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1_
Kia Motors 2007Annual Report
Annual Report 2007
002_
History
004_
Line-up
006_
Chairman's Message
008_
President's Message
010_
Designing a New Growth Engine
022_
Building a Solid Growth Engine
028_
Creating a Diverse Growth Platform
044_
Financial Review
108_
IR Information
109_
Five Year Summary
110_
Board of Directors
CONTENTS

Table of contents

  • Page 1
    ... 004_ Line-up 006_ Chairman's Message 008_ President's Message 010_ Designing a New Growth Engine 022_ Building a Solid Growth Engine 028_ Creating a Diverse Growth Platform 044_ Financial Review 108_ IR Information 109_ Five Year Summary 110_ Board of Directors 1_ Kia Motors 2007Annual Report

  • Page 2
    ... brands. More than 1.4 million vehicles a year are produced in 14 manufacturing and assembly operations in eight countries which are then sold and serviced through a network of distributors and dealers covering 165 countries. Kia today has over 33,000 employees and annual revenues of almost US$17...

  • Page 3
    ... brands. More than 1.4 million vehicles a year are produced in 14 manufacturing and assembly operations in eight countries which are then sold and serviced through a network of distributors and dealers covering 165 countries. Kia today has over 33,000 employees and annual revenues of almost US$17...

  • Page 4
    ...well-balanced vehicle that looks as good in the VIP parking lot as it does cruising through the city. It boasts the magnificent styling, cutting-edge technology and an extravagant interior. This is the ultimate sedan - the standard to which all other sedans aspire. 04_ Kia Motors Annual Report 2007

  • Page 5
    ... Reliable Multi-Player Be it a stroll through a meadow or a commute in the city, let Sedona take you there. The image of Sedona is stylish durability packaged in a classy and versatile MPV with an optimum level of luxury and convenience for your driving pleasure. 05_ Kia Motors Annual Report 2007

  • Page 6
    Chairman's Message 06_ Kia Motors Annual Report 2007

  • Page 7
    ...qualitative growth in all regions of the world. Through sound management activities, we look forward to taking a huge leap forward into the future as we continue to cement our status as one of the world's fastest rising car companies. Mong-Koo Chung Chairman & CEO 07_ Kia Motors Annual Report 2007

  • Page 8
    ... share in their respective segments, and we have maintained the top position in the KS-SQI (Korean Standards - Service Quality Index) for four years in a row. In addition, we began to establish a long-term foundation for profitability improvement by launching the 08_ Kia Motors Annual Report 2007

  • Page 9
    ... while further strengthening the foundation to build a profitable company. I wish all of you - our valued shareholders - and your families happiness and good health and also look forward to your continued interest in Kia Motors. Thank you. Euisun Chung President 09_ Kia Motors Annual Report 2007

  • Page 10
    ...Kia brand a significant boost by helping to create Kia's global design language. Kia's four concept vehicles (ex_cee'd, KND-4, Kue, Kee) revealed in 2007 and two 2008 production models (Borrego/Mohave and SOUL) hint at the future styling directions of Kia's lineup. 010_ Kia Motors 2007Annual Report

  • Page 11
    011_ Kia Motors Annual Report 2007

  • Page 12
    ..."Design." 2004 Opening of new Korea Design Center 2005 Establishment of Global Brand Management Strategy Brand slogan "The Power to Surprise" 2006 Appointment of Peter Schreyer as Chief Design Officer Direction of future design "Simplicity of the straight line" 012_ Kia Motors Annual Report 2007

  • Page 13
    2007 Opening of new European Design Center 2008 Opening of new USA Design Center Continue to launch new vehicles under Kia's design philosophy Change into a creative company with design-focused mindset 013_ Kia Motors Annual Report 2007

  • Page 14
    ... this philosophy. Kia is now facing challenges and opportunities in terms of elevating the brand. To this end, all Kia employees, from designers who make sketches to workers on the production lines, should head in the same direction and focus all their energies towards it. The future of Kia Motors...

