common
stock
Share
premium
Retained
earnings
Other
components
of equity
Equity
attributable
to owners of
the parent
Non-
controlling
interests Total Notes
Balance at January 1, 2013 119,467 778,047 4,403,893 119,985,689 (8,193,044) 117,094,052 4,386,154 121,480,206
Profit for theyear - - - 29,821,215 - 29,821,215 653,549 30,474,764
Changesinvalueof available-for-sale
financial assets, net of tax 9, 23 - - - - 187,477 187,477 (997) 186,480
Shareof other comprehensiveincome
(loss) of associatesandjoint
ventures, net of tax 12 - - - - 20,949 20,949 (193) 20,756
Foreigncurrencytranslation, net of
tax - - - - (986,691) (986,691) (14,270) (1,000,961)
Remeasurement of net definedbenefit
liabilities, net of tax 17 - - - - (205,360) (205,360) (7,753) (213,113)
Total comprehensive income (loss) - - - 29,821,215 (983,625) 28,837,590 630,336 29,467,926
Dividends 22 - - - (1,206,622) - (1,206,622) (42,155) (1,248,777)
Capital transactionunder common
control - - - - (312,959) (312,959) 600,042 287,083
Changesinconsolidatedentities - - - - - - (918) (918)
Disposal of treasurystock 23 - - - - 41,817 41,817 - 41,817
Stockoptionactivities 24 - - - - (11,999) (11,999) - (11,999)
Others - - - - 737 737 (65) 672
Total transactions with owners - - - (1,206,622) (282,404) (1,489,026) 556,904 (932,122)
Balance at December 31, 2013 119,467 778,047 4,403,893 148,600,282 (9,459,073) 144,442,616 5,573,394 150,016,010
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
10
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands of US dollars (Note 2.28))
2013 USD
Preferred
stock
Common
stock
Share
premium
Retained
earnings
Other
components
of equity
Equity
attributable
to owners of
the parent
Non-
controlling
interests Total Notes
Balance at January 1, 2013 113,207 737,276 4,173,119 113,698,180 (7,763,711) 110,958,071 4,156,310 115,114,381
Profit for theyear - - - 28,258,519 - 28,258,519 619,302 28,877,821
Changesinvalueof available-for-sale
financial assets, net of tax 9, 23 - - - - 177,653 177,653 (945) 176,708
Shareof other comprehensiveincome
(loss) of associatesandjoint
ventures, net of tax 12 - - - - 19,851 19,851 (183) 19,668
Foreigncurrencytranslation, net of tax - - - - (934,986) (934,986) (13,522) (948,508)
Remeasurement of net definedbenefit
liabilities, net of tax 17 - - - - (194,599) (194,599) (7,347) (201,946)
Total comprehensive income (loss) - - - 28,258,519 (932,081) 27,326,438 597,305 27,923,743
Dividends 22 - - - (1,143,392) - (1,143,392) (39,946) (1,183,338)
Capital transactionunder common
control - - - - (296,559) (296,559) 568,599 272,040
Changesinconsolidatedentities - - - - - - (870) (870)
Disposal of treasurystock 23 - - - - 39,626 39,626 - 39,626
Stockoptionactivities 24 - - - - (11,370) (11,370) - (11,370)
Others - - - - 697 697 (62) 635
Total transactions with owners - - - (1,143,392) (267,606) (1,410,998) 527,721 (883,277)
Balance at December 31, 2013 113,207 737,276 4,173,119 140,813,307 (8,963,398) 136,873,511 5,281,336 142,154,847
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
11
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of Korean won, in thousands of US dollars (Note 2.28))
For the year ended December 31,
Notes 2013 2012 2013 2012
KRW KRW USD USD
Cash flows from operating
activities
Profit for theyear 30,474,764 23,845,285 28,877,821 22,595,741
Adjustments 31 23,804,832 22,759,559 22,557,407 21,566,909
Changesinoperatingassetsand
liabilities 31 (1,313,245) (5,777,949) (1,244,428) (5,475,173)
Cashflowsfromoperatingactivities 52,966,351 40,826,895 50,190,800 38,687,477
Interest received 1,034,074 789,397 979,886 748,031
Interest paid (434,857) (576,379) (412,070) (546,175)
Dividendreceived 592,217 1,112,940 561,184 1,054,620
Incometaxpaid (7,450,345) (4,180,044) (7,059,931) (3,961,001)
Net cash generated from operating
activities 46,707,440 37,972,809 44,259,869 35,982,952
Cash flows from investing activities
Net increaseinshort-termfinancial
instruments (19,391,643) (5,965,611) (18,375,479) (5,653,000)
Net decrease(increase) inshort-term
available-for-salefinancial assets 33,663 (589,072) 31,899 (558,203)
Proceedsfromdisposal of long-term
available-for-salefinancial assets 1,691,463 106,208 1,602,827 100,642
Acquisitionof long-termavailable-
for-salefinancial assets (1,531,356) (870,249) (1,451,110) (824,646)
Proceedsfromdisposal of associates
andjoint ventures 240 41,091 227 38,938
Acquisitionof associatesandjoint
ventures (181,307) (279,022) (171,806) (264,401)
Disposal of propertyandequipment 377,445 644,062 357,666 610,312
Purchasesof propertyandequipment (23,157,587) (22,965,271) (21,944,079) (21,761,841)
Disposal of intangibleassets 4,562 61,497 4,323 58,274
Purchasesof intangibleassets (934,743) (650,884) (885,760) (616,776)
Cashoutflowsfrombusiness
combination (167,155) (464,279) (158,396) (439,950)
Others (1,490,601) (390,024) (1,412,491) (369,586)
Net cash used in investing activities (44,747,019) (31,321,554) (42,402,179) (29,680,237)
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
12
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of Korean won, in thousands of US dollars (Note 2.28))
For the year ended December 31,
Notes 2013 2012 2013 2012
KRW KRW USD USD
Cash flows from financing activities
Net repayment of short-term
borrowings (1,861,536) (800,579) (1,763,987) (758,627)
Disposal of treasurystock 34,390 88,473 32,588 83,837
Proceedsfromlong-termborrowings
anddebentures 26,672 1,862,256 25,274 1,764,670
Repayment of long-termborrowings
anddebentures (1,368,436) (522,899) (1,296,727) (495,498)
Payment of dividends (1,249,672) (1,265,137) (1,184,186) (1,198,841)
Net increase(decrease) innon-
controllinginterests 281,551 (1,200,134) 266,797 (1,137,244)
Others - (26,488) - (25,101)
Net cash used in financing activities (4,137,031) (1,864,508) (3,920,241) (1,766,804)
Effect of exchangeratechangeson
cashandcashequivalents (330,070) (687,048) (312,774) (651,045)
Net increase (decrease) in cash and
cash equivalents (2,506,680) 4,099,699 (2,375,325) 3,884,866
Cash and cash equivalents
Beginning of the year 18,791,460 14,691,761 17,806,747 13,921,881
End of the year 16,284,780 18,791,460 15,431,422 17,806,747
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13
1. General Information
1.1 Company Overview
SamsungElectronics Co., Ltd. (“SEC”) was incorporatedunder thelaws of theRepublic of Koreain1969andlisted
itssharesontheKoreaStock Exchangein1975.
SEC and its subsidiaries (collectively referred to as the “Company”) operate three business divisions: Consumer
Electronics (“CE”), Informationtechnology & Mobilecommunications (“IM”), andDeviceSolution(“DS”). TheCE
division includes digital TVs, monitors, printers, air conditioners and refrigerators and the IM division includes
mobile phones, communication system, and computers. The DS division includes products such as memory and
systemLSI in the semiconductor business (“Semiconductor”), and LCD and OLED panels in the display business
(“DP”). TheCompany is domiciled in theRepublic of Koreaand theaddress of its registered officeis Suwon, the
Republicof Korea.
These consolidated financial statements have been prepared in accordance with Korean International Financial
Reporting Standards (“K-IFRS”) 1110, Consolidated Financial Statements. SEC, as the controlling Company,
consolidates its 153 subsidiaries including Samsung Display and Samsung Electronics America. TheCompany also
appliestheequitymethodof accountingtoits36affiliates, includingSamsungSDI.
1.2 Consolidated Subsidiaries
(A) Theconsolidatedsubsidiariesasof December 31, 2013areasfollows:
Area Subsidiaries Industry
Percentage
of
ownership
1
Domestic
WorldCyber Games Cyber gamematchhosting 99.9
HighPioneer PrivateInvestment Trust #1 Technologybusinessventurecapital investments 100.0
SamsungDisplay(SDC) Manufactureandsaleof displaypanels 84.8
SU Materials Manufactureof LCDcomponents 50.0
STECO Manufactureof semiconductor components 51.0
SEMES Manufactureof semiconductor/FPD 91.3
SamsungElectronicsService Repair servicesfor electronicdevices 99.3
SamsungElectronicsSales Saleof electronicdevices 100.0
SamsungElectronicsLogitech General logisticsagency 100.0
SamsungElectronicsFootball Club Sponsoringof sportsteamandgames 100.0
SamsungMedison Medical equipment 68.5
Ray Dental CT 68.1
SamsungVentureCapital Union#6 Technologybusinessventurecapital investments 99.0
SamsungVentureCapital Union#14 Technologybusinessventurecapital investments 99.0
SamsungVentureCapital Union#20 Technologybusinessventurecapital investments 99.0
SamsungVentureCapital Union#21 Technologybusinessventurecapital investments 99.0
SamsungVentureCapital Union#22 Technologybusinessventurecapital investments 99.0
SamsungVentureCapital Union#23 Technologybusinessventurecapital investments 99.0
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14
Area Subsidiaries Industry
Percentage
of
ownership
1
America
SamsungElectronicsAmerica(SEA) Saleof electronicdevices 100.0
NexusDX (Nexus) Medical equipment 100.0
SamsungReceivables(SRC) Credit management 100.0
NeuroLogica Medical equipment 100.0
SamsungSemiconductor (SSI) Saleof semiconductor/LCD 100.0
SamsungElectronicsCanada(SECA) Saleof electronicdevices 100.0
SamsungInformationSystemsAmerica
(SISA)
R&D 100.0
Grandis R&D 100.0
SamsungMexicana(SAMEX) Manufactureof electronicdevices 100.0
SamsungInternational (SII) Manufactureof CTV/monitors 100.0
SamsungTelecommunicationsAmerica
(STA)
Saleof communicationequipment 100.0
SamsungAustinSemiconductor (SAS) Manufactureof semiconductor 100.0
SamsungElectronicsMexico(SEM) Saleof electronicdevices 99.9
SEMESAmerica(SEMESA) Semiconductor equipment 100.0
SamsungElectronicsDigital Appliance
Mexico(SEDAM)
Manufactureof electronicdevices 99.9
SamsungElectronicsLatinoamericaMiami
(SEMI)
Saleof electronicdevices 100.0
Nvelo Software 100.0
SamsungElectronicsLatinoamerica(SELA) Saleof electronicdevices 100.0
SamsungElectronicsVenezuela(SEVEN) Marketingandservices 100.0
SamsungElectronicaColombia(SAMCOL) Saleof electronicdevices 100.0
SamsungElectronicsPanama(SEPA) Consulting 100.0
SamsungElectronicadaAmazonia(SEDA) Manufactureandsaleof electronicdevices 100.0
SamsungElectronicsArgentina(SEASA) Marketingandservices 100.0
SamsungElectronicsChile(SECH) Saleof electronicdevices 100.0
SamsungElectronicsPeru(SEPR) Saleof electronicdevices 100.0
Europe
SamsungElectronics(UK) (SEUK) Saleof electronicdevices 100.0
SamsungElectronicsHolding(SEHG) HoldingCompany 100.0
SamsungSemiconductor EuropeGmbH
(SSEG)
Saleof semiconductor/LCD 100.0
SamsungElectronicsGmbH(SEG) Saleof electronicdevices 100.0
SamsungElectronicsIberia(SESA) Saleof electronicdevices 100.0
SamsungElectronicsFrance(SEF) Saleof electronicdevices 100.0
SamsungElectronicsHungarian(SEH) Manufactureandsaleof electronicdevices 100.0
SamsungElectronicsCzechandSlovak
(SECZ)
Saleof electronicdevices 100.0
SamsungElectronicsItalia(SEI) Saleof electronicdevices 100.0
SamsungElectronicsEuropeLogistics
(SELS)
Logistics 100.0
SamsungElectronicsBenelux(SEBN) Saleof electronicdevices 100.0
SamsungDisplaySlovakia(SDSK) Toll processingof LCD 100.0
SamsungElectronicsRomania(SEROM) Saleof electronicdevices 100.0
SamsungElectronicsOverseas(SEO) Saleof electronicdevices 100.0
SamsungElectronicsPolska(SEPOL) Saleof electronicdevices 100.0
SamsungElectronicsPortuguesa(SEP) Saleof electronicdevices 100.0
SamsungElectronicsNordic(SENA) Saleof electronicdevices 100.0
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15
Area Subsidiaries Industry
Percentage
of
ownership
1
SamsungSemiconductor Europe(SSEL) Saleof semiconductor/LCD 100.0
SamsungElectronicsAustria(SEAG) Saleof electronicdevices 100.0
Europe
(Cont.)
SamsungElectronicsSlovakia(SESK) Manufactureof CTV/monitors 100.0
SamsungElectronicsEuropeHolding
(SEEH)
HoldingCompany 100.0
SamsungElectronicsPolandManufacturing
(SEPM)
Manufactureof homeappliances 100.0
SamsungElectronicsGreece(SEGR) Saleof electronicdevices 100.0
SamsungNanoradioDesignCenter (SNDC) R&D 100.0
NanoradioHellas R&D 100.0
SonoAceDeutschland(SMDE) Medical equipment 100.0
SamsungMedisonEurope(SMNL) Medical equipment 100.0
NanogenRecognomics(Nanogen) Medical equipment 60.0
SamsungElectronicsRus(SER) Marketing 100.0
SamsungElectronicsRusCompany(SERC) Saleof electronicdevices 100.0
SamsungElectronicsUkraine(SEU) Marketing 100.0
SamsungElectronicsBaltics(SEB) Saleof electronicdevices 100.0
SamsungElectronicsUkraineCompany
(SEUC)
Saleof electronicdevices 100.0
SamsungR&DInstituteRus(SRR) R&D 100.0
SamsungElectronicsKazakhstan(SEK) Marketing 100.0
SamsungElectronicsKZandCentral Asia
(SEKZ)
Saleof electronicdevices 100.0
SamsungElectronicsRusKaluga(SERK) Manufactureof CTV 100.0
SamsungRussiaServiceCentre(SRSC) Services 100.0
SamsungElectronics(London) Limited
(SEL)
HoldingCompany 100.0
SamsungDenmarkResearchCenter
(SDRC)
R&D 100.0
SamsungFranceResearchCenter (SFRC) R&D 100.0
SamsungCambridgeSolutionCentre
(SCSC)
R&D 100.0
SamsungElectronicsSwitzerlandGmbH
(SESG)
Saleof electronicdevices 100.0
MiddleEast
andAfrica
SamsungElectronicsWest Africa(SEWA) Marketing 100.0
SamsungElectronicsEast Africa(SEEA) Marketing 100.0
SamsungGulf Electronics(SGE) Saleof electronicdevices 100.0
SamsungElectronicsEgypt (SEEG) Manufactureof CTV/monitors 100.0
SamsungElectronicsIsrael (SEIL) Marketing 100.0
SamsungElectronicsTunisia(SETN) Marketing 100.0
SamsungElectronicsPakistan(SEPAK) Marketing 100.0
SamsungElectronicsSouthAfrica(SSA) Saleof electronicdevices 100.0
SamsungElectronicsTurkey(SETK) Saleof electronicdevices 100.0
SamsungSemiconductor Israel R&DCenter
(SIRC)
R&D 100.0
SamsungElectronicsLevant (SELV) Saleof electronicdevices 100.0
SamsungElectronicsMorocco(SEMRC) Saleof electronicdevices 100.0
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16
Area Subsidiaries Industry
Percentage
of
ownership
1
China
SamsungDisplayDongguan(SDDG) Manufactureof LCD 100.0
SamsungDisplayTianjin(SDTJ ) Manufactureof LCD 95.0
SamsungElectronicsHongKong(SEHK) Saleof electronicdevices 100.0
SuzhouSamsungElectronics(SSEC) Manufactureof homeappliances 88.3
SamsungSuzhouElectronicsExport
(SSEC-E)
Manufactureof homeappliances 100.0
Samsung(China) Investment (SCIC) Saleof electronicdevices 100.0
SamsungMobileR&DCenter China-
Guangzhou(SRC-Guangzhou)
R&D 100.0
SamsungTianjinMobileDevelopment
Center (STMC)
R&D 100.0
SamsungNetworkR&DCenter China-
Shenzhen(SRC-Shenzhen)
R&D 100.0
SamsungElectronicsSuzhouSemiconductor
(SESS)
Toll processingof semiconductor 100.0
SamsungElectronics(Shandong) Digital
Printing(SSDP)
Manufactureof printers 100.0
SamsungElectronicsHuizhou(SEHZ) Manufactureof electronicdevices 99.9
TianjinSamsungElectronics(TSEC) Manufactureof CTV/monitors 91.2
SamsungElectronicsTaiwan(SET) Saleof electronicdevices 100.0
BeijingSamsungTelecomR&DCenter
(BST)
R&D 100.0
TianjinSamsungTelecomTechnology
(TSTC)
Manufactureof communicationequipment 90.0
Shanghai SamsungSemiconductor (SSS) Saleof semiconductor/LCD 100.0
SamsungElectronicsSuzhouComputer
(SESC)
Manufactureof electronicdevices 100.0
SamsungDisplaySuzhou(SDSZ) Toll processingof LCD 100.0
SamsungSuzhouLCD(SSL) Manufactureof LCD 60.0
ShenzhenSamsungElectronics
Telecommunication(SSET)
Manufactureof communicationequipment 95.0
SamsungElectronicsShanghai
Telecommunication(SSTC)
Saleof mobilecommunicationandnetwork
equipment
100.0
SamsungSemiconductor (China) R&D
(SSCR)
R&D 100.0
SamsungElectronicsChinaR&DCenter
(SCRC)
R&D 100.0
Samsung(China) Semiconductor (SCS) Manufactureof semiconductor 100.0
SamsungElectronicsHainanFiberoptics
(SEHF)
Manufactureof optical fiber/cable 100.0
SamsungElectronics(Beijing) Service
(SBSC)
Services 100.0
SamsungMedisonShanghai Medical
Instrument (SMS1)
Medical equipment 100.0
MedisonMedical Equipment (Shanghai)
(MMS)
Medical equipment 100.0
TianjinSamsungLED(TSLED) Manufactureof LED 100.0
TianjinSamsungOpto-Electronics(TSOE) Manufactureof cameras/camcorders 90.0
SamsungR&DInstituteChina-Xian
(SRC-Xian)
R&D 100.0
SEMES(Xian) Semiconductor equipment 100.0
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17
Area Subsidiaries Industry
Percentage
of
ownership
1
Rest of Asia
SamsungJ apan(SJ C) Saleof electronicdevices 100.0
SamsungR&DInstituteJ apan(SRJ ) R&D 100.0
SamsungElectronicsJ apan(SEJ ) Saleof electronicdevices 100.0
SamsungElectronicsDisplay(M) (SDMA) Manufactureandsaleof electronicdevices 100.0
SamsungElectronics(M) (SEMA) Manufactureof homeappliances 100.0
SamsungVinaElectronics(SAVINA) Manufactureandsaleof electronicdevices 100.0
SamsungAsiaPrivate(SAPL) Saleof electronicdevices 100.0
SamsungIndiaElectronics(SIEL) Manufactureandsaleof electronicdevices 100.0
SamsungR&DInstituteIndia-Bangalore
(SRI-B)
R&D 100.0
SamsungElectronicsAustralia(SEAU) Saleof electronicdevices 100.0
SamsungElectronicsIndonesia(SEIN) Manufactureandsaleof electronicdevices 100.0
SamsungTelecommunicationsIndonesia
(STIN)
Saleandservicesof communicationsystems 99.0
Thai SamsungElectronics(TSE) Manufactureandsaleof electronicdevices 91.8
SamsungElectronicsPhilippines(SEPCO) Saleof electronicdevices 100.0
SamsungMalaysiaElectronics(SME) Saleof electronicdevices 100.0
SamsungR&DInstituteBangladesh
(SRBD)
R&D 100.0
SamsungElectronicsVietnam(SEV) Manufactureof electronicdevices 100.0
SamsungTelecommunicationsMalaysia
(STM)
Communicationsystemservices 100.0
SamsungElectronicsVietnam
THAINGUYEN (SEVT)
Manufactureof communicationequipment 100.0
SamsungMedisonIndia(SMIN) Medical equipment 100.0
MedisonMedical Systems(India) (MI) Medical equipment 100.0
SamsungElectronicsNewZealand(SENZ) Saleof electronicdevices 100.0
1
OwnershiprepresentstheCompany’sownershipof thevotingrightsineachentity.
(B) A summaryof financial dataof major consolidatedsubsidiariesisasfollows:
(1) 2013
2013
(In millions of Korean won) Assets Liabilities Sales
Net Income
(Loss)
SamsungDisplay(SDC) 35,754,894 6,682,229 29,386,907 2,400,779
SamsungElectronicsAmerica(SEA) 12,248,560 7,262,519 14,321,018 70,690
Samsung(China) Investment (SCIC) 8,406,438 6,780,610 25,605,822 743,369
SamsungSemiconductor (SSI) 7,346,339 3,991,768 17,932,937 39,289
SamsungAustinSemiconductor (SAS) 6,393,348 3,467,968 2,409,773 60,980
SamsungElectronicsEuropeHolding(SEEH) 5,780,302 4,025,760 - (17,863)
SamsungElectronicsVietnam(SEV) 5,625,759 1,493,868 26,594,578 3,087,252
SamsungTelecommunicationsAmerica(STA) 4,735,432 4,085,299 21,387,737 173,510
SamsungElectronicsHuizhou(SEHZ) 4,599,200 1,802,686 22,644,923 1,012,728
Samsung(China) Semiconductor (SCS) 3,752,682 1,284,560 - (40,537)
SamsungElectronicadaAmazonia(SEDA) 3,429,136 1,658,072 7,852,428 920,157
TianjinSamsungTelecomTechnology(TSTC) 2,939,027 1,415,277 15,293,633 767,822
SamsungAsiaPrivate(SAPL) 2,425,585 1,099,521 1,558,990 674,510
SamsungIndiaElectronics(SIEL) 1,924,832 1,195,824 6,737,419 324,171
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18
2013
(In millions of Korean won) Assets Liabilities Sales
Net Income
(Loss)
SamsungElectronicsEuropeLogistics(SELS) 1,903,892 1,806,486 14,543,524 7,613
SamsungElectronicsSlovakia(SESK) 1,764,078 317,224 4,561,795 140,825
SamsungElectronicsMexico(SEM) 1,554,638 1,311,133 3,261,067 9,886
Thai SamsungElectronics(TSE) 1,476,296 373,181 5,033,203 222,389
SamsungSuzhouLCD(SSL) 1,463,589 379,118 18,892 12,067
SamsungElectronicsRusCompany(SERC) 1,410,054 1,107,915 5,809,646 (11,137)
SamsungElectronics(UK) (SEUK) 1,393,507 705,504 6,075,490 92,969
SamsungElectronicsTaiwan(SET) 1,390,404 1,141,842 3,909,546 30,802
Shanghai SamsungSemiconductor (SSS) 1,310,109 1,005,056 15,937,922 130,082
SamsungElectronicsBenelux(SEBN) 1,290,124 322,622 2,700,887 25,233
SamsungElectronicsHungarian(SEH) 1,249,691 253,536 3,272,358 103,658
(2) 2012
2012
(In millions of Korean won) Assets Liabilities Sales
Net Income
(Loss)
SamsungDisplay(SDC) 33,791,814 9,122,941 22,304,545 2,079,916
SamsungElectronicsAmerica(SEA) 11,432,490 6,598,643 12,430,205 201,790
SamsungAustinSemiconductor (SAS) 6,728,824 3,819,196 3,063,343 (86,815)
SamsungSemiconductor (SSI) 5,502,929 2,136,789 17,325,969 20,797
Samsung(China) Investment (SCIC) 5,407,272 4,519,921 13,796,191 264,269
SamsungTelecommunicationsAmerica(STA) 5,009,772 4,516,706 15,308,222 109,896
SamsungElectronicsEuropeHolding(SEEH) 4,377,597 3,068,900 - 7,856
SamsungElectronicsVietnam(SEV) 3,416,148 1,498,575 14,599,505 854,250
SamsungElectronicsHuizhou(SEHZ) 3,275,716 1,496,513 15,343,968 700,435
SamsungElectronicadaAmazonia(SEDA) 2,556,334 1,564,590 6,145,530 198,552
TianjinSamsungTelecomTechnology(TSTC) 2,234,437 1,227,917 10,697,834 551,682
SamsungElectronicsTaiwan(SET) 2,117,243 1,885,749 4,967,564 38,298
Shanghai SamsungSemiconductor (SSS) 1,998,989 1,824,247 12,584,108 60,991
SamsungElectronicsRusCompany(SERC) 1,705,108 1,367,484 6,712,179 21,832
SamsungElectronicsSlovakia(SESK) 1,696,474 426,980 5,279,531 147,665
SamsungJ apan(SJ C) 1,570,232 1,382,927 6,021,986 26,503
SamsungSemiconductor EuropeGmbH(SSEG) 1,569,684 1,556,757 5,191,270 (32)
SamsungElectronicsEuropeLogistics(SELS) 1,529,851 1,443,264 12,873,583 29,372
SamsungIndiaElectronics(SIEL) 1,449,983 964,580 5,089,445 316,994
Thai SamsungElectronics(TSE) 1,447,777 463,908 4,799,886 295,994
SamsungElectronics(UK) (SEUK) 1,349,828 763,081 5,722,969 74,329
SamsungElectronicsHungarian(SEH) 1,301,842 416,616 3,542,522 153,961
SamsungElectronicsRusKaluga(SERK) 1,296,147 465,344 2,348,160 194,169
SamsungElectronicsHongKong(SEHK) 1,294,473 1,067,647 2,362,833 83,950
SamsungElectronicsMexico(SEM) 1,291,398 1,053,329 2,814,961 37,902
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19
(C) Changesinscopefor consolidation
(1) Subsidiariesnewlyincludedintheconsolidationfor theyear endedDecember 31, 2013:
Area Subsidiaries Description
America
NeuroLogica
Intellectual KeystoneTechnology(IKT)
Acquisitionof shares
Incorporation
Europe SamsungElectronicsSwitzerlandGmbH(SESG) Incorporation
Asia
SamsungElectronicsVietnamTHAINGUYEN (SEVT) Incorporation
SamsungElectronicsNewZealand(SENZ) Incorporation
China
SamsungNetworkR&DCenter China-Shenzhen(SRC-Shenzhen) Incorporation
SamsungR&DInstituteChina-Xian(SRC-Xian) Incorporation
SEMES(Xian) Incorporation
(2) Subsidiariesexcludedfromtheconsolidationfor theyear endedDecember 31, 2013:
Area Subsidiaries Description
Domestic
SECRON Merger
GES Merger
America
NewtonSub Merger
SamsungMedisonAmerica(SMUS) Liquidation
Deltapoint CardiacDiagnostics(Deltapoint) Liquidation
Intellectual KeystoneTechnology(IKT) Disposal of shares
mSpot Merger
SamsungElectronicsCorporativo(SEC) Merger
SamsungMedisonBrasil (SMBR) Merger
Europe
SamsungTelecoms(UK) (STUK) Liquidation
SamsungLCDNetherlandsR&DCenter (SNRC) Disposal
SamsungLCDNetherlandsR&DCenter UK (SNRC (UK)) Disposal
General RF Modules Liquidation
SamsungMedisonFrance(SMFR) Liquidation
SamsungOpto-ElectronicsGmbH(SOG) Liquidation
SamsungMedisonItalia(SMIT) Liquidation
Asia
SamsungElectronicsPhilippinesManufacturing(SEPHIL)
BatinoRealtyCorporation(BRC)
Disposal
Disposal
TNP Small/MediumSize& VentureEnterpriseGrowth
PromotionInvestment LimitedPartnership(TSUNAMI)
Reclassifiedintoanassociatefroma
subsidiary
China
SamsungLCDNetherlandsR&DCenter HK (SNRC (HK)) Disposal
Medison(Shanghai) (SMS2) Liquidation
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20
2. Summary of Significant Accounting Policies
Theprincipal accountingpoliciesappliedinthepreparationof theseconsolidatedfinancial statementsareset out
below. Thesepolicieshavebeenconsistentlyappliedtoall theyearspresented, unlessotherwisestated.
2.1 Basis of Presentation
TheCompany has prepared theconsolidated financial statements in accordancewith Korean International Financial
Reporting Standards (“K-IFRS”). International Financial Reporting Standards (IFRS) have been adopted by the
KoreanAccountingStandardsBoardasK-IFRS basedonstandardsandinterpretationspublishedby theInternational
AccountingStandardsBoard.
K-IFRS permits the use of critical accounting estimates in the preparation of the financial statements and requires
management judgments in applying accounting policies. Footnote 3 explains where more complex and higher
standardsof judgment or critical assumptionsandestimatesarerequired.
2.2 Changes in Accounting Policy and Disclosures
(A) NewandamendedstandardsadoptedbytheCompany
The Company applied the following amended and enacted standards for the annual period beginning on J anuary 1,
2013:
K-IFRS 1110, ‘Consolidated Financial Statements’
Thestandardintroducesasinglecontrol concept andprovidesaspecificguidancefor thecontrol. Theadoptionof this
standarddoesnot haveanimpact onconsolidationscopeintheconsolidatedfinancial statements.
K-IFRS 1111, ‘Joint Arrangements’
Thestandardreflectsthesubstanceof joint arrangementsandfocusesontherightsandobligationsof thepartiestothe
joint arrangements rather than on the legal forms of the arrangements. J oint arrangements are classified into joint
operations or joint ventures. The adoption of this standard does not have a material impact on the consolidated
financial statements.
K-IFRS 1112, ‘Disclosure of Interests in Other Entities’
The standard provides disclosure requirements for all types of equity investments in other entities including
subsidiaries, joint arrangements, associatesandunconsolidatedstructuredentities.
K-IFRS 1113, ‘Fair Value Measurement’
Thestandardprovidesaprecisedefinitionof fair value, andasinglesourceof fair valuemeasurement anddisclosure
requirements for use across K-IFRS. The adoption of this standard does not have a material impact on the
consolidatedfinancial statements.
K-IFRS 1027, ‘Separate Financial Statements’
The standard contains accounting treatments and requirements for investments in subsidiaries, associates, and joint
venturesrelatingonlytoseparatefinancial statementsof theCompany.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21
(B) NewandamendedstandardsearlyadoptedbytheCompany
Amendment to K-IFRS 1036, ‘Impairment of Assets’
Theamendment reflectsthechangeindisclosurerequirement of therecoverableamount for eachcash-generatingunit
including goodwill or intangible assets with indefinite useful lives. The amendment requires disclosure of the
recoverable amount only if the entity has recognized impairment losses or reversals of impairment losses. For
consistency, the amendment also requires additional disclosures when the recoverable amount of impaired assets is
based on fair value less costs of disposal. The amendment to this standard does not have a material impact on the
consolidatedfinancial statements.
Amendments to K-IFRS 1110, ‘Consolidated Financial Statements’, K-IFRS 1112, ‘Disclosure of Interests in Other
Entities’, and K-IFRS 1027, ‘Separate Financial Statements’
The amendments define an investment entity and require a parent that is an investment entity to measure its
investments in particular subsidiaries at fair valuethrough profit or loss instead of presenting consolidated financial
statements. Theseamendmentsdonot applytoaparent of aninvestment entityif theparent itself isnot aninvestment
entity. The amendments to K-IFRS 1110 and K-IFRS 1027 do not have a material impact on the consolidated
financial statements.
(C) Newandamendedstandardsnot adoptedbytheCompany
Newstandards, amendments and interpretations issued but not effective for the financial year beginning J anuary 1,
2013andnot earlyadoptedareasfollows:
Amendment to K-IFRS 1032, ‘Financial Instruments: Presentation’
Thestandardprovidesthat theright tooffset must not becontingent onafutureevent andmust belegallyenforceable
inall of circumstances; andif anentity cansettleamounts inamanner suchthat outcomeis, ineffect, equivalent to
net settlement, the entity will meet the net settlement criterion. This amendment is effective for annual periods
beginningonor after J anuary 1, 2014, andtheCompany is assessingtheimpact of applicationof this amendment on
itsconsolidatedfinancial statements.
Enactment of K- IFRIC Interpretations 2121, ‘Levies’
Theinterpretationrequires that theliability topay alevy is recognizedwhentheactivity that triggersthepayment of
the levy occurs, as identified by the legislation (the obligating event). This interpretation is effective for annual
periodsbeginningonor after J anuary1, 2014, withearlyadoptionpermitted. TheCompanyisassessingtheimpact of
applicationof thisinterpretationonitsconsolidatedfinancial statements.
2.3 Consolidation
The Company prepares annual consolidated financial statements in accordance with K-IFRS 1110, ‘Consolidated
Financial Statements’
(A) Subsidiaries
Subsidiaries areall entities (including special purposeentities) over which theCompany has control. TheCompany
controlsthecorrespondinginvesteewhenit isexposed, or hasrights, tovariablereturnsfromitsinvolvement withthe
investeeandhas theability to affect thosereturns throughits power over theinvestee. Consolidationof asubsidiary
begins fromthedatetheCompany obtains control of asubsidiary andceases whentheCompany loses control of the
subsidiary.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22
TheCompany applies theacquisition method to account for business combinations. Theconsiderationtransferred is
measured at the fair values of the assets transferred, and identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are initially measured at their fair values at the acquisition date. The
Companyrecognizesanynon-controllinginterest intheacquireeonanacquisition-by-acquisitionbasisintheevent of
liquidation at thenon-controlling interest’s proportionateshareof therecognized amounts of acquiree’s identifiable
net assets. Acquisition-relatedcostsareexpensedasincurred.
Goodwill isrecognizedastheexcessof (1) theaggregateof i) theconsiderationtransferred, ii) theamount of anynon-
controlling interest in the acquiree and iii) the acquisition-date fair value of the Company’s previously held equity
interest intheacquireeover (2) thenet identifiableassetsacquired. If theaggregateamount in(1) islessthanthefair
valueof theacquiree’snet assetsin(2), thedifferenceisrecognizedinprofit or loss.
Balances of receivables and payables, income and expenses and unrealized gains on transactions between the
Company subsidiaries are eliminated. Accounting policies of subsidiaries are changed where necessary to ensure
consistencywiththepoliciesadoptedbytheCompany.
(B) Changesinownershipinterestsinsubsidiarieswithout changeof control
Transactionswithnon-controllingintereststhat donot result inlossof control areaccountedfor asequitytransactions
– that is, as transactions with the owners in their capacity as owners. The difference between fair value of any
considerationpaidandtherelevant shareacquiredof thecarryingvalueof net assets of thesubsidiary is recordedin
equity. Gainsor lossesondisposalstonon-controllinginterestsarealsorecordedinequity.
(C) Disposal of subsidiaries
If theCompanylosescontrol of asubsidiary, anyinvestment continuouslyretainedinthesubsidiaryisre-measuredat
its fair valueat thedatewhen control is lost and any resultingdifferences arerecognized inprofit or loss. Suchfair
valuebecomestheinitial carryingamount for thesubsequent measurement of theretainedinterest accountedfor asan
associate, joint venture, or financial asset. In addition, any amounts previously recognized in other comprehensive
income in respect of such entity are accounted for as if the Company had directly disposed of the related assets or
liabilities.
(D) Non-controllinginterests
Each component of profit or loss and other comprehensiveincomeis attributed to owners of theparent and to non-
controllinginterests. Total comprehensiveincomeisattributedtoownersof theparent andtonon-controllinginterests
evenif thisresultsinanegativebalanceof non-controllinginterests
(E) Associates
Associates areall entities over whichtheCompany has significant influence, generally investees of whichfrom20%
to50%of votingstock isownedbytheCompany. Investmentsinassociatesareinitiallyrecognizedat acquisitioncost
usingtheequity method. Unrealizedgains ontransactions betweentheCompany andits associates areeliminatedto
the extent of the Company’s interest in the associates. If there is any objective evidence that the investment in the
associateisimpaired, theCompany recognizesthedifferencebetweentherecoverableamount of theassociateandits
bookvalueasimpairment loss.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23
(F) J oint arrangements
A joint arrangement of whichtwoor morepartieshavejoint control isclassifiedaseither ajoint operationor ajoint
venture. A joint operator hasrightstotheassets, andobligationsfor theliabilities, relatingtothejoint operationand
recognizestheassets, liabilities, revenuesandexpensesrelatingtoitsinterest inajoint operation. A joint venturer has
rightstothenet assetsrelatingtothejoint ventureandaccountsfor that investment usingtheequitymethod.
2.4 Foreign Currency Translation
(A) Functional andpresentationcurrency
Items included in thefinancial statements of eachof theCompany’s entities aremeasured usingthecurrency of the
primary economic environment in whicheachentity operates (the“functional currency”). Theconsolidatedfinancial
statementsarepresentedinKoreanwon, whichistheCompany’sfunctional andpresentationcurrency.
(B) Transactionsandbalances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of thetransactions or valuationwhereitems arere-measured. Foreignexchangegains andlosses resultingfrom
the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and
liabilitiesdenominatedinforeigncurrenciesarerecognizedinprofit or loss.
Exchangedifferences arisingonnon-monetary financial assets andliabilities suchas equity instruments at fair value
throughprofit or loss and available-for-saleequity instruments arerecognized inprofit or loss and included inother
comprehensiveincome, respectively, aspart of thefair valuegainor loss.
(C) Translationintothepresentationcurrency
The results and financial position of all the foreign entities that have a functional currency different from the
presentationcurrencyof theCompanyaretranslatedintothepresentationcurrencyasfollows:
Assets andliabilities for eachstatement of financial positionpresentedaretranslatedat theclosingrateat theendof
thereportingdate.
Incomeandexpensesfor eachstatement of incomearetranslatedat averageexchangerates, unlessthisaverageisnot
a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
incomeandexpensesaretranslatedat therateonthedatesof thetransactions.
All resultingexchangedifferencesarerecognizedinother comprehensiveincome.
On consolidation, exchange differences arising fromthe translation of the net investment in foreign operations are
recognized in other comprehensiveincome. When aforeign operation is partially disposed of or sold, theexchange
differences that wererecordedinequity arereclassifiedas part of gains andlosses ondispositioninthestatement of
income. When the Company loses control over foreign subsidiaries, theexchangedifferences that wererecorded in
equityarereclassifiedintoprofit or losswhensuchgainor lossondispositionisrecognized.
Anygoodwill arisingontheacquisitionof aforeignoperationandanyfair valueadjustmentsaretreatedastheforeign
operation’s assets and liabilities. Such goodwill is expressed in the foreign operation’s functional currency and is
translatedat theclosingrate. Exchangedifferencesarerecognizedinother comprehensiveincome.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24
2.5 Cash and Cash Equivalents
Cashand cashequivalents includecashonhand, deposits held at call withbanks, and other short-termhighly liquid
investments that arereadily convertibleto aknownamount of cashandaresubject to aninsignificant risk of change
invalue.
2.6 Financial Assets
(A) Classification
TheCompany classifies its financial assets inthefollowingcategories: financial assets at fair valuethroughprofit or
loss, loansandreceivables, available-for-salefinancial assets, andheld-to-maturity financial assets. Theclassification
depends on the terms of the instruments and purpose for which the financial assets were acquired. Management
determinestheclassificationof itsfinancial assetsat initial recognition.
(1) Financial assetsat fair valuethroughprofit or loss
Financial assetsat fair valuethroughprofit or lossarefinancial assetsheldfor trading. A financial asset isclassifiedin
this category if acquired principally for the purpose of selling in the short-term. Derivatives not subject to hedge
accountingandderivativesseparatedfromfinancial instrumentssuchasembeddedderivativesarealsocategorizedas
heldfor trading. Assetsinthiscategoryareclassifiedascurrent assets.
(2) Loansandreceivables
Loans andreceivables arenon-derivativefinancial assets withfixedor determinablepayments that arenot quotedin
anactivemarket. Theyareincludedincurrent assets, except for thosewithmaturitiesgreater than12monthsafter the
endof thereportingperiodwhichareclassifiedasnon-current assets.
(3) Available-for-salefinancial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in
any of the other categories. They are included in non-current assets unless an investment matures or management
intendstodisposeof it within12monthsof theendof thereportingperiod.
(B) Recognitionandmeasurement
Regular purchasesandsalesof financial assetsarerecognizedonthetradedate. At initial recognition, financial assets
are measured at fair value plus, in the case of financial assets not carried at fair value through profit or loss,
transactioncosts. Transaction costs of financial assets carried at fair valuethroughprofit or loss areexpensed inthe
statement of income. After theinitial recognition, available-for-salefinancial assets and financial assets at fair value
throughprofit or loss aresubsequently carried at fair value. Loans and receivables and held-to-maturity investments
aresubsequentlycarriedat amortizedcost usingtheeffectiveinterest method.
Changesinfair valueof financial assetsat fair valuethroughprofit or lossarerecognizedinprofit or lossandchanges
infair valueof available-for-salefinancial assetsarerecognizedinother comprehensiveincome. Whentheavailable-
for-salefinancial assets aresoldor impaired, thefair valueadjustments recordedinequity arereclassifiedinto profit
or loss.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25
Interest on available-for-sale financial assets and held-to-maturity financial assets calculated using the effective
interest method is recognized in thestatement of incomeas part of financeincome. Dividends on available-for-sale
financial assetsarerecognizedinthestatement of incomeaspart of other non-operatingincomewhentheCompany’s
right toreceivepaymentsisestablished.
(C) Offsettingfinancial instruments
Financial assetsandliabilitiesareoffset andthenet amount reportedinthestatement of financial positionwhenthere
is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or
realizetheasset andsettletheliabilitysimultaneously.
(D) Derecognitionof financial assets
If theCompany transfers afinancial asset andthetransfer does not result inderecognitionbecausetheCompany has
retainedsubstantially of all therisks andrewards of ownershipof thetransferredasset dueto arecourseintheevent
thedebtor defaults, theCompany continuestorecognizethetransferredasset initsentirety andrecognizesafinancial
liability for theconsiderationreceived. Therelatedfinancial liability is classifiedas ‘borrowings’ inthestatement of
financial position.
2.7 Impairment of Financial Assets
TheCompanyassessesat theendof eachreportingperiodwhether thereisobjectiveevidencethat afinancial asset or
groupof financial assetsisimpaired. A financial asset or agroupof financial assetsisimpairedandimpairment lossis
recognized only if thereis objectiveevidence and that loss event (or events) has an impact on theestimated future
cashflowsof thefinancial asset or groupof financial assetsthat canbereliablyestimated.
Impairment of loans and receivables is presented as a deduction in an allowance account. Impairment of other
financial assets is directly deducted fromtheir carrying amount. The Company writes off financial assets when the
assetsaredeterminedtobenolonger recoverable.
The objective evidence that a financial asset is impaired includes significant financial difficulty of the issuer or
obligor; adelinquency in interest or principal payments; or thedisappearanceof an active market for that financial
asset becauseof financial difficulties. A declinein thefair valueof an available-for-saleequity instrument by more
than 20%fromits cost or aprolonged declinebelowits cost for morethansix months is also objectiveevidenceof
impairment.
2.8 Trade Receivables
Tradereceivablesareamountsduefromcustomersfor merchandisesoldor servicesperformedintheordinary course
of business. If collectionis expectedinoneyear or less (or inthenormal operatingcycleof theCompany if longer),
they areclassifiedas current assets. If not, they arepresentedas non-current assets. Tradereceivables arerecognized
initially at fair valueandsubsequently measuredat amortizedcost usingtheeffectiveinterest method, less provision
for impairment.
