Financial Results for Fiscal 2013

Bridgestone Corporation
February 18, 2014

Contents

1. Business and Financial Performance for Fiscal 2013

P.3

2. Consolidated Projections for Fiscal 2014

P.9

3. Management basic approach

P.18

Copyright © 2014 Bridgestone Corporation | Feb.18, 20142

1. Business and Financial Performance for Fiscal 2013

Business Environment Surrounding Bridgestone Group in 2013
Currency Exchange

Estimated Tire Demand
Tire Demand for 2013 : Original Equipment (VS 2012)
Passenger
Radial Tires

Truck and Bus
Radial Tires

Japan

96％

105％

N. America

109％

98％

Europe97％

107％

Asia *1110％

101％

2013

US DollarEuro(Ref.)
Fiscal
2012

1sthalf

2ndhalf

Fiscal961009880126

134130103

Raw Materials
Market trend of natural rubber and crude oil (Average)

Tire Demand for 2013 : Replacement (VS 2012)
Passenger
Radial Tires
Japan104％

107％

N. America

104％

99％

Europe99％

107％

Asia *12013

Truck and Bus
Radial Tires

113％*1 Total of Thailand, Indonesia, India, and China*2 The numbers of demand are estimated by Bridgestone Corporation

108％(Ref.)
Fiscal
2012

1sthalf

2ndhalf

FiscalNatural Rubber<TSR20>*(￠/kg)

270

232

251

315

Natural Rubber<RSS#3>*(￠/kg)

303

255

279

337

Crude Oil*source<WTI> : Singapore Commodity Exchange Limited 期近市況価格参照(＄/ｂｂl)941019794*Source : Current Prices for Singapore Commodity Exchange LimitedCopyright © 2014 Bridgestone Corporation | Feb.18, 20144

Consolidated Results for Fiscal 2013
Yen/US dollar rate:

80

98+1895(Yen in billions) Yen/Euro rate:103

130+27124

2012
Results2013
ResultsVS PY (%)

Net Sales

3,039.7

3,568.0+173,590.0

Tires
Diversified
Products

2,557.2

3,036.9+193,050.0

499.0

546.2

+9540.0

285.9

438.1

+53400.0（Ratio） 9.4%

（Ratio） 12.3%（Ratio）+2.9%（Ratio） 11.1%

Tires

260.4

399.4+53367.0

Diversified
Products

25.5

38.5+51

33.0

Ordinary Income

285.0

434.7

+53381.0

Extraordinary
Loss (Gain)

16.9

94.6+457-Net Income

171.6

202.0+18

246.0

Dividends per Share

32 yen57 yen+25 yen54 yenOperating Income（ReferenceAug 9, 2013
announcement）
2013 Projections

Copyright © 2014 Bridgestone Corporation | Feb.18, 2014

5

Analysis of Consolidated Operating Income for Fiscal 2013
(Yen in billions)
Raw
Materials+100.0450

StrategicProducts+15.0400

ForeignExch. Gain
+114.0350
Price, Mix,
Volume etc.
(62.9)

300

250

285.9

438.1

SGA
(13.0)

Depreciation
(1.0)

200

2012
Operating Income+152.1

2013
Operating Income*Figures within parentheses mean minus
Copyright © 2014 Bridgestone Corporation | Feb.18, 20146

Financial Results for Fiscal 2013 : Geographic Segments(Yen in billions)

2012
Results

2013
Results

VS PY (%)

（ReferenceAug 9, 2013
announcement）
2013 Projections

Japan

1,218.7

1,270.3+41,290.0

The Americas

1,330.9

1,651.9+24

1,640.0

Europe348.8

423.3+21410.0

Other Regions

699.9

862.7

+23890.0

Consolidated
Net Sales3,039.7

3,568.0+173,590.0

Japan

158.4

219.5

+39215.0

The Americas

92.3

156.4+69137.0

Europe1.82.0+113.5

Other Regions

55.7

80.2+4477.0

Consolidated Operating
Income285.9

438.1+53400.0

Copyright © 2014 Bridgestone Corporation | Feb.18, 2014

7

B/S and C/F Highlights(Yen in billions)

FY 2012FY 2013(As of Dec. 31, 2012)(As of Dec. 31, 2013)

VS. Dec. 31, 2012

Total Assets

3,039.7

3,577.0+537.2

Total Equity
Ratio of total equity to total assets (%)

1,417.3
45.2

1,862.950.5+445.6+5.3

Interest-Bearing Debt (Net)350.6

239.6(111.0)

FY 2012FY 2013

Cash Flow by Operating Activities
Cash Flow by Investing Activities

404.4(237.9)

471.7(265.2)+67.3(27.3)

Free Cash Flow

166.5

206.5

+40.0

Capital Expenditure
Depreciation

245.6
155.0

274.9
176.1

+29.3
+21.1

ROA （％）

6.0

6.1

+0.1

VS. PY*Figures within parentheses mean minus
Copyright © 2014 Bridgestone Corporation | Feb.18, 20148

