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ANNUAL REPORT
2012
_

Table of contents

  • Page 1
    ANNUAL REPORT 2012 _

  • Page 2
    ... Design Management 24 Branding 28 Marketing 30 2012 New Models 32 Our Future Corporate Social Responsibility 36 Researcu & Development 38 Global R&D Network 42 Eco-friendly Models & Concept Cars 44 Financial Review 46 Product Line-up 106 Company History 108 Global Network 110 Board of Directors...

  • Page 3
    AnnuAl RePORt 2012 Despite challenging market conditions, Kia Motors delivered strong operating performance in 2012, driving to A Different Beat for the future of mobility. We have achieved Vibrant Growth further differentiated ourselves from our competitors through , Distinctive Creativity and ...

  • Page 4
    KIA MOtORS FInAnCIAl HIgHlIgHtS 2012 Consolidated Statement of Financial Position* (KRW in millions) 2011 2010 2009 2008 Total Assets Casu Items (Liquidity) Current Assets Total Liabilities Suort-term Debt Current Liabilities Long-term Debt Total Debt Net Debt Total Stockholders' Equity Total...

  • Page 5
    AnnuAl RePORt 2012 2012 At A glAnCe 2012 Production (Unit: Tuousand units) 2011 2010 2009 2008 Total Korea Overseas Global Retail Sales (Unit: Tuousand units) 2,724 1,586 1,138 2,542 1,584 959 2,139 1,417 722 1,531 1,137 394 1,395 1,055 340 Total Korea Overseas 2,709 481 2,228 2,478 ...

  • Page 6
    KIA MOtORS CHAIRMAn'S MeSSAge We will achieve sustainable growth with unyielding commitment and a spirit of challenge. 06

  • Page 7
    AnnuAl RePORt 2012 Despite tue cuallenging business environment in 2012, Kia Motors acuieved growtu and development at uome and abroad. Witu global sales of 2.72 million units, up about 7% from tue previous year, we entered tue ranks of tue world's top 100 global brands and cemented our presence as...

  • Page 8
    KIA MOtORS VICe CHAIRMAn'S MeSSAge We will make a leap forward as a true global automaker through relentless innovation. 08

  • Page 9
    ...at our sales and production sites. We will strengtuen our global competitiveness by developing new customer-centric sales and service programs, conducting consistent marketing activities, and initiating quality innovation at all production sites. We also plan to secure a firm basis for management to...

  • Page 10
    ... by providing tue best quality and impeccable service witu all values centered on our customers. Collaboration We create synergy turougu a sense of "togetuerness" tuat is fostered by mutual communication and cooperation wituin tue company and witu our business partners. Globality We respect tue...

  • Page 11
    ... social responsibility management • Develop global uuman resources In 2012, Kia Motors establisued Kia Vision 2016 to meet its mid- to long-term business goals and secure future growtu engines. Tue main goal is to enuance global competitiveness turougu qualitative growtu. In line witu tuis, Kia...

  • Page 12
    ... growth towards globality Kia Motors uas been increasingly recognized at uome and abroad as a renowned global player selling over 2.7 million veuicles per year in 168 countries across tue globe. We uave confirmed our presence as one of tue most beloved automakers turouguout tue world by closely...

  • Page 13
    AnnuAl RePORt 2012

  • Page 14
    KIA MOtORS our PerformAnce DOMeStIC BuSIneSS PeRFORMAnCe In 2012, we focused on expanding sales with the completion of the K-series and enhancing market competitiveness despite continuing challenges facing the domestic market. We will overcome the current difficulties and will achieve new growth by...

  • Page 15
    ...-oriented management. To tuis end, we plan to intensively focus on fostering Kia Motors as a premium brand turougu distinctive marketing, boosting our corporate image turougu innovation in customer services, enuancing staff confidence at business sites, and strengtuening our competitiveness. Tuis...

  • Page 16
    ...player. This success can be attributed to our product quality, design management, and global management with a focus on localization strategies. 2008 2009 2010 2011 2012 Overseas Retail Sales (Unit: Tuousand units) 2,228 1,059 1,239 1,605 1,986 2,228 Driving Our Global Growth In 2012, Kia Motors...

  • Page 17
    AnnuAl RePORt 2012 Working Globally, Acting Locally Tue biggest driver of Kia Motors' sustained growtu in tue global market is our successful localization strategy. We develop strategic models befitting tue needs and consumption trends for eacu region of tue world. As of tue end of 2012, we sold ...

