2016 Consolidated Financial Statements

(Unit: KRW)

Current Year

Previous Year

Auditor's

Opinion

Unqualified

Unqualified

On going

Concern

N/A

N/A

Asset

178,835,928,000,000

165,367,946,000,000

Liability

106,491,350,000,000

98,486,545,000,000

Equity

72,344,578,000,000

66,881,401,000,000

Revenue

93,649,024,000,000

91,958,736,000,000

Operating

Income

5,193,500,000,000

6,357,906,000,000

Income

Before tax

7,307,072,000,000

8,459,373,000,000

Net Income

5,719,653,000,000

6,509,165,000,000

ASSETS

December 31, 2016

December 31, 2015

(In millions of Korean Won)

Current assets:

Cash and cash equivalents

￦

7,890,089

￦

7,331,463

Short-term financial instruments

7,361,735

6,904,917

Other financial assets

12,723,993

10,334,803

Trade notes and accounts receivable

4,437,552

4,468,351

Other receivables

3,181,030

3,846,104

Inventories

10,523,812

9,198,999

Current tax assets

46,924

57,022

Financial services receivables

24,865,594

23,777,277

Non-current assets classified as held for sale

29,068

47,643

Other assets

1,389,803

1,562,631

Total current assets

72,449,600

67,529,210

Non-current assets:

Long-term financial instruments

99,484

71,545

Other financial assets

2,560,550

2,804,842

Long-term trade notes and accounts receivable

138,105

67,591

Other receivables

1,301,059

1,163,566

Property, plant and equipment

29,405,716

28,698,927

Investment property

211,671

291,424

Intangible assets

4,586,172

4,298,088

Investments in joint ventures and associates

18,070,121

16,909,943

Deferred tax assets

1,116,774

764,733

Financial services receivables

26,918,009

24,559,123

Operating lease assets

21,317,260

17,719,606

Other assets

661,407

489,348

Total non-current assets

106,386,328

97,838,736

Total assets

￦

178,835,928

￦

165,367,946

LIABILITIES AND EQUITY

December 31, 2016

December 31, 2015

(In millions of Korean Won)

Current liabilities:

Trade notes and accounts payable

￦

6,985,942

￦

7,081,124

Other payables

4,946,723

4,711,494

Short-term borrowings

8,760,678

9,384,165

Current portion of long-term debt and debentures

14,836,967

10,788,049

Income tax payable

540,909

1,000,763

Provisions

1,925,562

1,710,342

Other financial liabilities

138,106

675,437

Other liabilities

5,474,906

5,862,146

Total current liabilities

43,609,793

41,213,520

Non-current liabilities:

Long-term other payables

22,586

2,054

Debentures

36,456,392

36,207,504

Long-term debt

13,389,983

8,552,622

Net defined benefit liabilities

492,173

604,433

Provisions

5,047,078

5,031,558

Other financial liabilities

23,454

145,282

Deferred tax liabilities

4,622,226

4,257,834

Other liabilities

2,827,665

2,471,738

Total non-current liabilities

62,881,557

57,273,025

Total liabilities

106,491,350

98,486,545

Equity:

Capital stock

1,488,993

1,488,993

Capital surplus

4,202,597

3,520,395

Other capital items

(1,640,096)

(1,588,697)

Accumulated other comprehensive loss

(1,223,244)

(1,431,821)

Retained earnings

64,361,408

60,035,088

Equity attributable to the owners of the

Company

67,189,658

62,023,958

Non-controlling interests

5,154,920

4,857,443

Total equity

72,344,578

66,881,401

Total liabilities and equity

￦

178,835,928

￦

165,367,946

2016

2015

(In millions of Korean Won, except per share amounts)

Sales

￦

93,649,024

￦

91,958,736

Cost of sales

75,959,720

73,701,296

Gross profit

17,689,304

18,257,440

Selling and administrative expenses

12,495,804

11,899,534

Operating income

5,193,500

6,357,906

Gain on investments in joint ventures and

associates, net

1,729,447

1,930,675

Finance income

1,111,238

831,376

Finance expenses

678,037

713,452

Other income

1,177,887

1,255,105

Other expenses

1,226,963

1,202,237

Income before income tax

7,307,072

8,459,373

Income tax expense

1,587,419

1,950,208

Profit for the year

￦

5,719,653

￦

6,509,165

Profit attributable to:

Owners of the Company

5,406,435

6,417,303

Non-controlling interests

313,218

91,862

Earnings per share attributable to the owners

of the Company:

Basic earnings per share:

Common stock

￦

20,118

￦

23,861

1st preferred stock

￦

20,156

￦

23,909

Diluted earnings per share:

Common stock

￦

20,118

￦

23,861

1st preferred stock

￦

20,156

￦

23,909

2016

2015

(In millions of Korean Won)

Profit for the year

￦

5,719,653

￦

6,509,165

Other comprehensive income (loss):

Items that will not be reclassified subsequently to

profit or loss:

Remeasurements of defined benefit plans

(2,601)

68,670

Changes in retained earnings of equity-accounted

investees, net

12,433

(15,571)

9,832

53,099

Items that may be reclassified subsequently to

profit or loss:

Loss on available-for-sale ("AFS")

financial assets, net

(152,755)

(59,422)

Gain on valuation of cash flow hedge

derivatives, net

37,066

8,297

Changes in share of earnings of equity-accounted

investees, net

(114,037)

(11,585)

Gain on foreign operations translation, net

475,636

630

245,910

(62,080)

Total other comprehensive income (loss)

255,742

(8,981)

Total comprehensive income

￦

5,975,395

￦

6,500,184

Comprehensive income attributable to:

Owners of the Company

5,614,509

6,384,881

Non-controlling interests

360,886

115,303

Total comprehensive income

￦

5,975,395

￦

6,500,184

Capital

stock

Capital

surplus

Other

capital

items

Accumulated other

comprehensive

loss

Retained

earnings

Total equity attributable to the owners of the Company

Non-

controlling

interests

Total

equity

(In millions of Korean Won)

Balance at

January 1, 2015

￦

1,488,993

￦

4,134,550

￦

(1,273,752)

￦

(1,344,826)

￦

54,649,863

￦

57,654,828

￦

4,965,737

￦

62,620,565

Comprehensive

income:

Profit for the year

-

-

-

-

6,417,303

6,417,303

91,862

6,509,165

Gain (loss) on AFS financial assets, net

-

-

-

(62,845)

-

(62,845)

3,423

(59,422)

Gain (loss) on

valuation of

cash flow hedge

derivatives, net

-

-

-

(640)

-

(640)

8,937

8,297

Changes in valuation

of equity-accounted

investees, net

-

-

-

(12,967)

(15,552)

(28,519)

1,363

(27,156)

Remeasurements of

defined benefit plans

-

-

-

-

70,125

70,125

(1,455)

68,670

Gain (loss) on foreign

operations

translation, net

-

-

-

(10,543)

-

(10,543)

11,173

630

Total comprehensive

income (loss)

-

-

-

(86,995)

6,471,876

6,384,881

115,303

6,500,184

Transactions with

owners, recorded

directly in equity:

Payment of cash

dividends

-

-

-

-

(1,085,983)

(1,085,983)

(266,583)

(1,352,566)

Increase in

subsidiaries' stock

-

-

-

-

-

-

15,646

15,646

Purchases of

subsidiaries' stock

-

-

-

-

-

-

11,104

11,104

Disposals of

subsidiaries' stock

-

7,067

-

-

-

7,067

17,065

24,132

Reclassification to

other financial liabilities

-

(621,267)

-

-

-

(621,267)

-

(621,267)

Purchases of

treasury stock

-

-

(314,945)

-

-

(314,945)

-

(314,945)

Others

-

45

-

-

(668)

(623)

(829)

(1,452)

Total transactions with

owners, recorded directly in equity

-

(614,155)

(314,945)

-

(1,086,651)

(2,015,751)

(223,597)

(2,239,348)

Balance at

December 31, 2015

￦

1,488,993

￦

3,520,395

￦

(1,588,697)

￦

(1,431,821)

￦

60,035,088

￦

62,023,958

￦

4,857,443

￦

66,881,401

Capital

stock

Capital

surplus

Other

capital

items

Accumulated other

comprehensive

income (loss)

Retained

earnings

Total equity attributable to the owners of the Company

Non-

controlling

interests

Total

equity

(In millions of Korean Won)

Balance at

January 1, 2016

￦

1,488,993

￦

3,520,395

￦

(1,588,697)

￦

(1,431,821)

￦

60,035,088

￦

62,023,958

￦

4,857,443

￦

66,881,401

Comprehensive

income:

Profit for the year

-

-

-

-

5,406,435

5,406,435

313,218

5,719,653

Loss on AFS financial assets, net

-

-

-

(150,181)

-

(150,181)

(2,574)

(152,755)

Gain on valuation of

cash flow hedge

derivatives, net

-

-

-

34,725

-

34,725

2,341

37,066

Changes in valuation

of equity-accounted

investees, net

-

-

-

(108,205)

