Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail.

Annual Securities Report(Filed pursuant to Article 24, paragraph (1) of the Financial Instruments and Exchange Act of Japan)
Business year
From January 1, 2022 To December 31, 2022
(104th Fiscal Period)

Bridgestone Corporation(E01086)

104th Fiscal Period (from January 1, 2022 to December 31, 2022)

Annual Securities Report1This document was prepared for printing by adding a table of contents and pages to the Annual Securities
Report, which is in accordance with Article 24, paragraph (1) of the Financial Instruments and ExchangeAct, submitted as data on March 28, 2023 using the Electronic Data Processing System for Disclosure(EDINET) prescribed in Article 27-30, paragraph (2) of the aforementioned act.

2

The document does not include the attachments to the Annual Securities Report submitted as describedabove, but the Audit Report is bound in an unpaginated booklet.

Bridgestone Corporation

Table of Contents
Annual Securities Report for the 104th Fiscal Period
Cover ........................................................................................................................................................................................................ 1
Part I Information on the Company .......................................................................................................................................................... 2
I.
Overview of the Company .......................................................................................................................................................... 2
1.
Key financial data and trends ................................................................................................................................................. 22.
History.................................................................................................................................................................................... 6
3.
Description of business .......................................................................................................................................................... 7
4.
Subsidiaries and associates ..................................................................................................................................................... 95.
Employees ............................................................................................................................................................................ 13
II. Business Overview ................................................................................................................................................................... 16
1.
Management policy, management environment and issues to be addressed ......................................................................... 16
2.
Business risks ....................................................................................................................................................................... 20
3.
Management analysis of financial position, operating results and cash flows ...................................................................... 25
4.
Important business contracts ................................................................................................................................................ 32
5.
Research and development activities .................................................................................................................................... 33
III.
Facilities ............................................................................................................................................................................... 36
1.
Overview of capital expenditures ......................................................................................................................................... 36
2.
Major facilities ..................................................................................................................................................................... 37
3.
Plans for addition and retirement of facilities....................................................................................................................... 42IV.
Status of the Company ......................................................................................................................................................... 43
1.
Shares of the Company......................................................................................................................................................... 432.
Acquisition of treasury stock, etc. ........................................................................................................................................ 51
3.
Dividend policy .................................................................................................................................................................... 53
4.
Status of corporate governance ............................................................................................................................................ 54
V. Financial Information.............................................................................................................................................................. 100
1.
Consolidated Financial Statements, etc. ............................................................................................................................. 101
2.
Non-consolidated Financial Statements, etc. ...................................................................................................................... 181
VI.
Administrative Information on the Company’s Shares ....................................................................................................... 198
VII.
Reference Information on the Company............................................................................................................................. 199
1.
Information on the parent company or equivalent of the Company ................................................................................... 199
2.
Other reference information ............................................................................................................................................... 199
Part II Information About Company Which Provides Guarantee to Reporting Company..................................................................... 201

Audit ReportCover[Document Submitted]
Annual Securities Report[Article of the Applicable Law
Article 24, paragraph (1) of the Financial Instruments andRequiring Submission of This
Exchange Act
Document][Filed to]
Director of the Kanto Local Finance Bureau[Date of Submission]
March 28, 2023
[Business Year]
104th Fiscal Period (from January 1, 2022 to December 31, 2022)[Company Name]
Bridgestone Corporation[Company Name (in English)]
BRIDGESTONE CORPORATION[Position and Name of Representative] Shuichi Ishibashi
Member of the Board
Global CEO and Representative Executive Officer[Location of Head Office]3-1-1 Kyobashi, Chuo-ku, Tokyo[Phone No.]+81-3 6836 3162
[Contact for Communications]
Keisuke Murakami,
Director, Global Financial Accounting Division[Nearest Contact]
3-1-1 Kyobashi, Chuo-ku, Tokyo[Phone No.]+81-3 6836 3162
[Contact for Communications]
Keisuke Murakami,
Director, Global Financial Accounting Division[Place Where Available for PublicTokyo Stock Exchange, Inc.
Inspection](2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Fukuoka Stock Exchange(2-14-2 Tenjin, Chuo-ku, Fukuoka)

1

Part I Information on the Company
I. Overview of the Company
1. Key financial data and trends(1) Consolidated financial data
International Financial Reporting Standards
TermYear ended

Transition
date

101st

102nd

103rd

104th

January 1,
2019

December
2019

December
2020

December
2021

December
2022

Revenue

Yen in millions–

3,507,243

2,695,224

3,246,057

4,110,070

Profit before tax

Yen in millions–

335,510

27,412

377,594

423,458

Profit (loss) attributable toowners of parent

Yen in millions–

240,111(23,301)

394,037

300,367

Comprehensive income
attributable to owners ofparentYen in millions–

227,517(108,005)

581,731556,793

Equity attributable toowners of parent

Yen in millions

2,439,799

2,349,378

2,149,958

2,629,883

2,965,806

Total assets

Yen in millions

4,252,677

4,277,016

4,189,327

4,574,892

4,961,818

Total equity attributable toowners of parent per share

Yen

3,245.23

3,336.92

3,053.35

3,734.23

4,333.76

Basic earnings (loss) per
share

Yen

–

332.31(33.09)559.56432.29Diluted earnings (loss) per
share

Yen

–

331.76(33.09)558.71431.70

Ratio of equity attributableto owners of parent to total
assets

%

54.9

51.3

57.5

59.8

Ratio of profit on equity
attributable to owners ofparent to total assets

%

–

10.0

(1.0)

16.5

10.7

Price earnings ratio

Times

–

12.2

–

8.8

10.9

Net cash provided by(used in) operating
activities

Yen in millions–

505,029

526,947

281,538

268,483

Net cash provided by(used in) investing
activities

Yen in millions–(261,875)(155,378)

131,701(338,004)

Net cash provided by(used in) financing
activities

Yen in millions–(240,458)

18,077(379,321)(364,109)