2. Consolidated Projections for Fiscal 2014

Business Environment Surrounding Bridgestone Group in 2014
Estimated Tire DemandCurrency Exchange

Tire Demand for 2014 : Original Equipment (VS 2013)
Passenger
Radial Tires

Truck and Bus
Radial Tires

Japan95％

112％

N. America

104％112％Europe100％102％

Asia *1103％103％

2012
US DollarEuro2013

2014

8098100103

130135

Raw Materials

Tire Demand for 2014 : Replacement(VS 2013)
Passenger
Radial Tires

Truck and Bus
Radial Tires

Japan97％

98％

N. America

101％103％

Europe101％

101％

Asia *1114％

110％*1 Total of Thailand, Indonesia, India, and China*2 The numbers of demand are estimated by Bridgestone Corporation*source : Singapore Commodity Exchange Limited

Copyright © 2014 Bridgestone Corporation | Feb.18, 201410Consolidated Projections for Fiscal 2014
(Yen in billions)

Yen/US dollar rate:

98100+2

Yen/EURO rate:

130135+52013
Results2014
Projections

VS PY(%）

Net Sales

3,568.03,800.0+6

Tires

3,036.9

3,250.0+7

Diversified
Products

546.2

570.0+4438.1

460.0+5（Ratio）12.3%（Ratio） 12.1%（Ratio）(0.2%)

Tires

399.4

419.0+5

Diversified
Products

38.5

40.0+4

Ordinary Income

434.7

442.0+2

Net Income

202.0

285.0+4157 yen

80 yen+23 yen

Operating Income*Figures within parentheses mean minus

Dividends per Share

Copyright © 2014 Bridgestone Corporation | Feb.18, 201411

Analysis of Consolidated Operating Income for Fiscal 2014
(Yen in billions)Exchange rate
Sensitivity (full year)500

USD：4.5bil. Yen
EUR：0.7bil. Yen
Strategic
Products
+29.0

450

ForeignExch. Gain
+21.0

Price, Mix,
Volume etc.
+48.8

400

460.0
438.1

SGA(40.0)

350

2013
Operating Income

Depreciation(14.0)
Raw
Materials(23.0)+21.8

2014
Operating Income*Figures within parentheses mean minus
Copyright © 2014 Bridgestone Corporation | Feb.18, 201412

Financial Projections for Fiscal 2014 : Geographic Segments(Yen in billions)VS. PY
(%)

1,290.0+2200.0(9)

20%

1500

15%

Net Sales

1000

10%

Operating Income

500

5%

＜2014 REP Tire Sales (unit base, vs.PY%)＞

0%

Passenger Radial Tires

02011

2012
Sales

2013

2014

1500

15%

Net Sales

1000

10%

Operating Income

500

5%0%
2012
Sales

2013
OP%

2014

OP%

20%

0～+5%

(Yen in billions)

2000

2011

around±0%

Truck and Bus Radial Tires

OP%

Americas[North America + Latin America]

Sales ( billion )2014
Projections

2000

OP%

Sales ( billion )Japan[Japan Tire + Specialty Tire + Diversified Products]

2014
Projections

VS. PY(%)

1,790.0+8167.0+7＜2014 REP Tire Sales (unit base, vs.PY%)＞
Passenger Radial Tires+6%～+10%

Truck and Bus Radial Tires+11%～+15%*Figures within parentheses mean minus
Copyright © 2014 Bridgestone Corporation | Feb.18, 201413

Financial Projections for Fiscal 2014 : Geographic Segments(Yen in billions)

2000

20%

1500

15%

Net Sales

1000

10%

Operating Income

500

5%

00%
2011

2012
Sales

2013

OP%

Sales ( billion )Europe[Western Europe + Eastern Europe]

2014
Projections

VS. PY
(%)

440.0+48.5+315＜2014 REP Tire Sales (unit base, vs.PY%)＞

2014

Passenger Radial Tires～+5%Truck and Bus Radial Tires～+5%OP%(Yen in billions)2014
Projections

VS. PY(%)

Net Sales

940.0+9Operating Income

93.5+17Others
200020%1500

15%100010%5005%02011

2012
Sales

2013
OP%

2014

0%

OP%

Sales ( billion )[Asia&Pacific + China + Middle East&Africa + Russia]＜2014 REP Tire Sales (unit base, vs.PY%)＞
Asia
Passenger Radial Tires+11%～15%
Pacific
Truck and Bus Radial Tires+16%～20%
China

Passenger Radial Tires+16%～20%

Truck and Bus Radial Tires+11%～15%

Copyright © 2014 Bridgestone Corporation | Feb.18, 201414To achieve 2014 target2013

2014

・Stable and lower raw material price & weaker yen
・Tire demand JP&NA：Slightly recovering
Euro：Signs of bottom out
Emerging countries：Slowdown in growth・Market expansion of general use tire segment
・Competition with emerging players & price competition

Net Sales ： 3,800 billion yen
Op Income ： 460 billion yen： 12.1 ％OP%： Improve further
ROA・Well balanced operation between quantity and quality ineach market
・Cost reduction and improvement to strengthen businesscompetencies