2.9 Inventories
Inventoriesarestatedat thelower of cost andnet realizablevalue. Cost isdeterminedusingtheaveragecost method,
except for materialsintransit. Thecost of finishedgoodsandwork inprogresscomprisesdesigncosts, rawmaterials,
direct labor, other direct costs and related production overheads (based on normal operating capacity). It excludes
costs of idle plant and abnormal waste. Net realizable value is the estimated selling price in the ordinary course of
business, lessapplicablevariablesellingexpenses.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26
Inventories are reduced for the estimated losses arising from excess, obsolescence, and decline in value. This
reduction is determined by estimating market value based on future customer demand. The losses on inventory
obsolescencearerecordedasapart of cost of sales.
2.10 Disposal Group Held-for-Sale
Non-current assets(or disposal group) areclassifiedasassetsheld-for-salewhentheir carryingamount istobe
recoveredprincipallythroughasaletransactionandasaleisconsideredhighlyprobable. Theassetsaremeasuredat
thelower amount betweentheir carryingamount andthefair valuelesscoststosell.
2.11 Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Historical cost includesexpendituresthat aredirectly attributabletotheacquisitionof theitems. Subsequent costsare
includedintheasset’scarryingamount or recognizedasaseparateasset, asappropriate, only whenit isprobablethat
futureeconomic benefitsassociatedwiththeitemwill flowtotheCompany andthecost of theitemcanbemeasured
reliably. Thecarryingamount of thoseparts that arereplacedis derecognizedandrepairs and maintenanceexpenses
arerecognizedinprofit or lossintheperiodtheyareincurred.
Depreciation on tangible assets is calculated using the straight-line method to allocate the difference between their
cost and their residual values over their estimated useful lives. Land is not depreciated. Costs that are directly
attributable to the acquisition, construction or production of a qualifying asset, including capitalized interest costs,
formpart of thecost of that asset andareamortizedover theestimateduseful lives.
The Company’s policy is that property, plant and equipment should be depreciated over the following estimated
useful lives:
Estimateduseful lives
Buildingsandstructures 15, 30years
Machineryandequipment 5years
Others 5years
Thedepreciationmethod, residual valuesanduseful livesof property, plant andequipment arereviewed, andadjusted
if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its
recoverableamount if theasset’s carryingamount is greater thanits estimatedrecoverableamount. Gains andlosses
on disposals are determined by comparing the proceeds with the carrying amount and are recognized within the
statement of incomeaspart of other non-operatingincomeandexpenses.
2.12 Intangible Assets
Goodwill represents the excess of the cost of an acquisition over the fair value of the group’s share of the net
identifiable assets of the acquired subsidiary, associates, joint ventures and businesses at the date of acquisition.
Goodwill onacquisitionsof subsidiariesandbusinessesisincludedinintangibleassetsandgoodwill onacquisitionof
associatesandjoint venturesareincludedintheinvestmentsinassociatesandjoint ventures.
Intangible assets, except for goodwill, are initially recognized at their historical cost and carried at cost less
accumulatedamortizationandaccumulatedimpairment losses.
Internally generateddevelopment costsaretheaggregatecostsrecognizedafter meetingtheasset recognitioncriteria,
including technical feasibility, and determined to havefutureeconomic benefits. Membership rights areregarded as
intangibleassets withindefiniteuseful lifeandnot amortizedbecausethereis no foreseeablelimit to theperiodover
whichtheassetsareexpectedtobeutilized. Intangibleassetswithdefiniteuseful lifesuchastrademarksandlicenses
areamortizedusingthestraight-linemethodover their estimateduseful lives.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27
TheCompany’spolicyisthat intangibleassetsshouldbeamortizedover thefollowingestimateduseful lives:
Estimateduseful lives
Development costs 2years
Trademarks, licensesandother intangibleassets 5- 10years
2.13 Impairment of Non-Financial Assets
Goodwill or intangible assets with indefinite useful life are not subject to amortization and are tested annually for
impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the
amount bywhichtheasset’scarryingamount exceedsitsrecoverableamount. Therecoverableamount isthehigher of
anasset’sfair valuelesscoststosell andvalueinuse. For thepurposesof assessingimpairment, assetsaregroupedat
thelowest levels for which thereareseparately identifiable cash flows (cash-generating units). Non-financial assets
other than goodwill that suffered impairment arereviewed for possiblereversal of theimpairment at each reporting
date.
2.14 Financial Liabilities
(A) Classificationandmeasurement
Financial liabilities at fair valuethrough profit or loss arefinancial instruments held for trading. Financial liabilities
areclassifiedinthiscategoryif incurredprincipallyfor thepurposeof repurchasingtheminthenear term. Derivatives
that arenot designated as hedges or bifurcated fromfinancial instruments containing embedded derivatives arealso
categorizedasheld-for-trading.
TheCompany classifies non-derivativefinancial liabilities, except for financial liabilities at fair valuethroughprofit
or loss, financial guarantee contracts and financial liabilities that arise when a transfer of financial assets does not
qualify for derecognition, as financial liabilities carried at amortized cost and presented as ‘trade payables’,
‘borrowings’, and‘other financial liabilities’ inthestatement of financial position.
(B) Derecognition
Financial liabilities areremovedfromthestatement of financial positionwhenit is extinguished, for example, when
theobligationspecifiedinthecontract is discharged, cancelledor expiredor whentheterms of anexistingfinancial
liabilityaresubstantiallymodified.
2.15 Trade Payables
Tradepayablesareamountsduetosuppliersfor merchandisepurchasedor servicesreceivedintheordinarycourseof
business. If payment isexpectedinoneyear or less(or inthenormal operatingcycleof theCompany if longer), they
areclassifiedas current liabilities. If not, they arepresentedas non-current liabilities. Non-current tradepayables are
recognizedinitiallyat fair valueandsubsequentlymeasuredat amortizedcost usingtheeffectiveinterest method.
2.16 Borrowings
Borrowingsarerecognizedinitially at fair value, net of transactioncostsandaresubsequently measuredat amortized
cost. Any differencebetweencost andtheredemptionvalueis recognizedinthestatement of incomeover theperiod
of theborrowings usingtheeffectiveinterest method. If theCompany has anindefiniteright to defer payment for a
periodlonger than12monthsafter theendof thereportingdate, suchliabilitiesarerecordedasnon-current liabilities,
otherwise, theyarerecordedascurrent liabilities.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28
2.17 Provisions
A provisionisrecognizedwhentheCompany hasapresent legal or constructiveobligationasaresult of apast event,
it isprobablethat anoutflowof resourcesembodyingeconomicbenefitswill berequiredtosettletheobligation, anda
reliable estimate can be made of the amount of the obligation. Provisions are not recognized for future operating
losses.
Provisionsaremeasuredat thepresent valueof theexpendituresexpectedtoberequiredtosettletheobligationusing
a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the
obligation. Theincreaseintheprovisionduetopassageof timeisrecognizedasinterest expense.
Whenit is probablethat anoutflowof economic benefits will occur dueto apresent obligationresultingfromapast
event, and the amount is reasonably estimable, a corresponding provision is recognized in the financial statements.
However, when such outflow is dependent upon a future event, that is not certain to occur, or cannot be reliably
estimated, adisclosureregardingthecontingent liabilityismadeinthenotestothefinancial statements.
2.18 Net Defined Benefit Liabilities
The Company has a variety of retirement pension plans including defined benefit or defined contribution plans. A
definedcontributionplanis apensionplanunder whichtheCompany pays fixedcontributions into aseparateentity.
TheCompany hasnolegal or constructiveobligationstopay further contributionsif thefunddoesnot holdsufficient
assets to pay all employees the benefits relating to employee service in the current and prior periods. For defined
contributionplans, theCompanypayscontributionstoannuityplansthat aremanagedeither publiclyor privatelyona
mandatory, contractual or voluntary basis. The Company has no further future payment obligations once the
contributions have been paid. The contributions are recognized as employee benefit expense when they are due.
Prepaidcontributions arerecognizedasanasset totheextent that acashrefundor areductioninthefuturepayments
isavailable.
A definedbenefit planisapensionplanthat isnot adefinedcontributionplan. Typically definedbenefit plansdefine
anamount of pensionbenefit that anemployeewill receiveonretirement, usually dependent ononeor morefactors
such as age, years of service and compensation. The liability recognized in the statement of financial position in
respect to defined benefit pension plans is the present value of the defined benefit obligation at the end of the
reportingperiodlessthefair valueof planassets. Thedefinedbenefit obligationiscalculatedannuallybyindependent
actuaries usingtheprojectedunit credit method. Thepresent valueof thedefinedbenefit obligationis determinedby
discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are
denominatedinthecurrency inwhichthebenefits will bepaidandthat haveterms to maturity approximatingto the
termsof therelatedpensionobligation.
Actuarial gains and losses resulting fromthe changes in actuarial assumptions, and the differences between the
previous actuarial assumptions and what has actually occurred, arerecognizedinother comprehensiveincomeinthe
periodinwhichtheywereincurred. Past servicecostsareimmediatelyrecognizedinprofit or loss.
2.19 Financial Guarantee Contract
Financial guaranteecontracts arecontractsthat requiretheissuer to makespecifiedpaymentstoreimbursetheholder
for a loss it incurs because a specified debtor fails to make payments when due. Financial guarantees are initially
recognized in the financial statements at fair valueon the datetheguarantee was given. If theamount measured in
subsequent periods exceeds the unamortized balance of the amount initially recognized, the excess is classified as
other financial liability.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29
2.20 Current and Deferred Tax
Thetaxexpensefor theperiodcomprisescurrent anddeferredtax. Taxisrecognizedontheprofit for theperiodinthe
statement of income, except totheextent that it relatestoitemsrecognizedinother comprehensiveincomeor directly
inequity, in whichcasethetax is also recognizedinother comprehensiveincomeor directly inequity, respectively.
Thetax expenseiscalculatedonthebasis of thetax lawsenactedor substantively enactedat theendof thereporting
period.
Deferred tax is recognized for temporary differences arising between thetax bases of assets and liabilities and their
carryingamountsasexpectedtaxconsequencesat therecoveryor settlement of thecarryingamountsof theassetsand
liabilities. However, deferred tax assets and liabilities arenot recognized if they arisefrominitial recognition of an
asset or liability in atransaction other than abusiness combination that at thetimeof thetransaction affects neither
accounting nor taxable profit or loss. Deferred tax assets are recognized only to the extent that it is probable that
futuretaxableprofit will beavailableagainst whichthetemporarydifferencescanbeutilized.
A deferred tax liability is recognized for taxable temporary differences associated with investments in subsidiaries,
associates, and interests in joint ventures, except to theextent that theCompany is ableto control thetiming of the
reversal of the temporary differences and it is probable that the temporary difference will not reverse in the
foreseeable future. In addition, a deferred tax asset is recognized for deductible temporary differences arising from
such investments to theextent that it is probablethetemporary differencewill reversein theforeseeablefutureand
taxableprofit will beavailableagainst whichthetemporarydifferencecanbeutilized.
Deferredtaxassetsandliabilitiesareoffset whenthereisalegallyenforceableright tooffset current taxassetsagainst
current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or different taxable entities where there is an intention to
settlethebalancesonanet basis.
2.21 Derivative Instruments
All derivativeinstrumentsareaccountedfor at fair valuewiththeresultingvaluationgainor lossrecordedasanasset
or liability. If thederivativeinstrument isnot designatedasahedginginstrument, thegainor lossisrecognizedinthe
statement of incomeintheperiodof change.
Fair valuehedgeaccountingisappliedtoaderivativeinstrument withthepurposeof hedgingtheexposuretochanges
inthefair valueof anasset or aliability or afirmcommitment (hedgeditem) that is attributableto aparticular risk.
Hedge accounting is applied when the derivative instrument is designated as a hedging instrument and the hedge
accountingcriteriahavebeenmet.
2.22 Dividend Distribution
DividenddistributiontotheCompany’sshareholdersisrecognizedwhenthedividendsareapproved.
2.23 Share Capital
Common shares and preferred shares with no repayment obligations are classified as equity. When the Company
purchases its common shares, theacquisition costs including direct transaction costs are deducted fromequity until
the redemption or reissuance of treasury shares. Consideration received on the subsequent sale or issue of treasury
sharesiscreditedtoequity.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
2.24 Revenue Recognition
Revenue mainly comprises the fair value of the consideration received or receivable for the sale of goods in the
ordinary courseof theCompany’s activities. Revenueis shown net of value-added tax, returns, sales incentives and
discountsandafter eliminatingintercompanytransactions.
The Company recognizes revenue when specific recognition criteria have been met for each of the Company’s
activitiesasdescribedbelow. TheCompanybasesitsestimatesonhistorical results, takingintoconsiderationthetype
of customer, thetypeof transactionandthespecificsof eacharrangement.
Where multiple-element arrangements exist, the fair values of each element are determined based on the current
market priceof eachof theelements whensoldseparately. Whenthefair values of eachelement areindeterminable,
the fair values of deliverables which have already been provided are calculated in such way that the fair values of
elements, whichareyet tobeprovided, aresubtractedfromtotal contract valueof thearrangement.
(A) Salesof goods
Salesof productsandmerchandisearerecognizedupondelivery whenthesignificant risksandrewardsof ownership
of goods have transferred to the buyer, continuing managerial involvement usually associated with ownership and
effective control have ceased, the amount of revenue can be measured reliably, it is probable that the economic
benefitsassociatedwiththetransactionwill flowtotheCompanyandthecostsincurredor tobeincurredinrespect of
the transaction can be measured reliably. The Company records reductions to revenue for special pricing
arrangements, priceprotectionandother volumebaseddiscounts. If product salesaresubject tocustomer acceptance,
revenueisnot recognizeduntil customer acceptanceoccurs.
(B) Salesof services
Revenues fromrenderingservices aregenerally recognizedusingthepercentage-of-completionmethod, basedonthe
percentageof coststodatecomparedtothetotal estimatedcosts, contractual milestonesor performance.
(C) Other sourcesof revenue
Interest income is recognized using the effective interest method. When a loan and receivable is impaired, the
Company reduces thecarryingamount to its recoverableamount, beingtheestimated futurecashflowdiscountedat
theoriginal effectiveinterest rateof theinstrument, andcontinuesunwindingthediscount asinterest income. Royalty
income is recognized on an accruals basis in accordance with the substance of the relevant agreements. Dividend
incomeisrecognizedwhentheright toreceivepayment isestablished.
2.25 Government Grants
Government grantsarerecognizedat their fair valueswhenthereisreasonableassurancethat thegrant will be
receivedandtheGroupwill complywiththeconditionsattachingtoit. Government grantsrelatedtoassetsare
presentedbydeductingthegrantsinarrivingat thecarryingamount of theassets, andgrantsrelatedtoincomeare
deferredandpresentedbydeductingtherelatedexpensesfor thepurposeof thegovernment grants.
2.26 Earnings per Share
Basic earnings per shareis calculated by dividing net profit for theperiod availableto common shareholders by the
weighted-average number of common shares outstanding during the year. Diluted earnings per share is calculated
usingtheweighted-averagenumber of common shares outstanding adjusted to includethepotentially dilutiveeffect
of commonequivalent sharesoutstanding.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31
2.27 Operating Segments
Operating segments aredisclosed in themanner reported to thechief operating decision-maker (pleaseseefootnote
33). The chief operating decision-maker is responsible for making strategic decisions on resource allocation and
performanceassessment of theoperating segments. The management committee which makes strategic decisions is
regardedasthechief operatingdecision-maker.
2.28 Convenience Translation into United States Dollar Amounts
TheCompany operates primarily in Korean won and its official accounting records aremaintained in Korean won.
The US dollar amounts provided in the financial statements represent supplementary information solely for the
convenienceof thereader. All KoreanwonamountsareexpressedinU.S. dollarsat therateof ?1,055.30toUS $1,
the exchange rate in effect on December 31, 2013. Such presentation is not in accordance with generally accepted
accountingprinciples, andshouldnot beconstruedas arepresentationthat theKoreanwonamounts showncouldbe
readilyconverted, realizedor settledinUSdollarsat thisor at anyother rate.
2.29 Approval of the Consolidated Financial Statements
Theseconsolidatedfinancial statementswereapprovedbytheBoardof DirectorsonJ anuary24, 2014.
3. Critical Accounting Estimates and Assumptions
The Company makes estimates and assumptions concerning the future. The estimates and assumptions are
continuouslyassessed, consideringhistorical experienceandother factors, includingexpectationsof futureeventsthat
arebelievedto bereasonableunder thecircumstances. Theresultingaccountingestimates will, by definition, seldom
equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment tothecarryingamountsof assetsandliabilitieswithinthenext financial year areaddressedbelow.
(A) Revenuerecognition
The Company uses the percentage-of-completion method in accounting for its fixed-price contracts to deliver
installation services. Use of the percentage-of-completion method requires the Company to estimate the services
performed to date as a proportion of the total services to be performed. Revenues and earnings are subject to
significant change, effectedbyearlystepsinalong-termprojects, changeinscopeof aproject, cost, period, andplans
of thecustomers.
(B) Provisionfor warranty
The Company recognizes provision for warranty on products sold. The Company accrues provision for warranty
basedonthebest estimateof amountsnecessarytosettlefutureandexistingclaims. Theamountsareestimatedbased
onhistorical data.
(C) Fair valueof derivativesandother financial instruments
The fair value of financial instruments that are not traded in an active market is determined by using a variety of
methodsandassumptionsthat aremainlybasedonmarket conditionsexistingat theendof eachreportingperiod.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
32
(D) Net definedbenefit liabilities
The net defined benefit liability depends on a number of factors that are determined on an actuarial basis using a
number of assumptions. Any changesintheseassumptions will impact thecarryingamount of thenet definedbenefit
liability. The Company, in consideration of the interest rates of high-quality corporate bonds, determines the
appropriatediscount rateat theendof eachyear. Thisistheinterest ratethat isusedtodeterminethepresent valueof
estimatedfuturecashoutflowsexpectedtoberequiredtosettlethenet definedbenefit liability.
Theprincipal actuarial assumptions associated with thenet defined benefit liability arebased on thecurrent market
expectations.
(E) Estimatedimpairment of goodwill
TheCompany tests at theendof eachreportingperiod whether goodwill has sufferedany impairment inaccordance
with the accounting policy described in Note 2.12. The recoverable amounts of cash-generating units have been
determinedbasedonvalue-in-usecalculations. Thesecalculationsarebasedonestimates.
(F) Incometaxes
Income taxes on the Company’s taxable income from operating activities are subject to various tax laws and
determinations of each tax authority across various countries in the world. There is uncertainty in determining the
eventual tax effects on the taxable income fromoperating activities. The Company has recognized current tax and
deferredtax at theendof thefiscal year basedonthebest estimationof futuretaxes payableas aresult of operating
activities. However, the resulting deferred income tax assets and liabilities may not equal the actual future taxes
payable and such difference may impact the current tax and deferred income tax assets and liabilities upon the
determinationof eventual taxeffects.
4. Cash and Cash Equivalents
Cashand cashequivalents includecashonhand, deposits held at call withbanks, and other short-termhighly liquid
investments that arereadily convertibleto aknownamount of cashandaresubject to aninsignificant risk of change
invalue.
Cashandcashequivalentsasof December 31, 2013and2012, consist of thefollowing:
(In millions of Korean won) 2013 2012
Cashonhand ? 14,454 ? 12,900
Bankdeposits, etc. 16,270,326 18,778,560
Total ? 16,284,780 ? 18,791,460
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
33
5. Financial Assets Subject to Withdrawal Restrictions
Financial instrumentssubject towithdrawal restrictionsasof December 31, 2013and2012, consist of thefollowing:
(In millions of Korean won) 2013 2012
Short-termfinancial instruments ? 23,850 ? 46,489
Long-termfinancial instruments 15 29
6. Financial Instruments by Category
(A) Categorizationsof financial assetsandliabilitiesasof December 31, 2013and2012, areasfollows:
(1) Asof December 31, 2013
(In millions of Korean won)
Assets at fair
value through
profit or loss
Loans and
receivables
Available-for-
sale financial
assets Total
Assets
Cashandcashequivalents ? - ? 16,284,780 ? - ? 16,284,780
Short-termfinancial instruments - 36,722,702 - 36,722,702
Short-termavailable-for-salefinancial assets - - 1,488,527 1,488,527
Tradeandother receivables - 24,988,532 - 24,988,532
Long-termavailable-for-salefinancial assets - - 6,238,380 6,238,380
Others 40,552 5,432,404 - 5,472,956
Total ? 40,552 ? 83,428,418 ? 7,726,907 ? 91,195,877
(In millions of Korean won)
Liabilities at
fair value
through profit
or loss
Financial
liabilities
measured at
amortized cost
Other
financial
liabilities Total
Liabilities
Tradeandother payables ? - ? 16,314,720 ? - ? 16,314,720
Short-termborrowings - 3,181,582 3,256,935 6,438,517
Debentures - 1,311,068 - 1,311,068
Long-termborrowings - 985,117 - 985,117
Long-termother payables - 1,023,714 - 1,023,714
Others 244,172 13,044,171 - 13,288,343
Total ? 244,172 ? 35,860,372 ? 3,256,935 ? 39,361,479
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
34
(2) Asof December 31, 2012
(In millions of Korean won)
Assets at fair
value through
profit or loss
Loans and
receivables
Available-for-
sale financial
assets Total
Assets
Cashandcashequivalents ? - ? 18,791,460 ? - ? 18,791,460
Short-termfinancial instruments - 17,397,937 - 17,397,937
Short-termavailable-for-salefinancial assets - - 1,258,874 1,258,874
Tradeandother receivables - 23,861,235 - 23,861,235
Long-termavailable-for-salefinancial assets - - 5,229,175 5,229,175
Others 47,227 5,685,042 - 5,732,269
Total ? 47,227 ? 65,735,674 ? 6,488,049 ? 72,270,950
(In millions of Korean won)
Liabilities at
fair value
through profit
or loss
Financial
liabilities
measured at
amortized cost
Other
financial
liabilities Total
Liabilities
Tradeandother payables ? - ? 16,889,350 ? - ? 16,889,350
Short-termborrowings - 4,115,249 4,328,503 8,443,752
Debentures - 1,829,374 - 1,829,374
Long-termborrowings - 3,623,028 - 3,623,028
Long-termother payables - 1,165,881 - 1,165,881
Others 79,212 10,788,823 - 10,868,035
Total ? 79,212 ? 38,411,705 ? 4,328,503 ? 42,819,420
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
35
(B) Net gainsor net lossesoneachcategoryof financial instrumentsfor theyearsendedDecember 31, 2013and
2012, areasfollows:
(1) Asof December 31, 2013
(In millions of Korean won)
Financial Assets
Assets at fair
value through
profit or loss
Loans and
receivables
Available-for-
sale financial
assets Total
Gainonvaluation(other comprehensiveincome) ? - ? - ? 1,271,817 ? 1,271,817
Gain/(loss) onvaluation/disposal (profit or loss) (32,867) (33,518) 1,079,393 1,013,008
Lossonvaluation(reclassification) - - (1,000,260) (1,000,260)
Interest income - 1,342,394 9,215 1,351,609
Foreignexchangedifferences(profit or loss) - (393,407) - (393,407)
Foreignexchangedifferences
(other comprehensiveincome) - - 939 939
Dividendincome - - 112,159 112,159
Impairment/reversal (profit or loss) - (18,681) (5,177) (23,858)
(In millions of Korean won)
Financial Liabilities
Liabilities at
fair value
through profit
or loss
Financial
liabilities
measured at
amortized cost
Other financial
liabilities Total
Lossonvaluation/disposal (profit or loss) ? (216,236) ? - ? - ? (216,236)
Interest expense 319,342 190,316 509,658
Foreignexchangedifferences(profit or loss) (230,212) 43,836 (186,376)
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
36
(2) Asof December 31, 2012
(In millions of Korean won)
Financial Assets
Assets at fair
value through
profit or loss
Loans and
receivables
Available-for-
sale financial
assets Total
Gainonvaluation(other comprehensiveincome) ? - ? - ? 1,185,256 ? 1,185,256
Gain/(loss) onvaluation/disposal (profit or loss) (74,609) 28,915 105,192 59,498
Gainonvaluation(reclassification) - - 23,072 23,072
Interest income - 840,150 5,281 845,431
Foreignexchangedifferences(profit or loss) - (355,989) - (355,989)
Foreignexchangedifferences
(other comprehensiveincome) - - (19,302) (19,302)
Dividendincome - - 106,181 106,181
Impairment/reversal (profit or loss) - (76,231) (94,466) (170,697)
(In millions of Korean won)
Financial Liabilities
Liabilities at
fair value
through profit
or loss
Financial
liabilities
measured at
amortized cost
Other financial
liabilities Total
Lossonvaluation/disposal (profit or loss) ? (125,553) ? - ? - ? (125,553)
Interest expense - 277,512 321,494 599,006
Foreignexchangedifferences(profit or loss) - 17,938 43,909 61,847
7. Credit Quality of Financial Assets
Thecredit quality of financial assets that areneither past duenor impairedis assessedby referenceto external credit
ratingsasof December 31, 2013and2012, asfollows:
- Superior abilitytorepay: Aaa~Aa(Moody's), AAA~AA (S&P, Fitch), A1(Credit ratingagenciesinKorea)
- Strongabilitytorepay: A (Moody's), A (S&P, Fitch), A2(Credit ratingagenciesinKorea)
- Acceptableabilitytorepay: Baa(Moody's), BBB (S&P, Fitch), A3(Credit ratingagenciesinKorea)
- Currently having the ability to repay: Ba or below (Moody's), BB or below (S&P, Fitch), B or below (Credit
ratingagenciesinKorea)
- Group1: Customerswiththetradepayablesguaranteedbycredit insuranceor collateral
- Group 2: Customers having experienced impairment of capital. As the trade payables are guaranteed by credit
insuranceor collateral, all default riskhasbeenrelieved
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
37
(A) Accountsreceivables
(In millions of Korean won) 2013 2012
Counterpartieswithexternal credit rating
Superior abilitytorepay ? 3,414,467 ? 1,818,158
Strongabilitytorepay 2,796,881 3,742,515
Acceptableabilitytorepay 2,491,635 3,217,663
Currentlyhavingtheabilitytorepay 4,370,114 3,834,957
13,073,097 12,613,293
Counterpartieswithout external credit rating
Group1 9,429,612 8,680,397
Group2 153,770 50,160
9,583,382 8,730,557
? 22,656,479 ? 21,343,850
(B) Cashequivalentsandshort-termfinancial instruments
(In millions of Korean won) 2013 2012
Superior abilitytorepay ? 2,584,121 ? 2,850,476
Strongabilitytorepay 49,891,037 32,675,712
Acceptableabilitytorepay 493,383 505,631
Currentlyhavingtheabilitytorepay 1,111 12,896
Others
1
23,376 131,782
? 52,993,028 ? 36,176,497
1
Short-termfinancial instrumentsheldat financial institutions(Credit union, etc.) without external credit rating
8. Transfer of Financial Assets
Tradereceivables of theCompany havebeendiscountedthroughfactoringagreements withbanks in2013and2012.
Collaterals(tradereceivablesandother) providedinsuchfactoringtransactionsdonot meet therequirementsfor asset
derecognitionasrisksandrewardsarenotsubstantiallytransferredintheevent thedebtor defaults. Financial liabilities
recognized in relation to these transactions are included as short-termborrowings on the statements of financial
position(Note15).
Thefollowingtablepresentsabreakdownof discountedtradereceivablesasof December 31, 2013and2012:
(In millions of Korean won) 2013 2012
Carryingamount of thediscountedtradereceivables
1
? 3,256,935 ? 4,328,503
Carryingamount of therelatedborrowings 3,256,935 4,328,503
1
Thediscountedtradereceivablesincludeintercompanybalances.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
38
9. Available-for-Sale Financial Assets
Changesinavailable-for-salefinancial assetsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Balanceasof J anuary1 ? 6,488,049 ? 3,879,567
Acquisitions 4,031,357 2,613,703
Increasefrombusinesscombinations - 16,544
Disposals (4,120,906) (1,171,666)
Gainonvaluationof available-for-salefinancial assets 1,271,817 1,185,256
Impairment (5,177) (28,009)
Foreignexchangedifferences 939 (19,302)
Others 60,828 11,956
Balanceasof December 31 ? 7,726,907 ? 6,488,049
(A) Current portion 1,488,527 1,258,874
(B) Non-current portion 6,238,380 5,229,175
(A) Short-termavailable-for-salefinancial assets
Detailsof short-termavailable-for-salefinancial assetsasof December 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Beneficiarycertificates
1
? 1,257,492 ? 1,258,873
National bonds 180,959 1
Bankdebentures 50,076 -
? 1,488,527 ? 1,258,874
1
Detailsof beneficiarycertificatesasof December 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Bonds ? 1,232,523 ? 1,159,290
Timedeposits 364 238
Call loans 15,449 85,200
Others 9,156 14,145
? 1,257,492 ? 1,258,873
Changesinvaluationgains(losses) recognizedinequity(other comprehensiveincome) onshort-termavailable-for-
salefinancial assetsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Balanceasof J anuary1 ? 8,873 ? 5,969
Fair valuegains 7,492 8,873
Net gainstransferredfromequity (8,873) (5,969)
Balanceasof December 31 7,492 8,873
Deferredincometax (1,813) (2,147)
? 5,679 ? 6,726
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
39
(B) Long-termavailable-for-salefinancial assets
Detailsof long-termavailable-for-salefinancial assetsasof December 31, 2013and2012, areasfollows:
(In millions of Korean won) Detail 2013 2012
Equitysecurities- Listed (1) ? 4,399,314 ? 4,435,856
Equitysecurities- Non-listed (2) 782,297 667,325
Debt securities
1
(3) 1,056,769 125,994
? 6,238,380 ? 5,229,175
1
Themaximumexposuretocredit riskof available-for-saledebt securitiesisthecarryingvalueat thereportingdate.
(1) Equitysecurities- Listed(excludinginvestmentsinassociatesandjoint ventures)
Detailsof listedequitysecuritiesasof December 31, 2013and2012, areasfollows:
(In millions of Korean won, number of shares and percentage)
2013 2012
Number of
Shares Owned
Percentage of
Ownership (%)
Acquisition
Cost
Book Value
(Market Value)
Book Value
(Market Value)
SamsungHeavyIndustries 40,675,641 17.6 ? 258,299 ? 1,547,708 ? 1,568,046
SamsungFineChemicals 2,164,970 8.4 45,678 96,449 132,063
Hotel Shilla 2,004,717 5.1 13,957 133,314 88,107
Cheil Worldwide 2,998,725 2.6 2,920 82,465 64,623
iMarket Korea 647,320 1.8 324 16,668 18,416
SFA 1,822,000 10.2 38,262 74,884 85,998
WonikIPS 7,220,216 9.0 63,249 61,949 -
ASML 12,595,575 2.9 726,024 1,248,019 856,253
CSR 9,925,000 6.0 59,612 110,135 58,765
Rambus 4,788,125 4.2 92,682 47,851 24,976
SeagateTechnology
1
12,539,490 3.8 218,544 743,161 1,474,032
Wacom 8,398,400 5.0 62,013 62,268 -
Sharp 35,804,000 2.1 122,535 120,143 -
Others - - 59,328 54,300 64,577
? 1,763,427 ? 4,399,314 ? 4,435,856
1
InOctober 2013, theCompanysoldpart of itsinvestment inSeagateTechnologyfor USD1,505million.
Acquisition cost includes impairment loss on available-for-sale financial assets recognized due to the decline in
realizablevaluebelowacquisitioncost.
The difference between the acquisition cost and the current fair value, after income tax effects, is recorded within
other componentsof equity(unrealizedgainsor lossesonavailable-for-salefinancial assets).
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
40
(2) Equitysecurities- Non-listed(excludinginvestmentsinassociatesandjoint ventures)
Detailsof non-listedequitysecuritiesasof December 31, 2013and2012, areasfollows:
(In millions of Korean won, number of shares and percentage)
2013 2012
Number of
Shares Owned
Percentage of
Ownership (%) Acquisition Cost Book Value Book Value
KihyupTechnology 1,000,000 17.2 ? 5,000 ? 5,000 ? 5,000
PusanNewport
1
1,135,307 1.0 5,677 5,677 5,677
SamsungVentureInvestment 980,000 16.3 4,900 7,021 6,053
SamsungPetrochemical 514,172 13.0 8,040 80,347 84,427
SamsungGeneral Chemicals 1,914,251 3.9 19,143 80,653 74,487
TaewonElectric 9,000 15.0 16,544 17,072 16,225
CSOT
2
- 14.5 278,130 278,130 278,130
Pantech 53,000,000 10.0 53,000 53,053 -
Nanosys
2
13,100,436 13.0 17,861 17,861 17,861
OpenX
2
8,899,172 3.5 10,738 10,738 10,738
Others
3
- - 242,069 226,745 168,727
? 661,102 ? 782,297 ? 667,325
1
As of December 31, 2013, the Company’s investments in Pusan Newport are pledged as collateral against the investee's debt
(Note19).
2
Nonmarketableshares includingCSOT aremeasuredat cost as therangeof reasonablefair valueestimates is significant andthe
probabilitiesof thevariousestimatesandapplicablediscount ratecannot bereasonablyassessed.
3
Impairment lossesonunlistedequitysecuritiesresultingfromthedeclineinrealizablevaluebelowtheacquisitioncost amounted
to?5,177millionand?2,235millionfor theyearsendedDecember 31, 2013and2012, respectively.
(3) Debt securities
Detailsof debt securitiesasof December 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Corporatebonds ? 106,944 ? 125,894
Government andpublicbonds 50,356 100
Bankdebentures 899,469 -
? 1,056,769 ? 125,994
Changes in valuation gain (loss) on long-termavailable-for-sale financial assets for the years ended December 31,
2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Balanceasof J anuary1 ? 2,572,755 ? 1,367,331
Fair valuegain 1,264,325 1,176,383
Net gainsor lossestransferredfromequity (991,387) 29,041
Balanceasof December 31 2,845,693 2,572,755
Deferredincometaxandnon-controllinginterests (662,359) (577,945)
? 2,183,334 ? 1,994,810
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
41
10. Trade and Other Receivables
(A) Trade and other receivables, and provisions for impairment as of December 31, 2013 and 2012, are as
follows:
2013 2012
(In millions of Korean won) Trade Non-Trade Trade Non-Trade
Receivables ? 25,292,231 ? 2,931,605 ? 24,168,427 ? 2,834,187
Less: Provisionsfor impairment (267,675) (20,046) (276,787) (2,595)
Receivables, net 25,024,556 2,911,559 23,891,640 2,831,592
Less: Non-current portion (36,024) (24,157) (30,405) (18,231)
Current portion ? 24,988,532 ? 2,887,402 ? 23,861,235 ? 2,813,361
TheCompany transferred receivablebalances to abank in exchangefor cash during the years ended December 31,
2013 and 2012. The outstanding balances of transferred receivables amounting to ?3,256,935 million and
?4,328,503 million havebeen accounted for as borrowings as of December 31, 2013 and 2012, respectively (Note
15).
(B) Movementsintheprovisionsfor impairment of receivablesfor theyearsendedDecember 31, 2013and2012,
areasfollows:
2013 2012
(In millions of Korean won) Trade Non-Trade Trade Non-Trade
Balanceasof J anuary1 ? (276,787) ? (2,595) ? (214,597) ? (37,833)
Provisionsfor impairedreceivables
(reversalsof unusedamounts) (2,785) (18,794) (83,588) 6,370
Receivableswrittenoff duringtheyear asuncollectible 13,787 511 18,752 28,203
Others (1,890) 832 2,646 665
Balanceasof December 31 ? (267,675) ? (20,046) ? (276,787) ? (2,595)
(C) Theaginganalysisof tradeandother receivablesasof December 31, 2013and2012, isasfollows:
(In millions of Korean won) 2013 2012
Receivablesnot past due ? 25,420,912 ? 24,151,060
Past duebut not impaired
1
:
Lessthan31daysoverdue 2,058,708 2,226,759
Impaired
2
:
31daysto90daysoverdue 184,405 231,343
90daysoverdueor more 559,811 393,452
? 28,223,836 ? 27,002,614
1
TheCompanydoesnot consider receivablesthat areoverduefor lessthanor equal to31daysasimpaired.
2
Provisionsfor impairedreceivableamount to?287,721millionasof December 31, 2013(2012: ?279,382million).
(D) Themaximumexposureto credit risk at thereportingdateis thecarrying valueof each class of receivable
mentionedabove. As of December 31, 2013, theCompany has credit insurancewithKoreaTradeInsurance
andoverseasinsurancecompaniesagainst itsexport accountsreceivablesfromapprovedforeigncustomers.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
42
11. Inventories
Inventoriesasof December 31, 2013and2012, areasfollows:
(In millions of Korean won)
2013 2012
Gross
Amount
Valuation
Allowance Book Value
Gross
Amount
Valuation
Allowance Book Value
Finishedgoods ? 7,597,391 ? (168,041) ? 7,429,350 ? 7,003,826 ? (166,576) ? 6,837,250
Workinprocess 4,466,028 (395,762) 4,070,266 3,623,572 (392,996) 3,230,576
Rawmaterialsandsupplies 6,960,985 (151,873) 6,809,112 5,239,262 (157,866) 5,081,396
Materialsintransit 826,140 - 826,140 2,598,191 - 2,598,191
?19,850,544 ? (715,676) ?19,134,868 ?18,464,851 ? (717,438) ?17,747,413
Thecost of inventoriesrecognizedasexpenseandincludedin‘cost of sales’ amountsto?136,755,644million(2012:
?125,746,083 million). Inventory valuation loss of ?435,607 million was recognized in 2013 (2012: ?367,279
million).
12. Investments in Associates and Joint Ventures
(A) Changesininvestmentsinassociatesandjoint venturesfor theyearsendedDecember 31, 2013and2012,
areasfollows:
(In millions of Korean won) 2013 2012
Balanceasof J anuary1 ? 8,785,489 ? 9,204,169
Acquisition 181,307 279,022
Disposal (240) (21,891)
Shareof profit 504,063 986,611
Others
1
(3,048,327) (1,662,422)
Balanceasof December 31 ? 6,422,292 ? 8,785,489
1
Othersconsist of dividends, businesscombination, andeffectsof changesinforeignexchangerates, etc.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
43
(B) Major investmentsinassociatesandjoint venturesasof December 31, 2013, areasfollows:
(1) Investmentsinassociates
Investee Nature of Relationship with Associate
Percentage of
Ownership
1
(%)
Principal
Business
Location
SamsungCard Businessalliance 37.5 Korea
SamsungElectro-Mechanics
Manufactureandsupplyelectroniccomponents
includingpassivecomponent, circuit board, and
module
23.7 Korea
SamsungSDI
Manufactureandsupplyelectronicdevices
includingPDP andsecondary(rechargeable)
batteries
20.4 Korea
SamsungSDS
ProvideIT servicesincludingcomputer
programming, systemintegrationand
management
22.6 Korea
SamsungTechwin
Manufacture and supply engine and precision
machines
25.5 Korea
1
TheownershiprepresentstheCompany’sownershipof commonstockineachentity.
(2) Investmentsinjoint ventures
Investee Nature of Relationship with Joint Venture
Percentage of
Ownership
1
(%)
Principal
Business
Location
SamsungCorningAdvancedGlass
Manufacture and supply other industrial glass
devices
50.0 Korea
1
TheownershiprepresentstheCompany’sownershipof commonstockineachentity.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
44
(C) Detailsof investmentsinassociatesandjoint venturesasof December 31, 2013and2012, areasfollows:
(1) Investmentsinassociates
(In millions of Korean won) 2013
Investee Acquisition cost
Net asset
value of
equity
shares
1
Book value
SamsungCard ? 1,538,540 ? 2,322,897 ? 2,340,009
SamsungElectro-Mechanics 359,237 951,693 954,496
SamsungSDI 423,722 1,451,770 1,175,204
SamsungSDS 147,963 858,671 879,956
SamsungTechwin 174,531 433,624 402,745
Others 582,646 375,959 548,553
Total ? 3,226,639 ? 6,394,614 ? 6,300,963
(In millions of Korean won) 2012
Investee Acquisition cost
Net asset
value of
equity
shares
1
Book value
SamsungCard ? 1,538,540 ? 2,221,201 ? 2,238,073
SamsungElectro-Mechanics 359,237 887,933 890,460
SamsungSDI 423,722 1,450,811 1,174,183
SamsungSDS 17,967 689,874 701,808
SamsungTechwin 174,531 401,146 360,739
Others 461,599 513,580 457,016
Total ? 2,975,596 ? 6,164,545 ? 5,822,279
1
Company’sportionof net asset valueof associatesbasedontheCompany’sownershippercentage
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
45
(2) Investmentsinjoint ventures
(In millions of Korean won) 2013
Investee Acquisition cost
Net asset
value of
equity
shares
1
Book value
SamsungCorningPrecisionMaterials ? - ? - ? -
SamsungCorningAdvancedGlass 115,000 111,961 111,961
Others 422,995 (16,357) 9,368
Total ? 537,995 ? 95,604 ? 121,329
(In millions of Korean won) 2012
Investee Acquisition cost
Net asset
value of
equity
shares
1
Book value
SamsungCorningPrecisionMaterials ? 297,165 ? 2,825,104 ? 2,794,617
SamsungCorningAdvancedGlass 115,000 114,274 114,274
Others 419,461 64,193 54,319
Total ? 831,626 ? 3,003,571 ? 2,963,210
1
Company’sportionof net asset valueof associatesbasedontheCompany’sownershippercentage
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
46
(D) Details of valuation of investments in associates and joint ventures under the equity method for the years
endedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013
Investee
Balance as of
January 1
Gain/loss on
valuation
Other
comprehensive
income/loss Others
1
Balance as of
December 31
SamsungCard ? 2,238,073 ? 102,361 ? 29,828 ? (30,253) ? 2,340,009
SamsungElectro-Mechanics 890,460 75,565 6,354 (17,883) 954,496
SamsungSDI 1,174,183 25,760 (10,310) (14,429) 1,175,204
SamsungSDS 701,808 69,739 (17,838) 126,247 879,956
SamsungTechwin 360,739 39,554 9,021 (6,569) 402,745
SamsungCorningPrecisionMaterials
2
2,794,617 347,981 (1,247) (3,141,351) -
SamsungCorningAdvancedGlass 114,274 (2,302) (11) - 111,961
Others 511,335 (154,595) 4,959 196,222 557,921
Total ? 8,785,489 ? 504,063 ? 20,756 ?(2,888,016) ? 6,422,292
1
Othersconsist of acquisitions, disposals, dividends, andeffectsof changesinforeignexchangerates, etc.
2
Duringtheyear endedDecember 31, 2013, theCompanysignedaframework agreement for comprehensivebusinesscooperation
withCorningIncorporatedanditsrelatedparties. Asof December 31, 2013, theCompany classifieditsshareinSamsungCorning
Precision Materials Co., Ltd (ownership percentage: 42.54%) as assets held-for-sale, and disposed of such shares for USD 1,902
million on J anuary 15, 2014. Under the agreement, the Company will receive additional dividends after the resolution of
shareholders’ meeting.
