2014 Samsung Electronics Annual Report

2014
SAMSUNG ELECTRONICS
ANNUAL REPORT
Contents
002 CEO Greetings
006 About the Board
8
Business Overview
Consumer Electronics
IT & Mobile Communications
Device Solutions
29
Global Citizenship
Social Contributions
Green Management
Health and Safety
Sharing Growth
037 Financial Statements
Proactive
Possibility
Partnership
Prepared for whatever the future unfolds.
Challenged by endless possibilities.
Propelled by our warmhearted and solid

partnerships. These are the growth strategies and
successful know-how that
drive Samsung Electronics.
When we sharpen our competitive
advantages, unlock the potential of amazing
possibilities and collaborate closely with our
talented partners, the world turns new again
and our trust in accomplishment deepens.
We will keep moving forward as we inspire
new futures and create exciting tomorrows.
2014 Financial Summary

Samsung Electronics and Consolidated Subsidiaries
Sales and Operating Profit (in billions of KRW)
Sales
Operating Profit
228,693
206,206
201,104
36,785
29,049
2012
25,025
2013
2014
Cash Flows from Operating Activities
Cash Flows
(in billions of KRW)
46,707
37,973
2012
Cash Flows from Investing Activities
36,975
2013
(31,322)
2014
(32,806)
(44,747)
This annual report includes forward-looking statements that relate to future events and can be
generally identified by phrases containing words such as believes, expects, anticipates,
foresees, forecasts, estimates or other words or phrases of similar meaning. These
forward-looking statements are not guarantees of future performance and may involve known
and unknown risks, uncertainties and other factors that may affect our actual results,
performance, achievements or financial position, making them materially different from the
actual future results, performance, achievements or financial position expressed or implied by
these forward-looking statements. Unless otherwise specified, all data presented in this report
is from our consolidated financial statements.
CEO Greetings
With differentiated core

competencies and confident
leadership, Samsung Electronics
is setting new challenges as
a respected world-class company
Accelerating growth engines in a difficult business environment

In 2014, despite the economic and political uncertainties of Chinas
slowed growth and rising tensions in Russia and the Middle East,
Samsung Electronics focused on identifying growth engines, develop-ing
innovative technology and products and pursuing creative solutions.
As a result, we recorded revenue of KRW 206 trillion, operating profit
of KRW 25 trillion and net income of KRW 23 trillion, based on
consolidated financial statements. Sales and profits declined over the
previous year owing to poor smartphone and other performance. Even so,
across the global industry, we strengthened our leadership in sound
financial management, brand value and corporate rankings.
Vice Chairman & CEO
Kwon
Oh-Hyun
002
2014 Samsung Electronics Annual Report
003
Enhancing product competency and reinforcing market leadership
Innovating technology and products while
Our Memory Business significantly improved owing to greater cost
fortifying future growth engines
competitiveness and advanced process technology development. In
In 2014, we invested KRW 15 trillion in R&D to lead industry innovation as
turn, that boosted sales of differentiated and high-value-added
we continued to expand global R&D centers and recruit top talent. Our
products, including SSD. In the Mobile Communications Business,
New York and Silicon Valley-based Open Innovation Center extended our
amid intense industry competition and slowing global demand, sales
reach, enabling us to secure outside talent and technologies. Those
and profits of smartphone and tablets weakened and growth was
forward-looking measures fueled remarkable performance and sparked
stagnant over the previous year. Nonetheless, we maintained our
superior technologies, including mass production of the worlds first 20nm
global No. 1 leadership in both the mobile phone and smartphone
DRAM and V-NAND with 3-bit technology; the launch of a smartphone
markets. In the Visual Display Business, we also solidified our market
with the worlds first curved display; wearable devices such as Samsung
leadership by promoting sales of our premium products, including
Gear S and Gear VR; and developing new IoT (Internet of Things) tech-
UHD, Curved and ultra-large-size TVs. As a result, we achieved No. 1
nology based on automatic ID technology that utilizes diverse sensors.
worldwide market share for the ninth year in a row since 2006.
We also reinforced the foundation of our technology leadership and

sustained future growth by registering 4,952 US patents in 2014, the No. 2
world record. In addition, we maintained our profile as an innovative company with 36 CES 2015 Innovation Awards and with the No. 3 ranking on
the Boston Consulting Groups list of The Most Innovative Companies
2014 around the world. Moreover, we were ranked No. 7 on Interbrands
The Best 100 Global Brands 2014, with an estimated brand value of USD
45.5 billion. Fortune listed Samsung Electronics as No. 13 on its list of the
Worlds Most Admired Companies 2014.
President & CEO
Boo-Keun Yoon
President & CEO
Jong-Kyun Shin
CEO Greetings
Building sound management with an unmatched challenging spirit Going

forward, we anticipate lingering uncertainty in the world economy owing to
Next, we will place new demands on B2B and Contents & Services Busi-
an increase in US interest rates, economic recession in the Eurozone and
nesses. With a revamped organizational structure, we will implement a focused
financial risks in emerging countries because of the sharp drop in crude oil
strategy that builds a world-class B2B business, working closely with sales
prices. Competition in the electronics industry will turn ever more fierce as
networks to develop corporate customers. By propelling mo-mentum in
growth continues to slow in our key product markets. Nevertheless, we
advanced markets and realizing high growth in emerging mar-kets, we will
are prepared. Our experienced sound management and unrivaled
position Samsung as a global leader in the B2B business. We will further
challenging spirit will enable us to effectively respond to the fast-changing
enhance our product competitiveness with robust soft compet-itiveness,
business environment.
producing must-have content and services and strengthening our service
First, we will strengthen our competitiveness and profit structures in
platforms, such as Big Data and Cloud Services.
existing business areas. In our core areas, including memory chips, TVs
Third, we will assure stronger competitiveness with preemptive mea-
and mobile phones, we will hone our competitive advantages as we focus
sures going forward. We will aggressively pursue IoT businesses as new
on
technology
growth engines, including Smart Health and Smart Home. We expect to
leadership. Our top ranking in the Memory Business is fully supported by
developing
premium
products
and
strengthening
embed a creative corporate culture in our Samsung Electronics DNA by
our superior technology. In TVs, we will highlight our premium brand
using such tools as MOSAIC, which was introduced in 2014 to improve
power with a central focus on SUHD TVs. In the Mobile Communications
cross-discipline thinking and collective knowledge. Such measures will
Business, we will lead the premium market with the Galaxy S6 and Gal-
establish the firm foundation for our new challenges.
axy S6 edge, while also launching differentiated products for mid- and
low-priced markets. That strategy will not only maintain our dominance in
advanced markets but also fuel growth in emerging and low-priced
markets. In addition, we will realize significant growth in sales and profits
in our developing businesses, such as Digital Appliances, Printing Solutions, Networks, Health & Medical Equipment, System LSI and LED.
004
Vice Chairman & CEO
Growing together as a respected world-class company
005
Oh-Hyun Kwon
Looking ahead in 2015, we are committed to our social responsibility

contributions, with a focus on education, job training and improving
healthcare. Designed for corporate citizenship, our programs support
local issues around the world. We are also leading the way in a range of
green management and environmental activities, such as producing
President & CEO
Boo-Keun Yoon
President & CEO
Jong-Kyun Shin
green products and workplaces and working to reduce greenhouse gas

emissions. We strive to maintain safe environments in which our employees can work healthfully and live happily. As always, we support our
partners worldwide and promote their success by forging win-win partnerships for shared and sustainable growth.
For the past 46 years, Samsung Electronics has grown rapidly by
surmounting many crises and difficulties. As we pursue our dream of
making a better and brighter world for everyone, we will embrace and
overcome new challenges. Todays complex business environment is
pushing us to redouble efforts and increase innovation. We will steadily
realize our dream by relying on our wisdom to overcome crisis, our courage to blaze new trails and our passion to serve our customers.
We are grateful for your unwavering support and encouragement as
we create the imaginative opportunities that will open doors to the future.
Thank you.
About the Board
Our board of directors
Oh-Hyun Kwon
conducts transparent and
Vice Chairman & CEO (2012-Present)

Vice Chairman & Head, Samsung
Advanced Institute of Technology
(2013-Present)
Vice Chairman & Head, Device Solutions
(2011-Present)
President & Head, Device Solutions
(2011-2011)
President & Head, Semiconductor
Business (2008-2011)
President & Head, System LSI Business
(2004-2008)
Head, LSI Technology (2000-2004)
Head, ASIC Business (1998-2000)
responsible management to
maximize corporate value
At Samsung Electronics, our board consists of nine members,

including five outside directors. The board deliberates and resolves: issues determined by laws or articles; issues that arise from
general shareholders meetings; and issues of key princi-ples in
company management and business operation. The board also
oversees the activities of directors. In 2014, we convened seven
board meetings and proposed and addressed 26 motions. We
manage
six
board
committees,
including
the
Boo-Keun Yoon
President & CEO (2013-Present)
President & Head, Consumer Electronics
(2012-Present)
Head, Consumer Electronics Division
(2011-2012)
Head, Visual Display Business
(2007-2011)
Head, R&D Team, Visual Display Business
(2003-2007)
Management
Committee, the Audit Committee, the Outside Director Candidate

Recommendation Committee, the Internal Transaction Com-mittee,
the Compensation Committee and the CSR Committee. Board
committees were also active in 2014. Comprised of four in-side
directors, our Management Committee
hosted 13 meetings.
Comprised of three outside directors, the Audit Committee had five
Jong-Kyun Shin
meetings. To ensure fairness and independence, three of the four

members of the Outside Director Candidate Recommenda-tion
Committee
are
outside
directors.
The
Internal
Transaction
Committee has three outside directors and had seven meetings in

2014. With three outside directors, the Compensation Commit-tee
hosted two meetings while the CSR Committee, with five out-side
directors, held two meetings that deliberated and resolved the
delegated issues.
President & CEO (2013-Present)

President & Head, IT & Mobile
Communications (2012-Present)
Head, IT & Mobile Communications
Division (2011-2012)
Head, Mobile Communications Business
(2009-2011)
Head, Mobile R&D Office,
Mobile
Communications
Business (20062009)
006
Sang-Hoon Lee
President & CFO, Corporate Management
Office (2012-Present)
Head, Strategy Team 1, Samsung
Corporate Strategy Office (2010-2012)
Head, Corporate Management Support
Team (2008-2010)
Strategy & Planning Office (2006-2008)
In-Ho Lee
Independent Director (2010-Present)
Corporate Advisor, Shinhan Bank
(2009-2011)
Chief Executive Officer, Shinhan Financial
Group (2005-2009)
President & Chief Executive Officer,
Shinhan Bank (1999-2003)
Director & Deputy President
(Executive Vice President),
Shinhan Bank (1991-1999)
Han-Joong Kim
Chairman, CHA Strategy Committee,
CHA Health Systems (2012-Present)
Professor Emeritus, Yonsei University
(2012-Present)
Chairman, Korea University Sport
Federation (2010-2012)
Trustee, Korean Council for University
Education (2008-2012)
President, Yonsei University (2008-2012)
Chairman, Board of Directors, The Korean
Society for Preventive Medicine
(2006-2008)
Professor, Department of Preventive
Medicine & Public Health (1982-2012)
007
Kwang-Soo Song
Advisor, Kim & Chang Law Office
(2007-Present)
Prosecutor General, Supreme
Prosecutors Office (2003-2005)
Chief Prosecutor, Daegu High Prosecutors
Office (2002-2003)
Senior Prosecutor, Director of Prosecution
Bureau, Ministry of Justice (2001-2002)
Byeong-Gi Lee
Professor of Electrical Engineering,
Seoul National University (1986-Present)
President, IEEE Communications Society
(2010-2011)
Commissioner, Korea Communications
Commission (2008-2010)
President, Korea Information and
Communication Society (KICS)

(2007-2007)
President, Korea Society of Engineering
Education (KSEE) (2003-2004)
Vice Chancellor for Research Affairs,
Seoul National University (2000-2002)
Member of Technical Staff, AT&T Bell
Laboratories (1984-1986)
Eun-Mee Kim
Dean, Graduate School of International
Studies, Ewha Womans University (2011-Present)

Professor, Graduate School of International
Studies, Ewha Womans University

(1997-Present)
President, Korea Association of International
Development and Cooperation (KAIDEC)
(2011-2012)
Dean, Graduate School of International
Studies, Ewha Womans University (2005-2007)

Visiting Scholar, Brown University (2003-2004)
Visiting Scholar, Harvard University (1994-1994)

Professor, Department of Sociology,
University of Southern California (1987-1997)
In 2014, Samsung Electronics embraced

the challenges of growing despite
the increased political and economic
uncertainties of the complex global
environment. We strengthened our product
and market leadership and again elevated
our corporate value and brand power.
Management climates are always changing
so we are acclimated to uncertainty.
Our substantial competitive capabilities

are equal to any crisis. Relying on our
excellent competitive position to lead the
global electronics industry, we will again
achieve remarkable results and
performance by realizing daring
challenges and creative innovations.
Business Overview
Visual Display
Digital Appliances
Printing Solutions
Health & Medical Equipment
Business
Business
Business
Business
Mobile Communications
Network
Business
Business
Device Solutions
Memory
System LSI
LED
Business
Business
Business
Business Overview
Visual Display
Business
Presenting the future of visual display with extraordinary picture quality and advanced features and content
We fortified our leadership in the global TV market throughout 2014. For
current limits in conventional display to again make industry history, our
the ninth year in a row, Samsung Electronics earned No. 1 global TV
SUHD TV delivers unprecedented ultra-high picture quality with ultimate
market share, achieving 28.3% across all flat-panel TV product lines,
brightness, contrast range and the widest spectrum of precise color.
including LCD and LED. We further ranked global No. 1 in the ultra-large-
With the goal of promoting growth and consumer satisfaction in the
size market, winning 39.1% market share of TVs 60 inches and larger and
UHD TV market, we are collaborating with global companies in several
a robust 34.3% share of the UHD TV market, a significant increase over
fields to form the UHD Alliance, which will showcase rich content and su-
the previous year. Despite the depressed TV market and tougher
perb picture quality. We will also include the Tizen platform in our Smart
competition, we reinforced our reputation as the worlds best TV maker in
TVs to ensure faster and more convenient user experiences. Comple-
premium markets, including North America, with trendsetting differen-
mented by our sophisticated AV products, such as omnidirectional audio
tiated products such as Curved TV and UHD TV.
and Curved Soundbar, we continue to offer the stellar sound environ-ment
In 2015, Samsung Electronics is poised to secure that global TV
that connects TV visual and audio in perfect harmony.
leadership with a range of innovative products. We will increase sales of

premium TVs, including UHD, Curved and ultra-large-size TVs, and we
will launch our new game-changer, the SUHD TV. Going well beyond
SUHD TV JS9000
Reinvigorating the TV viewing
experience with true-to-life ultra-high
picture quality on the curved display,
the groundbreaking SUHD TV JS9000
delivers a wider color range and
a softly textured Shirring design.
Wireless Audio-360
The innovative speaker system
uses our proprietary ring radiator
technology to emit 360-degree
omnidirectional sound for
an exceptionally rich listening
experience.
010
28.3
Top Global Flat Panel TV

Market Share in 2014
Source: D.Search
(based on annual sales)
34.3
Top Global UHD TV

Source: D.Search
(based on annual sales)
SUHD TV JS9500
The innovative SUHD TV JS9500
offers the beautiful Chamfer bezel
and ultra-high quality curved display
for noticeably enhanced brightness,
contrast and color expression.
011
Business Overview
Digital Appliances
Business
Generating memorable moments and better lives with inventive home appliances that turn daily routines into premium experiences
In 2014, Samsung Electronics focused on producing first-class home
loading and unloading while Auto Optimal Wash takes care of the de-tails
appliances that add comfort and convenience to consumer lives. We
like dosing and cycle intensity. Our cutting-edge home cleaning ro-bot
continued our efforts to enhance daily tasks by creating home appli-ances
vacuum, POWERbot, also attracted worldwide notice. Other popular
that deliver premium performance, such as the Chef Collection
consumer products included the the Q9000 Smart Air Conditioner that
Refrigerator and Front Load Crystal Blue Washing Machine. We also
cools with powerful spiral airflow. In addition, the air purification feature
launched lifestyle labs in seven regions around the world to strengthen our
efficiently protects consumers health by removing ultra fine dust and air
local product lines. In response, we achieved remarkable results, boosting
contaminants such as viruses and bacteria via its built-in Virus Doctor. The
our status in the premium home appliance market.
dehumidifier function removes excess humidity in the air.
Designed and developed in collaboration with three-star Michelin
In 2015, we will secure leadership in the global home appliance mar-
chefs, the Chef Collection Refrigerator garnered terrific reviews for its
ket by emphasizing sales capabilities and by launching additional excit-ing
versatile storage spaces and its Metal and Triple Cooling technology that
premium products that enhance family life. We are forcefully moving into
maintains food freshness from fridge to table. Our front load washing
the Smart Home era with synergistic convergences among our pre-mium
machine was particularly well received in Europe. Maximizing design and
home appliances and our advanced ICT devices and networks.
convenience, the WW9000 Crystal Blues door opens wider for easy
activewash Washing Machine

Featuring a dedicated built-in
sink and water jet for convenient
pre-treatment, the ergonomically
designed activewash Washing
Machine delivers one-stop
laundry solution to homes.
Chef Collection Induction Cooktop

with Virtual Flame Technology
The Chef Collection Cooktop with

Virtual Flame Technology uses
induction to deliver efficient precision
cooking, while embedded LED lights
evoke the visual of gas cooking.
The detachable Magnetic Knob makes
cleanup easy.
012
Q9000 Smart Air Conditioner

The Q9000 provides year-round
comfort by monitoring temperature,
humidity and air cleanliness.
Chef Collection Refrigerator

With our revolutionary Precise Chef
Cooling and Triple Metal Cooling
technology the super-premium Chef
Collection refrigerator maintains food
freshness, taste, flavor and texture for
smarter and healthier lives.
013
Business Overview
Printing Solutions
Business
Improving work productivity with advanced mobile printing technology and optimized document management solutions
Effectively maximizing hardware and software capabilities, Samsung
In 2015, mobile printing technology and choices will accelerate as the
Electronics printing technology boosts productivity and efficiency by
business expands into electronic document-based solutions and ser-
offering more convenient and easily customized office solutions and
vices. In response, we are focused on our technology leadership and
services. We also are developing future-oriented options for mobile
will provide top quality, performance and mobile convenience. We will
tech-nology to realize faster and more intuitive printing.
strengthen the competitiveness of our A4 and multifunction printers
In 2014, we anticipated changes in the printing market by providing
while broadening the A3 multifunction line. We will continue to serve
mobile printing that uses NFC (Near Field Communication) and Cloud
B2B customers by developing optimized solutions and services that
connections and by including the latest document management solu-tions.
advance their business, such as the launch of our SMART
We launched differentiated products and solutions recognized by the
MultiXpress X7600 Series, the worlds first quad core CPU-installed
global market, such as SMART MultiXpress Series, which applies a world-
A3 multifunction printer with Samsung Cloud Print services.
first Android operating system. As a result, our A4 laser printer earned No.
2 in global market share. We also continued growth in the A3 multifunction
printer market, which has a high entry barrier.
SMART MultiXpress X7600 Series

With quad core CPU and upgraded
Android OS-based Smart UX 2.0, the
A3 multifunction printer series
manages more work faster and easier
while providing a comfortable user
experience.
014
15
2nd in Global A4 Laser

Printer Market Share
in 2014
Source: IDC
Line of the Year
SMART MultiXpress Line-up

Applying the industry-first Android OSbased Smart UX with full touch
screen, the A3/A4 multifunction series
offers excellent convenience
and features as well as a range of
advanced solutions, including bestin-class print and scan speed,
security and document automation.
2015 Monochrome Printer/

MFP Line of the Year
Award from Buyers
Laboratory (BLI), a leading
independent tester for the
global imaging industry
015
Business Overview
Health & Medical Equipment

Business
Improving healthcare by developing cutting-edge medical devices that perform with greater accuracy and ease
Samsung Electonics advances the capabilities of medical institutions
In 2015, we expect the global diagnostic medical equipment market to
around the world by developing large-scale medical imaging
continue to scale with particular growth in emerging markets. We will
equipment, including ultrasound, digital X-ray, portable CT and IVD (in
fo-cus
vitro diagnos-tic) solutions. Our state-of-the-art medical devices
competitiveness of our X-ray equipment and strengthening overseas
harness our expert technological convergence across visual display,
sales. Our strategy for the ultrasound system includes identifying a
ICT, semiconductor, telecommunications and other fields.
large distribution chan-nel and improving competitiveness in the
on
expanding
our
ultrasound
system
line,
improving
In 2014, the global diagnostic medical equipment market continued to
public bidding market. We will also increase sales of X-ray equipment
grow over the previous year. By launching differentiated products
by securing differentiated technol-ogies, including image engine and
supported by energetic marketing, we strengthened our worldwide
usability features. Looking ahead, we are developing innovative
competitiveness. We also expanded our medical imaging product line with
medical devices that will expertly integrate our cutting-edge
RS80A, our premium ultrasound system that helps diagnose breast cancer
technologies to support advanced healthcare and healthful living.
by offering highly accurate image quality and outstanding auto-mation. In

addition, we launched GM60A, our mobile digital X-ray device that reliably
delivers high-quality imaging directly to a patients bedside.
WS80A with Elite

Enhanced image quality and more
powerful diagnosis capability has
upgraded our earlier WS80A into the
WS80A with Elite. This premium
Ob/Gyn ultrasound improves
diagnostic accuracy by offering
detailed 3D fetal imaging.
RS80A with Prestige

Our premium ultrasound system
for medical imaging, the RS80A with
Prestige, speeds more accurate
diagnosis with high-quality image
performance and user convenience.
GC85A
Our premium digital X-ray GC85A
uses outstanding imaging technology
to provide high-resolution images
for
greater
diagnostic accuracy
and
sophisticated
automation features
to ease testing for
medical teams.
016
017
Business Overview
Mobile Communications
Business
Delivering ultimate consumer experiences and exciting moments with breakthrough design and differentiated technology
Around the globe in 2014, Samsung Electronics mobile phones again
our new Galaxy S6 and Galaxy S6 edge in the premium smartphone
proved the product consumers loved the most. Despite slower growth
market. Equipped with first-of-its-kind technology and already winning
and intensified competition, Samsung Electronics continued to rank
widespread recognition, the S6 and S6 edge are beautifully crafted from
No. 1 in the world across all mobile and smartphone markets. We
metal and glass and blend purposeful design with powerful features.
maintained that established leadership with new products such as the
Our Galaxy Tablets will boost demand by continuing to connect with
Galaxy S5, Galaxy Note 4 and Galaxy Note edge and with aggressive
what matters, offering differentiated options with high-value services for
marketing sup-port. We also earned No. 1 status in the rising global
syncing and sharing as well as richly relevant content. In wearable tech,
wearable tech mar-ket with our stylishly innovative wearable products,
we will maintain leadership with pioneering products that integrate
including Samsung Gear 2, Gear S, Gear VR and Gear Circle.
distinctive design with easy usability. In addition, our new B2B growth
In the year ahead, the time looks right for the mobile business to
engine is revving up as we enhance enterprise mobile security with
take off again. We plan to propel smartphone sales with competitive
KNOX, our proprietary security platform, and identify expanding markets
new lines, to secure our market leadership by launching innovative
in education, the public sector, retail and more.
premium smartphones and to provide a range of upgraded mid-price

products of impressive quality. We anticipate remarkable results from
Galaxy Note 4
Offering a new dimension in
Samsungs unique Note culture,
the Galaxy Note 4 blends an evolved S
Pen with superior viewing, providing
users with the most powerful mobile
experience on the market with its 5.7inch Quad HD Super AMOLED display,
16MP camera, fast charging, ultra
power saving mode and multitasking.
Samsung Gear S
Samsungs first network-connected
wearable, the Samsung Gear S
features a 2-inch curved Super
AMOLED display, optimized UI and
smartphone link to make and answer
calls, check texts, email, get schedule
updates and even stream music, right
from your wrist.
22.1
018
Top Global Mobile Phone

24.7
Top Global Smartphone

Source: Strategy Analytics
Galaxy S6 edge
Beautifully crafted from metal and
glass, the Galaxy S6 edge is the most
advanced smartphone on the market
and defines Whats Next in Mobility,
including the worlds first dual edge
display, fast and powerful cameras,
wireless charging and more.
019
Business Overview
Network
Business
Building the next-generation network market with outstanding capabilities in technology development and unrivaled know-how
In 2014, Samsung Electronics actively expanded our successful commer-
service
cialization in advanced LTE markets, including Korea, the US and Ja-pan.
network design and consulting. We will continue to build the next-
businesses, including
network
management solutions,
In collaboration with major mobile service providers, we developed
generation net-work by successful commercialization of NFV
innovative technologies, including 3-band CA (Carrier Aggregation) and
(Network Function Virtual-ization) and 5G technology development.
eMBMS, in addition to the world-first commercializations. Leveraging
In the enterprise network business, we lead the market by
capability and experience, we provided stable LTE networks to Europe-an
supplying IP Telephony and the Smart WLAN solution. Our Smart
mobile service providers in the UK and Ireland, aw well as to Russian
WLAN ranked No. 1 in Korean market share with its security AP and
providers. We also consolidated leadership in LTE-TDD (Time Division
we are expanding share in the UK and the US. Looking forward in
Duplex) by supplying the technology to the Americas, Southwest Asia and
2015, we will enhance our business platform in the global market,
East Asia.
particularly in Europe, the Pacific Islands and Africa.
In 2015, we will improve network quality for mobile service providers

in leading LTE markets by providing new technologies, including VoLTE
and TDD-FDD CA. We will target new markets, such as new global mobile service providers and Southeast Asias LTE market, while expanding
IAU (Integrated Antenna Unit)

