Financial Overview

(in million EUR)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	Rate of change (%)	Factors
Overall
Sales	34,505.7	33,331.0	3.5	1)
EBITDA	5,133.8	5,095.0	0.8	-
Chassis & Safety
Sales	7,514.9	7,269.2	3.4	2)
EBITDA	1,018.1	990.2	2.8	-
Powertrain
Sales	6,494.3	6,260.3	3.7	3)
EBITDA	443.3	650.2	(31.8)	-
Interior
Sales	7,002.5	6,605.7	6.0	4)
EBITDA	946.3	850.2	11.3	-
Tires
Sales	9,784.4	9,583.2	2.1	5)
EBITDA	2,280.8	2,137.7	6.7	-
ContiTech
Sales	3,931.2	3,878.3	1.4	6)
EBITDA	551.8	576.3	(4.3)	-

Factors
1) Net Sales
-The Company's net sales in the fiscal year ended December 31, 2014 increased by 3.5% to EUR 34,505.7 million. Most of these gains were because of increased production of passenger cars and light commercial vehicles combined with a vehicle mix which was more favorable to the Company. The Company experienced particularly strong growth in its Automotive Group operations in NAFTA countries and China. These increases in sales were slightly offset by negative currency exchange effects.

2) Chassis & Safety
-Sales in the Company's Chassis & Safety division in the fiscal year ended December 31, 2014 increased by 3.4% over the previous year to EUR 7,514.9 million. Increased sales of electronic brake systems, brake boosters and air bag control units all contributed to improved sales figures. Specifically, sales of advanced driver assistance systems increased by over 40% compared to the previous year.

3) Powertrain
-In the fiscal year ended December 31, 2014, the Powertrain division had sales of EUR 6,494.3 million, an increase of 3.7% over the previous year. The Fuel & Exhaust Management business unit experienced higher sales from both organic growth and the acquisition of Emitec. Higher demand for exhaust sensors due to tighter regulations in Asia also improved sales figures. In the Engine Systems business unit, sales growth in engine management systems and turbochargers were offset by declines in injectors and pumps. Similarly, the Hybrid Electric Vehicle business unit had decreased sales in electric motors and battery systems, but increased sales in on-board power supply systems.

4) Interior
-The Company's Interior division's sales increased by 6.0% in the fiscal year ended December 31, 2014 to EUR 7,002.5 million. New seat control devices, lighting control systems, and body controllers significantly increased sales volume in the Body & Security business unit. The Infotainment & Connectivity business unit had mixed results, with increased sales of multimedia systems in Asia and the U.S. being offset by declines in device connectivity and telematic products. Increased demand for new braking systems and TPMS along with new replacement parts improved sales in the Commercial Vehicle & Aftermarket business unit. In 2014, sales of instrument clusters experienced its greatest increase in year-over-year sales, leading to higher sales in the Instrumentation & Driver HMI business unit as a whole.

5) Tires
-Sales in the Tire division increased by 2.1% over the previous year to EUR 9,784.4 million. While sales of tires for passenger cars and light trucks to OEMs remained level from the previous year, aftermarket tires had increased sales in all regions. Sales of tires for commercial vehicles also increased compared to the previous year.

6) ContiTech
-The ContiTech division had sales of EUR 3,931.2 million in the fiscal year ended December 31, 2014, an increase of 1.4% from the previous year. Increased sales in both aftermarket and OEM products were partially offset by decreased sales to industrial markets.

