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HMM INSIDE 2011WE CARRY THE FUTURE

We Carry the Future!Table of ContentsFinancial Highlights

01. Corporate Overview

02. Unit Information

03. General Information

04. Sustainability Management

05. Financial Information

Hyundai Merchant Marine-which consists

of experts unrivaled in the shipping and

logistic industry - seeks to develop the

best solutions for all its customers and

contributes to enhancing the happiness of

the global community.

FINANCIAL HIGHLIGHTS

Statements of Income

(Unit: KRW Billion)

22000099 22001100 22001111

Revenue 6,115 7,978 7,188

Cost of Sales 6,561 7,242 7,344

Selling and Administrative Expenses 120 159 162

Operating Income -565 598 -367

Profit(Loss) before income tax -798 525 -453

Profit(Loss) for the year -802 540 -473

Statements of Financial Position

(Unit: KRW Billion)

22000099 22001100 22001111

Total Assets 8,341 8,478 8,432

Total Liabilities 6,127 6,064 6,732

Shareholders' Equity 2,214 2,415 1,700

Statements of Cash Flows

(Unit: KRW Billion)

22000099 22001100 22001111

Cash Flows from Operating Activities -154 308 75

Cash Flows from Investing Activities -77 342 -367

Cash Flows from Financing Activities 782 -239 -285

Net Changes in Cash & Cash Equivalents 552 412 -578

Cash & Cash Equivalents, Beginning of Year 220 771 1,172

Cash & Cash Equivalents, End of Year 771 1,172 590

*Accounting Method : Year 2009 (K-GAAP), Year 2010 & 2011 (K-IFRS)

*Above data is based on separate financial statements.

HMM INSIDE 2011

CAPEX

(Unit: KRW Billion)

22000099 22001100 22001111

CAPEX 256 534 771

Dividened

(Unit: KRW)

22000099 22001100 22001111

Dividend per share (Common stock) 500 500 -

Dividend per share (Preferred stock) 600 600 N/A

Liquidity

22000099 22001100 22001111

Debt Equity Ratio 276.7% 251.1% 396.0%

Net Debt Equity Ratio 202.4% 178.5% 310.0%

Credit Ratings

22000099 22001100 22001111

Korea Ratings Co., Ltd.Bond A A A

CP A2 A2 A2

Bond A A A

CP A2 A2 A2

*Accounting Method : Year 2009 (K-GAAP), Year 2010 & 2011 (K-IFRS)

*Above data is based on separate financial statements.

*All preferred stock has been disposed of

05

CEO INTERVIEW

HMM INSIDE 2011

President & CEO

Suk-Hui Lee

HMM believes the shipping industry has

entered a turning point of the paradigm

shift.

The global shipping business has already

entered an era of limitless competition of

Economy of Scale triggered by European

leading carriers which competitively order mega

ships during the bullish cycle. HMM, however,

doesn t believe that the number of mega-sized

vessels is the only aspect of a shipping

company s competiveness. Mega-sized vessels

can provide great efficiency on simple ocean

transport, but they don t assure customer

satisfaction. Customers will seek the company

that truly cares about optimizing their supply

chain.

In the end, HMM believes Scale Competition

gives way to Value Competition. In other

words, the shipping industry will have to be

redefined from a cargo delivery service to an

SCM provider. The new leader in the shipping

industry will need to be one which provides

customer oriented value. HMM has reconfirmed

company goals and direction by declaring a new

vision and new core values in order to take

advantage of this paradigm shift in the shipping

industry.

HMM s new vision statement is to upgrade the

company viewpoint from Cargo Delivery

Myopia to Customer Value Developer by

providing consolidated solutions which will

optimize customer supply chains worldwide.

To achieve the company s vision, HMM will have

to be the best company in order to challenge the

paradigm shift of winner-takes-all and limitless

competition. Thus, HMM endeavors to become

the best company in four areas: human

resources, quality of services, costs

competitiveness, and eco-friendly management.

The shipping industry is well known to be a cyclical business with a relatively predictable up-cycle and

down-cycle. However, recently the cyclical risk has increased and the range of fluctuation has become

unpredictable. In contrast to the historic bull market of 2010, 2011 was a year of economic collapse with

every global carrier experiencing the worst market ever caused by slow demand growth, capacity

surplus and rising oil prices. In 2012, the macro economy will likely worsen due to the European debt

crisis and skyrocketing oil prices caused by the political state of affairs in Iran. Moreover, the supply-

demand balance will deteriorate due to over-capacity versus established orders waiting for delivery. Not

surprisingly, fiercer competition among shipping companies is anticipated, and only shipping companies

with strong competiveness are eligible to become survivors.

07

Hyundai Merchant Marine - a company of unrivaled

experts offering the best solutions, going beyond

customer satisfaction and making happiness of the

global community.

Vision Statements

First, HMM will be the highly capable

expert group.

Talent is one of Hyundai Group s corporate

culture 4Ts: Trust, Tenacity, Togetherness and

Talent. HMM s goal is to be the market leader with

workers of creativity, passion, and expertise. HMM

s HR system is designed to educate workers in

areas of knowledge expertise and professional

attitude development. In addition, to prevent

personal mannerism caused by repetition of tasks,

HMM complements an HR system with Job

Rotation, which offers various benefits to both

company and workers. Moreover, Job Rotation

stimulates a habitual work process by promoting

different ways thinking and offers new opportunities

and various work experiences to employees.

Second, HMM will provide the highest

quality services.

Instead of simply reducing cost of per unit service,

HMM aims to enhance the value of per unit service.

In 2011 HMM achieved innovative working methods

by establishing a Smart Working environment of

Unified Communication Platform. This is a platform

for the working process evolution so that HMM can

provide better solutions to any requests and can

serve customers needs rapidly and accurately. At

the same time, HMM completed its major project

Process Innovation Phase 2 (PI2) which supports

efficiency on Customer Related Management

(CRM), Supply Chain Management (SCM) and

Strategic Enterprise Management (SEM). As a

result, HMM has completed a platform to develop

and optimize SCM solutions to individual

customers businesses.

HMM INSIDE 2011

Third, HMM maintains excellent yield

management via cost competency.

If carrier service quality and freight rate levels

are similar, cost competitiveness shall be a

crucial factor for yield management. In 2011,

HMM placed a concentrated effort toward vessel

cost reduction. For the Container Division, HMM

successfully ordered five 13,000 TEU container

vessels at an attractive price. These new vessels

will be delivered in 2014 and will contribute to

improvement for cost per box. Dry Bulk Division

was able to minimize losses in 2011 through

bulk ship cost restructuring in spite of

comparatively worse market conditions of 2010.

In 2012, HMM will continue TCR (Total Cost

Reduction) with corporate-level cost reductions

to enhance profitability by various activities

related to port fees, cargo cost, fuel cost and

charterage.

Fourth, HMM will become the best in

eco-friendly management.

HMM has been pursuing environmentally sound

and sustainable growth as the importance of

environmental issues continues to grow day by

day. HMM kept up green movement in various

fields such as energy saving, recycling and

developing eco-friendly ships. After continued

efforts on Green Management, HMM was

certified Green Management System by the

Korean government in 2011, the first ever in the

Korean shipping industry. At the same time,

Seaintel (Maritime Analysis) placed HMM as one

of the world s top 3 eco-friendly shipping

companies as a result of global shipping

companies eco-friendly achievements

evaluation. Aside from successful results in

green movement, HMM desires to keep up its

reputation as a leading eco-friendly shipping

company. In line with HMM s new vision, we

believe eco-friendly managements will bring

happiness to the global community.