  • Page 15
    Kia's next phase of brand evolution will be led by great design C L E A N N E S S P E R P E T U I T Y H O N E S T Y 015_ Kia Motors Annual Report 2007

  • Page 16
    ... It adopts a rear-wheel-drive frame platform and boasts class-leading engine performance. (Mohave is offered with a 3.8-liter V6 as well as Kia's first 4.6-liter V8 DOHC engine in some markets including North America, the latter producing more than 300-horsepower) 016_ Kia Motors Annual Report 2007

  • Page 17
    ... appearance, which is geared toward satisfying customers with active lifestyles. The SOUL's exterior exudes an athletic presence, while several design cues lend a svelte, edgy look indicative of today's urban attitude. SOUL _A Car that Defies Classification 017_ Kia Motors Annual Report 2007

  • Page 18
    Kia's future design direction - concept vehicles revealed in 2007 ...stands out from the cabrio crowd. By adopting a fabric roof, the ex_cee'd deliberately goes against the trend towards cabrios with folding metal roofs. Peter Schreyer paid special attention to designing... Kia Motors Annual Report 2007

  • Page 19
    ...sense of individuality. The exterior styling of KND-4 is designed to appeal to consumers who crave freedom and an active lifestyle, while removing the traditional boundaries between urban and rural vehicles to create an SUV that looks great in any location. KND-4 019_ Kia Motors Annual Report 2007

  • Page 20
    Kia's future design direction - concept vehicles revealed in 2007 Kee _A new ethos for Kia This car stands as a clear indication of Kia's design philosophy, an indication of how Kia... cabin with striking graphic treatment, sculpted flanks and strong swage lines. 020_ Kia Motors Annual Report 2007

  • Page 21
    ... SUV characteristics and capabilities, the Kia Kue focuses more on giving the driver an exhilarating driving experience on the way to the home improvement center than on how much it can haul. _A true reflection of the Kia brand and the passion it embraces 021_ Kia Motors Annual Report 2007

  • Page 22
    ... Engine Together with Hyundai Motor, Kia is the sixth largest auto manufacturer in the world (Automotive News, 25 June 2007). In 2007, Kia's global retail sales were 1.27 million units, which was a 3.6% increase compared to the previous year. Kia is continuously boosting its overseas manufacturing...

  • Page 23
    023_ Kia Motors 2007Annual Report

  • Page 24
    ... with Hyundai Motor Company. Alongside Kia's second manufacturing plant in China completed at the end of 2007 and the start of production at its first European production facility in Slovakia at the end of 2006, the U.S. plant will play a critical role in boosting Kia's sales and brand development...

  • Page 25
    ... of 'design-focused management' that the company is enthusiastically pursuing. from European media outlets about the quality and marketability of the cee'd family of vehicles has elevated the status of Korean cars in the European market. The excellent reviews 025_ Kia Motors Annual Report 2007

  • Page 26
    ... upgraded Cerato in October 2007, with the 5-door hatchback version added in December. Kia is also planning to introduce new models for production at the new plant in 2009 and is currently assessing Chinese market trends and conditions before finalizing the next model. 026_ Kia Motors Annual Report...

  • Page 27
    ...world Kia has shown remarkable sales growth in oilproducing and commodity-rich countries that have benefited from rising oil and raw material prices. In 2007, Kia posted a sales increase of 26% in Central & South America (62,200 units in 2007 and 49,300 units in 2006) and 22% in Africa & Middle East...

  • Page 28
    ... Platform Design and R&D facilities located throughout the world allow Kia to produce vehicles tailored toward different regional tastes. Kia is also actively developing state-of-theart eco-friendly cars for future commercialization. Opened in late 2005, the EcoTechnology Research Institute in Korea...