By integrating the antenna into
the radio unit (RU), the IAU reduces
signal drops from cable installations
between the antenna and RU and also
saves on lease costs by reducing the
installation area.
Smart WLAN
(Wireless Enterprise Solutions)
An integrated wireless network
solution for business, the Smart
WLAN provides a comprehensive
working environment designed for
mobile devices with seamless user
experiences, robust connections and
high-quality voice calling.
020
Most Innovative
Application/Service
1st Place in
Wide Area
Network-Core
2014 LTE Awards
CTIA 2014
E-Tech Award
Macro Cell (RRU)
Small Cell
Macro Cell (CDU)

application and boosts
operational performance.
Smart LTE Networks with IBS

By installing the IBS, which flexibly
manages network conditions and
resources to speed high-capacity
mobile data transfer, the LTE network
innovatively expands the range of
021
Smart Scheduler
IBS (Inter BBU Switch)
Business Overview
Device Solutions
Memory
Business
Leading the innovation for faster, thinner and smaller next-generation IT devices with high-density 3D memory technology
In 2014, Samsung Electronics took its technological leadership in
cluding the new 8Gb LPDDR4 DRAM-based 4GB LPDDR4 mobile mem-
memo-ry solutions to the next level with 3D through silicon via (TSV)
ory, Samsung now offers a comprehensive 20nm DRAM line-up for mo-
package technology which further pushes the limits in memory chip
bile memory, enterprise server, PC and consumer graphics applications.
manufac-turing. By applying the vertically interconnected TSV
To expand our premium product line-up, we launched the high-ca-
technology, we launched mass production of the 64GB 3D TSV
pacity 128GB Universal Flash Storage (UFS) embedded memory for
registered dual inline memory modules (RDIMM) for enterprise
high-end flagship smartphones as well as the 32-layer 3D V-NAND
servers. The new high-speed, highly energy-efficient and high-density
technology-based SSD 850 PRO and portable SSD T1 to drive the
module is recognized as an op-timized solution for the era of Big Data
fast-growing storage memory market.
and cloud computing. In addition, our development of the industrys
In 2015, we will expand the premium memory market with timely
first 32-layer V-NAND flash memory and mass-production of next-
introduction of high-quality products and solutions based on our tech-
generation Non-Volatile Memory Express (NVMe) SSD allowed us to
nological prowess. We also plan to continue driving the trends of the
secure a strong foothold in the premium memory market.
next-generation IT market as we solidify our leading position and
We were also the first in the industry to mass-produce 8Gb DRAM
contrib-ute to the overall development of the IT industry.
based on our leading-edge 20-nanometer (nm) process technology. In-
3D V-NAND based Premium SSD 850

PRO & Portable SSD T1
SSDs with maximized performance
and world-class design, offering
enhanced user convenience.
8Gb LPDDR4 Mobile DRAM

Next-generation mobile DRAM with
doubled memory performance for
high-end smartphones.
128GB UFS
Ultra-fast embedded memory for
high-end smartphones that is up to
12 times faster than a typical
memory card.
022
40.4
Top Global DRAM

Source: IHS iSuppli,
based on 2014 sales
36.5
Top Global NAND

Flash Market Share in 2014
based on 2014 sales
64GB 3D Through Silicon Via

(TSV) RDIMM
High-speed, high-density and
engery-efficent memory that
introduced a new era in DRAM
technology.
023
Business Overview
Device Solutions
System LSI
Business
Spearheading growth in the system semiconductor market with cutting-edge logic process technology and advanced development
of next-generation products
With cutting-edge competitiveness in logic process technology and
In 2015, we expect continuous growth in the global system LSI market
advanced development of next-generation products, Samsung Elec-
with a focus on mobile products. Early this year, we were able to secure
tronics has achieved leadership in the global system LSI market. By
leadership in advanced process technology by launching 64-bit mobile APs
focusing on the key segments of SoC, LSI and the foundry business, we
based on 14nm FinFET. Looking ahead, we will further strengthen our
are consistently enhancing our leading position in the global market to
leading position with cutting-edge process technologies beyond 14nm
provide competitive products, including mobile application processors
FinFET. In addition, we will bolster our competitiveness in mo-bile AP
(AP), CMOS image sensors (CIS), display driver ICs (DDI) and near field
products and focus on providing high-value products, such as high-
communication (NFC) ICs as well as state-of-the-art foundry services.
resolution ISOCELL CIS for enhanced picture quality. In the foundry
In 2014, we launched the 16 megapixel (MP) mobile image sensor

based on ISOCELL technology along with the industrys first APS-C CIS
business, we will boost our competitive edge by developing state-of-the-art

logic process technology and diversifying our customer base.
for digital cameras using 65-nanometer (nm) back side illuminated (BSI)
pixel technology. We also focused on the advanced development of nextgeneration products such as the industrys first flexible mobile DDI using
2-metal chip on film (COF) package technology.
Flexible Mobile DDI

Mobile DDI fabricated with the
industrys first 2-metal COF package
technology, enabling flexible display
and ultra-high-quality QHD resolution.
16MP Mobile Image Sensor

Mobile image sensor based on
ISOCELL technology that provides
high-quality color representation and
supports QHD resolution at 30 frames
per second (fps).
18
024
Top Global DDI

based on 2014 sales
20
Exynos 7420
High-performance, low-power mobile

AP fabricated with the latest 14nm
FinFET process technology.
No. 3 Global CMOS

Image Sensor Market
Share in 2014
Source: TSR Report,
based on 1H 2014 sales
025
Business Overview
Device Solutions
LED
Business
Strengthening our global leadership by developing eco-friendly LED light sources with high energy-efficiency and powerful output
While strengthening leadership in the LED lighting component market
Despite higher competition in the market, we will solidify our technologi-cal
with differentiated solutions, Samsung Electronics also redefined the
leadership with high-performance products at competitive price points and
LED TV market by developing innovative LED TV components. Our
reinforce our presence in the global LED market as we bolster rela-
LED
tionships with customers and increase market share.
lighting
solutions
integrate
world-class
semiconductor
technology and manufacturing expertise to produce advanced LED

components, display modules and light engines that deliver strong
output, high efficiency and excellent color reproduction.
Thanks to increased demand for LED lighting, the global LED market
continued to grow in 2014. We expect this trend to extend into 2015 as
international regulations toward energy-efficient lighting take effect.
LAM-32B
High-performance, highly reliable
LED module ideal for use in ambient
lighting with excellent packaging
technology and advanced optic
technology.
LH351B
A high-power LED
package, delivering
high efficiency of 154
lm/W, 5000K CCT and
over 70 CRI.
026
Top Global LED TV Module

Source: Strategies Unlimited,
based on 2014 sales
LM561B
The most advanced mid-power LED
package in its class, delivering the
industrys highest light efficacy of
179lm/W at 65mA, 5000K CCT and
over 80 CRI.
027
Our products and goals are continually

informed by peoples everyday needs and
promises. We make it easy to communicate
with loved ones and convenient to cook and
share family dinners. We help get work
done efficiently and enable a rich range of
instantaneous content.
Samsung Electronics develops

technologies, innovates products and
provides solutions that create happier lives
in an enriched world. With our
semiconductor components, visual display,
home appliances, office solutions, medical
equipment, ICT and mobile products, we
are advancing our shared futures while
inspiring amazing experiences
and leading the way toward wondrous change.
Global Citizenship
Samsung Electronics believes that our continuous and effective social
responsibility programs build a better world. We look for ways to instill joy by helping to
resolve community challenges, protect the environment and share growth with
our employees and partners. With the combined efforts of our sincere hearts and spirits,
we expect to create a healthier and friendlier world.
Green Management
Health and Safety
Sharing Growth
Sharing and Volunteering to
Green Management that
Creating Safe and Healthy
Success Built on
Support New Hope
Protects the Planet
Workplace
Helping and
Dreaming Together
Global Citizenship
Sharing and Volunteering to

Support New Hope
Global Social Contribution Programs
Around the globe, Samsung Electronics hosts five social responsibility
Samsung Care Drive
programs to address education, job training and healthcare issues that
Samsung Electronics supports a variety of healthcare programs with its
reflect the needs, business affiliations and characteristics of the local
advanced medical equipment technology, products and services to
community. We work to improve education in disadvantaged areas by
promote the wellbeing and quality of life of local residents. We operate a
offering education infrastructure and e-learning to students. We expand
mobile medical center in areas that lack convenient medical facilities and
job opportunities for young adults with IT vocational training. We improve
professionals and we provide medical training for local medical associa-
the health and quality of lives in disadvantaged regions with high-tech
tions. First launched in China, Southeast Asia and regions of Africa, the
medical equipment. Our programs are specifi-cally developed and
program will be expanded worldwide in the future.
implemented to address local issues.
Samsung Nanum Village

Samsung Tech Institute
Samsung Nanum Village is designed to target the roots of poverty
Samsung Tech Institute develops the independence and self-reliance
and to build self-reliance. We provide comprehensive infrastructure
of young adults with systematic vocational education. We nurture
and critical basic services to socially disadvantaged populations. In
talent and create jobs by operating branches of the Samsung Tech
partnership with national governments, we select candidate regions
Institute in Europe, Central and Latin America, Southeast Asia, the
and offer support for education infrastructure, medical facilities, clean
Middle East, Africa and more. Programs vary with location. We train
water and the construc-tion of community centers.
software engi-neers in advanced countries and offer computer

science classes in de-veloping countries.
Samsung Employee Donations and Volunteering

Samsung Electronics employees are increasingly involved in helping
Samsung SMART School
neighbors at home and abroad. In Korea, we raise social funds from
Samsung SMART School works to bridge the global education gap
employee donations and company matching funds to support a range of
by improving educational environments for students in disadvantaged
causes, including education, job training, healthcare and commu-nity.
areas. Tailored to regional needs, SMART School Solutions include IT
Every year, more and more employees actively volunteer their time and
training curriculum for advanced countries and basic education infra-
skills. We also continue to expand our volunteer programs in developing
structure, such as buildings, educational materials and books, for
countries. In our workplaces around the world, we host volunteer
devel-oping countries.
services that care for neighbors in need, address local issues with IT
classes and other education, participate in Habitat for Humanity, mentor
Samsung Solve for Tomorrow

A competitive program open to anyone interested but especially for students and nonprofit organizations, Samsung Solve for Tomorrow engages
communities in addressing pressing social issues. First, we identify an
issue in need of a solution. We solicit ideas through the competition and
hold a workshop for selected winners to investigate how to develop and
implement a resolution. Contests have been held in North America, Chi-na
and Central and Latin America and are spreading worldwide.
youth and disabled children and support social welfare groups.
030
11.3
hours
Average number of our employee

volunteer hours in Korea in 2014
523,109
billion (KRW)
Global social contributions in 2014
031
Global Citizenship
Green Management
Green Management that

Protects the Planet
Establishing Eco-Management 2020
Operating Green Workplaces
Samsung Electronics Green Management is founded on our
In order to create green workplaces, we established and manage
PlanetFirst initiative, which puts protection of the earth first. In 2014,
perfor-mance of four key goals, including practicing systematic green
we established the new mid- and long-term goals of Eco-
manage-ment, reducing greenhouse gas emissions, reducing the use
Management 2020, which included achieving accumulated 250
of water resources and increasing waste recycling. We go well
million tons of greenhouse gas reduction during the product use
beyond legal com-pliance standards to strictly monitor air and water
phase and reducing greenhouse gas emissions by 70% on KRW-
pollution levels and substances that can deplete the ozone layer.
based energy conversion, based on 2008 standards. We also

developed three strategic missions to achieve a range of activities in
Developing Green Technology and Products
green products, green workplaces and green com-munications.
Guided by fundamental principles to minimize environmental impact

across every stage of the product life cycle, from resources to
Green Communications
procure-ment, manufacturing to retail, usage to waste, we develop
To share the value and benefits of Green Management, Samsung
energy-ef-ficient technology and utilize green materials such as
Elec-tronics is expanding Green Communications to all our
bioplastic and recycled plastic at the design stage. By developing
stakeholders, including global partners, employees, customer-tailored
recyclable green materials, we also conserve resources in product
campaigns and community programs. In alliance with global
packaging and energy in shipping. Globally recognized for our
institutions, we are imple-menting green projects around the world.
products eco-friendliness, we re-ceived green certifications for an
We also are supporting em-ployee interest and engagement by
accumulated 3,027 product models as of the end of 2014, from 11
hosting green events and education programs. In addition, we are
nations including Korea, the US, China and European countries.
providing green education and campaigns to our customers and to

children to further drive green programs within local communities.
Greenhous Gas Emissions
Greenhouse Gas Emissions Intensity
Korea
Unit: 1,000 tons of CO eq
Unit: Tons of CO eq/KRW 100 million, reflecting the Korean Price Index
Global
*Emissions before 2011 are recalculated

based on the restructuring of the LCD
Business and the merger of Samsung
LED with Samsung Electronics in 2012
9,290
8,018
7,486
6,544
2010
6,303
2010
2011
2012
2013
2014
Korea
3.56
3.13
2.54
2.23
2.71
Global
3.29
2.93
2.34
2.13
2.72
6,004
5,993
5,066
6,775
5,307
2011
2012
2013
2014
032
53
37,594
Amount of water we reused worldwide in 2014
92
Average rate of waste we

recycled worldwide in 2014
Number of our products certified

green by global institutes
(as of end of 2014)
products
Reduction rate for our

greenhouse gas emissions
(KRW-based energy
conversion as of end of 2013,
based on 2008 standards)
million tons
3,027
033
Global Citizenship
Health and Safety / Sharing Growth
Creating
Safe and Healthy Workplaces
Building Health and Safety Management Systems
Supporting Employee Health and Safety Management
Samsung Electronics makes every effort to operate safe workplaces and
We are equally committed to improving employee safety and healthcare.
to protect employee health by creating comfortable and thoroughly safe
By analyzing the causes of muscular skeletal disease, which may be
conditions. Across our workplaces worldwide, we comply with OHSAS
associated with the manufacturing processes, we build ergonomic ad-
18001, a global standard for occupational health and safety management
aptations in the working environment. In addition, we prohibit business
systems. Besides the world-class safety and health management sys-
trips to regions that have a high risk of infectious disease, such as Ebola
tems in every workplace, we have established a variety of health-first
or MERS, in order to protect our employees from contagion. Any employ-
programs for employees, including professional medical services at an in-
ees who travel on business to neighboring regions are supported with
house hospital, diet clinics, preventive measures for muscular skeletal
medical checkups upon their return.
disease and several counseling facilities, such as the Life Coaching

Center, to help manage mental health.
Operating Workplaces with Safe Conditions

We focus on developing safe workplaces by examining potential risks
in
advance.
We
then
institute
continuous
monitoring
and
improvement. We also develop emergency scenarios in the event of

harmful chemical substance spills, fires, explosions and natural
disasters. To prepare for environmental accidents, we also run handson employee education programs for fire and chemical safety,
operations and personal safety and drills for emergency evacuation.
on environmental and
Number of our
employees who
participated in hands-
39,968
Drill for emergency evacuation from

a high-rise building in case of fire.
employees
safety education
programs in 2014
Global certification for

our health and safety
management systems
100
Program to teach emergency CPR

(cardiopulmonary resuscitation).
034
035
Success Built on
Helping and Dreaming Together
Developing Robust Systems for Win-Win Partnerships
Establishing the Win-Win Partnership Academy for Systematic Support In
As valued partners, our suppliers sharpen the competitive position of
partnership with the major banks of Korea, we operate a Shared Growth
Samsung Electronics. With the goal of growing together in global mar-
Fund of KRW 1 trillion to help improve business for suppliers that find it
kets, we operate a range of programs designed to bolster supplier skills.
difficult to secure funding. The Fund offers operational loans at low
To that end, we promote transparent procurement, win-win partnerships
interest rates and we have expanded this benefit to second-tier suppli-ers.
and a culture of shared growth. In 2010, we established the Seven
In 2013, we established the Win-Win Partnership Academy, which
Shared Growth Implementation Plan. In 2013, we took that initiative to the
consists of centers for education, career development, business con-
next level with the Shared Growth Ecosystem Program. Working within
sulting and win-win partnership research that together provide compre-
the ecosystem, we plan to extend the benefits of our shared val-ues to
hensive and systematic support for first- and second-tier suppliers. The
second- and third-tier suppliers.
education center offers customized programs to train supplier employ-ees.

The career center helps suppliers to identify and recruit top-rated talent
Providing Programs That Hone the Competitive Edge
and also helps young jobseekers find work. The consulting center
We share growth and prosperity by running several programs that actively
organizes the Supplier Consulting Team, a roster of 100 of our directors
support suppliers and strengthen their skills. In our flagship program,
and executives in the fields of manufacturing, product, development and
Globally Competitive SMEs, we identify suppliers with high technology
quality control who use their know-how to advise suppliers. We also
potential and back them with customized funds, technology and human
support innovation in manufacturing and factory development for SMEs
resources so they develop a competitive edge in their fields. We
generally.
participate in a Joint Technology Development Partnership to spark

Korean SME technology development and we also operate a variety of
Open Innovation programs designed to discover and support technology
startups, such as our Innovative Technology Company Council.
Amount of Shared
Growth Fund that offers
low-interest supplier loans
Number of people trained

at the Win-Win Partnership
Academy in 2014
KRW
trillion
11,927
employees
Ceremony to honor the 2014 Globally Competitive SMEs.
We believe the fastest route to building

a better world is to grow in harmony with
people, community and the environment.
Samsung Electronics helps people dream
of brighter futures by offering education and
job training programs.
We help neighbors to anticipate better tomorrows
by supporting healthcare and improved living
conditions in local communities. We are realizing
green management
initiatives that help protect our precious planet.
By committing our global corporate social
responsibility efforts to our people, communities

and the environment, we are fulfilling everyones
dream of a better world.
Financial Statements
38 Independent Auditors Report

40 Consolidated Statements of Financial Position
42 Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
43 Consolidated Statements of Changes in Equity

46 Consolidated Statements of Cash Flows
47 Notes to the Consolidated Financial Statements
INDEPENDENT AUDITORS
REPORT
To the Board of Directors and
Shareholders of
Samsung Electronics Co., Ltd.
We have audited the accompanying consolidated financial statements

of Samsung Electronics Co., Ltd. and its subsidiaries (collectively the
Group), which comprise the consolidated statements of financial
position as at December 31, 2014 and 2013, and the consolidated
statements of income, consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated
statements of cash flows for the years then ended, and a summary of
significant accounting policies and other explanatory information.
Managements responsibility for the financial statements
Management is responsible for the preparation and fair presentation of
these financial statements in accordance with the International Finan-cial
Reporting Standards as adopted by the Republic of Korea (Korean IFRS)
and for such internal control as management determines is nec-essary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
038
039
Auditors responsibility
Opinion
Our responsibility is to express an opinion on these financial
In our opinion, the consolidated financial statements present fairly, in all
statements based on our audits. We conducted our audits in
material respects, the financial position of the Group as at December 31,
accordance with the Korean Standards on Auditing. Those standards
2014 and 2013, and their financial performance and their cash flows for
require that we comply with ethical requirements and plan and
the years then ended in accordance with the Korean IFRS.
perform the audit to obtain rea-sonable assurance about whether the

financial statements are free from material misstatement.
Other Matters
An audit involves performing procedures to obtain audit evidence
The consolidated financial statements of the Group as at and for the
about the amounts and disclosures in the financial statements. The
year ended December 31, 2013 were audited in accordance with the
procedures selected depend on the auditors judgment, including the
previous Korean Standards on Auditing. We did not audit the financial
assessment of the risks of material misstatement of the financial state-
statements of certain subsidiaries, whose financial statements rep-
ments, whether due to fraud or error. In making those risk assessments,
resents 6.8% of the Groups consolidated total assets as at
the auditor considers internal control relevant to the entitys preparation
December 31, 2013, and 25.6% of the Groups consolidated sales for
and fair presentation of the financial statements in order to design audit
the year then ended. These financial statements were audited by
procedures that are appropriate in the circumstances, but not for the
other auditors whose report has been furnished to us and our opinion,
purpose of expressing an opinion on the effectiveness of the entitys
insofar as it re-lates to the amounts included for those subsidiaries, is
internal control. An audit also includes evaluating the appropriateness of
based solely on the report of the other auditors.
accounting policies used and the reasonableness of accounting esti-mates
Auditing standards and their application in practice vary among
made by management, as well as evaluating the overall presen-tation of
countries. The procedures and practices used in the Republic of
the financial statements.
Korea to audit such financial statements may differ from those
We believe that the audit evidence we have obtained is sufficient
generally ac-cepted and applied in other countries.
and appropriate to provide a basis for our audit opinion.

February 24, 2015
Seoul, Korea
This report is effective as at February 24, 2015, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this
report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that there is a
possibility that the above audit report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Samsung Electronics Co., Ltd. and its subsidiaries
(In millions of Korean won, in thousands of US dollars (Note 2.28))
Notes
December 31, 2014
December 31, 2013
December 31, 2014
December 31, 2013
KRW
KRW
USD
USD
16,840,766
41,689,776
16,284,780
36,722,702
15,997,688
39,602,713
15,469,535
34,884,299
Assets
Current assets
Cash and cash equivalents
Short-term financial instruments
Short-term available-for-sale financial assets
Trade receivables
Non-trade receivables
4, 6, 7
5, 6, 7
6, 9
3,286,798
1,488,527
3,122,255
1,414,009
6, 7, 10
24,694,610
24,988,532
23,458,355
23,737,562
10
3,539,875
2,887,402
3,362,663
2,742,854
Advances
1,989,470
1,928,188
1,889,874
1,831,660
Prepaid expenses
3,346,593
2,472,950
3,179,057
2,349,150
17,317,504
19,134,868
16,450,560
18,176,943
1,795,143
2,135,589
1,705,275
2,028,678
645,491
2,716,733
613,177
2,580,729
115,146,026
110,760,271
109,381,617
105,215,419
6, 9
12
12,667,509
5,232,461
6,238,380
6,422,292
12,033,351
4,970,515
5,926,076
6,100,781
Property, plant and equipment
13
80,872,950
75,496,388
76,824,309
71,716,907
Intangible assets
14
4,785,473
3,980,600
4,545,904
3,781,324
4,857,126
3,465,783
4,613,970
3,292,280
4,526,595
4,621,780
4,299,986
4,390,406
2,334,818
3,089,524
2,217,933
2,934,857
230,422,958
214,075,018
218,887,585
203,358,050
Inventories
11
Other current assets

Assets held-for-sale
12, 37
Total current assets

Non-current assets
Long-term available-for-sale financial assets
Investment in associates and joint ventures
Long-term prepaid expenses

Deferred income tax assets
29
Other non-current assets

Total assets
The accompanying notes are an integral part of these consolidated financial statements.
040
041
Notes
December 31, 2014
December 31, 2013
December 31, 2014
December 31, 2013
KRW
KRW
USD
USD
6
6, 8, 15
7,914,704
8,029,299
8,437,139
6,438,517
7,518,480
7,627,338
8,014,761
6,116,194
Liabilities and Equity

Current liabilities
Trade and other payables
Short-term borrowings
Other payables
10,318,407
9,196,566
9,801,850
8,736,170
Advances received
1,427,230
1,706,313
1,355,780
1,620,892
Withholdings
1,161,635
1,176,046
1,103,482
1,117,171
12,876,777
11,344,530
12,232,143
10,776,603
Accrued expenses
Income tax payable
Current portion of long-term liabilities
Provisions
2,161,109
3,386,018
2,052,920
3,216,508
6, 15, 16
1,778,667
2,425,831
1,689,624
2,304,390
18
5,991,510
6,736,476
5,691,565
6,399,236
326,259
467,973
309,930
444,548
28,316
26,898
52,013,913
51,315,409
49,410,010
48,746,473
6, 16
6, 15
1,355,882
101,671
1,311,068
985,117
1,288,004
96,581
1,245,434
935,800
2,562,271
1,053,756
2,433,999
1,001,003
Other current liabilities

Liabilities held-for-sale
37
Total current liabilities

Non-current liabilities
Debentures
Long-term borrowings
Long-term other payables
Net defined benefit liabilities
17
201,342
1,854,902
191,262
1,762,042
Deferred income tax liabilities
29
4,097,811
6,012,371
3,892,667
5,711,381
Provisions
18
499,290
460,924
474,295
437,849
1,502,590
1,065,461
1,427,368
1,012,122
62,334,770
64,059,008
59,214,186
60,852,104
20
20
119,467
778,047
119,467
778,047
113,486
739,097
113,486
739,097
4,403,893
4,403,893
4,183,426
4,183,426
Retained earnings
21
169,529,604
148,600,282
161,042,656
141,161,092
Other components of equity
23
(12,729,387)
(9,459,073)
(12,092,132)
(8,985,535)
Accumulated other comprehensive income
37
80,101
76,091
Non-controlling interests
162,181,725
5,906,463
144,442,616
5,573,394
154,062,624
5,610,775
137,211,566
5,294,380
Total equity
168,088,188
150,016,010
159,673,399
142,505,946
Total liabilities and equity
230,422,958
214,075,018
218,887,585
203,358,050
Other non-current liabilities

Total liabilities
Equity attributable to owners of the parent
Preferred stock
Common stock
Share premium
attributable to assets held-for-sale
CONSOLIDATED STATEMENTS OF INCOME

For the year ended December 31,

Notes
Revenue
Cost of sales
25
Gross profit
Selling and administrative expenses
25, 26
Operating profit
2014
2013
2014
KRW
KRW
USD
2013
USD
206,205,987
228,692,667
195,882,955
217,243,913
128,278,800
137,696,309
121,856,939
130,802,991
77,927,187
90,996,358
74,026,016
86,440,922
52,902,116
54,211,345
50,253,744
51,497,430
25,025,071
36,785,013
23,772,272
34,943,492
Other non-operating income

Other non-operating expense
27
27
3,801,357
2,259,737
2,429,551
1,614,048
3,611,054
2,146,611
2,307,923
1,533,246
Share of profit of associates
12
342,516
504,063
325,369
478,829
and joint ventures

Financial income
28
8,259,829
8,014,672
7,846,328
7,613,444
Financial expense
28
7,294,002
7,754,972
6,928,852
7,366,745
27,875,034
38,364,279
26,479,560
36,443,697
Profit before income tax

Income tax expense
29
Profit for the year

Profit attributable to owners of the parent
Profit attributable to non-controlling interests
Earnings per share for profit attributable to owners of
the parent (in Korean Won, in US dollars)
- Basic
4,480,676
7,889,515
4,256,366
7,494,552
23,394,358
30,474,764
22,223,194
28,949,145
23,082,499
311,859
29,821,215
653,549
21,926,949
296,245
28,328,313
620,832
153,105
197,841
145.44
187.94
153,096
197,800
145.43
187.90
30
- Diluted
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


Notes
2014
2013
2014
KRW
KRW
USD
USD
23,394,358
30,474,764
22,223,194
28,949,145
17, 23
(710,318)
(213,113)
(674,758)
(202,444)
9, 23
(232,105)
186,480
(220,485)
177,144
12, 23
(128,932)
20,756
(122,477)
19,717
(950,851)
Profit for the year
2013
Other comprehensive loss

Items not to be reclassified to profit or
loss subsequently:
Remeasurement of net defined benefit liabilities,
net of tax
Items to be reclassified to profit or loss subsequently:
Changes in value of available-for-sale financial assets,
net of tax
Share of other comprehensive income (loss) of
associates and joint ventures, net of tax
Foreign currency translation, net of tax
(922,059)
(1,000,961)
(875,899)
Other comprehensive loss for the year, net of tax
(1,993,414)
(1,006,838)
(1,893,619)
(956,434)
Total comprehensive income for the year
21,400,944
29,467,926
20,329,575
27,992,711
Comprehensive income attributable to:

Owners of the parent
20,990,732
28,837,590
19,939,900
27,393,930
410,212
630,336
389,675
598,781
23
042
043
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In millions of Korean won)
2013 KRW
Note Preferred
stock
for-sale financial assets, net of tax

Share of other comprehensive
Share
premium
Retained
Other
Accumulated
earnings components
other
of equity comprehensive
income
attributable to
assets held-forsale
Equity
Nonattributable to controlling
owners of the
interests
parent
Total
119,985,689
(8,193,044)
117,094,052
9, 23
29,821,215
-
187,477
29,821,215
187,477
653,549
(997)
30,474,764
186,480
20,949
(193)
20,756
12, 23
20,949
(986,691)
(14,270)
(1,000,961)
(205,360)
(7,753)
(213,113)
29,467,926
Balance as at January 1, 2013

Profit for the year
Changes in value of available-
Common
stock
119,467
778,047 4,403,893
4,386,154 121,480,206
income (loss) of associates and

joint ventures, net of tax
Foreign currency translation,
23
(986,691)
net of tax
Remeasurement of net defined
17, 23
(205,360)
29,821,215
(983,625)
28,837,590
630,336
(1,206,622)
-
(312,959)
(1,206,622)
(312,959)
(42,155) (1,248,777)
600,042
287,083
benefit liabilities, net of tax

Total comprehensive income (loss)
Dividends
Capital transaction under common
22
control
Changes in consolidated entities
(918)
(918)
Disposal of treasury stock
23, 24
41,817
41,817
41,817
Stock option activities
23, 24
(11,999)
(11,999)
(11,999)
737
737
(65)
672
(1,206,622)
(282,404)
(1,489,026)
556,904
(932,122)
778,047 4,403,893
148,600,282
(9,459,073)
144,442,616
Others
Total transactions with owners
Balance as at December 31, 2013
119,467
5,573,394 150,016,010
(In thousands of US dollars (Note 2.28))
2013 USD
Note Preferred
stock

Profit for the year
Changes in value of availablefor-sale financial assets, net of tax
113,486
Common
stock
739,097 4,183,426
9, 23
Share
premium
Retained
Other
Accumulated
earnings components
other
income
attributable to
assets held-forsale
Equity
Nonattributable to controlling
owners of the
interests
parent
Total
113,978,996
(7,782,886)
111,232,119
28,328,313
-
178,091
28,328,313
178,091
4,166,575 115,398,694
620,832
(947)
28,949,145
177,144
12, 23
19,900
19,900
(183)
19,717

23
(937,295)
(937,295)
(13,556)
(950,851)
net of tax
17, 23
(195,079)
(195,079)
(7,365)
(202,444)
28,328,313
(934,383)
27,393,930
598,781
27,992,711
(1,146,217)
-
(297,292)
(1,146,217)
(297,292)
(40,045) (1,186,262)
570,003
272,711

Dividends
Capital transaction under common
22
control
(872)
(872)
23, 24
39,724
39,724
39,724
23, 24
(11,398)
(11,398)
(11,398)
700
700
(62)
638
(1,146,217)
(268,266)
(1,414,483)
529,024
(885,459)
739,097 4,183,426
141,161,092
(8,985,535)
137,211,566
Others
113,486
5,294,380 142,505,946
2014 KRW
Note Preferred Common

stock
stock

Profit for the year
Changes in value of available-
119,467
Share
premium
Retained
earnings
778,047 4,403,893
Other
Accumulated
components
other
income
attributable to
assets held-forsale
Equity
Nonattributable controlling
to owners
interests
of the
parent
Total
148,600,282
(9,459,073)
144,442,616
9, 23
23,082,499
-
(314,069)
23,082,499
(314,069)
5,573,394 150,016,010
311,859
81,964
23,394,358
(232,105)
12, 23
(128,495)
(954,999)
(128,495)
(954,999)
(437)
32,940
(128,932)
(922,059)
23
(694,204)
(694,204)
(16,114)
(710,318)
17, 23
(80,101)
80,101
37
23,082,499
(2,171,868)
80,101
20,990,732
410,212
21,400,944
(2,157,011)
-
(158)
(2,157,011)
(158)
569
569
(1,125,322)
for-sale financial assets, net of tax

net of tax
Classified as held-for-sale
Dividends
Capital transaction under
22
common control
(74,216) (2,231,227)
244
86
Acquisition of treasury stock
23, 24
(1,125,322)
(1,125,322)
23, 24
32,764
32,764
32,764
23, 24
(9,436)
(9,436)
(9,436)
3,834
3,706
7,540
(3,740)
3,800
(2,153,177)
(1,098,446)
(3,251,623)
(77,143) (3,328,766)
778,047 4,403,893
169,529,604
(12,729,387)
80,101
162,181,725
5,906,463 168,088,188
Others
119,467
044
045
(In thousands of US dollars (Note 2.28))
2014 USD
Note Preferred Common

stock
stock

Profit for the year
Changes in value of availablefor-sale financial assets, net of tax
113,486
Share
premium
Retained
earnings
Other
components
of equity
Accumulated
other
comprehensive
income
attributable to
assets held-forsale
739,097 4,183,426
Equity
Nonattributable controlling
to owners
interests
of the
parent
Total
141,161,092
(8,985,535)
137,211,566
9, 23
21,926,949
-
(298,346)
21,926,949
(298,346)
5,294,380 142,505,946
296,245
77,861
22,223,194
(220,485)
12, 23
(122,062)
(122,062)
(415)
(122,477)

23
(907,190)
(907,190)
31,291
(875,899)
net of tax
17, 23
(659,451)
(659,451)
(15,307)
(674,758)
37
(76,091)
76,091
21,926,949
(2,063,140)
76,091
19,939,900
389,675
20,329,575
(2,049,027)
-
(150)
(2,049,027)
(150)

Classified as held-for-sale
Dividends
Capital transaction under
22
common control
(70,500) (2,119,527)
232
82
541
541
23, 24
(1,068,987)
(1,068,987)
(1,068,987)
23, 24
31,124
31,124
31,124
23, 24
(8,964)
(8,964)
(8,964)
3,642
3,520
7,162
(3,553)
3,609
(2,045,385)
(1,043,457)
(3,088,842)
(73,280) (3,162,122)
739,097 4,183,426
161,042,656
(12,092,132)
76,091
154,062,624
5,610,775 159,673,399
Others
113,486
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of Korean won, in thousands of US dollars (Note 2.28)

Notes
2014
2013
2014
2013
KRW
KRW
USD
USD
Cash flows from operating activities

Profit for the year
Adjustments
31
23,394,358
22,323,765
30,474,764
23,804,832
22,223,194
21,206,200
28,949,145
22,613,120
Changes in operating assets and liabilities
31
(3,837,136)
(1,313,245)
(3,645,042)
(1,247,502)
41,880,987
52,966,351
39,784,352
50,314,763
Interest received
1,555,373
1,034,074
1,477,508
982,306
Interest paid
(463,740)
(434,857)
(440,524)
(413,087)
Dividend received
Income tax paid
Net cash generated from operating activities
1,495,658
592,217
1,420,783
562,570
(7,492,889)
(7,450,345)
(7,117,782)
(7,077,368)
36,975,389
46,707,440
35,124,337
44,369,184
(1,110,842)
(713,452)
(19,391,643)
33,663
(1,055,231)
(677,735)
(18,420,863)
31,978
202,904
1,691,463
192,746
1,606,785
Cash flows from investing activities

Net increase in short-term financial instruments
Net decrease (increase) in short-term availablefor-sale financial assets
Proceeds from disposal of long-term available-forsale financial assets
(6,212,102)
(1,531,356)
(5,901,113)
(1,454,694)
Acquisition of long-term available-for-sale

financial assets
2,014,430
240
1,913,584
228
Proceeds from disposal of associates and

joint ventures
(719,800)
(181,307)
(683,766)
(172,230)
Acquisition of associates and joint ventures

Disposal of property, plant and equipment
Purchases of property, plant and
equipment Disposal of intangible assets
Purchases of intangible assets
Cash outflows from business combination
Others
Net cash used in investing activities
385,610
377,445
366,306
358,549
(22,042,943)
(23,157,587)
(20,939,435)
(21,998,278)
31,731
4,562
30,142
4,334
(1,324,307)
(934,743)
(1,258,010)
(887,948)
(176,625)
(167,155)
(167,783)
(158,787)
(3,141,012)
(1,490,601)
(2,983,767)
(1,415,979)
(32,806,408)
(44,747,019)
(31,164,062)
(42,506,905)
1,833,419
(1,125,322)
(1,861,536)
-
1,741,635
(1,068,986)
(1,768,344)
32,668
Cash flows from financing activities

Net increase (decrease) in short-term borrowings
27,582
34,390
26,201
Proceeds from long-term borrowings and debentures
1,740,573
26,672
1,653,437
25,337
Repayment of long-term borrowings and debentures
(3,299,595)
(1,368,436)
(3,134,412)
(1,299,930)
Payment of dividends
(2,233,905)
(1,249,672)
(2,122,072)
(1,187,111)
139
281,551
132
267,456
(3,057,109)
(4,137,031)
(2,904,065)
(3,929,924)
(555,886)
(330,070)
(528,057)
(313,546)
Net increase in non-controlling interests

Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
555,986
(2,506,680)
528,153
(2,381,191)

Beginning of the year
16,284,780
18,791,460
15,469,535
17,850,726
End of the year
16,840,766
16,284,780
15,997,688
15,469,535
Net increase (decrease) in cash and cash equivalents
046
047
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. General Information
1.1 Company Overview
Samsung Electronics Co., Ltd. (SEC) was incorporated under the laws of the Republic of Korea in 1969 and listed its shares on the Korea Stock Exchange in 1975.
SEC and its subsidiaries (collectively referred to as the Group) operate three business divisions: Consumer Electronics (CE), Information technology & Mobile communica-tions (IM), and
Device Solution (DS). The CE division includes digital TVs, monitors, printers, air conditioners and refrigerators and the IM division includes mobile phones, communication systems, and
computers. The DS division includes products such as memory and system LSI in the semiconductor business (Semiconductor), and LCD and OLED panels in the display business (DP).
SEC is domiciled in the Republic of Korea and the address of its registered office is Suwon, the Republic of Korea.
These consolidated financial statements have been prepared in accordance with the Korean International Financial Reporting Standards (Korean IFRS) 1110,
Consolidated Financial Statements. SEC, as the controlling company, consolidates its 158 subsidiaries, including Samsung Display and Samsung Electronics
America (Note 1.2). The Group also applies the equity method of accounting to its 37 affiliates, including Samsung Electro-Mechanics.
1.2 Consolidated Subsidiaries

(A) The consolidated subsidiaries as at December 31, 2014 are as follows:
Area
Subsidiaries
Industry
Domestic
High Pioneer Private Investment Trust #1

Samsung Display (SDC)
Technology business, Venture capital investments

Manufacture and sale of display panels
SU Materials
Manufacture of LCD components
50.0
STECO
Manufacture of semiconductor components
51.0
SEMES
Manufacture of semiconductor/FPD
91.5
Samsung Electronics Service
Repair services for electronic devices
Samsung Electronics Sales
Sale of electronic devices
100.0
Samsung Electronics Logitech
General logistics agency
100.0
Samsung Medison
Medical equipment
68.5
Ray
Dental CT
68.1
Samsung Venture Capital Union #6
99.0
99.0
99.0
99.0
99.0
99.0
99.0
99.0
Ownership represents the Groups ownership of voting rights in each entity.
Percentage of
ownership1
100.0
84.8
99.3
Area
Subsidiaries
Industry
America
Samsung Electronics America (SEA)

NexusDX (Nexus)

Medical equipment
100.0
100.0
Samsung Receivables (SRC)
Credit management
100.0
NeuroLogica
Medical equipment
100.0
Samsung Semiconductor (SSI)
Sale of semiconductor/LCD
100.0
Samsung Electronics Canada (SECA)
100.0
Samsung Research America (SRA)
R&D
100.0
Grandis
R&D
100.0
Samsung Mexicana (SAMEX)
Manufacture of electronic devices
100.0
Samsung International (SII)
Manufacture of CTV/monitors
100.0
Samsung Telecommunications America (STA)
Sale of communication equipment
100.0
Samsung Austin Semiconductor (SAS)
Manufacture of semiconductor
100.0
Samsung Electronics Mexico (SEM)
99.9
SEMES America (SEMESA)
Semiconductor equipment
100.0
Samsung Electronics Digital Appliance Mexico (SEDAM)
Samsung Electronics Latinoamerica Miami (SEMI)
100.0
Nvelo
Software
100.0
Samsung Electronics Latinoamerica (SELA)
100.0
Samsung Electronics Venezuela (SEVEN)
Marketing and services
100.0
Samsung Electronica Colombia (SAMCOL)
100.0
Samsung Electronics Panama (SEPA)
Consulting
100.0
Samsung Electronica da Amazonia (SEDA)
Manufacture and sale of electronic devices
100.0
Samsung Electronics Argentina (SEASA)
Marketing and services
100.0
Samsung Electronics Chile (SECH)
100.0
Samsung Electronics Peru (SEPR)
100.0
RT SV CO-INVEST (RT-SV)
Quietside
Sale of heating and cooling products
100.0
SmartThings
Sale of smart home electronics
100.0
PrinterOn
Sale of printing solutions
100.0
PrinterOn America
100.0
Samsung Electronics (UK) (SEUK)

Samsung Electronics Holding (SEHG)

Holding Company
100.0
100.0
Samsung Semiconductor Europe GmbH (SSEG)
100.0
Samsung Electronics GmbH (SEG)
100.0
Samsung Electronics Iberia (SESA)
100.0
Samsung Electronics France (SEF)
100.0
Samsung Electronics Hungarian (SEH)
100.0
Samsung Electronics Czech and Slovak (SECZ)
100.0
Samsung Electronics Italia (SEI)
100.0
Samsung Electronics Europe Logistics (SELS)
Logistics
100.0
Samsung Electronics Benelux (SEBN)
100.0
Samsung Display Slovakia (SDSK)
Toll processing of LCD
100.0
Samsung Electronics Romania (SEROM)
100.0
Samsung Electronics Overseas (SEO)
100.0
Samsung Electronics Polska (SEPOL)
100.0
Europe
Percentage of
ownership1
99.9
99.9
048
049
Area
Subsidiaries
Industry
Europe (Cont.)
Samsung Electronics Portuguesa (SEP)

100.0
100.0
100.0
100.0
100.0
Holding Company
100.0
Manufacture of home appliances
100.0
100.0
R&D
100.0
R&D
100.0
Medical equipment
100.0
Marketing
100.0
100.0
Marketing
100.0
100.0
100.0
R&D
100.0
Marketing
100.0
100.0
Manufacture of CTV
100.0
Services
100.0
Holding Company
100.0
R&D
100.0
R&D
100.0
R&D
100.0
100.0
100.0
Marketing
100.0
Marketing
Marketing
100.0
100.0
100.0
100.0
Marketing
100.0
Marketing
100.0
Marketing
100.0
100.0
100.0
R&D
100.0
100.0
100.0
100.0
Samsung Electronics Nordic (SENA)

Samsung Semiconductor Europe (SSEL)
Samsung Electronics Austria (SEAG)
Samsung Electronics Slovakia (SESK)
Samsung Electronics Europe Holding (SEEH)
Samsung Electronics Poland Manufacturing (SEPM)
Samsung Electronics Greece (SEGR)
Samsung Nanoradio Design Center (SNDC)
Nanoradio Hellas
SonoAce Deutschland (SMDE)
Samsung Electronics Rus (SER)
Samsung Electronics Rus Company (SERC)
Samsung Electronics Ukraine (SEU)
Samsung Electronics Baltics (SEB)
Samsung Electronics Ukraine Company (SEUC)
Samsung R&D Institute Rus (SRR)
Samsung Electronics Kazakhstan (SEK)
Samsung Electronics Central Eurasia (SECE)
Samsung Electronics Rus Kaluga (SERK)
Samsung Russia Service Centre (SRSC)
Samsung Electronics (London) Limited (SEL)
Samsung Denmark Research Center (SDRC)
Samsung France Research Center (SFRC)
Samsung Cambridge Solution Centre (SCSC)
Samsung Electronics Switzerland GmbH (SESG)
PrinterOn Europe
Samsung Electronics Caucasus (SECC)
Middle East and Africa
Samsung Electronics West Africa (SEWA)

Samsung Electronics East Africa (SEEA)
Samsung Gulf Electronics (SGE)
Samsung Electronics Egypt (SEEG)
Samsung Electronics Israel (SEIL)
Samsung Electronics Tunisia (SETN)
Samsung Electronics Pakistan (SEPAK)
Samsung Electronics South Africa (SSA)
Samsung Electronics Turkey (SETK)
Samsung Semiconductor Israel R&D Center (SIRC)
Samsung Electronics Levant (SELV)
Samsung Electronics Morocco (SEMRC)
Samsung Electronics South Africa Production (SSAP)
Percentage of
ownership1
Area
Subsidiaries
Industry
China
Samsung Display Dongguan (SDDG)

Samsung Display Tianjin (SDTJ)
Manufacture of LCD
Manufacture of LCD
100.0
95.0
Samsung Electronics Hong Kong (SEHK)
100.0
Suzhou Samsung Electronics (SSEC)
88.3
Samsung Suzhou Electronics Export (SSEC-E)
100.0
Samsung (China) Investment (SCIC)
100.0
Samsung Mobile R&D Center China-Guangzhou (SRC-Guangzhou)
R&D
100.0
Samsung Tianjin Mobile Development Center (STMC)
R&D
100.0
Samsung Network R&D Center China-Shenzhen (SRC-Shenzhen)
R&D
100.0
Samsung Electronics Suzhou Semiconductor (SESS)
Toll processing of semiconductor
100.0
Samsung Electronics (Shandong) Digital Printing (SSDP)
Manufacture of printers
100.0
Samsung Electronics Huizhou (SEHZ)
Tianjin Samsung Electronics (TSEC)
Samsung Electronics Taiwan (SET)
100.0
Beijing Samsung Telecom R&D Center (BST)
R&D
100.0
Tianjin Samsung Telecom Technology (TSTC)
Manufacture of communication equipment
Shanghai Samsung Semiconductor (SSS)
100.0
Samsung Electronics Suzhou Computer (SESC)
100.0
Samsung Display Suzhou (SDSZ)
Toll processing of LCD
100.0
Samsung Suzhou LCD (SSL)
Manufacture of LCD
Shenzhen Samsung Electronics Telecommunication (SSET)
Samsung Electronics Shanghai Telecommunication (SSTC)
Sale of mobile communication and
100.0
Samsung Semiconductor (China) R&D (SSCR)
network equipment
R&D
100.0
Samsung Electronics China R&D Center (SCRC)
R&D
100.0
Samsung (China) Semiconductor (SCS)
Manufacture of semiconductor
100.0
Samsung Electronics Hainan Fiberoptics (SEHF)
Manufacture of optical fiber/cable
100.0
Samsung Electronics (Beijing) Service (SBSC)
Services
100.0
Samsung Medison Shanghai Medical Instrument (SMS1)
Medical equipment
100.0
Tianjin Samsung LED (TSLED)
Manufacture of LED
100.0
Tianjin Samsung Opto-Electronics (TSOE)
Manufacture of cameras/camcorders
Samsung R&D Institute China-Xian (SRC-Xian)
R&D
100.0
SEMES (Xian)
Semiconductor equipment
100.0
Percentage of
ownership1
99.9
91.2
90.0
60.0
95.0
90.0
050
051
Area
Subsidiaries
Industry
Rest of Asia
Samsung Japan (SJC)

R&D
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
R&D
100.0
100.0
100.0
Sale and services of communication systems
100.0
Samsung R&D Institute Japan (SRJ)

Samsung Electronics Japan (SEJ)
Samsung Electronics Display (M) (SDMA)
Samsung Electronics (M) (SEMA)
Samsung Vina Electronics (SAVINA)
Samsung Asia Private (SAPL)
Samsung India Electronics (SIEL)
Samsung R&D Institute India-Bangalore (SRI-B)
Samsung Electronics Australia (SEAU)
Samsung Electronics Indonesia (SEIN)
Samsung Telecommunications Indonesia (STIN)
Thai Samsung Electronics (TSE)
Samsung Electronics Philippines (SEPCO)
Samsung Malaysia Electronics (SME)
Samsung R&D Institute Bangladesh (SRBD)
Samsung Electronics Vietnam (SEV)
Samsung Telecommunications Malaysia (STM)
Samsung Electronics Vietnam THAINGUYEN (SEVT)
Samsung Medison India (SMIN)

Samsung Electronics New Zealand (SENZ)
Samsung Display Bac Ninh (SDBN)
1
Percentage of
ownership1
91.8
100.0
100.0
R&D
100.0
100.0
Communication system services
100.0
100.0
Medical equipment
100.0
100.0
Manufacture of LCD
100.0
(B) A summary of financial data of major consolidated subsidiaries is as follows:

(1) 2014
2014
Assets
Samsung Electronics Vietnam THAINGUYEN (SEVT)

Samsung Electronics GmbH (SEG)
Sales
Net Income (Loss)
37,939,965
10,697,787
6,728,991
5,409,749
Liabilities
24,980,628
14,076,007
1,698,239
(80,403)
9,603,679
7,830,941
16,451,983
162,677
7,577,935
3,883,673
19,105,338
194,713
7,022,746
5,062,988
93,605
6,765,278
3,911,166
877,508
166,754
6,553,628
1,251,667
19,811,537
2,012,173
6,503,003
3,375,099
2,423,230
78,747
5,321,014
4,573,413
23,002,379
66,255
4,966,486
1,258,635
17,166,345
829,880
3,957,700
3,042,402
8,265,414
772,450
3,797,166
1,330,302
7,936,105
887,715
3,110,433
671,729
1,423,212
1,057,873
2,949,605
1,776,936
6,849,389
428,757
2,560,852
2,120,738
13,331,324
125,239
2,316,054
789,395
11,413,234
510,357
1,869,697
405,089
4,248,232
142,416
1,831,794
768,230
815,705
(38,931)
1,654,988
307,109
4,442,707
202,647
1,621,583
1,524,468
13,320,129
38,209
1,583,027
1,299,330
4,472,432
44,559
1,287,972
323,972
3,113,297
109,549
1,235,239
964,058
4,304,335
72,231
1,207,723
245,237
2,394,375
30,404
1,142,897
1,082,420
6,377,894
(17,881)
052
(2) 2013
053
2013




Samsung Electronics Mexico (SEM)
Samsung Electronics Rus Company (SERC)
Assets
Liabilities
Sales
Net Income (Loss)
35,754,894
12,248,560
6,682,229
7,262,519
29,386,907
14,321,018
2,400,779
70,690
8,406,438
6,780,610
25,605,822
743,369
7,346,339
3,991,768
17,932,937
39,289
6,393,348
3,467,968
2,409,773
60,980
5,780,302
4,025,760
(17,863)
5,625,759
1,493,868
26,594,578
3,087,252
4,735,432
4,085,299
21,387,737
173,510
4,599,200
1,802,686
22,664,923
1,012,728
3,752,682
1,284,560
(40,537)
3,429,136
1,658,072
7,852,428
920,157
2,939,027
1,415,277
15,293,633
767,822
2,425,585
1,099,521
1,558,990
674,510
1,924,832
1,195,824
6,737,419
324,171
1,903,892
1,806,486
14,543,524
7,613
1,764,078
317,224
4,561,795
140,825
1,554,638
1,311,133
3,261,067
9,886
1,476,296
373,181
5,033,203
222,389
1,463,589
379,118
18,892
12,067
1,410,054
1,107,915
5,809,646
(11,137)
1,393,507
705,504
6,075,490
92,969
1,390,404
1,141,842
3,909,546
30,802
1,310,109
1,005,056
15,937,922
130,082
1,290,124
322,622
2,700,887
25,233
1,249,691
253,536
3,272,358
103,658
(C) Changes in scope of consolidation

(1) Subsidiaries newly included in the consolidation for the year ended December 31, 2014:
Area
Subsidiary
Description
Domestic

Incorporation
Incorporation
America
RT SV CO-INVEST (RT-SV)
Quietside
Acquisition of shares
SmartThings
PrinterOn
PrinterOn America
1397011 Ontario
Europe
PrinterOn Europe
Samsung Electronics Caucasus (SECC)
Incorporation
Middle East and Africa
Samsung Electronics South Africa Production (SSAP)
Incorporation
Asia
Samsung Display Bac Ninh (SDBN)
Incorporation
(2) Subsidiaries excluded from the consolidation for the year ended December 31, 2014:
Area
Subsidiary
Description
Domestic
World Cyber Games

Samsung Electronics Football Club
Liquidation
Disposal
America
1397011 Ontario
Liquidation
Europe
Samsung Medison Europe (SMNL)

Nanogen Recognomics (Nanogen)
Liquidation
Liquidation
Asia
Medison Medical Systems (India) (MI)
Liquidation
China
Medison Medical Equipment (Shanghai) (MMS)
Liquidation
054
2. Summary
of
Accounting Policies
Significant
055
(B) New and amended standards not adopted by the Group