Cash and cash equivalents
at end of period

Yen in millions

433,916

432,924

810,546787,542518,905

57.4

Number of employees
Persons
143,509
143,589
138,036
135,636
129,262(Notes) 1. The Bridgestone Group (the “Group”) prepares its consolidated financial statements based on International Financial
Reporting Standards (IFRS) from the 102nd fiscal period.
2. Price earnings ratio is not listed for the 102nd fiscal period due to there being a basic loss per share.
3. The average number of temporary employees is omitted since the number is below 10% of the number of employees.
4. On March 31, 2021, FIRESTONE BUILDING PRODUCTS COMPANY, LLC (hereinafter “FSBP”), a subsidiary ofBridgestone Corporation (the “Company”), was sold to Holcim Participations (US) Inc. FSBP has thus been categorized
as discontinued operations. Accordingly, the amounts of revenue and profit before tax for the 102nd fiscal period havebeen reclassified to present the respective amounts of continuing operations, excluding the discontinued operations.
5. On December 10, 2021, the Company decided to newly establish a wholly owned subsidiary through an absorption-typecompany split which will succeed the Company’s anti-vibration rubber business, and after transferring all ownership of
the Group’s anti-vibration rubber business to the wholly owned subsidiary, it will sell all shares of stock in the wholly
owned subsidiary to Anhui Zhongding Holding (Group) Co., Ltd. (hereinafter “AZ”). The anti- vibration rubber businesshas thus been categorized as discontinued operations. Accordingly, the amounts of revenue and profit before tax for the2

102nd fiscal period have been reclassified to present the respective amounts of continuing operations, excluding thediscontinued operations.
6. On December 10, 2021, the Company decided to newly establish a wholly owned subsidiary through an absorption-typecompany split which will succeed the Company’s chemical products solutions business, and after transferring allownership of the Group’s chemical products solutions business to the wholly owned subsidiary, it will sell all shares ofstock in the wholly owned subsidiary to Endeavour United II Investment Business Limited Partnership (hereinafter “EUF2”), which is organized, managed, and operated by an investment fund Endeavour United Co., Ltd. (hereinafter “EU”).
The chemical products solutions business has thus been categorized as discontinued operations. Accordingly, the amountsof revenue and profit before tax for the 102nd fiscal period have been reclassified to present the respective amounts ofcontinuing operations, excluding the discontinued operations.

3

J-GAAP

Term
Year ended

100th

101st

102nd

December
2018

December
2019

December
2020

Net sales

Yen in millions

3,650,111

3,525,600

2,999,018

Ordinary Profit

Yen in millions

381,132

316,823

173,802

Profit (loss) attributable toowners of parent

Yen in millions

291,642

292,598(2,016)Comprehensive income

Yen in millions

162,160

237,629(99,079)

Total equity

Yen in millions

2,436,162

2,344,290

2,119,718

Total assets

Yen in millions

3,840,269

3,946,505

3,876,270

Total equity per share

Yen

3,163.71

3,250.37

2,942.56

Earnings (loss) per shareYen

387.95404.95(2.86)

Diluted earnings per shareYen

387.28404.28Equity ratio

%

61.9

58.0

53.5

Return on equity

%

12.4

12.5

(0.1)

Price earnings ratio

–

Times

10.9

10.0

–

Net cash provided by (usedin) operating activities

Yen in millions

360,955

464,457

483,938

Net cash provided by (usedin) investing activities

Yen in millions(243,061)(266,910)(157,772)

Net cash provided by (usedin) financing activities

Yen in millions(159,094)(198,601)

61,086

Cash and cash equivalents at
end of period

Yen in millions

433,916435,319

810,546

Number of employees
Persons
143,509
143,589
138,036(Notes) 1. The average number of temporary employees is omitted since the number is below 10% of the number of employees.
2. At the beginning of the 101st fiscal period, the Group adopted the “Partial Amendments to Accounting Standard for Tax
Effect Accounting, etc.” (Accounting Standards Board of Japan (ASBJ) Statement No. 28, February 16, 2018). This
standard was applied retrospectively to key financial data for the 100th fiscal period and the key financial data reflects
the retrospective adoption of these accounting standards, etc.
3. Various figures derived from generally accepted accounting principles in Japan (Japanese GAAP) for the 102nd fiscal
period have not been audited in accordance with the provisions of Article 193-2, paragraph (1) of the Financial Instruments
and Exchange Act.
4. Diluted earnings per share is not listed for the 102nd fiscal period due to there being a net loss per share despite their
being potential shares.
5. Price earnings ratio is not listed for the 102nd fiscal period due to there being a net loss per share.

4(2) Financial data for the Company
Term

100th

101st

102nd

103rd

104th

Year ended

December
2018

December
2019

December
2020

December
2021

December
2022

Net sales

Yen in millions

889,413867,267

691,683

839,528

981,660

Ordinary Profit

Yen in millions

218,951

203,233

96,155292,915

231,918

ProfitYen in millions

176,069

224,719

82,914

167,024

164,341

Common stock

Yen in millions

126,354

126,354

126,354

126,354

126,354

Total number of sharesissuedThousands ofshares761,536

761,536

713,698

713,698

713,698

Total equity

Yen in millions

1,442,509

1,312,152

1,294,084

1,373,813

1,304,356

Total assets

Yen in millions

1,977,911

1,975,746

2,097,389

2,135,579

1,911,361

Yen

1,914.12

1,859.05

1,833.40

1,946.44

1,902.07

160

160

110

170

175

[80]

[80]

[50]

[85]

[85]

Total equity per share
Dividend per share[Interim dividend amount]

Yen

Earnings per shareYen

234.21311.00117.76237.18236.52

Diluted earnings per share

Yen

233.80310.49117.57236.83236.20Equity ratio

%

72.8

66.2

61.6

64.2

68.1

Return on equity

%

12.2

16.4

6.4

12.5

12.3

Price earnings ratio

Times

18.1

13.1

28.7

20.9

19.8

Dividend payout ratio

%

68.3

51.4

93.4

71.7

74.0

Number of employees

Persons

14,075

14,567

14,85814,745

13,903

Total shareholder return[Comparative indicator:
TOPIX (dividend included)]

%

83.9

83.8

72.8

105.9

104.4

%

[84.0][99.2][106.6][120.2][117.2]Highest share priceYen

5,515.0

4,734.0

4,082.0

5,467.0

5,509.0

Lowest share priceYen
3,906.0
3,888.0
2,861.5
3,307.0
4,042.0(Notes) 1. The average number of temporary employees is omitted since the number is below 10% of the number of employees.
2. From April 4, 2022, the highest share price and lowest share price are those recorded on the Tokyo Stock Exchange (Prime
Market). Prior to that, the prices were those recorded on the Tokyo Stock Exchange (First Section).
3. At the beginning of the 101st fiscal period, the Group adopted the “Partial Amendments to Accounting Standard for Tax
Effect Accounting, etc.” (Accounting Standards Board of Japan (ASBJ) Statement No. 28, February 16, 2018). This
standard was applied retrospectively to key financial data for the 100th fiscal period and the key financial data reflects
the retrospective adoption of these accounting standards, etc.
4. At the beginning of the 104th fiscal period, the Group adopted the “Accounting Standard for Revenue Recognition”(ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations. The key financial data for the 104th fiscal
period reflects the adoption of these accounting standards, etc.

