Kumho Tire Co., Inc. Business Report FY ended Dec. 2018

Financial Overview (Consolidated)

(in millions of won)

	FY ended Dec. 31, 2018	FY ended Dec. 31, 2017	Rate of Change (%)
Sales	2,558,681	2,876,420	(11.04)
Operating income	(78,852)	(157,160)	49.82
Net income	(182,696)	(111,842)	(63.35)

Change in Top Shareholders

-Kumho Tire Co., Ltd. held an extraordinary general shareholders' meeting on July 6, 2017, and appointed Mr. Chai Yongsen, Chairman and Mr. Zhang Junhua, Chief Financial Operator (CFO) of the Qingdao Doublestar Group to inside directors of the Korean company. On the same day, Qingdao Doublestar invested Chinese yuan (CNY) 3.9 billion or Korean won (KRW) 646.3 billion to acquire a 45% stake in the tire manufacturer and become the top shareholder. As a result, the investment ratio of the investors' group of Korea Development Bank and other companies went down by 23.1%. (From some releases on July 7, 2018)

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, 2018	FY ended Dec. 31, 2017	FY ended Dec. 31, 2016
Amount	79,736	93,674	93,701
% of sales	3.12%	3.26%	3.18%

Capital Investment

(in millions of won)

Division	Planned amount of investment for 2018	Amount invested in 2018	Planned amount of investment for 2019	Purpose of investment
Tires (construction / industrial equipment)	171,711	106,772	111,998	Quality enhancement