The Group expects that new standards, amendments and interpretations issued but not
effective for the financial year beginning January 1, 2014, and not early ad-opted, would
not have a material impact on its consolidated financial statements.
The principal accounting policies applied in the preparation of these consolidated financial
statements are set out below. These policies have been consistently ap-plied to all the
years presented, unless otherwise stated.
2.3 Consolidation
2.1 Basis of Presentation
The Group prepares the consolidated financial statements in accordance

with Korean IFRS 1110, Consolidated Financial Statements.
The Group maintains its accounting records in Korean won and prepares
statu-tory financial statements in the Korean language (Hangul) in
accordance with the International Financial Reporting Standards as adopted
by the Republic of Korea (Korean IFRS). The accompanying consolidated
financial statements have been condensed, restructured and translated into
English from the Korean language financial statements.
(A) Subsidiaries
Subsidiaries are all entities (including special purpose entities) over which the Group has
control. The Group controls the corresponding investee when it is exposed, or has rights,
to variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee. Consolidation of a subsidiary begins
from the date the Group obtains control of a subsidiary and ceases when the Group loses
control of the subsidiary.
Certain information attached to the Korean language financial statements,

but not required for a fair presentation of the Groups financial position,
financial perfor-mance or cash flows, is not presented in the accompanying
consolidated financial statements.
The consolidated financial statements of the Group presented have been
pre-pared in accordance with Korean IFRS. International Financial Reporting
Stan-dards (IFRS) have been adopted by the Korean Accounting
Standards Board as Korean IFRS based on standards and interpretations
published by the Internation-al Accounting Standards Board.
The Group applies the acquisition method to account for business

combinations. The consideration transferred is measured at the fair values of
the assets trans-ferred, 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 Group recognizes
any non-controlling interest in the acquiree on an acquisition-by-acquisition
basis in the event of liquidation at the non-controlling interests proportionate
share of the recognized amounts of acquirees identifiable net assets.
Acquisition-related costs are expensed as in-curred.
Korean IFRS permits the use of critical accounting estimates in the

preparation of the financial statements and requires management judgments
in applying ac-counting policies. The areas involving a higher degree of
judgment or complexity, or areas where assumptions and estimates are
significant to the consolidated financial statements, are disclosed in Note 3.
Goodwill is recognized as the excess of (1) the aggregate of i) the

consideration transferred, ii) the amount of any non-controlling interest in the
acquiree and iii) the acquisition-date fair value of the Groups previously held
equity interest in the ac-quiree over (2) the net identifiable assets acquired. If
this consideration (1) is lower than the fair value of the acquirees net assets
in (2), the difference is recognized in profit or loss.
2.2 Changes in Accounting Policy

and Disclosures
Balances of receivables and payables, income and expenses and unrealized

gains on transactions between the Group subsidiaries are eliminated.
Accounting policies of subsidiaries are changed where necessary to ensure
consistency with the policies adopted by the Group.
(A) New and amended standards adopted by the Group
The Group applied the following amended and enacted standards for the
annual period beginning on January 1, 2014:
Amendment to Korean IFRS 1032, Financial Instruments: Presentation
Amendment to Korean IFRS 1032, Financial Instruments: Presentation, provides that the
right to offset must not be contingent on a future event and must be le-gally enforceable
in all of circumstances; and if an entity can settle amounts in a manner such that the
outcome is, in effect, equivalent to net settlement, the entity will meet the net settlement
criterion. The adoption of this standard did not have a material impact on the consolidated
financial statements.
Enactment of Korean IFRS 2121, Levies
Korean IFRS 2121, Levies, is applied to a liability to pay a levy imposed by

the government in accordance with the legislation. The interpretation
requires that the liability to pay a levy is recognized when the activity that
triggers the payment of the levy occurs (obligating event), as identified by
the legislation. The application of this interpretation did not have a material
impact on the consolidated financial statements.
(B) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control

are accounted for as equity transactions that is, as transactions with the
owners in their capacity as owners. The difference between fair value of any
consideration paid and the relevant share acquired of the carrying value of
net assets of the subsidiary is recorded in equity. Gains or losses on
disposals of non-controlling interests are also recorded in equity.
(C) Disposal of subsidiaries

If the Group loses control of a subsidiary, any investment continuously retained in the
subsidiary is re-measured at its fair value at the date when control is lost and any
resulting differences are recognized in profit or loss. Such fair value becomes the initial
carrying amount for the subsequent measurement of the retained inter-est accounted for
as an 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 Group had directly disposed of the related assets or liabilities. As a result, the
previously recognized other comprehensive income are reclassified into profit or loss.
2.4 Foreign Currency Translation

(A) Functional and presentation currency
Items included in the financial statements of each of the Groups entities are
measured using the currency of the primary economic environment in which
each entity operates (the functional currency). The consolidated financial
statements are presented in Korean won, which is the parent companys
functional and pre-sentation currency.
(B) Transactions and balances
(D) Non-controlling interests

Each component of profit or loss and other comprehensive income is attributed to owners
of the parent and to non-controlling interests. Total comprehensive income is attributed to
owners of the parent and to non-controlling interests even if this results in a negative
balance of non-controlling interests.
(E) Associates
Associates are all entities over which the Group has significant influence but does not
have control, generally investees of which from 20% to 50% of voting stock is owned by
the Group. Investments in associates are initially recognized at acquisi-tion cost using the
equity method. Unrealized gains on transactions between the Group and its associates
are eliminated to the extent of the Groups interest in the associates. If there is any
objective evidence that the investment in the associate is impaired, the Group recognizes
the difference between the recoverable amount of the associate and its book value as
impairment loss.
(F) Joint arrangements

A joint arrangement of which two or more parties have joint control is classified as either a
joint operation or a joint venture. A joint operator has rights to the assets, and obligations
for the liabilities, relating to the joint operation and recognizes the assets, liabilities,
revenues and expenses relating to its interest in a joint opera-tion. A joint venturer has
rights to the net assets relating to the joint venture and accounts for that investment using
the equity method.
Foreign currency transactions are translated into the functional currency

using the exchange rates prevailing at the dates of the transactions or
valuation where items are re-measured. Foreign exchange gains and losses
resulting from the settle-ment of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognized in profit or loss.
Exchange differences arising on non-monetary financial assets and liabilities
such as equity instruments at fair value through profit or loss and availablefor-sale eq-uity instruments are recognized in profit or loss and other
comprehensive income, respectively, as part of the fair value gain or loss.
(C) Translation into the presentation currency
The results and financial position of all the foreign entities that have a
functional currency different from the presentation currency of the Group are
translated into the presentation currency as follows:
Assets and liabilities for each statement of financial position presented are
trans-lated at the closing rate at the end of the reporting date.
Income and expenses for each statement of income are translated at average exchange
rates, unless this average is not a reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions.
All resulting exchange differences are recognized in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment
in foreign operations are recognized in other comprehensive income. When a foreign
operation is partially disposed of or sold, the exchange differences that were recorded in
equity are reclassified as part of gains and losses on dispo-sition in the statement of
income. When the Group loses control over foreign sub-sidiaries, the exchange
differences that were recorded in equity are reclassified into profit or loss when such gain
or loss on disposition is recognized.
Any goodwill arising on the acquisition of a foreign operation and any fair
value ad-justments are treated as the foreign operations assets and
liabilities. Such good-will is expressed in the foreign operations functional
currency and is translated at the closing rate. Exchange differences are
recognized in other comprehensive income.
056
2.5 Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, and
other short-term highly liquid investments that are readily convertible to a known amount
of cash and are subject to an insignificant risk of change in value.
2.6 Financial Assets
057
(B) Recognition and measurement
Regular purchases and sales of financial assets are recognized on the trade
date. 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,
transaction costs. Transaction costs of financial assets carried at fair value
through profit or loss are expensed in the statement of income. After the
initial recognition, available-for-sale financial assets and financial assets at
fair value through profit or loss are subsequently carried at fair value. Loans
and receivables and held-to-maturity in-vestments are subsequently carried
at amortized cost using the effective interest method.
(A) Classification
The Group classifies its financial assets in the following categories: financial
as-sets at fair value through profit or loss, loans and receivables, availablefor-sale financial assets, and held-to-maturity financial assets. The
classification depends on the terms of the instruments and purpose for which
the financial assets were acquired. Management determines the
classification of its financial assets at initial recognition.
Changes in fair value of financial assets at fair value through profit or loss
are recognized in profit or loss and changes in fair value of available-for-sale
financial assets are recognized in other comprehensive income. When the
available-for-sale financial assets are sold or impaired, the fair value
adjustments recorded in equity are reclassified into profit or loss.
Interest on available-for-sale financial assets and held-to-maturity financial assets
(1) Financial assets at fair value through profit or loss
calculated using the effective interest method is recognized in the statement of in-come
Financial assets at fair value through profit or loss are financial assets held
for trading. A financial asset is classified in this category if acquired
principally for the purpose of selling in the short-term. Derivatives not subject
to hedge accounting and derivatives separated from financial instruments,
such as embedded deriva-tives, are also categorized as held for trading.
Assets in this category are classified as current assets.
as part of financial income. Dividends on available-for-sale financial assets are
(2) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determin-able
recognized in the statement of income as part of other non-operating income when the
Groups right to receive payments is established.
(C) Offsetting financial instruments
Financial assets and liabilities are offset, and the net amount reported in the
state-ment of financial position, when there is a legally enforceable right to
offset the recognized amounts and there is an intention to settle on a net
basis, or realize the asset and settle the liability simultaneously.
payments that are not quoted in an active market. They are included in cur-rent assets,
except for those with maturities greater than 12 months after the end of the reporting
(D) Derecognition of financial assets
period which are classified as non-current assets.
If the Group transfers a financial asset and the transfer does not result in derecog-nition
because the Group has retained substantially all of the risks and rewards of ownership of
(3) Available-for-sale financial assets
the transferred asset due to a recourse in the event the debtor defaults, the Group
Available-for-sale financial assets are non-derivative financial assets that are either
continues to recognize the transferred asset in its entirety and recognizes a financial
designated in this category or not classified in any of the other categories. They are
liability for the consideration received. The related financial liability is classified as
included in non-current assets unless an investment matures or management intends to
borrowings in the statement of financial position.
dispose of it within 12 months of the end of the reporting period.
2.7 Impairment of Financial Assets

The Group assesses at the end of each reporting period whether there is
objective evidence that a financial asset or group of financial assets is
impaired. A financial asset or a group of financial assets is impaired and
impairment loss is recognized only if there is objective evidence and that
loss event (or events) has an impact on the estimated future cash flows of
the financial asset or group of financial assets that can be reliably estimated.
Impairment of loans and receivables is presented as a deduction in an
allowance account. Impairment of other financial assets is directly deducted
from their carry-ing amount. The Group writes off financial assets when the
assets are determined to no longer be recoverable.
The objective evidence that a financial asset is impaired includes significant financial
difficulty of the issuer or obligor, a delinquency in interest or principal pay-ments, or the
disappearance of an active market for that financial asset because of financial difficulties.
A decline in the fair value of an available-for-sale equity in-strument by more than 20%
from its cost or a prolonged decline below its cost for more than six months is also
objective evidence of impairment.
2.8 Trade Receivables
The Groups policy is that property, plant and equipment should be

depreciated over the following estimated useful lives:
Estimated useful lives
Trade receivables are amounts due from customers for merchandise sold or ser-vices
performed in the ordinary course of business. If collection is expected in one year or less,
they are classified as current assets. If collection is expected beyond one year, they are
presented as non-current assets. Trade receivables are recog-nized initially at fair value
Buildings and structures

Machinery and equipment
Other
15, 30 years
5 years
5 years
and subsequently measured at amortized cost using the effective interest method, less
provision for impairment.
The depreciation method, residual values and useful lives of property, plant and
equipment are reviewed, and adjusted if appropriate, at the end of each reporting period.
2.9 Inventories
An assets carrying amount is written down immediately to its recoverable amount if the
assets carrying amount is greater than its estimated recoverable amount. Gains and
losses on disposals are determined by comparing the pro-ceeds with the carrying amount
Inventories are stated at the lower of cost and net realizable value. Cost is deter-mined
and are recognized within the statement of income as part of other non-operating income
using the average cost method, except for materials in transit. The cost of finished goods
and expenses.
and work in progress comprises design costs, raw materials, direct labor, other direct
costs and related production overheads (based on normal oper-ating capacity). It
excludes costs of idle plant and abnormal waste. Net realizable value is the estimated
selling price in the ordinary course of business, less appli-cable variable selling expenses.
Inventories are reduced for the estimated losses arising from excess,
obsoles-cence, and decline in value. This reduction is determined by
estimating market value based on future customer demand. The losses on
inventory obsolescence are recorded as a part of cost of sales.
2.10 Disposal Group Held-for-Sale

Non-current assets (or disposal group) are classified as assets held-for-sale when their
carrying amount is to be recovered principally through a sale transaction and a sale is
considered highly probable. The assets are measured at the lower of their carrying
amount and the fair value less costs to sell.
2.12 Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair
value of the Groups share of the net identifiable assets of the acquired
subsidiary, associ-ates, joint ventures and businesses at the date of
acquisition. Goodwill on acquisi-tions of subsidiaries and businesses is
included in intangible assets and goodwill on acquisition of associates and
joint ventures is included in the investments in associates and joint ventures.
Intangible assets, except for goodwill, are initially recognized at their
historical cost and carried at cost less accumulated amortization and
accumulated impairment losses.
Internally generated development costs are the aggregate costs recognized after meeting
the asset recognition criteria, including technical feasibility, and deter-mined to have future
economic benefits. Membership rights are regarded as in-tangible assets with an
2.11 Property, Plant and Equipment
indefinite useful life and not amortized because there is no foreseeable limit to the period
over which the assets are expected to be utilized. Intangible assets with definite useful
lives such as trademarks and licenses, are amortized using the straight-line method over
Property, plant and equipment are stated at cost less accumulated depreciation and
their estimated useful lives.
accumulated impairment losses. Historical cost includes expenditures that are directly
attributable to the acquisition of the items. Subsequent costs are included in the assets
carrying amount or recognized as a separate asset, as appropriate, only when it is
The Groups policy is that intangible assets should be amortized over the
follow-ing estimated useful lives:
Estimated useful lives
probable that future economic benefits associated with the item will flow to the Group and
replaced is derecognized and repairs and mainte-nance expenses are recognized in profit
Development costs
Trademarks, licenses and other intangible
or loss in the period they are incurred.
assets
the cost of the item can be measured reliably. The carrying amount of those parts that are
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 capi-talized interest costs, form part of the cost of that asset
and are amortized over the estimated useful lives.
2 years
5 - 10 years
058
059
2.13 Impairment of Non-Financial Assets
2.17 Provisions
Goodwill or intangible assets with indefinite useful lives are not subject to amorti-zation
A provision is recognized when the Group has a present legal or constructive

obligation as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation, and a re-liable estimate can be made of the amount of the
obligation. Provisions are not recognized for future operating losses.
and are tested annually for impairment. Assets that are subject to amortiza-tion 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 by which the assets carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an assets fair value less costs to sell and value in
use. For the purposes of assessing impairment, assets are grouped at the lowest levels
Provisions are measured at the present value of the expenditures expected to be required
for which there are separately identifiable cash flows (cash-generating units). Non-
to settle the obligation using a pre-tax rate that reflects current market as-sessments of
financial assets other than goodwill for which an impairment charge was previously
the time value of money and the risks specific to the obligation. The increase in the
recorded are reviewed for possible reversal of the impairment at each reporting date.
provision due to passage of time is recognized as interest expense.

When it is probable that an outflow of economic benefits will occur due to a pres-ent
obligation resulting from a past event, and the amount is reasonably estimable, a
2.14 Financial Liabilities

(A) Classification and measurement
Financial liabilities at fair value through profit or loss are financial instruments held for
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, a disclosure regarding the contingent liability is made in the notes to the
financial statements.
trading. Financial liabilities are classified in this category if incurred principally for the
purpose of repurchasing them in the near term. Derivatives that are not designated as
hedges or bifurcated from financial instruments containing embed-ded derivatives are
2.18 Net Defined Benefit Liabilities
also categorized as held-for-trading.

The Group has a variety of retirement pension plans including defined benefit and defined
The Group classifies non-derivative financial liabilities, except for financial

liabili-ties at fair value through profit or loss, financial guarantee contracts
and financial liabilities that arise when a transfer of financial assets does not
qualify for derecog-nition, as financial liabilities carried at amortized cost and
presented as trade payables, borrowings, and other financial liabilities in
the statement of financial position.
contribution plans. A defined contribution plan is a pension plan under which the Group
pays fixed contributions into a separate entity. The Group has no legal or constructive
obligations to pay further contributions if the fund does not hold sufficient assets to pay all
employees the benefits relating to employee service in the current and prior periods. For
defined contribution plans, the Group pays contributions to annuity plans that are
managed either publicly or privately on a mandatory, contractual or voluntary basis. The
Group has no further future payment obligations once the contributions have been paid.
(B) Derecognition
The contributions are recognized as employee benefit expense when they are due.
Financial liabilities are removed from the statement of financial position

when they are extinguished, for example, when the obligation specified in
the contract is dis-charged, cancelled or expires or when the terms of an
existing financial liability are substantially modified.
Prepaid contribu-tions are recognized as an asset to the extent that a cash refund or a
reduction in the future payments is available.
A defined benefit plan is a pension plan that is not a defined contribution plan. Typ-ically
defined benefit plans define an amount of pension benefit that an employee will receive
2.15 Trade Payables
on retirement, usually dependent on one or more factors 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
Trade payables are amounts due to suppliers for merchandise purchased or ser-vices
received in the ordinary course of business. If payment is expected in one year or less,
they are classified as current liabilities. If payment is expected beyond one year, they are
presented as non-current liabilities. Non-current trade payables are recognized initially at
fair value and subsequently measured at amortized cost using the effective interest
method.
2.16 Borrowings
the end of the reporting period less the fair value of plan assets. The defined benefit
obligation is calculated annually by indepen-dent actuaries using the projected unit credit
method. The present value of the defined benefit obligation is determined by discounting
the estimated future cash outflows using interest rates of high-quality corporate bonds
that are denominated in the currency in which the benefits will be paid and that have
terms to maturity approximating to the terms of the related pension obligation.
Actuarial gains and losses resulting from the changes in actuarial assumptions, and the
differences between the previous actuarial assumptions and what has actually occurred,
are recognized in other comprehensive income in the period in which they were incurred.
Borrowings are recognized initially at fair value, net of transaction costs, and
are subsequently measured at amortized cost. Any difference between cost
and the redemption value is recognized in the statement of income over the
period of the borrowings using the effective interest method. If the Group has
an indefinite right to defer payment for a period longer than 12 months after
the end of the reporting date, such liabilities are recorded as non-current
liabilities, otherwise, they are re-corded as current liabilities.
Past service costs are immediately recognized in profit or loss.
2.19 Financial Guarantee Contract
2.21 Derivative Instruments
Financial guarantee contracts are contracts that require the issuer to make speci-fied
All derivative instruments are accounted for at their fair value according to the rights and
payments to reimburse the holder for a loss it incurs because a specified debt-or fails to
obligations associated with the derivative contracts. The resulting changes are
make payments when due. Financial guarantees are initially recognized in the financial
recognized in profit or loss in the year in which they are incurred. Cer-tain derivatives that
statements at fair value on the date the guarantee was given. If the amount measured in
qualify as cash flow hedges and hedges on net investments in foreign operations are
subsequent periods exceeds the unamortized balance of the amount initially recognized,
recognized under equity.
the excess is classified as other financial liability.
2.20 Current and Deferred Tax

The tax expense for the period comprises current and deferred tax. Tax is recog-nized on
2.22 Dividend
Dividend distribution to the Groups shareholders is recognized as a liability
when the dividends are approved.
the profit for the period in the statement of income, except to the extent that it relates to
items recognized in other comprehensive income or directly in equity, in which case the
tax is also recognized in other comprehensive income or directly in equity, respectively.
The tax expense is calculated on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period.
Deferred tax is recognized for temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts as expected tax conse-quences at the
recovery or settlement of the carrying amounts of the assets and liabilities. However,
deferred tax assets and liabilities are not recognized if they arise from initial recognition of
2.23 Share Capital

Common shares and preferred shares with no repayment obligations are clas-sified as
equity. When the Group purchases its common shares, the acquisition costs, including
direct transaction costs, are deducted from equity until the re-demption or reissuance as
treasury shares. Consideration received on the subse-quent sale or issuance of treasury
shares is credited to equity.
an asset or liability in a transaction other than a business combination that at the time of
the transaction affects neither accounting nor taxable profit or loss. Deferred tax assets
are recognized only to the extent that it is probable that future taxable profit will be
2.24 Revenue Recognition
available against which the temporary differences can be utilized.
A deferred tax liability is recognized for taxable temporary differences

associat-ed with investments in subsidiaries, associates, and interests in joint
ventures, except to the extent that the Group is able to control the timing 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 the extent that it is probable the temporary
difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilized.
Revenue mainly comprises the fair value of the consideration received or

receiv-able for the sale of goods in the ordinary course of the Groups
activities. Revenue is shown net of value-added tax, returns, sales
incentives and discounts and after eliminating intercompany transactions.
The Group recognizes revenue when the amount of revenue can be reliably
measured; when it is probable that future economic benefits will flow to the
entity; and when specific criteria have been met for each of the Groups
activities, as de-scribed below. The Group measures revenue by reliably
estimating the contingen-cies associated with revenue based on historical
results, taking into consideration the type of customer, the type of transaction
and the specifics of each arrange-ment.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when the de-ferred income
Where multiple-element arrangements exist, the fair values of each element are
taxes assets and liabilities relate to income taxes levied by the same taxation authority on
determined based on the current market price of each of the elements when sold
either the same taxable entity or different taxable enti-ties where there is an intention to
separately. When the fair values of each element are indeterminable, the fair val-ues of
settle the balances on a net basis.
deliverables which have already been provided are calculated in such way that the fair
values of elements which are yet to be provided are subtracted from total contract value
of the arrangement.
060
(A) Sales of goods
Sales of products and merchandise are recognized upon delivery when the
sig-nificant risks and rewards of ownership of goods have transferred to the
buyer. Revenue is recognized net of discounts and returns, estimated at the
time of sale based on past experience.
(B) Sales of services
061
2.27 Operating Segments

Operating segments are disclosed in the manner reported to the chief operating decisionmaker (Note 33). The chief operating decision-maker is responsible for making strategic
decisions on resource allocation and performance assessment of the operating
segments. The Management Committee, which makes strategic decisions, is regarded as
the chief operating decision-maker.
Revenues from rendering services are generally recognized using the percent-age-ofcompletion method based on the percentage of costs to date compared to the total
estimated costs, contractual milestones or performance.
(C) Interest income
2.28 Convenience Translation into

United States Dollar Amounts
Interest income is recognized using the effective interest method according to the time
passed. When a loan or receivable is impaired, the Group reduces the carrying amount to
its recoverable amount, to the extent of the estimated future cash flow discounted at the
original effective interest rate of the instrument, and continues unwinding the discount as
interest income. Interest income on impaired loans and receivables is recognized using
the original effective interest rate.
(D) Royalty income
Royalty income is recognized on an accrual basis in accordance with the

sub-stance of the relevant agreements.
The Group operates primarily in Korean won and its official accounting
records are maintained in Korean won. The US dollar amounts provided in
the financial statements represent supplementary information solely for the
convenience of the reader. All Korean won amounts are expressed in US
dollars at the rate of KRW1,052.70 to US $1, the average exchange rate for
the year ended December 31, 2014. Such presentation is not in accordance
with generally accepted account-ing principles, and should not be construed
as a representation that the Korean won amounts shown could be readily
converted, realized or settled in US dollars at this or at any other rate.
(E) Dividend income

Dividend income is recognized when the right to receive payment is established.
2.25 Government Grants

Government grants are recognized at their fair values when there is reasonable
assurance that the grant will be received and the Group will comply with the con-ditions
attached to it. Government grants relating to costs are deferred and recog-nized in the
income statement over the period necessary to match them with the costs that they are
intended to compensate. Government grants relating to assets are recognized in liabilities
as deferred income government grants and are credit-ed to the income statement on a
straight line basis over the expected lives of the related assets.
2.26 Earnings per Share

Basic earnings per share is calculated by dividing net profit for the period available to
common shareholders by the weighted-average number of common shares outstanding
during the year. Diluted earnings per share is calculated using the weighted-average
number of common shares outstanding adjusted to include the potentially dilutive effect of
common equivalent shares outstanding.
2.29 Approval of the Consolidated

These consolidated financial statements were approved by the Board of
Directors on January 29, 2015.
3. Critical Accounting
and Assumptions
Estimates
4. Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, and
The Group makes estimates and assumptions concerning the future. The esti-mates and
other short-term highly liquid investments that are readily convertible to a known amount
assumptions are continuously assessed, considering historical experi-ence and other
of cash and are subject to an insignificant risk of change in value.
factors, including expectations of future events that are believed to be reasonable under
the circumstances. The resulting accounting estimates will, by definition, seldom equal the
Cash and cash equivalents as at December 31, 2014 and 2013, consist of the fol(In millions of Korean won)
related actual results. The estimates and assump-tions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the
lowing:
next financial year are addressed below.
(A) Revenue recognition

The Group uses the percentage-of-completion method in accounting for its fixed-price
contracts to deliver installation services. Use of the percentage-of-comple-tion method
Cash on hand
Bank deposits and others
Total
2014
2013
15,550
16,825,216
14,454
16,270,326
16,840,766
16,284,780
requires the Group to estimate the services performed to date as a proportion of the total
services to be performed. Revenues and earnings are sub-ject to significant change,
effected by early steps in a long-term projects, change in scope of a project, cost, period,
and plans of the customers.
(B) Provision for warranty
5. Financial Assets Subject

to Withdrawal Restrictions
The Group recognizes provision for warranty on products sold. The Group accrues
provision for warranty based on the best estimate of amounts necessary to settle future
and existing claims. The amounts are estimated based on past experience.
Financial instruments subject to withdrawal restrictions as at December 31, 2014
(C) Fair value of derivatives and other financial instruments
and 2013, consist of the following:
The fair value of financial instruments that are not traded in an active market
is determined by using a variety of methods and assumptions that are mainly
based on market conditions existing at the end of each reporting period.