  • Page 18
    ... plant. Kia Motors uas equipped itself witu tue systems required to make prompt responses to market needs turougu tue localization of all areas of tue business. From design, R&D, production, sales and services, we uave establisued a robust foundation to grow as a world-class automaker in tue world...

  • Page 19
    ... our launcu of competitive new products. Profitability will continue to be strengtuened turougu fundamentals-oriented management by selling our products at full price. Furtuermore, we will seek continued growtu by setting specific sales strategies for eacu market including tue U.S., Europe and Cuina...

  • Page 20
    ... glOBAl AWARDS lISt â- red dot Design Award red dot, germany, March 2012 â- Sedan of the Year Autobytel, uSA, January 2012 â- IDEA Design Award Industrial Design Society of America, uSA, July 2012 â- Drivers' Choice Awards Motor Week, uSA, February 2012 â- People's Choice Winner...

  • Page 21
    ... of Motoring Writers, uK, October 2012 Drive Magazine, Australia, november 2012 â- Transportation Design Award iF Design Awards, germany, December 2012 â- red dot Design Award red dot, germany, March 2012 â- Five Star ANCAP Safety Rating â- Best Car of the Year Automail, Russia, March 2012...

  • Page 22
    ... that identifies who we really are. Backed by our unique and advanced design management, Kia Motors is creating new and pleasant experiences for the world's consumers. And as a result, we proved our 'power to surprise' by being selected as one of top 100 global brands in 2012 by Interbrand.

  • Page 23
    AnnuAl RePORt 2012

  • Page 24
    KIA MOtORS our strengths DeSIgn MAnAgeMent Design is our competitive edge, and represents a unique aspect of Kia Motors' culture. Ranging from product design, production and sales, through to communication with customers, we think and act with a design-oriented mindset in order to better promote ...

  • Page 25
    ...Kia Kia Motors' models are increasingly recognized for tueir global design competitiveness after a winning spree of prestigious design awards at uome and abroad. In 2009, tue Soul was named Honorable Mention in tue Product Design category at tue red dot Design Award. Tuis was tue first time a Korean...

  • Page 26
    KIA MOtORS our strengths Aside from global awards for our product quality and design, we are also being recognized for our innovative marketing activities. Tue mobile application for tue Optima (K5) was selected as tue Winner in tue Mobile Application category in Communication Design at tue 2012 iF...

  • Page 27
    ...) July 2011 Kia Motors - 2011 Automotive Brand Contest by german Design Council Best of Best Award in Brand Design Optima (K5) - good Design Award Winner - Prime Ministerial Award - good Design Award awarded by online consumers Cerato (Forte) - Pin up Design Award gold Award (transportation) Rio...

  • Page 28
    KIA MOtORS our strengths BRAnDIng Kia Motors drives sustainable growth through steady innovation in its brand value, while creating emotional ties with customers. With our new Brand Identity System (BIS) established in 2012, 'A Different Beat' will be offered to more customers across the globe. ...

  • Page 29
    AnnuAl RePORt 2012 Setting a New Direction For Kia Motors, elevating our brand is a long-term commitment toward ensuring sustainable growtu. In line witu tuis, we uave remained true to wuo we are: a young and dynamic brand. We redefined our brand as one tuat is vibrant, distinctive and reliable, ...

  • Page 30
    ...event. As a result, Kia Motors can expect to furtuer receive promotional benefits from tuis sponsorsuip. In terms of brand exposure in 2012, Kia enjoyed 6,463 uours of television exposure and media value wortu USD 355 million, up 54% and 105%, respectively, from 2009. During tue 2013 Australian Open...

  • Page 31
    ... of tue 'Smart App Awards.' Tue Rio (Pride) and Picanto (Morning) mobile applications took uome tue Best of tue Best prize at tue red dot Design Award and Winner distinction at tue iF Design Award, respectively. Moreover, we were tue first Korean company to receive tue mobile marketing gold prize...

  • Page 32
    ...flagsuip model. Tue result of Kia Motors' proven design competency and cutting-edge tecunology, tue Kia Quoris will compete witu otuer prestigious global brands in tue growing luxury car segment. Tue Kia Quoris was launcued after four years and five montus of intensive R&D witu a development cost of...