(In millions of Korean won) 2012
Investee
Balance as of
January 1
Gain/loss on
valuation
Other
comprehensive
income/loss Others
1
Balance as of
December 31
SamsungCard ? 2,184,855 ? 264,688 ? (181,217) ? (30,253) ? 2,238,073
SamsungElectro-Mechanics 799,792 102,946 11,689 (23,967) 890,460
SamsungSDI
1,185,509 31,256 (30,531) (12,051) 1,174,183
SamsungSDS
632,593 89,157 (16,488) (3,454) 701,808
SamsungTechwin
370,379 39,356 (27,171) (21,825) 360,739
SamsungCorningPrecisionMaterials
3,089,298 644,242 (10,300) (928,623) 2,794,617
SamsungCorningAdvancedGlass
- (726) - 115,000 114,274
Others
941,743 (184,308) (96,473) (149,627) 511,335
Total
? 9,204,169 ? 986,611 ? (350,491) ?(1,054,800) ? 8,785,489
1
Othersconsist of acquisitions, disposals, dividends, andeffectsof changesinforeignexchangerates, etc.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
47
(E) Summaryof condensedfinancial informationof major associatesandjoint ventures.
(1) A summaryof condensedfinancial informationof major associates, detailsof adjustmentsfromthebook
valueof investmentsinassociates, anddividendsreceivedfromassociatesasof andfor theyearsended
December 31, 2013and2012, isasfollows:
(In millions of Korean won) 2013
Investee SamsungCard
1
Samsung
Electro-
Mechanics SamsungSDI SamsungSDS
Samsung
Techwin
1. Condensed financial information
Current assets
?16,560,926
? 2,650,765 ? 2,063,192 ? 2,928,998 ? 1,561,706
Non-current assets 4,534,578 8,492,479 2,371,102 1,872,518
Current liabilities
10,358,265
1,787,432 1,526,957 1,219,484 1,169,253
Non-current liabilities 1,139,884 1,486,297 197,222 560,191
Non-controllinginterests - 83,966 164,323 80,644 1,628
Revenue 2,847,053 8,256,579 5,016,465 7,046,833 2,912,031
2. Details of adjustments from the book value of investments in associates
Net assets(a) 6,202,661 4,174,061 7,378,094 3,802,750 1,703,152
Ownershippercentage
2
(b) 37.5% 22.8% 19.7% 22.6% 25.5%
Net assetsof equityshares(axb) 2,322,897 951,693 1,451,770 858,671 433,624
Goodwill 17,181 - - 26,801 -
Intercompanytransactions, etc. (69) 2,803 (276,566) (5,516) (30,879)
Bookvalueof associates 2,340,009 954,496 1,175,204 879,956 402,745
3. Dividends from associates
Dividends ? 30,375 ? 17,693 ? 13,924 ? 3,914 ? 6,763
1
SamsungCarddoesnot present current andnon-current assets, andcurrent andnon-current liabilities, asseparateclassifications
initsstatement of financial position.
2
Ownershippercentageincludescommonandpreferredstocks
(In millions of Korean won) 2013
Investee
Samsung
Card
Samsung
Electro-
Mechanics
Samsung
SDI
Samsung
SDS
Samsung
Techwin Others
Profit (loss) fromcontinuing
operations
1
? 273,232 ? 330,240 ? 130,599 ? 312,372 ? 132,493 ?(139,194)
Other comprehensiveincome(loss)
1
84,153 26,676 (63,211) (88,703) 21,596 (11,862)
Total comprehensiveincome(loss)
1
? 357,385 ? 356,916 ? 67,388 ? 223,669 ? 154,089 ?(151,056)
1
Profit attributabletoownersof theparent
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
48
(In millions of Korean won) 2012
Investee SamsungCard
1
Samsung
Electro-
Mechanics SamsungSDI SamsungSDS
Samsung
Techwin
1. Condensed financial information
Current assets
?16,287,816
? 2,631,235 ? 2,414,856 ? 2,283,331 ? 1,386,237
Non-current assets 4,260,230 8,480,231 2,182,077 1,854,702
Current liabilities
10,357,253
1,959,072 2,004,041 1,067,256 1,019,550
Non-current liabilities 966,744 1,326,564 153,211 643,713
Non-controllinginterests - 71,252 191,257 60,909 2,094
Revenue 3,817,670 7,912,830 5,771,185 6,105,858 2,934,702
2. Details of adjustments from the book value of investments in associates
Net assets(a) 5,930,563 3,894,397 7,373,225 3,184,032 1,575,582
Ownershippercentage
2
(b) 37.5% 22.8% 19.7% 21.7% 25.5%
Net assetsof equityshares(axb) 2,221,201 887,933 1,450,811 689,874 401,146
Goodwill 17,181 - - 19,597 -
Intercompanytransactions, etc. (309) 2,527 (276,628) (7,663) (40,407)
Bookvalueof associates 2,238,073 890,460 1,174,183 701,808 360,739
3. Dividends from associates
Dividends ? 30,375 ? 13,270 ? 13,924 ? 3,914 ? 6,763
1
SamsungCarddoesnot present current andnon-current assets, andcurrent andnon-current liabilities, asseparateclassifications
initsstatement of financial position.
2
Ownershippercentageincludescommonandpreferredstocks
(In millions of Korean won) 2012
Investee
Samsung
Card
Samsung
Electro-
Mechanics
Samsung
SDI
Samsung
SDS
Samsung
Techwin Others
Profit (loss) fromcontinuing
operations
1
?749,875 ?411,299 ?1,471,502 ?395,805 ?131,030 ? (84,072)
Post-taxprofit fromdiscontinued
operations
1
- 29,503 - - - -
Other comprehensiveincome(loss)
1
(570,471) 1,009 (150,859) (34,303) (118,743) (34,316)
Total comprehensiveincome(loss)
1
?179,404 ?441,811 ?1,320,643 ?361,502 ?12,287 ?(118,388)
1
Profit attributabletoownersof theparent
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
49
(2) Summary of condensed financial information of major joint ventures, details of adjustments fromthe
book value of investments in joint ventures, and dividends fromjoint ventures as of and for the years
endedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Investee
SamsungCorning
AdvancedGlass
SamsungCorning
PrecisionMaterials
SamsungCorning
AdvancedGlass
1. Condensed financial information
Current assets ? 171,353 ? 3,429,581 ? 187,684
- Cashandcashequivalent 64,113 1,707,998 10,887
Non-current assets 95,310 3,731,710 51,669
Current liabilities 42,674 431,475 10,702
- Current financial liabilities
1
40,575 148,492 10,393
Non-current liabilities 67 80,507 103
Non-controllinginterests - 8,442 -
Revenue 68,803 3,245,243 30,288
Depreciationandamortization 283 390,091 35
Interest income 4,618 109,710 4,600
Incometaxexpense (567) 299,996 (178)
2. Details of adjustments from the book value of investments in joint ventures
Net assets(a) 223,922 6,640,867 228,548
Ownershippercentage
2
(b) 50.0% 42.5% 50.0%
Net assetsof equityshares(axb) 111,961 2,825,104 114,274
Intercompanytransactions, etc.
3
- (30,487) -
Bookvalueof joint ventures 111,961 2,794,617 114,274
3. Dividends from joint ventures
Dividends ? - ? 927,984 ? -
1
Account payables, other payables, provisionsareexcluded
2
Ownershippercentageincludescommonandpreferredstocks
3
Consist of unrealizedgainsandlosses, andother differences
(In millions of Korean won) 2013 2012
Investee
Samsung
Corning
Advanced
Glass Others
Samsung
Corning
Advanced
Glass
Samsung
Corning
Advanced
Glass Others
Profit (loss) fromcontinuing
operations
1
? (4,604) ? (166,310) ? 1,353,460 ? (1,452) ? (129,202)
Other comprehensiveincome(loss)
1
(21) (1,942) (9,536) - (12,901)
Total comprehensiveincome(loss)
1
? (4,625) ? (168,252) ? 1,343,924 ? (1,452) ? (142,103)
1
Profit attributabletoownersof theparent
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
50
(F) Fair valueof marketableinvestmentsinassociatesasof December 31, 2013and2012, isasfollows:
(In millions of Korean won and
number of shares)
2013 2012
Number of shares held Market value Market value
SamsungSDI 9,282,753 ? 1,503,806 ? 1,401,696
SamsungElectro-Mechanics 17,693,084 1,291,595 1,755,154
SamsungCard 43,393,170 1,622,905 1,583,851
SamsungTechwin 13,526,935 ? 735,865 ? 807,558
13. Property, Plant and Equipment
(A) Changesinproperty, plant andequipment for theyearsendedDecember 31, 2013and2012, areasfollows:
2013
(In millions of Korean won) Land
Buildings and
Structures
Machinery
and
Equipment
Construction
In Progress Others Total
Balanceasof J anuary1 ? 7,152,141 ?13,008,839 ?38,046,176 ? 8,492,885 ? 1,784,702 ?68,484,743
Acquisitioncost 7,152,141 19,624,030 110,034,355 8,492,885 5,011,914 150,315,325
Accumulateddepreciation
andimpairment - (6,615,191) (71,988,179) - (3,227,212) (81,830,582)
Acquisitionsandcapital
expenditures
1
322,433 4,209,093 12,627,962 5,362,760 1,237,317 23,759,565
Businesscombinations - 31 877 - 144 1,052
Depreciation - (1,146,000) (13,473,515) - (850,497) (15,470,012)
Sales/disposals (29,572) (30,850) (320,296) (50,930) (60,143) (491,791)
Impairment - (78) (145,263) - (175) (145,516)
Others
2
(15,715) (325,971) (237,463) 35,457 (97,961) (641,653)
Balanceasof December 31 ? 7,429,287 ? 15,715,064 ?36,498,478 ?13,840,172 ? 2,013,387 ?75,496,388
Acquisitioncost 7,429,287 23,375,035 118,621,699 13,840,172 5,518,351 168,784,544
Accumulateddepreciation
andimpairment - (7,659,971) (82,123,221) - (3,504,964) (93,288,156)
1
The capitalized borrowing costs are ?52,039 million and the interest rate used to calculate the borrowing costs eligible for
capitalizationis1.73%.
2
Othersincludeeffectsof changesinforeigncurrencyexchangerates.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
51
2012
(In millions of Korean won) Land
Buildings and
Structures
Machinery
and
Equipment
Construction
In Progress Others Total
Balanceasof J anuary1 ?7,214,734 ?12,778,760 ?33,453,220 ?6,982,473 ?1,614,764 ?62,043,951
Acquisitioncost 7,214,734 18,472,852 96,618,176 6,982,473 4,683,845 133,972,080
Accumulateddepreciationand
impairment - (5,694,092) (63,164,956) - (3,069,081) (71,928,129)
Acquisitionsandcapital
expenditures
1
54,960 1,681,106 18,302,895 1,854,111 956,723 22,849,795
Businesscombinations - - 654,490 21,612 29,007 705,109
Depreciation - (1,121,614) (12,895,133) - (818,299) (14,835,046)
Sales/disposals (76,724) (100,854) (604,989) (22,213) (114,292) (919,072)
Impairment - (3,992) (211,299) - (34) (215,325)
Others
2
(40,829) (224,567) (653,008) (343,098) 116,833 (1,144,669)
Balanceasof December 31 ?7,152,141 ?13,008,839 ?38,046,176 ?8,492,885 ?1,784,702 ?68,484,743
Acquisitioncost 7,152,141 19,624,030 110,034,355 8,492,885 5,011,914 150,315,325
Accumulateddepreciationand
impairment - (6,615,191) (71,988,179) - (3,227,212) (81,830,582)
1
Thecapitalizedborrowingcostsare?36,129millionandtheinterest rateusedtocalculatetheborrowingcostseligiblefor
capitalizationis2.50%.
2
Othersincludeeffectsof changesinforeigncurrencyexchangerates.
(B) Detailsof depreciationof property, plant andequipment bylineitemfor theyearsendedDecember 31, 2013
and2012, areasfollows:
(In millions of Korean won) 2013 2012
Cost of sales ? 14,053,512 ? 13,666,700
Sellingandadministrativeexpenses, etc. 1,416,500 1,168,346
?15,470,012 ?14,835,046
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
52
14. Intangible Assets
(A) Changesinintangibleassetsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won)
2013
Intellectual
property
rights
Capitalized
cost Membership Goodwill Others Total
Balanceasof J anuary1 ? 1,186,033 ? 602,274 ? 170,843 ? 573,845 ? 1,196,710 ? 3,729,705
Internallygenerated
(development costs) - 461,030 - - - 461,030
External acquisitions 284,392 - 7,203 - 182,118 473,713
Businesscombinations 49,046 - - 115,331 2,176 166,553
Amortization (200,452) (310,635) - - (464,314) (975,401)
Sales/disposals (44,633) - (572) (24,651) (4,125) (73,981)
Impairment (1,753) - - (99,643) (7,024) (108,420)
Others
1
(40,960) - 58 (4,348) 352,651 307,401
Balanceasof December 31 ? 1,231,673 ? 752,669 ? 177,532 ? 560,534 ? 1,258,192 ? 3,980,600
1
Othersincludeeffectsof changesinforeigncurrencyexchangerates.
(In millions of Korean won)
2012
Intellectual
property
rights
Capitalized
cost Membership Goodwill Others Total
Balanceasof J anuary1 ? 983,802 ?473,024 ?197,957 ?523,409 ?1,177,044 ?3,355,236
Internallygenerated
(development costs) - 359,639 - - - 359,639
External acquisitions 227,538 - 9,520 - 64,832 301,890
Businesscombinations 163,164 - 3,670 259,961 71,917 498,712
Amortization (169,668) (229,186) - - (388,116) (786,970)
Sales/disposals (13,123) - (39,095) - (980) (53,198)
Impairment (124) (1,203) - (204,746) (10,717) (216,790)
Others
1
(5,556) - (1,209) (4,779) 282,730 271,186
Balanceasof December 31 ?1,186,033 ?602,274 ?170,843 ?573,845 ?1,196,710 ?3,729,705
1
Othersincludeeffectsof changesinforeigncurrencyexchangerates.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
53
(B) Goodwill
Goodwill isallocatedtocash-generatingunitsat theendof thereportingperiod, andconsistsof thefollowing:
(In millions of Korean won) 2013 2012
S. LSI business ? 109,120 ? 112,723
Memorybusiness 74,418 74,995
HealthCareEquipment business 199,758 89,258
Digital Imagingbusiness - 82,599
LCDbusiness 80,299 80,299
LEDbusiness 79,277 79,277
Others 17,662 54,694
Total ? 560,534 ? 573,845
Goodwill impairment reviews are undertaken annually, and the recoverable amounts of cash-generating units have
been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on
financial budgets approved by management coveringafive-year period. Cash flows beyond thefive-year period are
extrapolated using theestimated growth rates stated below. Thegrowth ratedoes not exceed thelong-termaverage
growthratefor thebusiness. Inaddition, aconstant growthrateassumptionisusedfor perpetual cashflowcalculation.
Pursuant to the results of the goodwill impairment reviews performed, the Company recognized an impairment of
goodwill for theDigital Imagingbusiness. Themajor assumptionsusedincalculatingthevalueinuseareasfollows:
Samsung Digital Imaging 2013 2012
Salesgrowthrate
1
0.2 6.7
Perpetual growthrate
2
(4.1) (2.4)
Pre-taxdiscount rate
3
13.0 15.6
1
Futurecashflowsfor 5yearsareprojectedbasedonpreviousgrowthrateandtheindustryestimates.
2
Theprojectedgrowthratebeyondfiveyearsisconsistent withindustryestimates.
3
Pre-taxdiscount rateappliedtothecashflowprojections
Sales growth rate was determined on the basis of past performance and expectations of market fluctuations. The
discount ratereflectsthespecial riskrelatedtothedivision.
Thecarryingvalueof SamsungDigital Imagingexceededthevalueinuseby?82,599millionin2013and?204,600
million in 2012 and the amounts have been recognized as the other non-operating expenses in the consolidated
statementsof income.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
54
(C) Details of amortization of intangibleassets by lineitemfor theyears ended December 31, 2013 and 2012,
areasfollows:
(In millions of Korean won) 2013 2012
Cost of sales ? 418,447 ? 327,869
Sellingandadministrativeexpenses, etc. 556,954 459,101
Total ? 975,401 ? 786,970
15. Borrowings
(A) Detailsof thecarryingamountsof borrowingsasof December 31, 2013and2012, areasfollows:
(In millions of Korean won)
Financial
Institutions
Annual Interest Rates (%)
as of December 31, 2013 2013 2012
Short-term borrowings
Collateralizedborrowings
1
Woori Bank, etc. 0.6~11.7 ?3,256,935 ?4,328,503
Non-collateralizedborrowings Citi Bank, etc. 0.6~19.0 3,181,582 4,115,249
Total ?6,438,517 ?8,443,752
Current portion of long-term
borrowings
Bankborrowings SMBC, etc. 1.3~7.4 ?1,900,937 ?480,567
Financial leaseliabilities
2
CSSD, etc. 1.1~15.7 19,811 13,293
Total ?1,920,748 ?493,860
Long-term borrowings
Bankborrowings SMBC, etc. 0.7~5.3 ?902,715 ?3,521,257
Financial leaseliabilities
2
CSSD, etc. 1.1~15.7 82,402 101,771
Total ?985,117 ?3,623,028
1
Collateralizedborrowingsaresecuredbytradereceivables(Note8).
2
Leasedproperty, plant andequipment werepledgedascollateral (Note19).
(B) Maturitiesof long-termborrowingsoutstandingasof December 31, 2013, areasfollows:
(In millions of Korean won) Long-term borrowings
For the Years Ending December 31
2014 ? 1,920,748
2015 356,455
2016 559,624
2017 7,248
2018andthereafter 61,790
Total ? 2,905,865
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
55
16. Debentures
Detailsof carryingamount of debenturesasof December 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Koreanwondenominateddebentures(A) ? 198,566 ? 697,822
Foreigncurrencydenominateddebentures(B) 1,112,502 1,131,552
Total ? 1,311,068 ? 1,829,374
(A) Detailsof Koreanwondenominateddebenturesasof December 31, 2013and2012, areasfollows:
(In millions of Korean
won) Issue Date Due Date
Annual Interest Rates (%)
as of December 31, 2013 2013 2012
Unsecureddebentures 2010.6.17 2013.6.17 - - 500,000
Unsecureddebentures 2011.11.17 2014.11.17 4.1 500,000 500,000
Unsecureddebentures 2011.11.17 2016.11.17 4.2 200,000 200,000
Less: Current portion (500,000) (500,000)
Less: Discounts (1,434) (2,178)
Total 198,566 697,822
All theabovedebentureshavebeenissuedbySamsungDisplayandwill berepaiduponmaturity.
(B) Detailsof foreigncurrencydenominateddebenturesasof December 31, 2013and2012, areasfollows:
(In millions of Korean
won) Issue Date Due Date
Annual Interest Rates (%)
as of December 31, 2013 2013 2012
USdollar denominated
straight bonds
1
1997.10.2 2027.10.1 7.7
? 73,871
(US$70million)
? 80,333
(US$75million)
USdollar denominated
unsecuredbonds
2
2012.4.10 2017.4.10 1.8
1,055,300
(US$1,000million)
1,071,100
(US$1,000million)
Less: Current portion (5,277) (5,356)
Less: Discounts (11,392) (14,525)
Total ?1,112,502 ?1,131,552
1
USdollar straight bondsarerepaidannuallyfor twentyyearsafter aten-year graceperiodfromthedateof issuance. Interest is
paidsemi-annually.
2
SamsungElectronicsAmericaissueddollar denominatedunsecuredbonds. Repayment of thesedebenturesisdueonthedateof
maturityandinterest ispaidsemi-annually.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
56
(C) Maturitiesof debenturesoutstandingasof December 31, 2013areasfollows:
(In millions of Korean won)
For the Years Ending December 31 Debentures
2014 ? 505,277
2015 5,277
2016 205,277
2017 1,060,577
2018andthereafter 52,763
Total ? 1,829,171
17. Net Defined Benefit Liabilities
(A) Detailsof net definedbenefit liabilitiesrecognizedonthestatementsof financial positionasof December 31,
2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Present valueof fundeddefinedbenefit obligations ? 5,672,147 ? 4,593,284
Present valueof unfundeddefinedbenefit obligations 55,931 76,183
Subtotal 5,728,078 4,669,467
Fair valueof planassets (3,873,176) (2,939,528)
Total ? 1,854,902 ? 1,729,939
(B) Theamounts recognizedinthestatements of incomefor theyears endedDecember 31, 2013and2012, are
asfollows:
(In millions of Korean won) 2013 2012
Current servicecost ? 836,916 ? 670,123
Interest cost 82,487 58,591
Others 8,164 8,033
? 927,567 ? 736,747
(C) The amounts recognized as cost of defined contribution plan for the years ended December 31, 2013 and
2012, are?44,430millionand?31,676million, respectively.
(D) Thepensionexpenses related to defined benefit plans by lineitemrecognized onthestatements of income
for theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Cost of sales ? 376,588 ? 291,355
Sellingandadministrativeexpenses, etc. 550,979 445,392
? 927,567 ? 736,747
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
57
(E) Changesinthedefinedbenefit obligationsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Balance as of January 1 ? 4,669,467 ? 3,542,340
Current servicecost 836,916 670,123
Interest cost 226,271 194,625
Remeasurement:
Actuarial gainsor lossesarisingfromchangesin
demographicassumptions (38) 81,587
Actuarial gainsor lossesarisingfromchangesin
financial assumptions (22,870) 473,488
Others 257,724 55,396
Benefitspaid (244,186) (301,444)
Foreignexchangedifferences (18,128) (22,028)
Others 22,922 (24,620)
Balance as of December 31 ? 5,728,078 ? 4,669,467
(F) Changesinthefair valueof planassetsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Balance as of January 1 ? 2,939,528 ? 2,423,152
Expectedreturnonplanassets 143,784 136,034
Remeasurement factor of planassets (37,343) (47,333)
Contributionsbytheemployer 978,313 595,420
Benefitspaid (141,017) (155,000)
Foreignexchangedifferences (3,035) (8,812)
Others (7,054) (3,933)
Balance as of December 31 ? 3,873,176 ? 2,939,528
Expected contributions to post-employment benefit plans for the year ending December 31, 2014, are ?1,176,458
million.
(G) Planassetsasof December 31, 2013and2012, consist of asfollows:
(In millions of Korean won) 2013 2012
Equityinstruments ? - ? 59,988
Debt instruments 3,851,102 2,859,415
Others 22,074 20,125
? 3,873,176 ? 2,939,528
1
Planassetsaremostlyinvestedininstrumentswhichhaveaquotedpriceinactivemarket.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
58
(H) Theprincipal actuarial assumptionsasof December 31, 2013and2012, areasfollows:
(In %) 2013 2012
Discount rate 1.0~7.0 3.7~7.0
Salarygrowthrate 1.7~6.6 2.5~9.0
(I) The sensitivity of the defined benefit obligations as of December 31, 2013, to changes in the weighted
principal assumptionsis:
Rate of change
Discount rate
1%increases 90%
1%decreases 112%
Salarygrowthrate
1%increases 112%
1%decreases 90%
(J ) Theactual returnsonplanassetsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Actual returnonplanassets ? 106,441 ? 88,701
(K) Expectedmaturityanalysisof undiscountedpensionbenefitsasof December 31, 2013, isasfollows:
(In millions of Korean won)
Lessthan1year Between1and2
years
Between2and5
years
Between5and10
years
Total
Pensionbenefits ? 307,533 ? 318,113 ? 1,253,532 ? 3,507,267 ? 5,386,445
Theweightedaveragedurationof thedefinedbenefit obligationsis11.00years.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
59
18. Provisions
Changesintheprovisionsfor theyear endedDecember 31, 2013, areasfollows:
(In millions of Korean won)
Warranty (A)
Royalty expenses
(B)
Long-term
incentives (C) Others Total
Balanceasof J anuary1 ? 2,032,817 ? 2,773,196 ? 576,329 ? 81,040 ? 5,463,382
Charged(credited) tothe
statement of income 2,076,633 1,854,900 498,483 (6,862) 4,423,154
Payment (2,104,019) (278,961) (152,964) (16,636) (2,552,580)
Others
1
(59,439) (76,465) - (652) (136,556)
Balanceasof December 31 ? 1,945,992 ? 4,272,670 ? 921,848 ? 56,890 ? 7,197,400
1
Othersincludeeffectsof changesinforeigncurrencyexchangerates.
(A) TheCompany accrues warranty reserves for estimated costs of futureservice, repairs and recalls, based on
historical experienceandtermsof warrantyprograms.
(B) The Company makes provisions for the estimated royalty expenses under negotiation with counterparties.
Thetimingof payment dependsonthesettlement of thenegotiation.
(C) The Company has a long-term incentive plan for its executives based on a three-year management
performancecriteriaandhasmadeaprovisionfor theestimatedincentivecost for theaccruedperiod.
19. Commitments and Contingencies
(A) Guarantees
(In millions of Korean won) 2013 2012
Guaranteesof debt for housingrental
1
? 151,985 ? 151,817
1
Represent themaximumamount of debt guarantee, whichwasprovidedfor employeeswhotookdebt fromfinancial institutions
inorder tofinanceemployeehousingrental.
In addition to the guarantees described above, the Company provides guarantees for borrowings by Intellectual
KeystoneTechnology(IKT), theCompany’sassociate, toCitibankintheamount of ?31,659million(USD30million).
As of December 31, 2013, the Company’s investments in Pusan Newport are pledged as collateral against the
investee'sdebt (Note9).
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
60
(B) Lease
TheCompanyleasescertainproperty, plant andequipment under variousfinanceleasearrangements. Assetsrecorded
under finance lease agreements are included in property, plant and equipment with a net book value of ?110,655
million (2012: ?121,402 million). Depreciation expensefor thefinanceleaseassets amounted to ?10,587 million
for theyear endedDecember 31, 2013(2012: ?9,650million).
Theminimumleasepaymentsunder financeleaseagreementsandtheir present valueasof December 31, 2013and
2012, areasfollows:
(In millions of Korean won)
2013 2012
Minimum Lease
payments
Present
values
Minimum Lease
payments
Present
values
Withinoneyear ? 27,893 ? 19,811 ? 21,399 ? 13,293
Fromoneyear tofiveyears 57,508 28,213 70,310 40,216
Morethanfiveyears 95,192 54,189 108,865 61,555
Total ? 180,593 ? 102,213 ? 200,574 ? 115,064
Present valueadjustment (78,380) (85,510)
Financeleasepayables ? 102,213 ? 115,064
(C) Litigation
(1) Based on the agreement entered on August 24, 1999 with respect to Samsung Motor Inc.’s (“SMI”)
bankruptcy proceedings, SMI’s creditors (the“Creditors”) filedacivil actionagainst Mr. KunHeeLee,
chairman of the Company, and 28 Samsung Group affiliates including the Company under joint and
several liability for failing to comply with such agreement. Under the suit, the Creditors have sought
?2,450 billion (approximately USD 2.32 billion) for loss of principal on loans extended to SMI, a
separateamount for breach of theagreement, and an amount for default interest. During thecourseof
Samsung Life Insurance’s (“SLI”) Initial Public Offering (“IPO”), its shares owned by the Creditors
weredisposed of, and thepart of proceeds exceeding thepar valueof ?70,000 was deposited into an
escrowaccount (?877.6 billion, approximately USD 0.83 billion). Most of theclaims with regards to
thelawsuit havebeen withdrawn. OnJ anuary 11, 2011, theSeoul HighCourt ordered SamsungGroup
affiliates to pay to the Creditors ?600 billion (approximately USD 0.57 billion) and penalties due to
delay. In accordance with the Seoul High Court order, ?620.4 billion (which includes penalties and
interest owed) was paid to the Creditors from the funds held in escrow during J anuary 2011. The
Samsung Group affiliates and the Creditors appealed the Seoul High Court’s ruling to the Korean
SupremeCourt andtheappeal iscurrentlyinprogress.
(2) ThelitigationwithAppleInc. inmultipleregionsincludingtheUSA isongoingasof thereportingdate.
Regardingtheongoinglawsuit intheUSA, onAugust 24, 2012, thejury determinedthat theCompany
partially infringed Apple’s design and utility patent and should pay damages to Apple. On March 1,
2013, however, the J udge ordered a new trial for a certain portion of the damages, ruling that it was
originally miscalculated. As of the reporting date, the first appeal is still ongoing regarding the jury’s
verdict onNovember 21, 2013. Thefinal conclusionandtheeffect of thepatent lawsuitswithAppleare
uncertainasof thereportingdate.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
61
(3) In addition, during the normal course of business with numerous companies, the Company has been
involved in various claims, disputes, and investigations conducted by regulatory bodies. Although, the
outflowof resources andtimingof thesematters areuncertain, theCompany believes theoutcomewill
not haveamaterial impact onthefinancial conditionof theCompany.
(D) Other commitments
Asof December 31, 2013, theCompanyhasatradefinancingagreement, tradenotesreceivablediscountingfacilities,
andloanfacilitieswithaccountsreceivablepledgedascollateral with13financial institutions, includingWoori Bank,
withacombinedlimit of upto?13,309,900million.
In addition, theCompany has atradefinancing agreement with 19 financial institutions, including KoreaExchange
Bank, for up to US$3,723 million and ?83,000 million, and has loan facilities with accounts receivablepledged as
collateral with6financial institutions, includingIndustrial Bankof Korea, for upto?288,600million.
Samsung Display has a facility loan agreement with 3 financial institutions including SMBC for up to J PY 60,700
million.
Two foreign subsidiaries including SEA have a contract for issuing ABS (Asset Backed Securities) backed by
accounts receivablewithBTMU and other financial institutions for up to US$1,169 millionand other 3 subsidiaries
including SSDG haveacredit facility agreement with Bank of Chinaand other financial institutions for up to CNY
3,400millionandEUR 30million.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
62
20. Share Capital
TheCompany’stotal number of authorizedsharesis500,000,000shares(?5,000per share). TheCompanyhasissued
147,299,337sharesof commonstockand22,833,427sharesof preferredstockasof December 31, 2013, excluding
retiredshares. Duetoretirement of shares, thetotal par valueof thesharesissuedis?850,664million(common
stock?736,497million, preferredstock?114,167million), whichdoesnot agreewithpaid-incapital of ?897,514
million.
Changesinthenumber of sharesoutstandingfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In number of shares)
Number of shares of
Preferred stock Common stock Total
Balance as of January 1, 2012 19,853,734 130,386,723 150,240,457
Disposal of treasury stock through exercise of stock
option
- 191,309 191,309
Other disposal of treasurystock - 269,867 269,867
Balance as of December 31, 2012 19,853,734 130,847,899 150,701,633
Disposal of treasury stock through exercise of stock
option
- 67,222 67,222
Balance as of December 31, 2013 19,853,734 130,915,121 150,768,855
21. Retained Earnings
Retainedearningsasof December 31, 2013and2012, consist of:
(In millions of Korean won) 2013 2012
Appropriated, etc.
? 104,175,235 ? 87,915,275
Unappropriated
44,425,047 32,070,414
Total
? 148,600,282 ? 119,985,689
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
63
22. Dividends
TheCompanydeclaredcashdividendstoshareholdersof commonstockandpreferredstockasinterimdividendsfor
thesix-monthperiodsendedJ une30, 2013and2012, andasyear-enddividendsfor theyearsendedDecember 31,
2013and2012.
Detailsof interimdividendsandyear-enddividendsareasfollows:
(A) Interimdividends
(In millions of Korean won and number of shares) 2013 2012
Number of shareseligiblefor dividends
Commonstock 130,878,713shares 130,759,755shares
Preferredstock 19,853,734shares 19,853,734shares
Dividendrate 10% 10%
Dividendamount
Commonstock ? 65,439 ? 65,380
Preferredstock 9,927 9,927
Total ? 75,366 ? 75,307
(B) Year-enddividends
(In millions of Korean won and number of shares) 2013 2012
Number of shareseligiblefor dividends
Commonstock 130,915,121shares 130,847,899shares
Preferredstock 19,853,734shares 19,853,734shares
Dividendrate
Commonstock 276% 150%
Preferredstock 277% 151%
Dividendamount
Commonstock ? 1,806,629 ? 981,359
Preferredstock 274,974 149,896
Total ? 2,081,603 ? 1,131,255
(C) Dividendpayout ratio
2013 2012
Dividendpayout ratio 7.2% 5.2%
(D) Dividendyieldratio
2013 2012
Common Stock Preferred Stock Common Stock Preferred Stock
Dividendyieldratio
1 1.0% 1.4% 0.5% 1.0%
1
Theaverageclosingpricefor aweekbefore2tradingdaysprior todividenddate.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
64
23. Other Components of Equity
(A) Other componentsof equityasof December 31, 2013and2012, consist of:
(In millions of Korean won) 2013 2012
Treasurystock (7,323,432) (7,350,927)
Stockoptions 10,243 22,242
Unrealizedgainsonavailable-for-salefinancial assets 2,189,013 2,001,536
Shareof other comprehensiveincomeof associatesandjoint ventures 741,893 720,944
Foreigncurrencytranslation (3,610,654) (2,623,963)
Remeasurement of net definedbenefit liabilities (1,302,588) (1,097,228)
Others (163,548) 134,352
(9,459,073) (8,193,044)
(B) Detailsof treasurystockasof December 31, 2013and2012, areasfollows:
TheCompanyrepurchasesregisteredcommonstockandnon-votingpreferredstock, andrecognizestherepurchase
amount inother componentsof equity. Suchstock will bedistributeduponexerciseof stockoptions, etc.
2013 2012
(In millions of Korean won and
number of shares) Preferred Stock Common Stock Common Stock Preferred Stock
Number of shares 2,979,693shares 16,384,216shares 2,979,693shares 16,451,438shares
Acquisitioncost ? 621,843 ? 6,701,589 ? 621,843 ? 6,729,084
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
65
24. Share-Based Compensation
The Company has a stock option plan that provides for the granting of stock purchase options to employees or
directors who havecontributed or areexpectedto contributeto themanagement and technological innovationof the
Company. No share-basedcompensationhas beengrantedsinceDecember 20, 2005. All options currently issuedare
fullyvested.
A summaryof thetermsandthenumber of outstandingstockoptionsasof December 31, 2013isasfollows:
?Typeof stocktobeissuedthroughstockoptions: registeredcommonstock
?Grantingmethod: Issuanceof newcommonstock(useof treasurystockpossibleaswell)
?Exerciseconditions: 2or moreyearsof employeeservicesfromthedateof thegrant
?Thenumber of shares andper-shareexercisepriceof stock to beissuedthroughstock options (after theexclusion
of stockoptionsexpiredduetotermination, etc.)
Date of the Grant
February 28,
2002
March 25,
2002
March 7,
2003
April 16,
2004
December 20,
2005
Granted 988,000 121,000 368,100 590,000 10,000
Expired 53,859 12,942 37,744 53,061 -
Exercisedprior toDecember 31, 2012 934,141 108,058 314,509 438,034 5,000
Outstandingasof J anuary1, 2013 - - 15,847 98,905 5,000
Exercisedduring2013 - - 15,847 51,375 -
Outstandingasof December 31, 2013 - - - 47,530 5,000
Exerciseprice ? 329,200 ? 342,800 ? 288,800 ? 580,300 ? 606,700
Weightedaveragesharepriceat thedate
of exerciseduring2013 - - ?1,517,741 ?1,448,886 -
Exerciseperiodfromthedateof thegrant 2- 10years 2- 10years 2- 10years 2- 10years 2- 10years
Note 1: The number of shares and exercise prices are subject to adjustments resulting fromcapital increase with or without
consideration, stockdividends, stocksplits, stockconsolidations, etc.
Note 2: As of reporting date, exercise periods of stock options granted on March 16, 2000, March 9, 2001, February 28, 2002,
March25, 2002, March7, 2003, andOctober 15, 2004haveall expired, andall suchoptionshavebeenexercised.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
66
25. Expenses by Nature
Expensesbynaturefor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Rawmaterialsandgoods ? 95,070,004 ? 85,193,865
Wagesandsalaries 17,250,962 13,629,400
Pension 971,997 768,423
Depreciation 15,470,012 14,835,046
Amortization 975,401 786,970
Welfare 3,142,187 2,481,756
Commissionandservicecharges 9,124,803 6,961,701
Other expenses 49,902,288 47,397,114
Total
1
? 191,907,654 ? 172,054,275
1
Expensesaboveequal tothesumof cost of sales, andsellingandadministrativeexpensesonthestatementsof income.
26. Selling and Administrative Expenses
Sellingandadministrativeexpensesfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
1) Selling and Administrative Expenses
Wagesandsalaries ? 5,559,339 ? 4,032,848
Pension 232,676 204,929
Commissionandservicecharges 9,124,803 6,961,701
Depreciation 555,944 442,080
Amortization 401,987 353,909
Advertising 4,165,290 4,887,089
Salespromotion 8,019,462 6,055,105
Transportation 3,929,114 3,794,950
Warranty 2,967,724 3,247,757
Others 4,935,604 3,889,181
2) Research and development expenses
Total expenses
Capitalizedexpenses
14,780,432
(461,030)
11,892,434
(359,639)
Total ? 54,211,345 ? 45,402,344
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
67
27. Other Non-Operating Income and Expense
Detailsof other non-operatingincomefor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Dividendincome ? 112,159 ? 106,181
Rental income 104,608 98,462
Gainondisposal of investments 1,117,029 112,505
Gainondisposal of property, plant andequipment 110,638 147,645
Others 985,117 1,088,196
? 2,429,551 ? 1,552,989
Detailsof other non-operatingexpensefor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Lossondisposal of property, plant andequipment ? 187,863 ? 324,993
Donations 495,301 235,349
Impairment lossesonintangibleassets 108,420 216,790
Others 822,464 798,893
? 1,614,048 ? 1,576,025
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
68
28. Finance Income and Costs
Detailsof financeincomeandcostsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Finance income
Interest income
Interest incomefromloansandreceivables ? 1,342,394 ? 840,150
Interest incomefromavailable-for-salefinancial assets 9,215 5,281
Foreignexchangedifferences 6,199,517 6,452,612
Gainsonvaluationof derivatives 65,787 27,719
Gainsonderivativestransaction 397,759 510,792
? 8,014,672 ? 7,836,554
(In millions of Korean won) 2013 2012
Finance costs
Interest expense:
Interest expensefromfinancial liabilitiesmeasuredat amortizedcost ? 319,342 ? 277,512
Other financial liabilities 190,316 321,494
Foreignexchangedifferences 6,529,622 6,596,524
Lossesonvaluationof derivatives 209,311 124,344
Lossesonderivativestransaction 506,381 614,576
? 7,754,972 ? 7,934,450
TheCompanyrecognizesforeignexchangegainsandlossesarisingfromforeigncurrencytransactionsandtranslation
asfinanceincomeandcosts.
29. Income Tax
(A) Incometaxexpensefor theyearsendedDecember 31, 2013and2012, consistsof:
(In millions of Korean won) 2013 2012
Current taxes:
Current taxonprofitsfor theyear ? 7,406,736 ? 5,656,298
Adjustmentsinrespect of prior years 52,318 95,296
Deferredtaxes:
Changesinthecarryforwardof unusedtaxcredits (52,085) 235,640
Changesintemporarydifferences 501,450 19,885
Changesinthecarryforwardof unusedtaxlosses 2,805 (850)
Others (10,490) 60,654
Itemschargeddirectlytoequity (11,219) 2,809
Incometaxexpense ? 7,889,515 ? 6,069,732
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
69
(B) Thetax on theCompany’s profit beforetax differs fromthetheoretical amount that would ariseusing the
weightedaveragetaxrateapplicabletoprofitsof theCompanyasfollows:
(In millions of Korean won) 2013 2012
Incomebeforetax ? 38,364,279 ? 29,915,017
Taxcalculatedat weightedaveragetaxratesapplicable
1
9,576,241 7,664,722
Taxeffectsof:
Permanent differences (335,146) (161,762)
Temporarydifferencesfor whichnodeferredincometaxwasrecognized 1,307 (7,930)
Taxcredit (2,156,519) (1,980,710)
Subsidiaries, associatesandinterestsinjoint ventures 318,359 650,000
Impact of changesintaxrates 5,526 (3,602)
Others 479,747 (90,986)
Incometaxexpense ? 7,889,515 ? 6,069,732
Effectivetaxrate 20.56% 20.29%
1
Weighted average statutory tax rates that are applied differently for theprofits of the Company at each tax authority as of
December 31, 2013and2012.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
70
(C) Deferred income tax assets and liabilities resulting from the tax effect of temporary differences as of
December 31, 2013and2012, areasfollows:
(1) Asof December 31, 2013
Temporary Differences Deferred Income Tax Assets (Liabilities)
(In millions of Korean won)
Balance as of
January 1
Increase
(Decrease)
Balance as of
December 31
Balance as of
January 1
Increase
(Decrease)
Balance as of
December 31
Deferred tax arising from temporary differences
Special reservesappropriated
for taxpurposes ? (33,097) ? 5,312 ? (27,785) ? (8,010) ? 1,286 ? (6,724)
Revaluationof land (3,477,691) 1,587 (3,476,104) (841,601) 384 (841,217)
Investmentsinsubsidiaries, associates
andjoint ventures
1
(25,263,866) (2,555,796) (27,819,662) (3,682,268) (318,359) (4,000,627)
Depreciation 1,237,393 (402,647) 834,746 193,344 (57,968) 135,376
Accruedincome (124,177) (179,613) (303,790) (28,163) (44,682) (72,845)
Provisions, accruedexpensesandothers 10,362,208 1,983,485 12,345,693 2,556,845 596,301 3,153,146
Foreigncurrencytranslation (13,260) (168,042) (181,302) (5,967) (38,058) (44,025)
Asset impairment losses 90,656 251,433 342,089 16,524 65,375 81,899
Assetsheldfor sale - 7,527,869 7,527,869 - 1,821,744 1,821,744
Others (894,234) (10,818,680) (11,712,914) (171,750) (2,527,473) (2,699,223)
Subtotal ? (18,116,068) ? (4,355,092) ? (22,471,160) ? (1,971,046) ? (501,450) ? (2,472,496)
Deferred tax arising from carryforwards
Unusedtaxlosses ? 130,992 ? (23,764) ? 107,228 ? 27,811 ? (2,805) ? 25,006
Unusedtaxcredits 1,316,509 25,141 1,341,650 1,260,107 52,085 1,312,192
Deferred tax recognized in other comprehensive income
Valuationof available-for-salefinancial
instruments ? (2,581,628) ? (306,252) ? (2,887,880) ? (580,092) ? (84,080) ? (664,172)
Actuarial valuation 1,471,318 247,136 1,718,454 349,833 59,046 408,879
Subtotal ? (1,110,310) ? (59,116) ? (1,169,426) ? (230,259) ? (25,034) ? (255,293)
Deferredtaxassets ? 4,621,780
Deferredtaxliabilities (6,012,371)
Total ? (1,390,591)
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
71
(2) Asof December 31, 2012
Temporary Differences Deferred Income Tax Assets (Liabilities)
(In millions of Korean won)
Balance as of
January 1
Increase
(Decrease)
Balance as of
December 31
Balance as of
January 1
Increase
(Decrease)
Balance as of
December 31
Deferred tax arising from temporary differences
Special reservesappropriated
for taxpurposes ? (18,146) ? (14,951) ? (33,097) ? (4,391) ? (3,619) ? (8,010)
Revaluationof land (4,017,316) 539,625 (3,477,691) (972,191) 130,590 (841,601)
Investmentsinsubsidiaries, associates
andjoint ventures
1
(13,450,537) (11,813,329) (25,263,866) (3,032,268) (650,000) (3,682,268)
Depreciation (13,547) 1,250,940 1,237,393 (62,124) 255,468 193,344
Accruedincome (92,953) (31,224) (124,177) (21,337) (6,826) (28,163)
Provisions, accruedexpensesandothers 7,144,431 3,217,777 10,362,208 1,806,514 750,331 2,556,845
Foreigncurrencytranslation 150,908 (164,168) (13,260) 35,482 (41,449) (5,967)
Asset impairment losses 52,901 37,755 90,656 10,937 5,587 16,524
Others 779,626 (1,673,860) (894,234) 288,217 (459,967) (171,750)
Subtotal ? (9,464,633) ? (8,651,435) ?(18,116,068) ? (1,951,161) ? (19,885) ?(1,971,046)
Deferred tax arising from carryforwards
Undisposedaccumulateddeficit ? 100,401 ? 30,591 ? 130,992 ? 26,961 ? 850 ? 27,811
Taxcredit carryforwards 1,512,052 (195,543) 1,316,509 1,495,747 (235,640) 1,260,107
Deferred tax recognized in other comprehensive income
Valuationof available-for-salefinancial
instruments ?(1,316,863) ?(1,264,765) ? (2,581,628) ? (318,052) ? (262,040) ? (580,092)
Actuarial valuation 813,514 657,804 1,471,318 196,149 153,684 349,833
Subtotal ? (503,349) ? (606,961) ? (1,110,310) ? (121,903) ? (108,356) ? (230,259)
Deferredtaxassets ? 2,516,080
Deferredtaxliabilities (3,429,467)
Total ? (913,387)
1
Deferredtaxassetswerenot recognizedif it isprobablethat thetemporarydifferenceswill not reverseintheforeseeablefuture
for investmentsinsubsidiaries, associatesandjoint ventures.