Other non-current assets
(D) Net defined benefit liabilities

The net defined benefit liability depends on a number of factors that are deter-mined on
an actuarial basis using a number of assumptions. Any changes in these assumptions will
impact the carrying amount of the net defined benefit liability. The Group, in consideration
of the interest rates of high-quality corporate bonds, de-termines the appropriate discount
rate at the end of each year. This is the interest rate that is used to determine the present
value of estimated future cash outflows expected to be required to settle the net defined
benefit liability. The principal actu-arial assumptions associated with the net defined
benefit liability are based on the current market expectations.
(E) Estimated impairment of goodwill
At the end of each reporting period, the Group tests whether goodwill has
become impaired by comparing the carrying amounts of cash-generating
units to the re-coverable amounts. The recoverable amounts of cashgenerating units have been determined based on value-in-use calculations,
and these calculations are based on estimates.
(F) Income taxes
Income taxes on the Groups taxable income from operating activities are subject to
various tax laws and determinations of each tax authority across various coun-tries
throughout the world. There is uncertainty in determining the eventual tax effects on the
taxable income from operating activities. The Group has recognized current tax and
deferred tax at the end of the fiscal year based on the best estima-tion of future taxes
payable as a result of operating activities. However, the result-ing 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
determination of eventual tax effects.
2014
2013
13,919
202
23,850
15
062
063
6. Financial Instruments by Category

(A) Categorizations of financial assets and liabilities as at December 31, 2014 and 2013, are as follows:
(1) As at December 31, 2014
Assets
Assets at fair value through

profit or loss
Loans and
receivables
Available-for-sale
financial assets
Total
16,840,766
41,689,776
16,840,766
41,689,776
3,286,798
3,286,798
Trade receivables
24,694,610
24,694,610
12,667,509
12,667,509
Other
48,360
4,614,560
100,051
4,762,971
Total
48,360
87,839,712
16,054,358
103,942,430
Liabilities
Liabilities at fair value

Financial liabilities
through profit or loss measured at amortized cost
Other
financial liabilities
Total
7,914,704
3,367,915
4,661,384
7,914,704
8,029,299
Other payables
9,258,344
9,258,344
1,778,667
1,778,667
Debentures
1,355,882
1,355,882
101,671
101,671
2,520,277
2,520,277
Other
78,348
11,395,781
11,474,129
Total
78,348
37,693,241
4,661,384
Trade payables
Assets
42,432,973

profit or loss
Loans and
receivables
Available-for-sale
financial assets
Total
16,284,780
36,722,702
16,284,780
36,722,702
1,488,527
1,488,527
Trade receivables
24,988,532
24,988,532
6,238,380
6,238,380
Other
40,552
5,432,404
5,472,956
Total
40,552
83,428,418
7,726,907
91,195,877

Liabilities

Other
financial liabilities
Total
8,437,139
3,181,582
3,256,935
8,437,139
6,438,517
Other payables
7,877,581
7,877,581
2,425,831
2,425,831
Debentures
1,311,068
1,311,068
985,117
985,117
1,023,714
1,023,714
Other
244,172
10,618,340
10,862,512
Total
244,172
35,860,372
3,256,935
39,361,479
Trade payables
(B) Net gains or net losses on each category of financial instruments for the years ended December 31, 2014 and 2013, are as follows:
Financial Assets

profit or loss
Loans and
receivables
Available-for-sale
financial assets
Total
(8,755)
(23,522)
(117,455)
168,869
(117,455)
136,592
Reclassification from other comprehensive income to
(153,693)
(153,693)
profit or loss
Interest income
1,734,963
98,398
1,833,361
Foreign exchange differences (profit or loss)
(59,125)
(59,125)
Foreign exchange differences
(127,288)
(127,288)
(other comprehensive income)

Dividend income
1,436,235
1,436,235
Impairment/reversal (profit or loss)
12,387
(67,636)
(55,249)
Loss on valuation (other comprehensive income)

Gain/(loss) on valuation/disposal (profit or loss)
Financial Liabilities
Loss on valuation/disposal (profit or
loss) Interest expense

through profit or loss
Financial liabilities measured at amortized cost
Other financial liabilities
Total
(15,153)
-
466,371
126,569
(15,153)
592,940
(343,865)
61,644
(282,221)

Financial Assets
Gain on valuation (other comprehensive income)
Gain/(loss) on valuation/disposal (profit or loss)
Reclassification from other comprehensive income

to profit or loss
Interest income
(other comprehensive income)
Dividend income

profit or loss
Loans and
receivables
Available-for-sale
financial assets
Total
(32,867)
(33,518)
1,271,817
1,079,393
1,271,817
1,013,008
(1,000,260)
(1,000,260)
1,342,394
9,215
1,351,609
(393,407)
(393,407)
939
939
112,159
112,159
(18,681)
(5,177)
(23,858)
Impairment/reversal (profit or
loss)

Financial Liabilities
Loss on valuation/disposal (profit or
loss) Interest expense
Total
(216,236)
-
319,342
190,316
(216,236)
509,658
(230,212)
43,836
(186,376)
064
065
7. Credit Quality of Financial Assets
8. Transfer of Financial Assets
The credit quality of financial assets that are neither past due nor impaired is
as-sessed by reference to external credit ratings as at December 31, 2014
and 2013, as follows:
Trade receivables of the Group have been discounted through factoring agreements with
banks in 2014 and 2013. Collateral (trade receivables and other) provided in such
factoring transactions do not meet the requirements for asset derecognition as risks and
rewards are not substantially transferred in the event the debtor defaults. Financial
Superior ability to repay: Aaa-Aa (Moodys), AAA-AA (S&P, Fitch),
liabilities recognized in relation to these transactions are included as short-term
A1 (Credit rating agencies in Korea)
borrowings on the statement of financial position (Note 15).
Strong ability to repay: A (Moodys), A (S&P, Fitch),
A2 (Credit rating agencies in Korea)
The following table presents a breakdown of discounted trade receivables as at

Acceptable ability to repay: Baa (Moodys), BBB (S&P, Fitch), A3

(Credit rating agencies in Korea)
December 31, 2014 and 2013:
Currently having the ability to repay: Ba or below (Moodys),
BB or below (S&P, Fitch),

B or below (Credit rating agencies in Korea)
Group 1: Customers with the trade payables guaranteed by credit insurance or

col-lateral
Group 2: Customers having experienced impairment of capital, but, as the trade
payables are guaranteed by credit insurance or collateral, all default
risk has been relieved
(A) Trade receivables

Counterparties with external credit rating:
Superior ability to repay
2014
2013
2,368,544
3,414,467
Strong ability to repay
3,926,159
2,796,881
Acceptable ability to repay
2,812,165
2,491,635
Currently having the ability to repay
3,572,935
4,370,114
12,679,803
13,073,097
8,978,175
9,429,612
223,596
153,770
Subtotal
Counterparties without external credit
rating:
Group 1
Group 2
Subtotal
Total
9,201,771
9,583,382
21,881,574
22,656,479
(B) Cash equivalents and short-term financial instruments

Superior ability to repay

Strong ability to repay
Acceptable ability to repay
Currently having the ability to

repay Other1
2014
2013
3,808,656
2,584,121
52,949,611
49,891,037
1,726,291
493,383
4,311 26,123
1,111 23,376
58,514,992
52,993,028
Total
1 Short-term
financial instruments held at financial institutions (such as Credit unions)

without an external credit rating.
Carrying amount of the discounted trade

receivables1
Carrying amount of
2014
2013
4,661,384
3,256,935
4,661,384
3,256,935
the related borrowings

1
The discounted trade receivables include intercompany balances.
(A) Short-term available-for-sale financial assets

7
8(In millions of Korean won)
Details of short-term available-for-sale financial assets as at December 31, 2014

5
and 2013, are as follows:

Beneficiary certificates1
Government bonds
2014
2013
2,166,143
1,257,492
50,256
180,959
1,070,399
50,076
3,286,798
1,488,527
Bank debentures
9. Available-for-Sale Financial Assets
Total
1
Details of beneficiary certificates as at December 31, 2014 and 2013, are as follows:
Changes in available-for-sale financial assets for the years ended December 31,
2014 and 2013, are as follows:
2014
Balance as at January 1
Acquisitions
Disposals
Gain on valuation of available-for-sale
financial assets
Impairment
7,726,907
9,304,021
6,488,049
4,031,357
Bonds
Time deposits
(2,521,342)
(4,120,906)
Call loans
(117,455)
1,271,817
(63,600)
(5,177)
(127,288)
939
Other1
1,753,064
60,828
15,954,307
3,286,798
7,726,907
1,488,527
12,667,509
6,238,380
Balance as at December 31
(A) Current portion
(B) Non-current portion
1
2013
During the year ended December 31, 2014, the Groups ownership interest in Samsung
SDI decreased. Consequently, KRW 1,550,241 million was reclassified from investment
in associate to available-for-sale financial assets.
2014
2013
952,931
1,154,703
1,232,523
364
50,760
15,449
Other
7,749
9,156
Total
2,166,143
1,257,492
Changes in valuation gains (losses) recognized in equity (other comprehensive income)

on short-term available-for-sale financial assets for the years ended December 31, 2014 and 2013, are as follows:
Fair value gains
Net gains transferred from equity
Deferred income tax
Total
2014
2013
7,492
16,990
8,873
7,492
(7,492)
(8,873)
16,990
(4,112)
7,492
(1,813)
12,878
5,679
(B) Long-term available-for-sale financial assets

Details of long-term available-for-sale financial assets as at December 31, 2014

Equity securities - Listed
Equity securities - Non-listed
Debt securities1
Total
2014
2013
5,776,836
3,746,393
4,399,314
782,297
3,144,280
1,056,769
12,667,509
6,238,380
1The maximum exposure to credit risk of available-for-sale debt securities is the

carrying value at the reporting date.
066
067
(1) Equity securities - Listed
Details of listed equity securities as at December 31, 2014 and 2013, are as follows:
(In millions of Korean won, number of shares and percentage)
2014
2013
Number of
Shares Owned
Percentage of
Ownership (%)
Acquisition Cost
Book Value
(Market Value)
Book Value
(Market Value)
Samsung SDI
Samsung Heavy Industries
13,462,673
40,675,641
19.6
17.6
2,180,953
258,299
1,561,670
811,479
1,547,708
Samsung Fine Chemicals
2,164,970
8.4
45,678
70,795
96,449
Hotel Shilla
2,004,717
5.1
13,957
183,231
133,314
14,498,725
12.6
223,941
249,378
82,465
647,320
1,822,000
1.8
10.2
324
38,262
18,384
90,462
16,668
74,884
7,220,216
9.0
63,250
100,722
61,949
12,595,575
2.9
726,024
1,506,664
1,248,019
Cheil Worldwide1
iMarket Korea
SFA
Wonik IPS
ASML
CSR2
110,135
Rambus
Seagate Technology
4,788,125
12,539,490
4.2
3.8
92,682
218,544
58,368
916,597
47,851
743,161
Sharp
120,143
35,804,000
2.1
122,535
88,292
SunEdison Semiconductor
2,425,578
5.8
37,553
49,511
Wacom
8,398,400
5.0
62,013
36,084
62,268
Other
51,837
35,199
54,300
Total
4,135,852
5,776,836
4,399,314
1
2
The Group acquired 11,500,000 shares of Cheil Worldwide during the year ended December 31, 2014.
The Group disposed all of its CSR shares during the year ended December 31, 2014.
Acquisition cost includes impairment loss on available-for-sale financial assets recognized due to the decline in realizable value below acquisition cost. The difference between the acquisition
cost and the current fair value, after income tax effects, is recorded within other components of equity (unrealized gains or losses on available-for-sale financial assets).
(2) Equity securities - Non-listed
Details of non-listed equity securities as at December 31, 2014 and 2013, are as follows:
(In millions of Korean won, number of shares and percentage)
2014
Kihyup Technology
Pusan Newport1
Samsung Venture Investment
Samsung Petrochemical2
Samsung General Chemicals2
Taewon Electric
Pantech3
Corning Inc.4
CSOT5
Nanosys
OpenX5
Other3
Total
1
2013
Number of
Shares Owned
Percentage of
Ownership (%)
Acquisition Cost
Book Value
Book Value
1,000,000
1,135,307
17.2
1.0
5,000
5,677
5,000
5,677
5,000
5,677
980,000
-
16.3
-
4,900
-
6,586
-
7,021
80,347
80,653
45,000
53,000,000
15.0
10.0
16,544
53,000
17,094
-
17,072
53,053
2,300
7.4
2,434,320
3,106,332
9.5
278,130
278,130
278,130
13,100,436
8,899,172
11.2
3.2
17,861
10,738
21,786
10,738
17,861
10,738
339,361
295,050
226,745
3,165,531
3,746,393
782,297
As at December 31, 2014, the Groups investments in Pusan Newport are pledged as collateral against the investee's debt (Note 19).
During 2014, Samsung General Chemicals Co., Ltd. merged with Samsung Petrochemical Co., Ltd., and the Group entered into an agreement with Hanwha Chemical and Hanwha
Energy Corporation to sell all of its Samsung General Chemincals Co., Ltd. As a result, the shares are reclassified as assets held-for-sale.
3
Impairment losses on unlisted equity securities resulting from the decline in realizable value below the acquisition cost amounted to KRW 58,357 million and KRW 5,177 million for the years
ended December 31, 2014 and 2013, respectively.
4
During the year ended December 31, 2014, the Group acquired 2,300 shares of convertible preferred shares of Corning Incorporated, which are convertible into common shares.
Percentage of ownership is calculated under the assumption that all shares have been converted into common shares.
5
Nonmarketable shares, including CSOT, are measured at cost as the variability of estimated cash flow is significant and the probability of various estimates, including discount rate,
cannot be reasonably assessed.
2
(3) Debt securities
Details of debt securities as at December 31, 2014 and 2013, are as follows:
2014
2013
Corporate bonds
Government bonds
108,275
272,526
106,944
50,356
Bank debentures
2,763,479
899,469
3,144,280
Total
1,056,769
Changes in valuation gain (loss) on long-term available-for-sale financial assets for the years ended December 31, 2014 and 2013, are as follows:
2014
2013
2,845,693
2,572,755
Fair value gain (loss)
(134,445)
1,264,325
Net (loss) transferred from equity
(146,201)
(991,387)
2,565,047
2,845,693
Deferred income tax and

non-controlling interests
(702,980)
(662,359)
1,862,067
Total
2,183,334
10. Trade and Other Receivables

(A) Trade and other receivables as at December 31, 2014 and 2013, are as follows:
2014
Receivables
Less: Provisions for impairment
Receivables, net
Less: Non-current portion
Current portion
2013
Trade
Non-Trade
Trade
Non-Trade
25,008,013
(277,788)
3,559,111
(9,894)
25,292,231
(267,675)
2,931,605
(20,046)
24,730,225
(35,615)
3,549,217
(9,342)
25,024,556
(36,024)
2,911,559
(24,157)
24,694,610
3,539,875
24,988,532
2,887,402
The Group transferred receivable balances to financial institutions in exchange for cash during the years ended December 31, 2014 and 2013. The outstanding
balances of transferred receivables, amounting to KRW 4,661,384 million and KRW 3,256,935 million, have been accounted for as collateralized borrowings as at
December 31, 2014 and 2013, respectively (Note 15).
(B) Movements in the provisions for impairment of receivables for the years ended December 31, 2014 and 2013, are as follows:
2014
2013
Trade
Non-Trade
Trade
Non-Trade
(267,675)
(17,475)
(20,046)
5,700
(276,787)
(2,785)
(2,595)
(18,794)
(provisions for impaired receivables)

Receivables written off during the year as
6,017
1,491
13,787
511
uncollectible
Other
1,345
2,961
(1,890)
832
(277,788)
(9,894)
(267,675)
(20,046)
Reversals of unused amounts /
068
(C) The aging analysis of trade and other receivables as at December 31, 2014 and 2013, is as follows:
069
2014
2013
25,271,779
Receivables not past due
25,420,912
Past due but not impaired1:

Less than 31 days overdue
2,333,812
2,058,708
Impaired :
31 days to 90 days overdue
378,242
Over 90 days overdue
583,291
559,811
28,567,124
Total
1
184,405
28,223,836
The Group does not consider receivables that are overdue for less than or equal to 31 days as impaired.
Provisions for impaired receivables amount to KRW 287,682 million as at December 31, 2014 (2013: KRW 287,721 million).
(D) The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. As at December 31, 2014, the Group
has credit insurance with Korea Trade Insurance and overseas insurance companies against its export accounts receivables. In accordance with the terms of the
con-tract, the Group is entitled to a compensation on bad debts if the criteria set forth in the agreement, such as customers refusal of payment, are satisfied.
11. Inventories
Inventories as at December 31, 2014 and 2013, are as follows:
2014
2013
Gross Amount
Valuation
Allowance
Book Value
Gross Amount
Valuation
Allowance
Book Value
6,011,078
5,018,416
(237,630)
(553,345)
5,773,448
4,465,071
7,597,391
4,352,080
(168,041)
(281,814)
7,429,350
4,070,266
Raw materials and supplies
6,244,161
(287,155)
5,957,006
6,960,985
(151,873)
6,809,112
Materials in transit
1,121,979
1,121,979
826,140
826,140
18,395,634
(1,078,130)
17,317,504
19,736,596
(601,728)
19,134,868
Finished goods
Work in process
Total
The cost of inventories recognized as expense and included in cost of sales for the year ended December 31, 2014, amounts to KRW 127,584,292 million (2013:
KRW 136,755,644 million). Inventory valuation loss of KRW 637,233 million was recognized for the year ended December 31, 2014 (2013: KRW 435,607 million).
12. Investments in Associates and Joint Ventures

(A) Changes in investments in associates and joint ventures for the years ended December 31, 2014 and 2013, are as follows:
Acquisition
2014
2013
6,422,292
721,299
8,785,489
181,307
Disposal
(38,450)
(240)
Share of profit
342,516
504,063
Other1
(2,215,196)
(3,048,327)
5,232,461
6,422,292
Other consists of dividends, business combinations, and effects of changes in foreign exchange rates.
(B) Major investments in associates and joint ventures as at December 31, 2014, are as follows:
(1) Investments in associates
Percentage of Ownership1 (%) Principal Business Location
Investee
Nature of Relationship with Associate
Samsung Card
Samsung Electro-Mechanics
Business alliance
Manufacture and supply electronic components including
37.5
23.7
Korea
Korea
Samsung SDS
passive component, circuit board, and module

Provide IT services including computer programming,
22.6
Korea
25.5
Korea
system integration and management

Samsung Techwin2
1
2
Manufacture and supply engine and precision machines
Ownership represents the Groups ownership of common stock in each entity.

During the year ended December 31, 2014, the Groups investment in Samsung Techwin met the asset held-for-sale classification criterion and was reclassified accordingly.
(2) Investments in joint ventures

Percentage of Ownership1 (%) Principal Business Location
Investee
Nature of Relationship with Joint Venture
Samsung Corning Advanced Glass
Manufacture and supply other industrial glass devices
50.0
Korea
Ownership represents the Groups ownership of common stock in each entity.
(C) Details of investments in associates and joint ventures as at December 31, 2014 and 2013, are as follows:
(1) Investments in associates
Investee
2014
Acquisition cost
Net asset value of equity shares1
Book value
1,538,540
359,237
2,393,185
1,038,184
2,354,026
1,040,404
Samsung SDS
147,963
928,548
951,776
Other
745,568
485,330
623,480
Total
2,791,308
4,845,247
Samsung Card
4,969,686
Investee
Samsung Card
2013
Acquisition cost
Book value
1,538,540
2,322,897
2,340,009
359,237
951,693
954,496
Samsung SDI
423,722
1,451,770
1,175,204
Samsung SDS
147,963
858,671
879,956
Samsung Techwin
174,531
433,624
402,745
Other
582,646
375,959
548,553
Total
3,226,639
6,394,614
6,300,963
Groups portion of net asset value of joint ventures is based on the Groups ownership percentage.
070
(2) Investments in joint ventures
071
2014
Investee
Acquisition cost
Book value
215,000
527,204
196,015
100,948
195,930
66,845
742,204
296,963
262,775

Other
Total
Investee
2013
Acquisition cost
Book value

Other
115,000
422,995
111,961
(16,357)
111,961
9,368
Total
537,995
95,604
121,329
Groups portion of net asset value of joint ventures is based on the Groups ownership percentage.
(D) Details of the valuations of investments in associates and joint ventures under the equity method for the years ended December 31, 2014 and 2013, are as follows:
Investee
2014
Balance as at Gain/loss on valuation
January 1
2,340,009
954,496
Samsung Card
189,533
114,013
Other comprehensive
income/loss
Other1
Balance as at
December 31
(145,141)
(14,834)
(30,375)
(13,271)
2,354,026
1,040,404
Samsung SDI2
1,175,204
11,636
32,795
(1,219,635)
Samsung SDS
879,956
95,160
(18,971)
(4,369)
951,776
Samsung Techwin3
402,745
(4,094)
19,502
(418,153)
111,961
(14,937)
(986)
99,892
195,930
Other
557,921
(48,795)
(1,297)
182,496
690,325
Total
6,422,292
342,516
(128,932)
(1,403,415)
5,232,461
1
2
3
Other consists of acquisitions, disposals, dividends, effects of changes in foreign exchange rates and reclassifications.
During the year ended December 31, 2014, the Groups ownership interest in Samsung SDI decreased. Consequently, the investment was reclassified to available-for-sale financial assets.
During the year ended December 31, 2014, the Groups investment in Samsung Techwin met the asset held-for-sale classification criterion and was reclassified accordingly.
Investee
2013
Balance as at Gain/loss on valuation
January 1
Samsung Card
Samsung SDI
Other comprehensive
income/loss
Other1
Balance as at
December 31
2,238,073
890,460
102,361
75,565
29,828
6,354
(30,253)
(17,883)
2,340,009
954,496
1,174,183
25,760
(10,310)
(14,429)
1,175,204
Samsung SDS
701,808
69,739
(17,838)
126,247
879,956
Samsung Techwin
360,739
39,554
9,021
(6,569)
402,745
2,794,617
347,981
(1,247)
(3,141,351)
Samsung Corning Precision Materials
114,274
(2,302)
(11)
111,961
Other
511,335
(154,595)
4,959
196,222
557,921
Total
8,785,489
504,063
20,756
(2,888,016)
6,422,292
Other consists of acquisitions, disposals, dividends, and effects of changes in foreign exchange rates.
During the year ended December 31, 2013, the Group signed a framework agreement for comprehensive business cooperation with Corning Incorporated. During
the year ended December 31, 2014, the Group completed disposal of all shares of Samsung Corning Precision Materials held by the Group.
4
,
4
2
2
9
2
5
2
6
,
6
(E) Summary of the condensed financial information of major associates and joint ventures.
(1) A summary of condensed financial information of major associates, details of adjustments from the book value of investments in associates, and dividends received
from associates as at and for the years ended December 31, 2014 and 2013, is as follows:
Investee
2014
Samsung Card1
Samsung SDS
17,736,627
3,553,987
3,228,074
4,164,625
2,317,971
2,151,002
1,117,969
924,814
214,051
89,390
101,766
3,521,846
7,143,746
7,897,748
1. Condensed financial information

Condensed statement of financial position:
Current assets
Non-current assets
Current liabilities
11,346,281
Condensed statement of comprehensive
income:
Revenue
Profit from continuing operations2

Other comprehensive loss
Total comprehensive income2
656,025
502,704
412,880
(387,559)
(65,510)
(83,938)
268,466
437,194
328,942
6,390,346
37.5%
4,553,406
22.8%
2,396,380
1,038,184
2.Details of adjustments from the book

value of investments in associates
Net assets (a)
Ownership percentage (b)3
Net assets of equity shares (a x b)
Goodwill
Intercompany transactions
Book value of associates
17,181
(59,535)
2,220
2,354,026
1,040,404
30,375
13,270
3. Dividends from associates

Dividends
1
2
3
Samsung Card does not present current and non-current assets and liabilities as separate classifications in its statement of financial position.
Income (loss) attributable to owners of the parent.
Ownership percentage includes common and preferred stock.
072
073
Investee
2013
Samsung Card1
Samsung ElectroMechanics
Samsung SDI
Samsung SDS
Samsung Techwin
16,560,926
2,650,765
2,063,192
2,928,998
1,561,706
4,534,578
8,492,479
2,371,102
1,872,518
1,787,432
1,526,957
1,219,484
1,169,253
1,139,884
1,486,297
197,222
560,191
83,966
164,323
80,644
1,628
2,847,053
8,256,579
5,016,465
7,046,833
2,912,031
273,232
330,240
130,599
312,372
132,493

Condensed statement of financial position:
Current assets
Non-current assets
Current liabilities
10,358,265
Condensed statement of comprehensive
income:
Revenue
Profit from continuing operations
Other comprehensive income (loss)
Total comprehensive income2
84,153
26,676
(63,211)
(88,703)
21,596
357,385
356,916
67,388
223,669
154,089
6,202,661
37.5%
4,174,061
22.8%
7,378,094
19.7%
3,802,750
22.6%
1,703,152
25.5%
2,322,897
951,693
1,451,770
858,671
433,624
17,181
26,801
(69)
2,803
(276,566)
(5,516)
(30,879)
2,340,009
954,496
1,175,204
879,956
402,745
30,375
17,693
13,924
3,914
6,763
2. Details of adjustments from the book

value of investments in associates
Net assets (a)
Ownership percentage (b)3
Goodwill
Intercompany transactions
Book value of associates
3. Dividends from associates
Dividends
1
2
3
Samsung Card does not present current and non-current assets and liabilities as separate classifications in its statement of financial position.
Ownership percentage includes common and preferred stock.
19
20
(In millions of
4
2013
171,353
64,113
95,310
42,674
40,575
7
67
68,803
9
283
10
4,618
11
(567)
(4,604)
(21)
12
13
14
15
16
17
18
(2) Summary of condensed financial information of major joint ventures, details of adjustments from the book value of investments in joint ventures, and dividends from
joint ventures as at and for the years ended December 31, 2014 and 2013, is as follows:
Investee
2014

Condensed statements of financial position
Current assets
C
a
sh and cash equivalent
228,312
Non-current assets
Current liabilities
14,696
- Current financial liabilities 1
200,105
34,719
Condensed statements of
comprehensive income
18,718
1,669
Revenue
Depreciation and amortization
Interest income
264,754
Income tax expense
705
Loss from continuing operations2
912
Other comprehensive loss2
(6,133)
Total comprehensive loss2
(29,922)
2.Details of adjustments from the book

value of investments in joint ventures
(2,028)
(31,950)
Net assets (a)

Ownership percentage (b)
392,029
Intercompany transactions3
50.0%
Book value of joint ventures
196,015
3.Dividends from joint ventures
(85)
Dividends
195,930
-
Account payables, other payables, and provisions are excluded.