  • Page 29

  • Page 30
    HIGHER TECHNOLOGY Customer satisfaction with an automobile's performance, convenience, safety, and fuel efficiency are crucial factors for Kia. GLOBAL R&D NETWORK 030_ Kia Motors Annual Report 2007

  • Page 31
    ... California Proving Ground Location: Mojave Desert, California, USA European Design and Technical Center Location:Russelsheim, Germany Kia European Design Center (with Kia Motors Europe) Location: Frankfurt, Germany Japan R&D Center Location:Chiba Tokyo, Japan 031_ Kia Motors Annual Report 2007

  • Page 32
    HIGHER TECHNOLOGY Kia is actively developing state-of-the-art eco-friendly cars for future commercialization. PURSUING GREEN MANAGEMENT 032_ Kia Motors Annual Report 2007

  • Page 33
    ... to market 'eco' versions of cee'd models Kia is striving to create environmentally friendly and fuel efficient models Kia is actively developing state-of-the-art eco-friendly cars for future commercialization and the Rio hybrid electric vehicle is currently undergoing long-term testing by public...

  • Page 34
    ... Eight Kia vehicles (Sedona/Carnival, Rio 4- & 5-door, Spectra 4- & 5-door, Optima/Magentis, Sportage and Sorento) were given The Car Book 2007's "Best Bet"distinction in the USA. Rio and Optima/Magentis were both recipients of the award in 2006. Kia's first car made for and by Europeans, the cee...

  • Page 35
    Kia vehicles offer world-class quality and award-winning customer satisfaction. The cee'd was short-listed for the "2008 European Car of the Year"(COTY) award. 035_ Kia Motors Annual Report 2007

  • Page 36
    ... the new cee'd to provide the highest levels of occupant protection in real-world accident scenarios. Our engineers predicted that cee'd would achieve a Euro NCAP 5-Star rating and this result confirms the major engineering advances made by Kia in recent years. 036_ Kia Motors Annual Report 2007

  • Page 37
    Occupant safety is an absolute priority for Kia and we invest substantially to ensure the highest safety standards throughout our product lineup. 037_ Kia Motors Annual Report 2007

  • Page 38
    ... WINNING CUSTOMERS' cee'd Best 'Value-for-Money' Auto 2007 Innovation Award, Autoweek (Netherlands) / July Sedona / Carnival Best Minivan Motor Week (USA) / February Sorento Best All-wheel Drive Vehicle over 1,800 kg Towcar of the Year 2008 (UK) / September Family Car of the Year Motorforaren...

  • Page 39
    Kia cars offer world-class quality and award-winning customer satisfaction. SATISFACTION AROUND THE GLOBE Rio Executive Subcompact Car of the Year CAGI (Philippines) / November Sportage Best in Class SUV New England Motor Press Association (USA) / March Kia Motors Car Company of the Year Award ...

  • Page 40
    ...new series of on-court performance awards that include four of the NBA's most prestigious year-end honors. Kia Motors America also has partnerships with 16 NBA teams. Kia has upgraded its presenting sponsor status of the X Games Asia, one of the world's signature action sports competitions, to title...

  • Page 41
    ... THROUGH SPORTS MARKETING Kia is the major sponsor of the Australian Tennis Open and an official worldwide sponsor of the Davis Cup. It is an official automotive partner of FIFA - the governing body of the FIFA World Cup - as well as a EUROTOP partner of UEFA. 041_ Kia Motors Annual Report 2007

  • Page 42
    ... Supporting research on mobility for the vulnerable Supporting special shoes and prosthetic devices to persons with special needs Kia Motor's focus: support for youths Support for expedition to Lhotse, Himalaya Support for global university student work camp 042_ Kia Motors Annual Report 2007

  • Page 43
    Kia has established and maintained a diverse social contribution system. MOVES TOGETHER 043_ Kia Motors Annual Report 2007

  • Page 44
    Financial Review

  • Page 45
    2007 will indeed be an important turning point for Kia Motors as we attempt to secure stable growth for the next decades to come. 046_ 058_ 059_ 061_ 062_ 063_ 065_ 066_ 106_ Management's Discussion & Analysis Independent Auditors' Report Non-Consolidated Balance Sheets Non-Consolidated Statements...

  • Page 46
    ... Hyundai Motor. Its brand value has been steadily enhanced. While overall 2007 automobile industry demand in the US decreased by 2.5% from the previous year, Hyundai and Kia Motors sales increased by 2.9%, thanks to our enhanced product quality and brand image. In the Western European market...