The Company periodically assesses its ability to recover deferred income tax assets. In the event of a significant
uncertaintyregardingtheCompany'sultimateabilitytorecover suchassets, deferredincometaxassetsarerecognized
onlytotheextent that it isprobablethat futuretaxableprofit will beavailableagainst whichthetemporarydifferences
canbeutilized.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
72
Temporary differences whose deferred tax effects were not recognized due to the uncertainty regarding ultimate
realizabilityof suchassetsasof December 31, 2013and2012areasfollows:
(In millions of Korean won) 2013 2012
Unusedtaxlosses ? 12,196 ? -
Unusedtaxcredits 30,098 48,262
Expiry dates of unusedtax losses andunusedtax credits for whichno deferredtax asset is recognizedinthebalance
sheet areasfollows:
(In millions of Korean won) 2014 2015 2016 2017 and after
Undisposedaccumulateddeficit ? - ? - ? - ? 12,196
Taxcredit carryforwards 4,170 3,437 18,525 3,966
(D) Theliquidityanalysisof deferredtaxassetsanddeferredtaxliabilitiesisasfollows:
(In millions of Korean won) 2013 2012
Current ? (107,699) ? 1,898,481
Non-current (1,282,892) (2,811,868)
Total ? (1,390,591) ? (913,387)
30. Earnings per Share
Basicearningsper sharefor theyearsendedDecember 31, 2013and2012, arecalculatedasfollows:
(In millions of Korean won and thousands of number of shares) 2013 2012
Net incomeasreportedonthestatementsof income ? 29,821,215 ? 23,185,375
Net incomeavailablefor commonstock 25,893,396 20,130,020
Weighted-averagenumber of commonsharesoutstanding(inthousands) 130,880 130,698
Basicearningsper share(inKoreanwon) ? 197,841 ? 154,020
(In millions of Korean won and thousands of number of shares) 2013 2012
Net incomeasreportedonthestatementsof income ? 29,821,215 ? 23,185,375
Net incomeavailablefor preferredstock 3,927,819 3,055,355
Weighted-averagenumber of preferredsharesoutstanding(inthousands) 19,854 19,854
Basicearningsper preferredshare(inKoreanwon) ? 197,838 ? 153,893
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
73
Diluted earnings per shareis calculated by adjustingtheweighted averagenumber of ordinary shares outstandingto
assume conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential
ordinary shares: stock options. A calculationisdonetodeterminethenumber of sharesthat couldhavebeenacquired
at fair value(determined as theaverageannual market sharepriceof theCompany’s shares) based onthemonetary
value of the subscription rights attached to outstanding share options. The number of shares calculated as above is
comparedwiththenumber of sharesthat wouldhavebeenissuedassumingtheexerciseof theshareoptions.
Dilutedearningsper sharefor theyearsendedDecember 31, 2013and2012, arecalculatedasfollows:
(In millions of Korean won and thousands of number of shares) 2013 2012
Net incomeavailablefor commonstockandcommonstockequivalents ? 25,894,151 ? 20,131,405
Weighted-averagenumber of sharesof commonstockandcommonstock
equivalents(inthousands) 130,911 130,766
Dilutedearningsper share(inKoreanwon) ? 197,800 ? 153,950
(In millions of Korean won and thousands of number of shares) 2013 2012
Net incomeavailablefor preferredstockandpreferredstockequivalents ? 3,927,064 ? 3,053,970
Weighted-averagenumber of sharesof preferredstockandpreferredstock
equivalents(inthousands) 19,854 19,854
Dilutedearningsper preferredshare(inKoreanwon) ? 197,800 ? 153,823
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
74
31. Cash Generated from Operations
(A) Cashflowsfromoperatingactivitiesasof December 31, 2013and2012, consist of thefollowing:
(In millions of Korean won) 2013 2012
Adjustmentsfor:
Incometaxexpense ? 7,889,515 ? 6,069,732
Financeincome (2,551,623) (2,068,888)
Financecosts 1,568,663 1,755,715
Severanceandretirement benefits 971,997 768,423
Depreciation 15,470,012 14,835,046
Amortization 975,401 786,970
Baddebt expenses, etc. 282,978 205,424
Gainonvaluationof equitymethod (504,063) (986,611)
Gainondisposal of property, plant andequipment (110,638) (147,645)
Lossondisposal of property, plant andequipment 187,863 324,993
Obsolescenceandscrappingof inventories, etc. 1,045,360 1,212,222
Gainondisposal of investments (1,117,029) (112,505)
Impairment lossesonintangibleassets 108,420 216,790
Other income/expense (412,024) (100,107)
Adjustments, total ? 23,804,832 ? 22,759,559
(In millions of Korean won) 2013 2012
Changesinassetsandliabilities:
Increaseintradereceivables ? (1,993,705) ? (2,032,126)
Decrease/(increase) inother receivables 192,054 (536,202)
Increaseinadvances (144,720) (277,329)
Increaseinprepaidexpenses (321,953) (72,285)
Increaseininventories (3,097,762) (4,011,553)
Decreaseintradepayables (965,677) (465,450)
Increase/(decrease) inother payables 1,296,263 (416,870)
Increaseinadvancesreceived 49,495 88,152
Increase/(decrease) inwithholdings 323,874 (663,733)
Increaseinaccruedexpenses 2,261,910 2,183,846
Increaseinprovisions 2,009,248 1,824,693
Payment of severancebenefits (244,186) (301,444)
Increaseinplanassets (837,296) (440,420)
Others 159,210 (657,228)
Changesinnet workingcapital, total ? (1,313,245) ? (5,777,949)
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
75
(B) Significant transactions not affecting cash flows for the years ended December 31, 2013 and 2012, are as
follows:
(In millions of Korean won) 2013 2012
Valuationof available-for-salefinancial assets ? 1,271,817 ? 1,185,256
Reclassificationof constructioninprogressand machineryintransit to
property, plant andequipment 16,578,339 19,567,010
Reclassificationof investment inassociatestoassetsheldfor sale 2,716,733 -
Valuationof investmentsinassociatesandjoint ventures 20,756 (350,491)
Non-cashconsiderationtransferredfor businesscombinations - (633,708)
Reclassificationof current maturitiesof long-termborrowings 1,920,748 493,860
Reclassificationof current maturitiesof bonds 505,277 505,356
(C) TheCompany reportedcashreceiptsandpaymentsarisingfromtransactionsoccurringfrequently andshort-
termfinancial instruments, loans, andborrowingsonanet basis.
(D) Amongthenet cashusedininvestingactivities for theyear endedDecember 31, 2013, cashoutflows from
businesscombinationincludetheacquisitionof assetsandliabilitiesof NeuroLogica.
32. Financial Risk Management
TheCompany’s financial risk management focuses on minimizing market risk, credit risk, and liquidity risk arising
fromoperating activities. To mitigatetheserisks, theCompany implements and operates afinancial risk policy and
programthat closelymonitorsandmanagessuchrisks.
The finance team mainly carries out the Company’s financial risk management. With the cooperation of the
Company’sdivisions, domesticandforeignsubsidiaries, thefinanceteamperiodicallymeasures, evaluatesandhedges
financial riskandalsoestablishesandimplementstheglobal financial risk management policy.
Also, financial risk management officersaredispatchedtotheregional headquartersof eachareaincludingtheUnited
States of America, England, Singapore, China, J apan, Brazil andRussiato operatethelocal financecenter for global
financial risk management.
TheCompany’sfinancial assetsthat areunder financial risk management arecomposedof cashandcashequivalents,
short-termfinancial instruments, available-for-sale financial assets, trade and other receivables and other financial
assets. TheCompany’sfinancial liabilitiesunder financial risk management arecomposedof tradeandother payables,
borrowings, debentures, andother financial liabilities.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
76
(A) Market risk
(1) Foreignexchangerisk
TheCompany is exposedto foreignexchangerisk arisingfromvarious currency exposures, primarily withrespect to
the United States of America, European Union, South America, J apan and other Asian countries. Revenues and
expensesarisefromforeigncurrencytransactionsandexchangepositions, andthemost widelyusedcurrenciesarethe
US Dollar, EU’s EURO, J apanese Yen and Chinese Yuan. Foreign exchange risk management of the Company is
carriedout by bothSEC anditssubsidiaries. Tominimizeforeignexchangerisk arisingfromoperatingactivities, the
Company’s foreignexchangemanagement policy requires normal business transactions to beinlocal currency or for
thecash-incurrencytobematchedupwiththecash-out currency. TheCompany’sforeignexchangerisk management
policy also defines foreign exchange risk, measuring period, controlling responsibilities, management procedures,
hedgingperiodandhedgeratio.
TheCompany limits all speculativeforeign exchangetransactions and operates asystemto managereceivables and
payables denominated in foreign currency. It evaluates, manages and reports foreign currency exposures to
receivablesandpayables.
A summary of foreignassets andliabilities of theCompany, presentedinKoreanwon, as of December 31, 2013and
2012isasfollows:
(In millions of
Korean won)
2013 2012
USD EUR JPY Others USD EUR JPY Others
Financial assets ? 9,834,247 ? 1,253,898 ? 269,600 ? 1,581,019 ?12,709,235 ? 1,085,390 ? 178,373 ? 1,577,076
Financial liabilities 9,664,814 1,071,174 1,172,213 191,674 9,550,081 978,953 1,142,081 214,639
Foreigncurrencyexposuretofinancial assetsandliabilitiesof a5%currencyratechangeagainst theKoreanwonare
presentedbelow.
(In millions of Korean won) 2013 2012
Increase Decrease Increase Decrease
Financial assets ? 646,938 ? (646,938) ? 777,504 ? (777,504)
Financial liabilities (604,994) 604,994 (594,288) 594,288
Net effect 41,944 (41,944) 183,216 (183,216)
(2) Pricerisk
The Company’s investment portfolio consists of direct and indirect investments in equity securities classified as
available-for-sale, whichisinlinewiththeCompany’sstrategy.
Asof December 31, 2013and2012, apricefluctuationinrelationtomarketableequity securitiesby 1%wouldresult
in changes in other comprehensive income (before income tax) of ?43,933 million and ?44,359 million,
respectively.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
77
(3) Interest raterisk
Risk of changesininterest ratefor afloatinginterest ratefinancial instrument isdefinedastherisk that thefair value
of futurecashflowsof afinancial instrument will fluctuatebecauseof changesinmarket interest rates. TheCompany
is exposed to interest rate risk mainly through interest bearing liabilities and assets. The Company’s position with
regard to interest raterisk exposureis mainly driven by its debt obligations such as bonds, interest-bearing deposits
andissuanceof receivables. Inorder toavoidinterest raterisk, theCompany maintainsminimumexternal borrowings
by facilitatingcashpoolingsystems onaregional andglobal basis. TheCompany manages exposedinterest raterisk
viaperiodicmonitoringandhandlesriskfactorsonatimelybasis.
Thesensitivityriskof theCompanyisdeterminedbasedonthefollowingassumptions:
- Changesinmarket interest ratesthat couldimpact theinterest incomeandexpensesof floatinginterest ratefinancial
instruments
Based on the above assumption, changes to profit and net equity as a result of 1% increases in interest rate on
borrowingsarepresentedbelow:
(In millions of Korean won) 2013 2012
Increase Decrease Increase Decrease
Financial assets ? 46,025 ? (46,025) ? 78,164 ? (78,164)
Financial liabilities (22,942) 22,942 (21,864) 21,864
? 23,083 ? (23,038) ? 56,300 ? (56,300)
(B) Credit risk
Credit risk arisesduringthenormal courseof transactionsandinvestingactivitieswhereclientsor other partiesfail to
discharge an obligation. The Company monitors and sets the client’s and counterparty’s credit limit on a periodic
basisbasedontheclient’sandcounterparty’sfinancial conditions, default historyandother important factors.
Credit risk canarisefromtransactions withfinancial institutions whichincludefinancial instrument transactionssuch
ascashandcashequivalents, savings, andderivativeinstruments. Tominimizesuchrisk, theCompany transactsonly
withbanks whichhavestronginternational credit rating(S&P A andabove), andall newtransactions withfinancial
institutions with no prior transaction history areapproved, managed and monitored by theCompany’s financeteam
andthelocal financecenter. TheCompanyrequiresseparateapproval for contractswithrestrictions.
Most of the Company’s accounts receivable is adequately insured to manage any risk, therefore, the Company
estimatesitscredit risk exposuretobelimited. TheCompanyestimatesthat itsmaximumexposuretocredit risk isthe
carryingvalueof itsfinancial assets, net of impairment losses.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
78
(C) Liquidityrisk
Due to large investments made by the Company, maintaining adequate levels of liquidity risk is critical. The
Company strives to achievethis goal by periodically forecasting its capital balance, estimating required cash levels,
andmanagingincomeandexpenses.
The Company manages its liquidity risk by periodically forecasting projected cash flows. If abnormal signs are
identified, the Company works with the local finance center and provides liquidity support by utilizing a globally
integrated finance structure, such as Cash Pooling. In addition, the Company maintains a liquidity management
process whichprovides additional financial support by thelocal financecenter and theCompany. TheCashPooling
programallowssharingof surplusfundsamongentitiesandcontributestominimizingliquidityrisk andstrengthening
theCompany’scompetitivepositionbyreducingcapital operationexpensesandfinanceexpenses.
In addition, the Company mitigates liquidity risk by contracting with financial institutions with respect to bank
overdrafts and foreign trade finance and by providing payment guarantees to subsidiaries. For large scale facility
investments, liquidity risk is minimized by utilizing internal reserves and long termborrowings according to the
capital injectionschedule.
Thefollowingtableisanundiscountedcashflowanalysis for financial liabilitiesthat arepresentedonthestatements
of financial positionaccordingtotheir remainingcontractual maturity.
2013
(In millions of Korean
won)
Less than
3 months
4-6
months
7-12
months
1-5
years
More than
5 years
Financial liabilities ?33,862,896 ?1,095,285 ?4,806,477 ?2,564,769 ? 65,772
2012
(In millions of Korean
won)
Less than
3 months
4-6
months
7-12
months
1-5
years
More than
5 years
Financial liabilities ?32,257,940 ?1,690,825 ?2,371,879 ?7,006,975 ? 76,236
TheCompany’stradingportfolioof derivativeinstrumentshavebeenincludedat their fair valueof ?244,172million
(2012: ?79,212 million) within the less than three month time bucket because the contractual maturities are not
essential for anunderstandingof thetimingof thecashflows. Thesecontracts aremanagedonanet-fair valuebasis
rather than by maturity date. Net settled derivatives consist of forward exchangecontracts used by theCompany to
managetheexchangerateprofile.
Themaximumliquidityriskexposurefromthoseother thantheabovefinancial liabilities(e.g. payment guaranteesfor
affiliated companies and performance bonds) as of December 31, 2013 is ?183,644 million (December 31, 2012:
?151,817million).
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
79
(D) Capital risk management
The purpose of capital management is to maintain a sound capital structure. The Company monitors capital on the
basisof theratioof total liabilitiestototal equity. Thisratioiscalculatedbydividingtotal liabilitiesbytotal equityin
theconsolidatedfinancial statements.
TheCompany’scapital risk management policy has not changedsincethefiscal year endedDecember 31, 2012. The
CompanyhasmaintainedanA+andA1credit ratingsfromS&P andMoody’s, respectively, onitslongtermdebt.
Thetotal liabilitiestoequityratiosasof December 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Total liabilities ? 64,059,008 ? 59,591,364
Total equity 150,016,010 121,480,206
Total liabilitiestoequityratio 42.7% 49.1%
(E) Fair valuemeasurement
(1) Thefollowingtablepresentstheassetsandliabilities, bylevel, that aremeasuredat fair value:
2013
(In millions of Korean won) Level 1 Level 2 Level 3 Total balance
Derivatives ? - ? 40,552 ? - ? 40,552
Available-for-salefinancial assets
1
5,656,806 1,188,498 493,378 7,338,682
Total assets 5,656,806 1,229,050 493,378 7,379,234
Derivatives - 244,172 - 244,172
Total liabilities ? - ? 244,172 ? - ? 244,172
2012
(In millions of Korean won) Level 1 Level 2 Level 3 Total balance
Derivatives ? - ? 47,227 ? - ? 47,227
Available-for-salefinancial assets
1
5,694,730 125,994 389,195 6,209,919
Total assets 5,694,730 173,221 389,195 6,257,146
Derivatives - 79,212 - 79,212
Total liabilities ? - ? 79,212 ? - ? 79,212
1
Amount measured at cost (2013: ?388,225million, 2012: ?278,130million) is excluded as therangeof reasonablefair value
estimatesissignificant andtheprobabilitiesof thevariousestimatescannot bereasonablyassessed.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
80
Thelevelsof thefair valuehierarchyanditsapplicationtofinancial assetsandliabilitiesaredescribedbelow.
?Level 1: Quotedprices(unadjusted) inactivemarketsfor identical assetsor liabilities
?Level 2: Inputsother thanquotedpricesincludedwithinLevel 1that areobservablefor theasset or liability, either
directlyor indirectly
?Level 3: Inputsfor theasset or liabilitythat arenot basedonobservablemarket data(that is, unobservableinputs)
Thefair valueof financial instruments traded inactivemarkets is based onquoted market prices at thestatement of
financial position date. A market is regarded as active if quoted prices are readily and regularly available froman
exchange, dealer, broker, industry group, pricingservice, or regulatory agency, andthoseprices represent actual and
regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets
held by the Company is the current bid price. These instruments are included in Level 1. Instruments included in
Level 1arelistedequityinvestmentsclassifiedastradingsecuritiesor available-for-salefinancial assets.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determinedby usingvaluationtechniques. Thesevaluationtechniques maximizetheuseof observable
market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs
requiredtofair valueaninstrument areobservable, theinstrument isincludedinLevel 2.
If oneor moreof thesignificant inputsisnot basedonobservablemarket data, theinstrument isincludedinLevel 3.
Specificvaluationtechniquesusedtovaluefinancial instrumentsinclude:
?Quotedmarket pricesor dealer quotesfor similar instruments.
?Thefair valueof forwardforeignexchangecontractsisdeterminedusingforwardexchangeratesat thestatement of
financial positiondate, withtheresultingvaluediscountedbacktopresent value.
Other techniques, suchas discountedcashflowanalysis, areusedto determinefair valuefor theremainingfinancial
instruments. For tradeandother receivables, thebookvalueapproximatesareasonableestimateof fair value.
(2) ChangesinLevel 3instruments:
(In millions of Korean won)
2013 2012
Balanceasof J anuary1 ? 389,195 ? 623,739
Purchases 151,741 82,508
Disposals, etc. (46,357) (31,972)
Gainsandlossesrecognizedinother comprehensiveincome 2,615 (6,294)
Others
1
(3,816) (278,786)
Balanceasof December 31 ? 493,378 ? 389,195
1
Amount measured at cost is included as the range of reasonable fair value estimates is significant and the probabilities of the
variousestimatescannot bereasonablyassessed.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
81
(3) Valuationtechniqueandtheinputs
TheCompanyutilizesapresent valuetechniquetodiscount futurecashflowsat aproper interest ratefor corporate
bonds, government andpublicbonds, andbankdebenturesthat areclassifiedasLevel 2inthefair valuehierarchy.
TheCompanyusesabinomial pricingmodel derivedfromtheassumptionthat theunderlyingassetsfor thecurrency
forwardcontractsfollowabinomial probabilitydistribution.
Thefollowingtablepresentsthevaluationtechniqueandtheinputsusedfor major financial instrumentsclassifiedas
Level 3.
(In millions of Korean won)
Classification
Fair
Value
Valuation
Technique Level 3 Inputs
Input Range
(Weighted Average)
SamsungPetrochemical 80,347
Discountedcash
flow
Permanent growthrate -1.00%~1.00%(0%)
Weightedaveragecost of capital 6.37%~8.37%(7.37%)
SamsungGeneral
Chemicals
80,653
Discountedcash
flow
Permanent growthrate -1.00%~1.00%(0%)
Weightedaveragecost of capital 7.01%~9.01%(8.01%)
TaewonElectric 17,072
Discountedcash
flow
Permanent growthrate -1.00%~1.00%(0%)
Weightedaveragecost of capital 6.06%~8.06%(7.06%)
Pantech 53,053
Discountedcash
flow
Permanent growthrate -1.00%~1.00%(0%)
Weightedaveragecost of capital 8.81%~10.81%(9.81%)
SamsungVenture
Investment
7,021
Discountedcash
flow
Permanent growthrate -1.00%~1.00%(0%)
Weightedaveragecost of capital 7.69%~9.69%(8.69%)
Embeddedderivatives
(convertiblebonds, etc.)
13,240 Binomial model
Discount rate 6.81%~12.96%(8.34%)
Stockpricevolatility 13.77%~20.02%(17.15%)
(4) Sensitivityanalysisfor recurringfair valuemeasurementscategorizedwithinLevel 3
Sensitivityanalysisof financial instrumentsisperformedtomeasurefavorableandunfavorablechangesinthefair
valueof financial instrumentswhichareaffectedbytheunobservableparameters, usingastatistical technique. When
thefair valueisaffectedbymorethantwoinput parameters, theamountsrepresent themost favorableor most
unfavorable.
Theresultsof thesensitivityanalysisfor theeffect onprofit or lossfromchangesininputsfor eachfinancial
instrument, whichiscategorizedwithinLevel 3andsubject tosensitivityanalysis, areasfollows:
(In millions of Korean won) Favorable Changes Unfavorable Changes
Classification Profit or Loss Equity Profit or Loss Equity
Available-for-salefinancial assets
1
- 35,324 - (27,586)
Embeddedderivatives(convertiblebonds, etc.)
2
1,457 1,457 (1,499) (1,499)
Total 1,457 36,781 (1,499) (29,085)
1
For equitysecurities, changesintheir fair valuearecalculatedbyincreasingor decreasingthecorrelationbetweengrowthratio(-
1%~1%) anddiscount rate, whicharesignificant unobservableinputs.
2
For equityderivatives, changesintheir fair valuearecalculatedbyincreasingor decreasingthecorrelationbetweenstockprices
andvolatilityby10%.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
82
33. Segment Information
(A) Operatingsegment information
Thechief operatingdecisionmaker hasbeenidentifiedastheManagement Committee. TheManagement Committee
is responsible for making strategic decisions based on review of the group’s internal reporting. The Management
Committeehasdeterminedtheoperatingsegmentsbasedonthesereports.
TheManagement Committeereviews operatingprofits of eachoperatingsegment inorder toassess performanceand
tomakedecisionsabout allocatingresourcestothesegment.
The operating segments are product based and include CE, IM, Semiconductor, DP and others. Operating segment
informationfor theyear endedDecember 31, 2012hasbeenrestatedinaccordancewiththeorganizational changes.
Depreciation, amortizationof intangibleassets, andoperatingprofit werepreparedafter theallocationof internal
transactionadjustments. Total assetsandliabilitiesof eachoperatingsegment areexcludedfromthedisclosureasit
hasnot beenprovidedregularlytotheManagement Committee.
Thesegment informationprovidedtotheManagement committeefor thereportablesegmentsfor theyearsended
December 312013and2012, isasfollows:
2013 DS
(In millions of
Korean won) CE IM Total
1
Semi
conductor DP Total
1
Intercompany
elimination
within the
group Consolidated
Total segment
revenue 125,088,762 299,161,654 134,394,781 70,908,145 61,294,886 558,196,178 (329,503,511) 228,692,667
Intercompany
revenue (74,757,247) (160,344,435) (66,633,875) (33,471,566) (31,457,770) (329,503,511) 329,503,511 -
Net revenue
2
50,331,515 138,817,219 67,760,906 37,436,579 29,837,116 228,692,667 - 228,692,667
Depreciation 653,354 632,498 13,689,148 9,295,951 4,203,457 15,470,012 - 15,470,012
Amortization 93,699 188,353 416,916 294,605 106,249 975,401 - 975,401
Operatingprofit 1,673,343 24,957,741 10,000,665 6,887,978 2,980,563 36,785,013 - 36,785,013
2012 DS
(In millions of
Korean won) CE IM Total
1
Semi
conductor DP Total
1
Intercompany
elimination
within the
group Consolidated
Total segment
Revenue 117,897,781 224,920,171 136,724,256 66,976,623 69,359,762 479,499,910 (278,396,297) 201,103,613
Intercompany
revenue (66,792,679) (119,075,488) (68,436,962) (32,090,017) (36,360,406) (278,396,297) 278,396,297 -
Net revenue
2
51,105,102 105,844,683 68,287,294 34,886,606 32,999,356 201,103,613 - 201,103,613
Depreciation 578,686 484,231 13,354,303 9,087,880 4,179,088 14,835,046 - 14,835,046
Amortization 76,380 182,730 274,568 186,497 77,047 786,970 - 786,970
Operatingprofit 2,324,036 19,418,235 7,416,325 4,173,730 3,214,750 29,049,338 - 29,049,338
1
Thetotal amount includesothersnot composingoperatingsegments.
2
Net revenuebysegment includesintersegment revenuebysegment.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
83
(B) Regional information
Theregional segment informationprovidedto theManagement Committeefor thereportablesegments for theyears
ended31December 2013and2012, isasfollows:
2013
(In millions of Korean won) Korea America Europe
Asia and
Africa China
Intercompany
elimination
within the
group Consolidated
Total segment revenue 193,645,486 94,703,877 79,416,987 76,409,011 114,020,817 (329,503,511) 228,692,667
Intercompanyrevenue (170,862,177) (25,320,451) (26,738,602) (32,712,684) (73,869,597) 329,503,511 -
Revenuefrom
external customers 22,783,309 69,383,426 52,678,385 43,696,327 40,151,220 - 228,692,667
Non-current assets
1
61,881,863 7,172,187 1,024,699 2,636,552 7,436,424 (674,737) 79,476,988
1
The total of non-current assets other than financial instruments, deferred tax assets, and investments in associates and joint
ventures.
2012
(In millions of Korean won) Korea America Europe
Asia and
Africa China
Intercompany
elimination
within the
group Consolidated
Total segment revenue 179,434,349 81,440,718 75,448,403 57,246,033 85,930,407 (278,396,297) 201,103,613
Intercompanyrevenue (150,254,258) (23,277,536) (25,927,742) (21,167,278) (57,769,483) 278,396,297 -
Revenuefrom
external customers 29,180,091 58,163,182 49,520,661 36,078,755 28,160,924 - 201,103,613
Non-current assets
1
60,591,343 6,890,648 1,030,437 1,749,330 2,574,796 (622,106) 72,214,448
1
The total of non-current assets other than financial instruments, deferred tax assets, and investments in associates and joint
ventures.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
84
34. Related Party Transactions
(A) Saleandpurchasetransactions
Salesandpurchaseswithrelatedpartiesfor theyearsendedDecember 31, 2013and2012, areasfollows:
2013
(In millions of Korean won) Nameof Company
1
Sales, etc.
Disposal of
fixedassets Purchase, etc.
Purchaseof
fixedassets
Associates
SamsungSDS ? 35,166 ? 130,771 ?1,673,999 ? 369,395
SamsungElectro-Mechanics 72,897 192 2,662,680 76
SamsungSDI 52,909 - 667,658 1,258
SamsungSNS
2
11,418 - 164,093 3,973
SamsungTechwin 15,582 - 84,074 68,949
Others 412,353 - 6,042,874 284,231
Total (associates) 600,325 130,963 11,295,378 727,882
J oint ventures
SamsungCorningPrecisionMaterials 9,931 - 1,758,317 145,324
SiltronicSamsungWafer - - 195,795 -
Others 83 - 147 -
Total (joint ventures) 10,014 - 1,954,259 145,324
Other relatedparties
SamsungEverland 12,690 - 543,162 487,107
Others 112,896 - 83,058 22,942
Total (other related parties) 125,586 - 626,220 510,049
1
Transactionswithseparateentitiesthat arerelatedpartiesof theCompany
2
SamsungSNSwasacquiredbySamsungSDSin2013, andtheaboveamountsrelatetotransactionsprior totheacquisition.
.
2012
(In millions of Korean won) Nameof Company
1
Sales, etc.
Disposal of
fixedassets Purchase, etc.
Purchaseof
fixedassets
Associates
SamsungSDS ? 68,234 ? 202 ?1,508,214 ? 365,482
SamsungElectro-Mechanics 163,086 104 2,229,786 -
SamsungSDI 117,020 1 874,972 183
SamsungSNS 15,697 - 227,165 208
SamsungTechwin 25,051 - 89,889 79,076
Others 417,228 35 4,303,946 31,689
Total (associates) 806,316 342 9,233,972 476,638
J oint ventures
SamsungCorningPrecisionMaterials 20,185 14,660 2,517,028 -
SiltronicSamsungWafer - - 255,665 -
Others 639 - 28,296 -
Total (joint ventures) 20,824 14,660 2,800,989 -
Other relatedparties
SamsungEverland 8,363 281 398,621 319,459
Others 100,584 - 34,042 48
Total (other related parties) 108,947 281 432,663 319,507
1
Transactionswithseparateentitiesthat arerelatedpartiesof theCompany
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
85
(B) Balancesof receivablesandpayables
Year-endbalancesof receivablesandpayablesarisingfromsalesandpurchasesof goodsandservicesasof December
31, 2013and2012, areasfollows:
2013
(In millions of Korean won) Name of Company Receivables, etc. Payables, etc.
Associates
SamsungSDS ? 11,319 ? 479,417
SamsungElectro-Mechanics 5,972 168,494
SamsungSDI 4,863 39,207
SamsungTechwin 1,879 44,286
Others 65,714 477,446
Total (associates) 89,747 1,208,850
J oint ventures
SamsungCorningPrecisionMaterials 3,514 266,400
SiltronicSamsungWafer - 1,454
Others 3 25
Total (joint ventures) 3,517 267,879
Other relatedparties
SamsungEverland 188,982 282,777
Others 24,494 25,402
Total (other related parties) 213,476 308,179
2012
(In millions of Korean won) Name of Company Receivables, etc. Payables, etc.
Associates
SamsungSDS ? 13,651 ? 384,590
SamsungElectro-Mechanics 9,823 160,804
SamsungSDI 6,285 55,784
SamsungSNS 9,310 49,044
SamsungTechwin 1,859 18,167
Others 44,773 286,960
Total (associates) 85,701 955,349
J oint ventures
SamsungCorningPrecisionMaterials 560 380,904
SiltronicSamsungWafer - 20,595
Others 318 7,386
Total (joint ventures) 878 408,885
Other relatedparties
SamsungEverland 166,828 178,049
Others 23,012 1,597
Total (other related parties) 189,840 179,646
(C) Keymanagement compensation
Key management includes directors (executive and non-executive) and members of the Executive Committee. The
compensationpaidor payablefor employeeservicesfor theyearsendedDecember 31, 2013and2012, consistsof:
(In millions of Korean won) 2013 2012
Salariesandother short-termemployeebenefits ? 23,906 ? 10,062
Terminationbenefits 763 530
Other long-termbenefits 7,402 5,865
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
86
35. Information about Non-Controlling Interests
(A) Changesinaccumulatednon-controllinginterests
Theprofit or lossallocatedtonon-controllinginterestsandaccumulatednon-controllinginterestsof subsidiariesthat
arematerial totheCompanyfor theyearsendedDecember 31, 2013and2012, isasfollows:
2013
(In millions of Korean won)
Percentageof Non-
ControllingInterests
Balanceas
of J anuary1 Net Income Dividends Others
Balanceasof
December 31
SamsungDisplayandits
subsidiaries 15.2% 4,061,948 433,700 (1,553) 610,030 5,104,125
2012
(In millions of Korean won)
Percentageof Non-
ControllingInterests
Balanceas
of J anuary1 Net Income Dividends Others
Balanceasof
December 31
SamsungDisplayandits
subsidiaries 15.2% - 325,405 - 3,736,543 4,061,948
(B) Thesummarizedfinancial informationfor eachsubsidiarywithnon-controllingintereststhat arematerial to
theCompanybeforeintercompanyeliminationsisasfollows:
(1) Summarizedconsolidated statementsof financial position
(In millions of Korean won) Samsung Display and its subsidiaries
December 31, 2013 December 31, 2012
Current assets 14,473,616 11,605,285
Non-current assets 23,454,045 23,338,931
Current liabilities 6,115,203 6,328,757
Non-current liabilities 914,398 2,627,547
Equityattributableto: 30,898,060 25,987,912
Ownersof theparent 30,434,116 25,840,634
Non-controllinginterests 463,944 147,278
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
87
(2) Summarizedconsolidatedstatementsof comprehensiveincome
(In millions of Korean won) Samsung Display and its subsidiaries
2013 2012
Sales 29,478,707 21,737,347
Net income 2,669,623 2,329,078
Other comprehensiveincome (26,415) (82,279)
Total comprehensiveincomeattributableto: 2,643,208 2,246,799
Ownersof theparent 2,631,672 2,252,282
Non-controllinginterests 11,536 (5,483)
(3) Summarizedconsolidatedstatementsof cashflows
(In millions of Korean won) Samsung Display and its subsidiaries
2013 2012
Cashflowsfromoperatingactivities 7,748,974 6,073,334
Cashflowsfrominvestingactivities (10,321,562) (3,659,543)
Cashflowsfromfinancingactivities (1,339,815) 1,004,134
Exchangerateeffect onforeigncurrency(cash) 13,546 (7,152)
Increase(decrease) incashandcashequivalents (3,898,857) 3,410,773
Cashandcashequivalentsat beginningof period 5,341,713 1,930,940
Cashandcashequivalentsat endof period 1,442,856 5,341,713
36. Business Combination
Samsung Electronics America, the Company’s subsidiary, acquired 100% of equity shares of NeuroLogica, with a
closingdateof J anuary28, 2013andtheentitybecamepart of theconsolidationasof thesamedate.
(A) Overviewof theacquiredcompany
Nameof theacquiredcompany NeuroLogica
Headquarterslocation Danvers, MA. USA
Representativedirector EricBailey
Classificationof theacquiredcompany Non-listedcompany
Current relationshipwiththeCompany Subsidiary
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
88
(B) Purchasepriceallocation
Thefollowingtablesummarizestheconsiderationpaidfor NeuroLogica, theamountsof theassetsacquiredand
liabilitiesassumedasof theacquisitiondate.
(In millions of Korean won) Amount
I. Considerationtransferred ? 167,819
II. Identifiableassetsandliabilities
Cashandcashequivalents
664
Tradeandother receivables
7,301
Inventories
8,576
Property, plant andequipment
1,052
Intangibleassets
51,222
Tradeandother payables
(8,265)
Deferredincometaxliabilities
(8,630)
Total net identifiableassets 51,920
III. Goodwill ? 115,899
Had NeuroLogica been consolidated on J anuary 1, 2013, revenue would increase by ?1,043 million and net loss
would increase by ?403 million on the consolidated statement of income. Revenue and net loss contributed by
NeuroLogica after the consolidation date of J anuary 28, 2013 amount to ?38,646 million and ?385 million,
respectively.
37. Events after the Reporting Period
(A) OnJ anuary 1, 2014, anamendment to local incometax laws was promulgatedinRepublic of Korea, where
thecontrollingCompany isdomiciled. Thisisexpectedtoaffect themeasurementsof current tax for annual
periods beginningonor after J anuary 1, 2014andof deferredtax assets resultingfromthedeclineinfuture
taxeffectsontaxcredit carryforwards.
(B) On J anuary 15, 2014, theCompany disposed of all shares (percentageof ownership: 42.54%) of Samsung
Corning Precision Materials for USD 1,902 million and acquired 2,300 shares of convertible preferred
stocksof CorningIncorporatedfor USD2,300million.
(C) BasedontheBoardof DirectorsresolutiondatedJ anuary24, 2014, theCompanydecidedtoparticipateina
capital increase(investment amount: ?301,000million) toexpandtheproductioncapacityandtofundthe
development of biosimilarsof SamsungBiologics, arelatedpartyof theCompany.
doc_973938180.pdf
We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
CONSOLIDATED FINANCIAL STATEMENTS OF
SAMSUNG ELECTRONICS CO., LTD. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Auditors................................................................................. 1
Consolidated Financial Statements
ConsolidatedStatementsof Financial Position............................................................... 2- 4
ConsolidatedStatementsof Income................................................................................ 5
ConsolidatedStatementsof ComprehensiveIncome.................................................... 6
ConsolidatedStatementsof ChangesinEquity............................................................... 7- 10
ConsolidatedStatementsof CashFlows......................................................................... 11- 12
NotestotheConsolidatedFinancial Statements ....................................................... 13- 88
1
REPORT OF INDEPENDENT AUDITORS
TotheBoardof DirectorsandShareholdersof
SamsungElectronicsCo., Ltd.
Wehaveauditedtheaccompanyingconsolidatedfinancial statementsof SamsungElectronicsCo., Ltd.
and its subsidiaries (collectively referred to as the “Company”), which comprise the consolidated
statements of financial position as of December 31, 2013 and 2012, and the related consolidated
statements of income, comprehensive income, changes in equity and cash flow for the years then
ended. These financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion ontheseconsolidated financial statements basedon our audit.
Wedidnot audit thefinancial statementsof certainsubsidiaries, whosefinancial statementsrepresents
6.8%and7.2%of theconsolidatedtotal assets as of December 31, 2013and2012, respectively, and
25.6%and22.1%of theconsolidatedrevenues for theyear thenended, respectively. Thosefinancial
statements wereaudited by other auditors whosereports thereon havebeen furnished to us, and our
opinionexpressedherein, insofar as it relates to theamounts includedfor thosesubsidiaries, is based
solelyonthereportsof theother auditors.
Weconductedour auditsinaccordancewithauditingstandards generally acceptedintheRepublic of
Korea. Those standards require that we plan and performthe audit to obtain reasonable assurance
about whether thefinancial statementsarefreeof material misstatement. Anaudit includesexamining,
onatest basis, evidencesupportingtheamounts anddisclosures inthefinancial statements. Anaudit
alsoincludesassessingtheaccountingprinciplesusedandsignificant estimatesmadebymanagement,
as well as evaluatingtheoverall financial statement presentation. Webelievethat our audits and the
reportsof theother auditorsprovideareasonablebasisfor our opinion.
In our opinion, based on our audits, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Samsung Electronics Co., Ltd. and its
subsidiariesasof December 31, 2013and2012, andtheir financial performanceandcashflowsfor the
years then ended, in accordancewith International Financial Reporting Standards as adopted by the
Republicof Korea.
Seoul, Korea
February11, 2014
This report is effective as of February 11, 2014, the audit report date. Certain subsequent events or
circumstances, whichmay occur betweentheaudit report dateandthetimeof readingthis report, couldhavea
material impact on the accompanying financial statements and notes thereto. Accordingly, the readers of the
audit report should understand that thereis apossibility that theaboveaudit report may haveto berevised to
reflect theimpact of suchsubsequent eventsor circumstances, if any.
