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Hyundai Motor Company Annual Report 2006

Table of contents

  • Page 1
    Hyundai Motor Company Annual Report 2006

  • Page 2

  • Page 3
    ... Chairman 10 Customer-First Management 32 Sustaining Global Management 44 Global Marketing 46 Sports Marketing 48 Sustainable Management 52 Environmental Advancements 54 Social Initiatives 56 Financial Statements 126 Hyundai Motor Company Worldwide 128 Domestic & Overseas Facilities 130 Full Line-Up

  • Page 4

  • Page 5
    ... in the future and a realization of all your present dreams. This is the life journey. Where you began, where you are and where you are going to. With the clear view of the open road you can see clearly the road ahead and all the perils of the future become triumphs as you move...

  • Page 6
    ... years ended December 31, 2006, 2005, and 2004 Korean won in billions US dollars in millions 2006 Sales Net Income Total Assets Shareholder's Equity Earnings Per Share (Korean won, US dollars) Dividends Per Share (Korean won, US dollars) 63,648 1,259 70,709 20,966 5,737 1,000 2005 58,831 2,445 66...

  • Page 7
    ... so glad you joined us. We are passionate about the time we share with you. You understand how to make every moment count.... but we know how to work together and arrive as one. Check the plans. Got everything covered and we're ready for the open road. We know our route as we've planned every step of ...

  • Page 8
    Letter from the Chairman 04

  • Page 9
    Open Road Hyundai Motor Company Annual Report 2006 Moving into the Vanguard of the Global Auto Industry On the back of our continuous efforts to strengthen our global management structure and enhance quality and inspired by our 'Innovation for Humanity' vision, Hyundai Motor Company has made great...

  • Page 10
    Letter from the Vice Chairman 06

  • Page 11
    ..., Hyundai Motor Company recorded domestic sales of 580,000 vehicles, 1,031,000 units in exports while 886,000 units were sold from overseas manufacturing plants with sales totaling 2,497,000 units, an equivalent of 37 trillion Korean Won. Comparing with corresponding figures for 2005, the number of...

  • Page 12
    ...up once again in such opaque management environments. Designating 2007 as the milestone for HMC's rise to become a global leader, goals are set for 630,000 cars in domestic sales, 1,085,000 in exports, 1,020,000 in overseas plants totaling up to 2,735,000 cars worldwide, an equivalent of 42 trillion...

  • Page 13
    Open Road Hyundai Motor Company Annual Report 2006 In particular, with efforts to heighten marketing power and brand value, we will be presenting both high value-added vehicles and strategically targeted designs in domestic and global markets. We will also transparently pursue activities to ...

  • Page 14
    Customer-First Management All Things for All Time

  • Page 15
    ...Hyundai brand as a world citizen, educated, down-to-earth, father, mother, sister, brother. Environmentally conscious, moral and abiding, outgoing and adventurous, diligent and industrious...future. This is the ongoing dialogue between company and customer that we value above all else. This is the ...

  • Page 16
    ..., particularly in areas such as efficiency, safety, and price. J.D. Power & Associates' 2006 Automotive Performance, Execution and Layout Study reported that the Azera(Grandeur) has captured the imagination of American customers with superior comfort, efficiency and style. In addition, AutoPacific...

  • Page 17

  • Page 18
    ...to read the business news. Robert's in the next office screaming at his administration staff. What's up with him? Must have been the ride to work. Traffic was hell this morning. Or was it? Tom barely noticed. Since he's bought his new Azera(Grandeur) the ride to work has been like driving on a cloud...

  • Page 19
    morning time...

  • Page 20
    ... award and a host of other accolades, the Sonata carries the honor of the global Hyundai brand with its promise of outstanding quality and reliability. 203 HMC Toyota Average 156 133 124 119 111 102 104 106 102 154 118 2000 2002 2004 2006 2006 J.D.Power and Associates Initial Quality Study

  • Page 21

  • Page 22
    ... you do? There is always heavy traffic around the school at pick up time and the rain can make the driving perilous. Never fear. The Sonata will get you there. The Electronic Stability Control, which coordinates the ABS and Traction Control Systems, is tested and designed for worse than this. Mother...

  • Page 23
    noon...

