Kumho Tire Co., Inc. Business Report FY ended Dec. 2016

Financial Overview (Consolidated)

(in millions of won)

	FY2016 (ended Dec. 2016)	FY2015 (ended Dec. 2015)	Rate of Change (%)	Remarks
Sales	2,947,227	3,040,406	(3.1)	-
Operating income	120,050	135,962	(11.7)	-
Net income	(37,895)	(67,465)	-	-

Contracts

-The Company announced that it will supply its Solus TA31 tires as original equipment for the 2017 model-year Chrysler Pacifica minivans, which will be sold in the U.S. and Canada. The tire size will be 245/50R20 and 235/65R17. (From a press release on May 3, 2016)

R&D Structure

Facility	Location	Overview
Central R&D Center	Yong-in, Gyeonggi-do, Korea	-Year established : 2013 -Main R&D center
Kumho Tire America Technical Center (K.A.T.C)	Ohio USA	-Year established : 2006 -Developing tires for the North American OEM market and the aftermarket
Kumho Tire Europe Technical Center (K.E.T.C)	Frankfurt, Germany	-Year established : 1997 -Developing high-performance tires for the European market
Kumho Tire China Technical Center (K.C.T.C)	Tianjin China	-Year established : 2006 -Developing high-performance tires for the Chinese and European markets

R&D Expenditure (Consolidated)

(in millions of won)

	FY ended Dec. 31, 2016	FY ended Dec. 31, 2015	FY ended Dec. 31, 2014
Amount	93,701	89,702	98,580
% of sales	3.18%	2.95%	2.87%

Capital Investment

(in millions of won)

Division	Planned amount of investment for 2016	Amount invested in 2016	Purpose of investment
Tires (construction/industrial equipment)	272,631	255,950	Quality enhancement

Investment outside Korea

-The Company announced that it has held a ceremony to celebrate the completion of a new tire plant in Macon, Georgia, U.S. The Georgia plant is the Company's third overseas production base after China and Vietnam. The plant will produce 17-inch or larger passenger car tires and ultra high-performance tires. Eighty percent of the tires produced at the plant are expected to be provided as original equipment to Hyundai-Kia Motor's and Chrysler's plants in North America. The Georgia factory will first be able to produce 4 million tires per year, and plans to increase its capacity to 10 million units going forward. (From a press release on May 2, 2016)