Acquisitions

Acquisition of companies within Mecaseat by Benecke-Kalilo
-The Benecke-Kaliko Group, as part of the Company's ContiTech division, is expanding the production of foils for car interiors in Southern and Eastern Europe. Benecke-Kaliko acquired two sites from the Belgian Mecaseat Group. Retroactively effective from November 1, 2014, Mecaseat's Spanish company Gorvi S.A. in Pamplona and Polish company Mecapol in Wągrowiec will become wholly owned subsidiaries of the Benecke-Kaliko Group. Both locations employ a total of 150 employees. Gorvi supplies customers in Spain, France and North Africa while Mecapol supplies Eastern European and Russian customers with foils and upholstery materials. (From a press release on November 17, 2014)

Emitec
-The Company has acquired 100% ownership of Emitec for a cash consideration of GBP 46 million. Emitec was formerly a 50/50 joint venture between the Company and GKN. The acquisition will take effect on July 31, 2014. Emitec will form the Exhaust Management Segment of the Fuel & Exhaust Management business unit under the Powertrain Division. Products will still be made and sold under the Emitec brand name. With this transaction, the Company is planning to start production of Emitec products by the end of 2014 at its plant in Wuhu, China. (From a press release on July 31, 2014)

Zytek Automotive
-The Company has acquired full ownership of its former joint venture, Zytek Automotive, located in Fradley, UK. It previously had a 50% shareholding in Zytek Automotive. Zytek Automotive will operate as a part of the Continental Engineering Services (CES) organization in the United Kingdom, providing engineering services covering the chassis, interior and powertrain. Zytek Automotive's main focus has been on developing conventional, electrical and hybrid drive systems for passenger cars and commercial vehicles. (From a press release on April 3, 2014)

Veyance Technologies Inc.
-The Company announced that it has concluded an agreement with The Carlyle Group, located in Washington D.C., U.S., relating to the purchase of Veyance Technologies Inc., located in Fairlawn, Ohio, U.S., for approximately EUR 1.4 billion. Veyance operates globally in the field of rubber and plastics technology and recorded sales of approximately EUR 1.5 billion in 2013. Approximately 90% of Veyance's 2013 sales were achieved outside the automotive industry. Veyance focuses on conveyor belts, hoses, power transmission belts and air springs. (From a press release on February 10, 2014)

Restructuring

Dissolution of joint venture with SK Innovation
-The Company and its partner, SK Innovation Co., Ltd., South Korea, dissolved their joint venture SK Continental E-motion Pte. Ltd., Singapore at the end of 2014, due to weakening demand for electric vehicles. SK Continental E-motion developed and produced lithium-ion battery systems for the automotive industry.

Recent Development outside Germany

<India>
-The Company has launched the newly developed "ContiMaxContact MC5" and "ContiComfortContact CC5" premium passenger car tire lines in the Indian market. (From a press release on November 20, 2014)

<U.S.>
-The Company announced that it will begin production in March 2014 of short range radar sensors for advanced driver assistance systems at its plant in Seguin, Texas, U.S. A single line will handle production initially, but additional lines will be prepared to satisfy the OEM demand in the U.S. The Company plans to produce approximately three million short range radar sensors in Seguin in 2016. (From a press release on March 26, 2014)

Contracts

-Toyota Motor Corporation has selected Denso Corporation and the Company as its suppliers for "Toyota Safety Sense" active safety packages that will be launched starting 2015. Toyota has developed a high-performance P package with Denso and a standard C package for mass-production models with the Company. The P package consists of a monocular camera and millimeter-wave radar while the C package comprises a monocular camera and laser radar. (From an article in the Nikkan Jidosha Shimbun on November 28, 2014)

-The Company announced that it has started production of turbochargers for Ford's 1.0 liter EcoBoost gasoline engine at its Czech location in Trutnov. Previously, this turbocharger was produced by a plant in Lahr, Germany, belonging to Schaeffler AG, a partner of the Company. The Trutnov plant has 780 employees producing components for exhaust gas recirculation, high pressure pumps, high pressure sensors, and intelligent actuators. (From a press release on September 25, 2014)

-The Company announced that Maserati has approved its summer tires for use in the Maserati Ghibli. The Company will now manufacture the ContiSportContact 5 in eight sizes between 18 and 21 inches. The basic version of the Ghibli will be fitted with the ContiSportContact 5 in size 235/50 R 18 97 Y, whereas the axles on the more motorized cars will be fitted with 19-, 20-, and 21-inch tires. Vehicle models with more powerful engines of up to 301 kW (410 hp) will be fitted with tires in sizes 245/35 ZR 21 96 Y XL on the front axle and 285/30 ZR 21 100 Y XL on the rear axle. (From a press release on July 2, 2014)

