Detailed Information of the Business Report, etc.
of the 105th Annual Shareholders’ Meeting

Bridgestone Corporation

Note:
This English translation of the Detailed Information of the Business Report, etc. of the 105th
Annual Shareholders’ Meeting is for convenience only. If there are any differences between thistranslation and the Japanese original, the Japanese original supersedes this translation.

INDEX
BUSINESS REPORT
Primary Businesses ............................................................................................................................ 2
Major Business Locations.................................................................................................................. 2
Employees ........................................................................................................................................... 3
Shares of Bridgestone Corporation .................................................................................................. 4
Stock Acquisition Rights of Bridgestone Corporation ................................................................... 5
Matters Related to the Outside Directors ......................................................................................... 7
Matters Related to the Independent Auditor .................................................................................... 9
Systems to Ensure the Propriety of Business Operations (Internal Control Systems) ............ 10
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Changes in Equity .............................................................................. 15
Notes to Consolidated Financial Statements ................................................................................. 16
NON-CONSOLIDATED FINANCIAL STATEMENTS
Non-Consolidated Statement of Changes in Equity ...................................................................... 36
Notes To Consolidated Financial Statements ................................................................................ 37

1

BUSINESS REPORT(January 1, 2023 through December 31, 2023)

Primary Businesses
Name of segment
Japan

Primary businesses
Premium tire business
Solutions business
Chemical and industrial products and diversified products
businesses [sports, cycle]

China, Asia-Pacific

Premium tire business
Solutions businessAmericas

Premium tire business
Solutions business
Diversified products business [Air springs]

Europe, Russia, Middle
East, India and Africa

Premium tire business
Solutions business

OthersOther businessNotes 1. The premium tire business mainly comprises tires for passenger cars, trucks, buses, and specialties tires(for off-the-road mining and construction vehicles, aircraft, agricultural machinery, and motorcycles).
2. The solutions business comprises the retail and service solutions business, the tire-centric solutions
business, and the mobility solutions business.
3. The chemical and industrial products business mainly comprises hydraulic and high-performance hoses,
rubber tracks, plastic piping, and seismic insolation.
4. The transfer of the Russian business was completed in December 2023.

Major Business Locations
Bridgestone Corporation
Headquarters

3-1-1 Kyobashi, Chuo-ku, Tokyo

Technical Center

Kodaira, Tokyo and Totsuka-ku, Yokohama

Nasu Plant

Nasushiobara, Tochigi

Shimonoseki Plant

Shimonoseki, Yamaguchi

Tochigi Plant

Nasushiobara, Tochigi

Kitakyushu Plant

Wakamatsu-ku, Kitakyushu

Tokyo AC Tire Plant

Kodaira, Tokyo

Tosu Plant

Tosu, Saga

Yokohama Plant

Totsuka-ku, Yokohama

Saga Plant

Miyaki-gun, Saga

Seki Plant

Seki, Gifu

Kurume Plant

Kurume, Fukuoka

Hikone Plant

Hikone, Shiga

Amagi Plant

Asakura, Fukuoka

Hofu Plant

Hofu, Yamaguchi

Kumamoto Plant

Tamana, Kumamoto

Subsidiaries
Please see page 37 of the Proposals and Business Report, etc. of the 105th Annual
Shareholders’ Meeting, “6. Major Subsidiaries.”2

Employees
Business segments

Number of employees

Japan
China, Asia-Pacific
Americas
Europe, Russia, Middle East,
India and Africa
Other
Company-wide (common)
Total

26,384
17,51349,513

Increase (decrease) from theprevious period-end(665)(1,571)(685)

20,419(1,172)

8,041
3,329
125,199(18)
48(4,063)

Notes 1. The number of employees is the number of full-time employees.
2. The number of employees in the Japan segment includes the number of employees at tire plants in Japanthat produce tires for other segments.
3. The transfer of the Russian business was completed in December 2023.

3

Shares of Bridgestone Corporation as of December 31, 2023
1. Total Number of Shares Authorized to Be Issued:

1,450,000,000 shares

2. Total Number of Shares Issued:

713,698,221 shares

3. Number of Shareholders:

131,536 shareholders

4. Major Shareholders
Number ofshares owned(in thousands)

Name of shareholders
The Master Trust Bank of Japan, Ltd. (Trust account)
Ishibashi Foundation
Custody Bank of Japan, Ltd. (Trust account)
Hiroshi Ishibashi
SMBC Nikko Securities Inc.
Nagasaka Corporation
Nippon Life Insurance Company
STATE STREET BANK WEST CLIENT-TREATY 505234
Japan Securities Finance Co., Ltd.
SSBTC CLIENT OMNIBUS ACCOUNT
Note:105,671
76,69338,92321,00016,934
16,325
13,218
11,77010,9339,146

Percentage
owned
15.43%
11.20%
5.69%
3.07%
2.47%
2.38%
1.93%
1.72%
1.60%
1.34%

Shares held by trust banks include shares owned in the trustees’ capacity.

5. Shares Delivered to Directors and Executive Officers of the Company during
the Fiscal Year 2023 as Consideration for the Execution of Duties
Category

Class and numberof shares

No. of recipients

Executive Officers (including those
who concurrently serve as
Members of the Board)

36,300 common
stocks4Notes 1. The total number of shares delivered during the fiscal year 2023 under the Company’s executive
compensation system is stated.
2. The above number includes 19,600 shares delivered as restricted shares. Regarding details of the RSUs,
etc., which are a form of remuneration under the executive compensation system, please refer to “IV.
Matters Related to the Directors of the Company 3. Board Members’ and Executive Officers’ Remuneration
for the Current Period (1) Total amount of remuneration, amount of each type of remuneration, and thenumber of recipients by the categories of Members of the Board and Executive Officers” in the Proposals
and Business Report, etc. of the 105th Annual Shareholders’ Meeting.
3. No shares were delivered to Outside Directors.

4

Stock Acquisition Rights of Bridgestone Corporation
1. Status of Stock Acquisition Rights as of the End of Fiscal Year 2023
(1) Stock acquisition rights held by directors (excluding outside directors) and executive
officers

Name of stockacquisition rights(date of resolution)

Class and number ofshares underlying thestock acquisition rights

Issue price(per unit of stockacquisition right)

Exercise
price (pershare)

Exercise period

Number of stockacquisitionrights (units)
and number ofholders

The 7th Stock
Acquisition Rights(Mar. 26, 2009)

2,000 common stocks¥1,264 (Note)¥1

May 1, 2009, toApr. 30, 2029

20 units
1 personThe 8th Stock
Acquisition Rights(Mar. 30, 2010)

2,500 common stocks¥1,400 (Note)¥1

May 6, 2010, to
Apr. 30, 2030

25 units
1 personThe 9th Stock
Acquisition Rights(Mar. 29, 2011)

2,500 common stocks¥1,656 (Note)¥1

May 2, 2011, toApr. 30, 2031

25 units
1 personThe 10th Stock
Acquisition Rights(Mar. 27, 2012)

3,000 common stocks¥1,648 (Note)¥1

May 1, 2012, toApr. 30, 2032

30 units
1 personThe 11th Stock
Acquisition Rights(Mar. 26, 2013)

6,000 common stocks¥3,313 (Note)¥1

May 1, 2013, toApr. 30, 2033

60 units
1 personThe 12th Stock
Acquisition Rights(Mar. 25, 2014)

7,500 common stocks¥3,153 (Note)¥1

May 1, 2014, toApr. 30, 2034

75 units
3 persons

The 13th Stock
Acquisition Rights(Mar. 24, 2015)

7,700 common stocks¥4,099 (Note)¥1

May 1, 2015, toApr. 30, 2035

77 units
3 persons

The 14th Stock
Acquisition Rights(Apr. 21, 2016)

12,900 common stocks¥2,884 (Note)¥1

May 7, 2016, toMay 6, 2036

129 units
3 persons

21,400 common stocks¥3,577 (Note)¥1

May 13, 2017, to
May 12, 2037

214 units
5 persons

4,200 common stocks¥3,671 (Note)¥1

July 6, 2017, to
July 5, 2037

42 units
1 personThe 15th Stock
Acquisition Rights
Plan A(Apr. 27, 2017)
The 15th Stock
Acquisition Rights
Plan B(Apr. 27, 2017)5

(2) Stock acquisition rights held by outside directors
Name of stockacquisition rights(date of approval)

Class and number ofshares underlying thestock acquisition rights

Issue price(per unit of stockacquisition right)

Exercise
price (pershare)

Exercise period

Number of stockacquisitionrights (units)
and number ofholders

The 9th Stock
Acquisition Rights(Mar. 29, 2011)

1,000 common stocks¥1,656 (Note)¥1

May 2, 2011, toApr. 30, 2031

10 units
1 personThe 10th Stock
Acquisition Rights(Mar. 27, 2012)

1,000 common stocks¥1,648 (Note)¥1

May 1, 2012, toApr. 30, 2032

10 units
1 personNote: The Company and those to whom stock acquisition rights are allocated, offset, on the date of allocation, thereceivables and payables for the issue price payments and the same amount of remuneration for services.

6

Matters Related to the Outside Directors
Main activities of outside directors
Positions

Names

Attendance at meetings

Memberofthe Board

Scott
TrevorDavis

Board of Directors:
100%(15 out of 15 meetings)
Nominating Committee:
100%(18 out of 18 meetings)
Compensation Committee:
100%(15 out of 15 meetings)

Memberofthe Board

Yuri
Okina

Board of Directors:
100%(15 out of 15 meetings)
Nominating Committee:
100%(18 out of 18 meetings)
Compensation Committee:
100%(15 out of 15 meetings)

Memberofthe Board

Kenichi
MasudaBoard of Directors:
100%(15 out of 15 meetings)
Nominating Committee:
100%(18 out of 18 meetings)
Compensation Committee:
100%(15 out of 15 meetings)

Memberofthe Board

Kenzo
Yamamoto

Board of Directors:
100%(15 out of 15 meetings)
Audit Committee:
100%(19 out of 19 meetings)

7

Outline of primary activities and duties
performed in relation to the expected rolesof Outside Directors
Provided necessary input to guide decisions
made by the Board of Directors and actively
participated in discussions at the meetingsof the Board of Directors, principally basedon his high insight in sociology, international
business administration, domestic andoverseas CSR and sustainability. As the
Chairperson of the Board of Directors andthe Governance Committee, he played aleading role in enhancing deliberations. As amember of the Nominating Committee andthe Compensation Committee, heparticipated in active deliberations.
Provided necessary input to guide decisions
made by the Board of Directors and actively
participated in discussions at the meetingsof the Board of Directors, principally basedon her extensive research experience infinancial systems and financial
administration. As the Chairperson of theCompensation Committee, she played aleading role in enhancing deliberations. As amember of the Nominating Committee, sheparticipated in active deliberations.
Provided necessary input to guide decisions
made by the Board of Directors and actively
participated in discussions at the meetingsof the Board of Directors, principally basedon his professional perspective as a lawyer.
As the Chairperson of the Nominating
Committee and the Compliance Committee,
he played a leading role in enhancing
deliberations. As a member of theCompensation Committee, he participated in
active deliberations.
Provided necessary input to guide decisions
made by the Board of Directors and actively
participated in discussions at the meetingsof the Board of Directors, principally basedon his extensive experience in the financial
markets and financial systems. He played aleading role as the Chairperson of the Audit
Committee and promoted the strengtheningof the audit system from an objective
viewpoint, leveraging his broad knowledge.

Positions

Names

Attendance at meetings

Memberofthe Board

YojiroShiba

Board of Directors:
100%(15 out of 15 meetings)
Audit Committee:
100%(19 out of 19 meetings)

Memberofthe Board

Yoko
Suzuki

Board of Directors:
100%(15 out of 15 meetings)
Audit Committee:
100%(19 out of 19 meetings)

Memberofthe Board

Yukari
Kobayashi

Board of Directors:
100%(11 out of 11 meetings)
Audit Committee:
100%(14 out of 14 meetings)

Memberofthe Board

Yasuhiro
Nakajima

Board of Directors:
100%(11 out of 11 meetings)
Audit Committee:
100%(14 out of 14 meetings)

Note.

Outline of primary activities and duties
performed in relation to the expected rolesof Outside Directors
Provided necessary input to guide decisions
made by the Board of Directors and actively
participated in discussions at the meetingsof the Board of Directors, principally basedon his extensive experience in the financial
industry and entertainment businessindustry. As a member of the Audit
Committee, he promoted the strengtheningof the audit system from an objective
viewpoint, leveraging his broad knowledge.
Provided necessary input to guide decisions
made by the Board of Directors and actively
participated in discussions at the meetingsof the Board of Directors, principally basedon her professional perspective as a lawyer.
As a member of the Audit Committee, shepromoted the strengthening of the audit
system from an objective viewpoint,
leveraging her broad knowledge.
Provided necessary input to guide decisions
made by the Board of Directors and actively
participated in discussions at the meetingsof the Board of Directors, principally basedon her extensive practical and management
experience in the IT and consulting
industries. As a member of the Audit
Committee, she promoted the strengtheningof the audit system from an objective
viewpoint, leveraging her broad knowledge.
Provided necessary input to guide decisions
made by the Board of Directors and actively
participated in discussions at the meetingsof the Board of Directors, principally basedon his professional perspective as a certified
public accountant. As a member of the Audit
Committee, he promoted the strengtheningof the audit system from an objective
viewpoint, leveraging her broad knowledge.