2
Loss attributable to owners of the parent.
3
Consists of unrealized gains and losses and other differences.
(3) Profit (loss) amounts attributable to owners of the parent from associates and joint ventures which are not individually material for the years ended December 31, 2014
and 2013, are as follow:

Investee
Loss from continuing operations1
Other comprehensive income (loss) 1
Total comprehensive loss1
1
2014
2013
Associates
Joint ventures
Associates
Joint ventures
(32,436)
4,399
(30,181)
634
(139,194)
(11,862)
(166,310)
(1,942)
(28,037)
(29,547)
(151,056)
(168,252)
074
(F) Fair value of marketable investments in associates as at December 31, 2014 and 2013, is as follows:
075
(In millions of Korean won and number of shares)
2014
2013
Number of shares held
Market value
Market value
Samsung Card
17,693,084
43,393,170
967,812
1,917,978
1,291,595
1,622,905
Samsung SDS1
17,472,110
5,128,064
Samsung Techwin
13,526,935
322,617
735,865
During the year ended December 31, 2014, Samsung SDS Co., Ltd listed its shares on the Korea Stock Exchange.
13. Property, Plant and Equipment

(A) Changes in property, plant and equipment for the years ended December 31, 2014 and 2013, are as follows:
2014
Acquisition cost
Accumulated depreciation and impairment
Acquisitions and capital expenditures1
Business combinations
Depreciation
Sales/disposals
Impairment
Other2
Acquisition cost
1
2
Land
Buildings and
Structures
Machinery
and Equipment
Construction
In Progress
Other
Total
7,429,287
15,715,064
36,498,478
13,840,172
2,013,387
75,496,388
7,429,287
-
23,375,035
(7,659,971)
118,621,699
(82,123,221)
13,840,172
-
5,518,351
(3,504,964)
168,784,544
(93,288,156)
357,794
3,595,210
16,048,623
2,476,963
956,520
23,435,110
940
940
(1,305,220)
(14,729,718)
(875,088)
(16,910,026)
(67,001)
(457,634)
(193,077)
(44,883)
(71,550)
(834,145)
(2,280)
(173,140)
(6,710)
(182,130)
(9,728)
53,407
300,724
(439,945)
(37,645)
(133,187)
7,710,352
17,598,547
37,751,890
15,832,307
1,979,854
80,872,950
7,710,352
-
26,474,937
(8,876,390)
127,603,897
(89,852,007)
15,832,307
-
5,664,513
(3,684,659)
183,286,006
(102,413,056)
The capitalized borrowing costs are KRW 33,931 million and the interest rate used to calculate the borrowing costs eligible for capitalization is 2.06%.
Other includes transfer to assets held-for-sale and effects of changes in foreign currency exchange rates.
2013
Acquisition cost
Acquisitions and capital expenditures1
Depreciation
Sales/disposals
Impairment
Other
Acquisition cost
1
2
Land
Buildings and
Structures
Machinery
and Equipment
Construction
In Progress
Other
Total
7,152,141
13,008,839
38,046,176
8,492,885
1,784,702
68,484,743
7,152,141
-
19,624,030
(6,615,191)
110,034,355
(71,988,179)
8,492,885
-
5,011,914
(3,227,212)
150,315,325
(81,830,582)
322,433
4,209,093
12,627,962
5,362,760
1,237,317
23,759,565
31
877
144
1,052
(1,146,000)
(13,473,515)
(850,497)
(15,470,012)
(29,572)
(30,850)
(320,296)
(50,930)
(60,143)
(491,791)
(78)
(145,263)
(175)
(145,516)
(15,715)
(325,971)
(237,463)
35,457
(97,961)
(641,653)
7,429,287
15,715,064
36,498,478
13,840,172
2,013,387
75,496,388
7,429,287
-
23,375,035
(7,659,971)
118,621,699
(82,123,221)
13,840,172
-
5,518,351
(3,504,964)
168,784,544
(93,288,156)
The capitalized borrowing costs are KRW 52,039 million and the interest rate used to calculate the borrowing costs eligible for capitalization is 1.73%.
Other includes effects of changes in foreign currency exchange rates.
(B) Details of depreciation of property, plant and equipment for the years ended December 31, 2014 and 2013, are as follows:
2014
2013
Cost of sales
15,309,212
1,600,814
14,053,512
1,416,500
Total
16,910,026
15,470,012
14. Intangible Assets

(A) Changes in intangible assets for the years ended December 31, 2014 and 2013, are as follows:
2014
Internally generated (development costs)
Capitalized cost
Membership
Goodwill
Other
Total
1,231,673
-
752,669
940,001
177,532
-
560,534
-
1,258,192
-
3,980,600
940,001
288,197
4,835
91,274
384,306
50,429
175,885
18,498
244,812
(211,940)
(396,078)
(535,377)
(1,143,395)
(40,666)
(27,838)
(68,504)
(547)
(56,659)
(7,838)
(845)
(65,889)
23,335
48
10,995
479,164
513,542
1,340,481
1,239,933
182,415
739,576
1,283,068
4,785,473
External acquisitions
Amortization
Sales/disposals
Impairment
Other
1
Intellectual
property rights
Other includes transfer to assets held-for-sale and effects of changes in foreign currency exchange rates.
2013
Internally generated (development costs)
Intellectual
property rights
Capitalized cost
Membership
Goodwill
Other
Total
1,186,033
-
602,274
461,030
170,843
-
573,845
-
1,196,710
-
3,729,705
461,030
284,392
7,203
182,118
473,713
49,046
115,331
2,176
166,553
(200,452)
(310,635)
(464,314)
(975,401)
(44,633)
(572)
(24,651)
(4,125)
(73,981)
(1,753)
(99,643)
(7,024)
(108,420)
(40,960)
58
(4,348)
352,651
307,401
1,231,673
752,669
177,532
560,534
1,258,192
3,980,600
External acquisitions
Amortization
Sales/disposals
Impairment
Other1
1
CE
IM
Semiconductor
DP
Other
Total
(In percentage, %)
Key assumptions
Sales growth
rate
Perpetual growth
rate
Pre-tax discount
rate1
23.
1
Pre-tax discount rate applied to the cash flow
projections.
(2) For the year ended December 31, 2013, pursuant to the results of the goodwill impairment reviews performed, the Group recognized an impairment of KRW
82,599 mil-lion on goodwill recognized in the Digital Imaging business. The key assumptions used in calculating the value-in-use were as follows: (In percentage, %)
Key assumptions
Sales growth
rate1
Perpetual growth rate2
(4.1)
Pre-tax discount rate3
13.0
0.2
Future cash flows for 5 years are projected based on previous growth rate and the industry
estimates. 2 The projected growth rate beyond five years is consistent with industry estimates.
3
Pre-tax discount rate applied to the cash flow projections.
Sales growth rate was determined on the basis of past performance and expectations of market fluctuations. The discount rate reflects the special risk related to
the division.
(C) Details of amortization of intangible assets by line item for the years ended December 31, 2014 and 2013, are as follows:
Cost of sales
Total
2013
554,236
418,447
589,159
2014
1,143,395
(B) Goodwill
Goodwill is allocated to cash-generating units at the end of the reporting period, and consists of the following:
2014
556,954
975,401
076
077
2013
199,758
14,428
183,539
80,299
82,510
560,534
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 covering a five-year period. Cash flows
beyond the five-year period are extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term average growth rate for
the business. In addition, a constant growth rate assumption is used for perpetual cash flow calculation.
(1) For the year ended December 31, 2014, pursuant to the results of the goodwill impairment reviews performed, the Group recognized an impairment of KRW 7,838
mil-lion on goodwill recognized at Samsung France Research Center (SFRC). The key assumptions used in calculating the value in use were as follows:
15. Borrowings
(A) Details of the carrying amounts of borrowings as at December 31, 2014 and 2013, are as follows:
Collateralized borrowings1
Non-collateralized borrowings
Financial Institutions
Annual Interest Rates (%)

as at December 31, 2014
2014
2013
Woori Bank and others
0.6 ~ 11.4
4,661,384
3,256,935
Citibank and others
0.4 ~ 10.3
Total
Current portion of long-term borrowings
Bank borrowings
Financial lease liabilities 2
Financial lease liabilities 2
0.5 ~ 3.7
1,758,556
1,900,937
CSSD and others
1.1 ~ 15.7
14,807
19,811
1,773,363
1,920,748
SMBC and others
1.1 ~ 3.5
23,989
902,715
CSSD and others
1.1 ~ 15.7
77,682
82,402
101,671
985,117
Total
1
2
3,181,582
6,438,517
SMBC and others
Total
Bank borrowings
3,367,915
8,029,299
Collateralized borrowings are secured by trade receivables (Note 8).

Leased property, plant and equipment were pledged as collateral (Note 19).
(B) Maturities of long-term borrowings outstanding as at December 31, 2014, are as follows:
For the Years Ending December 31
2015
2016
1,773,363
30,952
2017
7,430
2018
2019 and thereafter
Total
7,863
55,426
1,875,034
078
079
16. Debentures
Details of the carrying amount of debentures as at December 31, 2014 and 2013, are as follows:
2014
Korean won denominated debentures (A)
Foreign currency denominated debentures (B)
199,515
1,156,367
Total
1,355,882
2013
198,566
1,112,502
1,311,068
(A) Details of Korean won denominated debentures as at December 31, 2014 and 2013, are as follows:
Unsecured debentures
Unsecured debentures
Issue Date
Due Date
Annual Interest
Rates (%) as at
December 31, 2014
2014
2013
2011. 11. 17
2011. 11. 17
2014. 11. 17
2016. 11. 17
4.1
4.2
200,000
500,000
200,000
Less: Current portion
(500,000)
Less: Discounts
(485)
(1,434)
Total
199,515
198,566
All of the above debentures have been issued by Samsung Display and will be repaid upon maturity.
(B) Details of foreign currency denominated debentures as at December 31, 2014 and 2013, are as follows:
Issue Date
Due Date
Annual Interest
Rates (%) as at
December 31, 2014
2014
2013
US dollar denominated straight bonds1
1997. 10. 2
2027. 10. 1
7.7
US dollar denominated unsecured bonds2
2012. 4. 10
2017. 4. 10
1.8
71,448
(US$65 million)
1,099,200
73,871
(US$70 million)
1,055,300
(US$1,000 million)
(US$1,000 million)
1
2
Less: Current portion
(5,496)
(5,277)
Less: Discounts
(8,785)
(11,392)
Total
1,156,367
1,112,502
US dollar straight bonds are repaid annually for twenty years after a ten-year grace period from the date of issuance. Interest is paid semi-annually.
Samsung Electronics America issued dollar denominated unsecured bonds. Repayment of these debentures is due on the date of maturity and interest is paid semi-annually.
(C) Maturities of debentures outstanding as at December 31, 2014, are as follows:

For the Years Ending December 31
Debentures
2015
2016
5,496
205,496
2017
1,104,696
2018
2019 and thereafter
Total
5,496
49,464
1,370,648
December 31, 2014 and 2013, are as follows:
Current service cost

Net interest cost
Past service cost
2014
2013
959,182
104,040
836,916
82,487
132,286
Other
29,994
8,164
Total
1,225,503
927,567
(C) The amounts recognized as cost of defined contribution plans for the
years ended December 31, 2014 and 2013, are KRW 64,470 million and
KRW 44,430 million, respectively.
(D) The pension expenses related to defined benefit plans recognized on the
statements of income for the years ended December 31, 2014 and 2013, are
as follows:
Cost of sales
Total
17. Net Defined Benefit Liabilities

(A) Details of net defined benefit liabilities recognized on the statements of
financial position as at December 31, 2014 and 2013, are as follows:
Present value of funded defined benefit

obligations
Present value of unfunded defined
benefit obligations
Subtotal
Fair value of plan assets
Total
2014
2013
7,404,205
5,672,147
138,042
55,931
7,542,247
5,728,078
(7,340,905)
(3,873,176)
201,342
1,854,902
(B) The amounts recognized in the statements of income for the years ended
2014
2013
518,401
707,102
376,588
550,979
1,225,503
927,567
(E) Changes in the defined benefit obligations for the years ended December
31, 2014 and 2013, are as follows:
2014
2013
5,728,078
4,669,467
Current service cost

Interest cost
959,182
306,810
836,916
226,271
Past service cost
132,286
Remeasurement:
Actuarial gains or losses arising from
57,355
(38)
changes in demographic assumptions

Actuarial gains or losses arising from
722,156
(22,870)
changes in financial assumptions

Other
54,586
257,724
(407,517)
(244,186)
(3,178)
(18,128)
Other
(7,511)
22,922
7,542,247
5,728,078
Benefits paid
(F) Changes in the fair value of plan assets for the years ended December 31,
2014 and 2013, are as follows:
Expected return on plan assets
Remeasurement factor of plan assets
2014
2013
3,873,176
2,939,528
202,770
(88,342)
143,784
(37,343)
Contributions by employer
3,536,443
978,313
Benefits paid
(187,391)
(141,017)
(497)
(3,035)
Other
4,746
(7,054)
7,340,905
3,873,176
Expected contributions to post-employment benefit plans for the year ending December
31, 2015, are KRW1,401,755 million.
(G) Plan assets as at December 31, 2014 and 2013, consist of as follows:
2014
2013
Debt instruments
Other
7,317,174
23,731
3,851,102
22,074
Total
7,340,905
3,873,176
(*) Plan assets are mostly invested in instruments which have a quoted price in active
mar-
kets.
080
(H) The principal actuarial assumptions as at December 31, 2014 and 2013, are as follows:
Discount rate
Salary growth rate
081
(In percentage, %)
2014
2013
1.2 - 6.5
1.7 - 6.6
1.0 - 7.0
1.7 - 6.6
(including the effects of inflation)

(I) The sensitivity of the defined benefit obligations as at December 31, 2014, to changes in the weighted principal assumptions is:
2014
Discount rate:
1% increases
1% decreases
Salary growth rate:
1% increases
1% decreases
2013
89%
90%
113%
112%
113%
112%
89%
90%
(J) The expected maturity analysis of pension benefits as at December 31, 2014, is as follows:
Less than 1 year Between 1 and 2 years Between 2 and 5 years Between 5 and 10 years
Pension benefits
350,687
Total
344,256
1,390,932
3,684,219
5,770,094
Warranty
(A)
Royalty expenses
(B)
Long-term incentives
(C)
Other
Total
1,945,992
2,261,665
4,272,670
956,350
921,848
217,075
56,890
(12)
7,197,400
3,435,078
(2,311,815)
(1,444,681)
(408,459)
(45,750)
(4,210,705)
(66,774)
133,453
2,348
69,027
1,829,068
3,917,792
730,464
13,476
6,490,800
The weighted average duration of the defined benefit obligations is 12.19 years.
18. Provisions
Changes in provisions for the year ended December 31, 2014, are as follows:
Charged (credited) to the statement of income
Payment
Other1
1
(A) The Group accrues warranty reserves for estimated costs of future service, repairs and recalls, based on historical experience and terms of warranty programs.
(B) The Group recognizes provisions for the estimated royalty expenses that are under negotiation with counterparties. The timing of payment depends on the settlement of the negotiations.
(C) The Group has a long-term incentive plan for its executives based on a three-year management performance criteria and recognizes a provision for the estimated
incentive cost for the accrued period.
19. Commitments and Contingencies

(A) Guarantees
Guarantees of debt for housing rental1

1
2014
2013
76,558
151,985
Represents the maximum amount of debt guarantee which was provided for employees who took debt from financial institutions in order to finance employee housing rental.
In addition to the guarantees described above, the Group provides guarantees for borrowings by Intellectual Keystone Technology (IKT), the Groups associate, to
Citibank in the amount of KRW 32,976 million (USD 30 million).
As at December 31, 2014, the Groups investments in Busan Newport are pledged as collateral against the investee's debt (Note 9).
(B) Leases
The Group leases certain property, plant and equipment under vtarious finance lease arrangements and recognizes the related amounts as lease assets or liabilities. Assets with a net book
value of KRW 102,569 million (2013: KRW 110,655 million) are treated as finance lease agreements and are included in property, plant and equipment. Depreci-ation expense for the finance
lease assets amounted to KRW 11,787 million for the year ended December 31, 2014 (2013: KRW 10,587 million).
The minimum lease payments under finance lease agreements and their present value as at December 31, 2014 and 2013, are as follows:
2014
Minimum Lease payments
Within one year
From one year to five years
More than five years
Total
2013
Present values
Minimum Lease payments
Present values
22,691
59,123
14,809
30,577
27,893
57,508
19,811
28,213
82,162
47,103
95,192
54,189
163,976
92,489
180,593
102,213
Present value adjustment
(71,487)
(78,380)
Finance lease payable
92,489
102,213
(C) Litigation
(1)The litigation with Apple Inc. (Apple) is ongoing in the United States as at the reporting date. Regarding the ongoing lawsuit in the United States, on August 24,
2012, the jury determined that the Group partially infringed Apples design and utility patent and should pay damages to Apple. On March 1, 2013, however, the
Judge ordered a new trial for a certain portion of the damages, ruling that it was originally miscalculated. On March 6, 2014, the Judge denied Apples bid for a
permanent injunction against the Group and made a final judgment restating the total damages amount determined by a jury verdict on November 21, 2013. The
Group appealed the decision on the damages amount on March 7, 2014, and a hearing on the appeal was held on December 4, 2014.
Additionally, on May 5, 2014, the jury in another ongoing lawsuit determined that the Group partially infringed Apples utility patent and should pay damages to
Apple. On November 25, 2014, first trial judgment was pronounced to confirm the jurys verdict. The Group appealed the decision on the damages and the appeal
is currently on-going. The final conclusion and the effect of the patent lawsuits with Apple are uncertain as at the reporting date.
In August 2014, the Group and Apple reached an agreement to withdraw from ongoing litigation in all regions other than the United States, and the Group is
currently in the process of withdrawing all non-United States based lawsuits.
(2)In addition, during the normal course of business with numerous companies, the Group has been involved in various claims, disputes, and investigations
conducted by reg-ulatory bodies. Although, the outflow of resources and timing of these matters are uncertain, the Group believes the outcome will not have a
material impact on the financial condition of the Group.
082
083
(D) Other commitments
As at December 31, 2014, the Group has a trade financing agreement, trade notes receivable discounting facilities, and loan facilities with accounts receivable
pledged as collateral with 15 financial institutions, including Woori Bank, with a combined limit of up to KRW 14,138,356 million.
In addition, the Group has a trade financing agreement with 21 financial institutions, including Korea Exchange Bank, for up to USD 5,073 million and KRW 103,000 million, and has loan
facilities with accounts receivable pledged as collateral with 5 financial institutions, including Industrial Bank of Korea, for up to KRW 263,559 million.
Samsung Display has a facility loan agreement with 3 financial institutions, including BTMU, for up to USD 200 million.
SEA, a foreign subsidiary, has a contract for issuing ABS (Asset Backed Securities) backed by accounts receivable with BTMU and other financial institutions for up to USD 700 million.
20. Share Capital

The Groups total number of authorized shares is 500,000,000 shares (KRW 5,000 per share). The Group has issued 147,299,337 shares of common stock and
22,833,427 shares of preferred stock as at December 31, 2014, excluding retired shares. Due to the retirement of shares, the total par value of the shares issued is
KRW 850,664 million (common stock KRW 736,497 million, preferred stock KRW 114,167 million), which does not agree with paid-in capital of KRW 897,514 million.
Changes in the number of shares outstanding for the years ended December 31, 2014 and 2013, are as follows:
Disposal of treasury stock through exercise
of stock options
Disposal of treasury stock through exercise
of stock options
(In number of shares)
Preferred stock
Common stock
130,847,899
19,853,734
67,222
130,915,121
19,853,734
47,530
(758,055)
(131,250)
130,204,596
19,722,484
21. Retained Earnings

Retained earnings as at December 31, 2014 and 2013, consist of:
2014
2013
Appropriated
Unappropriated
119,947,785
49,581,819
104,175,235
44,425,047
Total
169,529,604
148,600,282
22. Dividends
Details of interim and year-end dividends are as follows:

(A) Interim dividends (Record date: June 30, 2014 and 2013)
Number of shares
eligible for dividends
2014
2013
Common stock
Preferred stock
130,962,651 shares
19,853,734 shares
130,878,713 shares
19,853,734 shares
10%
10%
Common stock
Preferred stock
65,481
9,927
65,439
9,927
Dividend rate
Dividend amount
75,408
Total
(B) Year-end dividends (Record date: December 31, 2014 and 2013)
75,366
2014
2013
Number of shares
eligible for dividends
Common stock
Preferred stock
130,204,596 shares
19,722,484 shares
130,915,121 shares
19,853,734 shares
Dividend rate
Common stock
Preferred stock
390%
391%
276%
277%
Dividend amount
Common stock
Preferred stock
2,538,990
385,574
1,806,629
274,974
2,924,564
2,081,603
Total
23. Other Components of Equity

Other components of equity as at December 31, 2014 and 2013, consist of:
Treasury stock
Stock options
Unrealized gains on available-for-sale financial
2014
2013
(8,429,313)
806
(7,323,432)
10,243
1,850,195
2,189,013
559,280
741,893
assets
Share of other comprehensive income
of associates and joint ventures
Foreign currency translation
(4,566,887)
(3,610,654)
Remeasurement of net defined benefit
(1,996,792)
(1,302,588)
(146,676)
liabilities Other
(163,548)
(12,729,387)
Total
(9,459,073)
The Group repurchases registered common stock and non-voting preferred stock and recognizes the repurchase amount in other components of equity. Such stock will be distributed upon exercise of stock options. Treasury stock as at December 31, 2014 and 2013, consists of the following:
2014
Number of shares
Acquisition cost
2013
Preferred Stock
Common Stock
Preferred Stock
Common Stock
3,110,943 shares
755,764
17,094,741 shares
7,673,549
2,979,693 shares
621,843
16,384,216 shares
6,701,589
084
085
24. Share-Based Compensation

The Group has a stock option plan that provides for the granting of stock purchase options to employees or directors who have contributed, or are expected to
contribute, to the management and technological innovation of the Group. No share-based compensation has been granted since December 20, 2005.
A summary of the terms and the number of outstanding stock options as at December 31, 2014, is as follows:
Type of stock to be issued through stock options: registered common stock
Granting method: Issuance of new common stock (use of treasury stock possible as well)
Exercise conditions: 2 or more years of employee service from the date of the grant
The number of shares and per-share exercise price of stock to be issued through stock options (after the exclusion of stock options expired due to termination)
Date of the Grant
March 7, 2003
April 16, 2004
December 20, 2005
Granted
Expired
368,100
37,744
590,000
53,061
10,000
-
Exercised prior to December 31, 2013
314,509
438,034
5,000
15,847
15,847
98,905
51,375
5,000
-
47,530
Outstanding as at January 1, 2014

Exercised during 2013
Exercised during 2014
Outstanding as at December 31, 2014
Exercise price
Weighted average share price at the date of
exercise during 2014
Exercise period
5,000
288,800
580,300
606,700
1,342,919
2005. 3. 8 - 2013. 3. 7
2006. 4. 17 - 2014. 4. 16
2007. 12. 21 - 2015. 12. 20
Note 1: The number of shares and exercise prices are subject to adjustments resulting from capital increase with or without consideration, stock dividends, stock splits, and stock consolidations. Note 2: As at the reporting
date, the exercise periods of stock options granted on March 16, 2000, March 9, 2001, February 28, 2002, March 25, 2002, March 7, 2003, April 16, 2004, and
October 15, 2004 have all expired.
25. Expenses by Nature

Expenses by nature for the years ended December 31, 2014 and 2013, are as follows:
2014
2013
1,261,097
84,356,410
(716,124)
95,786,128
17,696,265
17,250,962
1,289,973
971,997
Depreciation
16,910,026
15,470,012
Amortization
1,143,395
975,401
Welfare
3,478,817
3,142,187
Changes in finished goods and work in process

Raw materials used and
merchandise purchased
Wages and salaries
Pension
Commission and service charges
8,499,107
9,124,803
46,545,826
49,902,288
181,180,916
191,907,654
Other expenses
Total1
1
Equal to the sum of cost of sales and selling and administrative expenses on the consolidated statements of income.
26. Selling and Administrative Expenses
28. Financial Income and Costs
Selling and administrative expenses for the years ended December 31, 2014 and
Details of financial income and costs for the years ended December 31, 2014 and
2013, are as follows:
2013, are as follows:

2014
2014
2013
5,214,171
300,776
5,559,339
232,676
8,499,107
9,124,803
Depreciation
670,709
555,944
Amortization
399,717
401,987
3,773,649
4,165,290
8,019,462
Gains from derivatives
1) Selling and Administrative Expenses

Wages and salaries
Pension
Commissions and service charges
Advertising
Sales promotion
Financial income
7,760,648
Interest income
Interest income from loans and
receiv-ables
Interest income from availablefor-sale financial assets
Transportation
3,733,045
3,929,114
Total
Warranty
3,201,776
2,967,724
Financial costs
Other
4,963,012
4,935,604
Interest expense:
Interest expense from financial
liabilities measured at amortized cost
2) Research and development expenses

Total expenses
Capitalized expenses
Total
15,325,507
(940,001)
14,780,432
(461,030)
52,902,116
54,211,345

Losses from derivatives
Total
Details of other non-operating income for the years ended December 31, 2014
2014
2013
1,436,235
89,199
112,159
104,608
Gain on disposal of investments
152,281
1,117,029
Gain on disposal of property, plant and
228,366
110,638
Dividend income
Rental income
equipment
Other
Total
1,895,276
985,117
3,801,357
2,429,551
Details of other non-operating expense for the years ended December 31, 2014

Loss on disposal of property, plant and
equipment
Donations
2014
2013
222,841
187,863
409,796
495,301
Loss on disposal of assets classified
723,869
as held-for-sale
Other
903,231
930,884
2,259,737
1,614,048
Total
1,734,963
1,342,394
98,398
9,215
5,766,640
6,199,517
659,828
8,259,829
466,371
463,546
8,014,672
319,342
126,569
190,316
6,016,728
6,529,622
684,334
7,294,002
715,692
7,754,972
The Group recognizes foreign exchange gains and losses arising from foreign currency
trans-actions and translation as financial income and costs.
27. Other Non-Operating Income and

Expense
2013
086
087
29. Income Tax

(A) Income tax expense for the years ended December 31, 2014 and 2013, consists of:
2014
2013
Current taxes:
Current tax on profits for the year
Adjustments in respect to prior years
5,953,438
7,406,736
71,530
52,318
722,023
(52,085)
Deferred taxes:
Changes in carryforward of unused tax
credits
Changes in temporary differences
Changes in carryforward of unused tax
losses
Other
Items charged directly to equity
Income tax expense
(483,290)
501,450
(1,792,553)
2,805
(3,430)
(10,490)
12,958
4,480,676
(11,219)
7,889,515
(B) The tax on the Groups profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the Group as follows:
Income before tax

Tax calculated at weighted average tax rates
2014
2013
27,875,034
6,880,857
38,364,279
9,576,241
(292,554)
(335,146)
(9,631)
1,307
(1,942,488)
(2,156,519)
201,835
318,359
applicable1
Tax effects of:
Permanent differences
Temporary differences for which no
deferred income tax was recognized
Tax credits
Results of subsidiaries, associates and
interests in joint ventures
Impact of changes in tax rates
Other
Income tax expense
1
1,756
5,526
(359,099)
479,747
4,480,676
7,889,515
Weighted average of statutory tax rates that are applied differently for the profits of the Group at each tax authority as at December 31, 2014 and 2013.
(C) Changes in deferred income tax assets and liabilities resulting from the tax effect of temporary differences for the years ended December 31, 2014 and 2013, are
as follows:
(1) 2014
Temporary Differences
Deferred Income Tax Assets (Liabilities)
Balance as at
January 1
Increase
(Decrease)
Balance as at
December 31
Balance as at
January 1
Increase
(Decrease)
Balance as at
December 31
(27,785)
(3,476,104)
13,417
412
(14,368)
(3,475,692)
(6,724)
(841,217)
3,247
100
(3,477)
(841,117)
(27,819,662)
(3,649,494)
(31,469,156)
(4,000,627)
(241,471)
(4,242,098)
Deferred tax arising from temporary

differences
Special reserves appropriated for tax purposes
Revaluation of land
Investments in subsidiaries, associates and
joint ventures
Depreciation
Accrued income
Provisions and accrued expenses
Asset impairment losses
834,746
1,774,306
2,609,052
135,376
507,818
643,194
(303,790)
(231,881)
(535,671)
(72,845)
(59,392)
(132,237)
12,345,693
(912,792)
11,432,901
3,153,146
(194,336)
2,958,810
(181,302)
280,090
98,788
(44,025)
69,541
25,516
342,089
237,566
579,655
81,899
59,478
141,377
(4,185,045)
1,951,177
(2,233,868)
(877,479)
338,305
(539,174)
(22,471,160)
(537,199)
(23,008,359)
(2,472,496)
483,290
(1,989,206)
107,228
1,341,650
7,358,111
(602,202)
7,465,339
739,448
25,006
1,312,192
1,792,553
(722,023)
1,817,559
590,169
Valuation of available-for-sale financial

instruments
Actuarial valuation
(2,887,880)
338,495
(2,549,385)
(664,172)
53,434
(610,738)
1,718,454
922,439
2,640,893
408,879
212,121
621,000
Subtotal
(1,169,426)
1,260,934
91,508
(255,293)
265,555
10,262
Other
Subtotal
Deferred tax arising from carryforwards
Unused tax losses
Unused tax credits
Deferred tax recognized in other
Deferred tax assets