-The Company announced that its third generation truck and bus tires have been selected as original equipment by MAN Truck & Bus. The Conti EcoPlus HS3 for truck steering axles and the Conti EcoPlus HD3 for driving axles were the first to obtain approval for all MAN models. In the bus segment, the Conti Coach HA3 for long-haul travel and the Conti CityPlus for regional travel will be used in MAN and Neoplan vehicles. (From a press release on April 28, 2014)

-The Company announced that Volkswagen has approved three premium summer tire models to be fitted at the factory. The Golf 7 will be fitted with the 15- and 16-inch ContiEcoContact 5 and ContiPremiumContact 5, the CC will be fitted with the 17-inch ContiSportContact 5 and ContiEcoContact 5, and the Beetle will also be fitted with the 20-inch ContiSportContact 5 tire in the future. The Company manufactures the tires for Volkswagen in its European tire plants and manufactures the ContiSportContact 5 for the Beetle in the American tire plant in Mount Vernon. (From a press release on January 27, 2014)

Awards

-The Company announced that it has received the 2014 Automotive News PACE (Premier Automotive Suppliers' Contribution to Excellence) Award for its pressure sensor-based Pedestrian Protection System (PPS pSAT). The Company has developed this solution for pedestrian protection – which has been in series production since 2011 – together with Daimler. (From a press release on April 9, 2014)

-The Company announced that it has received the "Special Award for Innovation" from Daimler AG. The honor was for the touchpad in the new Mercedes-Benz C-Class. In the new Mercedes-Benz C-Class, this touchpad is integrated into the center console. This ensures that it can easily be operated by drivers without taking their attention away from the road. It also allows characters to be input by handwriting in many languages and delivers clear haptic feedback. (From a press release on February 28, 2014)

Outlook

Overall
-The Company expects its sales in the fiscal year ending December 31, 2015 to surpass EUR 36 billion.

Outlook in Japan
-During a round-table discussion for the press in Tokyo, the Company's chairman, Dr. Elmar Degenhart, revealed a plan to double the company's 2013 sales from Japanese automakers to EUR 4 billion by 2020. The Company intends to increase orders for fuel-injection devices and actuators for transmissions in its power train business. The Company also plans to increase the number of employees in its Japanese subsidiary by 200 to 1,300 in 2015. (From an article in the Nikkan Jidosha Shimbun on September 19, 2014)

Chassis & Safety Division
-The Chassis & Safety Division announced that the percentage of systems projects for advanced driver assistance systems will grow from 30% to approximately 50% compared to component projects over the next three years. (From a press release on May 20, 2014)

Tire Division
-The Company announced that its Tire Division will see potential global output rise by more than 20 million tires per year in the run-up to 2016. The Tire Division is currently undergoing the largest investment program in the history of the Company which currently totals over EUR 1 billion. (From a press release on March 3, 2014)

R&D Expenditure by Divisions

(in million EUR)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
Chassis & Safety	629.5	535.3	500.2
Powertrain	635.1	561.8	529.0
Interior	570.9	492.0	446.1
Tires	216.9	204.7	195.1
ContiTech	85.3	84.6	74.4
Total	2,137.7	1,878.4	1,744.8

R&D Structure

-As of December 31, 2014, the Company has 127 research and development sites located in 27 countries.