In all respects, HMM endeavors to become the

world market leader and will continue to be the

best company, not in terms of size, but in terms

of value.

09

Corporate OverviewBusiness Portfolio

Fleet

Guidance

ttrust

Business Portfolio

Corporate Overview Unit Information

(Unit: No. of vessels)

2009 2010 2011

Container 61 62 62

Wet Bulk 53 43 39

Dry Bulk 48 59 76

Total 162 164 177

FLEET COMPOSITION

*Owned and Chartered over one year

*Above data is year-end basis.

Container

Wet Bulk

Dry Bulk

(Unit: KRW Billion)

2009 2010 2011

Container 4,128 5,721 5,260

Wet Bulk 1,189 1,113 885

Dry Bulk 798 1,253 1,043

Total 6,115 8,087 7,188

REVENUE BREAKDOWNContainer

Wet Bulk

Dry Bulk

2009

33%

30%

37%

HMM INSIDE 2011

43%

22%

35%

2011

19%

13%

68%

14%

15%

71%

15%

12%

73%

20112010

26%

36%

38%

20102009

*Accounting Method : Year 2009 & 2010 (K-GAAP), Year 2011 (K-IFRS)

General Information Sustainability Management Financial Information

2009 2010 22001111

Container Revenue 4,128 5,721 5,260

Operating Income -446 669 -261

OI Margin -10.8% 11.7% -5.0%

Wet Bulk Revenue 1,189 1,113 885

Operating Income 58 7 -6

OI Margin 4.9% 0.6% -0.7%

Dry Bulk Revenue 798 1,253 1,043

Operating Income -177 -75 -100

OI Margin -22.2% -6.0% -9.6%

Total Revenue 6,115 8,087 77,,118888

Operating Income -565 601 --336677

OI Margin -9.2% 7.4% --55..11%%

OPERATIONAL RESULT

13

*Accounting Method : Year 2009 & 2010 (K-GAAP), Year 2011 (K-IFRS)

(Unit: KRW Billion)

Corporate Overview Unit InformationHMM INSIDE 2011

(As of December 31, 2011)

Owned Chartered TToottaall

No. 1,000 Dwt Capacity No. 1,000 Dwt Capacity NNoo..11,,000000 DDwwtt CCaappaacciittyy

Container* 8,000 TEU 4 396 34 5 499 43 9 895 77

6,000 ~ 8,000 TEU 5 402 34 8 605 52 13 1,007 86

4,000 ~ 6,000 TEU 13 843 64 9 561 44 22 1,405 108

4,000 TEU 18 453 36 18 453 36

Container total 22 1,642 133 40 2,119 175 62 3,761 307

Wet Bulk Gas carrier** 6 454 790 5 331 503 11 785 1,293

Crude tanker 8 1,815 10 2,237 18 4,053

Other tanker 2 101 8 322 10 423

Wet bulk total 16 2,370 790 23 2,890 503 39 5,260 1,293

Dry Bulk Capesize 12 2,048 8 1,437 20 3,485

Panamax 16 1,210 16 1,210

Supramax 20 1,090 20 1,090

Handy 1 38 10 276 11 314

Heavy Lift 9 234 9 234

Dry bulk total 13 2,087 63 4,246 76 6,333

Total 51 6,099 126 9,255 117777 1155,,335544

* Contaner capacity : 1,000 TEU

** Gas carrier capacity : 1,000 CBM

Owned and Chartered over one year

FLEET PROFILE


22001122 22001133 22001144

OOwwnn CChhaarrtteerr OOwwnn CChhaarrtteerr OOwwnn CChhaarrtteerr

Container 13,100 TEU 5 5

5,000 TEU 5

Dry Bulk Capesize 2 3

Panamax 3

Supramax 2 3 5

Handy 1

Heavy Lift 1

Total No. of new vessels 4 16 10 5

FLEET EXPANSION PLAN

Owned and Chartered more than two years

Fleet

General Information Sustainability Management Financial Information15

2011 22001122((EE)) YoY Growth

Revenue (KRW Bn) 7,188 7,765 8.0%

Revenue (USD Mn) 6,519 7,257 11.3%

Operating Income (KRW Bn) -367 131 Turn Black

CAPEX (KRW Bn) 771 369 52.1%

Volume (1,000 TEU) 2,959 3,248 9.8%

2012 GUIDANCE


EEnndd ooff 22001111 EEnndd ooff 22001122 TToottaall NNeett CChhaannggee

OOwwnneedd CChhaarrtteerreedd TToottaall OOwwnneedd CChhaarrtteerreedd TToottaall NNoo.. %%

8,000 TEU 4 5 9 4 10 14 5 56%

6,000 ~ 8,000 TEU 5 8 13 3 9 12 1 8%

Container 4,000 ~ 6,000 TEU 13 9 22 13 10 23 1 5%

4,000 TEU 18 18 15 15 3 17%

Container total 22 40 62 20 44 64 2 3%

Crude Tanker 8 10 18 7 8 15 3 17%

Wet BulkProduct Tanker 2 8 10 2 10 12 2 20%

Gas Carrier 6 5 11 6 4 10 1 9%

Wet bulk total 16 23 39 15 22 37 2 5%

Capesize 12 8 20 12 15 27 7 35%

Panamax 16 16 21 21 5 31%

Dry Bulk Supramax 20 18 2 12 14 4 22%

Handy 1 19 22 1 24 25 3 14%

Dry bulk total 13 63 76 15 72 87 11 14%

Total 49 128 117777 50 138 118888 11 6%

FLEET PLAN

Owned and Chartered over one year

Guidance

Liner Unit

Bulk Unit

Unit Information

ttalent

Liner Unit

INTRODUCTION

LINER UNIT

Global service network with more than 51routes and over 100 ports of call enablesHMM to collaborate more strategicallywith the world’s major shippingcompanies.Since its inception in 1976, Hyundai Merchant

Marine (HMM) has continuously endeavored to

become a premier global shipping and logistics

company. With 62 operating vessels and 51

available services, HMM’s Liner business covers

Transpacific trade, Asia-Europe trade, Intra Asia

trade and Emerging market trade.


VOLUME

Service Route Routes

Trans-Pacific Trade USWC 9

USEC 5

Asia-Europe Trade N. Europe 6

Mediterranean 1

Atlantic 4

Intra Asia Trade Middle East 5

India 2

Others 7

Emerging Market Trade South America 5

Russia 2

Australia 4

East Africa 1

Total 51

(Unit: 1,000 TEU)

Volume breakdownIn 2011 HMM managed to achieve 2.96 Million TEU

lifts to the worldwide destinations. HMM carries

broad range of products including furniture,

electronic gadgets, apparel and tires. HMM

continuously developed specialized cargoes from

reefers, oversized cargoes to the dangerous

cargoes.