Ms. Yukari Kobayashi and Mr. Yasuhiro Nakajima’s attendance differs from other Outside Directors as
they were newly appointed as Members of the Board at the 104th Annual Shareholders’ Meeting held on
March 28, 2023, and were also appointed as Members of the Audit Committee on the same date.

8Matters Related to the Independent Auditor
1. Name of Independent Auditor
KPMG AZSA LLC
Note: Following the new appointment of KPMG AZSA LLC as the Independent Auditor of the Company at the 104th
Annual Shareholders’ Meeting held on March 28, 2023, the previous Independent Auditor of the Company,
Deloitte Touche Tohmatsu LLC retired.

2. Independent Auditor’s Compensation for the Fiscal Year 2023
Amount of compensation to be paid by the Company to the
independent auditors(of which amount of compensation for services set forth in
Article 2, Paragraph 1 of the Certified Public Accountants Act)
Total amount of compensation to be paid by the Company and its
subsidiaries to the independent auditors¥215 million¥215 million¥420 million

Notes 1. After reviewing and considering the details of the Independent Auditor’s audit plan, the basis forcalculation of compensation estimates, and non-audit fees, the Audit Committee agrees to the audit fees
set forth in Article 2, Paragraph 1 of the Certified Public Accountants Act as stipulated in Article 399,
Paragraph 1 of the Companies Act.
2. The audit agreement entered into by the Independent Auditor and the Company does not distinguish thecompensation amounts for the audit under the Companies Act and the audit under the Financial
Instruments and Exchange Act, and it is not practically possible to distinguish them. Hence, they areincluded in the amount of compensation for services set forth in Article 2, Paragraph 1 of the Certified
Public Accountants Act.
3. Major overseas subsidiaries are audited by overseas independent auditors other than the Company’s
independent auditor (such overseas independent auditors are qualified as certified public accountants or
audit corporations under relevant overseas laws and regulations). As used herein, the term “audit” means
those services intended to ensure compliance with overseas laws and regulations equivalent to theprovisions in the Companies Act or the Financial Instruments and Exchange Act of Japan.

3. Policy for Determination of Dismissal or Non-Reappointment of the
Independent Auditor
The Audit Committee dismisses the independent auditor with a unanimous resolution in the event thatit determines the independent auditor falls under any items of Article 340, Paragraph 1 of theCompanies Act. In this case, the members of the Audit Committee chosen by the Audit Committee
must report its decision and the reason for dismissal to the first Shareholders’ Meeting after thedismissal.
In addition to the above, in circumstances including when the Audit Committee deems it necessary tosecure an appropriate audit system or for its improvement, the Audit Committee determines details of
the proposal regarding the non-reappointment of the independent auditor, based on which the Boardof Directors submits the proposal to the Shareholders’ Meeting.

9Systems to Ensure the Propriety of Business Operations(Internal Control Systems)
At the Company’s Board of Directors’ meeting held on December 20, 2021, the following matters wereresolved regarding the development of internal control systems pursuant to the provisions of Items(i)(b) and (e) of Paragraph (1) of Article 416 of the Companies Act. The Board of Directors receives
reports from business divisions regarding the operational statuses of their internal control systems,
and oversees the implementation of these systems on an ongoing basis. The operational status ofeach item during the fiscal year 2023 is as indicated below.

1. Fundamental principles for the development of the Company’s internal control
systems
Under the corporate mission of “Serving Society with Superior Quality,” the Company has set its
vision in 2020 as: “Toward 2050, Bridgestone continues to provide social value and customer
value as a sustainable solutions company,” and has been engaged in management to realize thevision since.
As part of the initiatives undertaken, segregation between oversight and execution of the duties,
oversight by the Board of Directors, and appropriate and more efficient business operations are all
regarded as the fundamental principles that the Company should consider in the refinement of its
internal control systems.
With the understanding of the above, the Company’s Board of Directors determines policies fordeveloping and implementing internal control systems.
In order to further strengthen internal controls, evolve into a sustainable solutions company to beable to proactively address the changing business environment, and continue to implement theever more effective and efficient planning and execution of our business activities in accordancewith the policies on the development of the internal control systems, the Company’s Board of
Directors delegates the development and implementation of internal control systems that are inline with the set policies to the Representative Executive Officers and oversee the implementation
work.
Operational status for the year ended December 31, 2023
・In order to further strengthen internal controls, and evolve into a sustainable solutions company to beable to proactively address the changing business environment, the Company develops andimplements its internal control systems while making continuous improvements. The Board of
Directors oversees their progress through reports received from the Representative Executive
Officers and audits conducted by the Audit Committee, which are also reported to the Board of
Directors.

10

2. Matters that are necessary in the execution of duties by the Audit Committee(1) To assist the work of the Audit Committee, the Company appoints an Executive Director dedicatedto audit, and under the Executive Director, establishes a department dedicated to assist the Audit
Committee with their duties.
Decisions on the appointment and replacement of the Executive Director dedicated to audit are
made based on prior consultations with and consent of the Audit Committee. The same applies
when the Audit Committee requests the replacement of the Executive Director.
The performance evaluation of the Executive Director dedicated to audit shall be determinedbased on the performance evaluations conducted by the Audit Committee.
Operational status for the year ended December 31, 2023
・The Company appointed a dedicated Executive Director responsible for Internal Auditing andestablished a department to assist the Audit Committee with their duties.
・Decisions on the appointment and replacement of the Executive Director responsible for Internal
Auditing are made based on prior consultations with and consent of the Audit Committee. However,there were no appointments or replacements in the fiscal year 2023.
・The performance evaluation of the Executive Director responsible for Internal Auditing is determinedbased on the performance evaluations conducted by the Audit Committee.

(2) A person designated by the Audit Committee is required to report on matters predetermined by the
Audit Committee periodically or without delay.
The Company prohibits unfavorable treatment of Members of the Board, Executive Officers, Vice
President-Senior Officers, and employees of the Company, and the Members of the Board,
Corporate Auditors, Corporate Officers, and employees of subsidiaries for reporting matters to the
Audit Committee.
Operational status for the year ended December 31, 2023
・The business divisions of the Company report on items that are selected for periodic reporting by the
Audit Committee and any ad-hoc reporting items are reported on a regular basis without delay. In
addition, internal policies prohibit any unfavorable treatment of the reporting party, and it is confirmedthat such protection is appropriately in place.

11

(3) All the expenses associated with the execution of duties by the Audit Committee are fullycompensated.
Operational status for the year ended December 31, 2023
・The Company stipulates in its internal regulations that any budgeting and its use required for the
execution of duties based on resolution by the Audit Committee shall be fully compensated, and it isconfirmed that it is operated appropriately.

(4) In order to ensure an effective audit by the Audit Committee, the Company secures opportunities
for Members of the Audit Committee to gain an understanding of the Company’s important
decision-making processes and the status of business operations.
Operational status for the year ended December 31, 2023
・The Company ensures that the Audit Committee has appropriate opportunities to understand theimportant decision-making processes and status of business operations by attending important
meeting bodies, making documents available for inspection, submitting reports, etc., as requestedby the Audit Committee.

3. Systems to ensure that the execution of duties by Executive Officers complies
with relevant laws and regulations and the Articles of Incorporation, and othermatters necessary to ensure proper execution of the Company’s business
operations and the operations of the corporate group consisting of theCompany and its subsidiaries.
(1) Information concerning the execution of duties by Executive Officers is documented without delay
and adequately retained. Any significant information related to the execution of business isreported to the Board of Directors without delay.
Operational status for the year ended December 31, 2023
・The Company stipulates rules concerning retention of documents such as approval forms that areimportant sources of information for the execution of duties by Executive Officers, meeting minutes ofimportant committee meetings, and the documentation retention method. It is confirmed that such
documents are retained properly. In addition, the Representative Executive Officers report onimportant information related to execution of duties during the Board of Directors’ meeting in a timely
manner while continuously making improvements in its practices.

(2) A risk management system is developed and implemented to manage risks of incurring losses.
Operational status for the year ended December 31, 2023
・The Company stipulates rules concerning risk management systems in its internal policies andconfirms that such systems are functioning effectively within the Group globally. In addition, at the
GMRC (Global Management Risk Committee), a committee that is subordinate to the Global EXCO,
risk management systems are further refined by continuously making improvements on a global scale.

12(3) In order to ensure the efficient execution of duties by Executive Officers, under the appropriatedelegation of authority from the Board of Directors to the Representative Executive Officer, internal
policies are maintained, and appropriate authorities required for the execution of duties arereallocated.
Operational status for the year ended December 31, 2023
・The Company reallocates authorities appropriately in order to further strengthen internal controls,and evolve into a sustainable solutions company to be able to proactively address the changing
business environment.

(4) In order to ensure that execution of duties by the Executive Officers, Vice President-Senior
Officers, and employees complies with relevant laws and regulations and the Articles ofIncorporation, the Company shall establish a compliance system, a reporting system, a systemagainst antisocial forces, and a J-SOX system based on “System for Ensuring Appropriateness ofStatements on Finance and Accounting and Other information,” set forth in Article 24-4-4 of the
Financial Instruments and Exchange Act of Japan (the so-called “J-SOX Act”).
Operational status for the year ended December 31, 2023➢

Compliance systems
The Company has developed a compliance system based on the deliberations andrecommendations of the Compliance Committee, which is an advisory committee to the Board of
Directors, including all Independent Outside Directors. Under this system, the Company deploys
the Bridgestone Code of Conduct, which applies to the Group on a global basis, and operates theBridgeLine, a whistleblowing system. Through these ongoing activities, the Company will further
reinforce its systems.

➢

Implementation of a reporting framework
The Company stipulates a framework for reporting necessary information to the Representative
Executive Officers periodically or on an as-needed basis (reporting to meeting bodies such as
Global EXCO and a flow of communication and information in emergency situations) in its
internal policies, and operates the framework while continuously making improvements. In
addition, there is a system in place for the Representative Executive Officers to report on mattersat the Board of Directors’ meeting, where necessary.

➢

Implementation of systems against antisocial forces
Under the Representative Executive Officer policy, the Company appoints the Chief Risk Officer
as the person responsible, and assigns a manager at each office to promote internal systems,
and also provides training to all employees every year.

➢

Implementation of systems for the J-SOX Act compliance
The Company develops and implements appropriate systems for the J-SOX Act compliance inaccordance with the internal policies. In March 2023, the 2022 internal control system report was
submitted to the head of the Kanto Local Finance Bureau.

13(5) In order to ensure proper execution of business operations at subsidiaries, the Company shallcommunicate global policies and reallocate authorities appropriately, develop a system forreporting to the Company on the status of operations at subsidiaries, and conduct audits on a
global basis.
Risk management systems, compliance systems, systems against organized crime and otherviolent groups, and systems for J-SOX Act compliance are developed and implemented withineach subsidiary.
Operational status for the year ended December 31, 2023➢

Communication of policies
The Company establishes internal policies on communicating its management policies to ensurethat they are communicated appropriately across the Group globally. Where necessary, the policies
are revised through discussions held in the Global EXCO.

➢

Reallocation of authorities
Regarding important matters that the Company should coordinate in cooperation with its groupcompanies and matters for which decisions are made by group companies, the Company
reallocates authorities appropriately on a case-by-case basis, taking the business activities of eachgroup company and its level of governance maturity into consideration.

➢

A framework for reporting to the Company
The Company stipulates a framework for necessary information related to the status of business
operations within a group company to the Representative Executive Officers periodically or on an
as-needed basis (reporting to committees such as Global EXCO and a flow of communication andinformation in emergency situations) in its internal policies, and operates the framework while
continuously making improvements. In addition, there is a system in place for the Representative
Executive Officers to report on matters at Board of Directors’ meetings, where necessary.

➢

Global audits
The Company conducts global audits on areas determined by risk assessment and analysis. In
addition, the Internal Audit Department of each Strategic Business Unit (SBU) performs internal
audits at group companies in Japan and other countries. The Internal Audit Department of theCompany supervises the audits and provides reports to its Audit Committee.

➢

Risk management systems, compliance systems, systems against organized crime and other violent
groups, and systems for J-SOX Act compliance within each subsidiary
As mentioned in 3(4) above, the Company develops and implements the necessary systems,
including systems to be implemented at group companies.