R&D Facilities

-The Company announced that it has opened an extension building to expand its R&D capabilities at Continental Automotive Singapore Pte Ltd. With a total investment of SGD 29.7 million, the new extension building can accommodate around 450 employees and has a floor space of 5,000 square meters. The new extension will house R&D and administrative offices from ContiTech, the Tires Division, and four Interior Division business units, namely Instrumentation & Driver HMI, Infotainment and Connectivity, Body and Security and Commercial Vehicles and Aftermarket. (From a press release on November 27, 2014)

-The Company announced the grand opening of a new automotive research and development center in Lewes, East Sussex, U.K. The Company develops Surround View systems at its current facility in Lewes. The new "Pannett's Building" provides additional offices, meeting rooms, a workshop, and a show room for vehicles with Surround View systems. By the end of 2014, the Company expects to have 60 employees working in Lewes. (From a press release on November 12, 2014)

-The Company announced that it has opened a new Tires Technology Center at its location in Puchov, Slovakia to expand its research and development capacity within the Tires Division. The investment in the expansion of the research and development facilities totals approximately EUR 7.5 million and is part of the EUR 1 billion growth investment program announced in 2011 by the Tires Division. By 2016, the Company plans to increase the number of employees in the technology center by 15%. (From a press release on November 5, 2014)

-The Company's Sensors & Actuators (S&A) business unit opened a competence center in Ostrava, which is responsible for worldwide research and development in the field of sensors and actuators. S&A development was previously located in Frenstat. However, the expansion of production in Frenstat, especially in the area of sensors and actuators, made it necessary to relocate its development department. The new competence center is located in a laboratory and office complex with nearly 5,000 square meters of floor space. When the relocation phase is complete, approximately 160 employees will work in the new center. In the future, the Company plans to increase the workforce to 200 employees. (From a press release on May 8, 2014)

-The Company announced that it has set up a new fuel laboratory at its site in Regensburg, Germany, to study how the properties of various fuels affect engine components and functions. The Company will investigate how to optimally exploit the potential of fuels such as diesel, gasoline, biofuels, mineral oils, and additives at the new facility, thereby further reducing emissions. The Company has invested half a million euros in the new laboratory, which will be available to other business units. (From a press release on January 17, 2014)

R&D Activities

-The Company will begin autonomous vehicle testing on public roads in Japan and continue throughout 2015. The testing will start in Hokkaido and then continue on expressways such as the Tomei Expressway and Tohoku Expressway. Tests will also be conducted in urban areas. The vehicle is equipped with various sensors and integrated control logic systems to respond to traffic conditions such as traffic jams and construction sites. A driver will be present to monitor the vehicle. The Company had previously conducted autonomous vehicle tests on public roads in the U.S. In the future, the Company plans to continue tests with different autonomous vehicles. (From an article in the Nikkan Jidosha Shimbun on October 3, 2014)

-The Company is forming an international team of experts from the IT and automotive industries who will focus on Intelligent Transportation Systems (ITS). The new business unit, called Continental Intelligent Transportation Systems, LLC, will be headquartered in Silicon Valley, California, U.S. and serve as an example of the company's strategy to make the car an integral part of the Internet of Everything. The Company's key objectives include eliminating road accidents, minimizing energy consumption, maximizing comfort and accessibility of vehicles, and enabling them to exchange information in real-time. (From a press release on August 18, 2014)

-The Company is involved in the ACTIVE (Advanced Combustion Turbocharge Inline Variable Valvetrain Engine) project, a multi-million pound investment by both the UK government and automotive industry. ACTIVE is focused on Ford's 1.0-litre EcoBoost engine and will accelerate the introduction of future low carbon technologies, including advanced turbocharging, advanced combustion system development and variable valvetrain technology. Ford and its partners will receive a GBP 13.1 million grant for their GBP 100 million program to upgrade the EcoBoost engine. Other partners include Schaeffler UK and UEES (Unipart Eberspaecher Exhaust Systems). (From a press release on May 23, 2014)

-Continental Automotive Corporation, a Japanese unit of the Company, will establish a special division for developing autonomous driving technologies in Japan. The Company will develop technologies for mass production and cater to the specific needs of Japanese automakers. A prototype car featuring the latest autonomous driving technologies will be unveiled in the second half of 2014. The development division will be located at the company's engineering center in Yokohama, Japan. Test courses in Asahi, Chiba and Monbetsu, Hokkaido, will be partially renovated for use in research and development. (From an article in the Nikkan Jidosha Shimbun on March 27, 2014)