HMM has a trustful partnership withglobal leading carriers.As a member of The New World Alliance (TNWA) since

1998, HMM has allied with the American President

Line (APL) and Mitsui OSK Line (MOL) to form what is

now the premier carrier group in the world. Since

March 2012, HMM newly formed the G6 Alliance,

which includes members of the Grand Alliance (GA) -

Hapag Lloyd, NYK and OOCL- and The New World

Alliance (TNWA). As a result, G6 Alliance will create

one of the leading networks in the Far East to Europe

and Far East to Mediterranean container shipping

markets with more than 90 ships in nine services

calling at more than 40 ports in Asia, Europe and the

Mediterranean. The integrated cooperation of these six

liners will enable product and service features to be

easily adjusted to market requirements.


2011 HMM CONTAINER VOLUME


Exclusive rail arrangements with cutting-edge infrastructure provide greatercoverage in each of the crucial regions.HMM’s container business delivers quality door to

door services rapidly across its global network. To

retain its advantage, the company utilizes many

facilities worldwide: HII (Hyundai Intermodal, Inc.) in

the U.S., premium block train services in Europe,

and various feeder and barge services in Asia.

In response to the needs of its customers, the

company is also developing value-added inland

intermodal services within its existing logistics

network. HMM also operates a team to construct

and implement diverse transportation solutions,

tailored to the logistics needs of shippers.

HMM aims to enhance customers’ servicesatisfaction by effectively managingcontainer terminals.To link ocean transport service and Inland services

smoothly, terminals are the essential assets.

Container box handling knowhow at the terminal is

one of the thresholds to become a competitive

carrier. By efficient container box handling skills at

the terminals, it enables us to reduce

transportation cost and keep reliable shipping

schedules to the customers. Over the years,

“Prompt & Accurate box handling” has been proven

at the HMM’s operating terminals

As of 2012, HMM is operating 4 owned terminals,

CUT(California United Terminal), WUT(Washington

United Terminals), KHT(Kaohsiung Hyundai

Terminal) and HPNT(Hyundai Pusan New-port

Terminal). Furthermore, HMM was selected as one

of its key operators in Rotterdam, RWG(Rotterdam

World Gateway) with major companies such as

DPW, APL, MOL & CMA-CGM, which will open in

2014.

INTERVIEW

LOOKING BACK ON 2011

Looking back on the container industry in 2011,

vessel capacity increased remarkably with

deliveries of mega-sized vessels, and demand

experienced a slow down due to global economic

contraction. Thus, competition between carriers

grew fiercer due to supply-demand imbalance.

Rising oil prices also burdened carriers.

Furthermore, competition became more severe

after Maersk introduced a new service “Daily

Maersk” to the Asia-Europe routes with aggressive

marketing. Consequently, the Container Sector

experienced an estimated USD 5 billion loss in 2011.

HMM focused on sales reinforcement to improve

P&L structure in order to overcome the tough

business environment in 2011. First of all, HMM

defined the year of 2011 as a “Bridging Year” to

prepare for the delivery of a five 13,000 TEU

megasized vessels for 2012. HMM also enriched its

customer relationship management system by

efficiently utilizing and upgrading CRM systems

based on its “Process Innovation Phase 2(PI2).”

Most importantly, six leading container carriers,

including HMM, had agreed to create The G6

alliance in 2011. The G6 alliance is an integration of

both TNWA (The New World Alliance) and GA

(Grand Alliance) and will cover the Asia-Europe

market. This will provide a unified basis for HMM to

sustain a very competitive main container carrier in

2012 and will allow the company to step forward as

a global leading carrier.


Head of Liner UnitSoo-Ho Kim


MARKET FORECAST ANDSTRATEGY FOR 2012

As economic recovery is uncertain for 2012, the

tough business environment the company

experienced in 2011 continues due to an increase of

vessel supply and a slowdown in growth of the

world’s major leading countries. HMM is preparing

for the future by implementing various strategies

such as CRM enhancement, and cost

competiveness reinforcement and by expanding the

emerging market business for mid to long-term

growth.

Enhancing CRM (Customer Relationship Management)HMM will concentrate on service reinforcement

through “The G6 Alliance.” “The G6 Alliance”

provides customers with various choices and

upgraded service by maximizing efficiency of

HMM’s vessel utilization as well as making it

possible to expand global sales networks.

HMM will place more efforts on providing

distinguished services to customers and will

achieve this with strengthened client service

training and the enhanced CRM program, which

was upgraded last year.

Reinforcement of Cost CompetitivenessHMM will aggressively reinforce cost

competitiveness per unit through economy of scale

with the delivery of 5 vessels of 13,100 TEU. Delivery

of these vessels began in February of 2012. HMM

also plans to reduce costs by rationalizing route

and terminal operation and minimize fuel

consumption by enhancing navigation shipping

systems. Consequently, HMM provides the best

service with reasonable prices by securing cost

competitiveness in quantity and maximizing

operation efficiency versus lowering tariff rates per

vendor.

Creating a Base for Emerging MarketsDue to economic downturn in advanced countries

and limits on domestic consumption in China,

carriers are actively looking to find emerging

markets in Brazil, India, Africa, and so on. For

diversification of profitability, HMM plans to drive

service rationalization of routes to the North-South

and East-West trade.

In respects the Asia-South America service, which

was started in 2008, HMM created the Emerging

Trade Management Team in order to strengthen

sales in the North-South trade in 2011, focusing on

markets in South America, Russia, Australia, and

Africa. This year, HMM will strengthen its sales

force to improve profitability in the North-South

trade as well as place more efforts toward

developing additional emerging markets in the

future.

(Source : Alphaliner)

Bulk Unit

WET BULK INTRODUCTION

TANKER SERVICE

With growing contract commitments anda rising fleet, the Tanker Team goes fromstrength to strength.The Tanker Service has been at the center of

HMM’s growth over the past few years, and the

company aims to maintain its leading role. HMM’s

Tanker Service is organized in 2 teams: Crude

tanker team and Product tanker team. Its fleet

consists of 18 crude tankers including 10 VLCCs, 8

product tankers and 4 chemical tankers.

Currently around 47% of the crude tanker fleet and

37% of the product tanker fleet (LR, MR) have long-

term contract commitments, while the remainder

operates in the spot market. Each sector - even

each individual vessel - has different primary

business routes. VLCC tankers engaged in long-

term contracts with domestic and foreign oil

companies transport crude oil from the Middle East

to the Far East; whilst VLCCs committed to the spot

market operate from the Middle East or West Africa

to destinations either in the Far East or the West.

Smaller vessels, such as Aframaxes, MRs and

chemicals, usually operate for short-haul trips

between Southeast Asia and the Far East.

Fleet expansion necessitated that new staff were

posted to both London and Singapore in 2005. The

London office is currently responsible for the

Suezmax and MR business, while the chemical

tanker business is managed by the Singapore

office.

GAS CARRIER SERVICE

Dedicated to maintaining its presence inthe LNG and LPG markets, the GasCarrier Team will focus on fosteringgreater capacity.HMM’s LNG carrier service was launched in 1994

as the first Korean LNG carrier ever. Since the first

Korean flagged vessel “Hyundai Utopia”

transported LNG cargoes from Indonesia to Korea,

HMM has become the largest LNG carrier in Korea.