2
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions of Korean won, in thousands of US dollars (Note 2.28))
December 31, December 31, December 31, December 31,
Notes 2013 2012 2013 2012
KRW KRW USD USD
Assets
Current assets
Cashandcashequivalents 4, 6, 7 16,284,780 18,791,460 15,431,422 17,806,747
Short-termfinancial instruments 5, 6, 7 36,722,702 17,397,937 34,798,353 16,486,248
Available-for-salefinancial assets 6, 9 1,488,527 1,258,874 1,410,525 1,192,906
Tradeandother receivables 6, 7, 10 27,875,934 26,674,596 26,415,175 25,276,790
Advances 1,928,188 1,674,428 1,827,147 1,586,684
Prepaidexpenses 2,472,950 2,262,234 2,343,362 2,143,688
Inventories 11 19,134,868 17,747,413 18,132,160 16,817,410
Other current assets 2,135,589 1,462,075 2,023,680 1,385,459
Assetsheldfor sale 12, 37 2,716,733 - 2,574,370 -
Total current assets 110,760,271 87,269,017 104,956,194 82,695,932
Non-current assets
Available-for-salefinancial assets 6,9 6,238,380 5,229,175 5,911,475 4,955,155
Associatesandjoint ventures 12 6,422,292 8,785,489 6,085,750 8,325,110
Property, plant andequipment 13 75,496,388 68,484,743 71,540,214 64,895,995
Intangibleassets 14 3,980,600 3,729,705 3,772,008 3,534,260
Long-termprepaidexpenses 3,465,783 3,515,479 3,284,168 3,331,260
Deferredincometaxassets 29 4,621,780 2,516,080 4,379,589 2,384,232
Other non-current assets 3,089,524 1,541,882 2,927,627 1,461,085
Total assets 214,075,018 181,071,570 202,857,025 171,583,029
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
3
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions of Korean won, in thousands of US dollars (Note 2.28))
December 31, December 31, December 31, December 31,
Notes 2013 2012 2013 2012
KRW KRW USD USD
Liabilities and Equity
Current liabilities
Tradeandother payables 6 17,633,705 16,889,350 16,709,661 16,004,312
Short-termborrowings 6, 15 6,438,517 8,443,752 6,101,125 8,001,281
Advancesreceived 1,706,313 1,517,672 1,616,899 1,438,143
Withholdings 1,176,046 966,374 1,114,419 915,734
Accruedexpenses 6 11,344,530 9,495,156 10,750,052 8,997,589
Incometaxpayable 3,386,018 3,222,934 3,208,583 3,054,045
Current portionof long-term
borrowingsanddebentures 6, 15, 16 2,425,831 999,010 2,298,712 946,660
Provisions 18 6,736,476 5,054,853 6,383,470 4,789,968
Other current liabilities 467,973 343,951 443,450 325,927
Total current liabilities 51,315,409 46,933,052 48,626,371 44,473,659
Non-current liabilities
Long-termtradeandother payables 6 1,053,756 1,165,881 998,537 1,104,786
Debentures 6, 16 1,311,068 1,829,374 1,242,365 1,733,511
Long-termborrowings 6, 15 985,117 3,623,028 933,495 3,433,174
Net definedbenefit liabilities 17 1,854,902 1,729,939 1,757,701 1,639,286
Deferredincometaxliabilities 29 6,012,371 3,429,467 5,697,310 3,249,756
Provisions 18 460,924 408,529 436,771 387,121
Other non-current liabilities 1,065,461 472,094 1,009,628 447,355
Total liabilities 64,059,008 59,591,364 60,702,178 56,468,648
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
4
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions of Korean won, in thousands of US dollars (Note 2.28))
Notes
December 31, December 31, December 31, December 31,
2013 2012 2013 2012
KRW KRW USD USD
Equity attributable to owners
of the parent
Preferredstock 20 119,467 119,467 113,207 113,207
Commonstock 20 778,047 778,047 737,276 737,276
Sharepremium 4,403,893 4,403,893 4,173,119 4,173,119
Retainedearnings 21 148,600,282 119,985,689 140,813,307 113,698,180
Other componentsof equity 23 (9,459,073) (8,193,044) (8,963,398) (7,763,711)
Non-controlling interests 5,573,394 4,386,154 5,281,336 4,156,310
Total equity 150,016,010 121,480,206 142,154,847 115,114,381
Total liabilities and equity 214,075,018 181,071,570 202,857,025 171,583,029
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
5
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(In millions of Korean won, in thousands of US dollars (Note 2.28))
For the year ended December 31,
Notes 2013 2012 2013 2012
KRW KRW USD USD
Revenue 228,692,667 201,103,613 216,708,677 190,565,349
Cost of sales 25 137,696,309 126,651,931 130,480,725 120,015,096
Gross profit
90,996,358 74,451,682 86,227,952 70,550,253
Sellingandadministrativeexpenses 25, 26 54,211,345 45,402,344 51,370,553 43,023,163
Operating profit 36,785,013 29,049,338 34,857,399 27,527,090
Other non-operatingincome 27 2,429,551 1,552,989 2,302,237 1,471,609
Other non-operatingexpense 27 1,614,048 1,576,025 1,529,468 1,493,438
Shareof profit of
associatesandjoint ventures 12 504,063 986,611 477,649 934,910
Financeincome 28 8,014,672 7,836,554 7,594,686 7,425,902
Financecosts 28 7,754,972 7,934,450 7,348,595 7,518,667
Profit before income tax 38,364,279 29,915,017 36,353,908 28,347,406
Incometaxexpense 29 7,889,515 6,069,732 7,476,087 5,751,665
Profit for the year 30,474,764 23,845,285 28,877,821 22,595,741
Profit attributabletoownersof the
parent 29,821,215 23,185,375 28,258,519 21,970,411
Profit attributabletonon-controlling
interests 653,549 659,910 619,302 625,330
Earningsper sharefor profit
attributabletoownersof theparent
(inKoreanWon, in1/1000US
dollars) 30
- Basic 197,841 154,020 187,474 145,949
- Diluted 197,800 153,950 187,435 145,883
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
6
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions of Korean won, in thousands of US dollars (Note 2.28))
For the year ended December 31,
Notes 2013 2012 2013 2012
KRW KRW USD USD
Profit for the year 30,474,764 23,845,285 28,877,821 22,595,741
Other comprehensive income
Items not to be reclassified subsequently to
profit or loss :
Remeasurement of net definedbenefit
liabilities, net of tax 17, 23 (213,113) (504,120) (201,946) (477,703)
Items to be reclassified subsequently to
profit or loss :
Changesinvalueof available-for-sale
financial assets, net of tax 23 186,480 962,184 176,708 911,763
Shareof other comprehensiveincome(loss)
of associatesandjoint ventures, net of tax 23 20,756 (350,491) 19,668 (332,125)
Foreigncurrencytranslation, net of tax 23 (1,000,961) (1,824,653) (948,508) (1,729,037)
Other comprehensive loss for the year, net
of tax (1,006,838) (1,717,080) (954,078) (1,627,102)
Total comprehensive income for the year 29,467,926 22,128,205 27,923,743 20,968,639
Comprehensive income attributable to :
Ownersof theparent 28,837,590 21,499,343 27,326,438 20,372,732
Non-controllinginterests 630,336 628,862 597,305 595,907
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
7
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In millions of Korean won)
2012 KRW
Preferred
stock
Common
stock
Share
premium
Retained
earnings
Other
components
of equity
Equity
attributable
to owners of
the parent
Non-
controlling
interests Total Notes
Balance at January 1, 2012 119,467 778,047 4,403,893 97,622,872 (5,833,896) 97,090,383 4,223,247 101,313,630
Profit for theyear - - - 23,185,375 - 23,185,375 659,910 23,845,285
Changesinvalueof available-for-sale
financial assets, net of tax 9, 23 - - - - 960,688 960,688 1,496 962,184
Shareof other comprehensivelossof
associatesandjoint ventures, net of
tax 12 - - - - (350,491) (350,491) - (350,491)
Foreigncurrencytranslation, net of tax - - - - (1,789,877) (1,789,877) (34,776) (1,824,653)
Remeasurement of net definedbenefit
liabilities, net of tax 17 - - - - (506,351) (506,351) 2,231 (504,120)
Total comprehensive income (loss) - - - 23,185,375 (1,686,031) 21,499,344 628,861 22,128,205
Dividends 22 - - - (827,501) - (827,501) (373,632) (1,201,133)
Capital transactionunder common
control - - - - (1,089,835) (1,089,835) (104,395) (1,194,230)
Changesinconsolidatedentities - - - - - - 12,844 12,844
Disposal of treasurystock 23 - - - - 455,377 455,377 - 455,377
Stockoptionactivities 24 - - - - (33,071) (33,071) - (33,071)
Others - - - 4,943 (5,588) (645) (771) (1,416)
Total transactions with owners - - - (822,558) (673,117) (1,495,675) (465,954) (1,961,629)
Balance at December 31, 2012 119,467 778,047 4,403,893 119,985,689 (8,193,044) 117,094,052 4,386,154 121,480,206
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
8
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands of US dollars (Note 2.28))
2012 USD
Preferred
stock
Common
stock
Share
premium
Retained
earnings
Other
components
of equity
Equity
attributable
to owners of
the parent
Non-
controlling
interests Total Notes
Balance at January 1, 2012 113,207 737,276 4,173,119 92,507,223 (5,528,187) 92,002,638 4,001,940 96,004,578
Profit for theyear - - - 21,970,411 - 21,970,411 625,330 22,595,741
Changesinvalueof available-for-sale
financial assets, net of tax 9, 23 - - - - 910,345 910,345 1,418 911,763
Shareof other comprehensivelossof
associatesandjoint ventures, net of
tax 12 - - - - (332,125) (332,125) - (332,125)
Foreigncurrencytranslation, net of tax - - - - (1,696,083) (1,696,083) (32,954) (1,729,037)
Remeasurement of net definedbenefit
liabilities, net of tax 17 - - - - (479,816) (479,816) 2,113 (477,703)
Total comprehensive income (loss) - - - 21,970,411 (1,597,679) 20,372,732 595,907 20,968,639
Dividends 22 - - - (784,138) - (784,138) (354,053) (1,138,191)
Capital transactionunder common
control - - - - (1,032,725) (1,032,725) (98,924) (1,131,649)
Changesinconsolidatedentities - - - - - - 12,171 12,171
Disposal of treasurystock 23 - - - - 431,514 431,514 - 431,514
Stockoptionactivities 24 - - - - (31,338) (31,338) - (31,338)
Others - - - 4,684 (5,296) (612) (731) (1,343)
Total transactions with owners - - - (779,454) (637,845) (1,417,299) (441,537) (1,858,836)
Balance at December 31, 2012 113,207 737,276 4,173,119 113,698,180 (7,763,711) 110,958,071 4,156,310 115,114,381
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
9
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In millions of Korean won)
2013 KRW
Preferred
stock
Common
stock
Share
premium
Retained
earnings
Other
components
of equity
Equity
attributable
to owners of
the parent
Non-
controlling
interests Total Notes
Balance at January 1, 2013 119,467 778,047 4,403,893 119,985,689 (8,193,044) 117,094,052 4,386,154 121,480,206
Profit for theyear - - - 29,821,215 - 29,821,215 653,549 30,474,764
Changesinvalueof available-for-sale
financial assets, net of tax 9, 23 - - - - 187,477 187,477 (997) 186,480
Shareof other comprehensiveincome
(loss) of associatesandjoint
ventures, net of tax 12 - - - - 20,949 20,949 (193) 20,756
Foreigncurrencytranslation, net of
tax - - - - (986,691) (986,691) (14,270) (1,000,961)
Remeasurement of net definedbenefit
liabilities, net of tax 17 - - - - (205,360) (205,360) (7,753) (213,113)
Total comprehensive income (loss) - - - 29,821,215 (983,625) 28,837,590 630,336 29,467,926
Dividends 22 - - - (1,206,622) - (1,206,622) (42,155) (1,248,777)
Capital transactionunder common
control - - - - (312,959) (312,959) 600,042 287,083
Changesinconsolidatedentities - - - - - - (918) (918)
Disposal of treasurystock 23 - - - - 41,817 41,817 - 41,817
Stockoptionactivities 24 - - - - (11,999) (11,999) - (11,999)
Others - - - - 737 737 (65) 672
Total transactions with owners - - - (1,206,622) (282,404) (1,489,026) 556,904 (932,122)
Balance at December 31, 2013 119,467 778,047 4,403,893 148,600,282 (9,459,073) 144,442,616 5,573,394 150,016,010
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
10
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands of US dollars (Note 2.28))
2013 USD
Preferred
stock
Common
stock
Share
premium
Retained
earnings
Other
components
of equity
Equity
attributable
to owners of
the parent
Non-
controlling
interests Total Notes
Balance at January 1, 2013 113,207 737,276 4,173,119 113,698,180 (7,763,711) 110,958,071 4,156,310 115,114,381
Profit for theyear - - - 28,258,519 - 28,258,519 619,302 28,877,821
Changesinvalueof available-for-sale
financial assets, net of tax 9, 23 - - - - 177,653 177,653 (945) 176,708
Shareof other comprehensiveincome
(loss) of associatesandjoint
ventures, net of tax 12 - - - - 19,851 19,851 (183) 19,668
Foreigncurrencytranslation, net of tax - - - - (934,986) (934,986) (13,522) (948,508)
Remeasurement of net definedbenefit
liabilities, net of tax 17 - - - - (194,599) (194,599) (7,347) (201,946)
Total comprehensive income (loss) - - - 28,258,519 (932,081) 27,326,438 597,305 27,923,743
Dividends 22 - - - (1,143,392) - (1,143,392) (39,946) (1,183,338)
Capital transactionunder common
control - - - - (296,559) (296,559) 568,599 272,040
Changesinconsolidatedentities - - - - - - (870) (870)
Disposal of treasurystock 23 - - - - 39,626 39,626 - 39,626
Stockoptionactivities 24 - - - - (11,370) (11,370) - (11,370)
Others - - - - 697 697 (62) 635
Total transactions with owners - - - (1,143,392) (267,606) (1,410,998) 527,721 (883,277)
Balance at December 31, 2013 113,207 737,276 4,173,119 140,813,307 (8,963,398) 136,873,511 5,281,336 142,154,847
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
11
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of Korean won, in thousands of US dollars (Note 2.28))
For the year ended December 31,
Notes 2013 2012 2013 2012
KRW KRW USD USD
Cash flows from operating
activities
Profit for theyear 30,474,764 23,845,285 28,877,821 22,595,741
Adjustments 31 23,804,832 22,759,559 22,557,407 21,566,909
Changesinoperatingassetsand
liabilities 31 (1,313,245) (5,777,949) (1,244,428) (5,475,173)
Cashflowsfromoperatingactivities 52,966,351 40,826,895 50,190,800 38,687,477
Interest received 1,034,074 789,397 979,886 748,031
Interest paid (434,857) (576,379) (412,070) (546,175)
Dividendreceived 592,217 1,112,940 561,184 1,054,620
Incometaxpaid (7,450,345) (4,180,044) (7,059,931) (3,961,001)
Net cash generated from operating
activities 46,707,440 37,972,809 44,259,869 35,982,952
Cash flows from investing activities
Net increaseinshort-termfinancial
instruments (19,391,643) (5,965,611) (18,375,479) (5,653,000)
Net decrease(increase) inshort-term
available-for-salefinancial assets 33,663 (589,072) 31,899 (558,203)
Proceedsfromdisposal of long-term
available-for-salefinancial assets 1,691,463 106,208 1,602,827 100,642
Acquisitionof long-termavailable-
for-salefinancial assets (1,531,356) (870,249) (1,451,110) (824,646)
Proceedsfromdisposal of associates
andjoint ventures 240 41,091 227 38,938
Acquisitionof associatesandjoint
ventures (181,307) (279,022) (171,806) (264,401)
Disposal of propertyandequipment 377,445 644,062 357,666 610,312
Purchasesof propertyandequipment (23,157,587) (22,965,271) (21,944,079) (21,761,841)
Disposal of intangibleassets 4,562 61,497 4,323 58,274
Purchasesof intangibleassets (934,743) (650,884) (885,760) (616,776)
Cashoutflowsfrombusiness
combination (167,155) (464,279) (158,396) (439,950)
Others (1,490,601) (390,024) (1,412,491) (369,586)
Net cash used in investing activities (44,747,019) (31,321,554) (42,402,179) (29,680,237)
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
12
Samsung Electronics Co., Ltd. and its subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of Korean won, in thousands of US dollars (Note 2.28))
For the year ended December 31,
Notes 2013 2012 2013 2012
KRW KRW USD USD
Cash flows from financing activities
Net repayment of short-term
borrowings (1,861,536) (800,579) (1,763,987) (758,627)
Disposal of treasurystock 34,390 88,473 32,588 83,837
Proceedsfromlong-termborrowings
anddebentures 26,672 1,862,256 25,274 1,764,670
Repayment of long-termborrowings
anddebentures (1,368,436) (522,899) (1,296,727) (495,498)
Payment of dividends (1,249,672) (1,265,137) (1,184,186) (1,198,841)
Net increase(decrease) innon-
controllinginterests 281,551 (1,200,134) 266,797 (1,137,244)
Others - (26,488) - (25,101)
Net cash used in financing activities (4,137,031) (1,864,508) (3,920,241) (1,766,804)
Effect of exchangeratechangeson
cashandcashequivalents (330,070) (687,048) (312,774) (651,045)
Net increase (decrease) in cash and
cash equivalents (2,506,680) 4,099,699 (2,375,325) 3,884,866
Cash and cash equivalents
Beginning of the year 18,791,460 14,691,761 17,806,747 13,921,881
End of the year 16,284,780 18,791,460 15,431,422 17,806,747
Theaccompanyingnotesareanintegral part of theseconsolidatedfinancial statements.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13
1. General Information
1.1 Company Overview
SamsungElectronics Co., Ltd. (“SEC”) was incorporatedunder thelaws of theRepublic of Koreain1969andlisted
itssharesontheKoreaStock Exchangein1975.
SEC and its subsidiaries (collectively referred to as the “Company”) operate three business divisions: Consumer
Electronics (“CE”), Informationtechnology & Mobilecommunications (“IM”), andDeviceSolution(“DS”). TheCE
division includes digital TVs, monitors, printers, air conditioners and refrigerators and the IM division includes
mobile phones, communication system, and computers. The DS division includes products such as memory and
systemLSI in the semiconductor business (“Semiconductor”), and LCD and OLED panels in the display business
(“DP”). TheCompany is domiciled in theRepublic of Koreaand theaddress of its registered officeis Suwon, the
Republicof Korea.
These consolidated financial statements have been prepared in accordance with Korean International Financial
Reporting Standards (“K-IFRS”) 1110, Consolidated Financial Statements. SEC, as the controlling Company,
consolidates its 153 subsidiaries including Samsung Display and Samsung Electronics America. TheCompany also
appliestheequitymethodof accountingtoits36affiliates, includingSamsungSDI.
1.2 Consolidated Subsidiaries
(A) Theconsolidatedsubsidiariesasof December 31, 2013areasfollows:
Area Subsidiaries Industry
Percentage
of
ownership
1
Domestic
WorldCyber Games Cyber gamematchhosting 99.9
HighPioneer PrivateInvestment Trust #1 Technologybusinessventurecapital investments 100.0
SamsungDisplay(SDC) Manufactureandsaleof displaypanels 84.8
SU Materials Manufactureof LCDcomponents 50.0
STECO Manufactureof semiconductor components 51.0
SEMES Manufactureof semiconductor/FPD 91.3
SamsungElectronicsService Repair servicesfor electronicdevices 99.3
SamsungElectronicsSales Saleof electronicdevices 100.0
SamsungElectronicsLogitech General logisticsagency 100.0
SamsungElectronicsFootball Club Sponsoringof sportsteamandgames 100.0
SamsungMedison Medical equipment 68.5
Ray Dental CT 68.1
SamsungVentureCapital Union#6 Technologybusinessventurecapital investments 99.0
SamsungVentureCapital Union#14 Technologybusinessventurecapital investments 99.0
SamsungVentureCapital Union#20 Technologybusinessventurecapital investments 99.0
SamsungVentureCapital Union#21 Technologybusinessventurecapital investments 99.0
SamsungVentureCapital Union#22 Technologybusinessventurecapital investments 99.0
SamsungVentureCapital Union#23 Technologybusinessventurecapital investments 99.0
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14
Area Subsidiaries Industry
Percentage
of
ownership
1
America
SamsungElectronicsAmerica(SEA) Saleof electronicdevices 100.0
NexusDX (Nexus) Medical equipment 100.0
SamsungReceivables(SRC) Credit management 100.0
NeuroLogica Medical equipment 100.0
SamsungSemiconductor (SSI) Saleof semiconductor/LCD 100.0
SamsungElectronicsCanada(SECA) Saleof electronicdevices 100.0
SamsungInformationSystemsAmerica
(SISA)
R&D 100.0
Grandis R&D 100.0
SamsungMexicana(SAMEX) Manufactureof electronicdevices 100.0
SamsungInternational (SII) Manufactureof CTV/monitors 100.0
SamsungTelecommunicationsAmerica
(STA)
Saleof communicationequipment 100.0
SamsungAustinSemiconductor (SAS) Manufactureof semiconductor 100.0
SamsungElectronicsMexico(SEM) Saleof electronicdevices 99.9
SEMESAmerica(SEMESA) Semiconductor equipment 100.0
SamsungElectronicsDigital Appliance
Mexico(SEDAM)
Manufactureof electronicdevices 99.9
SamsungElectronicsLatinoamericaMiami
(SEMI)
Saleof electronicdevices 100.0
Nvelo Software 100.0
SamsungElectronicsLatinoamerica(SELA) Saleof electronicdevices 100.0
SamsungElectronicsVenezuela(SEVEN) Marketingandservices 100.0
SamsungElectronicaColombia(SAMCOL) Saleof electronicdevices 100.0
SamsungElectronicsPanama(SEPA) Consulting 100.0
SamsungElectronicadaAmazonia(SEDA) Manufactureandsaleof electronicdevices 100.0
SamsungElectronicsArgentina(SEASA) Marketingandservices 100.0
SamsungElectronicsChile(SECH) Saleof electronicdevices 100.0
SamsungElectronicsPeru(SEPR) Saleof electronicdevices 100.0
Europe
SamsungElectronics(UK) (SEUK) Saleof electronicdevices 100.0
SamsungElectronicsHolding(SEHG) HoldingCompany 100.0
SamsungSemiconductor EuropeGmbH
(SSEG)
Saleof semiconductor/LCD 100.0
SamsungElectronicsGmbH(SEG) Saleof electronicdevices 100.0
SamsungElectronicsIberia(SESA) Saleof electronicdevices 100.0
SamsungElectronicsFrance(SEF) Saleof electronicdevices 100.0
SamsungElectronicsHungarian(SEH) Manufactureandsaleof electronicdevices 100.0
SamsungElectronicsCzechandSlovak
(SECZ)
Saleof electronicdevices 100.0
SamsungElectronicsItalia(SEI) Saleof electronicdevices 100.0
SamsungElectronicsEuropeLogistics
(SELS)
Logistics 100.0
SamsungElectronicsBenelux(SEBN) Saleof electronicdevices 100.0
SamsungDisplaySlovakia(SDSK) Toll processingof LCD 100.0
SamsungElectronicsRomania(SEROM) Saleof electronicdevices 100.0
SamsungElectronicsOverseas(SEO) Saleof electronicdevices 100.0
SamsungElectronicsPolska(SEPOL) Saleof electronicdevices 100.0
SamsungElectronicsPortuguesa(SEP) Saleof electronicdevices 100.0
SamsungElectronicsNordic(SENA) Saleof electronicdevices 100.0
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15
Area Subsidiaries Industry
Percentage
of
ownership
1
SamsungSemiconductor Europe(SSEL) Saleof semiconductor/LCD 100.0
SamsungElectronicsAustria(SEAG) Saleof electronicdevices 100.0
Europe
(Cont.)
SamsungElectronicsSlovakia(SESK) Manufactureof CTV/monitors 100.0
SamsungElectronicsEuropeHolding
(SEEH)
HoldingCompany 100.0
SamsungElectronicsPolandManufacturing
(SEPM)
Manufactureof homeappliances 100.0
SamsungElectronicsGreece(SEGR) Saleof electronicdevices 100.0
SamsungNanoradioDesignCenter (SNDC) R&D 100.0
NanoradioHellas R&D 100.0
SonoAceDeutschland(SMDE) Medical equipment 100.0
SamsungMedisonEurope(SMNL) Medical equipment 100.0
NanogenRecognomics(Nanogen) Medical equipment 60.0
SamsungElectronicsRus(SER) Marketing 100.0
SamsungElectronicsRusCompany(SERC) Saleof electronicdevices 100.0
SamsungElectronicsUkraine(SEU) Marketing 100.0
SamsungElectronicsBaltics(SEB) Saleof electronicdevices 100.0
SamsungElectronicsUkraineCompany
(SEUC)
Saleof electronicdevices 100.0
SamsungR&DInstituteRus(SRR) R&D 100.0
SamsungElectronicsKazakhstan(SEK) Marketing 100.0
SamsungElectronicsKZandCentral Asia
(SEKZ)
Saleof electronicdevices 100.0
SamsungElectronicsRusKaluga(SERK) Manufactureof CTV 100.0
SamsungRussiaServiceCentre(SRSC) Services 100.0
SamsungElectronics(London) Limited
(SEL)
HoldingCompany 100.0
SamsungDenmarkResearchCenter
(SDRC)
R&D 100.0
SamsungFranceResearchCenter (SFRC) R&D 100.0
SamsungCambridgeSolutionCentre
(SCSC)
R&D 100.0
SamsungElectronicsSwitzerlandGmbH
(SESG)
Saleof electronicdevices 100.0
MiddleEast
andAfrica
SamsungElectronicsWest Africa(SEWA) Marketing 100.0
SamsungElectronicsEast Africa(SEEA) Marketing 100.0
SamsungGulf Electronics(SGE) Saleof electronicdevices 100.0
SamsungElectronicsEgypt (SEEG) Manufactureof CTV/monitors 100.0
SamsungElectronicsIsrael (SEIL) Marketing 100.0
SamsungElectronicsTunisia(SETN) Marketing 100.0
SamsungElectronicsPakistan(SEPAK) Marketing 100.0
SamsungElectronicsSouthAfrica(SSA) Saleof electronicdevices 100.0
SamsungElectronicsTurkey(SETK) Saleof electronicdevices 100.0
SamsungSemiconductor Israel R&DCenter
(SIRC)
R&D 100.0
SamsungElectronicsLevant (SELV) Saleof electronicdevices 100.0
SamsungElectronicsMorocco(SEMRC) Saleof electronicdevices 100.0
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16
Area Subsidiaries Industry
Percentage
of
ownership
1
China
SamsungDisplayDongguan(SDDG) Manufactureof LCD 100.0
SamsungDisplayTianjin(SDTJ ) Manufactureof LCD 95.0
SamsungElectronicsHongKong(SEHK) Saleof electronicdevices 100.0
SuzhouSamsungElectronics(SSEC) Manufactureof homeappliances 88.3
SamsungSuzhouElectronicsExport
(SSEC-E)
Manufactureof homeappliances 100.0
Samsung(China) Investment (SCIC) Saleof electronicdevices 100.0
SamsungMobileR&DCenter China-
Guangzhou(SRC-Guangzhou)
R&D 100.0
SamsungTianjinMobileDevelopment
Center (STMC)
R&D 100.0
SamsungNetworkR&DCenter China-
Shenzhen(SRC-Shenzhen)
R&D 100.0
SamsungElectronicsSuzhouSemiconductor
(SESS)
Toll processingof semiconductor 100.0
SamsungElectronics(Shandong) Digital
Printing(SSDP)
Manufactureof printers 100.0
SamsungElectronicsHuizhou(SEHZ) Manufactureof electronicdevices 99.9
TianjinSamsungElectronics(TSEC) Manufactureof CTV/monitors 91.2
SamsungElectronicsTaiwan(SET) Saleof electronicdevices 100.0
BeijingSamsungTelecomR&DCenter
(BST)
R&D 100.0
TianjinSamsungTelecomTechnology
(TSTC)
Manufactureof communicationequipment 90.0
Shanghai SamsungSemiconductor (SSS) Saleof semiconductor/LCD 100.0
SamsungElectronicsSuzhouComputer
(SESC)
Manufactureof electronicdevices 100.0
SamsungDisplaySuzhou(SDSZ) Toll processingof LCD 100.0
SamsungSuzhouLCD(SSL) Manufactureof LCD 60.0
ShenzhenSamsungElectronics
Telecommunication(SSET)
Manufactureof communicationequipment 95.0
SamsungElectronicsShanghai
Telecommunication(SSTC)
Saleof mobilecommunicationandnetwork
equipment
100.0
SamsungSemiconductor (China) R&D
(SSCR)
R&D 100.0
SamsungElectronicsChinaR&DCenter
(SCRC)
R&D 100.0
Samsung(China) Semiconductor (SCS) Manufactureof semiconductor 100.0
SamsungElectronicsHainanFiberoptics
(SEHF)
Manufactureof optical fiber/cable 100.0
SamsungElectronics(Beijing) Service
(SBSC)
Services 100.0
SamsungMedisonShanghai Medical
Instrument (SMS1)
Medical equipment 100.0
MedisonMedical Equipment (Shanghai)
(MMS)
Medical equipment 100.0
TianjinSamsungLED(TSLED) Manufactureof LED 100.0
TianjinSamsungOpto-Electronics(TSOE) Manufactureof cameras/camcorders 90.0
SamsungR&DInstituteChina-Xian
(SRC-Xian)
R&D 100.0
SEMES(Xian) Semiconductor equipment 100.0
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17
Area Subsidiaries Industry
Percentage
of
ownership
1
Rest of Asia
SamsungJ apan(SJ C) Saleof electronicdevices 100.0
SamsungR&DInstituteJ apan(SRJ ) R&D 100.0
SamsungElectronicsJ apan(SEJ ) Saleof electronicdevices 100.0
SamsungElectronicsDisplay(M) (SDMA) Manufactureandsaleof electronicdevices 100.0
SamsungElectronics(M) (SEMA) Manufactureof homeappliances 100.0
SamsungVinaElectronics(SAVINA) Manufactureandsaleof electronicdevices 100.0
SamsungAsiaPrivate(SAPL) Saleof electronicdevices 100.0
SamsungIndiaElectronics(SIEL) Manufactureandsaleof electronicdevices 100.0
SamsungR&DInstituteIndia-Bangalore
(SRI-B)
R&D 100.0
SamsungElectronicsAustralia(SEAU) Saleof electronicdevices 100.0
SamsungElectronicsIndonesia(SEIN) Manufactureandsaleof electronicdevices 100.0
SamsungTelecommunicationsIndonesia
(STIN)
Saleandservicesof communicationsystems 99.0
Thai SamsungElectronics(TSE) Manufactureandsaleof electronicdevices 91.8
SamsungElectronicsPhilippines(SEPCO) Saleof electronicdevices 100.0
SamsungMalaysiaElectronics(SME) Saleof electronicdevices 100.0
SamsungR&DInstituteBangladesh
(SRBD)
R&D 100.0
SamsungElectronicsVietnam(SEV) Manufactureof electronicdevices 100.0
SamsungTelecommunicationsMalaysia
(STM)
Communicationsystemservices 100.0
SamsungElectronicsVietnam
THAINGUYEN (SEVT)
Manufactureof communicationequipment 100.0
SamsungMedisonIndia(SMIN) Medical equipment 100.0
MedisonMedical Systems(India) (MI) Medical equipment 100.0
SamsungElectronicsNewZealand(SENZ) Saleof electronicdevices 100.0
1
OwnershiprepresentstheCompany’sownershipof thevotingrightsineachentity.
(B) A summaryof financial dataof major consolidatedsubsidiariesisasfollows:
(1) 2013
2013
(In millions of Korean won) Assets Liabilities Sales
Net Income
(Loss)
SamsungDisplay(SDC) 35,754,894 6,682,229 29,386,907 2,400,779
SamsungElectronicsAmerica(SEA) 12,248,560 7,262,519 14,321,018 70,690
Samsung(China) Investment (SCIC) 8,406,438 6,780,610 25,605,822 743,369
SamsungSemiconductor (SSI) 7,346,339 3,991,768 17,932,937 39,289
SamsungAustinSemiconductor (SAS) 6,393,348 3,467,968 2,409,773 60,980
SamsungElectronicsEuropeHolding(SEEH) 5,780,302 4,025,760 - (17,863)
SamsungElectronicsVietnam(SEV) 5,625,759 1,493,868 26,594,578 3,087,252
SamsungTelecommunicationsAmerica(STA) 4,735,432 4,085,299 21,387,737 173,510
SamsungElectronicsHuizhou(SEHZ) 4,599,200 1,802,686 22,644,923 1,012,728
Samsung(China) Semiconductor (SCS) 3,752,682 1,284,560 - (40,537)
SamsungElectronicadaAmazonia(SEDA) 3,429,136 1,658,072 7,852,428 920,157
TianjinSamsungTelecomTechnology(TSTC) 2,939,027 1,415,277 15,293,633 767,822
SamsungAsiaPrivate(SAPL) 2,425,585 1,099,521 1,558,990 674,510
SamsungIndiaElectronics(SIEL) 1,924,832 1,195,824 6,737,419 324,171
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18
2013
(In millions of Korean won) Assets Liabilities Sales
Net Income
(Loss)
SamsungElectronicsEuropeLogistics(SELS) 1,903,892 1,806,486 14,543,524 7,613
SamsungElectronicsSlovakia(SESK) 1,764,078 317,224 4,561,795 140,825
SamsungElectronicsMexico(SEM) 1,554,638 1,311,133 3,261,067 9,886
Thai SamsungElectronics(TSE) 1,476,296 373,181 5,033,203 222,389
SamsungSuzhouLCD(SSL) 1,463,589 379,118 18,892 12,067
SamsungElectronicsRusCompany(SERC) 1,410,054 1,107,915 5,809,646 (11,137)
SamsungElectronics(UK) (SEUK) 1,393,507 705,504 6,075,490 92,969
SamsungElectronicsTaiwan(SET) 1,390,404 1,141,842 3,909,546 30,802
Shanghai SamsungSemiconductor (SSS) 1,310,109 1,005,056 15,937,922 130,082
SamsungElectronicsBenelux(SEBN) 1,290,124 322,622 2,700,887 25,233
SamsungElectronicsHungarian(SEH) 1,249,691 253,536 3,272,358 103,658
(2) 2012
2012
(In millions of Korean won) Assets Liabilities Sales
Net Income
(Loss)
SamsungDisplay(SDC) 33,791,814 9,122,941 22,304,545 2,079,916
SamsungElectronicsAmerica(SEA) 11,432,490 6,598,643 12,430,205 201,790
SamsungAustinSemiconductor (SAS) 6,728,824 3,819,196 3,063,343 (86,815)
SamsungSemiconductor (SSI) 5,502,929 2,136,789 17,325,969 20,797
Samsung(China) Investment (SCIC) 5,407,272 4,519,921 13,796,191 264,269
SamsungTelecommunicationsAmerica(STA) 5,009,772 4,516,706 15,308,222 109,896
SamsungElectronicsEuropeHolding(SEEH) 4,377,597 3,068,900 - 7,856
SamsungElectronicsVietnam(SEV) 3,416,148 1,498,575 14,599,505 854,250
SamsungElectronicsHuizhou(SEHZ) 3,275,716 1,496,513 15,343,968 700,435
SamsungElectronicadaAmazonia(SEDA) 2,556,334 1,564,590 6,145,530 198,552
TianjinSamsungTelecomTechnology(TSTC) 2,234,437 1,227,917 10,697,834 551,682
SamsungElectronicsTaiwan(SET) 2,117,243 1,885,749 4,967,564 38,298
Shanghai SamsungSemiconductor (SSS) 1,998,989 1,824,247 12,584,108 60,991
SamsungElectronicsRusCompany(SERC) 1,705,108 1,367,484 6,712,179 21,832
SamsungElectronicsSlovakia(SESK) 1,696,474 426,980 5,279,531 147,665
SamsungJ apan(SJ C) 1,570,232 1,382,927 6,021,986 26,503
SamsungSemiconductor EuropeGmbH(SSEG) 1,569,684 1,556,757 5,191,270 (32)
SamsungElectronicsEuropeLogistics(SELS) 1,529,851 1,443,264 12,873,583 29,372
SamsungIndiaElectronics(SIEL) 1,449,983 964,580 5,089,445 316,994
Thai SamsungElectronics(TSE) 1,447,777 463,908 4,799,886 295,994
SamsungElectronics(UK) (SEUK) 1,349,828 763,081 5,722,969 74,329
SamsungElectronicsHungarian(SEH) 1,301,842 416,616 3,542,522 153,961
SamsungElectronicsRusKaluga(SERK) 1,296,147 465,344 2,348,160 194,169
SamsungElectronicsHongKong(SEHK) 1,294,473 1,067,647 2,362,833 83,950
SamsungElectronicsMexico(SEM) 1,291,398 1,053,329 2,814,961 37,902
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19
(C) Changesinscopefor consolidation
(1) Subsidiariesnewlyincludedintheconsolidationfor theyear endedDecember 31, 2013:
Area Subsidiaries Description
America
NeuroLogica
Intellectual KeystoneTechnology(IKT)
Acquisitionof shares
Incorporation
Europe SamsungElectronicsSwitzerlandGmbH(SESG) Incorporation
Asia
SamsungElectronicsVietnamTHAINGUYEN (SEVT) Incorporation
SamsungElectronicsNewZealand(SENZ) Incorporation
China
SamsungNetworkR&DCenter China-Shenzhen(SRC-Shenzhen) Incorporation
SamsungR&DInstituteChina-Xian(SRC-Xian) Incorporation
SEMES(Xian) Incorporation
(2) Subsidiariesexcludedfromtheconsolidationfor theyear endedDecember 31, 2013:
Area Subsidiaries Description
Domestic
SECRON Merger
GES Merger
America
NewtonSub Merger
SamsungMedisonAmerica(SMUS) Liquidation
Deltapoint CardiacDiagnostics(Deltapoint) Liquidation
Intellectual KeystoneTechnology(IKT) Disposal of shares
mSpot Merger
SamsungElectronicsCorporativo(SEC) Merger
SamsungMedisonBrasil (SMBR) Merger
Europe
SamsungTelecoms(UK) (STUK) Liquidation
SamsungLCDNetherlandsR&DCenter (SNRC) Disposal
SamsungLCDNetherlandsR&DCenter UK (SNRC (UK)) Disposal
General RF Modules Liquidation
SamsungMedisonFrance(SMFR) Liquidation
SamsungOpto-ElectronicsGmbH(SOG) Liquidation
SamsungMedisonItalia(SMIT) Liquidation
Asia
SamsungElectronicsPhilippinesManufacturing(SEPHIL)
BatinoRealtyCorporation(BRC)
Disposal
Disposal
TNP Small/MediumSize& VentureEnterpriseGrowth
PromotionInvestment LimitedPartnership(TSUNAMI)
Reclassifiedintoanassociatefroma
subsidiary
China
SamsungLCDNetherlandsR&DCenter HK (SNRC (HK)) Disposal
Medison(Shanghai) (SMS2) Liquidation
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20
2. Summary of Significant Accounting Policies
Theprincipal accountingpoliciesappliedinthepreparationof theseconsolidatedfinancial statementsareset out
below. Thesepolicieshavebeenconsistentlyappliedtoall theyearspresented, unlessotherwisestated.
2.1 Basis of Presentation
TheCompany has prepared theconsolidated financial statements in accordancewith Korean International Financial
Reporting Standards (“K-IFRS”). International Financial Reporting Standards (IFRS) have been adopted by the
KoreanAccountingStandardsBoardasK-IFRS basedonstandardsandinterpretationspublishedby theInternational
AccountingStandardsBoard.
K-IFRS permits the use of critical accounting estimates in the preparation of the financial statements and requires
management judgments in applying accounting policies. Footnote 3 explains where more complex and higher
standardsof judgment or critical assumptionsandestimatesarerequired.
2.2 Changes in Accounting Policy and Disclosures
(A) NewandamendedstandardsadoptedbytheCompany
The Company applied the following amended and enacted standards for the annual period beginning on J anuary 1,
2013:
K-IFRS 1110, ‘Consolidated Financial Statements’
Thestandardintroducesasinglecontrol concept andprovidesaspecificguidancefor thecontrol. Theadoptionof this
standarddoesnot haveanimpact onconsolidationscopeintheconsolidatedfinancial statements.
K-IFRS 1111, ‘Joint Arrangements’
Thestandardreflectsthesubstanceof joint arrangementsandfocusesontherightsandobligationsof thepartiestothe
joint arrangements rather than on the legal forms of the arrangements. J oint arrangements are classified into joint
operations or joint ventures. The adoption of this standard does not have a material impact on the consolidated
financial statements.
K-IFRS 1112, ‘Disclosure of Interests in Other Entities’
The standard provides disclosure requirements for all types of equity investments in other entities including
subsidiaries, joint arrangements, associatesandunconsolidatedstructuredentities.
K-IFRS 1113, ‘Fair Value Measurement’
Thestandardprovidesaprecisedefinitionof fair value, andasinglesourceof fair valuemeasurement anddisclosure
requirements for use across K-IFRS. The adoption of this standard does not have a material impact on the
consolidatedfinancial statements.
K-IFRS 1027, ‘Separate Financial Statements’
The standard contains accounting treatments and requirements for investments in subsidiaries, associates, and joint
venturesrelatingonlytoseparatefinancial statementsof theCompany.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21
(B) NewandamendedstandardsearlyadoptedbytheCompany
Amendment to K-IFRS 1036, ‘Impairment of Assets’
Theamendment reflectsthechangeindisclosurerequirement of therecoverableamount for eachcash-generatingunit
including goodwill or intangible assets with indefinite useful lives. The amendment requires disclosure of the
recoverable amount only if the entity has recognized impairment losses or reversals of impairment losses. For
consistency, the amendment also requires additional disclosures when the recoverable amount of impaired assets is
based on fair value less costs of disposal. The amendment to this standard does not have a material impact on the
consolidatedfinancial statements.
Amendments to K-IFRS 1110, ‘Consolidated Financial Statements’, K-IFRS 1112, ‘Disclosure of Interests in Other
Entities’, and K-IFRS 1027, ‘Separate Financial Statements’
The amendments define an investment entity and require a parent that is an investment entity to measure its
investments in particular subsidiaries at fair valuethrough profit or loss instead of presenting consolidated financial
statements. Theseamendmentsdonot applytoaparent of aninvestment entityif theparent itself isnot aninvestment
entity. The amendments to K-IFRS 1110 and K-IFRS 1027 do not have a material impact on the consolidated
financial statements.
(C) Newandamendedstandardsnot adoptedbytheCompany
Newstandards, amendments and interpretations issued but not effective for the financial year beginning J anuary 1,
2013andnot earlyadoptedareasfollows:
Amendment to K-IFRS 1032, ‘Financial Instruments: Presentation’
Thestandardprovidesthat theright tooffset must not becontingent onafutureevent andmust belegallyenforceable
inall of circumstances; andif anentity cansettleamounts inamanner suchthat outcomeis, ineffect, equivalent to
net settlement, the entity will meet the net settlement criterion. This amendment is effective for annual periods
beginningonor after J anuary 1, 2014, andtheCompany is assessingtheimpact of applicationof this amendment on
itsconsolidatedfinancial statements.
Enactment of K- IFRIC Interpretations 2121, ‘Levies’
Theinterpretationrequires that theliability topay alevy is recognizedwhentheactivity that triggersthepayment of
the levy occurs, as identified by the legislation (the obligating event). This interpretation is effective for annual
periodsbeginningonor after J anuary1, 2014, withearlyadoptionpermitted. TheCompanyisassessingtheimpact of
applicationof thisinterpretationonitsconsolidatedfinancial statements.
2.3 Consolidation
The Company prepares annual consolidated financial statements in accordance with K-IFRS 1110, ‘Consolidated
Financial Statements’
(A) Subsidiaries
Subsidiaries areall entities (including special purposeentities) over which theCompany has control. TheCompany
controlsthecorrespondinginvesteewhenit isexposed, or hasrights, tovariablereturnsfromitsinvolvement withthe
investeeandhas theability to affect thosereturns throughits power over theinvestee. Consolidationof asubsidiary
begins fromthedatetheCompany obtains control of asubsidiary andceases whentheCompany loses control of the
subsidiary.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22
TheCompany applies theacquisition method to account for business combinations. Theconsiderationtransferred is
measured at the fair values of the assets transferred, and identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are initially measured at their fair values at the acquisition date. The
Companyrecognizesanynon-controllinginterest intheacquireeonanacquisition-by-acquisitionbasisintheevent of
liquidation at thenon-controlling interest’s proportionateshareof therecognized amounts of acquiree’s identifiable
net assets. Acquisition-relatedcostsareexpensedasincurred.
Goodwill isrecognizedastheexcessof (1) theaggregateof i) theconsiderationtransferred, ii) theamount of anynon-
controlling interest in the acquiree and iii) the acquisition-date fair value of the Company’s previously held equity
interest intheacquireeover (2) thenet identifiableassetsacquired. If theaggregateamount in(1) islessthanthefair
valueof theacquiree’snet assetsin(2), thedifferenceisrecognizedinprofit or loss.
Balances of receivables and payables, income and expenses and unrealized gains on transactions between the
Company subsidiaries are eliminated. Accounting policies of subsidiaries are changed where necessary to ensure
consistencywiththepoliciesadoptedbytheCompany.
(B) Changesinownershipinterestsinsubsidiarieswithout changeof control
Transactionswithnon-controllingintereststhat donot result inlossof control areaccountedfor asequitytransactions
– that is, as transactions with the owners in their capacity as owners. The difference between fair value of any
considerationpaidandtherelevant shareacquiredof thecarryingvalueof net assets of thesubsidiary is recordedin
equity. Gainsor lossesondisposalstonon-controllinginterestsarealsorecordedinequity.
(C) Disposal of subsidiaries
If theCompanylosescontrol of asubsidiary, anyinvestment continuouslyretainedinthesubsidiaryisre-measuredat
its fair valueat thedatewhen control is lost and any resultingdifferences arerecognized inprofit or loss. Suchfair
valuebecomestheinitial carryingamount for thesubsequent measurement of theretainedinterest accountedfor asan
associate, joint venture, or financial asset. In addition, any amounts previously recognized in other comprehensive
income in respect of such entity are accounted for as if the Company had directly disposed of the related assets or
liabilities.
(D) Non-controllinginterests
Each component of profit or loss and other comprehensiveincomeis attributed to owners of theparent and to non-
controllinginterests. Total comprehensiveincomeisattributedtoownersof theparent andtonon-controllinginterests
evenif thisresultsinanegativebalanceof non-controllinginterests
(E) Associates
Associates areall entities over whichtheCompany has significant influence, generally investees of whichfrom20%
to50%of votingstock isownedbytheCompany. Investmentsinassociatesareinitiallyrecognizedat acquisitioncost
usingtheequity method. Unrealizedgains ontransactions betweentheCompany andits associates areeliminatedto
the extent of the Company’s interest in the associates. If there is any objective evidence that the investment in the
associateisimpaired, theCompany recognizesthedifferencebetweentherecoverableamount of theassociateandits
bookvalueasimpairment loss.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23
(F) J oint arrangements
A joint arrangement of whichtwoor morepartieshavejoint control isclassifiedaseither ajoint operationor ajoint
venture. A joint operator hasrightstotheassets, andobligationsfor theliabilities, relatingtothejoint operationand
recognizestheassets, liabilities, revenuesandexpensesrelatingtoitsinterest inajoint operation. A joint venturer has
rightstothenet assetsrelatingtothejoint ventureandaccountsfor that investment usingtheequitymethod.