Improvement of profitability
Achieved best profit
Issues・Strengthen business competencies in midand long-term
・Increase profit without favorable currency

Continue to achieve best
profit

Maintain performance and improve further tothe higher level

Implementation2014 Key measures
・Strengthen marketing strategy
・Accelerate solution business・Collaboration between tire and diversified business・Enhance innovation
・Reinforce fundamental competitiveness(Cost competitiveness / flexible supply structure)
Copyright © 2014 Bridgestone Corporation | Feb.18, 201415

New strategic products
Marketing strategy
Regional strategy

Global strategy

Secure global and regional competitive advantages throughsuitable marketing activities in each market
New strategic products
・ “Focus & Priority” to “marketing and customer viewpoint”
・ Lead unique and differentiating strategy
Passenger radial tire・ RFT・ Premium Summer（ POTENZA, TURANZA/REGNO, DUELER ）・ Premium WinterPassenger &Truck and bus radial tire

（ BLIZZAK ）・ Eco-friendly Strategic Products（ ECOPIA and others ）Copyright © 2014 Bridgestone Corporation | Feb.18, 201416

New strategic products ( example )RFTPremium Summer

Premium WinterEco-friendly Strategic Products
PSRTBR

Copyright © 2014 Bridgestone Corporation | Feb.18, 201417

3. Management basic approach

Plea agreement with U.S. Department of Justice (Automotive parts)
Facts: Entered into a plea agreement with the U.S. Department of Justice (“DOJ”) - one count, violation of U.S.
antitrust law related to the marketing and sale of AVP parts to certain Japanese auto manufacturers.
(Feb 13, 2014 (U.S. Eastern time))
 Fine amount：
US$425million (44.79billion yen) Subject products: Automotive anti-vibration rubber products (“AVP” is an automotive part comprised
primarily of rubber and metal and installed in automobiles to reduce engine and road vibration)







Period of cartel:

Jan, 2001 – Dec, 2008

Countermeasures: Reinforcement of compliance and corporate governance structure

Reinforce/further expand 2008 global compliance initiative in the areas of training/education,internal reviews and assessments.

Additional measures: New Board compliance committee, organizational reform,
developing/rotating human resources.

Management Responsibility： Top management’s most sincere regret that issue not discovered earlier (2008)
Inside board members and certain of corporate officers will forego bonus payments, scheduled inMarch, 2014.

Representative board members and certain of corporate officers will forfeit a portion ofcompensation for 6 months beginning March, 2014.

Involved individuals: Appropriate disciplinary action will be taken in accordance with applicable corporate
standards.

In order to reestablish trust with its stakeholders, Bridgestone group will redouble its
efforts to ensure full compliance with all relevant laws and regulations, and to enhance
its corporate governance structure.
Copyright © 2014 Bridgestone Corporation | Feb.18, 201419

Management basic approach
2nd Phase Management Reforms (2012 -)⇒ Ongoing Reforms : - Continuous quality improvement- Increase the speed and the agility of businessMission and Foundation

The Bridgestone Essence

Basic Stance

Lean ＆ Strategic (L&S)
Optimize management on a Group and Global basis(GG Optimization)

Reform Tools

SBU organization, MTP

Additional priority issues- Creating customer value- Enhancement of governance systems- Further development of competitive
advantage /differentiation through Innovation

Ongoing management reforms
Continuous improvement in all aspects
Copyright © 2014 Bridgestone Corporation | Feb.18, 201420

Management basic approach
Qualitative goal：‐ Maintain our commitment to the Bridgestone Essence andour basic stance (L&S and GG Optimization)‐ Secure growth and profitability‐ Always aim for “ the higher level ” position‐ Promote innovation
Quantitative goal
- Growth ： Exceed the industry average- Overall ： Consistently deliver ROA 6％ and OP10％

To become a truly global company
To achieve “Dan-Totsu” in our industries

Ongoing management reform, continuous improvement,sustainable business growth
Copyright © 2014 Bridgestone Corporation | Feb.18, 201421

Statements made in this presentation with respect to Bridgestone's current plans,estimates, strategies and beliefs and other statements that are not historical facts are forward-looking
statements about the future performance of Bridgestone. Forward-looking statements
include, but are not limited to, those statements using words such as "believe," "expect," "plans,""strategy," "prospects," "forecast," "estimate," "project," "anticipate," "may" or "might" and words ofsimilar meaning in connection with a discussion of future operations, financial performance,events or conditions. From time to time, oral or written forward-looking statements may also beincluded in other materials released to the public. These statements are based on management's
assumptions and beliefs in light of the information currently available to it. Bridgestone cautions
you that a number of important risks and uncertainties could cause actual results to differ
materially from those discussed in the forward-looking statements, and therefore you should notplace undue reliance on them. You also should not rely on any obligation of Bridgestone to updateor revise any forward-looking statements, whether as a result of new information, future events orotherwise. Bridgestone disclaims any such obligation.