14

CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Changes in Equity
Current Year (Year ended December 31, 2023)(Yen in millions)
Equity attributable to owners of parent
Other components of equity
Exchangedifferences ontranslation offoreign
operations

Effective portionof change in fairvalue of cash
flow hedges

Net change infair value offinancial assets
measuredthrough othercomprehensive
income2,673

310,3112,980

42,558

–

–

–

–

2,673

310,3112,980

42,558

–

–

–

–

–

–

–

–

183,178(1,886)

12,690–––183,178(1,886)

12,690

–

–

(16)

–

–

–

–

Disposal of treasury stock

–

–

1,420

(365)

–

–

–

Dividends

–

–

–

–

–

–

–

–

783

–

–

–

–

–

Commonstock

Capitalsurplus126,354

119,517––

126,354

119,517

Profit––Other comprehensive income–

Total comprehensive income–

Purchase of treasury stock

Balance at January 1, 2023
Cumulative effects of changes inaccounting policies
Restated balance at January 1,
2023

Changes in ownership interestsof owners in subsidiaries undercontrol
Transfer from other componentsof equity to retained earnings

Treasury stock

Stockacquisitionrights(136,814)–(136,814
)

–

–

–

–

–

–

(21,013)

Other changes

–

–

–

–

–

–

–

Total transactions withowners, etc.

–

783

1,405

(365)

–

–

(21,013)

126,354

120,300(135,409)

2,308

493,489

1,094

34,236

Balance at December 31, 2023

Equity attributable to owners of parent
Other components ofequityRemeasurements ofdefinedbenefitplans
Balance at January 1, 2023

Retainedearnings

Total

Non-controllinginterests

Total

Total

–

358,523

2,498,226

2,965,806

46,651

3,012,458

–

–

29

29

15

44

–

–

2,498,255

2,965,835

46,666

3,012,501––

331,305

331,305

6,048

337,352(9,136)

184,845–

184,845

4,206

189,051(9,136)

184,845

331,305

516,150

10,253

526,404

Purchase of treasury stock

–

–

(1)

(17)

–

(17)

Disposal of treasury stock

–

(365)

(162)

893

–

893

Dividends––(130,053)(130,053)(3,940)(133,994)

–

–

–

783

(1,228)

(445)

9,136

(11,876)

11,876

–

–

–

–

–

–

–

51

51

9,136

(12,242)(118,340)(128,394)(5,117)(133,511)–

531,127

2,711,220

3,353,592

51,803

3,405,394

Cumulative effects of changes
in accounting policies
Restated balance at January
1, 2023
ProfitOther comprehensive income
Total comprehensive
incomeChanges in ownershipinterests of owners in
subsidiaries under control
Transfer from othercomponents of equity toretained earnings
Other changes
Total transactions withowners, etc.
Balance at December 31,
2023

15

Notes to Consolidated Financial Statements(Basic important matters for the preparation of consolidated financial statements)
1. Standards for the preparation of consolidated financial statements
The consolidated financial statements of Bridgestone (the “Company”) and its subsidiaries (the “Group”) are preparedin accordance with the International Financial Reporting Standards (“IFRS”) pursuant to the provisions of the firstparagraph of Article 120 of the Ordinance on Company Accounting. The consolidated financial statements omit partof the disclosures required under IFRS pursuant to the provisions of the second sentence of the first paragraph of
Article 120.
2. Scope of consolidation(1) Number of consolidated subsidiaries: 239 companies
Names of principal companies:
・BRIDGESTONE TIRE SOLUTION JAPAN CO., LTD

・BRIDGESTONE BANDAG, LLC

・BRIDGESTONE RETAIL JAPAN CO., LTD

・FIRESTONE POLYMERS, LLC

・BRIDGESTONE DIVERSIFIED PRODUCTS JAPAN CO., LTD.

・FIRESTONE INDUSTRIAL PRODUCTS COMPANY, LLC

・BRIDGESTONE SPORTS CO., LTD.

・BRIDGESTONE CANADA INC.

・BRIDGESTONE CYCLE CO., LTD.

・BRIDGESTONE DE MEXICO, S.A. DE C.V.

・BRIDGESTONE MINING SOLUTIONS LATIN AMERICA S.A.

・BRIDGESTONE DO BRASIL INDUSTRIA E COMERCIO LTDA.

・BRIDGESTONE MINING SOLUTIONS AUSTRALIA PTY. LTD.

・BRIDGESTONE ARGENTINA S.A.I.C.

・BRIDGESTONE ASIA PACIFIC PTE. LTD.

・BRIDGESTONE EUROPE NV/SA・BRIDGESTONE (CHINA) INVESTMENT CO., LTD.

・BRIDGESTONE POZNAN SP. Z O.O.

・BRIDGESTONE (WUXI) TIRE CO., LTD.

・BRIDGESTONE STARGARD SP. Z O.O.

・THAI BRIDGESTONE CO., LTD.

・FIRST STOP AYME SAS

・BRIDGESTONE TIRE MANUFACTURING (THAILAND) CO., LTD.

・BRIDGESTONE HISPANIA MANUFACTURING S.L.U.

・PT BRIDGESTONE TIRE INDONESIA

・BRIDGESTONE MIDDLE EAST & AFRICA FZE・BRIDGESTONE AUSTRALIA LTD.

・BRIDGESTONE INDIA PRIVATE LTD.

・BRIDGESTONE AMERICAS, INC.

・BRIDGESTONE SOUTH AFRICA (PTY) LTD.

・BRIDGESTONE AMERICAS TIRE OPERATIONS, LLC

・BRIDGESTONE FINANCE CORPORATION

・BRIDGESTONE RETAIL OPERATIONS, LLC

・BRIDGESTONE TREASURY SINGAPORE PTE. LTD.

Changes in the scope of consolidation
Additions: 1 company
Dispositions: 17 companies (decreased mainly by sales)(2) There are no non-consolidated subsidiaries.
3. Scope of application of equity-method accounting(1) Number of equity-method associates and others: 128 companies
Names of principal companies:
・TIREHUB, LLC
・BRISA BRIDGESTONE SABANCI LASTIK SANAYI VE TICARET A.S.
Changes in the scope of equity-method accounting
Additions: 0 companies
Dispositions: 6 companies (decreased mainly by sales)(2) There are no non-consolidated subsidiaries or associates to which equity-method accounting is not applied.
4. Fiscal year of consolidated subsidiaries
The fiscal year for BRIDGESTONE INDIA PRIVATE LTD. ends on March 31. Its financial statements are prepared on
the basis of a provisional settlement of accounts performed as of the date of the consolidated financial statements.

16

5. Summary of significant accounting policies(1) Basis of consolidation① Subsidiaries
A subsidiary is an entity under the control of the Group. The Group controls an entity when it is exposed toor has rights to variable returns arising from its involvement in the entity and has an ability to affect those
returns through its power over the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the datethe Group gains control until the date that control is lost. If any accounting policies applied by a subsidiarydiffer from those of the Group, adjustments are made to the subsidiary’s financial statements where needed
to bring them in line with the Group’s accounting policies. The balances of payables and receivables andtransactions within the Group, as well as unrealized gains or losses arising from internal transactions within
the Group, are eliminated when preparing the consolidated financial statements.
Comprehensive income of subsidiaries is attributed to owners of parent and non-controlling interests, even
if this results in a negative balance in non-controlling interests.
When the closing date of a subsidiary is different from that of the Group, the subsidiary implements its
financial statements based on the provisional accounting as of the Group’s closing date. The main
subsidiary with a different closing date is BRIDGESTONE INDIA PRIVATE LTD., which adopts a closing
date of March 31 due to the local legal system where it operates.
Changes in the Group’s ownership interest in subsidiaries that do not result in a loss of control are accounted
for as equity transactions, and the difference between the amount by which non-controlling interests areadjusted and the fair value of the consideration is directly recognized in equity as interests attributable tothe shareholders of the Company.
If the Group loses control over a subsidiary, gains and losses derived from the loss of control are recognizedin profit or loss.
② Associates
An associate is an entity which the Group does not control, but exerts significant influence on financial andoperating policies thereof. The equity method is applied to associates from the date that the Group hassignificant influence to the date that it loses the significant influence.
③ Joint ventures
A joint venture is an entity jointly controlled by two or more parties, including the Group under thecontractually agreed sharing of control over economic activities of the joint venture, which exists only whenstrategic financial and operating decisions related to the relevant activities require unanimous consent of theparties sharing control.
The equity method is applied to joint ventures held by the Group.
(2) Business combinations
Business combinations are accounted for by the acquisition method. Consideration for acquisition is measured as
the sum of the acquisition-date fair values of the assets transferred, liabilities assumed, and equity instruments
issued by the Group in exchange of control over the acquired company. If consideration for acquisition exceeds
the fair value of identifiable assets and liabilities, such excess is recorded as goodwill in the consolidated statementof financial position. Conversely, if the consideration is less than the fair value, the difference is immediately
recognized in profit or loss in the consolidated statement of profit or loss. Acquisition costs that are attributable toa business combination are expensed as incurred.
If the initial accounting for a business combination is incomplete by the end of the fiscal year in which the businesscombination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete.
The provisional values recognized at the acquisition date are retrospectively adjusted to reflect new information
obtained during a certain designated period (the “measurement period”) on facts and circumstances that existed
at the acquisition date and, if known at the acquisition date, would have affected the measurement of the amounts
recognized. Additional assets or liabilities are recognized if this new information is known to have resulted in the
additional recognition of assets or liabilities. The measurement period may not exceed one year.
The acquisition of additional non-controlling interests is accounted for as an equity transaction, and accordingly, it
does not recognize goodwill attributable to such transactions.

17Business combinations under common control (i.e., transactions in which all of the combining entities and/or
businesses are ultimately controlled by the same party or parties both before and after the business combinationand the common control is not transitory) are accounted for at carrying amount.
(3)

Foreign currency translation
1) Foreign currency transactions
Foreign currency transactions are translated into the functional currency of each entity of the Group by using
the exchange rate at the date of the transaction or a rate that approximates such rate.
At the end of each reporting period, monetary items denominated in foreign currencies are translated intofunctional currencies using the exchange rate at the end of each reporting period. Non-monetary items at
fair value denominated in foreign currencies are translated at an exchange rate of the date when their fairvalues are measured.
Exchange differences arising from translation or settlement of monetary items denominated in foreign
currencies are recognized in profit or loss. However, those translation differences arising from financial
assets measured through other comprehensive income as well as from cash flow hedges are recognized inother comprehensive income.
2)

Financial statements of foreign operations
Assets and liabilities of foreign operations, including any goodwill arising on the acquisition of a foreign
operation and any fair value adjustments, are translated into presentation currency using the exchange rate
at the end of the reporting period. Additionally, income and expenses of foreign operations are translated
into presentation currency using average exchange rates during the period, except where the exchange
rates fluctuate significantly. Financial statements of foreign operations under a high inflationary economy
reflect the effect of inflation, and revenue and expenses are calculated in the presentation currency using
the exchange rate at the end of the reporting period.
Exchange differences arising from translation of the financial statements of foreign operations arerecognized in other comprehensive income. For disposals of entire interests in foreign operations and partial
disposals of interests resulting in loss of control or loss of significant influence, translation differences arerecognized in profit or loss as part of the gain or loss on disposal.

(4) Financial instruments
1) Financial assets other than derivativesaInitial recognition and measurement
Trade and other receivables are initially recognized on the date when they are incurred. All otherfinancial assets are initially recognized on the date when the Group becomes a party to the contract onsuch financial instruments.
At initial recognition, financial assets other than derivatives, which meet both of the following
requirements, are classified as financial assets measured at amortized cost, while the rest are classified
as financial assets measured at fair value.
• The assets are held based on the business model whose objective is to hold the assets in order tocollect contractual cash flows.
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Financial assets measured at fair value are classified into either financial assets whose changes in fairvalue after acquisition are recognized in profit or loss (“financial assets measured at fair value throughprofit or loss”) or financial assets whose changes in fair value after acquisition are recognized in othercomprehensive income (“financial assets measured at fair value through other comprehensive income”).
At initial recognition, equity instruments that are not designated as financial assets measured at fairvalue through other comprehensive income and debt instruments that do not meet the requirements forthe amortized cost measurement are classified as financial assets measured at fair value through profit
or loss.
Equity instruments that are not held for trading are, in principle, designated as financial assets measured
at fair value through other comprehensive income at initial recognition.
All the financial assets, except for those classified as financial assets measured at fair value through18

profit or loss, are measured at fair value plus transaction costs directly attributable to the acquisition of
the assets.
b

Subsequent measurement
Financial assets after the initial recognition are measured as follows, depending on respectiveclassifications:(a) Financial assets measured at amortized cost
After initial recognition, financial assets measured at amortized cost are measured at amortizedcost by using the effective interest method.
(b) Financial assets measured at fair value through profit or loss
After initial recognition, financial assets measured at fair value through profit or loss are remeasured
at fair value as of each closing date, and changes in fair value and dividends are recognized in profit
or loss.
(c) Financial assets measured at fair value through other comprehensive income
Changes in fair value measured after initial recognition are recognized in other comprehensive
income. Such amounts are reclassified into retained earnings in case of derecognition or asignificant decline in the fair values. Dividends from such financial assets are recognized in profit orloss as finance income in the period when the Group’s right to receive payment of the dividends isestablished.

c

Derecognition
Financial assets are derecognized when the right to receive benefits expires or all the risk and rewardsof ownership of the financial assets are transferred to other entities.