Deferred tax liabilities
Total
1
Deferred tax assets were not recognized if it is probable that the temporary differences will not reverse in the foreseeable future for investments in subsidiaries, associates and joint ventures.
4,526,595
(4,097,811)
428,784
088
089
(2) 2013
Temporary Differences
Deferred Income Tax Assets (Liabilities)
Balance as at
January 1
Increase
(Decrease)
Balance as at
December 31
Balance as at
January 1
Increase
(Decrease)
Balance as at
December 31
(33,097)
5,312
(27,785)
(8,010)
1,286
(6,724)
(3,477,691)
1,587
(3,476,104)
(841,601)
384
(841,217)
(25,263,866)
(2,555,796)
(27,819,662)
(3,682,268)
(318,359)
(4,000,627)
1,237,393
(402,647)
834,746
193,344
(57,968)
135,376
Deferred tax arising from temporary

differences
Special reserves appropriated
for tax purposes
Revaluation of land
Investments in subsidiaries, associates
and joint ventures1
Depreciation
Accrued income
(124,177)
(179,613)
(303,790)
(28,163)
(44,682)
(72,845)
10,362,208
1,983,485
12,345,693
2,556,845
596,301
3,153,146
(13,260)
(168,042)
(181,302)
(5,967)
(38,058)
(44,025)
90,656
251,433
342,089
16,524
65,375
81,899
7,527,869
7,527,869
1,821,744
1,821,744
(894,234)
(10,818,680)
(11,712,914)
(171,750)
(2,527,473)
(2,699,223)
(18,116,068)
(4,355,092)
(22,471,160)
(1,971,046)
(501,450)
(2,472,496)
130,992
1,316,509
(23,764)
25,141
107,228
1,341,650
27,811
1,260,107
(2,805)
52,085
25,006
1,312,192
Valuation of available-for-sale financial

instruments
Actuarial valuation
(2,581,628)
(306,252)
(2,887,880)
(580,092)
(84,080)
(664,172)
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)
Provisions and accrued expenses

Asset impairment losses
Other
Subtotal
Deferred tax arising from carryforwards
Unused tax losses
Unused tax credits
Deferred tax recognized in other
(25,034)
Deferred tax assets
Deferred tax liabilities
Total
1
(255,293)
4,621,780
(6,012,371)
(1,390,591)
Deferred tax assets were not recognized if it is probable that the temporary differences will not reverse in the foreseeable future for investments in subsidiaries, associates and joint ventures.
The Group periodically assesses its ability to recover deferred tax assets. In the event of a significant uncertainty regarding the Groups ultimate ability to recover such assets, deferred tax
assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.
Temporary differences whose deferred tax effects were not recognized due to uncertainty regarding the ultimate realizability of such assets as at December 31, 2014 and 2013,
2013
12,196
30,098
2018 and after
7,366
2,842
are as follows:
Unused
tax
losses Unused tax
2014
credits
7,366
19,632
Expiry dates of unused tax losses and unused tax credits for which no deferred tax asset is recognized in the balance sheet are as follows:
Undisposed accumulated deficit

Tax credit carryforwards
2015
2016
2017
3,978
12,812
(D) The liquidity analysis of deferred tax assets and deferred tax liabilities is as follows:
Deferred tax asset (liability) to be recovered

within 12 months
Deferred tax liability to be recovered after more
2014
2013
1,564,682
(107,699)
(1,135,898)
(1,282,892)
428,784
(1,390,591)
than 12 months
Total
30. Earnings per Share

(A) Basic earnings per share
Basic earnings per share for the years ended December 31, 2014 and 2013, are calculated as follows:
(1) Common stock
Profit attributable to owners of the

Parent company
(In millions of Korean won, except per share data, and thousands of number of shares)
2014
2013
23,082,499
20,045,198
29,821,215
25,893,396
130,924
130,880
153,105
197,841
Profit available for common stock

Weighted-average number of common
shares outstanding
Basic earnings per share
(2) Preferred stock
2014
Profit attributable to owners of the Parent

company
Profit available for common stock
Weighted-average number of preferred shares
2013
23,082,499
29,821,215
3,037,301
3,927,819
19,849
19,854
153,020
197,838
outstanding
Basic earnings per preferred share
(B) Diluted earnings per share
The Group has one category of potentially dilutive ordinary shares: stock options. Dilutive earnings per share is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.
Diluted earnings per share for the years ended December 31, 2014 and 2013, is calculated as follows:
(1) Common stock
Profit available for common stock and common
stock equivalents
Weighted-average number of shares of
2014
2013
20,045,299
25,894,151
130,933
130,911
153,096
197,800
common stock and dilutive potential

common stock
Diluted earnings per share
090
091
(2) Preferred stock
2014
2013
Net income available for preferred stock

and preferred stock equivalents
3,037,200
19,849
3,927,064
19,854
153,015
197,800
Weighted-average number of shares

of preferred stock and dilutive potential
preferred stock
Diluted earnings per preferred share
31. Cash Generated from Operations

(A) Adjustments and changes in assets and liabilities arising from operating activities for the years ended December 31, 2014 and 2013, are as follows:
- Adjustments
2014
2013
Adjustments for:
Income tax expense
4,480,676
7,889,515
Financial income
(3,094,422)
(2,551,623)
Financial costs
1,933,565
1,568,663
Severance and retirement benefits
1,289,973
971,997
Depreciation
16,910,026
15,470,012
Amortization
1,143,395
975,401
Bad debt expenses
365,681
282,978
Gain on valuation of equity method
(342,516)
(504,063)
investments
Gain on disposal of property,
(228,366)
(110,638)
plant and equipment

Loss on disposal of property,
222,841
187,863
plant and equipment

Obsolescence and scrapping of inventories
1,354,405
1,045,360
Gain on disposal of investments
(152,281)
(1,117,029)
723,869
(1,436,235)
(112,159)
Loss on disposal of assets classified as

held-for-sale
Dividend income
Impairment losses on intangible assets
Other income/expense
Adjustments, total
65,889
108,420
(912,735)
(299,865)
22,323,765
23,804,832
2013
1,271,817
16,578,339
2,716,733
20,756
1,920,748
505,277
- Changes in assets and liabilities arising from operating activities

Changes in assets and liabilities:
Increase in trade receivables
(Increase) decrease in other receivables
Decrease (increase) in advances
Increase in prepaid expenses
Decrease (increase) in inventories
Decrease in trade payables
2014
2013
(177,409)
(1,993,705)
(701,942)
192,054
90,122
(144,720)
(2,126,336)
(321,953)
266,961
(3,097,762)
(265,898)
(965,677)
Increase in other payables
1,053,152
1,296,263
(Decrease) increase in advances received
(50,848)
49,495
(Decrease) increase in withholdings
(10,687)
323,874
Increase in accrued expenses
1,586,212
2,261,910
(Decrease) increase in provisions
(702,672)
2,009,248
Payment of severance benefits
(407,517)
(244,186)
(3,349,052)
(837,296)
958,778
159,210
(3,837,136)
(1,313,245)
Increase in plan assets

Other
Changes in net working capital, total
(B) The Groups statements of cash flows are prepared using indirect method. Significant transactions not affecting cash flows for the years ended December 31, 2014

2014
Valuation of available-for-sale financial assets
(117,455)
Reclassification of construction in progress

and machinery in transit to property, plant
and equipment
19,979,420
Reclassification of available-for-sale
financial assets to assets held-for-sale
100,051
Reclassification of investment in associates

to assets held-for-sale
411,390
Valuation of investments in associates and

joint ventures
(128,932)
Reclassification of current maturities of

long-term borrowings
1,773,363
Reclassification of current maturities of bonds
5,496
(C) The Group reported cash receipts and payments arising from transactions occurring frequently and short-term financial instruments, loans, and borrowings on a net basis.
092
093
32. Financial Risk Management

The Groups financial risk management focuses on minimizing market risk, credit risk, and liquidity risk arising from operating activities. To mitigate these risks, the
Group imple-ments and operates a financial risk policy and program that closely monitors and manages such risks.
The finance team mainly carries out the Groups financial risk management. With the cooperation of the Groups divisions, domestic and foreign subsidiaries, the
finance team periodically measures, evaluates and hedges financial risk and also establishes and implements the global financial risk management policy.
Also, financial risk management officers are dispatched to the regional headquarters of each area including the United States, England, Singapore, China, Japan,
Brazil and Russia to operate the local finance center in accordance with global financial risk management.
The Groups financial assets that are under financial risk management are comprised of cash and cash equivalents, short-term financial instruments, available-forsale financial as-sets, trade and other receivables and other financial assets. The Groups financial liabilities under financial risk management are comprised of trade
and other payables, borrowings, debentures, and other financial liabilities.
(A) Market risk

(1) Foreign exchange risk
The Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the United States, European Union, South America,
Japan and other Asian countries. Revenues and expenses arise from foreign currency transactions and exchange positions, and the most widely used currencies
are the US Dollar, EUs EURO, Japanese Yen and Chinese Yuan. Foreign exchange risk management of the Group is carried out by both SEC and its subsidiaries.
To minimize foreign exchange risk arising from operating activities, the Groups foreign exchange management policy requires normal business transactions to be in
local currency or for the cash-in currency to be matched up with the cash-out currency. The Groups foreign exchange risk management policy also defines foreign
exchange risk, measuring period, controlling responsibilities, management procedures, hedging period and hedge ratio.
The Group limits all speculative foreign exchange transactions and operates a system to manage receivables and payables denominated in foreign currency. It
evaluates, man-ages and reports foreign currency exposures to receivables and payables.
The foreign currency exposure to financial assets and liabilities of a 5% currency rate change against the Korean won are presented below:
2014
2013
Increase
Decrease
Increase
Decrease
USD
EUR
(171,265)
(36,381)
171,265
36,381
8,472
9,136
(8,472)
(9,136)
JPY
(42,529)
42,529
(45,131)
45,131
(2) Price risk

The Groups investment portfolio consists of direct and indirect investments in equity securities classified as available-for-sale, which is in line with the Groups strategy.
As at December 31, 2014 and 2013, a price fluctuation in relation to marketable equity securities by 1% would result in changes in other comprehensive income
(before income tax) of KRW 57,768 million and KRW 43,993 million, respectively.
(3) Interest rate risk

Risk of changes in interest rates for floating interest rate financial instruments is defined as the risk that the fair value of components of the statement of financial position, and future cash flows
of interest income (expenses) of a financial instrument, will fluctuate because of changes in market interest rates. The Group is exposed to interest rate risk mainly through interest bearing
liabilities and assets. The Groups position with regard to interest rate risk exposure is mainly driven by its floating interest rate debt obligations and interest-bearing deposits. The Group
implemented policies and operates to minimize uncertainty arising from changes in interest rates and finance costs.
In order to avoid interest rate risk, the Group maintains minimum external borrowings by facilitating cash pooling systems on a regional and global basis. The Group
manages exposed interest rate risk via periodic monitoring and handles risk factors on a timely basis.
The sensitivity risk of the Group is determined based on the following assumptions:
- Changes in market interest rates that could impact the interest income and expenses of floating interest rate financial instruments
Based on the above assumption, changes to profit and net equity as a result of 1% increases in interest rates on borrowings are presented below: (In millions of Korean won)
2014
2013
Increase
Decrease
Increase
Decrease
Financial assets
52,977
(30,722)
(52,977)
30,722
46,025
(22,942)
(46,025)
22,942
Net effect
22,255
(22,255)
23,083
(23,083)
(B) Credit risk

Credit risk arises during the normal course of transactions and investing activities where clients or other parties fail to discharge an obligation. The Group monitors and sets the clients and
counterpartys credit limit on a periodic basis based on the clients and counterpartys financial conditions, default history and other important factors.
Credit risk can arise from transactions with financial institutions which include financial instrument transactions such as cash and cash equivalents, savings, and
derivative in-struments. To minimize such risk, the Group transacts only with banks which have strong international credit rating (S&P A and above), and all new
transactions with financial institutions with no prior transaction history are approved, managed and monitored by the Groups finance team and the local finance
center. The Group requires separate ap-proval for contracts with restrictions.
Most of the Groups trade receivable is adequately insured to manage any risk, therefore, the Group estimates its credit risk exposure to be limited. The Group
estimates that its maximum exposure to credit risk is the carrying value of its financial assets, net of impairment losses.
094
095
(C) Liquidity risk
Due to large investments made by the Group, maintaining adequate levels of liquidity risk is critical. The Group strives to achieve this goal by periodically forecasting
its capital balance, estimating required cash levels, and managing income and expenses.
The Group manages its liquidity risk by periodically forecasting projected cash flows. If abnormal signs are identified, the Group works with the local finance center and provides liquidity support
by utilizing a globally integrated finance structure, such as Cash Pooling. In addition, the Group maintains a liquidity management process which provides addi-tional financial support by the
local finance center and the Group. The Cash Pooling program allows sharing of surplus funds among entities and contributes to minimizing liquid-ity risk and strengthening the Groups
competitive position by reducing capital operation expenses and financial expenses.
In addition, the Group mitigates liquidity risk by contracting with financial institutions with respect to bank overdrafts and foreign trade finance, and by providing payment guaran-tees to
subsidiaries. For large scale facility investments, liquidity risk is minimized by utilizing internal reserves and long term borrowings according to the capital injection schedule.
The following table is an undiscounted cash flow analysis for financial liabilities that are presented on the statements of financial position according to their remaining
contractual maturity.
2014
Less than 3 months
4 - 6 months
7 - 12 months
1 - 5 years
34,502,783
706,077
3,528,699
3,994,862
More than 5 years

106,857
2013
Less than 3 months
4 - 6 months
7 - 12 months
1 - 5 years
More than 5 years
33,862,896
1,095,285
4,806,477
2,564,769
65,772
The table above shows the Groups financial liabilities based on the remaining period at the statement of financial position date until the contractual maturity date.
The amounts disclosed in the table are the contractual undiscounted cash flows. The Groups trading portfolio of derivative instruments has been included at its fair
value of KRW 78,348 million (2013: KRW 244,172 million). These contracts are managed on a net-fair value basis rather than by maturity date. Net settled
derivatives consist of forward exchange contracts used by the Group to manage the exchange rate profile.
The maximum liquidity risk exposure from those other than the above financial liabilities (e.g., payment guarantees for affiliated companies and performance bonds)
as at De-cember 31, 2014 is KRW 115,211 million (December 31, 2013: KRW 183,644 million).
(D) Capital risk management
The purpose of capital management is to maintain a sound capital structure. The Group monitors capital on the basis of the ratio of total liabilities to total equity. This
ratio is cal-culated by dividing total liabilities by total equity in the consolidated financial statements.
The Groups capital risk management policy has not changed since the fiscal year ended December 31, 2013. As at December 31, 2014, the Group has maintained
an A+ and A1 credit rating from S&P and Moodys, respectively, on its long term debt.
The total liabilities to equity ratios as at December 31, 2014 and 2013, are as follows:
Total liabilities
Total equity
Total liabilities to equity ratio
2014
2013
62,334,770
168,088,188
64,059,008
150,016,010
37.1%
42.7%
(E) Fair value estimation

(1) Carrying amounts and fair values of financial instruments by category as at December 31, 2014 and 2013 are as follows:
2014
Carrying amount
2013
Carrying amount
Fair value
Fair value
Financial assets
Cash and cash equivalents1
Short-term financial instruments1
Trade receivables1
Other
Total financial assets
16,840,766
16,284,780
41,689,776
36,722,702
3,286,798
3,286,798
1,488,527
1,488,527
24,694,610
24,988,532
12,667,509
12,272,756
6,238,380
5,850,155
4,762,971
4,725,263
5,472,956
5,436,470
103,942,430
91,195,877
7,914,704
8,437,139
Short-term borrowings1
8,029,299
6,438,517
Other payables1
9,258,344
7,877,581
Current portion of long-term liabilities 1
1,778,667
2,425,831
Debentures
1,355,882
1,377,113
1,311,068
1,327,569
Trade payables1
Other1
Total financial liabilities
1
101,671
82,271
985,117
971,844
2,520,277
2,606,179
1,023,714
1,090,580
11,474,129
10,862,512
42,432,973
39,361,479
Assets and liabilities whose carrying amount is a reasonable approximation of fair value are excluded from the fair value disclosures.
Amount measured at cost (2014: KRW 394,753 million, 2013: KRW 388,225 million) is excluded as the range of reasonable fair value estimates is significant and the probabilities of the
various estimates cannot be reasonably assessed.
096
097
(2) The following table presents the assets and liabilities, by level, that are measured at fair value:
2014
Level 1
Level 2
1) Assets
Level 3
Total balance
1,016,878
Long-term available-for-sale financial assets1
5,776,836
2,269,920
3,286,798
3,050,338
3,445,582
Other
12,272,756
45,898
102,513
148,411
2) Liabilities
Derivatives
78,348
78,348
2013
Level 1
Level 2
1) Assets
1,257,492
Long-term available-for-sale financial assets1
4,399,314
Other
2) Liabilities
Derivatives
1
Level 3
Total balance
231,035
1,488,527
957,463
493,378
5,850,155
40,552
40,552
244,172
244,172
Amount measured at cost (2014: KRW 394,753 million, 2013: KRW 388,225 million) is excluded as the range of reasonable fair value estimates is significant and the probabilities of the
various estimates cannot be reasonably assessed.
The levels of the fair value hierarchy and its application to financial assets and liabilities are described below.
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)
The fair value of financial instruments traded in active markets is based on quoted market prices at the statement of financial position date. A market is regarded as active if quoted prices are
readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market
transactions on an arms length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in Level 1. Instruments
included in Level 1 are listed equity investments classified as trading securities or available-for-sale financial assets.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques.
These val-uation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all
significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
Specific valuation techniques used to value financial instruments include:
- Quoted market prices or dealer quotes for similar instruments.
- The fair value of forward foreign exchange contracts is determined using forward exchange rates at the statement of financial position date, with the resulting value
discounted back to present value.
Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments. For trade and other receivables,
the book val-ue approximates a reasonable estimate of fair value.
(3) Valuation technique and the inputs
The Group utilizes a present value technique to discount future cash flows at a proper interest rate for corporate bonds, government and public bonds, and bank
debentures that are classified as Level 2 in the fair value hierarchy.
The following table presents the valuation technique and the inputs used for major financial instruments classified as Level 3.
Classification
Fair Value
Valuation Technique
Level 3 Inputs
Input Range
(Weighted Average)
17,094
Discounted cash flow
Permanent growth rate

Weighted average cost of
-1.00% ~ 1.00%(0%)
7.76% ~ 9.76%(8.76%)
Samsung Venture Investment
6,586

Samsung General Chemicals
100,051


Taewon Electric
capital
-1.00% ~ 1.00%(0%)
7.74% ~ 9.74%(8.74%)
capital
-1.00% ~ 1.00%(0%)
10.48% ~ 12.48%(11.48%)
capital
Corning Incorporated convertible
preferred stock
3,106,332
Trinomial model
Risk adjusted discount rate
4.96% ~ 6.96%(5.96%)
Price volatility
30.5% ~ 36.5%(33.5%)
Discount rate
5.16% ~ 10.3% (7.78%)
Derivatives
Embedded derivatives
(convertible bonds)
2,462
Binomial model
Stock price volatility
(4) Changes in Level 3 instruments:
11.88% ~ 17.6% (14.53%)
2014
2013
Balance as at January
493,378
389,195
1 Purchases
2,586,120
151,741
Disposals
(97,487)
(46,357)
Amount recognized in profit or loss
(67,581)
(5,177)
Amount recognized in other

646,856
2,615
Other
(13,191)
1,361
3,548,095
493,378
098
099
(5) Sensitivity analysis for recurring fair value measurements categorized within Level 3
Sensitivity analysis of financial instruments is performed to measure favorable and unfavorable changes in the fair value of financial instruments which are affected
by the unob-servable parameters, using a statistical technique. When the fair value is affected by more than two input parameters, the amounts represent the most
favorable or most unfa-vorable.
The results of the sensitivity analysis for the effect on profit or loss (before-tax amount for other comprehensive income or loss) from changes in inputs for each financial instru(In millions of Korean won)
ment which is categorized within Level 3 and subject to sensitivity analysis, are as follows:
Classification
Favorable Changes
Unfavorable Changes
Profit or Loss
Embedded derivatives
Equity
Profit or Loss
Equity
231,909
(225,568)
466
466
(475)
(475)
466
232,375
(475)
(226,043)
(convertible bonds)2
Total
1
Changes in fair value are calculated by increasing or decreasing the correlation between volatility (30.5% to 36.5%) and discount rate for convertible preferred stock. Similarly, for other
equity securities, changes in fair value are calculated with the correlation between growth ratio (-1% to 1%) and discount rate, which are significant unobservable inputs.
2
For equity derivatives, changes in their fair value are calculated by increasing or decreasing the correlation between stock prices and volatility by 10%.
(6) Fair value hierarchy classifications of the financial assets and financial liabilities that are measured at fair value as at December 31, 2014 and 2013, are as follows:
Classification
Assets
Other
Liabilities
Debentures
Carrying amount
2014
Level 1
Level 2
Level 3
Total
4,614,560
4,576,852
4,576,852
1,355,882
1,377,113
1,377,113
101,671
82,271
82,271
2,520,277
2,606,179
2,606,179
Classification
Assets
Other
Liabilities
Debentures
Carrying amount
2013
Level 1
Level 2
Level 3
Total
5,432,404
5,395,918
5,395,918
1,311,068
1,327,569
1,327,569
985,117
971,844
971,844
1,023,714
1,090,580
1,090,580
As at December 31, 2014, assets and liabilities not measured at fair value but for which the fair value is disclosed and categorized within Level 2 in the fair value
hierarchy, are measured using the present value technique which discounts future cash flows with appropriate interest rates.
33. Segment Information

(A) Operating segment information
The chief operating decision maker has been identified as the Management Committee. The Management Committee is responsible for making strategic decisions
based on review of the groups internal reporting. The Management Committee has determined the operating segments based on these reports.
The Management Committee reviews operating profits of each operating segment in order to assess performance and to make decisions about allocating resources
to the seg-ment. The operating segments are product based and include CE, IM, Semiconductor, DP and others.
Depreciation, amortization of intangible assets, and operating profit were prepared after the allocation of internal transaction adjustments. Total assets and liabilities
of each op-erating segment are excluded from the disclosure as these have not been provided regularly to the Management Committee.
(1) For the year eneded December 31, 2014

2014
Total segment
revenue
Intercompany
CE
IM
Total1
DS
Total1
Semi conductor
DP
Intercompany
elimination within
Consolidated
124,916,892
236,438,979
131,459,756
75,058,071
52,227,615
494,576,550
the group
(288,370,563)
206,205,987
(74,733,757)
(124,674,435)
(65,669,950)
(35,328,169)
(26,500,446)
(288,370,563)
288,370,563
revenue
Net revenue2
50,183,135
111,764,544
65,789,806
39,729,902
25,727,169
206,205,987
206,205,987
Depreciation
596,151
761,214
14,946,633
10,506,903
4,235,596
16,910,026
16,910,026
Amortization
98,165
186,471
534,487
402,862
117,139
1,143,395
1,143,395
1,184,325
14,562,885
9,430,915
8,776,442
660,181
25,025,071
25,025,071
Operating profit
1
2
Includes other amounts not included in specific operating segments.

Segment net revenue includes intersegment revenues.
100
(2) For the year ended December 31, 2013

2013
CE
IM
DS
Total
Total segment
revenue
Intercompany
101
Semi conductor
DP
Total1
Intercompany
elimination within
the group
Consolidated
125,088,762
299,161,654
134,394,781
70,908,145
61,294,886
558,196,178
(329,503,511)
228,692,667
(74,757,247)
(160,344,435)
(66,633,875)
(33,471,566)
(31,457,770)
(329,503,511)
329,503,511
revenue
Net revenue2
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
1,673,343
24,957,741
10,000,665
6,887,978
2,980,563
36,785,013
36,785,013
Operating profit
1
2
Includes other amounts not included in specific operating segments.