With Korea Gas Corporation (KOGAS), HMM has

established a 20~25-year-long term contract :

currently its nine vessels (one on charter) convey

KOGAS cargoes in diversified routes among Korea,

Indonesia, Malaysia, Qatar, Oman and Yemen. In

2011, HMM carried 7.5 million tons of LNG, which is

approximately 22% of the total 33.9 million tons of

domestic imports.

HMM also won the bid for KOGAS’s Joint Venture

Company Project, starting in the mid of 2009, in

which the total of transportation reaches 3.5 million

tons of LNG annually from Sakhalin and Yemen.

HMM acquired an 18% ownership stake for four

new LNG vessels, and a 20-year contract to operate

one vessel (Yemen-Korea route) out of those four.

For LPG Carrier service, it was launched at Jan

2006 with the long-term chartered VLGC, “DL

Calla” and has provided high quality service based

on spot trading and T/C out. HMM has a plan to

operate a total of 3 vessels (VLGC) in 2012 and will

expand the fleet continuously in the future, in the

balance of market demand. We are ready to give

the best service to the wide range of customers all

around the world.



WET BULK INTERVIEW


In 2011, the Crude Tanker market experienced

difficulties due to a slowdown in demand, excessive

shipping supply and a rise of bunker prices.

Moreover, Libya’s oil export cuts and Iran sanctions

induced further volatility. However, HMM continued

to strengthen competitiveness due to preemptive

action against recession in Crude Tanker Service,

which takes half of the revenue in the Wet Bulk

Sector along with LNG Carrier Service’s stable

earnings.

During the super cycle of 2007-2008 in the Crude

Tanker market, HMM had foreseen a long-term

slowdown of the Crude Tanker market and

increased COA and charter-out contracts

beforehand; therefore, in the unpredictable market

fall in 2009 and 2010, HMM could generate profits.

HMM also anticipated the weak market last year

and endeavored in increasing long-term charter-

out contracts in advance; thus, HMM managed

difficulties in the Wet Bulk Division in 2011

Additionally, in the LNG Carrier Service which

covers 40% of wet bulk revenues, HMM gained

stable earnings through a 100% long-term contract

with KOGAS (Korea Gas Corporation) last year. At

the same time, in the LPG Carrier and Product

Service, HMM endeavored to improve its profit and

loss structure by developing new shippers, return-

voyage cargoes and charter-out contracts.

Head of Bulk UnitYoung-Joon Lee

MARKET FORECAST ANDSTRATEGY FOR 2012

Even though demand for crude oil in advanced

countries may decrease due to Europe’s financial

crisis and slowdown of the economy in the United

States, world oil demand is expected to grow as

developing nations grow in 2012 90.5 mb/d [over

last year 1.3mb/d], IEA . However, with massive

vessel deliveries scheduled, an aggravated state of

oversupply is expected. Therefore, a bearish market

is likely to continue in 2012.

In 2012, HMM will uphold competitiveness by

reinforcing overseas sales on Crude Tanker and

LNG Carrier Service and seek opportunities to

expand Crude Tankers and LNG vessels utilizing

the trough of industrial cycle. Furthermore, HMM

will minimize spot exposure and reduce costs to

overcome this difficult market situation.

Seeking opportunities to reinforceOverseas Sales on Crude Tanker Serviceand LNG Carrier ServiceThanks to many years of accumulated sales

expertise, as well as smart investment on vessels,

HMM will strengthen overseas sales of Crude

Tanker Service and LNG Carrier Service to improve

the company’s competitiveness in 2012. HMM will

seek to engage in oil shipping to China and other

countries as well as proactively participate in bids

on new projects.

In addition, with the ship building market currently

being at its low point, HMM will take this

opportunity to reconstruct competitive fleets

especially in Crude Tankers. HMM will carefully

observe the market situation, and when the time

comes, HMM will aggressively, but prudently, invest

in Crude Tankers.

Reducing Spot Exposure and Cost-SavingSpot oriented vessels are susceptible to risks;

therefore, HMM will increase charter-out contracts

to bring down spot exposure and mitigate any risks

through trading and hedging activities in FFA

(Forward Freight Agreement). Additionally, HMM

will proactively reduce fuel costs through slow

steaming on ballast voyages.


(Source : Supply - Clarkson, Demand - IEA)


DRY BULK INTRODUCTION

TRAMPER SERVICE

Utilizing the finest dry bulk and tonnagefacilities, the Tramper Team will continueto meet customer satisfaction.HMM Tramp Team carries a broad range of both

major and minor bulk commodities in segmented

sections ; consisting of Cape/Panamax, Handy

/Handymax and Dedicated Tonnage Parts.

The Cape/Panamax Part carries iron ore, coal,

grain, coke and so forth, with owned or chartered

vessels ranging from 60,000 up to 200,000 DWT.

Handy/Handymax transports iron ore, coal,

fertilizer, cement, salt, bauxite and other materials,

with tonnages from 20,000 up to 60,000 DWT. Both

Parts are keen and willing to take spot market and

long-term business opportunities, either in cargoes

or tonnages, and ready to expand their business

scope into the Atlantic market while increasing

their Pacific business volumes.

The Dedicated Tonnage Part executes iron ore, coal

and steel product shipments with 10 ore/coal

carriers and a single steel product carrier. These

vessels have been serving KEPCO and POSCO

exclusively on 15- to 20-year contracts, and starting

in 2010 they will also include Hyundai Steel. Based

on more than 20 years of experience, HMM plans to

further expand its services towards overseas clients

in such areas as giant steel mills and power plants.

HMM has established its global network in the U.K.,

U.S., Singapore and India to assist chartering and

business development; while port captains all over

the world support the efficient operations of

vessels.

BULK LINER SERVICE

Fulfilling 4 to 5 million ton deliveriesannually across routes all over the world,the Bulk Liner Team aims to keep itsservice lines in motion.For the past 30 years, HMM’s Bulk Liner Team has

provided liner services for assorted steel and

wooden cargoes on 13 trading routes worldwide -

with capacities ranging from 10,000 to 60,000 DWT.

The team offers service routes from the Far East

/Southeast Asia to the America/Europe/Asia

/the Middle East, and has pioneered HMM’s first

service lines into the Black Sea/India/China regions

from 2004 and South America from 2009 again.

With established local offices in China, the U.S.,

Europe and India - as well as Korea and Southeast

Asia - the team annually performs over 350 voyages

and delivers 4-5 million tons of general cargoes on

a range of chartered vessels.

The demands of international customers are met

with highly qualified shipping knowledge and

experienced cargo handling. Through safe vessel

operation, the efforts of HMM Bulk Liner Team have

always been geared towards the achievement of

zero claims.


HEAVY LIFT & PROJECT SERVICE

After generations we are now looking toincrease our presence in the projectcargo market.Building on the success of various projects up to

2006, we launched the heavy-lift service in 2007. We

have made full use of our experience to establish

substantial market share in both projects and

plants in Korea, a primary hub of Asian project

activities and a primary source of project-related

equipment.

We currently provide project cargo services

between the Far East and the Middle East/India

using modern multipurpose carriers to carry

lengthy, super-heavy, and highly voluminous

cargoes such as petro-chemical equipment, wind

energy, power plant facilities, and so forth. To meet

clients’ needs, our project service offers

individually-tailored solutions using a 3D solution

system to consider the size and specific

requirements of each cargo.