2)

Impairment of financial assets measured at amortized cost
To account for impairment of items such as financial assets measured at amortized cost, the Group
recognizes an allowance for doubtful accounts against expected credit losses on such financial assets.
At each reporting date, financial assets are assessed whether there has been a significant increase in credit
risk on financial instruments since initial recognition.
If credit risk on a financial instrument has not increased significantly since initial recognition, the allowancefor doubtful accounts associated with the relevant financial instrument is measured at an amount equal to
12-month expected credit losses. In contrast, if credit risk on a financial instrument has increased significantly
since initial recognition, the allowance for doubtful accounts associated with the relevant financial instrument
is measured at an amount equal to lifetime expected credit losses.
However, the allowance for doubtful accounts for trade receivables and the like are always measured at an
amount equal to lifetime expected credit losses.
Expected credit losses of financial instruments are estimated in a way that reflect the following items:• Unbiased and probability-weighted amount that is determined by evaluating a range of possible
outcomes;• Time value of money• Reasonable and supportable information that is available without undue cost or effort at the reporting
date about past events, current conditions and forecasts of future economic conditions.
The amounts of these measurements are recognized in profit or loss.
The carrying amount of these financial assets is directly reduced for the impairment when they are expected
to become non-recoverable in the future, offsetting the carrying amount by the allowance for doubtful
accounts.

3)

Financial liabilities other than derivativesaInitial recognition and measurement
Debt securities issued by the Group are initially recognized at the date of issuance. All other financial
liabilities are recognized on the date when the Group becomes a party to the contract on such financial
instruments.
Financial liabilities other than derivatives are classified into either financial liabilities measured atamortized cost or financial liabilities measured at fair value through profit or loss at initial recognition.

19

All the financial liabilities are initially measured at fair value, while financial liabilities measured atamortized cost are measured at fair value less directly attributable transaction costs.
b

Subsequent measurement
Financial liabilities after the initial recognition are measured as follows, depending on respectiveclassifications:(a) Financial liabilities measured at amortized cost
After initial recognition, financial liabilities measured at amortized cost are measured at amortizedcost by using the effective interest method.
(b) Financial liabilities measured at fair value through profit or loss
After initial recognition, financial liabilities measured at fair value through profit or loss are
remeasured at fair value as of each closing date with any changes in fair value being recognized in
profit or loss.

c4)

Derecognition
Financial liabilities are derecognized when the obligation is discharged, canceled or expired.

Derivatives and hedge accounting
The Group uses derivatives, including forward exchange contracts and interest rate swap transactions, forthe purpose of hedging foreign currency risk and interest rate risk.
At the inception of the hedge, the Group designates and documents the hedging relationship between ahedging instrument and a hedged item as well as the Group’s risk management objective and strategy
concerning the hedge. That documentation includes the hedging relationship, the risk management objective
and strategy for undertaking the hedge, as well as the assessment of the hedge effectiveness.
These hedges are expected to be highly effective in offsetting changes in the fair value or the cash flows;
however, the Group assesses whether the hedging relationship meets the requirements for hedge
effectiveness, at the inception of the hedging relationship and on an ongoing basis.
Derivatives are initially recognized at fair value. After initial recognition, derivatives are measured at fair value
and the subsequent changes in fair value are accounted for as follows:a

Fair value hedges
Fair value changes on derivatives are recognized in profit or loss.
Fair value changes on hedged items attributable to hedged risks are recognized in profit or loss with thecarrying amounts of the hedged items being adjusted.

b

Cash flow hedges
For the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge,changes in fair value are recognized in other comprehensive income. When cash flows of the hedged
item affect profit or loss, they, together with the hedged item, are immediately recognized in profit orloss.
For the ineffective portion of hedge, the changes in fair value are recognized in profit or loss.
The Group discontinues hedging accounting prospectively when the hedging instrument is expired, sold,terminated or exercised, or when the hedge no longer qualifies for hedge accounting.

c5)

Derivatives not designated as hedging instruments
Fair value changes on derivatives are recognized in profit or loss.
Offsetting financial instruments
A financial asset and a financial liability are offset and the net amount presented only when the Groupcurrently has a legally enforceable right to set off the recognized amounts; and intends either to settle on a
net basis or to realize the asset and settle the liability simultaneously.

(5) Fair value measurement
Certain assets and liabilities are recognized at fair value. The fair value of such assets and liabilities is determined20

based on market information, such as quoted market price or valuation techniques including the market approach,the income approach and the cost approach. The inputs used in the fair value measurement are categorized into
the following three levels.
Level 1: Fair value that is measured by using quoted prices in active markets
Level 2: Fair value, other than Level 1, that is determined by directly or indirectly using the observable
price
Level 3: Fair value determined by using valuation techniques that incorporate unobservable inputs(6) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments with maturities
not exceeding three months from the acquisition date, that are readily convertible into cash and subject toinsignificant risk of changes in value.
(7) Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories includes costs ofpurchase, costs of conversion and other costs incurred in bringing the inventories to their present location andcondition. The cost of inventories is calculated by primarily using the moving-average method. Net realizable value
is determined at the estimated selling price in the ordinary course of business less estimated costs of completionand the estimated costs necessary to make the sale.
(8) Property, plant and equipment
Property, plant and equipment are measured by using the cost model, and stated at cost less any accumulated
depreciation and any accumulated impairment losses. The cost of an item of property, plant and equipment
includes any costs directly associated with its acquisition, and the costs of dismantling and removing the item andrestoring the site on which it is located, as well as the borrowing costs eligible for capitalization.
The depreciation of property, plant and equipment other than land and construction in progress is calculated using
the straight-line method over the following estimated useful lives. The estimated useful life of each main asset item
is as follows.
Buildings and structures:
Machinery and vehicles:

10 to 50 years
3 to 17 years

Tools, furniture and fixtures:
2 to 20 years
The depreciation method for property, plant and equipment is reviewed at the end of each reporting period, andany change thereof is accounted for as a change in accounting estimate.
(9) Goodwill and intangible assets
1) Goodwill
The Group recognizes goodwill arising from business combinations as an asset as of the date when control
is obtained (the acquisition date). The measurement of goodwill at initial recognition is presented in “(2)Business combinations”.
Goodwill is stated at cost less accumulated impairment losses. The Group does not amortize goodwill, but
tests for impairment annually or whenever there is any indication of impairment. For the purpose of
impairment test, goodwill obtained in business combinations is allocated to a cash-generating unit or groupsof cash-generating units that are expected to benefit from the synergies of the combination on and after theacquisition date.
Impairment losses of goodwill are recognized in profit or loss and not reversed subsequently.
2)

Intangible assets
The Group measures intangible assets using the cost model and stated at cost less any accumulated
amortization and any accumulated impairment losses.
Separately acquired intangible assets are initially measured at cost, while the cost of intangible assets
acquired in a business combination is measured at fair value as of the acquisition date. Expenditures forinternally generated intangible assets are recognized as an expense incurred during the period, except fordevelopment costs eligible for capitalization.
Intangible assets with finite useful lives are amortized by using the straight-line method over their respective

21

estimated useful lives. If there is an indication of impairment, they are tested for impairment. The estimateduseful life of each main asset item is as follows.
Software:1 to 10 years
Trademarks: 1 to 10 years
The amortization method for intangible assets with finite useful lives is reviewed at the end of each reporting
period, and any change thereof is accounted for as a change in accounting estimate.
Intangible assets with indefinite useful lives are not amortized but subject to impairment test, and stated atcost less any accumulated impairment losses. Intangible assets are tested for impairment individually or at
cash-generating unit level annually or whenever there is any indication of impairment.
(10) Leases
1) Lessee
At inception of a contract, the Group recognizes a right-of-use asset and a lease liability for lease
components other than short-term leases and leases for which the underlying asset is of low value. At thecommencement date, the Group measures the right-of-use asset at cost and the lease liability at the present
value of the lease payments that are not paid at that date.
The lease term is determined as the non-cancellable period of a lease, together with both: periods coveredby an option to extend the lease (if the Group is reasonably certain to exercise that option); and periods
covered by an option to terminate the lease (if the Group is reasonably certain not to exercise that option).
After the commencement date, the right-of-use asset is measured at cost less any accumulated depreciation
and any accumulated impairment losses. The Group applies the depreciation requirements in International
Accounting Standards (IAS) 16 “Property, Plant and Equipment” in depreciating the right-of-use asset. The
Group also applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset is impaired
and to account for any impairment loss identified.
If the lease transfers ownership of the underlying asset to the Group by the end of the lease term, the Groupdepreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying
asset. Otherwise, the Group depreciates the right-of-use asset from the commencement date to the earlierof the end of the useful life of the right-of-use asset or the end of the lease term.
After the commencement date, the Group measures the lease liability by:• increasing the carrying amount to reflect interest on the lease liability;• reducing the carrying amount to reflect the lease payments made; and• remeasuring the carrying amount to reflect changes to the lease payments or a lease modification, or to2)

reflect revised in-substance fixed lease payments.
LessorRental income is recognized on a straight-line basis over the lease term. Rental income arising fromsubleased properties is recognized in other income.

(11) Impairment of non-financial assets
The Group assesses, for each fiscal year, whether there is any indication that an asset may be impaired. If any
such indication exists (or if the impairment test is required each year), the Group estimates the recoverable amountof the asset. If it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount of anasset or a cash-generating unit is measured at the higher of its fair value less costs to sell and its value in use.
When the carrying amount of the asset or the cash-generating unit exceeds the recoverable amount, the Group
recognizes an impairment loss for the asset and reduces the carrying amount of the asset to its recoverable
amount. In calculating the asset’s value in use, the estimated future cash flows are discounted to the present value
by using a pre-tax discount rate that reflects current market assessments of the time value of money and otherfactors such as the risks specific to the asset. The fair value less costs to sell is calculated by using an appropriate
valuation model supported by indications of fair value available to the Group.
The Group assesses whether there is any indication that an impairment loss recognized in prior years for asset
other than goodwill may have decreased or may no longer exist due to a change in assumptions used to determine
the recoverable amount or other reasons. If any such indication exists, the Group estimates the recoverable
amount of the asset or the cash-generating unit. Then if such recoverable amount exceeds the carrying amountof the asset or the cash-generating unit, the Group reverses an impairment loss to the extent not exceeding the22lower of the estimated recoverable amount and the carrying amount that would have been determined (net ofamortization or depreciation) had no impairment loss been recognized for the asset in prior years.
(12) Assets held for sale and discontinued operations
An asset or asset group that is expected to be recovered through a sale transaction rather than through continuing
use is classified as an asset or disposal group held for sale if it is highly probable that the asset or asset group will
be sold within one year from the end of the reporting period; the asset or asset group is available for immediatesale in its present condition; and the management of the Group is committed to such sale. An asset held for saleis not depreciated or amortized and measured at the lower of its carrying amount and fair value less costs to sell.
A discontinued operation is recognized if the operation includes a component of an entity that either has been
disposed of or is classified as held for sale, represents a separate line of business of the Group or geographicalarea, and is part of a plan to dispose of a separate line of business of the Group or geographical area.
(13) Employee benefits
1)

Short-term employee benefits
The undiscounted amount of short-term employee benefits is recognized as an expense in the period inwhich the employees render related services. The bonuses and paid absences are recognized as a liability
and an expense when the Group has a present legal or constructive obligation to pay the benefits in returnfor the past services rendered by employees, and the Group can make a reliable estimate of the amount.

2)

Post-employment benefits
The Group has adopted a defined benefit plan (such as a corporate pension plan and a lump-sum retirement
benefit plan) and a defined contribution plan as the post-employment benefit plans for its employees.
The Group determines the present value of defined benefit obligation as well as the related current service
cost and past service cost by using the projected unit credit method. The discount rate is determined by firstsetting the discount period based on the periods until the dates on which the benefits for each fiscal year
will be paid, and then by referencing to market yields on high-grade corporate bonds and the like at the endof the reporting period corresponding the discount period. The defined benefit plan liability or asset isdetermined by subtracting the fair value of the plan assets from the present value of the defined benefit
obligation. Remeasurements of defined benefit plans are recognized in a lump sum in other comprehensive
income when they arise, and reclassified to retained earnings immediately. Past service cost is recognizedin profit or loss for the period in which it is incurred.
The Group accounts for the defined contribution plan by recognizing an expense when the Group makes
contribution to the plan.
Certain consolidated subsidiaries primarily in the United States have adopted a defined benefit retirement
plan and a post-employment medical benefit plan to prepare for the retirement benefits to the employees.
A post-employment medical benefit plan in the United States is included in the net defined benefit liability
due to the nature similar to the retirement benefits.