  • Page 24
    ... top in the J.D. Power & Associates' 2006 Initial Quality Survey and Strategic Vision 2006 Best Small SUV Ownership Experience (5-Star Safety Rating), and it has been recording rising international and domestic sales on the back of these prestigious global accolades. The Tucson boasts luxury class...

  • Page 25

  • Page 26
    ... ahead. Your Tuscon owns it place on the road. It negotiates sporty cornering in city streets with flat out freedom on the open road. The traffic's busy but you don't mind. You have time on your side and the trip computer in your Tucson always seems to read 400 kilometers left in the tank. Up ahead...

  • Page 27
    evening time...

  • Page 28
    ... in our US manufacturing plant in Alabama, the Santa Fe meets the demands of customers who prefer refinement and class, without compromising muscle and performance. 36th Brand HMC Infiniti Audi BMW DC VW Points 7 8 12 19 23 27 31 15 -4 -16 -24 -31 2007 Annual Car Reliability Survey by Consumer...

  • Page 29

  • Page 30
    ... on the highway. It has the power and performance he needs to feel comfortable in the mountains, by the beach, in the snow or in the desert and he likes the challenge of testing himself and his Santa Fe in a variety of conditions. Andre always says he thinks every car has a soul. Just like people...

  • Page 31
    weekend...

  • Page 32
    ... of a leading global brand and the engineering class of a luxury SUV, powered by a V6 3.0 E-VGT engine, fully developed by Hyundai technical staff in the home land of Korea. The Veracruz symbolizes Hyundai's long-term strategy in the American market of producing successful luxury class vehicles...

  • Page 33

  • Page 34
    ... superior handling and safety features will protect them from home to holiday. This sort of time is invaluable. This is how we re-generate, how we recharge for our working lives. As they drive on the Richards will soon pass that crucial half way point where the journey back is longer than the road...

  • Page 35
    Open Road Hyundai Motor Company Annual Report 2006 vacation...

  • Page 36
    Sustaining Global Management Bringing People Together

  • Page 37
    ...you dream of far away places? Do you imagine travel without end. Does life feel like a journey for you? We see our name in every country. We understand how we take travelers across mountains, plains and deserts and more ... new and ever more exciting places. Who knows who we'll meet on our next voyage?

  • Page 38
    ...000 miles (160,000km), far and away the best service plan on the North American continent. What's more, being a multi-faceted program allows Hyundai dealers to tailor each service contract to the customer, taking in variables such as road Total Sales & Market Share in USA Total Sales (Units) Market...

  • Page 39
    ...the deluxe Azera and the successful launch of the Veracruz. Export markets in South America recorded over 29 percent growth from 2005 while sales figures in North America rose steadily as the Hyundai Motor America Alabama plant began to flex its considerable muscle in the US and Canada." conditions...

  • Page 40
    ... Design & Research Center in Irvine, CA, Hyundai & Kia Motors California Proving Ground in the Mohave Desert, and the Hyundai & Kia American Technical Center, located in Michigan. These three centers collaborate on new designs and technologies to refine existing products and develop future...

  • Page 41
    Open Road Hyundai Motor Company Annual Report 2006 Africa & Mid-East • MARKET CONDITIONS & PERFORMANCE In keeping with HMC's management philosophy of respect for all markets regardless of size or location, Africa and the Middle East have been closely watched for many years and 2006 saw strong ...

  • Page 42
    Sustaining Global Management Europe • MARKET CONDITIONS & PERFORMANCE The Association of European Car Manufacturers (ACEA) rated Hyundai as the number two import brand in Europe for the first quarter of 2006. This accolade translated into continued strong sales throughout Europe in 2006. The ...

  • Page 43
    ...in the European market. Hyundai Motor Europe Technical Center 2006 Investment into this facility has created resources that will lead Hyundai to the forefront of European car sales. The HME Located in Frankfurt, Germany, this is a state-of-the-art multifunctional compound designed to develop high...

  • Page 44
    ... 2002, Beijing Hyundai Motor Company (BHMC) continued its rapid rise in the Hyundai consciousness in 2006. Producing 300,000 units per year the Beijing plant is perfectly situated to capitalize on China's growing middle class. An ever increasing desire of Chinese people to own and drive vehicles is...

  • Page 45
    ... Singapore and Malaysia, South East Asia holds many new and emerging markets such as Indonesia and Vietnam. • RESEARCH & DEVELOPMENT Research and development in Asia/Pacific is operated from our Hyundai Japan Research & Development center in Chiba, Japan. Historically the vanguard of technological...