Segment net revenue includes intersegment revenues.
(B) Regional information

The regional segment information provided to the Management Committee for the reportable segments as at and for the years ended December 31, 2014 and 2013, is as follows:
2014
Net segment revenue

Non-current assets1
1
Korea
America
20,728,917
63,355,887
68,704,659
7,650,511
Europe Asia and Africa
42,944,592
847,611
40,801,466
4,486,482
China
Intercompany
elimination
within the group
Consolidated
33,026,353
9,965,909
(647,977)
206,205,987
85,658,423
China
Intercompany
elimination
within the group
Consolidated
40,151,220
7,436,424
(674,737)
228,692,667
79,476,988
Total of non-current assets other than financial instruments, deferred tax assets, and investments in associates and joint ventures.
2013
Net segment revenue

Non-current assets1
1
Korea
America
22,783,309
61,881,863
69,383,426
7,172,187
Europe Asia and Africa
52,678,385
1,024,699
43,696,327
2,636,552
Total of non-current assets other than financial instruments, deferred tax assets, and investments in associates and joint ventures.
34. Related Party Transactions

(A) Sale and purchase transactions
Sales and purchases with related parties for the years ended December 31, 2014 and 2013, are as follows:
2014
Name of Company
Associates
Samsung SDS
Samsung Electro-
Sales
Disposal of
fixed assets
Purchases
Purchase of
fixed assets
29,355
28,852
110
1,886,282
2,379,046
228,515
-
17,508
7,835
57,226
39,867
78,736
170,739
Other
393,679
10,433
5,058,140
352,904
Total (associates)
477,229
10,543
9,420,561
830,894
164
67,826
Mechanics
Samsung Techwin
Samsung Card
Joint ventures
Other related parties
1
2
3
Samsung Corning
Precision Materials2
Siltronic Samsung Wafer
153,610
Other
2,599
647
184,430
Total (joint ventures)
2,763
647
405,866
Cheil Industries Inc.3

Samsung SDI
6,485
104,377
524,048
64,481
324,246
1,230,004
355,543
Other
229,384
1,900,435
117,597
Total
(other related parties)
300,350
324,246
3,234,816
997,188
Sales
Disposal of
fixed assets
Purchases
Purchase of
fixed assets
35,166
72,897
130,771
192
1,673,999
2,662,680
369,395
76
Mechanics
Samsung SNS2
11,418
164,093
3,973
Samsung Techwin
15,582
84,074
68,949
Samsung Card
22,468
40,787
Other
183,209
3,971,374
283,829
Total (associates)
340,740
130,963
8,597,007
726,222
9,931
1,758,317
145,324
Transactions with separate entities that are related parties of the Group.
During the year ended December 31, 2014, the Group sold all of its Samsung Corning Precision Materials shares.
During the year ended December 31, 2014, Samsung Everland changed its name to Cheil Industries Inc.
2013
Name of Company1
Associates
Samsung SDS
Samsung Electro-
Joint ventures
Samsung Corning
Precision Materials
195,795
83
147
10,014
1,954,259
145,324

Samsung SDI
12,690
543,162
487,107
52,909
667,658
1,258
Other
319,572
2,113,771
23,344
Total
385,171
3,324,591
511,709
Other
Transactions with separate entities that are related parties of the Group
Samsung SNS was acquired by Samsung SDS in 2013, and the above amounts relate to transactions prior to the acquisition.
102
103
(B) Balances of receivables and payables
Balances of receivables and payables arising from sales and purchases of goods and services as at December 31, 2014 and 2013, are as follows:
1
2014
Name of Company
Receivables
Payables
Associates
Samsung SDS
Samsung Electro-
3,353
1,431
359,001
237,816
Mechanics
Samsung Techwin
1,353
18,977
Samsung Card
5,431
1,124,240
Other
61,903
393,963
Total (associates)
73,471
2,133,997

Other
19,143
474
11,445
39,262
Joint ventures


Samsung SDI
Other
Total
1
2
19,617
50,707
187,108
288,984
4,771
122,936
18,052
126,422
209,931
538,342
Balances due from and to separate entities that are related parties of the Group.
2013
Name of Company1
Associates
Joint ventures
Receivables
Payables
Samsung SDS
Samsung Electro-
11,319
5,972
479,417
168,494
Mechanics
Samsung Techwin
1,879
44,286
Samsung Card
8,539
476,009
Other
44,211
330,348
Total (associates)
71,920
1,498,554
3,514
266,400
Samsung Corning
Precision Materials
Other
Cheil Industries Inc.

Samsung SDI
Other
Total
1
2
1,454
25
3,517
267,879
188,982
282,777
4,863
39,207
45,997
172,500
239,842
494,484
Balances due from and to separate entities that are related parties of the Group.
(C) Key management compensation

Key management includes directors (executive and non-executive) and members of the Executive Committee. The compensation paid or payable for employee services for the
years ended December 31, 2014 and 2013, consists of:
Salaries and other short-term employee

benefits
Termination benefits
Other long-term benefits
In millions of Korean won
2014
2013
26,969
23,906
973
763
7,137
7,402
35. Information about Non-Controlling Interests

(A) Changes in accumulated non-controlling interests
The profit or loss allocated to non-controlling interests and accumulated non-controlling interests of subsidiaries that are material to the Group for the years ended December 31,
2014 and 2013, is as follows:

2014
Samsung Display and its subsidiaries
Percentage of
Non-Controlling
Interests
Balance as at
January 1
Net Income
Dividends
Other
Balance as at
December 31
15.2%
5,104,125
171,178
(1,851)
86,740
5,360,192
2013
Percentage of
Non-Controlling
Interests
Balance as at
January 1
Net Income
Dividends
Other
Balance as at
December 31
15.2%
4,061,948
433,700
(1,553)
610,030
5,104,125
(B) The summarized financial information for each subsidiary with non-controlling interests that are material to the Group before intercompany eliminations is as follows:
(1) Summarized consolidated statements of financial position

December 31, 2014
Current assets
Non-current assets
Current liabilities
December 31, 2013
14,185,656
25,380,046
14,473,616
23,454,045
6,158,562
6,115,203
871,085
914,399
Equity attributable to:
32,536,055
30,898,059
32,073,951
30,434,116
462,104
463,943

104
105
(2) Summarized consolidated statements of comprehensive income

Sales
Net income
Other comprehensive income
Total comprehensive income attributable to:
2014
2013
25,646,109
1,153,734
29,478,707
2,669,623
485,350
(26,415)
1,639,084
2,643,208
1,640,637
2,631,672
(1,553)
11,536
(3) Summarized consolidated statements of cash flows

2014
2013

Cash flows from investing activities
4,722,526
(6,269,805)
7,748,974
(10,321,562)
Cash flows from financing activities
416,556
(1,339,815)
Exchange rate effect on foreign currency (cash)

Decrease in cash and cash equivalents
Cash and cash equivalents at
beginning of period
Cash and cash equivalents at end of period
9,249
13,546
(1,121,474)
(3,898,857)
1,442,856
5,341,713
321,382
1,442,856
36. Business Combination
37. Non-current Assets Held-for-Sale
Samsung Electronics America, the Groups subsidiary, acquired 100% of the

equity shares of SmartThings on August 18, 2014.
(A) As at December 31, 2014
(Assets of disposal group)
I. Sale of optical materials business segment
(A) Overview of the acquired company
Name of the acquired company

Headquarters location
SmartThings, Inc.
Washington D.C. USA.
Representative director
Alexander
Industry
Hawkinson
Sale of smart home electronics
(B) Purchase price allocation
Amount
166,546
I. Consideration transferred
II. Identifiable assets and liabilities
Trade and other receivables
Inventories
Property,
and
equipment Intangible assets

Trade and other payables
Deferred income tax liabilities
Total net identifiable assets
III. Goodwill (I II)
During the year ended December 31, 2014, the management of the
Group de-cided to sell the Optical Materials business segment and
accordingly related assets and liabilities are classified as held-forsale. Since the business does not represent a separate major line of
the Group, related profit or loss was not presented as profit or loss of
discontinued operations. The contract was entered into on December
2, 2014, and the transaction is expected to be completed by March
2015.
II. Sale of Samsung Techwin Co., Ltd
During the year ended December 31, 2014, the management of the Group de-cided
to sell all shares of Samsung Techwin Co., Ltd. to Hanwha Corporation. The
contract was entered into on November 26, 2014, and the transaction and
2,471
associated due diligence will be completed by June 2015.
667
1,208
plant
(1) Summary
126
47,763
(5,681)
(13,225)
III. Sale of Samsung General Chemicals Co., Ltd.
During the year ended December 31, 2014, the management of the
Group decided to sell all shares of Samsung General Chemicals Co.,
Ltd. to Hanwha Chemical and Hanwha Energy Corporation. The
contract was entered into on November 26, 2014, and the transaction
and associated due diligence will be completed by June 2015.
33,329
133,217
Had SmartThings been consolidated from January 1, 2014, revenues would increase by KRW 2,469 million
and net loss would increase by KRW 6,786 million on the consolidated statement of income. The revenues
(2) Details of assets and liabilities reclassified as held-for-sale, as at

December 31, 2014, are as follows: (In millions of Korean won)
and net loss contributed by SmartThings after the consolidation date of August 18, 2014 amount to KRW
Amount
2,733 million and KRW 7,424 million, respectively.
Trade receivables
60,173
Inventories
Other current assets

Property, plant and
equipment Investment
Other non-current
assets
Total
9,703
22,523
37,955
511,441
3,696
645,491
Liabilities held-forsale Current liabilities
25,939
2,377
Total
28,316
Impairment loss recognized from the reclassification of assets and liabilities

held-for-sale amounts to KRW 31,219 million.
106
107
Details of cumulative income or expense recognized in other comprehensive

income relating to the disposal group classified as held-for-sale as at Decem-ber
31, 2014 and 2013, are as follows: (In millions of Korean won)
Amount
24,750
54,118
1,233
80,101
(3)
Gain on valuation of available-forsale securities
Changes in equity under the
equity-method
Foreign exchange translation adjustment
Total
(B) As at December 31, 2013
38. Events after the Reporting Period

(A) On January 1, 2015, Samsung Electronics America (SEA), a subsidiary of
The Group entered into a comprehensive business cooperation agreement with Corning
the Group, merged with Samsung Telecommunications America (STA),
Incorporated during the year ended December 31, 2013. During the year ended
also a subsidiary of the Group. The merger was between two subsidiaries
December 31, 2014, the Group sold all of its shares of Samsung Corning Precision
Materials. The Group received an additional dividend declared following the resolution of
the general meeting of the Samsung Corning Precision Materials shareholders. Also, the
respective agreement includes ex-post settlement condi-tions based on the business
performance of Samsung Corning Precision Materi-als which may result in the future
outflow of or inflow to the Groups resource. As at the reporting date, the future inflow or
outflow are uncertain and thus, its impact to the Groups financial statements cannot be
under common control, therefore, the merger was accounted for by

transferring the book values on the consolidated financial statements. No
additional goodwill was recognized.
(B) Based on an agreement entered into in September 1999 related to Samsung
Motor Inc.s (SMI) bankruptcy proceedings, SMIs creditors (the Creditors)
estimated. The Groups management, however, believes the future inflow or outflow will
filed a civil action in December 2005 against 28 Samsung Group affiliates,
not have a material impact on the financial conditions of the Group.
including the Group, seeking to recover KRW 2,450 billion in losses as well as
additional penalty amounts. On January 29, 2015, the Supreme Court ordered
the Samsung Group affiliates to pay the Creditors an additional pen-alty of
KRW 600 billion plus an interest on late penalty payment (charged at 6% annual
interest rate). On January 11, 2011, the Seoul High Court ordered Samsung
Group affiliates to pay to the Creditors a penalty of KRW 600 billion and interest
due to late payment. Compared to the January 2011 ruling, the penalty amount
remained the same and the interest charge on late penalty payment increased
by 1% annually, thus the total amount due to Creditors increased by KRW 4
billion as a result of the Supreme Courts January 2015 decision.
Global Network
Global Network
GLOBAL HEADQUARTERS
REGIONAL HEADQUARTERS

129, Samsung-ro, Yeongtonggu, Suwon-si, Gyeonggi-do,
Korea Tel: 82-2-2255-0114
www.samsung.com/sec
China
Samsung Electronics
China Headquarters
23F China Merchants Tower,
No.118, Jian Guo Lu,
Chao Yang District,
Beijing, China 100022
SEOCHO OFFICE
Samsung Electronic Bldg., 11,
Seocho-daero 74-gil, Seocho-gu,
Seoul, Korea
Samsung Electronics
China Headquarters (DS)
200051, Floor 20&21,
Building B,1065 SOHO,
Rd. Zhongshan (West),
Shanghai, China
Japan
Samsung Electronics
Japan Headquarters (DS)
Roppongi T-CUBE 3-1-1,
Roppongi, Minato-ku,
Tokyo 106-8532, Japan
Russia
Samsung Electronics
Co., Ltd. CIS Headquarters
Floor 5, B.Gnezdnikovsky Pereulok 1,
Stroenie 2, 103009,
Moscow, Russia
UK
Samsung Electronics Europe
Headquarters
Samsung House, 1000 Hillswood Drive,
Chertsey, Surrey, KT16 0PS, UK
Germany
Samsung Electronics
Europe Headquarters (DS)
Kolner Str. 12,
D-65760 Eschborn, Germany
USA
Samsung Electronics
North America Headquarters
85 Challenger Road, Ridgefield Park,
NJ 07660, USA
Singapore
Samsung Electronics
Southeast Asia Headquarters
30 Pasir Panjang Road,
17-31/32 Mapletree Business City,
Singapore 117440
Samsung Electronics
America Headquarters (DS)
3655 North First Street,
San Jose, CA 95134, USA
Samsung Electronics
Southeast Asia Headquarters (DS)
Samsung Asia Pte Ltd,
3 Church Street, #26-01 Samsung Hub,
Singapore 049483
Brazil
Samsung Electronics
Latin America Headquarters
Samsung Electronics Da Amazonia Ltda
- Rua Henri Dunant, 1383 - Diamond
Tower Morumbi - CEP 04709-110, Sao
Paulo - SP - Brasil
India
Samsung Electronics
Southwest Asia Headquarters
2nd, 3rd & 4th Floor,
Tower - C, Vipul Tech Square,
Sector - 43, Golf Course Road,
Gurgaon - 122002, India
UAE
Samsung Electronics
Middle East Headquarters
43rd Floor, Business Central Tower A,
Sheikh Zayed Road, Dubai Media City,
P.O.Box 500047,
Dubai, U.A.E
South Africa
Samsung Electronics
Africa Headquarters
2929 William Nicol Drive,
Bryanston Johannesburg,
South Africa
PRODUCTION NETWORK
Korea
Suwon Complex
Suwon
Tel: 82-31-200-1114
Gumi Plant 1
Gumi
Tel: 82-54-479-5114
Gumi Plant 2
Gumi
Tel: 82-54-479-5114
Giheung Complex
Yongin
Tel: 82-31-209-7114
Hwaseong Complex
Hwaseong
Tel: 82-31-209-7114
Onyang Complex
Asan
Tel: 82-41-540-7114
Gwangju Plant
Gwangju
Tel: 82-62-950-6114
China
Tianjin Samsung Opto-Electronics
Co., Ltd. (TSOE), Tianjin
Tel: 86-22-2388-7788
Tianjin Samsung Electronics Company
(TSEC), Tianjin
Tel: 86-22-2532-1234
Tianjin Samsung
Telecommunication Technology
Co., Ltd. (TSTC), Tianjin
Tel: 86-22-8396-9600
Tianjin Samsung LED Co., Ltd.
(TSLED), Tianjin
Tel: 86-22-2397-9000
Samsung Electronics
Suzhou Computer
(SESC), Suzhou
Tel: 86-512-6253-8988 (6688)
Samsung Electronics
Suzhou Semiconductor
(SESS), Suzhou
Tel: 86-512-6761-1121
Suzhou Samsung Electronics Co., Ltd.
(SSEC), Suzhou
Tel: 86-512-6258-1234
108
Samsung Electronics
Huizhou Company
(SEHZ), Huizhou
Tel: 86-752-389-7777
Shenzhen Samsung
Electronics Telecommunication
(SSET), Shenzhen
Tel: 86-755-2699-0888
Samsung Electronics (Shandong)
Digital Printing Co., Ltd.
(SSDP), Weihai
Tel: 86-631-562-6868
China Printed Board Assembly
(China PBA), Zhoungshan
Tel: 86-760-830-4848 (219)
Samsung China Semiconductor
(SCS), Xian
Tel: 86-29-8887-8887
India
Samsung India Electronics
Pvt. Ltd. (SIEL-P(N)), Noida
Tel: 91-120-256-8251
Samsung Electronics
Vietnam Thai Nguyen
(SEVT), Thai Nguyen
Tel: 84-241-369-6049
MIDDLE EAST & AFRICA
Egypt
Samsung Electronics
Egypt (Product)
(SEEG-P), Beni Suef
Tel: 20-2-2528-5971
SOUTHEAST ASIA
Hungary
Samsung Electronics
Hungarian of Production Co., Ltd.
(SEH-P), Jaszfenyszaru
Tel: 36-57-522-200
Malaysia
Samsung Electronics
Display (M) Sdn. Bhd. (SDMA),
Seremban
Tel: 60-6-678-7914
Poland
Samsung Electronics
Poland Manufacturing
(SEPM), Wronki
Tel: 48-22-607-44-00
Samsung Electronics
Malaysia Sdn. Bhd. (SEMA), Klang
Tel: 60-3-3176-2050
NORTH AMERICA
Thailand
Thai Samsung Electronics of
Semiconductor LLC (SAS), Austin
Vietnam
Samsung Vina Electronics
Co., Ltd. (SAVINA-P), Ho Chi Minh
Tel: 84-8-3896-5500
Samsung Electronics
Vietnam (SEV), Hanoi
Tel: 84-241-369-6049
Samsung Electronica
Da Amazonia Ltda. (ProductCampinas)
(SEDA-P(C)), Campinas
Tel: 55-19-4501-2003
Slovakia s.r.o. (SESK), Galanta Tel:

421-31-7882-111
USA
Samsung Austin
Tel: 1-512-672-1000
Mexico
Samsung Electronics
Digital Appliances Mexico
(SEM-P), Queretaro
Tel: 52-442-296-9003
Samsung Mexicana
S.A. De C.V.
(SAMEX), Tijuana
Tel: 1-619-671-1669
Malaysia
Samsung Malaysia
Electronics (SET) Sdn Bhd (SME),
Kuala Lumpur
Tel: 60-3-2165-0000
Philippines
Samsung Electronics
CIS
Slovakia
Samsung Electronics
Tel: 66-38-320-777
Indonesia
P.T. Samsung Electronics
Indonesia of Sales (SEIN-S), Jakarta
Tel: 62-21-2958-8000
China
Samsung China
Investment Company (SCIC), Beijing
Tel: 86-10-6566-8100
Indonesia
P.T. Samsung Electronics
Indonesia (SEIN-P), Cikarang
Tel: 62-21-8983-7114
Production Co., Ltd. (TSE-P), Sriracha
SOUTHEAST ASIA
Brazil
Samsung Electronica
Da Amazonia Ltda. (Product-Manaus)
(SEDA-P(M)), Manaus
Tel: 55-92-4009-1141
SALES NETWORK
EUROPE
Samsung India Electronics
Product (SIEL-P(C)), Chennai
Tel: 91-44-6710-3000
SOUTH AMERICA
South Africa
Samsung Electronics
South Africa (Pty) Production Ltd
(SSAP), Durban
Tel: 27-11-549-1500
Russia
LLC Samsung Electronics
Rus Kaluga (SERK), Kaluga
Tel: 7-484-38-67-000
109
ASIA PACIFIC
Hong Kong
Samsung Electronics
H.K. Co., Ltd. (SEHK), Hong Kong
Tel: 852-2862-6300 (6900)
Taiwan
Samsung Electronics
Taiwan Co., Ltd. (SET), Taipei
Tel: 886-2-6603-5168
Japan
Samsung Electronics
Japan (SEJ), Tokyo
Tel: 81-3-6238-4082
Australia
Samsung Electronics
Australia Pty. Ltd. (SEAU), Sydney
Tel: 61-2-9763-9700
New Zealand
Samsung Electronics
New Zealand (SENZ), Auckland
Tel: 64-9-477-7000
India
Samsung India Electronics of
Sales Ltd. (SIEL-S), Gurgaon
Tel: 91-124-488-1234
Philippines Corporation (SEPCO), Manila
Tel: 63-2-241-7777
Singapore
Samsung Asia Pte (Private) Ltd.
(SAPL), Singapore
Tel: 65-6833-3106
Thailand
Thai Samsung Electronics
Co., Ltd. (TSE-S), Bangkok
Tel: 66-2-695-9000
Vietnam
Samsung Vina Electronics
Co., Ltd. (SAVINA-S), Ho Chi Minh
Tel: 84-8-3821-1111
MIDDLE EAST & AFRICA
Egypt
Samsung Electronics
Egypt (Sales)
(SEEG-S), Cairo
Tel: 20-2-2614-9200
UAE
Samsung Gulf Electronics Co., Ltd.
(SGE), Dubai
Tel: 971-4-440-6000
Turkey
Samsung Electronics
Turkey Ltd. (SETK), Istanbul
Tel: 90-212-467-0600
Jordan
Samsung Electronics
Levant Ltd. (SELV), Amman
Tel: 962-6-580-7102
Israel
Samsung Electronics Israel
(SEIL), Tel Aviv-Jaffa
Tel: 972-77-902-6276/16
Global Network
Morocco
Samsung Electronics
Morocco Ltd. (SEMRC), Casablanca
Tel: 212-22-33-53-83
Tunisia
Samsung Electronics Tunisia
(SETN), Tunis
Tel: 216-71-161-212 (200)
Pakistan
Samsung Electronics Pakistan
(SEPAK), Lahore
Tel: 92-42-3594-1283
South Africa
Samsung Electronics
South Africa (Pty) Ltd
(SSA), Johannesburg
Tel: 27-11-549-1500
EUROPE
Austria
Samsung Electronics
Austria GmbH (SEAG), Vienna
Tel: 43-1-51650
Serbia
Samsung Electronics
Adriatic (SEAD), Beograd
Tel: 381-11-4141-301
France
Samsung Electronics
France (SEF), Paris
Tel: 33-1-4404-7000
Germany
Samsung Electronics
Germany (SEG), Schwalbach
Tel: 49-6196-6660
Nigeria
Samsung Electronics
West Africa Limited
(SEWA), Lagos
Tel: 234-1-899-0095
Greece
Samsung Electronics
Greece (SEGR), Athens
Tel: 30-213-016-3800
Kenya
Samsung Electronics
East Africa (SEEA), Nairobi
Tel: 254-20-429-4000
Hungary
Samsung Electronics
Hungarian Private Co., Ltd.
(SEH-S), Budapest
Tel: 36-1-453-1180
CIS
Russia
Samsung Electronics
Russia Ltd (SERC), Moscow
Tel: 7-095-797-2344
Ukraine
Samsung Electronics
Ukraine Company
(SEUC), Kiev
Tel: 380-44-390-5333
Kazakhstan
Samsung Electronics
Central Eurasia
(SECE), Almaty
Tel: 7-727-332-1212
Azerbaijan
Samsung Electronics
Caucasus Company
(SECC), Baku
Tel: 994-12-499-8950
Romania
Samsung Electronics
Romania SRL
(SEROM), Bucharest
Tel: 40-31-620-2333
Italy
Samsung Electronics
Italia S.P.A
(SEI), Milano
Tel: 39-02-921-891
Netherlands
Samsung Electronics
Benelux B.V. (SEBN), Hague
Tel: 31-15-219-6100
Poland
Samsung Electronics
Polska (SEPOL), Warszawa
Tel: 48-22-607-44-00
Portugal
Samsung Electronics
Portuguesa S. A. (SEP), Lisbon
Tel: 351-21-425-1000
Spain
Samsung Electronics
Iberia S.A.U. (SESA), Madrid
Tel: 34-91-714-3700
Sweden
Samsung Electronics
Nordic AB (SENA), Stockholm
Tel: 46-8-5550-5700
Switzerland
Samsung Electronics
Switzerland Gmbh (SESG), Zurich
Tel: 41-(0)44-455-6710
UK
Samsung Electronics
United Kingdom (SEUK), London
Tel: 44-1932-455-000
Czech Republic
Samsung Electronics
Czech (SECZ), Prague
Tel: 420-225-020-777
Latvia
Samsung Electronics
Baltics (SEB), Riga
Tel: 371-6750-8500
NORTH AMERICA
Canada
Samsung Electronics
Canada Inc. (SECA), Toronto
Tel: 905-542-3535
USA
Samsung Electronics America Inc.
(SEA), New Jersey
Tel: 1-201-229-4000
Mexico
Samsung Electronics
Mexico (Sales) (SEM-S), Mexico City
Tel: 52-55-5747-5100
SOUTH AMERICA
Argentina
Samsung Electronics
Argentina S.A. (SEASA), Buenos Aires
Tel: 54-11-4109-4000
Brazil
Samsung Eletronica da
Amazonia Ltda. (SEDAS), Sao Paulo Tel: 55-115644-6400
Chile
(SECH), Santiago
Tel: 56-2-485-8500
Colombia
Samsung Electronics
Colombia S.A. (SAMCOL), Bogota
Tel: 57-1-487-0707
Panama
Samsung Electronics
Latino America S.A. (SELA), Panama
City
Tel: 507-306-2800
Peru
Samsung Electronics
Peru S.A.C. (SEPR), Lima
Tel: 51-1-711-4801
110
www.samsung.com

2014 Samsung Electronics Annual Report

Uploaded by

Copyright:

Available Formats

2014 Samsung Electronics Annual Report

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

2014 Samsung Electronics Annual Report

Uploaded by

Copyright:

Available Formats

2014

037 Financial Statements

Propelled by our warmhearted and solid

2014 Financial Summary

Sales and Operating Profit (in billions of KRW)

Cash Flows from Operating Activities

(in billions of KRW)

Cash Flows from Investing Activities

With differentiated core

Accelerating growth engines in a difficult business environment

Vice Chairman & CEO

2014 Samsung Electronics Annual Report

Enhancing product competency and reinforcing market leadership

Innovating technology and products while

Our Memory Business significantly improved owing to greater cost

fortifying future growth engines

competitiveness and advanced process technology development. In

In 2014, we invested KRW 15 trillion in R&D to lead industry innovation as

turn, that boosted sales of differentiated and high-value-added

products, including SSD. In the Mobile Communications Business,

amid intense industry competition and slowing global demand, sales

reach, enabling us to secure outside talent and technologies. Those

and profits of smartphone and tablets weakened and growth was

forward-looking measures fueled remarkable performance and sparked

stagnant over the previous year. Nonetheless, we maintained our

superior technologies, including mass production of the worlds first 20nm

global No. 1 leadership in both the mobile phone and smartphone

DRAM and V-NAND with 3-bit technology; the launch of a smartphone

markets. In the Visual Display Business, we also solidified our market

leadership by promoting sales of our premium products, including

UHD, Curved and ultra-large-size TVs. As a result, we achieved No. 1

nology based on automatic ID technology that utilizes diverse sensors.

We also reinforced the foundation of our technology leadership and

President & CEO

President & CEO

Building sound management with an unmatched challenging spirit Going

an increase in US interest rates, economic recession in the Eurozone and

nesses. With a revamped organizational structure, we will implement a focused

networks to develop corporate customers. By propelling mo-mentum in

growth continues to slow in our key product markets. Nevertheless, we

advanced markets and realizing high growth in emerging mar-kets, we will

are prepared. Our experienced sound management and unrivaled

position Samsung as a global leader in the B2B business. We will further

challenging spirit will enable us to effectively respond to the fast-changing

enhance our product competitiveness with robust soft compet-itiveness,

producing must-have content and services and strengthening our service

First, we will strengthen our competitiveness and profit structures in

platforms, such as Big Data and Cloud Services.

Third, we will assure stronger competitiveness with preemptive mea-

and mobile phones, we will hone our competitive advantages as we focus

sures going forward. We will aggressively pursue IoT businesses as new

growth engines, including Smart Health and Smart Home. We expect to

leadership. Our top ranking in the Memory Business is fully supported by

embed a creative corporate culture in our Samsung Electronics DNA by

our superior technology. In TVs, we will highlight our premium brand

using such tools as MOSAIC, which was introduced in 2014 to improve

power with a central focus on SUHD TVs. In the Mobile Communications

cross-discipline thinking and collective knowledge. Such measures will

establish the firm foundation for our new challenges.