2.4 Foreign Currency Translation
(A) Functional andpresentationcurrency
Items included in thefinancial statements of eachof theCompany’s entities aremeasured usingthecurrency of the
primary economic environment in whicheachentity operates (the“functional currency”). Theconsolidatedfinancial
statementsarepresentedinKoreanwon, whichistheCompany’sfunctional andpresentationcurrency.
(B) Transactionsandbalances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of thetransactions or valuationwhereitems arere-measured. Foreignexchangegains andlosses resultingfrom
the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and
liabilitiesdenominatedinforeigncurrenciesarerecognizedinprofit or loss.
Exchangedifferences arisingonnon-monetary financial assets andliabilities suchas equity instruments at fair value
throughprofit or loss and available-for-saleequity instruments arerecognized inprofit or loss and included inother
comprehensiveincome, respectively, aspart of thefair valuegainor loss.
(C) Translationintothepresentationcurrency
The results and financial position of all the foreign entities that have a functional currency different from the
presentationcurrencyof theCompanyaretranslatedintothepresentationcurrencyasfollows:
Assets andliabilities for eachstatement of financial positionpresentedaretranslatedat theclosingrateat theendof
thereportingdate.
Incomeandexpensesfor eachstatement of incomearetranslatedat averageexchangerates, unlessthisaverageisnot
a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
incomeandexpensesaretranslatedat therateonthedatesof thetransactions.
All resultingexchangedifferencesarerecognizedinother comprehensiveincome.
On consolidation, exchange differences arising fromthe translation of the net investment in foreign operations are
recognized in other comprehensiveincome. When aforeign operation is partially disposed of or sold, theexchange
differences that wererecordedinequity arereclassifiedas part of gains andlosses ondispositioninthestatement of
income. When the Company loses control over foreign subsidiaries, theexchangedifferences that wererecorded in
equityarereclassifiedintoprofit or losswhensuchgainor lossondispositionisrecognized.
Anygoodwill arisingontheacquisitionof aforeignoperationandanyfair valueadjustmentsaretreatedastheforeign
operation’s assets and liabilities. Such goodwill is expressed in the foreign operation’s functional currency and is
translatedat theclosingrate. Exchangedifferencesarerecognizedinother comprehensiveincome.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24
2.5 Cash and Cash Equivalents
Cashand cashequivalents includecashonhand, deposits held at call withbanks, and other short-termhighly liquid
investments that arereadily convertibleto aknownamount of cashandaresubject to aninsignificant risk of change
invalue.
2.6 Financial Assets
(A) Classification
TheCompany classifies its financial assets inthefollowingcategories: financial assets at fair valuethroughprofit or
loss, loansandreceivables, available-for-salefinancial assets, andheld-to-maturity financial assets. Theclassification
depends on the terms of the instruments and purpose for which the financial assets were acquired. Management
determinestheclassificationof itsfinancial assetsat initial recognition.
(1) Financial assetsat fair valuethroughprofit or loss
Financial assetsat fair valuethroughprofit or lossarefinancial assetsheldfor trading. A financial asset isclassifiedin
this category if acquired principally for the purpose of selling in the short-term. Derivatives not subject to hedge
accountingandderivativesseparatedfromfinancial instrumentssuchasembeddedderivativesarealsocategorizedas
heldfor trading. Assetsinthiscategoryareclassifiedascurrent assets.
(2) Loansandreceivables
Loans andreceivables arenon-derivativefinancial assets withfixedor determinablepayments that arenot quotedin
anactivemarket. Theyareincludedincurrent assets, except for thosewithmaturitiesgreater than12monthsafter the
endof thereportingperiodwhichareclassifiedasnon-current assets.
(3) Available-for-salefinancial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in
any of the other categories. They are included in non-current assets unless an investment matures or management
intendstodisposeof it within12monthsof theendof thereportingperiod.
(B) Recognitionandmeasurement
Regular purchasesandsalesof financial assetsarerecognizedonthetradedate. At initial recognition, financial assets
are measured at fair value plus, in the case of financial assets not carried at fair value through profit or loss,
transactioncosts. Transaction costs of financial assets carried at fair valuethroughprofit or loss areexpensed inthe
statement of income. After theinitial recognition, available-for-salefinancial assets and financial assets at fair value
throughprofit or loss aresubsequently carried at fair value. Loans and receivables and held-to-maturity investments
aresubsequentlycarriedat amortizedcost usingtheeffectiveinterest method.
Changesinfair valueof financial assetsat fair valuethroughprofit or lossarerecognizedinprofit or lossandchanges
infair valueof available-for-salefinancial assetsarerecognizedinother comprehensiveincome. Whentheavailable-
for-salefinancial assets aresoldor impaired, thefair valueadjustments recordedinequity arereclassifiedinto profit
or loss.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25
Interest on available-for-sale financial assets and held-to-maturity financial assets calculated using the effective
interest method is recognized in thestatement of incomeas part of financeincome. Dividends on available-for-sale
financial assetsarerecognizedinthestatement of incomeaspart of other non-operatingincomewhentheCompany’s
right toreceivepaymentsisestablished.
(C) Offsettingfinancial instruments
Financial assetsandliabilitiesareoffset andthenet amount reportedinthestatement of financial positionwhenthere
is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or
realizetheasset andsettletheliabilitysimultaneously.
(D) Derecognitionof financial assets
If theCompany transfers afinancial asset andthetransfer does not result inderecognitionbecausetheCompany has
retainedsubstantially of all therisks andrewards of ownershipof thetransferredasset dueto arecourseintheevent
thedebtor defaults, theCompany continuestorecognizethetransferredasset initsentirety andrecognizesafinancial
liability for theconsiderationreceived. Therelatedfinancial liability is classifiedas ‘borrowings’ inthestatement of
financial position.
2.7 Impairment of Financial Assets
TheCompanyassessesat theendof eachreportingperiodwhether thereisobjectiveevidencethat afinancial asset or
groupof financial assetsisimpaired. A financial asset or agroupof financial assetsisimpairedandimpairment lossis
recognized only if thereis objectiveevidence and that loss event (or events) has an impact on theestimated future
cashflowsof thefinancial asset or groupof financial assetsthat canbereliablyestimated.
Impairment of loans and receivables is presented as a deduction in an allowance account. Impairment of other
financial assets is directly deducted fromtheir carrying amount. The Company writes off financial assets when the
assetsaredeterminedtobenolonger recoverable.
The objective evidence that a financial asset is impaired includes significant financial difficulty of the issuer or
obligor; adelinquency in interest or principal payments; or thedisappearanceof an active market for that financial
asset becauseof financial difficulties. A declinein thefair valueof an available-for-saleequity instrument by more
than 20%fromits cost or aprolonged declinebelowits cost for morethansix months is also objectiveevidenceof
impairment.
2.8 Trade Receivables
Tradereceivablesareamountsduefromcustomersfor merchandisesoldor servicesperformedintheordinary course
of business. If collectionis expectedinoneyear or less (or inthenormal operatingcycleof theCompany if longer),
they areclassifiedas current assets. If not, they arepresentedas non-current assets. Tradereceivables arerecognized
initially at fair valueandsubsequently measuredat amortizedcost usingtheeffectiveinterest method, less provision
for impairment.
2.9 Inventories
Inventoriesarestatedat thelower of cost andnet realizablevalue. Cost isdeterminedusingtheaveragecost method,
except for materialsintransit. Thecost of finishedgoodsandwork inprogresscomprisesdesigncosts, rawmaterials,
direct labor, other direct costs and related production overheads (based on normal operating capacity). It excludes
costs of idle plant and abnormal waste. Net realizable value is the estimated selling price in the ordinary course of
business, lessapplicablevariablesellingexpenses.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26
Inventories are reduced for the estimated losses arising from excess, obsolescence, and decline in value. This
reduction is determined by estimating market value based on future customer demand. The losses on inventory
obsolescencearerecordedasapart of cost of sales.
2.10 Disposal Group Held-for-Sale
Non-current assets(or disposal group) areclassifiedasassetsheld-for-salewhentheir carryingamount istobe
recoveredprincipallythroughasaletransactionandasaleisconsideredhighlyprobable. Theassetsaremeasuredat
thelower amount betweentheir carryingamount andthefair valuelesscoststosell.
2.11 Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Historical cost includesexpendituresthat aredirectly attributabletotheacquisitionof theitems. Subsequent costsare
includedintheasset’scarryingamount or recognizedasaseparateasset, asappropriate, only whenit isprobablethat
futureeconomic benefitsassociatedwiththeitemwill flowtotheCompany andthecost of theitemcanbemeasured
reliably. Thecarryingamount of thoseparts that arereplacedis derecognizedandrepairs and maintenanceexpenses
arerecognizedinprofit or lossintheperiodtheyareincurred.
Depreciation on tangible assets is calculated using the straight-line method to allocate the difference between their
cost and their residual values over their estimated useful lives. Land is not depreciated. Costs that are directly
attributable to the acquisition, construction or production of a qualifying asset, including capitalized interest costs,
formpart of thecost of that asset andareamortizedover theestimateduseful lives.
The Company’s policy is that property, plant and equipment should be depreciated over the following estimated
useful lives:
Estimateduseful lives
Buildingsandstructures 15, 30years
Machineryandequipment 5years
Others 5years
Thedepreciationmethod, residual valuesanduseful livesof property, plant andequipment arereviewed, andadjusted
if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its
recoverableamount if theasset’s carryingamount is greater thanits estimatedrecoverableamount. Gains andlosses
on disposals are determined by comparing the proceeds with the carrying amount and are recognized within the
statement of incomeaspart of other non-operatingincomeandexpenses.
2.12 Intangible Assets
Goodwill represents the excess of the cost of an acquisition over the fair value of the group’s share of the net
identifiable assets of the acquired subsidiary, associates, joint ventures and businesses at the date of acquisition.
Goodwill onacquisitionsof subsidiariesandbusinessesisincludedinintangibleassetsandgoodwill onacquisitionof
associatesandjoint venturesareincludedintheinvestmentsinassociatesandjoint ventures.
Intangible assets, except for goodwill, are initially recognized at their historical cost and carried at cost less
accumulatedamortizationandaccumulatedimpairment losses.
Internally generateddevelopment costsaretheaggregatecostsrecognizedafter meetingtheasset recognitioncriteria,
including technical feasibility, and determined to havefutureeconomic benefits. Membership rights areregarded as
intangibleassets withindefiniteuseful lifeandnot amortizedbecausethereis no foreseeablelimit to theperiodover
whichtheassetsareexpectedtobeutilized. Intangibleassetswithdefiniteuseful lifesuchastrademarksandlicenses
areamortizedusingthestraight-linemethodover their estimateduseful lives.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27
TheCompany’spolicyisthat intangibleassetsshouldbeamortizedover thefollowingestimateduseful lives:
Estimateduseful lives
Development costs 2years
Trademarks, licensesandother intangibleassets 5- 10years
2.13 Impairment of Non-Financial Assets
Goodwill or intangible assets with indefinite useful life are not subject to amortization and are tested annually for
impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the
amount bywhichtheasset’scarryingamount exceedsitsrecoverableamount. Therecoverableamount isthehigher of
anasset’sfair valuelesscoststosell andvalueinuse. For thepurposesof assessingimpairment, assetsaregroupedat
thelowest levels for which thereareseparately identifiable cash flows (cash-generating units). Non-financial assets
other than goodwill that suffered impairment arereviewed for possiblereversal of theimpairment at each reporting
date.
2.14 Financial Liabilities
(A) Classificationandmeasurement
Financial liabilities at fair valuethrough profit or loss arefinancial instruments held for trading. Financial liabilities
areclassifiedinthiscategoryif incurredprincipallyfor thepurposeof repurchasingtheminthenear term. Derivatives
that arenot designated as hedges or bifurcated fromfinancial instruments containing embedded derivatives arealso
categorizedasheld-for-trading.
TheCompany classifies non-derivativefinancial liabilities, except for financial liabilities at fair valuethroughprofit
or loss, financial guarantee contracts and financial liabilities that arise when a transfer of financial assets does not
qualify for derecognition, as financial liabilities carried at amortized cost and presented as ‘trade payables’,
‘borrowings’, and‘other financial liabilities’ inthestatement of financial position.
(B) Derecognition
Financial liabilities areremovedfromthestatement of financial positionwhenit is extinguished, for example, when
theobligationspecifiedinthecontract is discharged, cancelledor expiredor whentheterms of anexistingfinancial
liabilityaresubstantiallymodified.
2.15 Trade Payables
Tradepayablesareamountsduetosuppliersfor merchandisepurchasedor servicesreceivedintheordinarycourseof
business. If payment isexpectedinoneyear or less(or inthenormal operatingcycleof theCompany if longer), they
areclassifiedas current liabilities. If not, they arepresentedas non-current liabilities. Non-current tradepayables are
recognizedinitiallyat fair valueandsubsequentlymeasuredat amortizedcost usingtheeffectiveinterest method.
2.16 Borrowings
Borrowingsarerecognizedinitially at fair value, net of transactioncostsandaresubsequently measuredat amortized
cost. Any differencebetweencost andtheredemptionvalueis recognizedinthestatement of incomeover theperiod
of theborrowings usingtheeffectiveinterest method. If theCompany has anindefiniteright to defer payment for a
periodlonger than12monthsafter theendof thereportingdate, suchliabilitiesarerecordedasnon-current liabilities,
otherwise, theyarerecordedascurrent liabilities.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28
2.17 Provisions
A provisionisrecognizedwhentheCompany hasapresent legal or constructiveobligationasaresult of apast event,
it isprobablethat anoutflowof resourcesembodyingeconomicbenefitswill berequiredtosettletheobligation, anda
reliable estimate can be made of the amount of the obligation. Provisions are not recognized for future operating
losses.
Provisionsaremeasuredat thepresent valueof theexpendituresexpectedtoberequiredtosettletheobligationusing
a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the
obligation. Theincreaseintheprovisionduetopassageof timeisrecognizedasinterest expense.
Whenit is probablethat anoutflowof economic benefits will occur dueto apresent obligationresultingfromapast
event, and the amount is reasonably estimable, a corresponding provision is recognized in the financial statements.
However, when such outflow is dependent upon a future event, that is not certain to occur, or cannot be reliably
estimated, adisclosureregardingthecontingent liabilityismadeinthenotestothefinancial statements.
2.18 Net Defined Benefit Liabilities
The Company has a variety of retirement pension plans including defined benefit or defined contribution plans. A
definedcontributionplanis apensionplanunder whichtheCompany pays fixedcontributions into aseparateentity.
TheCompany hasnolegal or constructiveobligationstopay further contributionsif thefunddoesnot holdsufficient
assets to pay all employees the benefits relating to employee service in the current and prior periods. For defined
contributionplans, theCompanypayscontributionstoannuityplansthat aremanagedeither publiclyor privatelyona
mandatory, contractual or voluntary basis. The Company has no further future payment obligations once the
contributions have been paid. The contributions are recognized as employee benefit expense when they are due.
Prepaidcontributions arerecognizedasanasset totheextent that acashrefundor areductioninthefuturepayments
isavailable.
A definedbenefit planisapensionplanthat isnot adefinedcontributionplan. Typically definedbenefit plansdefine
anamount of pensionbenefit that anemployeewill receiveonretirement, usually dependent ononeor morefactors
such as age, years of service and compensation. The liability recognized in the statement of financial position in
respect to defined benefit pension plans is the present value of the defined benefit obligation at the end of the
reportingperiodlessthefair valueof planassets. Thedefinedbenefit obligationiscalculatedannuallybyindependent
actuaries usingtheprojectedunit credit method. Thepresent valueof thedefinedbenefit obligationis determinedby
discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are
denominatedinthecurrency inwhichthebenefits will bepaidandthat haveterms to maturity approximatingto the
termsof therelatedpensionobligation.
Actuarial gains and losses resulting fromthe changes in actuarial assumptions, and the differences between the
previous actuarial assumptions and what has actually occurred, arerecognizedinother comprehensiveincomeinthe
periodinwhichtheywereincurred. Past servicecostsareimmediatelyrecognizedinprofit or loss.
2.19 Financial Guarantee Contract
Financial guaranteecontracts arecontractsthat requiretheissuer to makespecifiedpaymentstoreimbursetheholder
for a loss it incurs because a specified debtor fails to make payments when due. Financial guarantees are initially
recognized in the financial statements at fair valueon the datetheguarantee was given. If theamount measured in
subsequent periods exceeds the unamortized balance of the amount initially recognized, the excess is classified as
other financial liability.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29
2.20 Current and Deferred Tax
Thetaxexpensefor theperiodcomprisescurrent anddeferredtax. Taxisrecognizedontheprofit for theperiodinthe
statement of income, except totheextent that it relatestoitemsrecognizedinother comprehensiveincomeor directly
inequity, in whichcasethetax is also recognizedinother comprehensiveincomeor directly inequity, respectively.
Thetax expenseiscalculatedonthebasis of thetax lawsenactedor substantively enactedat theendof thereporting
period.
Deferred tax is recognized for temporary differences arising between thetax bases of assets and liabilities and their
carryingamountsasexpectedtaxconsequencesat therecoveryor settlement of thecarryingamountsof theassetsand
liabilities. However, deferred tax assets and liabilities arenot recognized if they arisefrominitial recognition of an
asset or liability in atransaction other than abusiness combination that at thetimeof thetransaction affects neither
accounting nor taxable profit or loss. Deferred tax assets are recognized only to the extent that it is probable that
futuretaxableprofit will beavailableagainst whichthetemporarydifferencescanbeutilized.
A deferred tax liability is recognized for taxable temporary differences associated with investments in subsidiaries,
associates, and interests in joint ventures, except to theextent that theCompany is ableto control thetiming of the
reversal of the temporary differences and it is probable that the temporary difference will not reverse in the
foreseeable future. In addition, a deferred tax asset is recognized for deductible temporary differences arising from
such investments to theextent that it is probablethetemporary differencewill reversein theforeseeablefutureand
taxableprofit will beavailableagainst whichthetemporarydifferencecanbeutilized.
Deferredtaxassetsandliabilitiesareoffset whenthereisalegallyenforceableright tooffset current taxassetsagainst
current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or different taxable entities where there is an intention to
settlethebalancesonanet basis.
2.21 Derivative Instruments
All derivativeinstrumentsareaccountedfor at fair valuewiththeresultingvaluationgainor lossrecordedasanasset
or liability. If thederivativeinstrument isnot designatedasahedginginstrument, thegainor lossisrecognizedinthe
statement of incomeintheperiodof change.
Fair valuehedgeaccountingisappliedtoaderivativeinstrument withthepurposeof hedgingtheexposuretochanges
inthefair valueof anasset or aliability or afirmcommitment (hedgeditem) that is attributableto aparticular risk.
Hedge accounting is applied when the derivative instrument is designated as a hedging instrument and the hedge
accountingcriteriahavebeenmet.
2.22 Dividend Distribution
DividenddistributiontotheCompany’sshareholdersisrecognizedwhenthedividendsareapproved.
2.23 Share Capital
Common shares and preferred shares with no repayment obligations are classified as equity. When the Company
purchases its common shares, theacquisition costs including direct transaction costs are deducted fromequity until
the redemption or reissuance of treasury shares. Consideration received on the subsequent sale or issue of treasury
sharesiscreditedtoequity.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30
2.24 Revenue Recognition
Revenue mainly comprises the fair value of the consideration received or receivable for the sale of goods in the
ordinary courseof theCompany’s activities. Revenueis shown net of value-added tax, returns, sales incentives and
discountsandafter eliminatingintercompanytransactions.
The Company recognizes revenue when specific recognition criteria have been met for each of the Company’s
activitiesasdescribedbelow. TheCompanybasesitsestimatesonhistorical results, takingintoconsiderationthetype
of customer, thetypeof transactionandthespecificsof eacharrangement.
Where multiple-element arrangements exist, the fair values of each element are determined based on the current
market priceof eachof theelements whensoldseparately. Whenthefair values of eachelement areindeterminable,
the fair values of deliverables which have already been provided are calculated in such way that the fair values of
elements, whichareyet tobeprovided, aresubtractedfromtotal contract valueof thearrangement.
(A) Salesof goods
Salesof productsandmerchandisearerecognizedupondelivery whenthesignificant risksandrewardsof ownership
of goods have transferred to the buyer, continuing managerial involvement usually associated with ownership and
effective control have ceased, the amount of revenue can be measured reliably, it is probable that the economic
benefitsassociatedwiththetransactionwill flowtotheCompanyandthecostsincurredor tobeincurredinrespect of
the transaction can be measured reliably. The Company records reductions to revenue for special pricing
arrangements, priceprotectionandother volumebaseddiscounts. If product salesaresubject tocustomer acceptance,
revenueisnot recognizeduntil customer acceptanceoccurs.
(B) Salesof services
Revenues fromrenderingservices aregenerally recognizedusingthepercentage-of-completionmethod, basedonthe
percentageof coststodatecomparedtothetotal estimatedcosts, contractual milestonesor performance.
(C) Other sourcesof revenue
Interest income is recognized using the effective interest method. When a loan and receivable is impaired, the
Company reduces thecarryingamount to its recoverableamount, beingtheestimated futurecashflowdiscountedat
theoriginal effectiveinterest rateof theinstrument, andcontinuesunwindingthediscount asinterest income. Royalty
income is recognized on an accruals basis in accordance with the substance of the relevant agreements. Dividend
incomeisrecognizedwhentheright toreceivepayment isestablished.
2.25 Government Grants
Government grantsarerecognizedat their fair valueswhenthereisreasonableassurancethat thegrant will be
receivedandtheGroupwill complywiththeconditionsattachingtoit. Government grantsrelatedtoassetsare
presentedbydeductingthegrantsinarrivingat thecarryingamount of theassets, andgrantsrelatedtoincomeare
deferredandpresentedbydeductingtherelatedexpensesfor thepurposeof thegovernment grants.
2.26 Earnings per Share
Basic earnings per shareis calculated by dividing net profit for theperiod availableto common shareholders by the
weighted-average number of common shares outstanding during the year. Diluted earnings per share is calculated
usingtheweighted-averagenumber of common shares outstanding adjusted to includethepotentially dilutiveeffect
of commonequivalent sharesoutstanding.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31
2.27 Operating Segments
Operating segments aredisclosed in themanner reported to thechief operating decision-maker (pleaseseefootnote
33). The chief operating decision-maker is responsible for making strategic decisions on resource allocation and
performanceassessment of theoperating segments. The management committee which makes strategic decisions is
regardedasthechief operatingdecision-maker.
2.28 Convenience Translation into United States Dollar Amounts
TheCompany operates primarily in Korean won and its official accounting records aremaintained in Korean won.
The US dollar amounts provided in the financial statements represent supplementary information solely for the
convenienceof thereader. All KoreanwonamountsareexpressedinU.S. dollarsat therateof ?1,055.30toUS $1,
the exchange rate in effect on December 31, 2013. Such presentation is not in accordance with generally accepted
accountingprinciples, andshouldnot beconstruedas arepresentationthat theKoreanwonamounts showncouldbe
readilyconverted, realizedor settledinUSdollarsat thisor at anyother rate.
2.29 Approval of the Consolidated Financial Statements
Theseconsolidatedfinancial statementswereapprovedbytheBoardof DirectorsonJ anuary24, 2014.
3. Critical Accounting Estimates and Assumptions
The Company makes estimates and assumptions concerning the future. The estimates and assumptions are
continuouslyassessed, consideringhistorical experienceandother factors, includingexpectationsof futureeventsthat
arebelievedto bereasonableunder thecircumstances. Theresultingaccountingestimates will, by definition, seldom
equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment tothecarryingamountsof assetsandliabilitieswithinthenext financial year areaddressedbelow.
(A) Revenuerecognition
The Company uses the percentage-of-completion method in accounting for its fixed-price contracts to deliver
installation services. Use of the percentage-of-completion method requires the Company to estimate the services
performed to date as a proportion of the total services to be performed. Revenues and earnings are subject to
significant change, effectedbyearlystepsinalong-termprojects, changeinscopeof aproject, cost, period, andplans
of thecustomers.
(B) Provisionfor warranty
The Company recognizes provision for warranty on products sold. The Company accrues provision for warranty
basedonthebest estimateof amountsnecessarytosettlefutureandexistingclaims. Theamountsareestimatedbased
onhistorical data.
(C) Fair valueof derivativesandother financial instruments
The fair value of financial instruments that are not traded in an active market is determined by using a variety of
methodsandassumptionsthat aremainlybasedonmarket conditionsexistingat theendof eachreportingperiod.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
32
(D) Net definedbenefit liabilities
The net defined benefit liability depends on a number of factors that are determined on an actuarial basis using a
number of assumptions. Any changesintheseassumptions will impact thecarryingamount of thenet definedbenefit
liability. The Company, in consideration of the interest rates of high-quality corporate bonds, determines the
appropriatediscount rateat theendof eachyear. Thisistheinterest ratethat isusedtodeterminethepresent valueof
estimatedfuturecashoutflowsexpectedtoberequiredtosettlethenet definedbenefit liability.
Theprincipal actuarial assumptions associated with thenet defined benefit liability arebased on thecurrent market
expectations.
(E) Estimatedimpairment of goodwill
TheCompany tests at theendof eachreportingperiod whether goodwill has sufferedany impairment inaccordance
with the accounting policy described in Note 2.12. The recoverable amounts of cash-generating units have been
determinedbasedonvalue-in-usecalculations. Thesecalculationsarebasedonestimates.
(F) Incometaxes
Income taxes on the Company’s taxable income from operating activities are subject to various tax laws and
determinations of each tax authority across various countries in the world. There is uncertainty in determining the
eventual tax effects on the taxable income fromoperating activities. The Company has recognized current tax and
deferredtax at theendof thefiscal year basedonthebest estimationof futuretaxes payableas aresult of operating
activities. However, the resulting deferred income tax assets and liabilities may not equal the actual future taxes
payable and such difference may impact the current tax and deferred income tax assets and liabilities upon the
determinationof eventual taxeffects.
4. Cash and Cash Equivalents
Cashand cashequivalents includecashonhand, deposits held at call withbanks, and other short-termhighly liquid
investments that arereadily convertibleto aknownamount of cashandaresubject to aninsignificant risk of change
invalue.
Cashandcashequivalentsasof December 31, 2013and2012, consist of thefollowing:
(In millions of Korean won) 2013 2012
Cashonhand ? 14,454 ? 12,900
Bankdeposits, etc. 16,270,326 18,778,560
Total ? 16,284,780 ? 18,791,460
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
33
5. Financial Assets Subject to Withdrawal Restrictions
Financial instrumentssubject towithdrawal restrictionsasof December 31, 2013and2012, consist of thefollowing:
(In millions of Korean won) 2013 2012
Short-termfinancial instruments ? 23,850 ? 46,489
Long-termfinancial instruments 15 29
6. Financial Instruments by Category
(A) Categorizationsof financial assetsandliabilitiesasof December 31, 2013and2012, areasfollows:
(1) Asof December 31, 2013
(In millions of Korean won)
Assets at fair
value through
profit or loss
Loans and
receivables
Available-for-
sale financial
assets Total
Assets
Cashandcashequivalents ? - ? 16,284,780 ? - ? 16,284,780
Short-termfinancial instruments - 36,722,702 - 36,722,702
Short-termavailable-for-salefinancial assets - - 1,488,527 1,488,527
Tradeandother receivables - 24,988,532 - 24,988,532
Long-termavailable-for-salefinancial assets - - 6,238,380 6,238,380
Others 40,552 5,432,404 - 5,472,956
Total ? 40,552 ? 83,428,418 ? 7,726,907 ? 91,195,877
(In millions of Korean won)
Liabilities at
fair value
through profit
or loss
Financial
liabilities
measured at
amortized cost
Other
financial
liabilities Total
Liabilities
Tradeandother payables ? - ? 16,314,720 ? - ? 16,314,720
Short-termborrowings - 3,181,582 3,256,935 6,438,517
Debentures - 1,311,068 - 1,311,068
Long-termborrowings - 985,117 - 985,117
Long-termother payables - 1,023,714 - 1,023,714
Others 244,172 13,044,171 - 13,288,343
Total ? 244,172 ? 35,860,372 ? 3,256,935 ? 39,361,479
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
34
(2) Asof December 31, 2012
(In millions of Korean won)
Assets at fair
value through
profit or loss
Loans and
receivables
Available-for-
sale financial
assets Total
Assets
Cashandcashequivalents ? - ? 18,791,460 ? - ? 18,791,460
Short-termfinancial instruments - 17,397,937 - 17,397,937
Short-termavailable-for-salefinancial assets - - 1,258,874 1,258,874
Tradeandother receivables - 23,861,235 - 23,861,235
Long-termavailable-for-salefinancial assets - - 5,229,175 5,229,175
Others 47,227 5,685,042 - 5,732,269
Total ? 47,227 ? 65,735,674 ? 6,488,049 ? 72,270,950
(In millions of Korean won)
Liabilities at
fair value
through profit
or loss
Financial
liabilities
measured at
amortized cost
Other
financial
liabilities Total
Liabilities
Tradeandother payables ? - ? 16,889,350 ? - ? 16,889,350
Short-termborrowings - 4,115,249 4,328,503 8,443,752
Debentures - 1,829,374 - 1,829,374
Long-termborrowings - 3,623,028 - 3,623,028
Long-termother payables - 1,165,881 - 1,165,881
Others 79,212 10,788,823 - 10,868,035
Total ? 79,212 ? 38,411,705 ? 4,328,503 ? 42,819,420
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
35
(B) Net gainsor net lossesoneachcategoryof financial instrumentsfor theyearsendedDecember 31, 2013and
2012, areasfollows:
(1) Asof December 31, 2013
(In millions of Korean won)
Financial Assets
Assets at fair
value through
profit or loss
Loans and
receivables
Available-for-
sale financial
assets Total
Gainonvaluation(other comprehensiveincome) ? - ? - ? 1,271,817 ? 1,271,817
Gain/(loss) onvaluation/disposal (profit or loss) (32,867) (33,518) 1,079,393 1,013,008
Lossonvaluation(reclassification) - - (1,000,260) (1,000,260)
Interest income - 1,342,394 9,215 1,351,609
Foreignexchangedifferences(profit or loss) - (393,407) - (393,407)
Foreignexchangedifferences
(other comprehensiveincome) - - 939 939
Dividendincome - - 112,159 112,159
Impairment/reversal (profit or loss) - (18,681) (5,177) (23,858)
(In millions of Korean won)
Financial Liabilities
Liabilities at
fair value
through profit
or loss
Financial
liabilities
measured at
amortized cost
Other financial
liabilities Total
Lossonvaluation/disposal (profit or loss) ? (216,236) ? - ? - ? (216,236)
Interest expense 319,342 190,316 509,658
Foreignexchangedifferences(profit or loss) (230,212) 43,836 (186,376)
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
36
(2) Asof December 31, 2012
(In millions of Korean won)
Financial Assets
Assets at fair
value through
profit or loss
Loans and
receivables
Available-for-
sale financial
assets Total
Gainonvaluation(other comprehensiveincome) ? - ? - ? 1,185,256 ? 1,185,256
Gain/(loss) onvaluation/disposal (profit or loss) (74,609) 28,915 105,192 59,498
Gainonvaluation(reclassification) - - 23,072 23,072
Interest income - 840,150 5,281 845,431
Foreignexchangedifferences(profit or loss) - (355,989) - (355,989)
Foreignexchangedifferences
(other comprehensiveincome) - - (19,302) (19,302)
Dividendincome - - 106,181 106,181
Impairment/reversal (profit or loss) - (76,231) (94,466) (170,697)
(In millions of Korean won)
Financial Liabilities
Liabilities at
fair value
through profit
or loss
Financial
liabilities
measured at
amortized cost
Other financial
liabilities Total
Lossonvaluation/disposal (profit or loss) ? (125,553) ? - ? - ? (125,553)
Interest expense - 277,512 321,494 599,006
Foreignexchangedifferences(profit or loss) - 17,938 43,909 61,847
7. Credit Quality of Financial Assets
Thecredit quality of financial assets that areneither past duenor impairedis assessedby referenceto external credit
ratingsasof December 31, 2013and2012, asfollows:
- Superior abilitytorepay: Aaa~Aa(Moody's), AAA~AA (S&P, Fitch), A1(Credit ratingagenciesinKorea)
- Strongabilitytorepay: A (Moody's), A (S&P, Fitch), A2(Credit ratingagenciesinKorea)
- Acceptableabilitytorepay: Baa(Moody's), BBB (S&P, Fitch), A3(Credit ratingagenciesinKorea)
- Currently having the ability to repay: Ba or below (Moody's), BB or below (S&P, Fitch), B or below (Credit
ratingagenciesinKorea)
- Group1: Customerswiththetradepayablesguaranteedbycredit insuranceor collateral
- Group 2: Customers having experienced impairment of capital. As the trade payables are guaranteed by credit
insuranceor collateral, all default riskhasbeenrelieved
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
37
(A) Accountsreceivables
(In millions of Korean won) 2013 2012
Counterpartieswithexternal credit rating
Superior abilitytorepay ? 3,414,467 ? 1,818,158
Strongabilitytorepay 2,796,881 3,742,515
Acceptableabilitytorepay 2,491,635 3,217,663
Currentlyhavingtheabilitytorepay 4,370,114 3,834,957
13,073,097 12,613,293
Counterpartieswithout external credit rating
Group1 9,429,612 8,680,397
Group2 153,770 50,160
9,583,382 8,730,557
? 22,656,479 ? 21,343,850
(B) Cashequivalentsandshort-termfinancial instruments
(In millions of Korean won) 2013 2012
Superior abilitytorepay ? 2,584,121 ? 2,850,476
Strongabilitytorepay 49,891,037 32,675,712
Acceptableabilitytorepay 493,383 505,631
Currentlyhavingtheabilitytorepay 1,111 12,896
Others
1
23,376 131,782
? 52,993,028 ? 36,176,497
1
Short-termfinancial instrumentsheldat financial institutions(Credit union, etc.) without external credit rating
8. Transfer of Financial Assets
Tradereceivables of theCompany havebeendiscountedthroughfactoringagreements withbanks in2013and2012.
Collaterals(tradereceivablesandother) providedinsuchfactoringtransactionsdonot meet therequirementsfor asset
derecognitionasrisksandrewardsarenotsubstantiallytransferredintheevent thedebtor defaults. Financial liabilities
recognized in relation to these transactions are included as short-termborrowings on the statements of financial
position(Note15).
Thefollowingtablepresentsabreakdownof discountedtradereceivablesasof December 31, 2013and2012:
(In millions of Korean won) 2013 2012
Carryingamount of thediscountedtradereceivables
1
? 3,256,935 ? 4,328,503
Carryingamount of therelatedborrowings 3,256,935 4,328,503
1
Thediscountedtradereceivablesincludeintercompanybalances.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
38
9. Available-for-Sale Financial Assets
Changesinavailable-for-salefinancial assetsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Balanceasof J anuary1 ? 6,488,049 ? 3,879,567
Acquisitions 4,031,357 2,613,703
Increasefrombusinesscombinations - 16,544
Disposals (4,120,906) (1,171,666)
Gainonvaluationof available-for-salefinancial assets 1,271,817 1,185,256
Impairment (5,177) (28,009)
Foreignexchangedifferences 939 (19,302)
Others 60,828 11,956
Balanceasof December 31 ? 7,726,907 ? 6,488,049
(A) Current portion 1,488,527 1,258,874
(B) Non-current portion 6,238,380 5,229,175
(A) Short-termavailable-for-salefinancial assets
Detailsof short-termavailable-for-salefinancial assetsasof December 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Beneficiarycertificates
1
? 1,257,492 ? 1,258,873
National bonds 180,959 1
Bankdebentures 50,076 -
? 1,488,527 ? 1,258,874
1
Detailsof beneficiarycertificatesasof December 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Bonds ? 1,232,523 ? 1,159,290
Timedeposits 364 238
Call loans 15,449 85,200
Others 9,156 14,145
? 1,257,492 ? 1,258,873
Changesinvaluationgains(losses) recognizedinequity(other comprehensiveincome) onshort-termavailable-for-
salefinancial assetsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Balanceasof J anuary1 ? 8,873 ? 5,969
Fair valuegains 7,492 8,873
Net gainstransferredfromequity (8,873) (5,969)
Balanceasof December 31 7,492 8,873
Deferredincometax (1,813) (2,147)
? 5,679 ? 6,726
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
39
(B) Long-termavailable-for-salefinancial assets
Detailsof long-termavailable-for-salefinancial assetsasof December 31, 2013and2012, areasfollows:
(In millions of Korean won) Detail 2013 2012
Equitysecurities- Listed (1) ? 4,399,314 ? 4,435,856
Equitysecurities- Non-listed (2) 782,297 667,325
Debt securities
1
(3) 1,056,769 125,994
? 6,238,380 ? 5,229,175
1
Themaximumexposuretocredit riskof available-for-saledebt securitiesisthecarryingvalueat thereportingdate.
(1) Equitysecurities- Listed(excludinginvestmentsinassociatesandjoint ventures)
Detailsof listedequitysecuritiesasof December 31, 2013and2012, areasfollows:
(In millions of Korean won, number of shares and percentage)
2013 2012
Number of
Shares Owned
Percentage of
Ownership (%)
Acquisition
Cost
Book Value
(Market Value)
Book Value
(Market Value)
SamsungHeavyIndustries 40,675,641 17.6 ? 258,299 ? 1,547,708 ? 1,568,046
SamsungFineChemicals 2,164,970 8.4 45,678 96,449 132,063
Hotel Shilla 2,004,717 5.1 13,957 133,314 88,107
Cheil Worldwide 2,998,725 2.6 2,920 82,465 64,623
iMarket Korea 647,320 1.8 324 16,668 18,416
SFA 1,822,000 10.2 38,262 74,884 85,998
WonikIPS 7,220,216 9.0 63,249 61,949 -
ASML 12,595,575 2.9 726,024 1,248,019 856,253
CSR 9,925,000 6.0 59,612 110,135 58,765
Rambus 4,788,125 4.2 92,682 47,851 24,976
SeagateTechnology
1
12,539,490 3.8 218,544 743,161 1,474,032
Wacom 8,398,400 5.0 62,013 62,268 -
Sharp 35,804,000 2.1 122,535 120,143 -
Others - - 59,328 54,300 64,577
? 1,763,427 ? 4,399,314 ? 4,435,856
1
InOctober 2013, theCompanysoldpart of itsinvestment inSeagateTechnologyfor USD1,505million.
Acquisition cost includes impairment loss on available-for-sale financial assets recognized due to the decline in
realizablevaluebelowacquisitioncost.
The difference between the acquisition cost and the current fair value, after income tax effects, is recorded within
other componentsof equity(unrealizedgainsor lossesonavailable-for-salefinancial assets).
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
40
(2) Equitysecurities- Non-listed(excludinginvestmentsinassociatesandjoint ventures)
Detailsof non-listedequitysecuritiesasof December 31, 2013and2012, areasfollows:
(In millions of Korean won, number of shares and percentage)
2013 2012
Number of
Shares Owned
Percentage of
Ownership (%) Acquisition Cost Book Value Book Value
KihyupTechnology 1,000,000 17.2 ? 5,000 ? 5,000 ? 5,000
PusanNewport
1
1,135,307 1.0 5,677 5,677 5,677
SamsungVentureInvestment 980,000 16.3 4,900 7,021 6,053
SamsungPetrochemical 514,172 13.0 8,040 80,347 84,427
SamsungGeneral Chemicals 1,914,251 3.9 19,143 80,653 74,487
TaewonElectric 9,000 15.0 16,544 17,072 16,225
CSOT
2
- 14.5 278,130 278,130 278,130
Pantech 53,000,000 10.0 53,000 53,053 -
Nanosys
2
13,100,436 13.0 17,861 17,861 17,861
OpenX
2
8,899,172 3.5 10,738 10,738 10,738
Others
3
- - 242,069 226,745 168,727
? 661,102 ? 782,297 ? 667,325
1
As of December 31, 2013, the Company’s investments in Pusan Newport are pledged as collateral against the investee's debt
(Note19).
2
Nonmarketableshares includingCSOT aremeasuredat cost as therangeof reasonablefair valueestimates is significant andthe
probabilitiesof thevariousestimatesandapplicablediscount ratecannot bereasonablyassessed.
3
Impairment lossesonunlistedequitysecuritiesresultingfromthedeclineinrealizablevaluebelowtheacquisitioncost amounted
to?5,177millionand?2,235millionfor theyearsendedDecember 31, 2013and2012, respectively.
(3) Debt securities
Detailsof debt securitiesasof December 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Corporatebonds ? 106,944 ? 125,894
Government andpublicbonds 50,356 100
Bankdebentures 899,469 -
? 1,056,769 ? 125,994
Changes in valuation gain (loss) on long-termavailable-for-sale financial assets for the years ended December 31,
2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Balanceasof J anuary1 ? 2,572,755 ? 1,367,331
Fair valuegain 1,264,325 1,176,383
Net gainsor lossestransferredfromequity (991,387) 29,041
Balanceasof December 31 2,845,693 2,572,755
Deferredincometaxandnon-controllinginterests (662,359) (577,945)
? 2,183,334 ? 1,994,810
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
41
10. Trade and Other Receivables
(A) Trade and other receivables, and provisions for impairment as of December 31, 2013 and 2012, are as
follows:
2013 2012
(In millions of Korean won) Trade Non-Trade Trade Non-Trade
Receivables ? 25,292,231 ? 2,931,605 ? 24,168,427 ? 2,834,187
Less: Provisionsfor impairment (267,675) (20,046) (276,787) (2,595)
Receivables, net 25,024,556 2,911,559 23,891,640 2,831,592
Less: Non-current portion (36,024) (24,157) (30,405) (18,231)
Current portion ? 24,988,532 ? 2,887,402 ? 23,861,235 ? 2,813,361
TheCompany transferred receivablebalances to abank in exchangefor cash during the years ended December 31,
2013 and 2012. The outstanding balances of transferred receivables amounting to ?3,256,935 million and
?4,328,503 million havebeen accounted for as borrowings as of December 31, 2013 and 2012, respectively (Note
15).
(B) Movementsintheprovisionsfor impairment of receivablesfor theyearsendedDecember 31, 2013and2012,
areasfollows:
2013 2012
(In millions of Korean won) Trade Non-Trade Trade Non-Trade
Balanceasof J anuary1 ? (276,787) ? (2,595) ? (214,597) ? (37,833)
Provisionsfor impairedreceivables
(reversalsof unusedamounts) (2,785) (18,794) (83,588) 6,370
Receivableswrittenoff duringtheyear asuncollectible 13,787 511 18,752 28,203
Others (1,890) 832 2,646 665
Balanceasof December 31 ? (267,675) ? (20,046) ? (276,787) ? (2,595)
(C) Theaginganalysisof tradeandother receivablesasof December 31, 2013and2012, isasfollows:
(In millions of Korean won) 2013 2012
Receivablesnot past due ? 25,420,912 ? 24,151,060
Past duebut not impaired
1
:
Lessthan31daysoverdue 2,058,708 2,226,759
Impaired
2
:
31daysto90daysoverdue 184,405 231,343
90daysoverdueor more 559,811 393,452
? 28,223,836 ? 27,002,614
1
TheCompanydoesnot consider receivablesthat areoverduefor lessthanor equal to31daysasimpaired.
2
Provisionsfor impairedreceivableamount to?287,721millionasof December 31, 2013(2012: ?279,382million).