  • Page 33
    AnnuAl RePORt 2012 New Cerato/Forte (K3) A Gift of True Innovation Tue new Cerato/Forte (K3) is a compact car imbued witu tue DNA of tue K-series. Tue model implements turee distinctive values: style tuat can effectively express a young spirit; strong performance and fuel efficiency for tue joy of...

  • Page 34
    KIA MOtORS our future

  • Page 35
    AnnuAl RePORt 2012 for a Better tomorrow At Kia Motors, the concept of sustainability is deeply ingrained in everything we do. We are moving toward our goal to make sustainability a firmly integrated aspect of our business by promoting a strong sense of responsibility toward sustainable operations....

  • Page 36
    ...our future CORPORAte SOCIAl ReSPOnSIBIlIty The goal of Kia Motors' social contribution activities is to realize the values of mobility and challenging spirit. We will make a happier tomorrow by enabling universal mobility, and through a challenging spirit that offers opportunities for a better life...

  • Page 37
    ... Support Programs Kia is involved in diverse social contribution projects to assist tue communities wuere Kia's major business sites are located at uome and abroad. In tue U.S., we selected training support programs based on feedback from local staff as well as a survey of 219 local car dealers...

  • Page 38
    ...future ReSeARCH & DeVelOPMent Kia Motors not only doubles the joy of driving but has also opened a new chapter in the era of eco-friendly cars that protect our beautiful environment. EcoDynamics is the path toward sustainable mobility, as well as Kia's promise to achieve this goal. R&D Investment...

  • Page 39
    AnnuAl RePORt 2012 Investing in Sustainable Mobility Determined to maintain its position as a major transport mobility supplier to customers around tue world in tue years auead, Kia invests 6% of its annual revenue in researcu and development. Tue company operates five international R&D centers ...

  • Page 40
    ...12 2013(e) Picanto (Moring) Optima (K5) Hybrid Ray eV Optima (K5) 2010. 06 2010. 07 2014 Mass-production of compact EVs 2012 Small-scale production of fuel cell electric vehicles 2011 Trial distribution and launch of light CuV electric cars 2010 Launch of Optima Hybrid in North America 2009...

  • Page 41
    ... over 20%. To tuis end, we uave implemented a joint project witu a steel subsidiary wituin tue Hyundai Motor Group to make our car bodies liguter. Kia Motors also seeks to acuieve downsizing of its engines, tuat is, to reduce or maintain engine size wuile raising fuel efficiency, reducing emissions...

  • Page 42
    KIA MOtORS our future glOBAl R&D netWORK 01 EuROPE TECHNICAL CENTER/ HYuNDAI DESIGN CENTER EuROPE Working with our local subsidiary that oversees product planning, sales and marketing in europe, the europe technical Center is strengthening our regional sales capabilities. - location: Russelsheim, ...

  • Page 43
    ..., uS 08 AMERICA DESIGN & TECHNICAL CENTER the America Design & technical Center undertakes research into concept cars and development of mass-production cars suitable for the uS market. - location: Irvine, California, uS - Facilities: Design Studio 09 KIA DESIGN CENTER AMERICA Boasting world-class...

  • Page 44
    KIA MOtORS our future eCO-FRIenDly MODelS & COnCePt CARS Eco-friendly Models 16.8 Optima Hybrid / K5 Hybrid Tue Optima (K5) Hybrid is Kia's first gasoline uybrid mid-size sedan. Its fuel efficiency is as outstanding as a sub-compact car, and it also guarantees a sopuisticated and distinctive ...

  • Page 45
    ... not only distinctive design but also excellent performance. A 2.0-litre turbocuarged in-line-four engine puts 250 uorsepower to tue road, a 66% increase over tuat of tue production Soul. Power is routed to all four wueels via an electronically controlled four-wueel-drive system. Tue suort-turow...

  • Page 46
    KIA MOtORS Financial Review 47 Independent Auditors' Report 48 Consolidated Statements of Financial Position 50 Consolidated Statements of Income 51 Consolidated Statements of Comprehensive Income 52 Consolidated Statements of Changes in equity 54 Consolidated Statements of Cash Flows 55 notes to ...

  • Page 47
    ... Based on a report originally issued in Korean The Board of Directors and Stockholders Kia Motors Corporation: We have audited the accompanying consolidated statements of financial position of Kia Motors Corporation and its subsidiaries (the "Company") as of December 31, 2012 and 2011, and the...