5

2. History
Date
March 1931
October 1935
May 1937
September 1937
February 1942
October 1949
February 1951
October 1961
June 1967
September 1972
September 1973
December 1980
November 1982

April 1984
January 1988
May 1988
January 1989
January 1993
December 1994
December 1994
January 1997

July 1998
November 1999
March 2000
December 2001

February 2003
October 2004
August 2005
July 2006
May 2007June 2014
May 2017
April 2019
September 2021
December 2021

Event
Established Bridgestone Tire Co., Ltd in the city of Kurume, Fukuoka Prefecture in Japan. Commenced
production of automotive tires.
Commenced production of golf balls
Relocated head office to Tokyo
Commenced production of V-belts and rubber hoses
Changed name to Nippon Tire Co., Ltd.
Company split with the establishment of Bridgestone Cycle Company (now, BRIDGESTONE CYCLE CO.,LTD.)
Renamed back to Bridgestone Tire Co., Ltd.
Listed on the Tokyo and Osaka Stock Exchanges
Established joint venture in Thailand, Thai Japan Tyre Co., Ltd. (now, THAI BRIDGESTONE CO., LTD.)
Established joint venture Bridgestone Spalding Co., Ltd. (now, BRIDGESTONE SPORTS CO., LTD.)
Established joint venture in Indonesia, P.T. Bridgestone Tire Indonesia (now, PT BRIDGESTONE TIRE
INDONESIA)
Acquired Uniroyal Holdings Limited (now, BRIDGESTONE AUSTRALIA LTD.) in Australia
Established BRIDGESTONE TIRE MANUFACTURING (U.S.A.), INC. in the U.S. (May 1990, mergedwith BRIDGESTONE/FIRESTONE, INC. (now, BRIDGESTONE AMERICAS TIRE OPERATIONS,
LLC))
Changed name to Bridgestone Corporation
Established Bridgestone Finance Europe B.V. in the Netherlands (now, such operations have been succeededby BRIDGESTONE TREASURY SINGAPORE PTE. LTD. in Singapore)
Acquired the Firestone Tire & Rubber Company. (now, BRIDGESTONE AMERICAS TIRE OPERATIONS,
LLC)
Established BRIDGESTONE FINANCE CORPORATION
Consolidated the sports business into BRIDGESTONE SPORTS CO., LTD.
Bridgestone/Firestone Europe S.A. (now, BRIDGESTONE EUROPE NV/SA) became a holding-company
structure for European operations with sales and logistics functions in Europe consolidated in that company
Established BMAH Corporation (now, BRIDGESTONE AMERICAS, INC.) in the U.S.
Acquired Fedstone (Pty) Limited (now, BRIDGESTONE SOUTH AFRICA HOLDINGS (PTY) LTD.), withthe consolidated subsidiary Firestone South Africa (Pty) Ltd. in South Africa (now, BRIDGESTONE
SOUTH AFRICA (PTY) LTD.)
Established Bridgestone/Firestone Poland Sp. z o.o. (now, BRIDGESTONE POZNAN SP. Z O.O.) in Poland
Established Bridgestone Middle East FZE (now, BRIDGESTONE MIDDLE EAST & AFRICA FZE) in the
United Arab Emirates
Established BRIDGESTONE TIRE MANUFACTURING (THAILAND) CO., LTD. in Thailand
BRIDGESTONE/FIRESTONE, INC. (now, BRIDGESTONE AMERICAS TIRE OPERATIONS, LLC) split
and reorganized by business with BRIDGESTONE/FIRESTONE AMERICAS HOLDING, INC. (now,
BRIDGESTONE AMERICAS, INC.) as a holding company for management of businesses in the Americas
Established BRIDGESTONE (WUXI) TIRE CO., LTD. in China
Established BRIDGESTONE (CHINA) INVESTMENT CO., LTD. in China
Acquired PT. Goodyear Sumatra Plantation (now PT BRIDGESTONE SUMATRA RUBBER ESTATE) in
Indonesia
Established BRIDGESTONE ASIA PACIFIC PTE. LTD. in Singapore
BRIDGESTONE AMERICAS HOLDING, INC. (now, BRIDGESTONE AMERICAS, INC.) acquired
Bandag, Incorporated (now, BRIDGESTONE BANDAG, LLC)
Acquired Masthead Industries, LLC (now BRIDGESTONE HOSE AMERICA, INC.) in the U.S.
BRIDGESTONE EUROPE NV/SA acquired Ets Paul Ayme (Holding) & Ayme er Fils SAS (now FIRSTSTOP AYME SAS) in France
BRIDGESTONE EUROPE NV/SA acquired Tom Tom Telematics B.V. (now BRIDGESTONE MOBILITY
SOLUTIONS B.V.) in Netherlands
BRIDGESTONE AMERICAS, INC. acquired AZUGA HOLDINGS, INC.
BRIDGESTONE MINING SOLUTIONS AUSTRALIA PTY. LTD. acquired OTRACO INTERNATIONAL
PTY. LTD.

6

3. Description of business
The Bridgestone Group (the “Group”) comprises Bridgestone Corporation (the “Company”), 255 subsidiaries (ofwhich 255 are consolidated subsidiaries), and 134 associates and joint ventures (of which 134 are accounted forusing the equity method). The Group is engaged in the businesses below through its reporting segments “Japan,”“Americas,” “Europe, Russia, Middle East, India and Africa,” and “China, Asia-Pacific,” as well as through othersegments.
Name of segment

Japan

Americas

Major businesses

Major companies

Tire business
Solutions business
Chemical and industrial products anddiversified products business [Golf goods,
bicycles, etc.][Controlling, manufacturing
and sales]

Bridgestone Corporation[Controlling of tire sales]

BRIDGESTONE TIRE
SOLUTION JAPAN CO.,LTD.