  • Page 47
    ... Resources Automobile manufacturers need to maintain a steady inflow of raw and secondary materials, including steel and more than 20,000 parts and components to keep their assembly lines running smoothly. Automotive steel in Korea is supplied by POSCO, the world's biggest steelmaker, and Hyundai...

  • Page 48
    ... strategies of imported cars and steady growth in the Korean market. Sales in the passenger car market has increased by 8.5% (58,407 units ) showing the highest growth rate, while 6.7%(17,657 units ) in RV market and 3.2%(7,289 units ) in the commercial vehicle market. 048_ Kia Motors Annual Report...

  • Page 49
    ... differences with the company's data Kia Motors' sales edged up by 2.6%(6,625 units ) below 7.1%, the growth rate of domestic auto market. Passenger car sales rose by 6.3%(7,303 units ) thanks to brisk sales of Morning(Picanto), Pride(Rio), Opirus(Amanti) and commercial vehicle sales inched up by...

  • Page 50
    ... lease program and install payment plan and promoting flexible car sales by regions and vehicle types considering market condition. Kia also focused on fortifying dealer network qualitatively by developing dealers in big cities to establish sales foundation for successful operation of US plant...

  • Page 51
    ...year. Retail sales in other markets excluding North America and Europe increased by 13.1% to 212,024 units from 187,524 units of last year. Exports per Region (Units) Region USA Canada Western Europe Eastern Europe/CIS Latin America Africa & Middle East Asia-Pacific Total * Exports from Korea plant...

  • Page 52
    ..., we intend to publicize high quality of products and brand image to increase market share in the commercial auto market that is expected to show a leap forward this year. Kia will take a further step to serve customers through various sales promotion events linked to cultural performances including...

  • Page 53
    ... Starting from 5Dr hatchback, the cee'd model line up was added with wagon in the second half and 3Dr hatchback at the end of 2007. cee'd was designed in Europe and then has got positive responses for its design specifically to suit European tastes. In the "2008 European Car of the Year"(COTY) award...

  • Page 54
    Management's Discussion & Analysis Production In 2007, global production amounted to 1,369 thousand units, a 7.8% increase from the previous year. Korean plant produced 1,119 thousand units (including OEM), a decrease of 2.8% over the previous year. High oil prices and environmental regulation led ...

  • Page 55
    ...." Credit Ratings (As of Mar, 2008) Classification Domestic Agency Korea Ratings Korea Investors Service NICE Investors Service Overseas Moody's Standard & Poor's Corporate Bond / Long-Term AAAAAABaa3 BBBA1 A1 Commercial Paper / Short-Term Profitability Revenue on the basis of head office recorded...

  • Page 56
    ... of total foreign currency debt. Korean Won against Net equity gains increased to 47 billion from the previous year. That was possible because Kia Motors Slovakia was transformed itself from deficit in 2006 to surplus in 2007 thanks to start of mass production. 056_ Kia Motors Annual Report 2007

  • Page 57
    ... of US plant construction. Shareholder's Equity Shareholder's equity fell to 5,075 billion, down by 173 billion at the end of 2007. The main reason was an appropriation of retained earings for capital injection to the overseas sales subsidiaries (Kia Motors Europe, Kia Motors Deutschland) which...

  • Page 58
    ...Report Based on a report originally issued in Korean The Board of Directors and Stockholders Kia Motors Corporation: We have audited the accompanying non-consolidated balance sheets of Kia Motors Corporation (the "Company") as of December 31, 2007 and 2006, the related non-consolidated statements...

  • Page 59
    Non-Consolidated Balance Sheets As at December 31, 2007 and 2006 In millions of Won, except share data Note Assets 2007 2006 Cash and cash equivalents Short - term deposits Accounts and notes receivable - trade, less discount on present value of 2007 and 2007 and 2,329 in 2006 and allowance ...