  • Page 48
    ... taxes Inventories Other current assets Total current assets Long-term financial instruments Long-term available-for-sale financial assets Long-term accounts and notes receivable - trade Investments in associates Property, plant and equipment, net Intangible assets, net Investment property Guarantee...

  • Page 49
    AnnuAl RePORt 2012 (In millions of won) Note 2012 2011 LIABILITIES Accounts and notes payable - trade Short-term borrowings Accounts and notes payable - other Advances received Accrued expenses Income taxes payable Current portion of long-term debt and bonds Provisions - current Finance lease ...

  • Page 50
    KIA MOtORS Consolidated Statements of Income KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 (In millions of won, except earnings per share information) Note 2012 2011 Sales Cost of sales GROSS PROFIT Selling expenses General and administrative expenses ...

  • Page 51
    ... Statements of Comprehensive Income KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 (In millions of won) 2012 2011 Profit for the year Other comprehensive income (net of tax): Change in fair unrealized value of available-for-sale financial assets...

  • Page 52
    ... at January 1, 2011 Comprehensive income (net of tax): Profit for the year Change in fair value of available-for-sale financial assets Effective portion of changes in fair value of cash flow hedges Effective portion of changes resulting from the changes in currency exchange rate of non-derivative...

  • Page 53
    ... of Parent Company Accumulated other comprehensive income (loss) Noncontrolling interests Common stock Capital surplus Retained earnings Other Total Balance at January 1, 2012 Comprehensive income (net of tax): Profit for the year Change in fair value of available-for-sale financial assets...

  • Page 54
    ... operating activities Cash flows from investing activities Proceeds from sale of investments in associates Proceeds from sale of long-term available-for-sale financial assets Proceeds from sale of property, plant and equipment Proceeds from sale of intangible assets Purchase of short-term financial...

  • Page 55
    AnnuAl RePORt 2012 Notes to Consolidated Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 1. General Description of Parent Company and Subsidiaries (a) Organization and description of the Company Kia Motors Corporation (the "Parent Company...

  • Page 56
    ... intra-group transaction) as of and for the years ended December 31, 2012 and 2011 are summarized as follows: (i) Financial information as of and for the year ended December 31, 2012 (In millions of won) Company Total assets Total liabilities Sales Net income KMA KMMG KMS KMR â,© 2,847 ,423...

  • Page 57
    ... the annual period ended December 31, 2012. The Company's operating profit is calculated as revenue less: (1) cost of goods sold, and (2) selling, general and administrative expenses, and is presented separately in the consolidated statement of income. (ii) Impact of change in accounting policy The...

  • Page 58
    KIA MOtORS Notes to Consolidated Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 3. Significant Accounting Policies The significant accounting policies applied by the Company in preparation of its consolidated financial statements are ...

  • Page 59
    ... them to their existing location and condition. When inventories are sold, the carrying amount of those inventories is recognized as cost of goods sold in same period as the related revenue. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated...

  • Page 60
    ... Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 (f) Non-derivative financial assets The Company recognizes and measures non-derivative financial assets by the following four categories: financial assets at fair value through profit...

  • Page 61
    ..., losses expected as a result of future events, regardless of likelihood, are not recognized. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment. If financial assets have objective evidence...

  • Page 62
    ... Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 FINANCIAL ASSETS MEASURED AT AMORTIZED COST An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present...

  • Page 63
    AnnuAl RePORt 2012 Depreciation methods, useful lives and residual values are reviewed at the end of each reporting date and adjusted, if appropriate. The change is accounted for as a change in an accounting estimate. (k) Borrowing costs The Company capitalizes borrowing costs directly ...

  • Page 64
    ... MOtORS Notes to Consolidated Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 (n) Impairment of non-financial assets The carrying amounts of the Company's non-financial assets, other than assets arising from employee benefits, inventories...

  • Page 65
    ... service in the current and prior periods, which is discounted to its present value, less fair value of plan assets is deducted. The calculation is performed annually by an independent actuary using the projected unit credit method. The discount rate is the yield at the reporting date on corporate...

  • Page 66
    KIA MOtORS Notes to Consolidated Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 (s) Foreign currency Transactions in foreign currencies are translated to the respective functional currencies of the Company entities at exchange rates at ...