Technological Alliance

eHorizon navigation system developed with IBM and HERE
-Together with its partners IBM and the location cloud company HERE, the Company will demonstrate a new version of its eHorizon navigation system at the 2015 CES in Las Vegas, U.S. Known as "dynamic eHorizon," the system is connected to both the HERE location cloud with real time digital maps and the IBM connected car cloud. Using IBM Big Data and Analytics, the system accounts for dynamic events such as weather, accidents, or traffic jams. According to a Company estimate, fleet operators using Scania trucks with eHorizon have saved over 63 million liters of diesel since 2012. (From a press release on December 10, 2014)

3D sound system developed with Auro Technologies
-Drawing on both companies' experience and knowledge in multimedia applications, the Company and Auro Technologies have announced a joint development project to bring true 3D sound to in-car infotainment systems. The Auro-3D format was first integrated into digital cinemas as Auro 11.1 by Barco. The format is fully scalable, so the Company can configure the system to the customers' need. Sources can range from mono to native 3D audio, and speaker layouts can range from simple setups up to Auro 22.1 speaker arrays. (From a press release on July 29, 2014)

Hybrid system for gasoline engines with Schaeffler
-The Company and Schaeffler AG have jointly developed a new mild hybrid system for gasoline engines. The new system features the Company's 48 Volt Eco Drive System which uses lithium-ion batteries mated with Schaeffler's electronic clutch (e-clutch). The new system increases the fuel efficiency of a vehicle by 17% compared with a vehicle using only the base engine. (From an article in the Nikkan Jidosha Shimbun on June 24, 2014)

Demonstration hybrid car with Schaeffler
-The Company and Schaeffler AG have developed a demonstration car that displays the benefits of the hybridization of passenger cars with a downsized gasoline engine. With their joint project, the Gasoline Technology Car (GTC), the engineers at the two companies cut the GTC's fuel consumption and curb its CO2 emissions by 15% in comparison to the base vehicle. This allows the vehicle to meet the limits defined by the upcoming Euro 6c emissions standard (2017/2018). (From a press release on March 18, 2014)

Connected car development with HERE
-The Company and Nokia's HERE, a leader in mapping and location services, announced that their teams will intensify their collaboration in developing the Connected Car. The two companies will focus on the Electronic Horizon (eHorizon) platform, future Automated Driving functionalities and Intelligent Transportation Systems (ITS). Work will begin with the development of highly precise map technology for the Company's eHorizon platform that will enable a vehicle to continuously determine its position on the road within 10-20 centimeters. The Company aims to provide a complete end-to-end connected eHorizon solution based on HERE data and cloud services to vehicle manufacturers worldwide. The solution will also be the basis for Highly Automated Driving functionality that the Company expects to have in vehicles by 2020. (From a press release on January 14, 2014)

Product Development

Cloud-linked LED headlamp
-The Company will commercialize its LED headlamp technology which uses cloud-based road information in 2016 to control lighting. Initially, the technology will use static information such as road layout and construction. Future versions of the technology will incorporate dynamic information about oncoming vehicles and weather. This headlamp system is a part of the Company's recent focus on control technologies which use in-vehicle communications. The Company will propose this technology to automakers by highlighting its effect on safety. (From an article in the Nikkan Jidosha Shimbun on December 25, 2014)

In-vehicle smartphone terminal
-The Company has developed a new in-vehicle terminal for smartphones. The new terminal provides wireless charging for the smartphone and wireless communications between the phone and the vehicle. The smartphone terminal uses near field communication technology (NFC) to connect the smartphone to the vehicle, which allows the driver to activate preset settings in the vehicle via the phone, such as preferred radio stations, air conditioning settings and seat positions. The wireless charging system of the terminal supports the "Qi" standard specified by the Wireless Power Consortium. The modular design of the terminal allows automakers to decide which features they want to incorporate in their models. Mass production of the new smartphone terminal will begin in 2015. (From an article in the Nikkan Jidosha Shimbun on October 29, 2014)