  • Page 60
    ... Total equity and liabilities See accompanying notes to non-consolidated financial statements. 23 24 23,26,30 6,7,22,31 25 1,848,652 1,704,583 (2,427) (64,729) 1,589,263 5,075,342 12,853,763 1,848,652 1,703,844 (2,640) (134,961) 1,832,861 5,247,756 12,106,605 060_ Kia Motors Annual Report 2007

  • Page 61
    ... Income before income taxes 24,968 73,213 Income taxes Net income 28 11,405 13,563 33,876 39,337 Earnings per share Basic earnings per share Diluted earnings per share See accompanying notes to non-consolidated financial statements. 29 29 39 39 114 113 061_ Kia Motors Annual Report 2007

  • Page 62
    ...accumulated deficit) Reserve (transfer) for technological development (243,537) 39,300 Unappropriated (undisposed) retained earnings (accumulated deficit) to be carried over to subsequent year See accompanying notes to non-consolidated financial statements - 61 062_ Kia Motors Annual Report 2007

  • Page 63
    ...,538) 2,175 (38,904) (43,129) 2,097 (274,156) 98,623 198,030 (2,244) (267,219) (472,676) 9,640 Net cash provided by (used in) operating activities See accompanying notes to non-consolidated financial statements. 28,240 (231,550) 063_ Kia Motors Annual Report 2007

  • Page 64
    ...Net increase (decrease) in cash and cash equivalents 165,303 (385,116) Cash and cash equivalents at beginning of year 521,608 906,724 Cash and cash equivalents at end of year See accompanying notes to non-consolidated financial statements. 686,911 521,608 064_ Kia Motors Annual Report 2007

  • Page 65
    ...- Total Balance at January 1, 2007 Net income Treasury stock granted under stock option plan Exercise of stock options Change in fair value of available-for-sale securities, net of tax Effective portion of changes in fair value of cash flow hedges Unrealized holding gain on equity method accounted...

  • Page 66
    ...The Company owns and operates three principal automobile production sites: the Sohari factory, the Hwasung factory and the Kwangju factory. The shares of the Company have been listed on the Korea Exchange since 1973. As of December 31, 2007, the Company's largest shareholder is Hyundai Motor Company...

  • Page 67
    ... the market interest rate. The market interest rate is determined by the issuers' credit rate announced by the accredited credit rating agencies in Korea. Money market funds are recorded at the fair value determined by the investment management companies. 067_ Kia Motors Annual Report 2007

  • Page 68
    ... incurred. Depreciation is computed by the straight-line method over the estimated useful lives of the respective assets as follows: Useful lives (years) Buildings and structures Machinery and equipment Dies, molds and tools Vehicles Other equipment 20-40 15 5 5 5 068_ Kia Motors Annual Report 2007

  • Page 69
    .... Capitalized development cost is amortized on a straightline basis over the expected periods to be benefited, generally three years. Expenditures subject to capitalization include the cost of materials, direct labor and an appropriate proportion of overheads. 069_ Kia Motors Annual Report 2007

  • Page 70
    ... rate risk exposures. Derivatives are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at their fair value. Attributable transaction costs are recognized in profit or loss when incurred. 070_ Kia Motors Annual Report 2007

  • Page 71
    ... statement of income. (r) Stock Options The Company has granted shares or share options to its employees and other parties. For equity-settled share-based payment transactions, the Company measures the goods or services received, and the corresponding increase in equity as a capital adjustment...

  • Page 72
    ... Financial Statements December 31, 2007 and 2006 Provision for card points The Company participates in the card-points program managed by Hyundai Card Co., Ltd., in which the card holders can redeem points to receive discounts when purchasing the Company's motor vehicles. A provision is estimated...

  • Page 73
    ... the years ended December 31, 2007 and 2006, the Company recognized loss of million, respectively. Outstanding trade accounts and notes receivable transferred to and discounted with banks, and excluded from the accompanying non-consolidated balance sheets, on which the Company remains contingently...