  • Page 67
    ... combination, or items recognized directly in equity or in other comprehensive income. CURRENT TAX Current tax is the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the end of the reporting period and any adjustment...

  • Page 68
    KIA MOtORS Notes to Consolidated Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 (y) Operating segments An operating segment is a component of the Company that: 1) engages in business activities from which it may earn revenues and incur ...

  • Page 69
    ... of sales by region based on the location of customers and non-current assets as of and for the year ended December 31, 2012: (In millions of won) Domestic North America Europe Other region Consolidation adjustment Consolidation amount Net sales Property, plant and equipment, intangible asset...

  • Page 70
    ... Assets (a) Long-term available-for-sales financial assets as of December 31, 2012 and 2011 are summarized as follows: (In millions of won) Company Percentage of ownership Acquisition Cost 2012 2011 Marketable securities Hyundai WIA Corporation Hyundai Hysco Co., Ltd. HMC Investment Securities...

  • Page 71
    AnnuAl RePORt 2012 (b) Changes in fair value of available-for-sale financial assets for the years ended December 31, 2012 and 2011 are summarized as follows: (In millions of won) 2012 2011 Balance at January 1 Changes in unrealized gain Realized in profit or loss upon disposal Balance at ...

  • Page 72
    ... Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 (In millions of won) 2012 Company Percentage of ownership Acquisition cost Carrying amount Acquisition cost 2011 Carrying amount Yanji Kia Motors A/S and Repair(*2) Hyundai Powertech...

  • Page 73
    AnnuAl RePORt 2012 (In millions of won) Company Beginning balance Acquisition Equity profit or loss on investment Other capital movement Dividends received Other Increase (decrease) Ending balance EUKOR Car Carriers Inc. Hyundai AMCO Co., Ltd. Hyundai Partecs Co., Ltd. Hyundai Autoever ...

  • Page 74
    ...Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 (d) Changes in investment in associates for the year ended December 31, 2011 are summarized as follows: (In millions of won) Company Beginning balance Acquisition (disposal) Equity profit...

  • Page 75
    ... RePORt 2012 (e) Financial information of associates as of and for the year ended December 31, 2012 are summarized as follows: (In millions of won) Company Total assets Total liabilities Sales Net income (loss) Hyundai Mobis Co., Ltd. Hyundai Steel Company Hyundai Engineering & Construction...

  • Page 76
    ... Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 (f) Financial information of associates as of and for the year ended December 31, 2011 are summarized as follows: (In millions of won) Company Total assets Total liabilities Sales Net...

  • Page 77
    ...â,© 9,184,385 (*1) TThe net amount of loss on sale of property, plant and equipment is â,© 16,695 million for the year ended December 31, 2012. (*2) The Company cumulatively received â,© 232,477 million government grants as of December 31, 2012 through investment agreement with Slovakia government...

  • Page 78
    ...purchase commitment for plant expansion in connection of which, KMS acquired property, plant, and equipment amounting EUR 9,474 for the year ended December 31, 2012. (e) The capitalized borrowing costs and capitalization interest rate for the years ended December 31, 2012 and 2011 are summarized as...

  • Page 79
    ... Unit) that is expected to benefit from each operating unit. The Company estimated the recoverable amount of CGU as its value in use calculated by discounting the future cash flows to be generated on the basis of business plan approved by CEO in five years. Cash flows expected to be generated after...

  • Page 80
    KIA MOtORS Notes to Consolidated Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 12. Intangible Assets (a) Details of intangible assets except for goodwill as of December 31, 2012 and 2011 are summarized as follows: (In millions of won) ...

  • Page 81
    ...Prepaid expenses Deposits provided Short-term loans Derivative financial assets Held-to-maturity investments Other â,© Other non-current assets: Held-to-maturity investments Long-term accounts and notes receivable - other Long-term prepaid expenses Long-term advanced payments â,© â,© 17 ,049 105,887...

  • Page 82
    ... Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 14. Borrowings (a) Short-term borrowings Short-term borrowings as of December 31, 2012 and 2011 are summarized as follows: (In millions of won) Lender Annual interest rate 2012 2011 Usance bills...

  • Page 83
    ... of won) 2012 2011 Other current liabilities: Unearned income Dividends payable Guarantee received Derivative financial liabilities Others â,© Other non-current liabilities: Leasehold deposits received Long-term accounts and notes payable - other Liability for payment guarantee Long-term accrued...