Transmission control unit for Audi dual clutch transmission
-The Company announced that it has developed a new control unit for the next generation of the Audi 7-speed S tronic dual clutch transmission. Challenges the Company faced in this new control unit included adding more functionality into less space while ensuring that the control unit could support the transmission's fuel efficiency, its dynamic performance, and its fast shifting. Another key requirement is the functional safety of the control unit, which follows Automotive Safety Integrity Level D, (ASIL-D) in line with the ISO 26262 standard. Series production will begin in late 2014. (From a press release on August 5, 2014)

Electric Parking Brake (EPB) for drum brakes
-The Company developed a concept for an Electric Parking Brake (EPB) for drum brakes. The concept is tailored towards compact cars that have traditionally used mechanical parking brakes built into the existing drum brake on the rear axle. The system consists of two actuators integrated into the drum-brake base panel on the rear axle, in addition to its control software. The electronics that activate the actuators are integrated into the Electronic Stability Control (ESC) system. Production of EPB is scheduled to begin by 2017. The functionality of the electro-mechanical system can be used in the future for duo-servo brakes common on light trucks and SUVs. (From a press release on July 23, 2014)

Combiner HUD
-The Company is continuing to extend its range of scalable solutions for head-up displays (HUD) with the development of a compact combiner HUD. In the combiner HUD, a small, transparent plastic disc called the "combiner" is used as a mirror for the information shown, instead of the windshield itself. Compared to a windshield HUD, the combiner HUD requires only approximately half the installation space, depending on the application. While a windshield HUD is usually an option for upper mid-size class vehicles, the combiner HUD is available for smaller volume models. The Company is plans to begin the first production run of the combiner HUD in 2015. (From a press release on July 22, 2014)
>>>Combiner HUD exhibited at 2014 JSAE Automotive Engineering Exposition

Turbocharger with aluminum turbine housing
-The Company announced it has launched series production of the first car turbocharger with an aluminum turbine housing. Since the spring of 2014, this turbocharger has been integrated in the three-cylinder gasoline engine on the MINI Hatch. Using aluminum provides weight savings of nearly 30% compared to a conventional turbocharger. The double-walled aluminum housing surrounds the hottest area with a cooling water jacket. Coolant flowing through the jacket ensures that the external housing surface does not exceed 120℃ and the internal temperature does not exceed 350℃ (662ºF). (From a press release on July 15, 2014)

Augmented Reality HUD (AR-HUD)
-The Company is presenting a new version of its head-up display (HUD). The Augmented Reality HUD (AR-HUD) supplements the view in front of the vehicle with virtual information (augmentations) for the driver. The AR-HUD is based on the previous HUD, with the information now appearing exactly where it is relevant to the driving situation. For example, a symbol is inserted precisely into the exterior view to show the driver the driving line on a curve in the road. When distance controls (Adaptive Cruise Control, ACC) are enabled, a marking in the AR-HUD indicates which vehicle is detected by the assistance system. The Company is planning production readiness of the AR-HUD in 2017. (From a press release on July 14, 2014)

Advanced driver assistance system for city driving
-Continental Automotive Corporation, a Japanese unit of the Company, presented a new advanced driver assistance system for city traffic. The system features four functions: narrow lane assistance, oncoming traffic assistance, lane change assistance and speed recommendation. The system uses four short range radars on the corners of the vehicle, a forward-facing long range radar and a stereo camera to establish a view of the area surrounding the vehicle. Data is received via in-vehicle sensors and vehicle-to-vehicle and vehicle-to-infrastructure communication. The data will be used to assist drivers in operating the vehicle, which is expected to increase traffic efficiency and reduce accidents. (From an article in the Nikkan Jidosha Shimbun on June 10, 2014)