12,390

(95,815)

(5,789)

(101,604)

Remeasurements of

defined benefit plans

-

-

-

-

(12,893)

(12,893)

10,292

(2,601)

Gain on foreign

operations

translation, net

-

-

-

432,238

-

432,238

43,398

475,636

Total comprehensive

income

-

-

-

208,577

5,405,932

5,614,509

360,886

5,975,395

Transactions with

owners, recorded

directly in equity:

Payment of cash

dividends

-

-

-

-

(1,079,544)

(1,079,544)

(5,002)

(1,084,546)

Increase in

subsidiaries' stock

-

(684)

-

-

-

(684)

26,721

26,037

Purchases of

subsidiaries' stock

-

15,273

-

-

-

15,273

(111,868)

(96,595)

Disposals of

subsidiaries' stock

-

1,438

-

-

-

1,438

26,785

28,223

Reclassification from

other financial liabilities

-

621,267

-

-

-

621,267

-

621,267

Purchases of

treasury stock

-

-

(261,552)

-

-

(261,552)

-

(261,552)

Disposals of

treasury stock

-

44,908

210,153

-

-

255,061

-

255,061

Others

-

-

-

-

(68)

(68)

(45)

(113)

Total transactions with

owners, recorded directly in equity

-

682,202

(51,399)

-

(1,079,612)

(448,809)

(63,409)

(512,218)

Balance at

December 31, 2016

￦

1,488,993

￦

4,202,597

￦

(1,640,096)

￦

(1,223,244)

￦

64,361,408

￦

67,189,658

￦

5,154,920

￦

72,344,578

2016

2015

(In millions of Korean Won)

Cash flows from operating activities:

Cash generated from operations:

Profit for the year

￦

5,719,653

￦

6,509,165

Adjustments

11,165,345

9,495,809

Changes in operating assets and liabilities

(13,565,128)

(13,497,418)

3,319,870

2,507,556

Interest received

486,709

712,853

Interest paid

(1,670,859)

(1,458,498)

Dividend received

932,038

1,149,100

Income tax paid

(2,070,794)

(1,662,596)

Net cash provided by operating activities

996,964

1,248,415

Cash flows from investing activities:

Proceeds from purchases of short-term

financial instruments, net

(419,325)

(2,874,548)

Proceeds from disposals (purchases) of other

financial assets (current), net

(1,580,624)

4,340,226

Proceeds from disposals of other financial assets

(non-current)

595,927

171,985

Receipts from other receivables

147,797

63,025

Disposals of long-term financial instruments

14

383

Proceeds from disposals of property, plant and

equipment

133,286

62,698

Proceeds from disposals of intangible assets

10,613

15,165

Proceeds from disposals of investments in

subsidiaries

-

99,013

Proceeds from disposals of investments in

joint ventures and associates

12,477

-

Acquisitions of other financial assets (non-current)

(244,563)

(156,792)

Increases in other receivables

(168,083)

(78,076)

Purchases of long-term financial instruments

(11,146)

(30,811)

Acquisitions of property, plant and equipment

(2,971,161)

(8,141,729)

Acquisitions of intangible assets

(1,406,352)

(1,218,136)

Cash outflows from business combinations

(2,370)

(86,613)

Acquisitions of investments in joint ventures and

associates

(431,517)

(256,624)

Other cash receipts from investing activities, net

23,277

30,546

Net cash used in investing activities

(6,311,750)

(8,060,288)

2016

2015

(In millions of Korean Won)

Cash flows from financing activities:

Proceeds from (repayment of) short-term borrowings, net

￦

(1,369,186)

￦

1,887,238

Proceeds from long-term debt and debentures

27,509,144

28,132,100

Paid-in capital increase of subsidiaries

25,536

15,646

Purchases of subsidiaries' stock

(96,595)

11,104

Disposals of subsidiaries' stock

34,206

27,153

Repayment of long-term debt and debentures

(19,015,198)

(21,142,350)

Purchases of treasury stock

(261,552)

(314,945)

Dividends paid

(1,084,546)

(1,352,510)

Other cash payments from financing activities, net

(50,391)

(49,769)

Net cash provided by financing activities

5,691,418

7,213,667

Effect of exchange rate changes on cash and

cash equivalents

181,994

(166,844)

Net increase in cash and cash equivalents

558,626

234,950

Cash and cash equivalents, beginning of the year

7,331,463

7,096,513

Cash and cash equivalents, end of the year

￦

7,890,089

￦

7,331,463