(14) Share-based payment
The Group has adopted the stock option plan and restricted share-based remuneration plan as an equity-settled
share-based payment plan as well as the Performance Share Units (PSU) plan, the Restricted Stock Units (RSU)
plan, etc. as a cash-settled share-based payment plan. Stock options are estimated at fair value at the date of
grant, taking into account the estimated number of options to be vested, and recognized as expenses over thevesting periods in the consolidated statement of profit or loss while corresponding increases to equity arerecognized in the consolidated statement of financial position. Fair value of stock options granted is calculated, in
accordance with various terms of such options, using the Black-Scholes model. Restricted share-based
remuneration is measured at fair value on the grant date and recognized in the consolidated statement of profit orloss as expenses over the vesting period from the grant date, and the same amount is recognized as an increasein equity in the consolidated statement of financial position. The fair value of restricted share-based remunerationis measured by reference to the fair value of granted shares of the Company.
For the PSU plan, the Group recognizes awards as an expense over the vesting period, recording the sameamount as an increase in a liability. As of the reporting date and the settlement date, the Group remeasures thefair value of the liability and recognizes any changes in fair value in profit or loss. The RSU plan, etc. are measured

23

at the standard amount of compensation by position and recognized in the consolidated statement of profit or loss
as expenses over the vesting period, and the same amount is recognized as an increase in liabilities in the
consolidated statement of financial position. As of the date of allotment and the day of lifting of transfer restrictionof the Company’s shares, the Group remeasures the fair value of the liability and recognizes any changes in fairvalue in profit or loss.
(15) Provisions
The Group recognizes provisions when it has a present obligation (legal or constructive) as a result of a past event;when it is probable that an outflow of resources embodying economic benefits will be required to settle theobligation; and when a reliable estimate can be made of the amount of the obligation.
Where the effect of the time value of money is material, the amount of a provision is measured at the present valueof the expenditures expected to be required to settle the obligation. The present value of the expenditures iscalculated by using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the liability with uncertainty of the occurrence of obligating events being reflected in theestimated future cash flows.
Provisions that the Group recognizes are mainly as follows:1)

Provision for compensation for industrial accidents
The Group estimates and records an amount based on past and current experience to prepare for thepayment of the medical expenses, the absence from work compensation, etc. incurred as a result ofindustrial accidents.

2)

Provision for loss on litigation
To prepare for the expenditures of litigation-related expenses, the Group estimates and records an amountof compensation for damages, settlement package, etc. that is currently expected to be incurred in the
future.

3)

Provision for product warranties
To prepare for the expenditures for after-sales and other services for products sold, the Group estimatesand records an amount to be incurred based on past experience.

(16) Revenue
The Group recognizes revenue at an amount reflecting the amount of consideration to which the Group expects
to be entitled in exchange for transferring the goods and services to the customer based on the following five-step
approach, except for interest and dividend income, etc. received under IFRS 9 “Financial Instruments”:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
The Group engages in the premium tire business, solutions business, and chemical and industrial products anddiversified products businesses. In these businesses, because customers mainly obtain control over the productat the time of delivery of the product, the performance obligations are considered to be satisfied at that time, andrevenue is recognized at the time of delivery of the product.
In addition, consideration for performance obligations is mainly received within one year from satisfaction of theperformance obligations, and contains no significant financing component.
Revenue is measured at an amount of consideration promised in a contract with a customer less estimated future
returns, discounts and rebates. The amount of returns is estimated and calculated based on an expected return
rate derived from the past data and the like. As for discounts and rebates, the amount of future payments is mainly
estimated and calculated based on contracts and the like until actual results are confirmed.
(17) Government grants
Government grants are recognized at fair value when conditions for the receipt of grants have been met andreasonable assurance for the receipt could be obtained.

24

When government grants are related to the items of expense, government grants are recognized in profit or loss
on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the
grant is intended to compensate. For grants related to assets, the amount of the grant is deducted from the costof the asset.
(18) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction, or production of a qualifying asset arecapitalized and form part of the cost of the asset. A qualifying asset is an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale. Other borrowing costs are recognized as expenses in the
period in which they are incurred.
(19) Income taxes
Income taxes consist of current tax and deferred tax. These are recognized in profit or loss, excluding tax arisingfrom the items recognized in other comprehensive income or directly in equity, and tax arising from businesscombinations.
Current taxes are measured at an expected amount of taxes to be paid to or of refund from the taxation authorities.
The amount of tax is calculated based on the tax rates and the tax laws that have been enacted, or substantiallyenacted by the reporting date.
Deferred taxes are recognized for the temporary differences between the carrying amount of assets and liabilities
for accounting purposes and their tax bases, unused tax losses carryforward and unused tax credits carryforward
as of the reporting date.
Deferred tax assets and liabilities are not recognized for following temporary differences:• Temporary differences arising from the initial recognition of goodwill• Temporary differences arising from initial recognition of assets and liabilities from transactions that are notbusiness combinations, affect neither accounting profit nor taxable income (loss), and do not give rise toequal taxable and deductible temporary differences at the time of the transaction• Deductible temporary differences arising from investments in subsidiaries and associates, and interests injoint arrangements when it is probable that the temporary difference will not reverse in the foreseeable futureor when it is not probable that taxable profit will be available against which the temporary difference can beutilized.
• Taxable temporary differences arising from investments in subsidiaries and associates, and interests in joint
arrangement when the Group is able to control the timing of the reversal of the temporary difference and it
is probable that the temporary difference will not reverse in the foreseeable future.
A deferred tax liability is recognized for all taxable temporary differences in principle, and a deferred tax asset isrecognized for all deductible temporary differences to the extent that it is probable that taxable income will beavailable against which deductible temporary differences can be utilized.
Carrying amount of deferred tax assets is reviewed each period and reduced to the extent that it is no longer
probable that sufficient taxable income will be available to use all or part of the benefit of the deferred tax assets.
Unrecognized deferred tax assets are reviewed each period and are recognized to the extent that it has become
probable that future taxable income will allow the deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates and by the tax laws that are expected to apply tothe period when the assets are realized or the liabilities are settled based on the tax rates and tax laws enacted
or substantively enacted at the end of the reporting period.
For uncertain income tax positions, the Group recognizes an asset or a liability at a reasonably estimated amountif the tax position has a high probability of being accepted based on a tax law interpretation.
Deferred tax assets and liabilities are offset against each other if the Group has a legally enforceable right to offset
current tax assets against current tax liabilities and when either of the following are met: income taxes are leviedby the same taxation authority on the same taxable entity; or income taxes are levied by the same taxation authority
on different taxable entities, but they either have the intention to settle current tax liabilities and current tax assets
on a net basis or plan to realize assets and settle liabilities simultaneously.
(20) Treasury stock
Treasury stock is measured at cost and presented as a deduction from equity. No gain or loss is recognized on
the purchase, sale or retirement of treasury stock. The difference between the carrying amount and the25consideration thereof at the time of sale is recognized as equity.
(21) Dividends
Of the dividend distributions to the shareholders of the Company, the year-end dividend is recognized as a liability
for the period that includes the date of resolution by the Company’s shareholders’ meeting, while the interim
dividend is recognized as a liability for the period that includes the date of resolution by the Board of Directors.
(22) Earnings per share
Basic earnings per share are calculated by dividing profit or loss attributable to owners of parent by the weightedaverage number of shares of ordinary shares outstanding adjusted by the number of shares of treasury stockduring the period. Diluted earnings per share are calculated taking into consideration the effect of all potential
shares with dilutive effect.

(Changes in accounting policies)
Deferred tax related to assets and liabilities arising from a single transaction
Due to the application of IAS 12 “Income Taxes” (amended in May 2021), the accounting treatment was clarified forthe initial recognition, etc. concerning transactions that give rise to equal taxable and deductible temporary differencesat the time of the transaction, and the deferred tax liabilities and deferred tax assets regarding the taxable anddeductible temporary differences are each recognized in the consolidated statement of financial position.
This change in accounting policy is applied retrospectively, and the cumulative effects were reflected in equity at the
beginning of the current fiscal year. As a result, the balance at the beginning of the period for retained earnings after
the retrospective application increased by 29 million yen, and the balance at the beginning of the period for noncontrolling interests increased by 15 million yen.
International Tax Reform—Pillar Two Model Rules
Due to the application of IAS 12, “Income Taxes” (amended in May 2023), the Company has applied a temporary
exception to the requirement to recognize and disclose deferred tax assets and deferred tax liabilities pertaining toincome taxes arising from the tax system related to the Pillar Two model rules announced by the Organisation for
Economic Co-operation and Development (OECD). As this standard was applied retrospectively, deferred tax assets
and deferred tax liabilities pertaining to income taxes arising from the tax system related to the Pillar Two model rules
have not been recognized or disclosed.
In the reforms to the Japanese tax system made in 2023, a corporate tax complying with the global minimum tax was
newly created, with the tax reform act (“Act for Partial Revision of the Income Tax Act, etc.” (Act No. 3 of 2023))(hereinafter “Revised Corporation Tax Act”) enacted on March 28, 2023 that includes the relevant regulations for the
global minimum tax. Within the global minimum tax rules in the Revised Corporation Tax Act, an income inclusion rule(“IIR”) has been introduced. Applicable from the business year starting on or after April 1, 2024, an additional tax will
be imposed on parent companies located in Japan up to the minimum tax rate (15%) of the taxes borne by thesubsidiaries, etc. of those parent companies located in Japan. This rule has already been applied to certain countries
outside of Japan such as EU countries, and the impact of this tax on the Group’s consolidated financial statements is
insignificant.

(Accounting estimates)
Items for which amounts have been recorded in the consolidated financial statements of the current fiscal year basedon accounting estimates, and may materially affect to the consolidated financial statements of the subsequent fiscal
year are as follows.
1. Impairment of non-financial assets
For the current fiscal year, “property, plant and equipment” of 1,738,506 million yen, “right-of-use assets” of 319,135
million yen, “intangible assets” of 200,858 million yen, and “goodwill” of 149,990 million yen have been recorded in
the consolidated statement of financial position.
For calculation method of the estimates, please refer to, “(Basic important matters for the preparation of consolidated
financial statements), 5. Summary of significant accounting policies, (11) Impairment of non-financial assets”.
These estimates are subject to uncertainties that may materially affect valuation of non-financial assets of thesubsequent fiscal year in case where estimates regarding valuation of non-financial assets have changed due to26

factors that include unpredictable change with respect to assumptions.
Impairment losses of 4,066 million yen recognized in the current fiscal year consist of 4,066 million yen recorded as“other expenses” in the consolidated statement of profit or loss (of which, “business and plant restructuring expenses”
are 2,233 million yen). Components of the 4,066 million yen impairment losses by asset item are property, plant andequipment of 3,814 million yen, goodwill and intangible assets of 53 million yen, and others of 198 million yen.
2. Recoverability of deferred tax assets
For the current fiscal year, “deferred tax assets” of 88,141 million yen have been recorded in the consolidated
statement of financial position.
For calculation method of the estimates, please refer to, “(Basic important matters for the preparation of consolidated
financial statements), 5. Summary of significant accounting policies, (19) Income taxes”.
Note that these estimates are subject to uncertainties that may materially affect amounts of deferred tax assets in the
consolidated financial statements of the subsequent fiscal year in case where estimates regarding valuation ofdeferred tax asset recoverability have changed due to factors that include unpredictable change with respect toassumptions.
3. Provisions
For the current fiscal year, “provisions” of 75,744 million yen have been recorded in the consolidated statement offinancial position.
For calculation method of the estimates, please refer to, “(Basic important matters for the preparation of consolidated
financial statements), 5. Summary of significant accounting policies, (15) Provisions”.
Note that these estimates are subject to uncertainties that may materially affect valuation of provisions of thesubsequent fiscal year in case where estimates regarding valuation of provisions have changed due to factors that
include unpredictable change with respect to assumptions.
4. Measurement of defined benefit obligations
For the current fiscal year, “retirement benefit liabilities” of 153,511 million yen have been recorded in the consolidated
statement of financial position upon measurement of defined benefit obligations.
For calculation method of the estimates, please refer to, “(Basic important matters for the preparation of consolidated
financial statements), 5. Summary of significant accounting policies, (13) Employee benefits”.
Note that the Group’s defined benefit plans are exposed to the following risks and such risks may materially affectmeasurement of defined benefit obligations of the subsequent fiscal year.
(1) Investment risk
The present value of the defined benefit obligations is calculated based on a discount rate that is determined byreference to market yields on high-grade corporate bonds at the end of fiscal year. In the event that the investment
yields for the plan assets fall below the discount rate, there is a risk of reduction in equity because of the worsened
funded status.
(2) Interest rate risk
In the event that the discount rate is reduced due to a decline in market yields on high-grade corporate bonds, thepresent value of the defined benefit obligations increases, resulting in a risk of reduction in equity because of theworsened funded status.
5. Fair value measurement of financial instruments
For calculation method of the amounts recorded in the consolidated financial statements and estimates with respect
to financial instruments measured at fair value, please refer to “(Notes to financial instruments)” as well as “(Basic
important matters for the preparation of consolidated financial statements), 5. Summary of significant accounting
policies, (4) Financial instruments” and “(Basic important matters for the preparation of consolidated financial
statements), 5. Summary of significant accounting policies, (5) Fair value measurement”.
Note that these estimates are subject to uncertainties that may materially affect fair value measurement of financial
instruments of the subsequent fiscal year in case where estimates regarding fair value measurement of financial
instruments have changed due to factors that include unpredictable change with respect to assumptions.
6. Uncertain income tax positions
As for the repayment of capital received from BRIDGESTONE AMERICAS, INC., a consolidated subsidiary, in fiscal
year 2021, the Company accounted for the transaction by recognizing deductible expenses as loss on transfer of27