Tire pressure sensors that measure tread depth
-The Company has developed new tire pressure sensors which can detect when a tire change is necessary due to insufficient tread depth. The electronic Tire Information System (eTIS) sensor's software deduces tread depth from gradual changes in tire rolling characteristics. The new feature is tentatively scheduled to be available in 2017 on new vehicle models equipped with the Company's tire pressure monitoring systems (TPMS). (From a press release on May 7, 2014)

Information service utilizing data sourced by telematics systems
-The Company has started marketing its new service that utilizes information provided by automakers' original telematics systems. The telematics systems include Toyota's G-Book, Nissan's Carwings, and Honda's Internavi. As the amount of information increases, the service can offer more accurate information on items such as traffic conditions and road environment changes. The Company's next-generation service is likely to include a rain detection function based on wiper movements and an icy-road detection system supported by ambient temperature sensors and anti-lock braking systems. By using the Company's new service, automakers can offer precise information to car users without adding their own telematics solutions to their vehicles. The Company plans to release the new service in Japan and other advanced countries. (From an article in the Nikkan Jidosha Shimbun on March 28, 2014)

Telematics module
-The Company has developed its new high-speed Telematics module. This new Telematics solution offers up to 100 Mbps bandwidth where the 4G Long Term Evolution (LTE) mobile network standard is available. By integrating configurable frequency variants, interchangeable options for air interface solutions, GPS/GLONASS, and WLAN into one scalable and highly compact hardware module, the module can be used worldwide. Applicable Telematics functions include connecting a smartphone to the vehicle, on- and off-board navigation, safety and security services such as automatic collision notification and remote diagnostics, premium roadside assistance, a Wi-Fi hot spot, and installable apps. The Company's new high-speed LTE Telematics module is scheduled to be available for mass production in early 2016. (From a press release on March 27, 2014)


LED light control units
-The Company has further developed its LED light control units, enabling them to control all light functions centrally. A prime example is the type of full-LED headlights developed by a German premium manufacturer. The LED strands in such headlights can be individually controlled to provide light based on the particular situation. Within fractions of a second, the Company's light control unit can adjust between lighting for freeways or country roads, low-beam and high-beam light, and lighting for brightly lit corners or intersections. (From a press release on March 14, 2014)

Harness integrating cables of wheel speed sensors and electric parking brakes
-The Company announced that it has integrated the cables for wheel speed sensors and the electric parking brake (EPB) into a single harness. Combining wheel speed sensors with the EPB cable results in lower development, product and assembly costs compared to the individual components. The first serial production project based on this new concept will launch with a Japanese car manufacturer in 2015. (From a press release on January 29, 2014)

Capital Expenditure

(in million EUR)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
Chassis & Safety	411.6	401.7	383.8
Powertrain	428.0	360.5	395.0
Interior	286.1	253.3	257.1
Tires	724.3	798.6	830.2
ContiTech	190.6	166.0	151.0
Other/Consolidation	4.8	1.0	2.3
Total	2,045.4	1,981.1	2,019.4

Investment in Germany

-The Company announced that it has broken ground on the new High Performance Technology Center (HPTC) at its plant in Korbach, Germany. The new production hall is located on a 12,000-square-meter site. The building is expected to be completed by the end of May 2015. Operations at the completed facility are scheduled to begin in July 2016 on two fronts. The HPTC will produce high-performance tires for sporty passenger cars. The Korbach plant will also serve as a testbed for development and optimization of production processes prior to subsequent introduction across other tire plants. The Company will invest EUR 45 million into the plant and will hire approximately 60 employees. The plant is expected to produce around 350,000 tires annually once regular operations begin. (From a press release on September 11, 2014)

Investment Outside Germany

<China>
-The Benecke-Kaliko Group began preparations for an investment for a facility in Changzhou, China. The investment will be the single largest investment in the history of the Benecke-Kaliko Group. The new facility will manufacture environmentally compatible surface materials for the automotive industry. Operations at the new facility are expected to begin at the end of 2015.