(D) Themaximumexposureto credit risk at thereportingdateis thecarrying valueof each class of receivable
mentionedabove. As of December 31, 2013, theCompany has credit insurancewithKoreaTradeInsurance
andoverseasinsurancecompaniesagainst itsexport accountsreceivablesfromapprovedforeigncustomers.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
42
11. Inventories
Inventoriesasof December 31, 2013and2012, areasfollows:
(In millions of Korean won)
2013 2012
Gross
Amount
Valuation
Allowance Book Value
Gross
Amount
Valuation
Allowance Book Value
Finishedgoods ? 7,597,391 ? (168,041) ? 7,429,350 ? 7,003,826 ? (166,576) ? 6,837,250
Workinprocess 4,466,028 (395,762) 4,070,266 3,623,572 (392,996) 3,230,576
Rawmaterialsandsupplies 6,960,985 (151,873) 6,809,112 5,239,262 (157,866) 5,081,396
Materialsintransit 826,140 - 826,140 2,598,191 - 2,598,191
?19,850,544 ? (715,676) ?19,134,868 ?18,464,851 ? (717,438) ?17,747,413
Thecost of inventoriesrecognizedasexpenseandincludedin‘cost of sales’ amountsto?136,755,644million(2012:
?125,746,083 million). Inventory valuation loss of ?435,607 million was recognized in 2013 (2012: ?367,279
million).
12. Investments in Associates and Joint Ventures
(A) Changesininvestmentsinassociatesandjoint venturesfor theyearsendedDecember 31, 2013and2012,
areasfollows:
(In millions of Korean won) 2013 2012
Balanceasof J anuary1 ? 8,785,489 ? 9,204,169
Acquisition 181,307 279,022
Disposal (240) (21,891)
Shareof profit 504,063 986,611
Others
1
(3,048,327) (1,662,422)
Balanceasof December 31 ? 6,422,292 ? 8,785,489
1
Othersconsist of dividends, businesscombination, andeffectsof changesinforeignexchangerates, etc.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
43
(B) Major investmentsinassociatesandjoint venturesasof December 31, 2013, areasfollows:
(1) Investmentsinassociates
Investee Nature of Relationship with Associate
Percentage of
Ownership
1
(%)
Principal
Business
Location
SamsungCard Businessalliance 37.5 Korea
SamsungElectro-Mechanics
Manufactureandsupplyelectroniccomponents
includingpassivecomponent, circuit board, and
module
23.7 Korea
SamsungSDI
Manufactureandsupplyelectronicdevices
includingPDP andsecondary(rechargeable)
batteries
20.4 Korea
SamsungSDS
ProvideIT servicesincludingcomputer
programming, systemintegrationand
management
22.6 Korea
SamsungTechwin
Manufacture and supply engine and precision
machines
25.5 Korea
1
TheownershiprepresentstheCompany’sownershipof commonstockineachentity.
(2) Investmentsinjoint ventures
Investee Nature of Relationship with Joint Venture
Percentage of
Ownership
1
(%)
Principal
Business
Location
SamsungCorningAdvancedGlass
Manufacture and supply other industrial glass
devices
50.0 Korea
1
TheownershiprepresentstheCompany’sownershipof commonstockineachentity.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
44
(C) Detailsof investmentsinassociatesandjoint venturesasof December 31, 2013and2012, areasfollows:
(1) Investmentsinassociates
(In millions of Korean won) 2013
Investee Acquisition cost
Net asset
value of
equity
shares
1
Book value
SamsungCard ? 1,538,540 ? 2,322,897 ? 2,340,009
SamsungElectro-Mechanics 359,237 951,693 954,496
SamsungSDI 423,722 1,451,770 1,175,204
SamsungSDS 147,963 858,671 879,956
SamsungTechwin 174,531 433,624 402,745
Others 582,646 375,959 548,553
Total ? 3,226,639 ? 6,394,614 ? 6,300,963
(In millions of Korean won) 2012
Investee Acquisition cost
Net asset
value of
equity
shares
1
Book value
SamsungCard ? 1,538,540 ? 2,221,201 ? 2,238,073
SamsungElectro-Mechanics 359,237 887,933 890,460
SamsungSDI 423,722 1,450,811 1,174,183
SamsungSDS 17,967 689,874 701,808
SamsungTechwin 174,531 401,146 360,739
Others 461,599 513,580 457,016
Total ? 2,975,596 ? 6,164,545 ? 5,822,279
1
Company’sportionof net asset valueof associatesbasedontheCompany’sownershippercentage
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
45
(2) Investmentsinjoint ventures
(In millions of Korean won) 2013
Investee Acquisition cost
Net asset
value of
equity
shares
1
Book value
SamsungCorningPrecisionMaterials ? - ? - ? -
SamsungCorningAdvancedGlass 115,000 111,961 111,961
Others 422,995 (16,357) 9,368
Total ? 537,995 ? 95,604 ? 121,329
(In millions of Korean won) 2012
Investee Acquisition cost
Net asset
value of
equity
shares
1
Book value
SamsungCorningPrecisionMaterials ? 297,165 ? 2,825,104 ? 2,794,617
SamsungCorningAdvancedGlass 115,000 114,274 114,274
Others 419,461 64,193 54,319
Total ? 831,626 ? 3,003,571 ? 2,963,210
1
Company’sportionof net asset valueof associatesbasedontheCompany’sownershippercentage
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
46
(D) Details of valuation of investments in associates and joint ventures under the equity method for the years
endedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013
Investee
Balance as of
January 1
Gain/loss on
valuation
Other
comprehensive
income/loss Others
1
Balance as of
December 31
SamsungCard ? 2,238,073 ? 102,361 ? 29,828 ? (30,253) ? 2,340,009
SamsungElectro-Mechanics 890,460 75,565 6,354 (17,883) 954,496
SamsungSDI 1,174,183 25,760 (10,310) (14,429) 1,175,204
SamsungSDS 701,808 69,739 (17,838) 126,247 879,956
SamsungTechwin 360,739 39,554 9,021 (6,569) 402,745
SamsungCorningPrecisionMaterials
2
2,794,617 347,981 (1,247) (3,141,351) -
SamsungCorningAdvancedGlass 114,274 (2,302) (11) - 111,961
Others 511,335 (154,595) 4,959 196,222 557,921
Total ? 8,785,489 ? 504,063 ? 20,756 ?(2,888,016) ? 6,422,292
1
Othersconsist of acquisitions, disposals, dividends, andeffectsof changesinforeignexchangerates, etc.
2
Duringtheyear endedDecember 31, 2013, theCompanysignedaframework agreement for comprehensivebusinesscooperation
withCorningIncorporatedanditsrelatedparties. Asof December 31, 2013, theCompany classifieditsshareinSamsungCorning
Precision Materials Co., Ltd (ownership percentage: 42.54%) as assets held-for-sale, and disposed of such shares for USD 1,902
million on J anuary 15, 2014. Under the agreement, the Company will receive additional dividends after the resolution of
shareholders’ meeting.
(In millions of Korean won) 2012
Investee
Balance as of
January 1
Gain/loss on
valuation
Other
comprehensive
income/loss Others
1
Balance as of
December 31
SamsungCard ? 2,184,855 ? 264,688 ? (181,217) ? (30,253) ? 2,238,073
SamsungElectro-Mechanics 799,792 102,946 11,689 (23,967) 890,460
SamsungSDI
1,185,509 31,256 (30,531) (12,051) 1,174,183
SamsungSDS
632,593 89,157 (16,488) (3,454) 701,808
SamsungTechwin
370,379 39,356 (27,171) (21,825) 360,739
SamsungCorningPrecisionMaterials
3,089,298 644,242 (10,300) (928,623) 2,794,617
SamsungCorningAdvancedGlass
- (726) - 115,000 114,274
Others
941,743 (184,308) (96,473) (149,627) 511,335
Total
? 9,204,169 ? 986,611 ? (350,491) ?(1,054,800) ? 8,785,489
1
Othersconsist of acquisitions, disposals, dividends, andeffectsof changesinforeignexchangerates, etc.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
47
(E) Summaryof condensedfinancial informationof major associatesandjoint ventures.
(1) A summaryof condensedfinancial informationof major associates, detailsof adjustmentsfromthebook
valueof investmentsinassociates, anddividendsreceivedfromassociatesasof andfor theyearsended
December 31, 2013and2012, isasfollows:
(In millions of Korean won) 2013
Investee SamsungCard
1
Samsung
Electro-
Mechanics SamsungSDI SamsungSDS
Samsung
Techwin
1. Condensed financial information
Current assets
?16,560,926
? 2,650,765 ? 2,063,192 ? 2,928,998 ? 1,561,706
Non-current assets 4,534,578 8,492,479 2,371,102 1,872,518
Current liabilities
10,358,265
1,787,432 1,526,957 1,219,484 1,169,253
Non-current liabilities 1,139,884 1,486,297 197,222 560,191
Non-controllinginterests - 83,966 164,323 80,644 1,628
Revenue 2,847,053 8,256,579 5,016,465 7,046,833 2,912,031
2. Details of adjustments from the book value of investments in associates
Net assets(a) 6,202,661 4,174,061 7,378,094 3,802,750 1,703,152
Ownershippercentage
2
(b) 37.5% 22.8% 19.7% 22.6% 25.5%
Net assetsof equityshares(axb) 2,322,897 951,693 1,451,770 858,671 433,624
Goodwill 17,181 - - 26,801 -
Intercompanytransactions, etc. (69) 2,803 (276,566) (5,516) (30,879)
Bookvalueof associates 2,340,009 954,496 1,175,204 879,956 402,745
3. Dividends from associates
Dividends ? 30,375 ? 17,693 ? 13,924 ? 3,914 ? 6,763
1
SamsungCarddoesnot present current andnon-current assets, andcurrent andnon-current liabilities, asseparateclassifications
initsstatement of financial position.
2
Ownershippercentageincludescommonandpreferredstocks
(In millions of Korean won) 2013
Investee
Samsung
Card
Samsung
Electro-
Mechanics
Samsung
SDI
Samsung
SDS
Samsung
Techwin Others
Profit (loss) fromcontinuing
operations
1
? 273,232 ? 330,240 ? 130,599 ? 312,372 ? 132,493 ?(139,194)
Other comprehensiveincome(loss)
1
84,153 26,676 (63,211) (88,703) 21,596 (11,862)
Total comprehensiveincome(loss)
1
? 357,385 ? 356,916 ? 67,388 ? 223,669 ? 154,089 ?(151,056)
1
Profit attributabletoownersof theparent
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
48
(In millions of Korean won) 2012
Investee SamsungCard
1
Samsung
Electro-
Mechanics SamsungSDI SamsungSDS
Samsung
Techwin
1. Condensed financial information
Current assets
?16,287,816
? 2,631,235 ? 2,414,856 ? 2,283,331 ? 1,386,237
Non-current assets 4,260,230 8,480,231 2,182,077 1,854,702
Current liabilities
10,357,253
1,959,072 2,004,041 1,067,256 1,019,550
Non-current liabilities 966,744 1,326,564 153,211 643,713
Non-controllinginterests - 71,252 191,257 60,909 2,094
Revenue 3,817,670 7,912,830 5,771,185 6,105,858 2,934,702
2. Details of adjustments from the book value of investments in associates
Net assets(a) 5,930,563 3,894,397 7,373,225 3,184,032 1,575,582
Ownershippercentage
2
(b) 37.5% 22.8% 19.7% 21.7% 25.5%
Net assetsof equityshares(axb) 2,221,201 887,933 1,450,811 689,874 401,146
Goodwill 17,181 - - 19,597 -
Intercompanytransactions, etc. (309) 2,527 (276,628) (7,663) (40,407)
Bookvalueof associates 2,238,073 890,460 1,174,183 701,808 360,739
3. Dividends from associates
Dividends ? 30,375 ? 13,270 ? 13,924 ? 3,914 ? 6,763
1
SamsungCarddoesnot present current andnon-current assets, andcurrent andnon-current liabilities, asseparateclassifications
initsstatement of financial position.
2
Ownershippercentageincludescommonandpreferredstocks
(In millions of Korean won) 2012
Investee
Samsung
Card
Samsung
Electro-
Mechanics
Samsung
SDI
Samsung
SDS
Samsung
Techwin Others
Profit (loss) fromcontinuing
operations
1
?749,875 ?411,299 ?1,471,502 ?395,805 ?131,030 ? (84,072)
Post-taxprofit fromdiscontinued
operations
1
- 29,503 - - - -
Other comprehensiveincome(loss)
1
(570,471) 1,009 (150,859) (34,303) (118,743) (34,316)
Total comprehensiveincome(loss)
1
?179,404 ?441,811 ?1,320,643 ?361,502 ?12,287 ?(118,388)
1
Profit attributabletoownersof theparent
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
49
(2) Summary of condensed financial information of major joint ventures, details of adjustments fromthe
book value of investments in joint ventures, and dividends fromjoint ventures as of and for the years
endedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Investee
SamsungCorning
AdvancedGlass
SamsungCorning
PrecisionMaterials
SamsungCorning
AdvancedGlass
1. Condensed financial information
Current assets ? 171,353 ? 3,429,581 ? 187,684
- Cashandcashequivalent 64,113 1,707,998 10,887
Non-current assets 95,310 3,731,710 51,669
Current liabilities 42,674 431,475 10,702
- Current financial liabilities
1
40,575 148,492 10,393
Non-current liabilities 67 80,507 103
Non-controllinginterests - 8,442 -
Revenue 68,803 3,245,243 30,288
Depreciationandamortization 283 390,091 35
Interest income 4,618 109,710 4,600
Incometaxexpense (567) 299,996 (178)
2. Details of adjustments from the book value of investments in joint ventures
Net assets(a) 223,922 6,640,867 228,548
Ownershippercentage
2
(b) 50.0% 42.5% 50.0%
Net assetsof equityshares(axb) 111,961 2,825,104 114,274
Intercompanytransactions, etc.
3
- (30,487) -
Bookvalueof joint ventures 111,961 2,794,617 114,274
3. Dividends from joint ventures
Dividends ? - ? 927,984 ? -
1
Account payables, other payables, provisionsareexcluded
2
Ownershippercentageincludescommonandpreferredstocks
3
Consist of unrealizedgainsandlosses, andother differences
(In millions of Korean won) 2013 2012
Investee
Samsung
Corning
Advanced
Glass Others
Samsung
Corning
Advanced
Glass
Samsung
Corning
Advanced
Glass Others
Profit (loss) fromcontinuing
operations
1
? (4,604) ? (166,310) ? 1,353,460 ? (1,452) ? (129,202)
Other comprehensiveincome(loss)
1
(21) (1,942) (9,536) - (12,901)
Total comprehensiveincome(loss)
1
? (4,625) ? (168,252) ? 1,343,924 ? (1,452) ? (142,103)
1
Profit attributabletoownersof theparent
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
50
(F) Fair valueof marketableinvestmentsinassociatesasof December 31, 2013and2012, isasfollows:
(In millions of Korean won and
number of shares)
2013 2012
Number of shares held Market value Market value
SamsungSDI 9,282,753 ? 1,503,806 ? 1,401,696
SamsungElectro-Mechanics 17,693,084 1,291,595 1,755,154
SamsungCard 43,393,170 1,622,905 1,583,851
SamsungTechwin 13,526,935 ? 735,865 ? 807,558
13. Property, Plant and Equipment
(A) Changesinproperty, plant andequipment for theyearsendedDecember 31, 2013and2012, areasfollows:
2013
(In millions of Korean won) Land
Buildings and
Structures
Machinery
and
Equipment
Construction
In Progress Others Total
Balanceasof J anuary1 ? 7,152,141 ?13,008,839 ?38,046,176 ? 8,492,885 ? 1,784,702 ?68,484,743
Acquisitioncost 7,152,141 19,624,030 110,034,355 8,492,885 5,011,914 150,315,325
Accumulateddepreciation
andimpairment - (6,615,191) (71,988,179) - (3,227,212) (81,830,582)
Acquisitionsandcapital
expenditures
1
322,433 4,209,093 12,627,962 5,362,760 1,237,317 23,759,565
Businesscombinations - 31 877 - 144 1,052
Depreciation - (1,146,000) (13,473,515) - (850,497) (15,470,012)
Sales/disposals (29,572) (30,850) (320,296) (50,930) (60,143) (491,791)
Impairment - (78) (145,263) - (175) (145,516)
Others
2
(15,715) (325,971) (237,463) 35,457 (97,961) (641,653)
Balanceasof December 31 ? 7,429,287 ? 15,715,064 ?36,498,478 ?13,840,172 ? 2,013,387 ?75,496,388
Acquisitioncost 7,429,287 23,375,035 118,621,699 13,840,172 5,518,351 168,784,544
Accumulateddepreciation
andimpairment - (7,659,971) (82,123,221) - (3,504,964) (93,288,156)
1
The capitalized borrowing costs are ?52,039 million and the interest rate used to calculate the borrowing costs eligible for
capitalizationis1.73%.
2
Othersincludeeffectsof changesinforeigncurrencyexchangerates.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
51
2012
(In millions of Korean won) Land
Buildings and
Structures
Machinery
and
Equipment
Construction
In Progress Others Total
Balanceasof J anuary1 ?7,214,734 ?12,778,760 ?33,453,220 ?6,982,473 ?1,614,764 ?62,043,951
Acquisitioncost 7,214,734 18,472,852 96,618,176 6,982,473 4,683,845 133,972,080
Accumulateddepreciationand
impairment - (5,694,092) (63,164,956) - (3,069,081) (71,928,129)
Acquisitionsandcapital
expenditures
1
54,960 1,681,106 18,302,895 1,854,111 956,723 22,849,795
Businesscombinations - - 654,490 21,612 29,007 705,109
Depreciation - (1,121,614) (12,895,133) - (818,299) (14,835,046)
Sales/disposals (76,724) (100,854) (604,989) (22,213) (114,292) (919,072)
Impairment - (3,992) (211,299) - (34) (215,325)
Others
2
(40,829) (224,567) (653,008) (343,098) 116,833 (1,144,669)
Balanceasof December 31 ?7,152,141 ?13,008,839 ?38,046,176 ?8,492,885 ?1,784,702 ?68,484,743
Acquisitioncost 7,152,141 19,624,030 110,034,355 8,492,885 5,011,914 150,315,325
Accumulateddepreciationand
impairment - (6,615,191) (71,988,179) - (3,227,212) (81,830,582)
1
Thecapitalizedborrowingcostsare?36,129millionandtheinterest rateusedtocalculatetheborrowingcostseligiblefor
capitalizationis2.50%.
2
Othersincludeeffectsof changesinforeigncurrencyexchangerates.
(B) Detailsof depreciationof property, plant andequipment bylineitemfor theyearsendedDecember 31, 2013
and2012, areasfollows:
(In millions of Korean won) 2013 2012
Cost of sales ? 14,053,512 ? 13,666,700
Sellingandadministrativeexpenses, etc. 1,416,500 1,168,346
?15,470,012 ?14,835,046
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
52
14. Intangible Assets
(A) Changesinintangibleassetsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won)
2013
Intellectual
property
rights
Capitalized
cost Membership Goodwill Others Total
Balanceasof J anuary1 ? 1,186,033 ? 602,274 ? 170,843 ? 573,845 ? 1,196,710 ? 3,729,705
Internallygenerated
(development costs) - 461,030 - - - 461,030
External acquisitions 284,392 - 7,203 - 182,118 473,713
Businesscombinations 49,046 - - 115,331 2,176 166,553
Amortization (200,452) (310,635) - - (464,314) (975,401)
Sales/disposals (44,633) - (572) (24,651) (4,125) (73,981)
Impairment (1,753) - - (99,643) (7,024) (108,420)
Others
1
(40,960) - 58 (4,348) 352,651 307,401
Balanceasof December 31 ? 1,231,673 ? 752,669 ? 177,532 ? 560,534 ? 1,258,192 ? 3,980,600
1
Othersincludeeffectsof changesinforeigncurrencyexchangerates.
(In millions of Korean won)
2012
Intellectual
property
rights
Capitalized
cost Membership Goodwill Others Total
Balanceasof J anuary1 ? 983,802 ?473,024 ?197,957 ?523,409 ?1,177,044 ?3,355,236
Internallygenerated
(development costs) - 359,639 - - - 359,639
External acquisitions 227,538 - 9,520 - 64,832 301,890
Businesscombinations 163,164 - 3,670 259,961 71,917 498,712
Amortization (169,668) (229,186) - - (388,116) (786,970)
Sales/disposals (13,123) - (39,095) - (980) (53,198)
Impairment (124) (1,203) - (204,746) (10,717) (216,790)
Others
1
(5,556) - (1,209) (4,779) 282,730 271,186
Balanceasof December 31 ?1,186,033 ?602,274 ?170,843 ?573,845 ?1,196,710 ?3,729,705
1
Othersincludeeffectsof changesinforeigncurrencyexchangerates.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
53
(B) Goodwill
Goodwill isallocatedtocash-generatingunitsat theendof thereportingperiod, andconsistsof thefollowing:
(In millions of Korean won) 2013 2012
S. LSI business ? 109,120 ? 112,723
Memorybusiness 74,418 74,995
HealthCareEquipment business 199,758 89,258
Digital Imagingbusiness - 82,599
LCDbusiness 80,299 80,299
LEDbusiness 79,277 79,277
Others 17,662 54,694
Total ? 560,534 ? 573,845
Goodwill impairment reviews are undertaken annually, and the recoverable amounts of cash-generating units have
been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on
financial budgets approved by management coveringafive-year period. Cash flows beyond thefive-year period are
extrapolated using theestimated growth rates stated below. Thegrowth ratedoes not exceed thelong-termaverage
growthratefor thebusiness. Inaddition, aconstant growthrateassumptionisusedfor perpetual cashflowcalculation.
Pursuant to the results of the goodwill impairment reviews performed, the Company recognized an impairment of
goodwill for theDigital Imagingbusiness. Themajor assumptionsusedincalculatingthevalueinuseareasfollows:
Samsung Digital Imaging 2013 2012
Salesgrowthrate
1
0.2 6.7
Perpetual growthrate
2
(4.1) (2.4)
Pre-taxdiscount rate
3
13.0 15.6
1
Futurecashflowsfor 5yearsareprojectedbasedonpreviousgrowthrateandtheindustryestimates.
2
Theprojectedgrowthratebeyondfiveyearsisconsistent withindustryestimates.
3
Pre-taxdiscount rateappliedtothecashflowprojections
Sales growth rate was determined on the basis of past performance and expectations of market fluctuations. The
discount ratereflectsthespecial riskrelatedtothedivision.
Thecarryingvalueof SamsungDigital Imagingexceededthevalueinuseby?82,599millionin2013and?204,600
million in 2012 and the amounts have been recognized as the other non-operating expenses in the consolidated
statementsof income.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
54
(C) Details of amortization of intangibleassets by lineitemfor theyears ended December 31, 2013 and 2012,
areasfollows:
(In millions of Korean won) 2013 2012
Cost of sales ? 418,447 ? 327,869
Sellingandadministrativeexpenses, etc. 556,954 459,101
Total ? 975,401 ? 786,970
15. Borrowings
(A) Detailsof thecarryingamountsof borrowingsasof December 31, 2013and2012, areasfollows:
(In millions of Korean won)
Financial
Institutions
Annual Interest Rates (%)
as of December 31, 2013 2013 2012
Short-term borrowings
Collateralizedborrowings
1
Woori Bank, etc. 0.6~11.7 ?3,256,935 ?4,328,503
Non-collateralizedborrowings Citi Bank, etc. 0.6~19.0 3,181,582 4,115,249
Total ?6,438,517 ?8,443,752
Current portion of long-term
borrowings
Bankborrowings SMBC, etc. 1.3~7.4 ?1,900,937 ?480,567
Financial leaseliabilities
2
CSSD, etc. 1.1~15.7 19,811 13,293
Total ?1,920,748 ?493,860
Long-term borrowings
Bankborrowings SMBC, etc. 0.7~5.3 ?902,715 ?3,521,257
Financial leaseliabilities
2
CSSD, etc. 1.1~15.7 82,402 101,771
Total ?985,117 ?3,623,028
1
Collateralizedborrowingsaresecuredbytradereceivables(Note8).
2
Leasedproperty, plant andequipment werepledgedascollateral (Note19).
(B) Maturitiesof long-termborrowingsoutstandingasof December 31, 2013, areasfollows:
(In millions of Korean won) Long-term borrowings
For the Years Ending December 31
2014 ? 1,920,748
2015 356,455
2016 559,624
2017 7,248
2018andthereafter 61,790
Total ? 2,905,865
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
55
16. Debentures
Detailsof carryingamount of debenturesasof December 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Koreanwondenominateddebentures(A) ? 198,566 ? 697,822
Foreigncurrencydenominateddebentures(B) 1,112,502 1,131,552
Total ? 1,311,068 ? 1,829,374
(A) Detailsof Koreanwondenominateddebenturesasof December 31, 2013and2012, areasfollows:
(In millions of Korean
won) Issue Date Due Date
Annual Interest Rates (%)
as of December 31, 2013 2013 2012
Unsecureddebentures 2010.6.17 2013.6.17 - - 500,000
Unsecureddebentures 2011.11.17 2014.11.17 4.1 500,000 500,000
Unsecureddebentures 2011.11.17 2016.11.17 4.2 200,000 200,000
Less: Current portion (500,000) (500,000)
Less: Discounts (1,434) (2,178)
Total 198,566 697,822
All theabovedebentureshavebeenissuedbySamsungDisplayandwill berepaiduponmaturity.
(B) Detailsof foreigncurrencydenominateddebenturesasof December 31, 2013and2012, areasfollows:
(In millions of Korean
won) Issue Date Due Date
Annual Interest Rates (%)
as of December 31, 2013 2013 2012
USdollar denominated
straight bonds
1
1997.10.2 2027.10.1 7.7
? 73,871
(US$70million)
? 80,333
(US$75million)
USdollar denominated
unsecuredbonds
2
2012.4.10 2017.4.10 1.8
1,055,300
(US$1,000million)
1,071,100
(US$1,000million)
Less: Current portion (5,277) (5,356)
Less: Discounts (11,392) (14,525)
Total ?1,112,502 ?1,131,552
1
USdollar straight bondsarerepaidannuallyfor twentyyearsafter aten-year graceperiodfromthedateof issuance. Interest is
paidsemi-annually.
2
SamsungElectronicsAmericaissueddollar denominatedunsecuredbonds. Repayment of thesedebenturesisdueonthedateof
maturityandinterest ispaidsemi-annually.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
56
(C) Maturitiesof debenturesoutstandingasof December 31, 2013areasfollows:
(In millions of Korean won)
For the Years Ending December 31 Debentures
2014 ? 505,277
2015 5,277
2016 205,277
2017 1,060,577
2018andthereafter 52,763
Total ? 1,829,171
17. Net Defined Benefit Liabilities
(A) Detailsof net definedbenefit liabilitiesrecognizedonthestatementsof financial positionasof December 31,
2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Present valueof fundeddefinedbenefit obligations ? 5,672,147 ? 4,593,284
Present valueof unfundeddefinedbenefit obligations 55,931 76,183
Subtotal 5,728,078 4,669,467
Fair valueof planassets (3,873,176) (2,939,528)
Total ? 1,854,902 ? 1,729,939
(B) Theamounts recognizedinthestatements of incomefor theyears endedDecember 31, 2013and2012, are
asfollows:
(In millions of Korean won) 2013 2012
Current servicecost ? 836,916 ? 670,123
Interest cost 82,487 58,591
Others 8,164 8,033
? 927,567 ? 736,747
(C) The amounts recognized as cost of defined contribution plan for the years ended December 31, 2013 and
2012, are?44,430millionand?31,676million, respectively.
(D) Thepensionexpenses related to defined benefit plans by lineitemrecognized onthestatements of income
for theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Cost of sales ? 376,588 ? 291,355
Sellingandadministrativeexpenses, etc. 550,979 445,392
? 927,567 ? 736,747
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
57
(E) Changesinthedefinedbenefit obligationsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Balance as of January 1 ? 4,669,467 ? 3,542,340
Current servicecost 836,916 670,123
Interest cost 226,271 194,625
Remeasurement:
Actuarial gainsor lossesarisingfromchangesin
demographicassumptions (38) 81,587
Actuarial gainsor lossesarisingfromchangesin
financial assumptions (22,870) 473,488
Others 257,724 55,396
Benefitspaid (244,186) (301,444)
Foreignexchangedifferences (18,128) (22,028)
Others 22,922 (24,620)
Balance as of December 31 ? 5,728,078 ? 4,669,467
(F) Changesinthefair valueof planassetsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Balance as of January 1 ? 2,939,528 ? 2,423,152
Expectedreturnonplanassets 143,784 136,034
Remeasurement factor of planassets (37,343) (47,333)
Contributionsbytheemployer 978,313 595,420
Benefitspaid (141,017) (155,000)
Foreignexchangedifferences (3,035) (8,812)
Others (7,054) (3,933)
Balance as of December 31 ? 3,873,176 ? 2,939,528
Expected contributions to post-employment benefit plans for the year ending December 31, 2014, are ?1,176,458
million.
(G) Planassetsasof December 31, 2013and2012, consist of asfollows:
(In millions of Korean won) 2013 2012
Equityinstruments ? - ? 59,988
Debt instruments 3,851,102 2,859,415
Others 22,074 20,125
? 3,873,176 ? 2,939,528
1
Planassetsaremostlyinvestedininstrumentswhichhaveaquotedpriceinactivemarket.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
58
(H) Theprincipal actuarial assumptionsasof December 31, 2013and2012, areasfollows:
(In %) 2013 2012
Discount rate 1.0~7.0 3.7~7.0
Salarygrowthrate 1.7~6.6 2.5~9.0
(I) The sensitivity of the defined benefit obligations as of December 31, 2013, to changes in the weighted
principal assumptionsis:
Rate of change
Discount rate
1%increases 90%
1%decreases 112%
Salarygrowthrate
1%increases 112%
1%decreases 90%
(J ) Theactual returnsonplanassetsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Actual returnonplanassets ? 106,441 ? 88,701
(K) Expectedmaturityanalysisof undiscountedpensionbenefitsasof December 31, 2013, isasfollows:
(In millions of Korean won)
Lessthan1year Between1and2
years
Between2and5
years
Between5and10
years
Total
Pensionbenefits ? 307,533 ? 318,113 ? 1,253,532 ? 3,507,267 ? 5,386,445
Theweightedaveragedurationof thedefinedbenefit obligationsis11.00years.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
59
18. Provisions
Changesintheprovisionsfor theyear endedDecember 31, 2013, areasfollows:
(In millions of Korean won)
Warranty (A)
Royalty expenses
(B)
Long-term
incentives (C) Others Total
Balanceasof J anuary1 ? 2,032,817 ? 2,773,196 ? 576,329 ? 81,040 ? 5,463,382
Charged(credited) tothe
statement of income 2,076,633 1,854,900 498,483 (6,862) 4,423,154
Payment (2,104,019) (278,961) (152,964) (16,636) (2,552,580)
Others
1
(59,439) (76,465) - (652) (136,556)
Balanceasof December 31 ? 1,945,992 ? 4,272,670 ? 921,848 ? 56,890 ? 7,197,400
1
Othersincludeeffectsof changesinforeigncurrencyexchangerates.
(A) TheCompany accrues warranty reserves for estimated costs of futureservice, repairs and recalls, based on
historical experienceandtermsof warrantyprograms.
(B) The Company makes provisions for the estimated royalty expenses under negotiation with counterparties.
Thetimingof payment dependsonthesettlement of thenegotiation.
(C) The Company has a long-term incentive plan for its executives based on a three-year management
performancecriteriaandhasmadeaprovisionfor theestimatedincentivecost for theaccruedperiod.
19. Commitments and Contingencies
(A) Guarantees
(In millions of Korean won) 2013 2012
Guaranteesof debt for housingrental
1
? 151,985 ? 151,817
1
Represent themaximumamount of debt guarantee, whichwasprovidedfor employeeswhotookdebt fromfinancial institutions
inorder tofinanceemployeehousingrental.
In addition to the guarantees described above, the Company provides guarantees for borrowings by Intellectual
KeystoneTechnology(IKT), theCompany’sassociate, toCitibankintheamount of ?31,659million(USD30million).
As of December 31, 2013, the Company’s investments in Pusan Newport are pledged as collateral against the
investee'sdebt (Note9).
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
60
(B) Lease
TheCompanyleasescertainproperty, plant andequipment under variousfinanceleasearrangements. Assetsrecorded
under finance lease agreements are included in property, plant and equipment with a net book value of ?110,655
million (2012: ?121,402 million). Depreciation expensefor thefinanceleaseassets amounted to ?10,587 million
for theyear endedDecember 31, 2013(2012: ?9,650million).
Theminimumleasepaymentsunder financeleaseagreementsandtheir present valueasof December 31, 2013and
2012, areasfollows:
(In millions of Korean won)
2013 2012
Minimum Lease
payments
Present
values
Minimum Lease
payments
Present
values
Withinoneyear ? 27,893 ? 19,811 ? 21,399 ? 13,293
Fromoneyear tofiveyears 57,508 28,213 70,310 40,216
Morethanfiveyears 95,192 54,189 108,865 61,555
Total ? 180,593 ? 102,213 ? 200,574 ? 115,064
Present valueadjustment (78,380) (85,510)
Financeleasepayables ? 102,213 ? 115,064
(C) Litigation
(1) Based on the agreement entered on August 24, 1999 with respect to Samsung Motor Inc.’s (“SMI”)
bankruptcy proceedings, SMI’s creditors (the“Creditors”) filedacivil actionagainst Mr. KunHeeLee,
chairman of the Company, and 28 Samsung Group affiliates including the Company under joint and
several liability for failing to comply with such agreement. Under the suit, the Creditors have sought
?2,450 billion (approximately USD 2.32 billion) for loss of principal on loans extended to SMI, a
separateamount for breach of theagreement, and an amount for default interest. During thecourseof
Samsung Life Insurance’s (“SLI”) Initial Public Offering (“IPO”), its shares owned by the Creditors
weredisposed of, and thepart of proceeds exceeding thepar valueof ?70,000 was deposited into an
escrowaccount (?877.6 billion, approximately USD 0.83 billion). Most of theclaims with regards to
thelawsuit havebeen withdrawn. OnJ anuary 11, 2011, theSeoul HighCourt ordered SamsungGroup
affiliates to pay to the Creditors ?600 billion (approximately USD 0.57 billion) and penalties due to
delay. In accordance with the Seoul High Court order, ?620.4 billion (which includes penalties and
interest owed) was paid to the Creditors from the funds held in escrow during J anuary 2011. The
Samsung Group affiliates and the Creditors appealed the Seoul High Court’s ruling to the Korean
SupremeCourt andtheappeal iscurrentlyinprogress.
(2) ThelitigationwithAppleInc. inmultipleregionsincludingtheUSA isongoingasof thereportingdate.
Regardingtheongoinglawsuit intheUSA, onAugust 24, 2012, thejury determinedthat theCompany
partially infringed Apple’s design and utility patent and should pay damages to Apple. On March 1,
2013, however, the J udge ordered a new trial for a certain portion of the damages, ruling that it was
originally miscalculated. As of the reporting date, the first appeal is still ongoing regarding the jury’s
verdict onNovember 21, 2013. Thefinal conclusionandtheeffect of thepatent lawsuitswithAppleare
uncertainasof thereportingdate.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
61
(3) In addition, during the normal course of business with numerous companies, the Company has been
involved in various claims, disputes, and investigations conducted by regulatory bodies. Although, the
outflowof resources andtimingof thesematters areuncertain, theCompany believes theoutcomewill
not haveamaterial impact onthefinancial conditionof theCompany.
(D) Other commitments
Asof December 31, 2013, theCompanyhasatradefinancingagreement, tradenotesreceivablediscountingfacilities,
andloanfacilitieswithaccountsreceivablepledgedascollateral with13financial institutions, includingWoori Bank,
withacombinedlimit of upto?13,309,900million.
In addition, theCompany has atradefinancing agreement with 19 financial institutions, including KoreaExchange
Bank, for up to US$3,723 million and ?83,000 million, and has loan facilities with accounts receivablepledged as
collateral with6financial institutions, includingIndustrial Bankof Korea, for upto?288,600million.
Samsung Display has a facility loan agreement with 3 financial institutions including SMBC for up to J PY 60,700
million.
Two foreign subsidiaries including SEA have a contract for issuing ABS (Asset Backed Securities) backed by
accounts receivablewithBTMU and other financial institutions for up to US$1,169 millionand other 3 subsidiaries
including SSDG haveacredit facility agreement with Bank of Chinaand other financial institutions for up to CNY
3,400millionandEUR 30million.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
62
20. Share Capital
TheCompany’stotal number of authorizedsharesis500,000,000shares(?5,000per share). TheCompanyhasissued
147,299,337sharesof commonstockand22,833,427sharesof preferredstockasof December 31, 2013, excluding
retiredshares. Duetoretirement of shares, thetotal par valueof thesharesissuedis?850,664million(common
stock?736,497million, preferredstock?114,167million), whichdoesnot agreewithpaid-incapital of ?897,514
million.
Changesinthenumber of sharesoutstandingfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In number of shares)
Number of shares of
Preferred stock Common stock Total
Balance as of January 1, 2012 19,853,734 130,386,723 150,240,457
Disposal of treasury stock through exercise of stock
option
- 191,309 191,309
Other disposal of treasurystock - 269,867 269,867
Balance as of December 31, 2012 19,853,734 130,847,899 150,701,633
Disposal of treasury stock through exercise of stock
option
- 67,222 67,222
Balance as of December 31, 2013 19,853,734 130,915,121 150,768,855
21. Retained Earnings
Retainedearningsasof December 31, 2013and2012, consist of:
(In millions of Korean won) 2013 2012
Appropriated, etc.
? 104,175,235 ? 87,915,275
Unappropriated
44,425,047 32,070,414
Total
? 148,600,282 ? 119,985,689
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
63
22. Dividends
TheCompanydeclaredcashdividendstoshareholdersof commonstockandpreferredstockasinterimdividendsfor
thesix-monthperiodsendedJ une30, 2013and2012, andasyear-enddividendsfor theyearsendedDecember 31,
2013and2012.
Detailsof interimdividendsandyear-enddividendsareasfollows:
(A) Interimdividends
(In millions of Korean won and number of shares) 2013 2012
Number of shareseligiblefor dividends
Commonstock 130,878,713shares 130,759,755shares
Preferredstock 19,853,734shares 19,853,734shares
Dividendrate 10% 10%
Dividendamount
Commonstock ? 65,439 ? 65,380
Preferredstock 9,927 9,927
Total ? 75,366 ? 75,307
(B) Year-enddividends
(In millions of Korean won and number of shares) 2013 2012
Number of shareseligiblefor dividends
Commonstock 130,915,121shares 130,847,899shares
Preferredstock 19,853,734shares 19,853,734shares
Dividendrate
Commonstock 276% 150%
Preferredstock 277% 151%
Dividendamount
Commonstock ? 1,806,629 ? 981,359
Preferredstock 274,974 149,896
Total ? 2,081,603 ? 1,131,255
(C) Dividendpayout ratio
2013 2012
Dividendpayout ratio 7.2% 5.2%
(D) Dividendyieldratio
2013 2012
Common Stock Preferred Stock Common Stock Preferred Stock
Dividendyieldratio
1 1.0% 1.4% 0.5% 1.0%
1
Theaverageclosingpricefor aweekbefore2tradingdaysprior todividenddate.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
64
23. Other Components of Equity
(A) Other componentsof equityasof December 31, 2013and2012, consist of:
(In millions of Korean won) 2013 2012
Treasurystock (7,323,432) (7,350,927)
Stockoptions 10,243 22,242
Unrealizedgainsonavailable-for-salefinancial assets 2,189,013 2,001,536
Shareof other comprehensiveincomeof associatesandjoint ventures 741,893 720,944
Foreigncurrencytranslation (3,610,654) (2,623,963)
Remeasurement of net definedbenefit liabilities (1,302,588) (1,097,228)
Others (163,548) 134,352
(9,459,073) (8,193,044)
(B) Detailsof treasurystockasof December 31, 2013and2012, areasfollows:
TheCompanyrepurchasesregisteredcommonstockandnon-votingpreferredstock, andrecognizestherepurchase
amount inother componentsof equity. Suchstock will bedistributeduponexerciseof stockoptions, etc.
2013 2012
(In millions of Korean won and
number of shares) Preferred Stock Common Stock Common Stock Preferred Stock
Number of shares 2,979,693shares 16,384,216shares 2,979,693shares 16,451,438shares
Acquisitioncost ? 621,843 ? 6,701,589 ? 621,843 ? 6,729,084
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
65
24. Share-Based Compensation
The Company has a stock option plan that provides for the granting of stock purchase options to employees or
directors who havecontributed or areexpectedto contributeto themanagement and technological innovationof the
Company. No share-basedcompensationhas beengrantedsinceDecember 20, 2005. All options currently issuedare
fullyvested.
A summaryof thetermsandthenumber of outstandingstockoptionsasof December 31, 2013isasfollows:
?Typeof stocktobeissuedthroughstockoptions: registeredcommonstock
?Grantingmethod: Issuanceof newcommonstock(useof treasurystockpossibleaswell)
?Exerciseconditions: 2or moreyearsof employeeservicesfromthedateof thegrant
?Thenumber of shares andper-shareexercisepriceof stock to beissuedthroughstock options (after theexclusion
of stockoptionsexpiredduetotermination, etc.)
Date of the Grant
February 28,
2002
March 25,
2002
March 7,
2003
April 16,
2004
December 20,
2005
Granted 988,000 121,000 368,100 590,000 10,000
Expired 53,859 12,942 37,744 53,061 -
Exercisedprior toDecember 31, 2012 934,141 108,058 314,509 438,034 5,000
Outstandingasof J anuary1, 2013 - - 15,847 98,905 5,000
Exercisedduring2013 - - 15,847 51,375 -
Outstandingasof December 31, 2013 - - - 47,530 5,000
Exerciseprice ? 329,200 ? 342,800 ? 288,800 ? 580,300 ? 606,700
Weightedaveragesharepriceat thedate
of exerciseduring2013 - - ?1,517,741 ?1,448,886 -
Exerciseperiodfromthedateof thegrant 2- 10years 2- 10years 2- 10years 2- 10years 2- 10years
Note 1: The number of shares and exercise prices are subject to adjustments resulting fromcapital increase with or without
consideration, stockdividends, stocksplits, stockconsolidations, etc.
Note 2: As of reporting date, exercise periods of stock options granted on March 16, 2000, March 9, 2001, February 28, 2002,
March25, 2002, March7, 2003, andOctober 15, 2004haveall expired, andall suchoptionshavebeenexercised.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
66
25. Expenses by Nature
Expensesbynaturefor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Rawmaterialsandgoods ? 95,070,004 ? 85,193,865
Wagesandsalaries 17,250,962 13,629,400
Pension 971,997 768,423
Depreciation 15,470,012 14,835,046
Amortization 975,401 786,970
Welfare 3,142,187 2,481,756
Commissionandservicecharges 9,124,803 6,961,701
Other expenses 49,902,288 47,397,114
Total
1
? 191,907,654 ? 172,054,275
1
Expensesaboveequal tothesumof cost of sales, andsellingandadministrativeexpensesonthestatementsof income.