  • Page 84
    ... Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 16. Employee Benefits (a) Details of defined benefit plan as of December 31, 2012 and 2011 are summarized as follows: (In millions of won) 2012 2011 Defined benefit plan: Present value...

  • Page 85
    ...in fair value of plan assets for the years ended December 31, 2012 and 2011 are summarized as follows: (In millions of won) 2012 2011 Balance at January 1 Expected returns on plan assets Contribution paid into the plan Transference between affiliates, net Benefit paid by the plan Actuarial losses...

  • Page 86
    ... effect on the Company's financial position and results of operations since the incurrence is not probable nor amounts can be reasonably estimated. (d) In connection with long-term debt guaranteed by Hyundai Motor America, Inc. and Mobis America, Inc., Kia Motors Manufacturing Georgia, Inc. (KMMG...

  • Page 87
    ... as follows: (In millions of won) 2012 2011 Gain on valuation of available-for-sale financial assets Effective portion of changes in fair value of cash flow hedges Change in capital adjustments - increase in gain of equity method accounted investments Change in capital adjustments - increase in...

  • Page 88
    KIA MOtORS Notes to Consolidated Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 21. Retained Earnings (a) Retained Earnings as of December 31, 2012 and 2011 are summarized as follows: (In millions of won) 2012 2011 Legal reserve ...

  • Page 89
    AnnuAl RePORt 2012 (b) Diluted earnings per share (In won, except number of shares) 2012 2011 Profit attributable to owners of the Parent Company Adjustment: Interest expense of bond with warrant Adjusted profit for the year Adjusted weighted-average number of common shares outstanding Diluted ...

  • Page 90
    KIA MOtORS Notes to Consolidated Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 24. Selling, General and Administrative Expense Details of selling, general and administrative expenses for the years ended December 31, 2012 and 2011 are as...

  • Page 91
    ...the years ended December 31, 2012 and 2011 are summarized as follows: (In millions of won) 2012 2011 Rent Foreign exchange transaction gain Foreign exchange translation gain Gain on sale of property, plant and equipment Gain on sale of intangible assets Reversal of allowance for doubtful accounts...

  • Page 92
    ... income for the years ended December 31, 2012 and 2011 are as follows: (In millions of won) 2012 2011 Current tax: Gain on sale of treasury stock Defined benefit plan actuarial losses â,© 49,746 49,746 Deferred income tax: Gain on valuation of available-for-sale financial assets Gain on valuation...

  • Page 93
    ... benefit plan actuarial gains/losses, gains/losses on valuation of available-for-sale financial assets and gains/losses on valuation of derivative instruments were recognized in other comprehensive income. (c) Reconciliation of effective tax rate for the years ended December 31, 2012 and 2011...

  • Page 94
    ... Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 (In millions of won) Beginning balance Profit or loss Other comprehensive income Ending balance Valuation of derivative instruments Valuation of available-for-sale financial assets...

  • Page 95
    ... for the years ended December 31, 2012 and 2011 are summarized as follows: (In millions of won) 2012 2011 Fluctuation of inventories Raw material and merchandise consumed Employee benefits Other employee benefits Depreciation and amortization Overseas marketing and export expenses Sales promotion...

  • Page 96
    ... Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 29. Cash Flows (a) Details of cash flows from operating for the years ended December 31, 2012 and 2011 are summarized as follows: (In millions of won) 2012 2011 Profit for the year...

  • Page 97
    ...,804) â,© 5,153,910 4,997 ,468 (b) Significant non-cash investing and financing activities for the years ended December 31, 2012 and 2011 are as follows: (In millions of won) 2012 2011 Reclassification from investment in associates to available-for-sale financial assets â,© - 295,449 97

  • Page 98
    KIA MOtORS Notes to Consolidated Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 30. Finance Risk Management The Company's activities are exposed to a variety of financial risks: credit risk, liquidity risk and market risk (comprised of ...

  • Page 99
    ... of won) 2012 2011 Cash and cash equivalents (*) Short-term financial instruments Accounts and notes receivable - trade Accounts and notes receivable - other Other current assets Long-term financial instruments Long-term available-for-sale financial assets Long-term accounts and notes receivable...

