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Hyundai Motor Company Annual Report 2004_118
HYUNDAI MOTOR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003
(2) As of December 31, 2004, the outstanding balance of accounts receivable discounted with recourse and transferred by the
Company and its subsidiaries amounts to 145,737 million (US$139,622 thousand).
(3) The Company and its subsidiaries have used a customer financing system related to a long-term installment sales system and have
provided guarantees to related banks amounting to 201,018 million (US$192,583 thousand) as of December 31, 2004.
These guarantees are all covered by insurance contracts, which specify the customer and the Company and its subsidiaries as
contractor and beneficiary, respectively.
(4) The Company accrues estimated product liabilities expenses and carries the products and completed operations liability insurance
(see Note 8) in order to cover the potential loss, which may occur due to the lawsuits related to its operation such as product
liabilities. The Company expects that the resolution of cases pending against the Company as of December 31, 2004 will not have
any material effect on its financial position.
Kia Motors Corporation, a domestic subsidiary, is a defendant pertaining to its claim in the in-court reorganization proceeding, the
lawsuits related to its operation such as product liabilities, lawsuits for compensation of losses or damages. KIA also has a pending
lawsuit in a Brazilian court pertaining to the disputes with the Brazilian Government and the Brazilian shareholders of Asia Motors Do
Brasil S.A. (AMB), which was established as a joint venture by Asia Motors with a Brazilian investor. Also, in 2002, KIA brought the
case to the International Court of Arbitration to settle the disputes. KIA, a stockholder of AMB, had already written off its investment
of 14,057 million (US$13,467 thousand) and estimates that the above matter does not and will not affect its financial statements at
this time. The outcome of the creditors’ claims in relation to KIA’s denial of their claims in the in-court reorganization proceedings is not
currently determinable.
(5) As of December 31, 2004, the Company’s consolidated subsidiaries have been provided for payment guarantee by other
companies as follows:
Consolidated Subsidiaries Company providing Amounts of Translation into
guarantee of indebtedness guarantee U.S. dollars (Note 2)
(in thousands)
Dymos Inc. The Korea Exchange Bank & other KRW 19,291 $18,482
KEFICO Corporation The Korea Exchange Bank USD 417,000 417
and other JPY 834,170,000 8,088
EUR 228,000 311
SEK 7,228,000 1,093
ROTEM The Korea Development Bank KRW 683,204 654,535
and other USD 64,360,947 64,361
EUR 4,031,040 5,495
NTD 19,340,000 606
HKD 45,138,196 5,805
HYUNDAI MOTOR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003
24. COMMITMENTS AND CONTINGENCIES:
(1)The Company and its consolidated subsidiaries are contingently liable for guarantees of indebtedness of related parties including
subsidiaries as of December 31, 2004 as follows:
Company providing Beneficiary Companies Korean won Translation into
guarantee of indebtedness (in millions) U.S. dollars (Note 2)
(in thousands)
Hyundai Motor Company Hyundai Merchant Marine 294,484 $282,127
Hyundai Motor America 223,185 213,820
Hyundai Motor Manufacturing 417,520 400,000
Alabama LLC
Hyundai Motor Finance Company 396,644 380,000
Hyundia Assan Otomotiv Sanayi Ve 78,285 75,000
Ticaret Anonim Sirketi
Hyundai Motor Europe GmbH 73,994 70,889
Hyundai Translead 145,088 139,000
Hyundai Machine Tool Europe GmbH 1,044 1,000
Hyundai Motor Poland Sp.Zo.O 12,095 11,587
Hyundai Motor Japan Co. 35,422 33,936
HMJ R&D Center Inc . 2,631 2,521
Hyundai Motor Company Australia 12,194 11,682
Equus Cayman Finance Ltd. 417,520 400,000
Smart Alabama LLC 37,577 36,000
Beijing Jingxian Motor Safeguard 2,610 2,500
Service Co., Ltd.
Hyundai Card Co., Ltd. 4,175 4,000
Other domestic companies 305 292
Dymos Inc. WIA Corporation 64,778 62,060
WIA Corporation Dymos Inc. 19,099 18,298
Other foreign subsidiaries 24 23
Hyundai HYSCO Hyundai Pipe of America, Inc. 10,438 10,000
Hysco America Company, Inc 15,657 15,000
Bejing Hyundai Hysco Steel
Process Co., Ltd. 31,361 30,045