  • Page 74
    ...3,000 700 600 241 200 4,168 9,269 720 18,898 These non-marketable securities are recorded at cost as fair value is not available except for Pilot Asset Securitization Specialty Co. - beneficiary certificate, which is recorded at the value assessed by Woori bank. 074_ Kia Motors Annual Report 2007

  • Page 75
    ... as held-to-maturity at December 31, 2007 were as follows: Book value 2007 4,912 4,943 9,855 2006 4,905 4,905 In millions of Won Book value Held-to-maturity Due before one year Due after one year through to five years Due after five years 4,955 4,085 815 9,855 075_ Kia Motors Annual Report 2007

  • Page 76
    ... Engine (Shandong) Company, Hyundai Commercial Co., Ltd., and The Korea Economic Daily Co., Ltd., which the Company generally presumes that the investee is under significant influence, and thus accounts for these investees under the equity method of accounting. 076_ Kia Motors Annual Report 2007

  • Page 77
    ... own more than 20% of EUKOR Car Carriers, Inc., Hyundai Card Co., Ltd and Hyundai Hysco Co., Ltd. which the Company generally presumed that the investee is under significant influence, and thus accounts for these investees under the equity method of accounting. 077_ Kia Motors Annual Report 2007

  • Page 78
    ... Inc. Hyundai Hysco Co., Ltd. EUKOR Car Carriers, Inc. AMCO Corp. Beijing Hyundai Mobis Automotive Parts Co., Ltd. China Millennium Corp. Hyundai-Motor Group Ltd. Donghee Auto Co., Ltd. Chasan Co., Ltd. Hyundai Commercial Co., Ltd. The Korea Economic Daily Co., Ltd. Balance at January 1, 2007 1,500...

  • Page 79
    ... Co., Ltd. Hyundai Mobis Co., Ltd. Hyundai Steel Company. Dymos Inc. Kia Motors Slovakia s.r.o. Hyundai Autonet Co., Ltd. TRW Steering Co., Ltd. 2007 Inventory 1,465 2,190 133 333 2,235 57 192 1,699 11 8,315 2006 Inventory 1,891 148 378 29 236 25 2 2,709 079_ Kia Motors Annual Report 2007

  • Page 80
    ... (d) Changes in balance of investments in affiliated companies accounted for using the equity method as of December 31, 2007 are as follows: In millions of Won Company Kia Motors America Inc.(*1) Kia Canada, Inc.(*1) Kia Motors Deutschland GmbH (*1, *4) Kia Motors Europe GmbH(*1, *4) Kia Motors...

  • Page 81
    ... by 12,789 million for the year ended December 31, 2007. (*4) The Company made additional investment in Kia Motors Deutschland GmbH and Kia Motors Europe GmbH during the year. However, as noted above, the equity method was discontinued as the Company's share of losses exceeded the carrying amount...

  • Page 82
    ...Changes in balance of investments in affiliated companies accounted for using the equity method as of December 31, 2006 are as follows: In millions of Won Company Hyundai Mobis Co., Ltd. Hyundai Hysco Co., Ltd. Hyundai Steel Company Hyundai Autonet Co., Ltd. Kia Motors America, Inc.(*1) Kia Canada...

  • Page 83
    ...equity method of accounting for investments on the non-consolidated (e) Summarized financial information of the investees as of and for the year ended December 31, 2007 is as follows: In millions of Won Company Kia Motors America, Inc. Kia Canada, Inc. Kia Motors Deutschland GmbH Kia Motors Europe...

  • Page 84
    ... or collectively, own more than 30% of total outstanding common stock and are the largest shareholder. (*2) These entities are wholly-owned subsidiaries of Kia Motors Europe GmbH. (*3) This entity is a wholly-owned subsidiary of Kia Motors Australia Pty Ltd. 084_ Kia Motors Annual Report 2007

  • Page 85
    ...year ended December 31, 2007 are summarized as follows: In millions of Won Revenue Name Hyundai Motor Company Kia Motors America, Inc. Kia Canada, Inc. Kia Motors Europe GmbH Kia Motors Australia Pty Ltd. Kia Motors Slovakia S.r.o. Dongfeng Yueda Kia Motors Co., Ltd. Hyundai Mobis Co., Ltd. Hyundai...

  • Page 86
    ...Financial Statements December 31, 2007 and 2006 Significant transactions which occurred in the normal course of business with related companies for the year ended December 31, 2006 are summarized as follows: In millions of Won Revenue Name Hyundai Motor Company Kia Motors America, Inc. Kia Canada...