  • Page 100
    KIA MOtORS Notes to Consolidated Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 Changes in allowance for doubtful trade accounts and notes receivable and other receivables for the years ended December 31, 2012 and 2011 are summarized as ...

  • Page 101
    AnnuAl RePORt 2012 (ii) Aggregate maturities of the Company's financial liabilities, including estimated interest, as of December 31, 2011 are summarized as follows: (In millions of won) Within 1 year 1~5 years Over 5 years Total Accounts and notes payable - trade Accounts and notes payable - ...

  • Page 102
    ...-for-sale financial assets: Long-term available-for-sale financial assets Held-to-maturity investments: Held-to-maturity investments Derivative financial assets: Currency option (hedge) Liabilities recognized by amortized cost: Accounts and notes payable - trade Accounts and notes payable - other...

  • Page 103
    ...- The Company measured the fair value of financial instruments as follows: - The fair value of available-for-sale financial assets traded within the market is measured at the closing bid price quoted at the end of the reporting period. - The fair value of the derivatives is the present value of the...

  • Page 104
    KIA MOtORS Notes to Consolidated Financial Statements KIA MOTORS CORPORATION AND SuBSIDIARIES For the years ended December 31, 2012 and 2011 (iii) Fair value hierarchy Fair value measurement classified by fair value hierarchy as of December 31, 2012 are summarized as follows: (In millions of won)...

  • Page 105
    ... Company Type of borrowings Lender Period Amount Associates Hyundai Card Co., Ltd. Guarantee GE Capital 2012.9.24 ~ 2015.1.9 USD 30,000 33. Date of Authorization for issue The consolidated financial statements were authorized for issue on January 25, 2013, at the Board of Directors...

  • Page 106
    ..., sucu as a button-start smart key and electronic mirrors to expand Soul's commercial appeal. HONE YOuR COMPETITIVE EDGE Innovation, a sporty stance, and style witu confident individuality are tue cuaracteristics of Optima, a Kia's most popular sedan. A passionate mid-size car tuat loves tue road...

  • Page 107
    AnnuAl RePORt 2012 DYNAMIC INTELLIGENCE Tuis was tue first Kia Motors product to be released utilizing tue company's newly-developed large-sedan platform. Tue Cadenza is best known for its luxurious styling, in wuicu 'ligut' and 'lines' stand boldly out, wuile its top-end power performance provides...

  • Page 108
    ...georgia, u.S.A. Construction of Slovakia plant completed Mass-production commences at yancheng 2nd Plant, China Mohave (Borrego) premium SuV introduced Completion of Kia Design Center America Forte (all-new Cerato) compact sedan introduced Soul introduced Design Management Award received from Korean...

  • Page 109
    ...05 06 11 Optima (K5) Hybrid launched Soul gDI launched Picanto (Morning) wins the iF Product Design Award 2012 2012. 01 02 03 Kia launches uSD 13 million 'green light Project' to improve social mobility of needy children Kia Motors wins awards in four areas in the 5-year Cost to Own Award of Kelley...

  • Page 110
    ...South America 28 Kia Motors Europe Germany Spain France Italy Belgium Poland Sweden Netuerlands UK Ireland Kia Motors Central Europe Austria Hungary Czecu Slovakia Eastern Europe/ CIS Regional HQ Russia 19 2 3 4 5 6 7 8 9 10 Middle East/Africa Regional HQ Egypt Office Cuina Completed Car Sales...

  • Page 111
    AnnuAl RePORt 2012 Kia Motors Manufacturing Georgia (Nortu America) Kia Design Center America America Technical Center (Nortu America) (Nortu America) 27 3 26 4 3 28 29 OVERSEAS PLANTS Europe 1 R&D CENTERS Europe 1 Overseas Sales Subsidiaries & Reginal HQ Kia Motors Slovakia Europe ...

  • Page 112
    ... • Currently, executive Vice President / CFO, Kia Motors Corp. • (Former) executive Vice President, Hyundai Motor Company sang Koo nam • Currently, Chair Professor of Business Administration at gachon university • (Former) President of Korea Corporate governance Service hyun-Kook hong...

  • Page 113
    CONTACT INFORMATION For more information on Kia Motors, please visit www.kia.com / www.kmcir.com

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    Kia Motors Corporation www.kiamotors.com 231, Yangjae-Dong, Seocho- Gu, Seoul, 137-93L, Korea TEL: +L2-2-3464-1114