  • Page 46
    ... value globally and increase sales domestically. In fact 2006 was another record breaking year for HMC as worldwide sales reached 2,617,644 units, a 3.9 percent increase over 2005. This outstanding result was led by productivity gains in our Korean manufacturing plants. HMC's three factories shipped...

  • Page 47
    ... and cleanest environmental technologies in the motoring industry. 2006 North America ...289,176 Europe ...360,539 South America ...107,161 Middle East / Africa ...177,416 Asia / Pacific ...96,482 Domestic ...580,288 Hyundai-Kia Corporate R&D Division The Hyundai-Kia Corporate R&D Division in...

  • Page 48
    ...340Nm torque at 2000rpm. In addition an inter-cooled turbo technology system with a European compliant particle filter means more power, less pollutants. The highly anticipated launch of the Hyundai Sonata Diesel was saved for January 2007 in New Delhi, India. The Sonata Embera, a luxury sedan, adds...

  • Page 49
    ..., Germany modeled the Arnejs on development plans for the new Elantra. At the 2006 Los Angeles Motor Show Hyundai got tough with the debut of the HCD-10(Hellion) Concept Car. The Hyundai Design and Technical Center and Hyundai Motor America presented the Hellion during a press conference at...

  • Page 50
    ... 2005 we have been one of the six elite official partners, the only motoring company to secure this honor. Set to continue through to 2014, our partnership with FIFA will ensure the Hyundai brand remains connected to the world game through the 2010 and 2014 world cups. At 2006 FIFA World Cup Germany...

  • Page 51
    Open Road Hyundai Motor Company Annual Report 2006 16 teams attended 2006 World Mini Football Competition held by HMC in Germany and the South African team who emerged victorious. The top class players of Korean 'Click Speed Festival' and Spain ' Getz CRDi cup' visited each other's countries to ...

  • Page 52
    Sustainable Management Sharing Our Thoughts and Dreams

  • Page 53
    .... This intimacy is our obligation. But caring for the family is about more than just people. We tend the gardens in which we work, caring for the ground we walk on. We care for those less fortunate than our immediate family and we care for future generations yet to enjoy the fruits of our labor.

  • Page 54
    ...has systemized all HMC research efforts in environmental technology. At the Eco-Technology Research Institute HMC has brought together its most brilliant minds, each with a mandate to ensure HMC remains at the cutting edge of environmental developments in the motor vehicle manufacturing industry. As...

  • Page 55
    Open Road Hyundai Motor Company Annual Report 2006 These technological and operational initiatives are about more than just products. We have invested heavily in end of life disassembly and recycling technologies as well as newer and cleaner methods of production to bring these future vehicles to ...

  • Page 56
    ...for researchers and developers in motor vehicle technology. In 2000 Hyundai became the sixth member in the world to join the California Fuel Cell Partnership and the first to apply a 350 bar hydrogen system in June 2001. In addition, since 2004 Hyundai has been involved in the Hydrogen fuel cell car...

  • Page 57
    Open Road Hyundai Motor Company Annual Report 2006 recycled. More than 85 percent of all liquids and gases are collected and recycled with more than 80 percent of all internal and external parts also being fully recycled along a continuous flow system in eight phases. The plant includes state of ...

  • Page 58
    ..., Hyundai Motor India Foundation (HMIF), in April 2006. The objective of HMIF is to address the needs and expectations of the Indian people and to support fields of Health care, Educational and Vocational Training, Environment, Road Safety, the arts, Science and Technology and many more. Financial...

  • Page 59
    Open Road Hyundai Motor Company Annual Report 2006 awareness and to support the Delhi Traffic Police in improving traffic management systems and road safety in Delhi. Indian programs also included a blood donation camp organized by HMI in Chennai. Over 150 employees of HMI, led by Managing ...

  • Page 60

  • Page 61
    Financial Statements 58 Independent Auditors' Report 59 Consolidated Balance Sheets 62 Consolidated Statements of Income 64 Consolidated Statements of Changes in Shareholders' Equity 66 Consolidated Statements of Cash Flows 69 Notes to Consolidated Financial Statements

  • Page 62
    ..., based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Hyundai Motor Company and its subsidiaries as of December 31, 2006 and 2005, and the results of their operations and changes in its...