In addition to our current Far East Middle East

Service, we will expand project cargo service

worldwide by 2014 by extending our service line

gradually to Europe & the Mediterranean Sea, the

U.S., Africa, Australia and further.

DRY BULK INTERVIEW


2011 was another tough year for the dry bulk

market due to new deliveries and unexpected

variables.

To describe the 2011 dry bulk market briefly, it

started weak, but recovered in the end. The market

was weak in the first half because of various

unfortunate events such as devastating weather

conditions in Australia and an earthquake in Japan,

which caused capacity surplus. Additionally, China’s

austerity measures brought a slump in iron ore

demand. In contrast, the second half of 2011 moved

to recovery as scrapping increased and slippage

rates reached approximately 35%. Also, iron ore

demand rebounded sharply as China’s raw material

imports resumed. Despite these factors, the level of

recovery was still insufficient as annual average

BDI in 2011 was 1,548, a 44% drop year-on-year.

Though the market was low, HMM could improve

profitability in the Dry Bulk Division, mainly due to

the four proper preemptive activities.

First, HMM successfully expended long-term

contracts of affreightment (COA) and charter-out

contracts for a fixed income.

Second, to improve profitability, HMM made extra

efforts to reduce the loss from return voyages.

Third, HMM consistently restructured costs to

enhance vessel cost competitiveness of high cost

vessels, which are chartered during strong

markets, by returning matured charter vessels or

renegotiating charter fees for the non-matured

vessels.

Lastly, HMM developing a new risk management

program. HMM improved operating risk

management through tight control of demurrages

and congestions. Also, HMM developed its FFA

simulation system (Mock Trading) to reduce risk

from forward derivations.


OUTLOOK AND STRATEGY FOR2012

Due to the 2011 capesize market ending strongly,

HMM forecasted that market would go upward in

2012. However, throughout the 1st quarter, 2012 the

market headed down.

Positive expectations are still in. There will be a

boost in China’s imports if raw material prices drop.

Additionally, supply discipline has strengthened

thanks to scrapping or slippage of mid-sized

vessels because the market has stayed historically

low over the years. However, the aforementioned

are not enough to improve supply-demand

imbalance . (2012 S&D forecasts: 3% growth in

supply, 12% growth in demand).

2012 will be another challenging year. HMM will set

a primary strategy to strengthen the sales force,

improve P&L structure through reduction of vessel

costs, and improve risk management.

Enhance Sales Capability for SecuringFuture Growth EngineHMM will strategically enhance trampers sales

capability to secure market competitiveness, which

is less vulnerable to market fluctuations. By

strategically restructuring the business model and

regional portfolio, HMM will develop overseas sales

and new customer networks so that HMM can have

more strategic options to choose from.

While the Heavy Lift & Project Cargo Service

concentrates on Middle East routes, HMM plans to

expand service composition to East Indies &

Australia for new growth momentum. In 2012, new

opportunity is predicted for dedicated service, as

cargo contract biddings from several power

producers seem to have been increased. The

Dedicated Service Team will try to win biddings by

meeting customer requirements.

Enhance Vessel Cost CompetitivenessConsistent with last year, cost restructuring efforts

will continue this year. Vessel cost competitiveness

of high cost vessels, which are chartered during a

strong market, will be enhanced by returning

matured charter vessels or renegotiation of charter

fee for the others. To maintain long-term cost

competiveness, HMM is also looking for attractive

vessel expansion opportunities during the current

low market.

Risk Management HMM will continue concentrating on risk hedging by

FFA transaction. Risk hedging will allow HMM to

overcome volatile dry bulk markets through

rationalized risk scope. To diversify the volatility

risk, HMM will focus on systematic exposure

control by considering business nature and cost

structure.


(Source : SSY)

General InformationStock information

HMM Developments

Overseas Organizations

Governance Structure

Major Shareholders

ttenacity

Stock information

HMM Developments

Corporate Overview Unit Information

SSttoocckk lliisstteedd iinn KRX (Seoul)

TTiicckkeerr 011200.KS

CCaappiittaall KRW 816,366 Million

NNuummbbeerr ooff sshhaarreess iissssuueedd Common Stock : 143,273,229

HHeeaadd ooffffiiccee 1-7 YeonjiDong, Jongno-Gu Seoul, Korea

NNuummbbeerr ooff HHMMMM EEmmppllooyyeessss 2035

1976: Company established as Asia Merchant Marine Transportation service opened with a fleet of three VLCCs

1977 : Bulk cargo tramper service and deep-sea tug service began

1981 : Specialized ore and coal transportation service began

1985 : Full container service opened between the Far East and the Western US

1994 : Korea’s first LNG transportation began with the launching of Hyundai Utopia

1995 : Listed on the Korean stock market

1998 : The New World Alliance service began with APL and MOL

2001 : Liquidity problem arose

2002 : Disposal of fleet, Car Carrier division & domestic terminals

2003 : Liquidity crisis was fully overcome

2004 ~ 2008: Success leads to fleet expansion

2009 : Process Innovation for management efficiency

2010 : Turnaround faster than peers

2011 : Proclaimation of New Vision & Mission

FFoouunnddaattiioonn &&

SSeettttiinngg BBuussiinneessss TTeerrrriittoorryy

((11997766 ~~11998866))

JJuummpp uupp ttoo

tthhee IInndduussttrryy LLeeaaddeerr

((11998877~~22000000))

OOvveerrccoommiinngg

GGrroowwiinngg PPaaiinnss

((22000011 ~~ 22000033))

SSuucccceessss BBuuiilltt oonn SSttrroonngg

FFoouunnddaattiioonn

((22000011 ~~ 22001100))

PPllaayy aa rroollee aass aa nneeww

llooggiissttiiccss vvaalluuee ccrreeaattoorr

((22001111~~))

HMM INSIDE 2011

Overseas Organizations



CCllaassssiiffiiccaattiioonn TTiittllee NNaammee AAppppooiinntteedd oonn TTeerrmm ((YYRR)) LLiiaabbiilliittyy

Chairwoman of BOD Jeong-Eun Hyun 19-Mar-10 3 Insured

Representative Director Suk-Hui Lee 23-Mar-12 2 Insured

Director Paik-Hoon Lee 23-Mar-12 2 Insured

Director Nam-Yong Lee 23-Mar-12 2 Insured

Director Dong-Gun Kim 25-Mar-11 2 Insured

Director Joon-Soo Jon 23-Mar-12 2 Insured

Director Taek-Soo Han 25-Mar-11 2 Insured

Director Yong-Kuen Cho 25-Mar-11 2 Insured

Director Eric Sing Chi Ip 25-Mar-11 2 Insured

Inside

director

Outside

director

Governance Structure


(As of December 31, 2011)

SShhaarreehhoollddeerrss SShhaarreess %%

Hyundai Elevator 34,674,191 24.2%

Hyundai Heavy Industries 23,424,037 16.3%

Hyundai Engineering & Constructions 11,048,227 7.7%

Hyundai Samho Heavy Industries 10,479,174 7.3%

Nexgen Capital 8,397,713 5.9%

Cape Fortune B. V. 7,301,838 5.1%

Others 47,948,049 33.5%

Total 143,273,229 100.0%

* Shareholders with shares above 5% based on disclosure data.