26. Selling and Administrative Expenses
Sellingandadministrativeexpensesfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
1) Selling and Administrative Expenses
Wagesandsalaries ? 5,559,339 ? 4,032,848
Pension 232,676 204,929
Commissionandservicecharges 9,124,803 6,961,701
Depreciation 555,944 442,080
Amortization 401,987 353,909
Advertising 4,165,290 4,887,089
Salespromotion 8,019,462 6,055,105
Transportation 3,929,114 3,794,950
Warranty 2,967,724 3,247,757
Others 4,935,604 3,889,181
2) Research and development expenses
Total expenses
Capitalizedexpenses
14,780,432
(461,030)
11,892,434
(359,639)
Total ? 54,211,345 ? 45,402,344
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
67
27. Other Non-Operating Income and Expense
Detailsof other non-operatingincomefor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Dividendincome ? 112,159 ? 106,181
Rental income 104,608 98,462
Gainondisposal of investments 1,117,029 112,505
Gainondisposal of property, plant andequipment 110,638 147,645
Others 985,117 1,088,196
? 2,429,551 ? 1,552,989
Detailsof other non-operatingexpensefor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Lossondisposal of property, plant andequipment ? 187,863 ? 324,993
Donations 495,301 235,349
Impairment lossesonintangibleassets 108,420 216,790
Others 822,464 798,893
? 1,614,048 ? 1,576,025
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
68
28. Finance Income and Costs
Detailsof financeincomeandcostsfor theyearsendedDecember 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Finance income
Interest income
Interest incomefromloansandreceivables ? 1,342,394 ? 840,150
Interest incomefromavailable-for-salefinancial assets 9,215 5,281
Foreignexchangedifferences 6,199,517 6,452,612
Gainsonvaluationof derivatives 65,787 27,719
Gainsonderivativestransaction 397,759 510,792
? 8,014,672 ? 7,836,554
(In millions of Korean won) 2013 2012
Finance costs
Interest expense:
Interest expensefromfinancial liabilitiesmeasuredat amortizedcost ? 319,342 ? 277,512
Other financial liabilities 190,316 321,494
Foreignexchangedifferences 6,529,622 6,596,524
Lossesonvaluationof derivatives 209,311 124,344
Lossesonderivativestransaction 506,381 614,576
? 7,754,972 ? 7,934,450
TheCompanyrecognizesforeignexchangegainsandlossesarisingfromforeigncurrencytransactionsandtranslation
asfinanceincomeandcosts.
29. Income Tax
(A) Incometaxexpensefor theyearsendedDecember 31, 2013and2012, consistsof:
(In millions of Korean won) 2013 2012
Current taxes:
Current taxonprofitsfor theyear ? 7,406,736 ? 5,656,298
Adjustmentsinrespect of prior years 52,318 95,296
Deferredtaxes:
Changesinthecarryforwardof unusedtaxcredits (52,085) 235,640
Changesintemporarydifferences 501,450 19,885
Changesinthecarryforwardof unusedtaxlosses 2,805 (850)
Others (10,490) 60,654
Itemschargeddirectlytoequity (11,219) 2,809
Incometaxexpense ? 7,889,515 ? 6,069,732
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
69
(B) Thetax on theCompany’s profit beforetax differs fromthetheoretical amount that would ariseusing the
weightedaveragetaxrateapplicabletoprofitsof theCompanyasfollows:
(In millions of Korean won) 2013 2012
Incomebeforetax ? 38,364,279 ? 29,915,017
Taxcalculatedat weightedaveragetaxratesapplicable
1
9,576,241 7,664,722
Taxeffectsof:
Permanent differences (335,146) (161,762)
Temporarydifferencesfor whichnodeferredincometaxwasrecognized 1,307 (7,930)
Taxcredit (2,156,519) (1,980,710)
Subsidiaries, associatesandinterestsinjoint ventures 318,359 650,000
Impact of changesintaxrates 5,526 (3,602)
Others 479,747 (90,986)
Incometaxexpense ? 7,889,515 ? 6,069,732
Effectivetaxrate 20.56% 20.29%
1
Weighted average statutory tax rates that are applied differently for theprofits of the Company at each tax authority as of
December 31, 2013and2012.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
70
(C) Deferred income tax assets and liabilities resulting from the tax effect of temporary differences as of
December 31, 2013and2012, areasfollows:
(1) Asof December 31, 2013
Temporary Differences Deferred Income Tax Assets (Liabilities)
(In millions of Korean won)
Balance as of
January 1
Increase
(Decrease)
Balance as of
December 31
Balance as of
January 1
Increase
(Decrease)
Balance as of
December 31
Deferred tax arising from temporary differences
Special reservesappropriated
for taxpurposes ? (33,097) ? 5,312 ? (27,785) ? (8,010) ? 1,286 ? (6,724)
Revaluationof land (3,477,691) 1,587 (3,476,104) (841,601) 384 (841,217)
Investmentsinsubsidiaries, associates
andjoint ventures
1
(25,263,866) (2,555,796) (27,819,662) (3,682,268) (318,359) (4,000,627)
Depreciation 1,237,393 (402,647) 834,746 193,344 (57,968) 135,376
Accruedincome (124,177) (179,613) (303,790) (28,163) (44,682) (72,845)
Provisions, accruedexpensesandothers 10,362,208 1,983,485 12,345,693 2,556,845 596,301 3,153,146
Foreigncurrencytranslation (13,260) (168,042) (181,302) (5,967) (38,058) (44,025)
Asset impairment losses 90,656 251,433 342,089 16,524 65,375 81,899
Assetsheldfor sale - 7,527,869 7,527,869 - 1,821,744 1,821,744
Others (894,234) (10,818,680) (11,712,914) (171,750) (2,527,473) (2,699,223)
Subtotal ? (18,116,068) ? (4,355,092) ? (22,471,160) ? (1,971,046) ? (501,450) ? (2,472,496)
Deferred tax arising from carryforwards
Unusedtaxlosses ? 130,992 ? (23,764) ? 107,228 ? 27,811 ? (2,805) ? 25,006
Unusedtaxcredits 1,316,509 25,141 1,341,650 1,260,107 52,085 1,312,192
Deferred tax recognized in other comprehensive income
Valuationof available-for-salefinancial
instruments ? (2,581,628) ? (306,252) ? (2,887,880) ? (580,092) ? (84,080) ? (664,172)
Actuarial valuation 1,471,318 247,136 1,718,454 349,833 59,046 408,879
Subtotal ? (1,110,310) ? (59,116) ? (1,169,426) ? (230,259) ? (25,034) ? (255,293)
Deferredtaxassets ? 4,621,780
Deferredtaxliabilities (6,012,371)
Total ? (1,390,591)
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
71
(2) Asof December 31, 2012
Temporary Differences Deferred Income Tax Assets (Liabilities)
(In millions of Korean won)
Balance as of
January 1
Increase
(Decrease)
Balance as of
December 31
Balance as of
January 1
Increase
(Decrease)
Balance as of
December 31
Deferred tax arising from temporary differences
Special reservesappropriated
for taxpurposes ? (18,146) ? (14,951) ? (33,097) ? (4,391) ? (3,619) ? (8,010)
Revaluationof land (4,017,316) 539,625 (3,477,691) (972,191) 130,590 (841,601)
Investmentsinsubsidiaries, associates
andjoint ventures
1
(13,450,537) (11,813,329) (25,263,866) (3,032,268) (650,000) (3,682,268)
Depreciation (13,547) 1,250,940 1,237,393 (62,124) 255,468 193,344
Accruedincome (92,953) (31,224) (124,177) (21,337) (6,826) (28,163)
Provisions, accruedexpensesandothers 7,144,431 3,217,777 10,362,208 1,806,514 750,331 2,556,845
Foreigncurrencytranslation 150,908 (164,168) (13,260) 35,482 (41,449) (5,967)
Asset impairment losses 52,901 37,755 90,656 10,937 5,587 16,524
Others 779,626 (1,673,860) (894,234) 288,217 (459,967) (171,750)
Subtotal ? (9,464,633) ? (8,651,435) ?(18,116,068) ? (1,951,161) ? (19,885) ?(1,971,046)
Deferred tax arising from carryforwards
Undisposedaccumulateddeficit ? 100,401 ? 30,591 ? 130,992 ? 26,961 ? 850 ? 27,811
Taxcredit carryforwards 1,512,052 (195,543) 1,316,509 1,495,747 (235,640) 1,260,107
Deferred tax recognized in other comprehensive income
Valuationof available-for-salefinancial
instruments ?(1,316,863) ?(1,264,765) ? (2,581,628) ? (318,052) ? (262,040) ? (580,092)
Actuarial valuation 813,514 657,804 1,471,318 196,149 153,684 349,833
Subtotal ? (503,349) ? (606,961) ? (1,110,310) ? (121,903) ? (108,356) ? (230,259)
Deferredtaxassets ? 2,516,080
Deferredtaxliabilities (3,429,467)
Total ? (913,387)
1
Deferredtaxassetswerenot recognizedif it isprobablethat thetemporarydifferenceswill not reverseintheforeseeablefuture
for investmentsinsubsidiaries, associatesandjoint ventures.
The Company periodically assesses its ability to recover deferred income tax assets. In the event of a significant
uncertaintyregardingtheCompany'sultimateabilitytorecover suchassets, deferredincometaxassetsarerecognized
onlytotheextent that it isprobablethat futuretaxableprofit will beavailableagainst whichthetemporarydifferences
canbeutilized.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
72
Temporary differences whose deferred tax effects were not recognized due to the uncertainty regarding ultimate
realizabilityof suchassetsasof December 31, 2013and2012areasfollows:
(In millions of Korean won) 2013 2012
Unusedtaxlosses ? 12,196 ? -
Unusedtaxcredits 30,098 48,262
Expiry dates of unusedtax losses andunusedtax credits for whichno deferredtax asset is recognizedinthebalance
sheet areasfollows:
(In millions of Korean won) 2014 2015 2016 2017 and after
Undisposedaccumulateddeficit ? - ? - ? - ? 12,196
Taxcredit carryforwards 4,170 3,437 18,525 3,966
(D) Theliquidityanalysisof deferredtaxassetsanddeferredtaxliabilitiesisasfollows:
(In millions of Korean won) 2013 2012
Current ? (107,699) ? 1,898,481
Non-current (1,282,892) (2,811,868)
Total ? (1,390,591) ? (913,387)
30. Earnings per Share
Basicearningsper sharefor theyearsendedDecember 31, 2013and2012, arecalculatedasfollows:
(In millions of Korean won and thousands of number of shares) 2013 2012
Net incomeasreportedonthestatementsof income ? 29,821,215 ? 23,185,375
Net incomeavailablefor commonstock 25,893,396 20,130,020
Weighted-averagenumber of commonsharesoutstanding(inthousands) 130,880 130,698
Basicearningsper share(inKoreanwon) ? 197,841 ? 154,020
(In millions of Korean won and thousands of number of shares) 2013 2012
Net incomeasreportedonthestatementsof income ? 29,821,215 ? 23,185,375
Net incomeavailablefor preferredstock 3,927,819 3,055,355
Weighted-averagenumber of preferredsharesoutstanding(inthousands) 19,854 19,854
Basicearningsper preferredshare(inKoreanwon) ? 197,838 ? 153,893
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
73
Diluted earnings per shareis calculated by adjustingtheweighted averagenumber of ordinary shares outstandingto
assume conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential
ordinary shares: stock options. A calculationisdonetodeterminethenumber of sharesthat couldhavebeenacquired
at fair value(determined as theaverageannual market sharepriceof theCompany’s shares) based onthemonetary
value of the subscription rights attached to outstanding share options. The number of shares calculated as above is
comparedwiththenumber of sharesthat wouldhavebeenissuedassumingtheexerciseof theshareoptions.
Dilutedearningsper sharefor theyearsendedDecember 31, 2013and2012, arecalculatedasfollows:
(In millions of Korean won and thousands of number of shares) 2013 2012
Net incomeavailablefor commonstockandcommonstockequivalents ? 25,894,151 ? 20,131,405
Weighted-averagenumber of sharesof commonstockandcommonstock
equivalents(inthousands) 130,911 130,766
Dilutedearningsper share(inKoreanwon) ? 197,800 ? 153,950
(In millions of Korean won and thousands of number of shares) 2013 2012
Net incomeavailablefor preferredstockandpreferredstockequivalents ? 3,927,064 ? 3,053,970
Weighted-averagenumber of sharesof preferredstockandpreferredstock
equivalents(inthousands) 19,854 19,854
Dilutedearningsper preferredshare(inKoreanwon) ? 197,800 ? 153,823
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
74
31. Cash Generated from Operations
(A) Cashflowsfromoperatingactivitiesasof December 31, 2013and2012, consist of thefollowing:
(In millions of Korean won) 2013 2012
Adjustmentsfor:
Incometaxexpense ? 7,889,515 ? 6,069,732
Financeincome (2,551,623) (2,068,888)
Financecosts 1,568,663 1,755,715
Severanceandretirement benefits 971,997 768,423
Depreciation 15,470,012 14,835,046
Amortization 975,401 786,970
Baddebt expenses, etc. 282,978 205,424
Gainonvaluationof equitymethod (504,063) (986,611)
Gainondisposal of property, plant andequipment (110,638) (147,645)
Lossondisposal of property, plant andequipment 187,863 324,993
Obsolescenceandscrappingof inventories, etc. 1,045,360 1,212,222
Gainondisposal of investments (1,117,029) (112,505)
Impairment lossesonintangibleassets 108,420 216,790
Other income/expense (412,024) (100,107)
Adjustments, total ? 23,804,832 ? 22,759,559
(In millions of Korean won) 2013 2012
Changesinassetsandliabilities:
Increaseintradereceivables ? (1,993,705) ? (2,032,126)
Decrease/(increase) inother receivables 192,054 (536,202)
Increaseinadvances (144,720) (277,329)
Increaseinprepaidexpenses (321,953) (72,285)
Increaseininventories (3,097,762) (4,011,553)
Decreaseintradepayables (965,677) (465,450)
Increase/(decrease) inother payables 1,296,263 (416,870)
Increaseinadvancesreceived 49,495 88,152
Increase/(decrease) inwithholdings 323,874 (663,733)
Increaseinaccruedexpenses 2,261,910 2,183,846
Increaseinprovisions 2,009,248 1,824,693
Payment of severancebenefits (244,186) (301,444)
Increaseinplanassets (837,296) (440,420)
Others 159,210 (657,228)
Changesinnet workingcapital, total ? (1,313,245) ? (5,777,949)
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
75
(B) Significant transactions not affecting cash flows for the years ended December 31, 2013 and 2012, are as
follows:
(In millions of Korean won) 2013 2012
Valuationof available-for-salefinancial assets ? 1,271,817 ? 1,185,256
Reclassificationof constructioninprogressand machineryintransit to
property, plant andequipment 16,578,339 19,567,010
Reclassificationof investment inassociatestoassetsheldfor sale 2,716,733 -
Valuationof investmentsinassociatesandjoint ventures 20,756 (350,491)
Non-cashconsiderationtransferredfor businesscombinations - (633,708)
Reclassificationof current maturitiesof long-termborrowings 1,920,748 493,860
Reclassificationof current maturitiesof bonds 505,277 505,356
(C) TheCompany reportedcashreceiptsandpaymentsarisingfromtransactionsoccurringfrequently andshort-
termfinancial instruments, loans, andborrowingsonanet basis.
(D) Amongthenet cashusedininvestingactivities for theyear endedDecember 31, 2013, cashoutflows from
businesscombinationincludetheacquisitionof assetsandliabilitiesof NeuroLogica.
32. Financial Risk Management
TheCompany’s financial risk management focuses on minimizing market risk, credit risk, and liquidity risk arising
fromoperating activities. To mitigatetheserisks, theCompany implements and operates afinancial risk policy and
programthat closelymonitorsandmanagessuchrisks.
The finance team mainly carries out the Company’s financial risk management. With the cooperation of the
Company’sdivisions, domesticandforeignsubsidiaries, thefinanceteamperiodicallymeasures, evaluatesandhedges
financial riskandalsoestablishesandimplementstheglobal financial risk management policy.
Also, financial risk management officersaredispatchedtotheregional headquartersof eachareaincludingtheUnited
States of America, England, Singapore, China, J apan, Brazil andRussiato operatethelocal financecenter for global
financial risk management.
TheCompany’sfinancial assetsthat areunder financial risk management arecomposedof cashandcashequivalents,
short-termfinancial instruments, available-for-sale financial assets, trade and other receivables and other financial
assets. TheCompany’sfinancial liabilitiesunder financial risk management arecomposedof tradeandother payables,
borrowings, debentures, andother financial liabilities.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
76
(A) Market risk
(1) Foreignexchangerisk
TheCompany is exposedto foreignexchangerisk arisingfromvarious currency exposures, primarily withrespect to
the United States of America, European Union, South America, J apan and other Asian countries. Revenues and
expensesarisefromforeigncurrencytransactionsandexchangepositions, andthemost widelyusedcurrenciesarethe
US Dollar, EU’s EURO, J apanese Yen and Chinese Yuan. Foreign exchange risk management of the Company is
carriedout by bothSEC anditssubsidiaries. Tominimizeforeignexchangerisk arisingfromoperatingactivities, the
Company’s foreignexchangemanagement policy requires normal business transactions to beinlocal currency or for
thecash-incurrencytobematchedupwiththecash-out currency. TheCompany’sforeignexchangerisk management
policy also defines foreign exchange risk, measuring period, controlling responsibilities, management procedures,
hedgingperiodandhedgeratio.
TheCompany limits all speculativeforeign exchangetransactions and operates asystemto managereceivables and
payables denominated in foreign currency. It evaluates, manages and reports foreign currency exposures to
receivablesandpayables.
A summary of foreignassets andliabilities of theCompany, presentedinKoreanwon, as of December 31, 2013and
2012isasfollows:
(In millions of
Korean won)
2013 2012
USD EUR JPY Others USD EUR JPY Others
Financial assets ? 9,834,247 ? 1,253,898 ? 269,600 ? 1,581,019 ?12,709,235 ? 1,085,390 ? 178,373 ? 1,577,076
Financial liabilities 9,664,814 1,071,174 1,172,213 191,674 9,550,081 978,953 1,142,081 214,639
Foreigncurrencyexposuretofinancial assetsandliabilitiesof a5%currencyratechangeagainst theKoreanwonare
presentedbelow.
(In millions of Korean won) 2013 2012
Increase Decrease Increase Decrease
Financial assets ? 646,938 ? (646,938) ? 777,504 ? (777,504)
Financial liabilities (604,994) 604,994 (594,288) 594,288
Net effect 41,944 (41,944) 183,216 (183,216)
(2) Pricerisk
The Company’s investment portfolio consists of direct and indirect investments in equity securities classified as
available-for-sale, whichisinlinewiththeCompany’sstrategy.
Asof December 31, 2013and2012, apricefluctuationinrelationtomarketableequity securitiesby 1%wouldresult
in changes in other comprehensive income (before income tax) of ?43,933 million and ?44,359 million,
respectively.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
77
(3) Interest raterisk
Risk of changesininterest ratefor afloatinginterest ratefinancial instrument isdefinedastherisk that thefair value
of futurecashflowsof afinancial instrument will fluctuatebecauseof changesinmarket interest rates. TheCompany
is exposed to interest rate risk mainly through interest bearing liabilities and assets. The Company’s position with
regard to interest raterisk exposureis mainly driven by its debt obligations such as bonds, interest-bearing deposits
andissuanceof receivables. Inorder toavoidinterest raterisk, theCompany maintainsminimumexternal borrowings
by facilitatingcashpoolingsystems onaregional andglobal basis. TheCompany manages exposedinterest raterisk
viaperiodicmonitoringandhandlesriskfactorsonatimelybasis.
Thesensitivityriskof theCompanyisdeterminedbasedonthefollowingassumptions:
- Changesinmarket interest ratesthat couldimpact theinterest incomeandexpensesof floatinginterest ratefinancial
instruments
Based on the above assumption, changes to profit and net equity as a result of 1% increases in interest rate on
borrowingsarepresentedbelow:
(In millions of Korean won) 2013 2012
Increase Decrease Increase Decrease
Financial assets ? 46,025 ? (46,025) ? 78,164 ? (78,164)
Financial liabilities (22,942) 22,942 (21,864) 21,864
? 23,083 ? (23,038) ? 56,300 ? (56,300)
(B) Credit risk
Credit risk arisesduringthenormal courseof transactionsandinvestingactivitieswhereclientsor other partiesfail to
discharge an obligation. The Company monitors and sets the client’s and counterparty’s credit limit on a periodic
basisbasedontheclient’sandcounterparty’sfinancial conditions, default historyandother important factors.
Credit risk canarisefromtransactions withfinancial institutions whichincludefinancial instrument transactionssuch
ascashandcashequivalents, savings, andderivativeinstruments. Tominimizesuchrisk, theCompany transactsonly
withbanks whichhavestronginternational credit rating(S&P A andabove), andall newtransactions withfinancial
institutions with no prior transaction history areapproved, managed and monitored by theCompany’s financeteam
andthelocal financecenter. TheCompanyrequiresseparateapproval for contractswithrestrictions.
Most of the Company’s accounts receivable is adequately insured to manage any risk, therefore, the Company
estimatesitscredit risk exposuretobelimited. TheCompanyestimatesthat itsmaximumexposuretocredit risk isthe
carryingvalueof itsfinancial assets, net of impairment losses.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
78
(C) Liquidityrisk
Due to large investments made by the Company, maintaining adequate levels of liquidity risk is critical. The
Company strives to achievethis goal by periodically forecasting its capital balance, estimating required cash levels,
andmanagingincomeandexpenses.
The Company manages its liquidity risk by periodically forecasting projected cash flows. If abnormal signs are
identified, the Company works with the local finance center and provides liquidity support by utilizing a globally
integrated finance structure, such as Cash Pooling. In addition, the Company maintains a liquidity management
process whichprovides additional financial support by thelocal financecenter and theCompany. TheCashPooling
programallowssharingof surplusfundsamongentitiesandcontributestominimizingliquidityrisk andstrengthening
theCompany’scompetitivepositionbyreducingcapital operationexpensesandfinanceexpenses.
In addition, the Company mitigates liquidity risk by contracting with financial institutions with respect to bank
overdrafts and foreign trade finance and by providing payment guarantees to subsidiaries. For large scale facility
investments, liquidity risk is minimized by utilizing internal reserves and long termborrowings according to the
capital injectionschedule.
Thefollowingtableisanundiscountedcashflowanalysis for financial liabilitiesthat arepresentedonthestatements
of financial positionaccordingtotheir remainingcontractual maturity.
2013
(In millions of Korean
won)
Less than
3 months
4-6
months
7-12
months
1-5
years
More than
5 years
Financial liabilities ?33,862,896 ?1,095,285 ?4,806,477 ?2,564,769 ? 65,772
2012
(In millions of Korean
won)
Less than
3 months
4-6
months
7-12
months
1-5
years
More than
5 years
Financial liabilities ?32,257,940 ?1,690,825 ?2,371,879 ?7,006,975 ? 76,236
TheCompany’stradingportfolioof derivativeinstrumentshavebeenincludedat their fair valueof ?244,172million
(2012: ?79,212 million) within the less than three month time bucket because the contractual maturities are not
essential for anunderstandingof thetimingof thecashflows. Thesecontracts aremanagedonanet-fair valuebasis
rather than by maturity date. Net settled derivatives consist of forward exchangecontracts used by theCompany to
managetheexchangerateprofile.
Themaximumliquidityriskexposurefromthoseother thantheabovefinancial liabilities(e.g. payment guaranteesfor
affiliated companies and performance bonds) as of December 31, 2013 is ?183,644 million (December 31, 2012:
?151,817million).
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
79
(D) Capital risk management
The purpose of capital management is to maintain a sound capital structure. The Company monitors capital on the
basisof theratioof total liabilitiestototal equity. Thisratioiscalculatedbydividingtotal liabilitiesbytotal equityin
theconsolidatedfinancial statements.
TheCompany’scapital risk management policy has not changedsincethefiscal year endedDecember 31, 2012. The
CompanyhasmaintainedanA+andA1credit ratingsfromS&P andMoody’s, respectively, onitslongtermdebt.
Thetotal liabilitiestoequityratiosasof December 31, 2013and2012, areasfollows:
(In millions of Korean won) 2013 2012
Total liabilities ? 64,059,008 ? 59,591,364
Total equity 150,016,010 121,480,206
Total liabilitiestoequityratio 42.7% 49.1%
(E) Fair valuemeasurement
(1) Thefollowingtablepresentstheassetsandliabilities, bylevel, that aremeasuredat fair value:
2013
(In millions of Korean won) Level 1 Level 2 Level 3 Total balance
Derivatives ? - ? 40,552 ? - ? 40,552
Available-for-salefinancial assets
1
5,656,806 1,188,498 493,378 7,338,682
Total assets 5,656,806 1,229,050 493,378 7,379,234
Derivatives - 244,172 - 244,172
Total liabilities ? - ? 244,172 ? - ? 244,172
2012
(In millions of Korean won) Level 1 Level 2 Level 3 Total balance
Derivatives ? - ? 47,227 ? - ? 47,227
Available-for-salefinancial assets
1
5,694,730 125,994 389,195 6,209,919
Total assets 5,694,730 173,221 389,195 6,257,146
Derivatives - 79,212 - 79,212
Total liabilities ? - ? 79,212 ? - ? 79,212
1
Amount measured at cost (2013: ?388,225million, 2012: ?278,130million) is excluded as therangeof reasonablefair value
estimatesissignificant andtheprobabilitiesof thevariousestimatescannot bereasonablyassessed.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
80
Thelevelsof thefair valuehierarchyanditsapplicationtofinancial assetsandliabilitiesaredescribedbelow.
?Level 1: Quotedprices(unadjusted) inactivemarketsfor identical assetsor liabilities
?Level 2: Inputsother thanquotedpricesincludedwithinLevel 1that areobservablefor theasset or liability, either
directlyor indirectly
?Level 3: Inputsfor theasset or liabilitythat arenot basedonobservablemarket data(that is, unobservableinputs)
Thefair valueof financial instruments traded inactivemarkets is based onquoted market prices at thestatement of
financial position date. A market is regarded as active if quoted prices are readily and regularly available froman
exchange, dealer, broker, industry group, pricingservice, or regulatory agency, andthoseprices represent actual and
regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets
held by the Company is the current bid price. These instruments are included in Level 1. Instruments included in
Level 1arelistedequityinvestmentsclassifiedastradingsecuritiesor available-for-salefinancial assets.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determinedby usingvaluationtechniques. Thesevaluationtechniques maximizetheuseof observable
market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs
requiredtofair valueaninstrument areobservable, theinstrument isincludedinLevel 2.
If oneor moreof thesignificant inputsisnot basedonobservablemarket data, theinstrument isincludedinLevel 3.
Specificvaluationtechniquesusedtovaluefinancial instrumentsinclude:
?Quotedmarket pricesor dealer quotesfor similar instruments.
?Thefair valueof forwardforeignexchangecontractsisdeterminedusingforwardexchangeratesat thestatement of
financial positiondate, withtheresultingvaluediscountedbacktopresent value.
Other techniques, suchas discountedcashflowanalysis, areusedto determinefair valuefor theremainingfinancial
instruments. For tradeandother receivables, thebookvalueapproximatesareasonableestimateof fair value.
(2) ChangesinLevel 3instruments:
(In millions of Korean won)
2013 2012
Balanceasof J anuary1 ? 389,195 ? 623,739
Purchases 151,741 82,508
Disposals, etc. (46,357) (31,972)
Gainsandlossesrecognizedinother comprehensiveincome 2,615 (6,294)
Others
1
(3,816) (278,786)
Balanceasof December 31 ? 493,378 ? 389,195
1
Amount measured at cost is included as the range of reasonable fair value estimates is significant and the probabilities of the
variousestimatescannot bereasonablyassessed.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
81
(3) Valuationtechniqueandtheinputs
TheCompanyutilizesapresent valuetechniquetodiscount futurecashflowsat aproper interest ratefor corporate
bonds, government andpublicbonds, andbankdebenturesthat areclassifiedasLevel 2inthefair valuehierarchy.
TheCompanyusesabinomial pricingmodel derivedfromtheassumptionthat theunderlyingassetsfor thecurrency
forwardcontractsfollowabinomial probabilitydistribution.
Thefollowingtablepresentsthevaluationtechniqueandtheinputsusedfor major financial instrumentsclassifiedas
Level 3.
(In millions of Korean won)
Classification
Fair
Value
Valuation
Technique Level 3 Inputs
Input Range
(Weighted Average)
SamsungPetrochemical 80,347
Discountedcash
flow
Permanent growthrate -1.00%~1.00%(0%)
Weightedaveragecost of capital 6.37%~8.37%(7.37%)
SamsungGeneral
Chemicals
80,653
Discountedcash
flow
Permanent growthrate -1.00%~1.00%(0%)
Weightedaveragecost of capital 7.01%~9.01%(8.01%)
TaewonElectric 17,072
Discountedcash
flow
Permanent growthrate -1.00%~1.00%(0%)
Weightedaveragecost of capital 6.06%~8.06%(7.06%)
Pantech 53,053
Discountedcash
flow
Permanent growthrate -1.00%~1.00%(0%)
Weightedaveragecost of capital 8.81%~10.81%(9.81%)
SamsungVenture
Investment
7,021
Discountedcash
flow
Permanent growthrate -1.00%~1.00%(0%)
Weightedaveragecost of capital 7.69%~9.69%(8.69%)
Embeddedderivatives
(convertiblebonds, etc.)
13,240 Binomial model
Discount rate 6.81%~12.96%(8.34%)
Stockpricevolatility 13.77%~20.02%(17.15%)
(4) Sensitivityanalysisfor recurringfair valuemeasurementscategorizedwithinLevel 3
Sensitivityanalysisof financial instrumentsisperformedtomeasurefavorableandunfavorablechangesinthefair
valueof financial instrumentswhichareaffectedbytheunobservableparameters, usingastatistical technique. When
thefair valueisaffectedbymorethantwoinput parameters, theamountsrepresent themost favorableor most
unfavorable.
Theresultsof thesensitivityanalysisfor theeffect onprofit or lossfromchangesininputsfor eachfinancial
instrument, whichiscategorizedwithinLevel 3andsubject tosensitivityanalysis, areasfollows:
(In millions of Korean won) Favorable Changes Unfavorable Changes
Classification Profit or Loss Equity Profit or Loss Equity
Available-for-salefinancial assets
1
- 35,324 - (27,586)
Embeddedderivatives(convertiblebonds, etc.)
2
1,457 1,457 (1,499) (1,499)
Total 1,457 36,781 (1,499) (29,085)
1
For equitysecurities, changesintheir fair valuearecalculatedbyincreasingor decreasingthecorrelationbetweengrowthratio(-
1%~1%) anddiscount rate, whicharesignificant unobservableinputs.
2
For equityderivatives, changesintheir fair valuearecalculatedbyincreasingor decreasingthecorrelationbetweenstockprices
andvolatilityby10%.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
82
33. Segment Information
(A) Operatingsegment information
Thechief operatingdecisionmaker hasbeenidentifiedastheManagement Committee. TheManagement Committee
is responsible for making strategic decisions based on review of the group’s internal reporting. The Management
Committeehasdeterminedtheoperatingsegmentsbasedonthesereports.
TheManagement Committeereviews operatingprofits of eachoperatingsegment inorder toassess performanceand
tomakedecisionsabout allocatingresourcestothesegment.
The operating segments are product based and include CE, IM, Semiconductor, DP and others. Operating segment
informationfor theyear endedDecember 31, 2012hasbeenrestatedinaccordancewiththeorganizational changes.
Depreciation, amortizationof intangibleassets, andoperatingprofit werepreparedafter theallocationof internal
transactionadjustments. Total assetsandliabilitiesof eachoperatingsegment areexcludedfromthedisclosureasit
hasnot beenprovidedregularlytotheManagement Committee.
Thesegment informationprovidedtotheManagement committeefor thereportablesegmentsfor theyearsended
December 312013and2012, isasfollows:
2013 DS
(In millions of
Korean won) CE IM Total
1
Semi
conductor DP Total
1
Intercompany
elimination
within the
group Consolidated
Total segment
revenue 125,088,762 299,161,654 134,394,781 70,908,145 61,294,886 558,196,178 (329,503,511) 228,692,667
Intercompany
revenue (74,757,247) (160,344,435) (66,633,875) (33,471,566) (31,457,770) (329,503,511) 329,503,511 -
Net revenue
2
50,331,515 138,817,219 67,760,906 37,436,579 29,837,116 228,692,667 - 228,692,667
Depreciation 653,354 632,498 13,689,148 9,295,951 4,203,457 15,470,012 - 15,470,012
Amortization 93,699 188,353 416,916 294,605 106,249 975,401 - 975,401
Operatingprofit 1,673,343 24,957,741 10,000,665 6,887,978 2,980,563 36,785,013 - 36,785,013
2012 DS
(In millions of
Korean won) CE IM Total
1
Semi
conductor DP Total
1
Intercompany
elimination
within the
group Consolidated
Total segment
Revenue 117,897,781 224,920,171 136,724,256 66,976,623 69,359,762 479,499,910 (278,396,297) 201,103,613
Intercompany
revenue (66,792,679) (119,075,488) (68,436,962) (32,090,017) (36,360,406) (278,396,297) 278,396,297 -
Net revenue
2
51,105,102 105,844,683 68,287,294 34,886,606 32,999,356 201,103,613 - 201,103,613
Depreciation 578,686 484,231 13,354,303 9,087,880 4,179,088 14,835,046 - 14,835,046
Amortization 76,380 182,730 274,568 186,497 77,047 786,970 - 786,970
Operatingprofit 2,324,036 19,418,235 7,416,325 4,173,730 3,214,750 29,049,338 - 29,049,338
1
Thetotal amount includesothersnot composingoperatingsegments.
2
Net revenuebysegment includesintersegment revenuebysegment.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
83
(B) Regional information
Theregional segment informationprovidedto theManagement Committeefor thereportablesegments for theyears
ended31December 2013and2012, isasfollows:
2013
(In millions of Korean won) Korea America Europe
Asia and
Africa China
Intercompany
elimination
within the
group Consolidated
Total segment revenue 193,645,486 94,703,877 79,416,987 76,409,011 114,020,817 (329,503,511) 228,692,667
Intercompanyrevenue (170,862,177) (25,320,451) (26,738,602) (32,712,684) (73,869,597) 329,503,511 -
Revenuefrom
external customers 22,783,309 69,383,426 52,678,385 43,696,327 40,151,220 - 228,692,667
Non-current assets
1
61,881,863 7,172,187 1,024,699 2,636,552 7,436,424 (674,737) 79,476,988
1
The total of non-current assets other than financial instruments, deferred tax assets, and investments in associates and joint
ventures.
2012
(In millions of Korean won) Korea America Europe
Asia and
Africa China
Intercompany
elimination
within the
group Consolidated
Total segment revenue 179,434,349 81,440,718 75,448,403 57,246,033 85,930,407 (278,396,297) 201,103,613
Intercompanyrevenue (150,254,258) (23,277,536) (25,927,742) (21,167,278) (57,769,483) 278,396,297 -
Revenuefrom
external customers 29,180,091 58,163,182 49,520,661 36,078,755 28,160,924 - 201,103,613
Non-current assets
1
60,591,343 6,890,648 1,030,437 1,749,330 2,574,796 (622,106) 72,214,448
1
The total of non-current assets other than financial instruments, deferred tax assets, and investments in associates and joint
ventures.
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
84
34. Related Party Transactions
(A) Saleandpurchasetransactions
Salesandpurchaseswithrelatedpartiesfor theyearsendedDecember 31, 2013and2012, areasfollows:
2013
(In millions of Korean won) Nameof Company
1
Sales, etc.
Disposal of
fixedassets Purchase, etc.
Purchaseof
fixedassets
Associates
SamsungSDS ? 35,166 ? 130,771 ?1,673,999 ? 369,395
SamsungElectro-Mechanics 72,897 192 2,662,680 76
SamsungSDI 52,909 - 667,658 1,258
SamsungSNS
2
11,418 - 164,093 3,973
SamsungTechwin 15,582 - 84,074 68,949
Others 412,353 - 6,042,874 284,231
Total (associates) 600,325 130,963 11,295,378 727,882
J oint ventures
SamsungCorningPrecisionMaterials 9,931 - 1,758,317 145,324
SiltronicSamsungWafer - - 195,795 -
Others 83 - 147 -
Total (joint ventures) 10,014 - 1,954,259 145,324
Other relatedparties
SamsungEverland 12,690 - 543,162 487,107
Others 112,896 - 83,058 22,942
Total (other related parties) 125,586 - 626,220 510,049
1
Transactionswithseparateentitiesthat arerelatedpartiesof theCompany
2
SamsungSNSwasacquiredbySamsungSDSin2013, andtheaboveamountsrelatetotransactionsprior totheacquisition.
.
2012
(In millions of Korean won) Nameof Company
1
Sales, etc.
Disposal of
fixedassets Purchase, etc.
Purchaseof
fixedassets
Associates
SamsungSDS ? 68,234 ? 202 ?1,508,214 ? 365,482
SamsungElectro-Mechanics 163,086 104 2,229,786 -
SamsungSDI 117,020 1 874,972 183
SamsungSNS 15,697 - 227,165 208
SamsungTechwin 25,051 - 89,889 79,076
Others 417,228 35 4,303,946 31,689
Total (associates) 806,316 342 9,233,972 476,638
J oint ventures
SamsungCorningPrecisionMaterials 20,185 14,660 2,517,028 -
SiltronicSamsungWafer - - 255,665 -
Others 639 - 28,296 -
Total (joint ventures) 20,824 14,660 2,800,989 -
Other relatedparties
SamsungEverland 8,363 281 398,621 319,459
Others 100,584 - 34,042 48
Total (other related parties) 108,947 281 432,663 319,507
1
Transactionswithseparateentitiesthat arerelatedpartiesof theCompany
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
85
(B) Balancesof receivablesandpayables
Year-endbalancesof receivablesandpayablesarisingfromsalesandpurchasesof goodsandservicesasof December
31, 2013and2012, areasfollows:
2013
(In millions of Korean won) Name of Company Receivables, etc. Payables, etc.
Associates
SamsungSDS ? 11,319 ? 479,417
SamsungElectro-Mechanics 5,972 168,494
SamsungSDI 4,863 39,207
SamsungTechwin 1,879 44,286
Others 65,714 477,446
Total (associates) 89,747 1,208,850
J oint ventures
SamsungCorningPrecisionMaterials 3,514 266,400
SiltronicSamsungWafer - 1,454
Others 3 25
Total (joint ventures) 3,517 267,879
Other relatedparties
SamsungEverland 188,982 282,777
Others 24,494 25,402
Total (other related parties) 213,476 308,179
2012
(In millions of Korean won) Name of Company Receivables, etc. Payables, etc.
Associates
SamsungSDS ? 13,651 ? 384,590
SamsungElectro-Mechanics 9,823 160,804
SamsungSDI 6,285 55,784
SamsungSNS 9,310 49,044
SamsungTechwin 1,859 18,167
Others 44,773 286,960
Total (associates) 85,701 955,349
J oint ventures
SamsungCorningPrecisionMaterials 560 380,904
SiltronicSamsungWafer - 20,595
Others 318 7,386
Total (joint ventures) 878 408,885
Other relatedparties
SamsungEverland 166,828 178,049
Others 23,012 1,597
Total (other related parties) 189,840 179,646
(C) Keymanagement compensation
Key management includes directors (executive and non-executive) and members of the Executive Committee. The
compensationpaidor payablefor employeeservicesfor theyearsendedDecember 31, 2013and2012, consistsof:
(In millions of Korean won) 2013 2012
Salariesandother short-termemployeebenefits ? 23,906 ? 10,062
Terminationbenefits 763 530
Other long-termbenefits 7,402 5,865
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
86
35. Information about Non-Controlling Interests
(A) Changesinaccumulatednon-controllinginterests
Theprofit or lossallocatedtonon-controllinginterestsandaccumulatednon-controllinginterestsof subsidiariesthat
arematerial totheCompanyfor theyearsendedDecember 31, 2013and2012, isasfollows:
2013
(In millions of Korean won)
Percentageof Non-
ControllingInterests
Balanceas
of J anuary1 Net Income Dividends Others
Balanceasof
December 31
SamsungDisplayandits
subsidiaries 15.2% 4,061,948 433,700 (1,553) 610,030 5,104,125
2012
(In millions of Korean won)
Percentageof Non-
ControllingInterests
Balanceas
of J anuary1 Net Income Dividends Others
Balanceasof
December 31
SamsungDisplayandits
subsidiaries 15.2% - 325,405 - 3,736,543 4,061,948
(B) Thesummarizedfinancial informationfor eachsubsidiarywithnon-controllingintereststhat arematerial to
theCompanybeforeintercompanyeliminationsisasfollows:
(1) Summarizedconsolidated statementsof financial position
(In millions of Korean won) Samsung Display and its subsidiaries
December 31, 2013 December 31, 2012
Current assets 14,473,616 11,605,285
Non-current assets 23,454,045 23,338,931
Current liabilities 6,115,203 6,328,757
Non-current liabilities 914,398 2,627,547
Equityattributableto: 30,898,060 25,987,912
Ownersof theparent 30,434,116 25,840,634
Non-controllinginterests 463,944 147,278
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
87
(2) Summarizedconsolidatedstatementsof comprehensiveincome
(In millions of Korean won) Samsung Display and its subsidiaries
2013 2012
Sales 29,478,707 21,737,347
Net income 2,669,623 2,329,078
Other comprehensiveincome (26,415) (82,279)
Total comprehensiveincomeattributableto: 2,643,208 2,246,799
Ownersof theparent 2,631,672 2,252,282
Non-controllinginterests 11,536 (5,483)
(3) Summarizedconsolidatedstatementsof cashflows
(In millions of Korean won) Samsung Display and its subsidiaries
2013 2012
Cashflowsfromoperatingactivities 7,748,974 6,073,334
Cashflowsfrominvestingactivities (10,321,562) (3,659,543)
Cashflowsfromfinancingactivities (1,339,815) 1,004,134
Exchangerateeffect onforeigncurrency(cash) 13,546 (7,152)
Increase(decrease) incashandcashequivalents (3,898,857) 3,410,773
Cashandcashequivalentsat beginningof period 5,341,713 1,930,940
Cashandcashequivalentsat endof period 1,442,856 5,341,713
36. Business Combination
Samsung Electronics America, the Company’s subsidiary, acquired 100% of equity shares of NeuroLogica, with a
closingdateof J anuary28, 2013andtheentitybecamepart of theconsolidationasof thesamedate.
(A) Overviewof theacquiredcompany
Nameof theacquiredcompany NeuroLogica
Headquarterslocation Danvers, MA. USA
Representativedirector EricBailey
Classificationof theacquiredcompany Non-listedcompany
Current relationshipwiththeCompany Subsidiary
Samsung Electronics Co., Ltd. and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
88
(B) Purchasepriceallocation
Thefollowingtablesummarizestheconsiderationpaidfor NeuroLogica, theamountsof theassetsacquiredand
liabilitiesassumedasof theacquisitiondate.
(In millions of Korean won) Amount
I. Considerationtransferred ? 167,819
II. Identifiableassetsandliabilities
Cashandcashequivalents
664
Tradeandother receivables
7,301
Inventories
8,576
Property, plant andequipment
1,052
Intangibleassets
51,222
Tradeandother payables
(8,265)
Deferredincometaxliabilities
(8,630)
Total net identifiableassets 51,920
III. Goodwill ? 115,899
Had NeuroLogica been consolidated on J anuary 1, 2013, revenue would increase by ?1,043 million and net loss
would increase by ?403 million on the consolidated statement of income. Revenue and net loss contributed by
NeuroLogica after the consolidation date of J anuary 28, 2013 amount to ?38,646 million and ?385 million,
respectively.
37. Events after the Reporting Period
(A) OnJ anuary 1, 2014, anamendment to local incometax laws was promulgatedinRepublic of Korea, where
thecontrollingCompany isdomiciled. Thisisexpectedtoaffect themeasurementsof current tax for annual
periods beginningonor after J anuary 1, 2014andof deferredtax assets resultingfromthedeclineinfuture
taxeffectsontaxcredit carryforwards.
(B) On J anuary 15, 2014, theCompany disposed of all shares (percentageof ownership: 42.54%) of Samsung
Corning Precision Materials for USD 1,902 million and acquired 2,300 shares of convertible preferred
stocksof CorningIncorporatedfor USD2,300million.
(C) BasedontheBoardof DirectorsresolutiondatedJ anuary24, 2014, theCompanydecidedtoparticipateina
capital increase(investment amount: ?301,000million) toexpandtheproductioncapacityandtofundthe
development of biosimilarsof SamsungBiologics, arelatedpartyof theCompany.
doc_973938180.pdf