  • Page 63
    ... 31, 2006 AND 2005 Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) ASSETS Current assets: Cash and cash equivalents (Notes 8 and 18) Short-term financial instruments (Note 18) Short-term investment securities (Note 4) Trade notes and accounts receivable, less...

  • Page 64
    ...million in 2006 and in 2005 (Note 2) Long-term account payable Derivative liabilities (Note 26) Long term accrued warranties (Note 15) Provision for other liabilities Deferred tax liabilities (Note 20) Other long-term liabilities Total long-term liabilities Other financial business liabilities (Note...

  • Page 65
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) AS OF DECEMBER 31, 2006 AND 2005 Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY Shareholders' equity: Capital stock (Note 16) Capital surplus ...

  • Page 66
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Korean Won (In millions, except per share amounts) Translation into U.S. Dollars (Note 2) (In thousands, except per share amounts) 2006 Sales (Notes 22, 23 and 24) Domestic ...

  • Page 67
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Korean Won (In millions, except per share amounts) Translation into U.S. Dollars (Note 2) (In thousands, except per share amounts) 2006 Ordinary income Income tax ...

  • Page 68
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) Capital stock Capital surplus Retained earnings Capital adjustments ...

  • Page 69
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) Capital stock Capital surplus Retained earnings Capital ...

  • Page 70
    ... (gain) on valuation of derivatives, net Loss on disposal of trade notes and accounts receivable Loss on disposal of property, plant and equipment, net Gain on disposal of short-term investment securities, net Gain on disposal of long-term investment securities, net Gain on valuation of investment...

  • Page 71
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) 2006 Cash flows from operating activities: Changes in operating assets and ...

  • Page 72
    ...: Purchase of short-term financial instruments Acquisition of short-term investment securities Acquisition of long-term investment securities Acquisition of investment securities using the equity method Acquisition of property, plant and equipment Expenditures for development costs Additions to...

  • Page 73
    ... (WIA) Hyundai Powertech Dymos Inc. (DYMOS) KEFICO Corporation Autoever Systems Corp. Partecs Co. Mseat Co., Ltd. METIA Co., Ltd. Mando Map & Soft Co., Ltd. Manufacturing Financing Manufacturing Credit card Manufacturing Information technology Manufacturing ˝ ˝ Software consultancy and supply...

  • Page 74
    ... Development Hyundai America Technical Center Inc. (HATCI) Hyundai Motor Poland Sp. Zo.O (HMP) World Marketing Group LLC (WMG) Hyundai Assan Otomotive Sannayi Ve Ticaret A.S. (HAOSVT) Hyundai Motor Norway (HMN) Hyundai Information Service North America (HISNA) Sales Manufacturing Manufacturing...

  • Page 75
    ...(KMIB) ˝ Kia Canada, Inc. (KCI) ˝ Kia Automobiles France (KMF) ˝ Kia Motors Deutschland GmbH (KMD) ˝ Kia Motors (UK) Ltd. (KMUK) ˝ Wia Automotive Engine (Shandong) Company Manufacturing Wia Automotive Parts (WAP) Bejing Hyundai Hysco Steel Process Co., Ltd. Hyundai-Kia Machine Europe GmbH (HKME...

  • Page 76
    ... overseas companies: Hyundai Motor Manufacturing Czech,s.r.o. (HMMC), Wia Automotive Engine(Shandong) Company, Jiangsu Hysco Steel Process. Co. Ltd., Hysco Slovakia, s.r.o., Hyundai-Hitech Electronics, Hyundai Motor Norway (HMN), Hyundai Information Service North America (HISNA), Kia Motors Sales...

  • Page 77
    ...subsidiary's stock is accounted for as consolidated capital surplus. Profits and losses on inter-company sales of products, property or other assets are eliminated in the consolidated financial statements based on the gross profit or loss recognized. Unrealized gains and losses arising from sales by...

  • Page 78
    .... Valuation loss incurred when the market value of an inventory falls below its carrying amount is added to the cost of goods sold. Investments in Securities Other Than Those Accounted for Using the Equity Method Classification of Securities At acquisition, the Company classifies securities into...

  • Page 79
    ... CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 The Company's portion of profits and losses resulting from inter-company transactions that are recognized in assets, such as inventories and fixed assets, are eliminated and charged to equity securities accounted for...