shares for tax purposes. In fiscal year 2021, the Company excluded some deductible expenses to calculate its taxable
income, for accounting purposes, with respect to this matter which gives rise to some uncertain tax treatments under
the Japan’s tax law. The Company had engaged third-party legal, tax professionals, etc. to consider plausible tax
treatments and estimated its taxable income using either the expected value method or the most likely amount method
for the effect of uncertainties considering various scenarios and assumptions. As a result, although an effect of 91,100
million yen in total would be imposed on a decrease in income taxes payable and an increase in deferred tax assets
if all the deductible expenses were included in calculating taxable income, the Company lowered its deferred tax
assets by 60,000 million yen in fiscal year 2021, relative to amounts under the aforementioned accounting treatment,
and also continued the same accounting treatment in the previous fiscal year.
Furthermore, in the current fiscal year, there was also no change in the judgment on this matter from fiscal year 2021.
However, due to progress in use of unused tax losses carryforward, the Company has lowered its deferred tax assets
by 27,241 million yen and increased its income taxes payable by 32,759 million yen in the current fiscal year, relative
to amounts in the case where all the deductible expenses were included in calculating taxable income.
A potential situation whereby such uncertain tax treatment differs from the final interpretation of Japan’s tax law
according to the tax authorities could materially affect the income tax expense amount of the subsequent fiscal year.
7. Measurement of disposal groups classified as held for sale
On December 10, 2021, the Group made the decision to transfer its anti-vibration rubber business to Anhui Zhongding
Holding (Group) Co., Ltd. (AZ). This entails the Group establishing a new wholly-owned subsidiary (PROSPIRACORPORATION) to which it would transfer the business operations by carrying out an absorption-type demerger,
then integrating the business operations of the Group into PROSPIRA CORPORATION, and subsequently
transferring all shares of PROSPIRA CORPORATION to AZ. The Group completed this business transaction on
September 1, 2022. The Group plans to conduct separate transfer targeting a company at a later time.
Accordingly, for the company planned to be separately transferred later, at the end of the current fiscal year, the Group
continued to classify assets and liabilities slated for transfer to PROSPIRA CORPORATION into a disposal groupclassified as held for sale. Such disposal group classified as held for sale is measured at fair value less costs to sellbecause the fair value less costs to sell has fallen below the carrying amount. The Group has consequently
recognized a reversal of expenses of 249 million yen, recorded in “profit from discontinued operations” in the
consolidated statement of profit or loss.
For details on calculating these estimates, please refer to, “(Basic important matters for the preparation of
consolidated financial statements), 5. Summary of significant accounting policies, (12) Assets held for sale anddiscontinued operations”.
Note that the estimates are subject to uncertainties that may materially affect measurement of disposal groups
classified as held for sale in the consolidated financial statements of the subsequent fiscal year in case where
estimates regarding measurement of disposal groups classified as held for sale have changed due to factors that
include unpredictable change with respect to assumptions.

(Notes to the consolidated statement of financial position)
1.

2.

Accumulated depreciation and accumulated impairment loss
Property, plant and equipment
Right-of-use assets
Assets provided as collateral and collateralized debt obligations
Assets pledged as collateral (Property, plant and equipment and others)
There are no obligations corresponding to the preceding.

3,571,141 million yen
252,891 million yen

726 million yen(Notes to the consolidated statement of profit or loss)
1.

Business and plant restructuring income
Mainly reversal of impairment losses, gain on sales of fixed assets and gain on transfer of interests associatedwith the reorganization of overseas tire plants are recorded at the amount of 8,645 million yen in “other income”
in the consolidated statement of profit or loss.

2.

Gain on sale of fixed assets
Mainly gains on the sale of land are recorded at the amount of 17,322 million yen in “other income” in the
consolidated statement of profit or loss.

28

3.

Business and plant restructuring expenses
Mainly expenses relating to the reorganization of overseas tire plants are recorded at the amount of 17,921 million
yen in “other expenses” in the consolidated statement of profit or loss.

(Notes to the consolidated statement of changes in equity)
1. Type and total number of shares issued/Type and number of treasury stock
As of January
1, 2023

Number ofincrease

Number of
decrease

As of December
31, 2023

Shares issued
Common stock(Thousands of shares)

713,698––

713,698

Treasury stock
Common stock
29,3493
305
29,047(Thousands of shares)(see Notes 1 and 2)
Notes 1. The increase in treasury stock consists of the purchase of 2 thousand shares according to therequests from the shareholders who have odd-lot shares, and the acquisition without contribution of
1 thousand shares of treasury stock as restricted share-based remuneration.
2. The decrease in treasury stock consists of the exercise of stock options of 125 thousand shares,
disposal of treasury stock as restricted stock compensation of 83 thousand shares, disposal oftreasury stock as Performance Share Units of 76 thousand shares, and disposal of treasury stock
as Restricted Stock Units, etc. and others of 20 thousand shares.
2. Dividends(1) Dividend payments
Resolution

Type

Annual Shareholders’Meeting, March 28,
2023

Common StockBoard of Directors’Meeting, August 9, 2023

Common Stock

Dividend per
share
(Yen)

Record date

Effective date

61,59290

December 31,
2022

March 29, 2023

68,462100

June 30, 2023

September 1,
2023

Total dividends(Yen in millions)(2) Dividends whose record date is in the current fiscal year and effective date is in the following fiscal year
Total
Dividend per
dividends
Resolution
Type
Sourceshare
Record date
Effective date
(Yen in(Yen)millions)
Annual Shareholders’CommonRetained
December
March 27,
Meeting, March 26,
68,465100
Stockearnings
31, 2023
2024
2024
3. The category and the number of shares to be allocated to stock acquisition rights at the end of the current fiscal year
(excluding those for which the beginning of their exercise periods has not yet occurred)
Common stock: 757,000 shares(Notes to financial instruments)
1.

Qualitative information on financial instruments
The Group is exposed to financial risks (e.g., credit risk, liquidity risk, foreign exchange risk, interest rate risk andmarket price risk) in the process of its management activities and it manages risks based on a specific policy inorder to avoid said risks.

(1) Credit risk management
The Group is exposed to credit risk such as a counterparty’s default on contractual obligations resulting in financial

29

losses to the Group. The Group regularly monitors the financial position of significant customers and manage thedue dates and the receivables balance of each customer to minimize the risk of defaults resulting fromdeterioration of a customer’s financial position, and when full or partial collection of the receivables is considered
impossible, or extremely difficult, it is deemed to be a default. The Group enters into derivative transactions onlywith highly rated financial institutions in order to minimize counterparty risk.
The carrying amounts after impairment presented in the consolidated statement of financial position represent theGroup’s maximum exposure to credit risk of financial assets.
(2) Liquidity risk management
The Group is exposed to liquidity risk when it is not able to repay liabilities on the due date due to deterioration of
the financing environment. Payment terms of payables, such as notes and accounts payable, and other payables
are approximately less than one year.
Based on a cash flow plan that incorporates estimated cash inflows and outflows arising from business activities,
the Group practices fund management effectively by recognizing the future fund position in advance based on
cash flow projections. The Group also strives to diversify sources of financing such as borrowings or bonds inorder to reduce liquidity risk. In addition, the Group keeps necessary credit facilities to manage liquidity risk by
having commitment lines with several financial institutions.
(3) Foreign exchange risk management
The Group engages in business, such as development, purchase, production, distribution and sales, globally andconducts international transactions in regions around the world, and therefore, the fluctuation of foreign currency
rates has an impact on the Group’s performance.
The Company and certain subsidiaries use principally forward exchange contracts to hedge foreign currency
exchange risk identified by currency on a monthly basis for receivables and payables in foreign currencies. When
receivables and payables in foreign currencies are expected from forecasted transactions related to exports andimports, forward exchange contracts and currency option contracts may be used, depending on exchange rate
conditions. In addition, currency swap contracts are used to hedge foreign currency exchange fluctuation risk
associated with loans and borrowings denominated in foreign currencies.
The Group limits derivative transactions to actual exposure under internal regulations and does not enter into
derivative transactions for speculative purposes.
(4) Interest rate risk management
Some of borrowings, etc. with floating interest rates in the Group are exposed to interest rate fluctuation risk. The
Group uses interest rate swap transactions for the purpose of hedging interest rate risk on borrowings.
The Group limits derivative transactions to actual exposure under internal regulations and does not enter into
derivative transactions for speculative purposes.
(5) Market price fluctuation risk management
Investment securities in the Group consist primarily of equity securities of business partners and are exposed tomarket price fluctuation risk.
The Group regularly monitors market prices and financial positions of the issuers with whom it has business
relations, and appropriately reviews the status of these securities held by the Group considering the relationships
with the issuers.
2.

Fair values of financial instruments
Carrying amounts of the consolidated statement of financial position and fair value of the financial instruments asof December 31, 2023, are as follows. Financial instruments for which carrying amounts are equal to or reasonably
approximate fair value are excluded from the following table.
(Yen in millions)
Carrying amounts
Financial instruments measured atamortized cost
Bonds and borrowings (Non-current)
Total

3.

239,789
239,789

Breakdown of fair values of financial instruments by level

30

Fair value

238,181
238,181Fair values of financial instruments are categorized into the following three levels according to the observability
and significance of inputs used in fair value measurement.
Level 1: Fair value that is measured by using quoted prices in active markets
Level 2: Fair value, other than Level 1, that is determined by directly or indirectly using the observable price
Level 3: Fair value determined by using valuation techniques that incorporate unobservable inputs(1) Financial instruments measured at fair value on a recurring basis(Yen in millions)Level 1

Level 2–Derivative assets

6,450
–

50,17450,174

Shares, etc.
Total

–
–

Derivative liabilities
Total

Total

Level 3
–

6,450

6,450

27,93727,937

78,111
84,561

22,64522,645––22,64522,645(2) Financial assets measured at amortized cost
Level 1
Bonds and borrowings
Total

Level 2––

238,181
238,181(Yen in millions)
Total

Level 3––

238,181
238,181

Note Explanation regarding valuation techniques and inputs used in fair value measurement
Derivative assets and derivative liabilities
Derivative assets and derivative liabilities are included in other financial assets and other financial liabilities,
respectively, and these are classified as financial assets and financial liabilities measured at fair value through profit
or loss. These are forward exchange contracts, currency swap contracts and interest rate swap contracts, etc., which
are measured based on the model using largely observable inputs such as foreign currency rates and interest rates.
Shares, etc.
Shares, etc. are included in other financial assets, classified into financial assets measured at fair value through profit
or loss, or financial assets measured at fair value through other comprehensive income. The shares, etc. categorized
in Level 1 are the listed stocks traded in active market, which are measured at a quoted price on the exchange. The
shares, etc. categorized in Level 3 are unlisted stocks, etc., which are primarily measured by using the net assetbased valuation model (i.e., a method of measuring enterprise value based on the net assets of the share issuing
company, adjusted for any items that should be adjusted due to marked-to-market, if any).
In addition, for written put options on shares of a subsidiary granted by the Group to owners of non-controlling interests,
the present value of their exercise price is recognized as financial liabilities. At initial recognition, the amount is reduced
from capital surplus.
As for the written put options (carrying amount at the end of the previous fiscal year was 3,771 million yen), whichwere included in other financial liabilities in the consolidated statement of financial position, there was no balance atthe end of the current fiscal year since all the rights of these put options were exercised.
Bonds and borrowings
The fair values of bonds are based on the market prices. The fair values of the borrowings are calculated based on
the present value and by discounting the total principal and interest over the remaining term at an interest rate thatwould be applied if similar borrowings were newly made.

31

(Notes to revenue recognition)
1.

Disaggregation of revenue
The breakdown of revenue from continuing operations is as follows.
(Yen in millions)
Reportable segments
Europe,Russia, Middle
Americas

Corporate or

Consolidated

elimination

total

Other

China, AsiaJapan

East, India and

Total

Pacific
Africa(Note 4)Tires (Note 1)

716,935

398,135

2,003,081

888,479

4,006,630

16,24923

4,022,902

Other (Note 2)
Total
external
revenue
Revenuerecognizedfromcontractswithcustomers
Revenuerecognizedfrom othersources(Note 3)229,613–59,992–289,605

1,293–

290,898

946,547

398,135

2,063,073

888,479

4,296,235

17,54323

4,313,800

915,826

398,135

2,055,923

876,578

4,246,462

17,54323

4,264,028

30,722–

7,150

11,90049,772––

49,772

Notes 1. “Tires” includes the premium tire business and solutions business that the Company operates in.
2. “Other” includes chemical and industrial products and diversified products businesses
that the Company operates in.
3. Revenue recognized from other sources includes lease income based on IFRS 16.
4. Transfer of the Russian business was completed in December 2023.
2.