[Tire sales]

BRIDGESTONE RETAILJAPAN CO., LTD.
BRIDGESTONE MINING
SOLUTIONS AUSTRALIA
PTY. LTD.

[Chemical and industrial
product sales]

BRIDGESTONE
DIVERSIFIED PRODUCTS
JAPAN CO., LTD.

[Manufacturing and sales ofgolf goods]

BRIDGESTONE SPORTS
CO., LTD.

[Manufacturing and sales ofbicycles, etc.]

BRIDGESTONE CYCLE CO.,LTD.

[Controlling]

BRIDGESTONE AMERICAS,
INC.

[Manufacturing and sales oftires]BRIDGESTONE AMERICASTIRE OPERATIONS, LLC
BRIDGESTONE BANDAG,
LLC
BRIDGESTONE CANADA
INC.
BRIDGESTONE DE
MEXICO, S.A. DE C.V.
BRIDGESTONE DO BRASIL
INDUSTRIA E COMERCIOLTDA.
BRIDGESTONE
ARGENTINA S.A.I.C.

[Tire sales]

BRIDGESTONE RETAILOPERATIONS, LLC[Manufacturing and sales ofraw materials for tires]

FIRESTONE POLYMERS,
LLC

Tire business
Solutions business
Diversified products business [Air springs][Manufacturing and sales of air FIRESTONE INDUSTRIAL
springs]
PRODUCTS COMPANY,
LLC[Controlling and sales]

BRIDGESTONE EUROPE
NV/SA[Manufacturing and sales oftires]BRIDGESTONE POZNANSP. Z O.O.
BRIDGESTONE STARGARD
SP. Z O.O.
BRIDGESTONE HISPANIAMANUFACTURING S.L.U.
BRIDGESTONE INDIA
PRIVATE LTD.
BRIDGESTONE SOUTH
AFRICA (PTY) LTD.

[Tire sales]

FIRST STOP AYME SAS
BRIDGESTONE MIDDLE
EAST & AFRICA FZEEurope, Russia,
Tire business
Middle East, India
Solutions businessand Africa

7Name of segment

China, Asia-Pacific

Major businesses

Major companies[Controlling and sales]

BRIDGESTONE ASIA
PACIFIC PTE. LTD.
BRIDGESTONE (CHINA)INVESTMENT CO., LTD.

[Manufacturing and sales oftires]BRIDGESTONE (WUXI)TIRE CO., LTD.
THAI BRIDGESTONE CO.,LTD.
BRIDGESTONE TIRE
MANUFACTURING(THAILAND) CO., LTD.
PT BRIDGESTONE TIRE
INDONESIA[Tire sales]

BRIDGESTONE
AUSTRALIA LTD.

Tire business
Solutions business[Finance]

BRIDGESTONE FINANCECORPORATION
Other
Diversified products business [Others]
BRIDGESTONE TREASURY
SINGAPORE PTE. LTD.
(Notes) 1. The tire business mainly comprises tires and tubes for passenger cars, trucks, buses, construction and off-the-road mining
vehicles, industrial and agricultural machinery, aircraft, motorcycles, and scooters, as well as tire-related products,
automotive maintenance and repair services, raw materials for tires, and other products.
2. The solutions business utilizes tires and tire-related and mobility-related data to provide high added value and new value.
3. The chemical and industrial products business mainly comprises industrial rubber products, building materials, hoses andother products.

8

4. Subsidiaries and associates
Name

Location

Common stock /Ownership
Officers
Investment in
Description of major
ratio ofcapitalbusinesses
voting rights serving Loansconcurr(Yen in millions)
(%)
ently

Relationship
Businesstransactions

Leasingoffacilities(Consolidated subsidiaries)

BRIDGESTONE TIRE SOLUTION
Chuo-ku, Tokyo
JAPAN CO., LTD.

Controlling the salesof automotive tires forthe domestic market,
710 sales of automotive
tires and development
and deployment ofsolutions business100.0 Yes

No

Purchase of
Business
products from thefacilities
Company

BRIDGESTONE RETAIL JAPANCO., LTD.

Chuo-ku, Tokyo

Sales of automotive
300 tires and automotive
products(100.0)
Yes
100.0

No

No

Hiki-gun,
SaitamaManufacturing, sales,
installation and100 maintenance ofindustrial machinery,
etc.

No

Supply,installation andmaintenance of Businessindustrial
facilities
machinery, etc. to
the Company

No

Shipping andwarehousing of
the Company’s
products

Businessfacilities

100.0 Yes

No

Purchase of
products fromand supply of
products to theCompany

Businessfacilities

BRIDGESTONE PLANT
ENGINEERING CO., LTD.

100.0 YesBusinessfacilities

BRIDGESTONE LOGISTICS CO.,
Chuo-ku, Tokyo
LTD.

Shipping and400
warehousing

BRIDGESTONE DIVERSIFIEDPRODUCTS JAPAN CO., LTD.

Chuo-ku, Tokyo

Sales of industrial
rubber products and400
sales and installationof building materials

BRIDGESTONE SPORTS CO.,LTD.

Chuo-ku, Tokyo

Manufacturing and
3,000 sales of sporting
goods

100.0 Yes

No

No

Businessfacilities

BRIDGESTONE CYCLE CO.,LTD.

Ageo, Saitama

10,120

Manufacturing andsales of bicycles

100.0 Yes

No

No

Businessfacilities

100.0 Yes

No

Settlement ofsome of theCompany’s
payables andNo
partially
entrusted service
for accounting

100.0 Yes

No

No

Loaning of cash,
factoring and
50 entrusted service foraccounting andpayroll

100.0 Yes

BRIDGESTONE FINANCECORPORATION

Kodaira, Tokyo

BRIDGESTONE AMERICAS,
INC.

U.S.

USD inControlling businesses
thousands
in Americas
127,000U.S.

USD in Manufacturing andthousands sales of automotive
1 tires(100.0)
Yes
100.0

No

Purchase of
products and raw
materials fromNoand supply of
products to theCompany

U.S.

Sales of automotive
USD in tires, maintenance andthousands repairing of vehicles
1 and sale of automotive
goods.

(100.0)
No
100.0

No

No

No

BRIDGESTONE BANDAG, LLC

U.S.

Manufacturing and
USD insales of retread
thousandsmaterial and supply of1
related techniques(100.0)
No
100.0

No

Supply of
products to theCompanyNo

FIRESTONE POLYMERS, LLC

U.S.