Major Shareholders

SustainabilityManagement

Green Management

Safety Management

Ethics Management

ttog

etherness

Green Management


GREEN & ENVIRONMENTAL POLICY

HMM maintains Eco-Friendly Policies, such as preventing marine & atmospheric pollution, minimizing waste

products and making economical use of resources & oil zero spills, to preserve the environment.

Considering the methodology, potential

abatement margin, HMM plans to reduce green

house emission more than 17% in 2015 based

on 2008 record in intensity unit

GHG Inventory to monitor GHG, SOC, NOX and

PM from Vessels, Terminals and Office building

Annual report on “Carbon Information Release

Project” for financial investors

Discussion with IMO marine Environment

Protection Committee

Discussion of eco-Friendly policy through

WS(World Shipping) Council Participation.

Promotion of eco-friendly maritime

transportation through BSR-CCWG(Clean

Cargo Working Group) participation

International CoordinationGHG Reduction Plan

Future PlanEnergy Efficiency

Ship Energy Efficiency Management

Plan(SEEMP), guidelines for efficient operation

methods to improve energy efficiency

Build & Charter environmental-friendly ship

EEOI & EEDI Calculator for measurement of

CO2 emission performance of existing ship and

from design phase

HMM has plans to minimize pollutants through

consistent verification of fuel-reduction facilities

and utilize resources/energy efficiently through

introducing a Green Management System

Green Management

System

EnvironmentalManagement

System

17%

Safety Management

General Information Sustainability Management Financial Information

SSuuppeerrbb VVeesssseell CCoonnddiittiioonn

Maintain best vessel condition

On dock Maintenance

Running Repair

EEmmeerrggeennccyy RReessppoonnssee

Cooperate with On-scene response

team, Emergency response team,

Business unit and the Ships

Direct communication with CEO

SSaaffee WWoorrkkiinngg

Hazard identification by risk

assessment

Reinforcement of work place order

Prevention of reoccurrence by

accident feedback

CCrreeww EEdduuccaattiioonn && TTrraaiinniinngg

Total 4 training module with 77

course

Up to dated training facilities

AAnnttii PPiirraaccyy AAccttiioonn PPllaann

Ship position reporting via satellite

communication

On-board guard & various anti

piracy arrangements incl. citadel

Coordinate with Korea Government

and Allied Navy

HHeeaalltthh && HHyyggiieennee

Periodical medical examination

Vaccination & sanitary inspection

SAFETY & QUALITY

Safety management is the fundamental activities for securing customers’ satisfaction as well as safety of

cargoes, vessel and crews onboard, and is the top priority in HMM

SafetyManagement

System

QualityManagement

System

OccupationalHealth & SafetyManagement

System

39


Business Ethics is the resource that enables

sustainability of a company by forming its values

and helping to execute them consistently. HMM

adopting ethical management understands

employees, customers, business partners,

competitors, and stockholders.

In February 2007, we formed the “Ethics

Management Team” It is HMM’s strong desire to

practice systematic and consistent ethics

management and CSR in the future. We had

proclaimed the Code of Ethics and employees

share and pledge such spirit in the Code of Ethics

Pledge Ceremony every year.

HMM believes that ethical business is the core value of a company’s activities. We will continuously strive for

ethical management and fully assume its social responsibilities by providing customers with excellent services

and doing business in a transparent, fair, and sensible manner to become a respected and trusted company.

Ethics Management

Financial Information41

General Information Sustainability Management

Based on the philosophy of respect and co-prosperity for all of humanity, we have practiced corporate social

responsibility and carried out numerous social contribution projects to help nearby communities grow.

‘‘BBAAPPPPUURR’’ ((FFRREEEE FFOOOODD SSEERRVVIINNGG)) VVOOLLUUNNTTAARRYYHMM staffs took part in the ‘Bappur’ (Free food serving) voluntary for the

homeless and itinerants, and for isolated senior citizens at a soup kitchen in

Seoul. The voluntary activities went through about 10 times. Total 420 staffs

participated in the activities throughout the year. HMM delivers various community

services and builds up its social responsibility of sharing to enrich the world.

MMEERRCCHHAANNTT--SSHHIIPP CCLLAASSSS FFOORR CCHHIILLDDRREENNEvery year, HMM also provides underprivileged children with “Merchant-ship

Class” the invitation program which includes field trip and learning class on ships

and maritime life. This annual activity has sought, since 2008, to develop the

maritime dreams and ambitions of children being helped by charity organizations.

HHAABBIITTAATT FFOORR HHUUMMAANNIITTYY HMM volunteers participate in a “Habitat for Humanity” venture to build houses

for families in need. For 2 times, HMM staffs worked in a sweat on ceiling

constructions and laying insulations in one of the new houses in Yangpyeong,

Gyeonggi-do. Total of 56 staffs volunteered throughout the year.

SOCIAL RESPONSIBILITY

Financial InformationIndependent Auditor’s Report

Separate Financial Statements

Consolidated Financial Statements

English Translation of a Report Originally Issued in Korean

To the Shareholders and the Board of Directors of

Hyundai Merchant Marine Co., Ltd.

We have audited the accompanying separate financial statements of Hyundai Merchant Marine Co., Ltd. (the

“Company”). The financial statements consist of the separate statements of financial position as of December

31, 2011, December 31, 2010 and January 1, 2010, respectively, and the related separate statements of

comprehensive income(loss), separate statements of changes in shareholders’ equity and separate statements

of cash flows, all expressed in Korean won, for the years ended December 31, 2011 and 2010, respectively. The

Company’s management is responsible for the preparation and fair presentation of the separate financial

statements and our responsibility is to express an opinion on these separate financial statements based on our

audits.

We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the financial statements. An audit also includes assessing the

accounting principles used and significant estimates made by management, as well as evaluating the overall

financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial

position of the Company as of December 31, 2011, December 31, 2010 and January 1, 2010, respectively, and

the results of its operations and its cash flows for the years ended December 31, 2011 and 2010, respectively, in

conformity with Korean International Financial Reporting Standards (“K-IFRS”).

Accounting principles and auditing standards and their application in practice vary among countries. The

accompanying separate financial statements are not intended to present the financial position, results of

operations and cash flows in accordance with accounting principles and practices generally accepted in

countries other than the Republic of Korea. In addition, the procedures and practices utilized in the Republic of

Korea to audit such financial statements may differ from those generally accepted and applied in other

countries. Accordingly, this report and the accompanying separate financial statements are for use by those

knowledgeable about Korean accounting procedures and auditing standards and their application in practice.

March 15, 2012

Deloitte Anjin LLC14Fl., Hanwha Securities Bldg.,23-5 Yoido-dong,Youngdeungpo-gu, Seoul150-717, KoreaTel: +82 (2) 6676 1000Fax: +82 (2) 6674 2114www.deloitteanjin.co.kr

Notice to ReadersThis report is effective as of March 15, 2012, the auditor's report date. Certain subsequent events or circumstances may have occurred

between the auditor's report date and the time the auditor's report is read. Such events or circumstances could significantly affect the

financial statements and may result in modifications to the auditor’s report.