  • Page 87
    (c) Account balances with related companies as of December 31, 2007 are as follows: In millions of Won Receivables Name Hyundai Motor Company Kia Motors America, Inc. Kia Canada, Inc. Kia Motors Europe GmbH Kia Motors Australia Pty Ltd. Kia Motors Slovakia s.r.o. Dongfeng Yueda Kia Motors Co., Ltd....

  • Page 88
    ... Financial Statements December 31, 2007 and 2006 Account balances with related companies as of December 31, 2006 are as follows: In millions of Won Receivables Name Hyundai Motor Company Kia Motors America, Inc. Kia Canada, Inc. Kia Motors Europe GmbH Kia Motors Polska Sp.z.o.o Kia Motors...

  • Page 89
    ... Europe GmbH Dongfeng Yueda Kia Motors Co., Ltd. Type of borrowings Plant loan and general loan Payment of customs duties Guarantee for borrowings related to construction of new office building Plant loan EUR USD RMB (f) Assets pledged as collateral for related companies as of December 31, 2007...

  • Page 90
    ...Consolidated Financial Statements December 31, 2007 and 2006 (a) Changes in property, plant and equipment for the year ended December 31, 2007 are as follows: In millions of Won 2007 Book value as of January 1, 2007 Land Buildings Structures Machinery and equipment Capital lease asset Dies, molds...

  • Page 91
    ...less discount on present value of 467 in 2007 and 861 in 2006 24,989 in 2006 3,358 22,562 176,776 202,728 32 2006 32 5,785 29,495 176,414 211,726 Long-term accounts receivable - other, less allowance for doubtful accounts of Guarantee deposits 23,668 in 2007 and 091_ Kia Motors Annual Report 2007

  • Page 92
    ... the five year (14) Short - Term Borrowings Short-term borrowings as of December 31, 2007 and 2006 amounted to commercial paper with annual interest rate ranging from 1.12% to 7.08%. 979,090 million and 659,979 million, respectively, and consist of bank loans and 092_ Kia Motors Annual Report 2007

  • Page 93
    ... on the debt principal starting from when the reorganization process began on a quarterly basis at the earning rate of the three-year unwarranted corporate bond. Furthermore, the Company provided blank notes and checks as collateral for these reorganized debts. 093_ Kia Motors Annual Report 2007

  • Page 94
    ... a year Due after one year through to five years Total minimum lease payments Less unearned interest Less current portion Present value of non-current portion of net minimum capital lease payments Capital leases 90,693 175,952 266,645 (24,263) (78,416) 163,966 094_ Kia Motors Annual Report 2007

  • Page 95
    ...484 27 1 7 310 139,440 56,719 93,260 267,128 1,257,441 582 1,933,959 Accounts and notes payable - other Accrued expenses Short-term borrowings JPY 3,040,839 USD 248,820 EUR 21,000 USD 154,682 EUR 1,025,000 JPY 37,249 Long-term debt (including current portion) 095_ Kia Motors Annual Report 2007

  • Page 96
    ... at beginning of year Provision for retirement and severance benefits Transfer-in from associate companies Payments Estimated retirement and severance benefits at end of year Transfer to National Pension Fund Deposit for severance benefit insurance Net balance at December 31, 2007 1,407,626 285...

  • Page 97
    ... interest rate and currency swap contracts as of December 31, 2007 was as other comprehensive gain and the translation gain of year ended December 31, 2007. 3,460 million related to the foreign currency debt was recorded in earnings as loss on valuation for the 097_ Kia Motors Annual Report 2007

  • Page 98
    ...stock) lost voting rights under paragraph 2 of Article 369 of the Korean Commercial Code. 136,701 million for such retirement purposes based on the decision of the Board of Directors on March 19, 2004. There are 347,230,455 shares of common stock remaining. Due to 098_ Kia Motors Annual Report 2007

  • Page 99
    ... shareholders' meeting. (26) Capital Adjustments Details of capital adjustments as of December 31, 2007 and 2006 are as follows: In millions of Won 2007 Treasury stock (note 30) Stock options (note 30) Number of shares (2,877) 450 (2,427) 2006 (3,603) 963 (2,640) 099_ Kia Motors Annual Report...