USD in Manufacturing andthousands sales of synthetic
1 rubber(100.0)
No
100.0

No

Supply of raw
materials to theCompanyNo

FIRESTONE INDUSTRIALPRODUCTS COMPANY, LLC

U.S.

USD inManufacturing andthousands
sales of air springs
1(100.0)
No
100.0

No

No

No

BRIDGESTONE CANADA INC.

CanadaManufacturing and
CAD insales of automotive
thousands
tires and automotive
127,553
parts(100.0)
No
100.0

No

Purchase of
products from the No
Company

BRIDGESTONE DE MEXICO,S.A. DE C.V.

MexicoMXN in Manufacturing andthousands sales of automotive
455,998 tires(100.0)
No
100.0

No

Purchase of
products from the No
Company

BRIDGESTONE AMERICASTIRE OPERATIONS, LLC

BRIDGESTONE RETAILOPERATIONS, LLC

9

No

Name

Location

Common stock /Ownership
Officers
Investment in
Description of major
ratio ofcapitalbusinesses
voting rights serving Loansconcurr(Yen in millions)
(%)
ently

Relationship
Businesstransactions

Leasingoffacilities

BRIDGESTONE DO BRASIL
INDUSTRIA E COMERCIO
LTDA.

Brazil

BRL in Manufacturing andthousands sales of automotive
509,788 tires(100.0)
No
100.0

No

Purchase of
products and raw
Nomaterials fromthe Company

BRIDGESTONE ARGENTINA
S.A.I.C.

Argentina

ARS in Manufacturing andthousands sales of automotive
201,242 tires(100.0)
No
100.0

No

Purchase of
products from the No
CompanyNo

BRIDGESTONE EUROPE NV/SA Belgium

Controlling businesses
EUR in in Europe, Russia,
thousands Middle East, India
2,063,963 and Africa, and salesof automotive tires

100.0 Yes

Yes

Purchase of
products fromand supply of
products to theCompany

BRIDGESTONE POZNAN SP. Z
O.O.

PolandPLN in Manufacturing andthousands sales of automotive
558,059 tires(100.0)
No
100.0

No

Purchase of raw
materials fromthe Company

No

BRIDGESTONE STARGARD SP.
Z O.O.

PolandPLN in Manufacturing andthousands sales of automotive
572,650 tires(100.0)
No
100.0

No

No

No

FIRST STOP AYME SAS

FranceEUR inSales of automotive
thousands
tires
22,178(100.0)
No
100.0

No

No

No

BRIDGESTONE TATABANYATERMELO KFT.

Hungary

HUF in Manufacturing andthousands sales of automotive
30,938,000 tires(100.0)
No
100.0

No

No

No

BRIDGESTONE HISPANIAMANUFACTURING S.L.U.

Spain

EUR in Manufacturing andthousands sales of automotive
3 tires(100.0)
No
100.0

No

No

No

BRIDGESTONE MIDDLE EAST
& AFRICA FZE

U.A.E.

AED inSales of automotive
thousands
tires
17,000(100.0)
No
100.0

No

No

No

BRIDGESTONE INDIA PRIVATE
India
LTD.

INR in Manufacturing andthousands sales of automotive
7,737,041 tires(100.0)
Yes
100.0

No

Purchase of
products fromand supply of
products to theCompanyNo

BRIDGESTONE SOUTH AFRICA
South Africa(PTY) LTD.

ZAR in Manufacturing andthousands sales of automotive
207 tires(75.0)
No
75.0

No

Purchase of
products and raw
Nomaterials fromthe Company

BRIDGESTONE ASIA PACIFIC
PTE. LTD.

SingaporeControlling tire
SGD in businesses in China
thousands and Asia-Pacific and1,623,782 sales of automotive
tires

100.0 Yes

No

Purchase of
products from the No
Company

BRIDGESTONE (CHINA)INVESTMENT CO., LTD.

China

Controlling tire
USD inbusinesses in China
thousands
and sales of347,665
automotive tires

100.0 Yes

No

Purchase of
products from the No
Company

BRIDGESTONE (SHENYANG)
TIRE CO., LTD.

China

USD in Manufacturing andthousands sales of automotive
183,180 tires(100.0)
Yes
100.0

No

Supply of
products to theCompanyNo

BRIDGESTONE (WUXI) TIRE
CO., LTD.

China

USD in Manufacturing andthousands sales of automotive
255,040 tires(100.0)
Yes
100.0

No

Supply of
products to theCompanyNo

BRIDGESTONE (HUIZHOU)TIRE CO., LTD.

China

USD in Manufacturing andthousands sales of automotive
160,000 tires(10.0)
Yes
100.0

No

No

No

BRIDGESTONE TIRE
MANUFACTURING VIETNAM
LLC

Vietnam

USD in Manufacturing andthousands sales of automotive
447,800 tires(100.0)
Yes
100.0

No

Supply of
products to theCompany

No

THAI BRIDGESTONE CO., LTD.

Thailand

THB in Manufacturing andthousands sales of automotive
400,000 tires(69.2)
Yes
69.2

No

Supply of
products to theCompanyNo

BRIDGESTONE TIRE
MANUFACTURING(THAILAND) CO., LTD.

Thailand

THB in Manufacturing andthousands sales of automotive
6,921,000 tires(100.0)
Yes
100.0

No

Supply of
products to theCompany

No

10

Name

Location

Common stock /Ownership
Officers
Investment in
Description of major
ratio ofcapitalbusinesses
voting rights serving Loansconcurr(Yen in millions)
(%)
ently

Relationship
Businesstransactions

Leasingoffacilities

No

Purchase of raw
materials fromand supply of
products to theCompanyNo(100.0)
No
100.0

No

No

No

Thailand

Manufacturing and
THB in sales of tires forthousands construction and
11,900,000 mining vehicles andaircraft tires

100.0 Yes

Yes

Supply of
products to theCompanyNo

BRIDGESTONE MINING
SOLUTIONS AUSTRALIA PTY.
LTD.

Australia

Sales and supplying
related services of
AUD intires for construction
thousands
and mining vehicles
7,000
and conveyor belts,
etc.

100.0 Yes

No

Purchase of
products from the No
Company

BRIDGESTONE SINGAPORE
PTE LTD.

Singapore

USD inSales and purchase of
thousands
natural rubber
674

100.0 YesNo

Supply of raw
materials to theCompany

Singapore

USD inLoaning of cash andthousands
factoring
450,700

100.0 Yes

No

Collection
agency for someNoof the Company’s
receivables

U.S.