  • Page 80
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 If the recoverable amount of an intangible asset becomes less than its carrying amount as a result of obsolescence, sharp decline in market value or other causes of ...

  • Page 81
    ...NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Accrued Warranties and Product Liabilities The Company and its subsidiaries generally provide a warranty to the ultimate consumer for each product sold and accrues warranty expense at the time of sale based on...

  • Page 82
    ..., which is adjusted by adding back the after-tax amount of expenses related to diluted securities, by weighted average number of common shares and diluted securities outstanding during the period. Basic ordinary income per common share and net income per common share in 2006 and 2005 are computed as...

  • Page 83
    ...Short-term investment securities as of December 31, 2006 consist of the following: Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) Description Trading securities: Government bonds Beneficiary certificates Corporate bonds Available-for-sale securities: Government bonds...

  • Page 84
    ... 2,166 10,000 Book value Book value Ownership percentage (*2) 9.29 6.20 4.41 2.88 2.50 2.28 2.21 Hyundai Finance Corporation KOENTEC Korea Information Service, Inc. Hyundai Heavy Industries Co., Ltd. Daewoo International Corporation Jin Heung Mutual Savings Bank Hyundai Information Technology Co...

  • Page 85
    ... Korea Information Service, Inc. Jin Heung Mutual Savings Bank Daewoo Engineering & Construction Co., Ltd. Hyundai Heavy Industries Co., Ltd. Daewoo International Corporation Hyundai Information Technology Co., Ltd. LG Telecom, Ltd. Hyundai Development Company Hyundai Corporation Doosan Industrial...

  • Page 86
    ...Muan Environment System Corporation (*2) The Sign Corporation (*1) Heesung PM Tech Corporation Clean Air Technology Inc. Industri Otomotif Komersial Hyundai Technology Investment Co., Ltd. Hyundai Research Institute Hyundai Unicorns Co., Ltd. Gyeongnam Credit Guarantee Foundation Kihyup Finance, Inc...

  • Page 87
    ... 0.30 0.02 - Korea Smart Card Co., Ltd. ENOVA System Hyundai Asan Corporation Hyundai Oil Refinery Co., Ltd. Space Imaging LLC ROTIS Inc. Koryo Co., Ltd. Korea Investment Mutual Savings & Finance Co., Ltd. International Convention Center Jeju Co., Ltd. GM Daewoo Auto and Technology Co., Ltd. Pilot...

  • Page 88
    ... Hyundai Oil Refinery Co., Ltd. Korea Credit Bureau Co., Ltd. Korea Smart Card Co., Ltd. ENOVA System Hyundai Asan Corporation Space Imaging LLC ROTIS Inc. Koryo Co., Ltd. Korea Investment Mutual Savings & Finance Co., Ltd. International Convention Center Jeju Co., Ltd. GM Daewoo Auto and Technology...

  • Page 89
    ... available-for-sale securities, included in long-term investment securities as of December 31, 2006 consist of the following: Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) Description Government bonds Corporate bonds Asset backed securities Other Acquisition cost...

  • Page 90
    ...., Ltd. (*1) Beijing-Hyundai Motor Company Hyundai Motor Deutschland GmbH Beijing Lear Dymos Automotive Systems Co., Ltd. Hyundai Electronics (Tianjin) Co., Ltd. (*1) Hysco Steel India, Ltd. (*1) Rotem USA Corporation (*1) Yan Ji Kia Motors A/S (*1) Hyundai Motor Japan R&D Center Inc. (*1) 429,513...

  • Page 91
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) (%) Affiliated company Acquisition cost Net equity value Book value Acquisition cost...

  • Page 92
    ... company Acquisition cost Net equity value Book value Acquisition cost Net equity value Book value Ownership percentage (*2) Hyundai Motor Japan R&D Center Inc. (*1) Hyundai Information System North America, LLC (*1) Hysco Slovakia S.R.O (*1) Global Engine Alliance, LLC Kia Motors Australia...

  • Page 93
    ... Center Inc. Autoever Systems India Pvt. Ltd. Eurotem DEMIRYOLU ARACLARI SAN. VE TIC A.S. Rotem Equipments (Beijing) Co., Ltd. Autoever Systems China Co., Ltd. Eukor Car Carriers Singapore Pte. Hyundai Information System North America, LLC Hysco Slovakia S.R.O Global Engine Alliance, LLC Kia Motors...