  • Page 100
    ... employee benefits Sales promotion Travel Communications Utilities Taxes and dues Rent Depreciation Amortization of intangible assets Repairs and maintenance Advertising Freight Supplies and stationery Commissions and fees Education and training Ordinary research and development Overseas marketing...

  • Page 101
    ... Bad debts written off Dividend income Loss on impairment of investments Accrued expenses Provision for warranties Loss on impairment of property, plant and equipment Net operating loss carryforward Carryforwards of unused tax credits Tax reserve applicable to equity Other Total deferred tax assets...

  • Page 102
    ...differences at December 31, 2007 Assets Allowance for doubtful accounts Bad debts written off Dividend income Loss on impairment of investments Provision for warranties Carryforwards of unused tax credits Net operating loss carryforward Tax reserve applicable to equity Others Liabilities Accumulated...

  • Page 103
    ... at the average market price ( 12,185 and 2006, respectively) of ordinary shares during the period is considered as an issue of ordinary shares for no consideration. 18,335 for the year ended 2007 and (30) Stock Options The Company granted stock options to its executive officers and directors in...

  • Page 104
    ... Financial Statements December 31, 2007 and 2006 If all stock options, which require at least two-years of continuous service, are exercised, new shares or treasury stock will be issued in accordance with the decision of the Board of Directors. The Company calculates the total compensation...

  • Page 105
    ... sales North America Europe Asia The Middle East / Africa Middle and South America China Other 4,879,604 2,860,028 598,200 1,197,637 778,745 245,752 536,501 15,948,542 4,852,075 2006 4,867,130 5,144,229 4,295,839 745,670 928,415 594,146 338,905 525,576 17,439,910 105_ Kia Motors Annual Report 2007

  • Page 106
    ... To the President of Kia Motors Corporation: We have reviewed the accompanying Report on the Operations of Internal Accounting Control System ("IACS") of Kia Motors Corporation (the "Company") as of December 31, 2007. The Company's management is responsible for designing and maintaining effective...

  • Page 107
    ... the Internal Accounting Control Officer ("IACO") of Kia Motors Corporation (the "Company"), have assessed the status of the design and operations of the Company's Internal Accounting Control System ("IACS") for the year ended December 31, 2007. The Company's management including IACO is responsible...

  • Page 108
    ... Non-Deal Road Show in US/Europe/Asia Annual General Shareholder's Meeting and Annual Report Release (Korean) Investors Conference in Seoul by Citigroup Investors Conference in New York by Morgan Stanley European Operations(Plant/Sales Subsidiary/R&D Center) Visit (for Credit/Equity Analysts) Annual...

  • Page 109
    Five Year Summary ( Units, Korean won in millions) 2007 Sales Volume Domestic Export Revenue Domestic Export Operating Income Income before Income Taxes Net Income 1,114,451 271,809 842,642 15,948,542 4,852,075 11,096,467 -55,404 24,968 13,563 2006 1,140,734 ...

  • Page 110
    ...Kia Motors Corp. Hwasung Plant Manager 8. Hyun-Kook Hong 4. Euisun Chung Currently, President, Kia Motors Corp. Head of Kia Motors Planning Office Deputy Head of Hyundai-Kia Planning Division Currently, Vice Chairman, Gaduk Tax Consulting Associates An Auditor of NTS (National Tax Service) Director...

  • Page 111
    ...Sales Network Korea Overseas 18 Regional HQs Regional HQ Sales Subsidiaries • Central & South America, Eastern Europe /CIS, Africa/Middle East, Asia, Pacific • 14 Sales Subsidiaries • 3,845 dealers 340 Sales Outlets 424 Dealers Dealers *Note : 14 Sales Subsidiaries (USA, Canada, Europe...

  • Page 112
    231, Yangjae-Dong, Seocho-Gu, Seoul, Korea, 137-938 TEL : 82-2-3464-1114 www.kia.com www.kmcir.com Copyright 2007 by Kia Motors Corp. Produced by IR-Plus 1_ Kia Motors 2007Annual Report