INDEPENDENT AUDITORS’ REPORT



(Korean won in millions)

2010 2011

ASSETS

CURRENT ASSETS:

Cash and cash equivalents 1,171,616 589,638

Trade and other receivables 680,923 870,237

Current tax assets 5,031 6,282

Inventories 267,510 406,038

Financial assets at fair value through profit or loss 10,638 9,996

Finance lease receivables 104,919 120,979

Other current financial assets 10,723 61,059

Other current assets 378,822 139,096

Assets classified as held for sale - 1,338

Total current assets 2,630,182 2,204,663

NON-CURRENT ASSETS:

Long-term trade and other receivables 24,519 44,338

Financial assets available-for-sale 373,978 266,188


Investment in subsidiaries 188,771 199,425

Investment in Joint ventures 35,240 22,327

Investments in associates 626,759 793,931

Property, vessels and equipment 3,681,516 3,853,045

Investment property 70,696 71,099

Intangible assets 39,464 40,667

Other non-current financial assets 370 110

Other non-current assets 40,753 30,873

Total non-current assets 5,848,207 6,227,636

TOTAL ASSETS 8,478,389 8,432,299

SEPARATE STATEMENTS OF FINANCIAL POSITIONAS OF DECEMBER 31, 2011, DECEMBER 31, 2010

45General Information Sustainability Management Financial Information


2010 2011

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Trade and other payables 521,758 730,920

Short-term borrowings 70 80,102

Provisions - 18,108

Current portion of long-term debt, net 1,128,732 1,018,769

Financial liabilities at fair value through profit or loss 3,245 1,308

Other current liabilities 4,258 2,188

Total current liabilities 1,658,063 1,851,395

NON-CURRENT LIABILITIES:

Long-term borrowings 207,223 627,500

Debentures 1,768,342 1,666,123

Provisions - 851

Finance lease obligations 2,389,217 2,528,539

Retirement benefit obligation 25,351 38,749


Other non-current financial liabilities 4,510 4,682

Other non-current liabilities 1,458 1,492

Total non-current liabilities 4,405,693 4,880,978

TOTAL LIABILITIES 6,063,756 6,732,373

SHAREHOLDERS’ EQUITY:

Capital stock 816,366 816,366

Other paid in capital 868,962 822,423

Retained earnings 655,574 107,244

Elements of other shareholders’ equity 73,731 -46,107

TOTAL SHAREHOLDERS’ EQUITY 2,414,633 1,699,926

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 8,478,389 8,432,299

SEPARATE STATEMENTS OF FINANCIAL POSITION


(Korean won in millions except per share amounts)

2010 2011

Revenue 7,977,688 7,187,858

Cost of sales -7,241,939 -7,344,235

Gross profit (loss) 735,749 -156,377

Other operating income 225,150 203,188

Other operating expenses -203,909 -251,823

Selling and administrative expenses -158,838 -161,984

Operating income (loss) 598,152 -366,996

Finance income 185,896 267,556

Finance expenses -446,143 -346,461

Gain (loss) on disposal of investment in subsidiaries, joint ventures and associates 187,097 -7,009

Impairment loss of investment in joint ventures - -547

Profit(Loss) before income tax 525,002 -453,457

Income tax benefits (expense) 14,983 -19,787

Profit(Loss) for the year 539,985 -473,244

OTHER COMPREHENSIVE INCOME(LOSS), NET OF TAX:

Gains (losses) on remeasuring available-for-sale financial assets 28,797 -111,854

Gains (losses) on exchange differences on translation -51,907 -7,984

Actuarial gain (loss) on defined benefit plans -8,941 -4,385

Total comprehensive income (loss) for the year 507,934 -597,467

EARNINGS(LOSS) PER COMMON SHARE:

Basic earnings (loss) and Diluted earnings (loss) per common share 4,158 -3,316

SEPARATE STATEMENTS OF COMPREHENSIVE INCOME(LOSS)FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010



2010 2011

CASH FLOWS FROM OPERATING ACTIVITIES:

Profit (Loss) for the year 539,985 -473,244

Adjustments to reconcile profit(loss) for the year to net cash provided by operating activities -148,956 660,147

Interest received 28,302 5,446

Dividends received 31,874 36,887

Income tax refund 2,892 -

Interest paid -145,661 -151,068

Income tax paid - -2,850

Net cash provided by operating activities 308,436 75,318

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property, vessels and equipment -170,745 -173,774

Acquisition of intangible asset -2,290 -4,245

Disposal of property, vessels and equipment 21,815 36,134

Disposal of intangible asset - 865

Acquisition of financial assets -76 -50,337

Disposal of financial assets 260,221 260

Acquisition of financial assets held-for-trading -10,001 -10,000

Disposal of financial assets held-for-trading - 10,008

Acquisition of financial assets available-for-sale -6,266 -10,997

Acquisition of investment in subsidiaries -27,687 -8,248

Disposal of investment in subsidiaries 247,314 -

Acquisition of investment in joint ventures -4,240 -1,539

Acquisition of investment in associates -6,672 -166,364

Disposal of investment in associates 9,001 26,012

Cash inflow from transaction of derivatives 2,599 3,463

Cash outflow from transaction of derivatives -3,631 -8,556

Decrease in loans 3,270 753

Increase in loans -21,833 -10,995

Decrease in guarantee deposits 6,155 214

Increase in guarantee deposits -2,039 -69

Disposal of assets classified as held for sale 47,561 -

Net cash provided by (used in) investment activities 342,456 -367,415

SEPARATE STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010



2010 2011

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from borrowings 563,285 572,610

Repayment of borrowings -950,109 -106,416

Proceeds from issue of debentures 1,107,224 577,348

Repayment of debentures -686,983 -615,907

Repayment of redemption preferred stock liabilities -183,980 -193,579

Increase in finance lease liabilities 168,348 -143

Payment of finance lease liabilities -579,555 -402,325

Repayment of liabilities related in assets classified as held for sale -9,395 -

Increase in deposit received 4,241 315

Decrease in deposit received -771 -142

Dividends paid -77,152 -70,701

Disposal of treasury stock 128,458 -

Purchase of treasury stock -48,159 -46,539

Paid in capital increase 326,007 -

Net cash used in financing activities -238,541 -285,479

Net changes in cash and cash equivalents 412,351 -577,576

Cash and cash equivalents at beginning of year 771,485 1,171,616

Effects of foreign exchange rate changes on the balance of cash held in foreign currencies -12,220 -4,402

CASH AND CASH EQUIVALENTS AT END OF YEAR 1,171,616 589,638

SEPARATE STATEMENTS OF CASH FLOWS



2010 2011

ASSETS

CURRENT ASSETS:

Cash and cash equivalents 1,289,989 679,372

Trade and other receivables 685,247 868,920

Due from customers for contract work 15,934 14,820

Inventories 272,452 412,715

Financial assets at fair value through profit or loss 10,638 9,997


Current tax assets 8,654 10,670

Other current financial assets 16,509 67,727

Other current assets 387,844 154,419

Assets classified as held for sale - 806

Total current assets 2,792,186 2,340,425

NON-CURRENT ASSETS:

Long-term trade and other receivables 28,871 50,338

Property, vessels and equipment 3,902,552 4,124,445

Investment property 74,393 74,702

Intangible assets 154,542 147,933

Financial assets available-for-sale 376,932 270,067

Investments in associates 700,316 838,941

Investment in Joint ventures 31,825 12,635


Deferred tax assets 771 1,912

Other non-current financial assets 584 320

Other non-current assets 43,264 32,088

Total non-current assets 6,080,191 6,459,014

TOTAL ASSETS 8,872,377 8,799,439

CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONAS OF DECEMBER 31, 2011, DECEMBER 31, 2010



2010 2011

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Trade and other payables 538,185 741,882

Short-term borrowings 14,575 89,957

Current portion of long-term debt, net 1,031,730 955,508


Current tax liabilities 4,337 3,503

Provisions - 18,108

Due to customers for contract work 6,212 12,671

Other current liabilities 25,197 24,940

Total current liabilities 1,623,481 1,847,885

NON-CURRENT LIABILITIES:

Long-term borrowings 2,263,903 2,904,082

Debentures 1,946,941 1,783,940

Redemption preferred stock liabilities - -

Provisions 2,869 3,030

Retirement benefit obligation 49,068 62,862

Finance lease obligations 257,881 281,210

Deferred tax liabilities 1,834 2,686


Other non-current financial liabilities 127,468 131,129

Other non-current liabilities 1,481 1,709

Total non-current liabilities 4,661,037 5,205,091

TOTAL LIABILITIES 6,284,518 7,052,976

SHAREHOLDERS’ EQUITY:

Equity attributable to owners of the company:

Capital stock 816,366 816,366

Other paid in capital 871,554 824,966

Retained earnings 794,083 189,373

Elements of other shareholders’ equity 56,055 -123,473

2,538,058 1,707,232

Non-Controlling Interests 49,801 39,231

TOTAL SHAREHOLDERS’ EQUITY 2,587,859 1,746,463

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 8,872,377 8,799,439

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION



2010 2011

Revenue 8,124,208 7,420,767

Cost of sales -7,177,953 -7,369,878

Gross profit (loss) 946,255 50,889

Other operating income 234,142 209,143

Other operating expense -214,664 -285,268

Selling and administrative expenses -376,098 -389,327

Operating income (loss) 589,635 -414,563

Finance income 157,411 213,021

Finance expenses -448,879 -358,989

Net gain on valuation of equity method investments 70,492 46,304

Gain on disposal of investment in joint ventures and associates 186,344 13,570

Impairment loss of investment in joint ventures and associates - -9,479

Profit (Loss) before income tax 555,003 -510,136

Income tax benefits (expense) 8,138 -24,700

Profit (Loss) from continuing operations 563,141 -534,836

Profit (Loss) from discontinued operation 13,254 522


OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:

Gains (loss) on remeasuring available-for-sale financial assets 28,807 -111,363

Changes in retained earnings of equity method investments - -4,697

Changes in equity of equity method investments 2,531 -45,393

Foreign operation translation -1,377 -2,343

Loss on exchange differences on translation -30,871 -20,567

Actuarial loss on defined benefit plans -8,352 -4,742

-9,262 -189,105

Total comprehensive income (loss) for the year 567,133 -723,419

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010



2010 2011

PROFIT (LOSS) FOR THE YEAR ATTRIBUTABLE TO:

Owners of the Company 586,277 -524,496

Non-controlling interests -9,882 -9,818

TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO:

Owners of the Company 577,204 -713,537

Non-controlling interests -10,071 -9,882

EARNINGS (LOSS) PER COMMON SHARE:

Continuing and discontinued operations

Basic earnings (loss) per common share 4,515 -3,675

Diluted earnings (loss) per common share 4,515 -3,675

Continuing operations

Basic earnings (loss) per common share 4,412 -3,679

Diluted earnings (loss) per common share 4,412 -3,679

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)



2010 2011

CASH FLOWS FROM OPERATING ACTIVITIES:


Adjustments to reconcile profit(loss) for the year to net cash provided by operating activities -189,426 695,379

Interest received 28,685 5,942

Dividends received 32,181 37,185

Income tax refund 3,108 313

Interest paid -147,620 -155,929

Income tax paid -5,474 -9,657

Net cash provided by operating activities 297,849 38,919

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property, vessels and equipment -161,089 -182,460

Acquisition of intangible asset -2,362 -4,483

Disposal of property, vessels and equipment 25,243 42,747

Disposal of intangible asset - 876

Acquisition of financial assets available-for-sale -6,537 -984

Disposal of financial assets available-for-sale - 98,000

Disposal of investment in subsidiaries 246,519 749

Acquisition of investment in subsidiaries -20,000 -

Disposal of investment in joint ventures and associates 9,796 24,757

Acquisition of investment in joint ventures and associates -10,912 -166,902

Acquisition of short-term financial assets -10,154 -54,975

Disposal of short-term financial assets 260,221 3,291

Disposal of long-term financial assets 3 266

Decrease in loans 3,440 869

Increase in loans -22,762 -11,075

Decrease in guarantee deposits 6,176 610

Increase in guarantee deposits -2,168 -998

Disposal of assets classified as held for sale 47,561 -

Disposal of financial assets at fair value through profit or loss 2,700 13,648

Acquisition of financial assets at fair value through profit or loss -4,642 -29,553

Cash inflow (outflow) from other investment activities 771 -756

Net cash provided by (used in) investment activities 361,804 -266,373

CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010



2010 2011

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from borrowings 3,246 98,331

Repayment of borrowings -10,457 -10,018

Repayment of current portion of long-term borrowings -3,946 -491,905

Proceeds from long-term borrowings 562,436 489,373

Repayment of long-term borrowings -951,493 -4,468

Increase pain in capital of subsidiaries 2,215 1,665

Purchase subsidiaries’ investment interest - -14

Increase in deposit received 4,504 314

Decrease in deposit received -771 -401

Proceeds from issue of debentures 1,107,224 577,348

Repayment of debentures -686,983 -713,689

Repayment of redemption preferred stock liabilities -183,980 -193,579

Increase in finance lease liabilities 168,348 1,082

Payment of finance lease liabilities -579,555 -12,733

Purchase of treasury stock -48,159 -46,539

Disposal of treasury stock 128,458 -

Dividends paid -67,792 -72,944

Government grants received 794 292

Government grants used -509 -524

Paid in capital increase 326,007 -

Repayment of liabilities related in assets classified as held for sale -9,395 -

Net cash used in financing activities -239,808 -378,409

Net increase (decrease) in cash and cash equivalents 419,845 -605,863

Cash and cash equivalents at beginning of year 882,971 1,289,989

Effects of foreign exchange rate changes on the balance of cash held in foreign currencies -12,827 -4,754

CASH AND CASH EQUIVALENTS AT END OF YEAR 1,289,989 679,372

CONSOLIDATED STATEMENTS OF CASH FLOWS

trust

talent

tenacity

togetherness

Representing a central part of Hyundai Group's scope and corporate

culture, the themes of Trust, Talent, Tenacity and Togetherness will unify

and guide HMM through whatever lies ahead. Both external and internal

challenges will be met in unison with the combined efforts of all. Without

compromise, the caliber of 4T will bring the eminent potential of HMM to

the fore to carry the success of the business to new heights.

4T

we carry the future hmm inside 2011 - 현대그룹 - 꿈과 …€¦ · · 2012-05-13cash flows...

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