-ContiTech opened its new plant in Sanmen, Zhejiang. ContiTech Power Transmission Group acquired Taizhou Fuju Rubber Belt Manufacture Co., Ltd. in January 2014 and renamed it ContiTech Power Transmission (Sanmen) Ltd. Covering 33,000 square meters, the new plant is the Power Transmission Group's second plant in China. The plant produces V-belts, V-ribbed belts and timing belts for the automotive OEM market, the automotive aftermarket and other industrial markets. (From a press release on December 30, 2014)

-ContiTech Grand Ocean (Changchun) Co., Ltd., a subsidiary of the Company, opened a new plant in Hangzhou spanning 2,000 square meters. The plant in Hangzhou is the fourth ContiTech Fluid Technology production site in China. It will produce underfloor air conditioning lines for Ford starting March 2015. (From a press release on November 30, 2014)

-The Company announced the opening of its second plant in Wuhu, Continental Automotive Interior (Wuhu) Co., Ltd. An initial investment of EUR 33 million was made for land and construction. The new facility is on a 120,000-square-meter plot and has an initial floor space of 46,000 square meters. The plant will have production operations, an R&D center, laboratories and warehousing, and will focus on the Instrumentation & Driver HMI business unit. The new plant is expected to be fully operational in the first quarter of 2015. By the end of 2015, the plant is expected to have 42 production lines and approximately 1,500 employees, including 215 R&D engineers. (From a press release on November 17, 2014)

-The Company will set up a new production line in Tianjin, China for transmission control units (TCU). The TCUs will be specifically designed for the EAST platform, a platform that is used primarily by Chinese manufacturers. (From a press release on May 21, 2014)

<India>
-The Company has established a new manufacturing facility for passenger and light truck tires at its existing tire plant at Modipuram with an initial annual capacity of 800,000 tires. In the future, further expansion at the plant is possible. (From a press release on November 20, 2014)

<U.S.>
-The Company announced an approximately USD 150 million investment at its Newport News manufacturing facility in Virginia, U.S. over a multi-year period. The Company will add new production lines and create approximately 500 new jobs, nearly doubling the facility's current workforce. Other plans include starting up turbocharger production and increasing the production of gasoline high pressure injectors, fuel rails and pump assembly lines. The expansion will allow the Company to begin producing turbochargers in the U.S. for the first time. (From a press release on August 26, 2014)

-The Company celebrated the 8,200-square-meter expansion of its manufacturing facility located in Fletcher, North Carolina, U.S. The USD 35 million investment added production and warehouse space, new manufacturing infrastructure and new equipment for machining and assembly. Approximately 40 new jobs will be created by the expansion. The goal is to increase the local production capacity of Electric Parking Brakes (EPB). The plant is part of the Hydraulic Brake Systems Business Unit of Continental's Chassis & Safety Division. (From a press release on March 31, 2014)

-A subsidiary of the Company, Continental Tire the Americas, LLC (CTA), announced the opening of its all new plant in Sumter, South Carolina, U.S. The first phase of the plant will reach an annual production capacity of approximately 5 million units in 2017. A second phase is expected to bring the plant's full production capacity to approximately 8 million units per year by 2021. Altogether, CTA will invest over USD 500 million into the Sumter plant throughout its development and create about 1,600 new jobs. (From a press release on January 28, 2014)

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-The Company announced that it has opened a new Automotive Division facility at its Russian production site in Kaluga. The Company has invested EUR 24 million in the facility, which has a production capacity of one million engine control units, 500,000 fuel supply units and 500,000 fuel rail systems. Volkswagen, Volvo Trucks and PSA assembly plants are located in the vicinity of the new plant. The new facility occupies an area of 7,200 square meters. Production of fuel supply units started at the new facility at the beginning of the 2014. Since then, production lines for engine control units and fuel rail systems have also begun operations. By 2016, the Company expects to increase the workforce within the Automotive Division in Kaluga to approximately 330 employees. (From a press release on June 5, 2014)