  • Page 94
    ...Company Hyundai Motor Deutschland GmbH Beijing Lear Dymos Automotive Systems Co., Ltd. Hyundai Electronics (Tianjin) Co., Ltd. Yan Ji Kia Motors A/S Hyundai Motor Japan R&D Center Inc. Hyundai Information System North America, LLC Hysco Slovakia S.R.O Global Engine Alliance, LLC Kia Motors Australia...

  • Page 95
    ...., Ltd. Kia Tigers Co., Ltd. Beijing-Hyundai Motor Company Hyundai Motor Deutschland GmbH Beijing Lear Dymos Automotive Systems Co., Ltd. Hyundai Electronics (Tianjin) Co., Ltd. Hysco Steel India, Ltd. Rotem USA Corporation Hyundai Motor Japan R&D Center Inc. Autoever Systems India Pvt. Ltd. Eurotem...

  • Page 96
    ... (In thousands) Affiliated company Hyundai Steel Company Hyundai MOBIS HK Mutual Savings Bank Price per share 28,950 85,900 2,805 Number of shares 18,159,517 16,415,620 10,045,060 Market value 525,718 1,410,102 28,176 Market value $565,531 1,516,891 30,310 7. LEASED ASSETS: The Company and its...

  • Page 97
    ...MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 9. PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipments as of December 31, 2006 and 2005 consist of the following: Korean Won (In millions) Translation into U.S. Dollars...

  • Page 98
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 The changes in property, plant and equipment in 2005 are as follows: Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) Beginning of year ...

  • Page 99
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 The changes in intangibles in 2006 are as follows: Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) Description Goodwill Negative ...

  • Page 100
    ... Long-term deposits Other 12. OTHER FINANCIAL BUSINESS ASSETS AND LIABILITIES: Other financial business assets as of December 31, 2006 and 2005 consist of the following: Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) 2006 Finance receivables Lease receivables Card...

  • Page 101
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 13. SHORT-TERM BORROWINGS: Short-term borrowings as of December 31, 2006 and 2005 consist of the following: Annual interest rate (%) Korean Won (In millions) Translation ...

  • Page 102
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Debentures as of December 31, 2006 and 2005 consist of the following: Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) Description ...

  • Page 103
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 15. ACCRUED WARRANTIES: The changes in accrued warranties in current and long-term liabilities in 2006 and 2005 are as follows: Korean Won (In millions) Translation into ...

  • Page 104
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Capital stock as of December 31, 2005 consists of the following: Authorized Issued Par value Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In ...

  • Page 105
    ...investment securities, including 7,538,466 shares of Kia Motors Corporation, 4,400,000 shares of Eukor Car Carriers Inc., 20,000 shares of Eukor Car Carriers Singapore Pte Ltd., 8,355,767 shares of Seoul Metro 9th Line and some government bonds are pledged as collateral to financial institutions and...

  • Page 106
    ... into U.S. Dollars (Note 2) (In thousands) 2006 Salaries Export related expenses Sales promotion Sales commission Sales warranties Taxes and dues Communications Utilities Freight and warehousing Rent Travel Service charges Maintenance Supplies Research Depreciation Amortization Stock option cost...

  • Page 107
    ...965,637 Accrued warranties Long-term investment securities Allowance for doubtful accounts Other non-current assets Reserve for research and manpower Development Derivative assets (liabilities) Development cost Depreciation Accrued income Dividends Advanced depreciation provisions Other Accumulated...

  • Page 108
    ... losses resulting from sales among consolidated subsidiaries are calculated based on the average gross margin rate of selling companies and are eliminated in the consolidated financial statements. Unrealized profits and losses related to sales of inventories and property, plant and equipment in 2006...

  • Page 109
    ...Dollars (Note 2) (In thousands) 2006 Company's income Kia Motors Corporation Dymos Inc. Hyundai Capital Service Inc. WIA Corporation KEFICO Corporation Hyundai Powertech Hyundai Autonet Co., Ltd. Hyundai HYSCO Autoever Systems Corp. Hyundai Card Co., Ltd. METIA Co., Ltd. ROTEM Automobile Industrial...