Contract balances
Contract balances of the Group consist of receivables, contract assets and contract liabilities arising fromcontracts with customers. In the consolidated statement of financial position, receivables arising from contracts
with customers are presented as “Trade and other receivables”, while the contract assets and contract liabilities
are as follows:(As of December 31, 2023)
Yen in millions
Contract assets
Contract liabilities

9,291
27,377Of the amount of revenue recognized in the current fiscal year, the amount included in the balance of contract
liabilities at the beginning of the current fiscal year was 18,532 million yen. The amount of revenue recognized in
the current fiscal year from performance obligations satisfied in the previous periods is not material.
The contract assets are presented as “Other current assets” and “Other non-current assets” in the consolidated
statement of financial position.
The contract assets primarily relate to unbilled accounts receivable on product design and development forcustomers.
Generally, contract assets increase when the Company transfers goods or services to customers before thecustomers pay consideration or the payment is due (excluding receivables for which the right to consideration is
unconditional), and decrease when the Company bills customers.
The contract liabilities are presented as “Other current liabilities” and “Other non-current liabilities” in the
consolidated statement of financial position.
The contract liabilities primarily relate to advances received from customers in association with maintenanceservices for automobiles.
Generally, contract liabilities increase when the Company receives consideration from customers before theCompany transfers goods or services to the customers, and decrease when the Company satisfies its
performance obligations.

32

Transaction price allocated to the remaining performance obligations
The amounts of revenue from continuing operations related to the unsatisfied (or partially unsatisfied) performanceobligations that is expected to be recognized in the future at the end of the current fiscal year are as follows:3.

(As of December 31, 2023)
Yen in millions
Within one year
Over one year and within five years

32,03021,795As the Group has applied the practical expedient provided in paragraph 121 of IFRS 15, it does not disclose
information about the remaining performance obligation that has an original expected duration of one year or less.
Among consideration from contracts with customers, there is no significant amount that is not included intransaction price.

(Notes to per-share information)
Total equity attributable to owners of parent per share
Continuing operations
Discontinued operations
Basic earnings per share

4,898.25 yen
477.60 yen
6.39 yen483.99 yen(Notes to discontinued operations)
1.

Anti-vibration rubber business
On December 10, 2021, the Group made the decision to transfer its anti-vibration rubber business (the “Business
Operations”) to Anhui Zhongding Holding (Group) Co., Ltd. (AZ). This entails the Group establishing a new whollyowned subsidiary (PROSPIRA CORPORATION) to which it would transfer the Business Operations by carryingout an absorption-type demerger (the “Corporate Demerger”), then integrating the Business Operations of theGroup into PROSPIRA CORPORATION, and subsequently transferring all shares of PROSPIRA CORPORATION
to AZ (the “Share Transfer”, with the Corporate Demerger and the Share Transfer hereinafter referred to as the“Business Transaction”). The Group completed the Business Transaction on September 1, 2022. The Group plans
to conduct separate transfer targeting a company at a later time.
The Group has accordingly classified the Business Operations of the Group, BRIDGESTONE APM COMPANY,
and BRIDGESTONE INDUSTRIAL PRODUCTS (THAILAND) CO., LTD. as discontinued operations as well as
PROSPIRA CORPORATION, PROSPIRA MANUFACTURING JAPAN CO.,LTD, PROSPIRA NTEC JAPAN
CO.,LTD, PROSPIRA INDIA AUTOMOTIVE PRODUCTS PRIVATE LIMITED, PROSPIRA (THAILAND) CO., LTD.
PROSPIRA AMERICA CORPORATION and PROSPIRA CHINA CO.,LTD.
Profit or loss from discontinued operations
Fiscal year ended
December 31, 2023
Yen in millions
Profit or loss from discontinued operations
IncomeExpenses (Note)
Loss before tax from discontinued operations
Income tax expense
Profit from discontinued operations
Note

2.

5,835
(1,574)
4,262
(850)
3,411

Expenses for the current fiscal year include a gain on business transfer to AZ of 3,626 million yen and areversal of expenses of 249 million yen recognized upon having measured the disposal group consisting of
discontinued operations at fair value less costs to sell.

Chemical products solutions business
On December 10, 2021, the Group made the decision to transfer its chemical products solutions business (the“Business Operations”) to Endeavour United II Investment Business Limited Partnership (EU Investment
Partnership). This entails the Group establishing a new wholly-owned subsidiary (ARCHEM INC.) to which it would
transfer the Business Operations by carrying out an absorption-type demerger (the “Corporate Demerger”), then33

integrating the Business Operations of the Group into the ARCHEM INC., and subsequently transferring all sharesof the ARCHEM INC. to EU Investment Partnership, which is structured, managed, and operated by Endeavour
United Co., Ltd. (EU) (the “Share Transfer”, with the Corporate Demerger and the Share Transfer hereinafterreferred to as the “Business Transaction”). The Group completed the Business Transaction on August 1, 2022.
The Group has accordingly classified Business Operations of the Group, BRIDGESTONE INDUSTRIALPRODUCTS (THAILAND) CO., LTD., and ARCHEM PHILIPPINES, INC., as discontinued operations as well as
BRIDGESTONE CHEMITECH CO., LTD. (BSCT), BRIDGESTONE DIVERSIFIED CHEMICAL PRODUCTS CO.,LTD. (BDCP), ARCHEM INC., BRIDGESTONE APM FOAMING COMPANY, BRIDGESTONE CHEMICALPRODUCTS MALAYSIA SDN. BHD., ARCHEM (THAILAND) CO., LTD., BRIDGESTONE ELECTRONIC
MATERIALS (HONG KONG) Ltd. (BEM), BRIDGESTONE (KAIPING) DIVERSIFIED PRODUCTS CO., LTD.,
GUANGZHOU ARCHEM AUTO COMPONENT CO., LTD., and ARCHEM (WUHAN) CO., LTD.
Profit or loss from discontinued operations
Fiscal year ended
December 31, 2023
Yen in millions
Profit or loss from discontinued operations
Income (Note)
Expenses
Loss before tax from discontinued operations
Income tax expense
Profit from discontinued operations
Note

2,077
(999)
1,078
(114)
964

Income for the current fiscal year includes a gain on business transfer to EU of 1,165 million yen.

(Notes to assets held for sale and liabilities directly associated with assets held for sale)
The breakdown of assets held for sale and liabilities directly associated with assets held for sale is as follows.
Assets held for sale
(As of December 31, 2023)
Yen in millions
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Others
Accumulated loss recognized upon having measured the disposalgroup consisting of discontinued operations at fair value lesscosts to sell
Total

5,276
870
472
2,994
379
(6,898)
3,093

Liabilities directly associated with assets held for sale
(As of December 31, 2023)
Yen in millions
Trade and other payables

1,058
1,058

Total

Assets held for sale and directly associated liabilities for the current fiscal year, mainly in the anti-vibration rubber
business, have been classified as assets held for sale as the Group made a decision to sell those operations. Details
for the anti-vibration rubber business are provided in “(Notes to discontinued operations)”.
For the disposal groups classified as assets held for sale, the anti-vibration rubber business is measured at fair valueless costs to sell as the fair value less costs to sell is less than the carrying amount. As a result, a recognized reversalof expenses of 249 million yen was recorded in “profit from discontinued operations”. The fair value has been classified
as Level 3 in the hierarchy because it was assessed based on the selling price.

34

(Notes to significant subsequent events)(Transfer of fixed assets)
To use our management resources effectively, the Company concluded a transfer agreement on February 16, 2024 totransfer the following fixed assets owned by the Company.
(1) Details of assets to be transferred
Details of assets and location
Gain on transfer
Actual statusLand
5,695.68 m2
Buildings 9,181.23 m2
Approx. 63.3 billion yen
Company housing
Location 4-26-5 Roppongi, Minato-ku, Tokyo
Notes 1. We will not be disclosing either the transfer amount or the carrying amount based on our agreement withthe transferee.
2. The gain on transfer is calculated by subtracting the carrying amount plus the estimatedamount of any expenses associated with the transfer from the transfer amount.
(2) Outline of transferee
The transferee is a company located in Japan, but we will not be disclosing further details based on our agreementwith the transferee.
There are no capital, personnel, business relationships or related party to note between the Company and thetransferee.
(3) Schedule of transfer
Date of conclusion of the agreement
Property handover dateFebruary 16, 2024
May 31, 2024 (scheduled)(4) Impact on profit or loss
In the fiscal year ending December 31, 2024, we plan to record approximately 63.3 billion yen in gain on sale of
fixed assets as other income.

35

NON-CONSOLIDATED FINANCIAL STATEMENTS
Non-consolidated Statement of Changes in Equity
Current Year (Year ended December 31, 2023)(Yen in millions)Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings
Reserve for

CommonTotal

Capital

stock

Legal

capitalreserve

reserve

surplusReserve for

specialadvancedaccount for

depreciation

advancedof fixed

depreciation

assetsof fixed

Unappropri-

Total

Generalatedretainedreserveretainedearnings

earnings

assetsBeginning Balance

126,354

122,079

122,079

31,279–29,859789,311306,534

1,156,982(130,053)(130,053)

1,063

–

(8,903)–284,215

284,215(Changes in the year)
Cash dividends
Reversal of reserve for advanced
depreciation of fixed assets
Provision of reserve for special accountfor advanced depreciation of fixed
assets(1,063)
8,903

ProfitPurchase of treasury stock

(1)

(1)

Disposal of treasury stock

(162)

(162)

Net change in the year other thanshareholders’ equity
Total Changes in the YearEnding Balance

–

–

–

–

(1,063)

8,903–

146,158

153,998

126,354

122,079

122,079

31,27928,796

8,903

789,311452,692

1,310,980

Net unrealized gain (loss) and

Shareholders’ equity

translation adjustments
Net

Treasurystock

unrealized

DeferredTotalgain (loss)

gain (loss)

shareholders’ononequityavailable-

derivative

for-sale

instruments

securities
Beginning Balance(136,813)

1,268,602

31,783

1,298

Total net
unrealized
gain (loss)

Stockacquisition

Total Equity

rightsandtranslation
adjustments
33,081

2,673

1,304,356(Changes in the year)
Cash dividends
Reversal of reserve for advanced
depreciation of fixed assets
Provision of reserve for special accountfor advanced depreciation of fixed
assetsProfit(130,053)(130,053)

–

–

–

–

284,215

284,215

Purchase of treasury stock

(16)

(17)

(17)

Disposal of treasury stock

1,420

1,258

1,258
(1,706)(115)(1,821)(365)(2,186)

1,405

155,403

(1,706)(115)(1,821)(365)

153,216(135,408)

1,424,005

30,076

1,183

31,2592,308

1,457,572

Net change in the year
Total Changes in the YearEnding Balance36Notes to Non-consolidated Financial Statements(Significant accounting policies)
1.

Valuation policies and methods for assets(1) Valuation policies and methods for investments in securities
Investments in subsidiaries and associates — The moving-average cost method
Available-for-sale securities
Marketable securities— Fair value(Unrealized gain and loss, net of tax is recorded in equity, and the moving-average method is used
to calculate the cost of securities sold)Non-marketable securities— Primarily the moving-average cost method.
Note that investments provided to limited investment partnerships and other organizations are
based on the most recent available financial statements according to the financial reporting datespecified in contracts with the partnership. They incorporate a net amount of equivalent equity.
(2)

Valuation policies and methods for derivatives
Fair value(3)

Valuation policies and methods for inventories
The moving-average cost method (for carrying amounts on the balance sheet, method in which carrying
amounts are lowered based on a decline in profitability)2.

Depreciation method for fixed assets(1) Property, plant and equipment
The declining-balance method(2) Intangible assets
The straight-line method

3.

Accounting policies for reserves and allowances(1) Allowance for doubtful accounts
In order to reserve for loss from the nonpayment of claims, the actual credit loss rate is used to calculate theamount to be recorded for general claims, and for designated claims for which there is a concern of
nonpayment, an amount based on the evaluation of potential loss in the receivables outstanding is recorded.
(2)

Allowance for losses on business transfer
In order to reserve for loss arising from a business transfer, the estimated amount to be incurred in the futureis recorded.

(3)

Accrued pension and liability for retirement benefits
In order to reserve for retirement benefits for employees, an amount based on the estimated amount ofprojected benefit obligations and pension plan assets as of the current fiscal year end is recorded.
① Method of attributing projected benefits to periods
Projected benefits are attributed to periods of service up to the end of the current fiscal year on a benefit
formula basis.
② Method of recognizing unrecognized actuarial gain/loss and past service cost
Past service cost is treated as an expense using the straight-line method over a fixed number of years (10years) within the average remaining years of service of the employees in the year in which the past service
costs occur.
Actuarial gain/loss is treated as an expense using the straight-line method over a fixed number of years (10years) within the average remaining years of service of the employees in the year in which the gain/loss
occurs, recorded from the following fiscal year.