USD inSales of automotive
thousands
tires
20,862(50.0)
No
50.0

No

No

TRY in Manufacturing andthousands sales of automotive
305,117 tires

43.6 Yes

No

Purchase of
products and raw
Nomaterials fromthe Company

PT BRIDGESTONE TIRE
INDONESIA

BRIDGESTONE AUSTRALIALTD.
BRIDGESTONE SPECIALTY
TIRE MANUFACTURING(THAILAND) CO., LTD.

BRIDGESTONE TREASURY
SINGAPORE PTE. LTD.

Indonesia

IDR in Manufacturing andthousands sales of automotive
10,358,400 tires(54.3)
Yes
54.3

Australia

AUD inSales of automotive
thousands
tires
205,820

No

Other: 214 companies(Equity-method associates andothers)TIREHUB, LLC

BRISA BRIDGESTONE SABANCILASTIK SANAYI VE TICARET
TurkeyA.S.

No

Other: 132 companies(Notes) 1. BRIDGESTONE TIRE SOLUTION JAPAN CO., LTD., BRIDGESTONE AMERICAS, INC., BRIDGESTONEAMERICAS TIRE OPERATIONS, LLC, BRIDGESTONE CANADA INC., BRIDGESTONE ARGENTINA S.A.I.C.,
BRIDGESTONE EUROPE NV/SA, BRIDGESTONE POZNAN SP. Z O.O., BRIDGESTONE STARGARD SP. Z O.O.,
BRIDGESTONE TATABANYA TERMELO KFT., BRIDGESTONE INDIA PRIVATE LTD., BRIDGESTONE ASIA
PACIFIC PTE. LTD., BRIDGESTONE (CHINA) INVESTMENT CO., LTD., BRIDGESTONE (SHENYANG) TIRE
CO., LTD., BRIDGESTONE (WUXI) TIRE CO., LTD., BRIDGESTONE (HUIZHOU) TIRE CO., LTD.,
BRIDGESTONE TIRE MANUFACTURING VIETNAM LLC, BRIDGESTONE TIRE MANUFACTURING(THAILAND) CO., LTD., BRIDGESTONE AUSTRALIA LTD., BRIDGESTONE SPECIALTY TIRE
MANUFACTURING (THAILAND) CO., LTD., BRIDGESTONE SINGAPORE PTE LTD., and BRIDGESTONE
TREASURY SINGAPORE PTE. LTD. are specified subsidiaries.
2. Figures in parentheses in the ownership ratio of voting rights column indicate indirect ownership ratio.
3. An insolvent company and the amount of insolvency are as follows:
BRIDGESTONE APM COMPANY
16,313 million yen
4. Revenues of BRIDGESTONE AMERICAS TIRE OPERATIONS, LLC (hereinafter “BATO”) and BRIDGESTONERETAIL OPERATIONS, LLC (hereinafter “BSRO”) (excluding internal sales from intercompany transactions within theGroup) exceed 10% of the consolidated revenue.

11

(Yen in millions)
Major financial
information

BATO(1) Revenue(2) Profit before tax(3) Profit

BSRO

1,161,841
171,946
130,852(4) Total equity

1,407,345(5) Total assets

1,662,361(1) Revenue

623,935(2) Profit before tax

39,684(3) Profit

31,526(4) Total equity

258,340(5) Total assets

444,96212

5. Employees(1) Consolidated companies(As of December 31, 2022)
Name of segment

Number of employeesJapan

27,049Americas50,198Europe, Russia, Middle East, India and Africa

21,591China, Asia-Pacific

19,084

Other

8,059

Company-wide (common)

3,281

Total
129,262(Notes) 1. The number of employees represents the number of active employees.
2. The number of employees in the Japan segment includes the number of employees at tire plants in Japan that produce
tires for other segments.
3. The decrease of 7,911 employees in the Japan segment compared to the previous fiscal year is mainly due to the transferof the anti-vibration rubber business and the chemical products solutions business.

(2) Status of the Company(As of December 31, 2022)
Number of employees

Average age (Years)

Average length of service(Years)Average annual salary(Thousands of yen)

13,903

41.5

15.2

7,485

Name of segment

Number of employees

Japan

9,994

Other

628

Company-wide (common)

3,281

Total
(Notes) 1. The number of employees represents the number of active employees.
2. The average annual salary includes bonuses and extra wages.

13,903(3) Labor union
The Company’s labor union is a member of the Japanese Trade Union Confederation (JTUC-RENGO).
There are currently no particular matters concerning relations with the labor union that require mentioning.
Labor-management relations are founded on mutual trust and are extremely amicable.
Stable labor-management relations are maintained at consolidated subsidiaries and there are no particularmatters that require mentioning.
(4) Percentage of female employees in managerial positions and rate of employees who took childcare leave
Since its founding in 1931, the Group has a history of accepting diverse talent and globally fostering diversity
through the acquisition of Firestone Tire & Rubber Company in the U. S. in 1988, etc. We believe that diversity
will become increasingly important for the future growth of the Company. As stated in the “2030 Long Term
Strategic Aspiration” announced in August 2022, the Group will strive to enhance corporate value by added
value creation aligned with its business strategy. At the same time, we will accelerate various initiatives basedon the Group’s talent strategy, which aims to allow diverse talents to shine through spreading success andgaining confidence of individuals.
1)

Percentage of female employees in managerial positions

The percentage of female employees in managerial positions by segment in the Group is as follows. The group
total has increased steadily compared to the previous fiscal year.
13

(As of December 31, 2022)
Top managerial positions
Managerial positions

Junior managerial
positions

Total

Japan

6.1%

4.3%

6.4%

5.3%

Americas

25.5%

23.2%

10.4%

14.8%

15.1%

14.6%

18.8%

17.6%

China, Asia-Pacific

12.6%

19.0%

23.6%

22.8%

Total

10.7%

11.6%

12.5%

12.1%

(Figures in parentheses are
figures from the previous fiscal(10.4%)

Europe, Russia, Middle East,
India and Africa(10.6%)

year)(Notes) 1. The percentages are based on the number of active employees.
2. “Japan” includes the “Other” and “Company-wide (common)” segments.
3. Top managerial positions refer to managerial positions with a reporting line no more than two levels below the CEO ineach company.
4. Managerial positions include all managerial positions excluding “Top managerial positions” and “Junior managerial
positions.”
5. Junior managerial positions refer to first-line managers, junior managers and the lowest level of management within acompany’s management hierarchy.