  • Page 110
    ...) 2006 Company's receivable Kia Motors Corporation Dymos Inc. Hyundai Capital Service Inc. WIA Corporation KEFICO Corporation Hyundai Powertech Hyundai Autonet Co., Ltd Hyundai HYSCO Autoever Systems Corp. Hyundai Card METIA Co., Ltd. ROTEM Haevichi Resort Hyundai Motor America Hyundai Motor Europe...

  • Page 111
    ...) Ltd. Autoever Systems Corp. Kia Motors Corporation Hyundai Capital Service Inc. Hyundai Card Hyundai HYSCO WIA Corporation Dymos Inc. ROTEM Hyundai Autonet Co., Ltd. KEFICO Corporation Hyundai Powertech Kia Motors Slovakia. s.r.o Hyundai Motor India Hyundai Information Service North America Dong...

  • Page 112
    ... Parts Hyundai Motor India Hyundai Powertech ROTEM Kia Motors Corporation Kia Motors Corporation WIA Corporation Autoever Systems Corp Dymos Inc. Hyundai HYSCO Kia Motors Corporation WIA Corporation Hyundai Hysco USA, Inc. Bejing Hyundai Hysco Steel Process Co., Ltd. Hysco America Company...

  • Page 113
    ...Inc. Hyundai Motor America Kia Motors Corporation Hyundai America Technical Center Inc. Hyundai Motor Finance Company Hyundai Motor Manufacturing Alabama, LLC World Marketing Group LLC Kia Motors America Inc. World Marketing Group LLC Hyundai Motor Europe Technical Center GmbH Kia Motors America Inc...

  • Page 114
    ...762 - Kia Motors Corporation Hyundai Capital Service Inc. WIA Corporation Autoever Systems Corp. Hyundai Powertech Dymos Inc. Hyundai HYSCO Hyundai Card KEFICO Corporation ROTEM Kia Motors America Inc. Kia Motors Europe GmbH Kia Canada, Inc. Dong Feng Yueda Kia Motor Co., Ltd. Kia Motors Polska Sp...

  • Page 115
    ... Hyundai Motor India Hyundai Information Service North America Dong Feng Yueda Kia Motor Co., Ltd. Hyundai Capital Service Inc. Kia Motors Corporation Hyundai Card Hyundai Powertech Hyundai Card Hyundai Capital Service Inc. Kia Motors Corporation Autoever Systems Corp Hyundai HYSCO WIA Corporation...

  • Page 116
    ...Wia Automotive Parts Hyundai Motor India Hyundai Powertech ROTEM Kia Motors Corporation Kia Motors Corporation Autoever Systems Corp Dymos Inc. Hyundai HYSCO Kia Motors Corporation Hyundai Card WIA Corporation Hyundai Hysco USA, Inc. Bejing Hyundai Hysco Steel Process Co., Ltd. Hysco America Company...

  • Page 117
    ... Europe GmbH Hyundai Motor (UK) Ltd. Hyundai Motor Europe Technical Center GmbH Hyundai Motor Finance Company Hyundai Translead, Inc. Kia Motors Corporation Hyundai Motor America Hyundai Motor America Hyundai Motor Finance Company Kia Motors America Inc. Hyundai Motor India WIA Corporation Hyundai...

  • Page 118
    ...., Ltd. Beijing-Hyundai Motor Company Hyundai Steel Company Iljin Bearing Co., Ltd. Eukor Car Carriers Inc. Kia Motors Corporation Hyundai Mobis Asset Management Co., Ltd. Glovis Co., Ltd. Donghui Auto Co., Ltd. Eukor Car Carriers Inc. In 2005, significant transactions with related parties other...

  • Page 119
    ... into U.S. Dollars (Note 2) (In thousands) Companies Hyundai Motor Company Related party Hyundai Mobis Amco Corp. Glovis Co., Ltd. Hyundai Steel Company Iljin Bearing Co., Ltd. EUKOR Car Carriers Inc. Receivables 112,481 713 19 38 13 357 - Payables 632,193 188,196 49,599 3,152 4,000 15,352...

  • Page 120
    ...Ltd. Hysco America Company, Inc Hysco Slovakia S.R.O Jiangsu Hyundai Hysco Steel Process Co., Ltd. Dymos Inc. MSEAT Corp. WIA Corp. Beijing Lear Dymos Automotive Systems Co. Amco town Contractors Dymos Inc. WIA Automotive Parts Hyundai-Kia Machine America Corp. Hyundai-Kia Machine Europe GmbH 116

  • Page 121
    ...million Kia Motors Corporation Kia Motors Slovakia Kia Motors (UK) Ltd. Kia Motors Europe Gmbh 424,202 31,632 55,000 11,155 3,758,442 Hyundai Autonet Total Hyundai Hi-Tech Electronics (Tianjin) Co. Ltd. (2) As of December 31, 2006, the outstanding balance of accounts receivable discounted with...