37

4.

Accounting policies for revenue and expenses
The Company recognizes revenue at an amount reflecting the amount of consideration to which the Company
expects to be entitled in exchange for transferring the goods and services to the customer based on the following
five-step approach, except for interest and dividend income, etc.:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
The Company engages in the premium tire business, solutions business, and chemical and industrial products
business.
In these businesses, because customers mainly obtain control over the product at the time of delivery of the
product, the performance obligations are considered to be satisfied at that time, and revenue is recognized at thetime of delivery of the product.
In addition, consideration for performance obligations is mainly received within one year from satisfaction of theperformance obligations, and contain no significant financing component.

5.

Accounting policies for the translation of foreign currency-denominated assets and liabilities into Japanese yen
Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at theexchange rate at the end of the fiscal year. The foreign currency exchange gain and loss from translation arerecognized in profit or loss.

6.

Hedge accounting(1) Hedge accounting method
Deferred hedge accounting is applied.
(2) Hedging instruments and items covered
Instruments
Items covered
Forward foreign exchange contracts
Foreign currency-denominatedobligations and forecasted foreign currency-denominated transactions
Foreign currency swaps
Borrowings and bonds
Interest rate swaps
Borrowings
Commodity swaps
Raw materials

monetaryclaimsand(3) Hedging policy
Forward exchange contracts are used only to cover actual foreign exchange needs, and foreign exchange
swaps are made to match the principal amount and term of the hedged foreign currency-denominatedobligation. Interest rate swaps are entered into for the amount of borrowings only. Commodity swaps areentered into for the trade amount of raw materials. It is the Company’s policy not to use any derivativetransactions for speculative purposes.
(4) Method for evaluating the effectiveness of hedges
The validity of hedges is evaluated based on a comparison of accumulated amount of fluctuations in the
cash flow or fluctuations in the market value of the hedged item with the accumulated amount of fluctuationsin the cash flow or fluctuations in the market value of the hedging instrument.

(Changes in presentations)Non-consolidated Statement of Profit or Loss
In the previous fiscal year, “Removal and disassembly expense” was disclosed separately in “Non-operating Expenses”
section. During the current fiscal year, the amount has become immaterial and such an amount is included in “Other”.
“Removal and disassembly expense” for the current fiscal year was 2,840 million yen.

(Accounting estimates)
1. Impairment on fixed assets(1) Amount recorded in the financial statements for the current fiscal year
Property, plant and equipment
265,338 million yen
Intangible assets
34,319 million yen

38

(2) Other information that contributes to understanding of users of the financial statements
The notes have been omitted since the same information has been provided in “(Basic important matters forthe preparation of consolidated financial statements) 5. Summary of significant accounting policies (11)Impairment of non-financial assets” in the notes to consolidated financial statements.
2. Recoverability of deferred tax assets and accounting treatment of income taxes payable(1) Amount recorded in the financial statements for the current fiscal year
Deferred tax assets
21,393 million yen
Income taxes payable
63,964 million yen(2) Other information that contributes to understanding of users of the financial statements
The notes have been omitted since the same information has been provided in “(Basic important matters forthe preparation of consolidated financial statements) 5. Summary of significant accounting policies (19)
Income taxes” in the notes to consolidated financial statements. In addition, as for the repayment of capitalreceived from BRIDGESTONE AMERICAS, INC., a subsidiary of the Company, in fiscal year 2021 theCompany accounted for the transaction by recognizing deductible expenses as loss on transfer of shares fortax purposes, while the Company’s investments in subsidiaries and associates were reduced by the sameamount for accounting purposes.
In fiscal year 2021, the Company excluded some deductible expenses to calculate its taxable income withrespect to this matter which gives rise to some uncertain tax treatments under the Japan’s tax law. The
Company had engaged third-party legal, tax professionals, etc. to consider plausible tax treatments andestimate reasonably its taxable income considering various scenarios and assumptions. As a result, althoughan effect of 91,100 million yen in total would be imposed on a decrease in income taxes payable and anincrease in deferred tax assets if all the deductible expenses were included in calculating taxable income, theCompany lowered its deferred tax assets by 60,000 million yen in fiscal year 2021, relative to amounts under
the aforementioned accounting treatment, and also continued the same accounting treatment in the previous
fiscal year. Furthermore, in the current fiscal year, there was also no change in the judgment on this matterfrom fiscal year 2021. However, due to progress in use of unused tax losses carryforward, the Company has
lowered its deferred tax assets by 27,241 million yen and increased its income taxes payable by 32,759 million
yen in the current fiscal year, relative to amounts in the case where all the deductible expenses were included
in calculating taxable income. A potential situation whereby the accounting estimate differs from the final
interpretation of Japan’s tax law according to the tax authorities could materially affect deferred tax assets,
income taxes payable, and other amounts for the subsequent fiscal year.

3. Accrued pension and liability for retirement benefits(1) Amount recorded in the financial statements for the current fiscal year
Accrued pension and liability for retirement
41,506 million yen
benefits(2) Other information that contributes to understanding of users of the financial statements
The notes have been omitted since the same information has been provided in “(Basic important matters forthe preparation of consolidated financial statements) 5. Summary of significant accounting policies (13)
Employee benefits” in the notes to consolidated financial statements.
4. Allowance for losses on business transfer(1) Amount recorded in the financial statements for the current fiscal year
Allowance for losses on business transfer
5,834 million yen(2) Other information that contributes to understanding of users of the financial statements
In order to reserve for a loss expected to be incurred in connection with a transfer of the anti-vibration rubber
business, the amount expected to be incurred in the future was recorded for such losses that can bereasonably estimated at the end of the current fiscal year.
Note that any unpredictable change in the external environment and other factors may materially affect theamount of losses on business transfer to be recognized in the financial statements of the subsequent fiscal
year.
5. Valuation of investments in subsidiaries and associates and investments in subsidiaries and associates, otherthan stock(1) Amount recorded in the financial statements for the current fiscal year
Non-marketable investments in subsidiaries and associates and investments in
853,048 million yen
subsidiaries and associates39

(2) Other information that contributes to understanding of users of the financial statements
For non-marketable investments in subsidiaries and associates and investments in subsidiaries andassociates, the Company’s policy is to compare the carrying amount of investments to the actual value basedon the net asset amount of each company, and recognize an impairment loss when the actual value declines
by 50% or more compared to the carrying amount of investments. Note that in cases where any change in theexternal environment and other factors materially affects the actual value, this may also affect valuation of
investments in subsidiaries and associates and investments in subsidiaries and associates, other than stock
for the subsequent fiscal year.

(Notes to the non-consolidated balance sheet)1.

Accumulated depreciation of property, plant and equipment

2.

Guarantees

1,083,977 million yen(Yen in millions)
Guarantees on borrowings and commercial papers issued by
BRIDGESTONE EUROPE NV/SA
Guarantees on bank borrowings of employees in consolidated
subsidiary (mortgages), etc.

102,128
16

Total

3.

102,144

Short-term monetary receivables from subsidiaries and associates
Long-term monetary receivables from subsidiaries and associates
Short-term monetary payables to subsidiaries and associates

391,857 million yen
1,276 million yen
64,200 million yen(Notes to the non-consolidated statement of profit or loss)
1.

Transactions with subsidiaries and associates
Net sales
Purchases, etc.
Transactions other than operating transactions

803,942 million yen
227,045 million yen
181,910 million yen

2.

Gain on sale of fixed assets
Mainly relates to gains on the sale of land.

3.

Gain on business transfer
Mainly due to adjustment of sales price in connection with a transfer of the anti-vibration rubber business.

40

(Notes to the non-consolidated statement of changes in equity)
Type and number of treasury stock
As of January
1, 2023

Number ofincrease

Number of
decrease

As ofDecember 31,
2023

Common stock
29,3463
305
29,044(Thousands of shares)
Notes 1. The increase in treasury stock consists of the purchase of 2 thousand shares according to the requests fromthe shareholders who have odd-lot shares, and the acquisition without contribution of 1 thousand shares oftreasury stock as restricted share-based remuneration.
2. The decrease in treasury stock consists of the exercise of stock options of 125 thousand shares, disposal oftreasury stock as restricted stock compensation of 83 thousand shares, disposal of treasury stock as
Performance Share Units of 76 thousand shares, and disposal of treasury stock as Restricted Stock Units,
etc. and others of 20 thousand shares.

(Notes to deferred income tax)
Deferred tax assets
Accrued pension and liability for retirement benefits
Investments in subsidiaries and associates (Note)
Depreciable assets
Accrued expenses
Allowance for losses on business transfer (Note)
Other

12,701 million yen
52,564
10,6876,211
1,785
10,408Deferred tax assets subtotal
Valuation allowance

94,357(42,236)

Total deferred tax assets

52,120

Deferred tax liabilities
Reserve for advanced depreciation of fixed assets
Reserve for special account for advanced depreciation of
fixed assets
Net unrealized gain on available-for-sale securities
Other (Note)(12,697) million yen(3,926)(12,859)(1,247)

Total deferred tax liabilities(30,728)
Deferred tax assets, net
21,393Note This includes deferred tax assets associated to loss on business transfer, which consist of the anti-vibration
rubber business of 7,813 million yen and the chemical products solutions business of 4,852 million yen.

41

(Notes to transactions with related parties)
Subsidiaries and associates, etc.
Percentageof ownership

Attribute

Company nameSubsidiary

BRIDGESTONETIRE SOLUTION
JAPAN CO., LTD.

Directownership
100.00%Subsidiary

BRIDGESTONE
DIVERSIFIEDPRODUCTSJAPAN CO., LTD.

Directownership
100.00%Subsidiary

BRIDGESTONEAMERICAS TIREOPERATIONS,
LLC

Indirectownership
100.00%Subsidiary

BRIDGESTONEEUROPE NV/SA

Directownership
100.00%Relationship withcounterparty

Transaction
amount(Yen inmillions)

Account item

174,750

Accounts
receivable

63,421

Sales of theCompany’s
products (Note 1)

65,982

Accounts
receivable

29,511

Sales of theCompany’s
products (Note 1)

148,493

Accounts
receivable

30,986

Sales of theCompany’s
products (Note 1)

108,443

Accounts
receivable

33,541

Short-term loans
receivable for–subsidiaries andassociates

88,773

Details oftransaction

Sales of theSales of theCompany’s productsCompany’s
Officers serving
products (Note 1)
concurrently
Sales of theCompany’s
products, etc.
Officers serving
concurrently
Sales of theCompany’s
products, etc.
Officers serving
concurrently

Sales of theCompany’s
products, etc.
Officers serving
concurrently

Loaning of cash
(Note 3)

Debt guarantee(Note 2)

Subsidiary

Subsidiary

BRIDGESTONEMININGSOLUTIONSAUSTRALIA PTY.
LTD.

Directownership
100.00%BRIDGESTONEAPM COMPANY

Directownership
100.00%102,128–

Sales of theSales of theCompany’s productsCompany’s
Officers serving
products (Note 1)
concurrently

71,998

Accounts
receivable

Officers serving
concurrently

Short-term loans
receivable for
26,224
subsidiaries andassociates

Collection of loans

Endingbalance(Yen inmillions)

Transaction conditions and policies for determination of transaction conditions, etc.
Notes 1. Sales price is determined based on the market price.
2. Rate of guarantee is determined reasonably in consideration of market interest rates and other rates.
3. Interest rate is determined based on the market interest rates.

(Notes to per-share information)
Total equity per share
Earnings per share

2,125.55 yen
415.19 yen(Notes to significant subsequent events)
Transfer of fixed assets
To use our management resources effectively, the Company concluded a transfer agreement on February 16, 2024 totransfer the following fixed assets owned by the Company.

42–

32,271–

(1) Details of assets to be transferred
Details of assets and location
Gain on transfer
Actual statusLand
5,695.68 m2
Buildings 9,181.23 m2
Approx. 63.4 billion yen
Company housing
Location 4-26-5 Roppongi, Minato-ku, Tokyo
Notes 1. We will not be disclosing either the transfer amount or the carrying amount based on our agreement withthe transferee.
2. The gain on transfer is calculated by subtracting the carrying amount plus the estimatedamount of any expenses associated with the transfer from the transfer amount.
(2) Outline of transferee
The transferee is a company located in Japan, but we will not be disclosing further details based on our agreementwith the transferee.
There are no capital, personnel, business relationships or related party to note between the Company and thetransferee.
(3) Schedule of transfer
Date of conclusion of the agreement
Property handover dateFebruary 16, 2024
May 31, 2024 (scheduled)(4) Impact on profit or loss
In the fiscal year ending December 31, 2024, we plan to record approximately 63.4 billion yen in gain on sale of
fixed assets as extraordinary Income.

(Notes to revenue recognition)
As for information that serves as the basis for understanding revenue, the notes have been omitted since the same
information has been provided in “(Significant accounting policies) 4. Accounting policies for revenue and expenses” inthe notes to non-consolidated financial statements.

43