The Company has set a goal of increasing the percentage of female managers to 7.5% by the end of 2025. Asof December 2022, this percentage stands at 3.4%, and the Company is working steadily toward this goal.
(Notes) 1. Female managers of the Company refer to line managers (executive and management levels), specialists andcoordinators.
2. The Company’s target and result for the percentage of female managers include those seconded to other regions orother companies belonging to the Company.

2)

Rate of employees who took childcare leave

The result of employees of the Company who took childcare leave is as follows: In particular, the rate of male
employees who took childcare leave has increased steadily compared to the previous fiscal year (12.2%).
(As of December 31, 2022)
Number of employees who took childcare
Rate of employees who took childcare leave
leave
Male

96

15.6%

Female51100.0%(Notes) 1. The rate of employees who took childcare leave is calculated by the formula: “Employees who started childcare
leave/Employees (or their spouses) who gave birth × 100.”
2. The number of male employees who took childcare leave after childbirth is added to the number of male employees who
took childcare leave.

(5) Wage disparities between male and female employees
There is no disparity in the wage structure or system between male and female employees in the Company.
However, there is a difference between male and female employees as a result of current talent portfolio in termsof job categories and the percentage of managers, resulting in wage disparities. In promoting “developing
various opportunities for diverse talents to shine,” which is the axis of our talent strategy, we are putting efforts
to have our talent portfolio more balanced, including enhancing participation of female managers in key
positions.
14

Wage disparities between male and female employees in the Company are as follows:(As of December 31, 2022)
Wage disparities between male and female employees(Ratio of women’s wages to men’s wages)
All employees

80.6%

Of which, regular (permanent) employees

81.6%

Of which, fixed-term employees

73.4%

15

II. Business Overview
1. Management policy, management environment and issues to be addressed
Changes are accelerating in the surrounding business environment in a wide range of areas, including international
relations, politics, economy, environmental issues, and technological innovation, and have become commonplace.
In addition to the impact of COVID-19, changes in the international situation triggered by Russia’s invasion of
Ukraine, fluctuations in raw material and energy prices, and rapid inflation continue to have a significant impact
on the global economy and people’s lives. Also, sustainability initiatives including climate change
countermeasures are becoming more and more important on a global scale. In the mobility industry, these efforts
are linked to the CASE and MaaS movements, such as the acceleration of the shift to EVs and digitalization, andthe value demanded of tires continues to change dramatically.
In order to survive these unpredictable times, the Group announced the “2030 Long Term Strategic Aspiration,”
its roadmap toward 2030. Looking ahead to the 100th anniversary of our founding in 2031, we will accelerate ourtransformation to a resilient “excellent” Bridgestone that transforms change to opportunity, unperturbed bycontinuous change and remaining robust and flexible like rubber.
2023, the final year of our Mid Term Business Plan (2021-2023: revenue of 3,300 billion yen, adjusted operating
profit of 450 billion yen, adjusted operating profit ratio of 13%, ROIC of 10%, and ROE of 12%) which aims toreturn to a strong Bridgestone capable of adapting to change, is an important year in building foundations for future
growth, and we will continue driving initiatives based on three axes. The first of these is to “Tackle past negative
legacies without delay,” the second is to “Focus on execution and delivering results for immediate issues,” and thethird is to “Lay foundation for future growth” with the year 2030 as a milestone.
With regard to our “past negative legacies,” by 2022, we have almost completed the business portfolio andmanufacturing footprint restructuring planned in our Mid Term Business Plan (2021-2023). We plan to complete
the first step in the rebuilding of earning power by continuing to promote expense and cost structure reformation,
including streamlining fixed costs. From the previous fiscal year, we have also begun full-scale efforts to resolve
issues in the areas of corporate culture change and talent development. By the end of 2023, we plan to materialize
the enhancement of talent creativity, which creates a virtuous cycle of value creation where reinforcing talent
investment leads to increasing added value, and set it as a global management KPI from the Mid Term Business
Plan (2024-2026).
Regarding “immediate issues,” mindset focused on execution and results with agile PDCA (Plan-Do-Check-Act)
cycles has penetrated across the group through the process of overcoming the turbulent business environment in
2022. In the premium tire business, we will further focus on the premium tire area, striving to further expand sales
and increase market share of premium products such as passenger car high-rim diameter (HRD) tires and off-theroad tires for mining vehicles. In addition, we will improve business quality even in a severe business environment,
through reinforcement of strategic price management based on proving the value of our products and services.
As for “laying foundation for future growth,” we will strengthen our management structure and implement
strategic growth investments in the premium tire business, the solutions business, the diversified products business,and the exploratory business, using the “2030 Long Term Strategic Aspiration” as a roadmap and withsustainability at the core of management. In the premium tire business, in order to reinforce the premium segment,
we will strengthen our structure to “produce and sell” tires by increasing production capacity to handle premium
products on a global basis. In addition, by expanding the value of our innovative tire technology “ENLITEN” forpassenger car tires and truck and bus tires to products and business models as a business strategy, and by providing
new value by linking “Bridgestone MasterCore,” the Dan-Totsu product for off-the-road tires for mining vehicles,with mining solutions, we will create both social value and customer value and drive the creation of Bridgestone’s“new premium.” In the creation of “new premium,” we will accelerate technology innovation based three types of“mastering”: “mastering rubber” and “mastering road contact” in the development of materials and tires, and“mastering manufacturing” which includes the promotion of green and smart factories as well as sustainability
initiatives. In our solutions business, our growth business, we will amplify the value of Dan-Totsu products by
maximizing safety and peace of mind, as well as productivity and economic value during customers’ tire “use”
based on retreading and the Group’s unique Real x Digital platform. In addition, building a structure for growth
mainly in Europe and the U.S. which are mature mobility markets, we will determine synergy with the premium
tire business, growth potential, and profitability of each solution, and allocate resources to the determined business16