  • Page 122
    ... SGD TND TTD Autoever Systems Corp. Hyundai Card Co., Ltd. WIA Corp. Hyundai Autonet Korea Software Financial Cooperative Seoul Guarantee Insurance Company The Export-Import Bank of Korea Machinery Insurance Cooperative Financial Institutions KRW KRW KRW KRW KRW 5,510,000 166,847,000 2,537 113,707...

  • Page 123
    ...-backed securities. (15) WIA Corp., one of domestic subsidiaries of the Company, made a general instalment financing contract with Yonhap Capital Corp. in order to promote the sales of its machine tools. According to the contract, if a user of the instalment financing service is in default, WIA Corp...

  • Page 124
    ... 11.5300 8.2611 7.8811 The gain or loss on valuation of these derivatives related to the fair value of Kia shares is recognized in current operations. As of December 31, 2006 and 2005, all premiums to be paid by the Company are recorded as accounts payable-other of million (US$23,154 thousand) and...

  • Page 125
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 (2) The transactions of currency options and forwards belonging to subsidiaries as of December 31, 2006 consist of following: Derivatives Currency option Contract parties...

  • Page 126
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 (4) Some subsidiaries entered into seven forward exchange contracts with Shinhan Bank and others to hedge the exposure to changes in foreign exchange rates on debts and ...

  • Page 127
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY Non-financial industry 23,883,705 10,642,770 34,526...

  • Page 128
    HYUNDAI MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) Non-financial industry Shareholders' equity: Capital stock Capital surplus Retained ...

  • Page 129
    ... MOTOR COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Consolidated Statements of Income for the year ended December 31, 2005 Korean Won (In millions) Translation into U.S. Dollars (Note 2) (In thousands) Non-financial industry...

  • Page 130
    ... (Ulsan Plant/Asan Plant/Jeonju Plant/ Hyundai-Kia Corporate R&D Division/ Commercial Vehicle R&D Center/ Eco-Technology Research Institute) 2. Hyundai - Kia America Technical Center Inc. (HATCI) 3. Hyundai - Kia California Design & Technical Center (HKMDTC) 4. Hyundai Motor Europe Technical Center...

  • Page 131
    ... & South America Regional Headquarters) 38. Hyundai Motor Company (Pacific Regional Headquarters) 39. Hyundai Motor Beijing Office 40. Hyundai Washington Office 41. Hyundai Detroit Office 42. Hyundai Motor Company Hanoi Office 43. Hyundai Motor China Sales Center 44. Brazil Assembly Plant 127

  • Page 132
    ... space :2,310,000 Production capacity :1,620,000 Vehicles produced: *No.1 Plant- Accent, Getz *No.2 Plant- Santa Fe, Centennial, Tucson, Veracruz *No.3 Plant- Elantra, Coupe Eco-Technology Research Institute Address: Guseong-myun, Younging-si, Kyunggi-do, Korea Tel Commercial Vehicle R&D Center...

  • Page 133
    ...) Brazile Industry Co.,Ltd Address : Anapolis, Goias Tel Hyundai Motor America (HMA) Address : 10550 Talbert Avenue, P.O. Box 20850, Fountain Valley, CA 92728 0850, U.S.A. : +1-714-965-3000 Hyundai Motor Company (Central & Eastern Europe Regional Headquarters) Address : World Trade Center, Ent...

  • Page 134
    Full Line-Up Centennial (Equus) Azera (Grandeur) Sonata Elantra (Avante) Hyundai Coupe (Tuscani) Accent (Verna) Getz (Click) Atos Prime (Santro) Matrix (Lavita) Santa Fe Tucson Veracruz

  • Page 135
    Open Road Hyundai Motor Company Annual Report 2006 H-1 Van (Starex) H-100 Truck (Porter II) Libero (H-1 Truck) e-Mighty Mega Truck Trago Cargo Truck Trago Dump Truck e-County New Super Aero city Universe