for expansion. For the chemical and industrial products and diversified products business, we will continue tosharply focus on areas where our core competencies can be leveraged. As for the exploratory business, we will
promote commercialization of the recycle business, the soft-robotics business, and the guayule business based on
co-creation.
To implement these measures, we will build a foundation for “new glocal & portfolio management” as amanagement structure adapted to each region’s business base, mobility maturity and market characteristics. As
part of such effort, we have adopted a Joint-Global COO structure and divided our market into the Bridgestone
EAST synergy area, which consists of the Japan and Asia businesses, our home market with a long history, andthe Bridgestone WEST synergy area, which consists of the Europe and North America businesses with highmobility maturity. We will work to evolve the glocal management that we have established so far by promoting
collaboration and integration of technology development, supply chains, management functions and organizations
related to the solutions business within each area in accordance with their business environment and business
operations.
With regard to sustainability, which is at the core of our management and business, we are working to establish
the Group’s unique sustainability business model that ensures the link between business model and sustainability
initiatives to realize carbon neutrality and circular economy across the value chain—“produce and sell” and “use”
of products, and their “renew” to raw material. Particularly on the environmental front, we set our long-term
environmental vision toward 2050 in 2012, and “Milestone 2030,” the mid-term environmental targets for 2030 torealize this vision.
In terms of carbon neutrality, we have set clear-cut targets of reducing CO2 emissions (Scopes 1, 2) (Note 1) by
50% in 2030 compared to our 2011 baseline, and achieving carbon neutrality by 2050. We estimate an approximate
29% reduction in 2022, setting the goal of a 30% reduction from the 2011 level in 2023. To achieve these targets,
we will promote the installation of solar power panels at our global plants and advance efforts to switch electricity
sourced from outside providers to renewable energy-derived electricity.
Through such efforts, we will conduct initiatives aimed at achieving the goal of increasing the ratio of renewableenergy (electricity) in the Group to 50% by 2023 and to 100% by 2030. As for the reduction of CO2 emissions
across the value chain (Scope 3) (Note 1), we will drive initiatives with the target of contributing to reducing morethan five times the total of Scope 1 and Scope 2 emissions by 2030 (base year: 2020) throughout the lifecycle ofour products, services, and solutions. In order to realize a circular economy, we aim to increase the ratio of recycled
and renewable resources to 40% by 2030 and to achieve 100% of sustainable material by 2050. Regarding the ratioof recycled and renewable resources, we estimate having achieved a ratio of approximately 37% in 2022, and aim
to achieve a ratio of recycled and renewable resources of 37% or more by 2023. In order to achieve 100%
sustainable material, we will evolve our ENLITEN business strategy and product strategy including retreading,and promote the utilization of renewable resources in the recycle business, the natural rubber business, and theguayule business.
In addition, as the business environment is constantly changing, we will strengthen our structure to cope with
global management risk unperturbed by change. The Global Management Risk Committee, which consists of the
top management of each regional business, conducts wide-ranging discussions on management risks and has set
three priority management items. The first is geopolitical risk. We analyzed the business impact when risks occur,considered measures to minimize it, and have begun to implement measures. The second item is our response to
TRWP (Tire Road Wear Particles). TRWP is the result of friction between the tire and the road surface, and is a
mixture of the tread, which is the surface of the tire, and road pavement materials. In response to TRWP, which isan industry-wide issue, as an industry leader, the Group is leading tire industry projects under the World BusinessCouncil for Sustainable Development (WBCSD), as well as initiatives by regional industry groups. Furthermore,in collaboration with other industry players and academic institutions, we are investigating the environmental andhealth impacts of tires throughout their lifecycle. Going forward, we will continue driving relevant initiatives,
including promotion of long-life products and linkage with the solutions business. The third item is our response
to cyberattacks. In the first quarter of 2022, a cyberattack occurred in the Group’s U.S. subsidiary, and we
implemented emergency measures in each region.
In the future, in order to strengthen our response to such situations, we established a global cyber security teamand will promote fundamental measures.
17

Going forward, with the “Bridgestone E8 Commitment” (Note 2) as the axis and guiding vectors to drive
management while earning the trust of future generations, we will commit to the realization of a sustainable society
by co-creating value together with various stakeholders, such as society, partners, and customers, achieving bothsustainability and corporate growth.

The Group is working toward promoting a talent strategy aligned with its business strategy. As the axis of ourtalent strategy, we aim to develop various opportunities for diverse talents to shine through spreading success andgaining confidence of individuals as well as increase corporate value by creating added value aligned with thebusiness strategy. To transform to a resilient “excellent” Bridgestone, it is essential to enhance the talent creativityof each and every talent, the driving force behind this transformation. Reinforcing talent investment leads toincreasing added value. We need to create this virtuous cycle of value creation and will proceed with initiatives toachieve this.
•

The Group’s Talent Development Policy
The Group promotes talent development based on a talent strategy aligned with its business strategy. We believethat “focus on quality,” “respect for being on-site,” “being attentive and supportive of customer problems,” and“challenging spirit,” all of which are in the Company’s DNA, are essential to transform to a resilient “excellent”
Bridgestone that transforms change into opportunity, unperturbed by continuous change and remaining robust
and flexible like rubber, as set forth in the “2030 Long Term Strategic Aspiration.” We will accelerate various
initiatives to support employee growth so that the growth of the Company and that of each and every employee
go hand in hand.
“Focus on quality” is a strength shared by the entire Group, and we intend to further develop it as the foundationof the Company’s business strategy. Regarding “respect for being on-site,” we are encouraging employees totake on challenges on-site through the “Genba (On-site) 100-Day Challenge Program” in Japan, encouraging
transformation of mind-set and behavior. In addition, to amplify the value of tires throughout the entire value
chain of “produce and sell” and “use” phases by strengthening the alignment between the Group’s “Dan-Totsu”
products and the solutions business, we must “be more attentive and supportive of customer problems.” In
response to an increasingly diverse society and needs of customers, and for our diverse talent to shine, we are
actively promoting DE&I. Specifically, in order to respect diverse values and promote diversity in decisionmaking as an organization, we are increasingly focusing on promoting the development and assignment offemale leaders, and in Japan, strengthening mid-career recruitment and retention of highly specialized talents.
Regarding “challenging spirit,” especially in the exploratory business, in addition to forming alliances withexternal partners, we have established a new corporate venture, Softrobotics Ventures, bringing together diverse
talents with an entrepreneurial spirit to create new businesses from scratch to take on the “challenge” of earlycommercialization. In the digital field, we are developing and acquiring advanced digital talents globally, andin Japan, we have introduced the “Digital 100-Day Training” covering a wide range of levels. With regard to
the development of management talents, “Bridgestone NEXT100,” a program to develop the next-generation
management leaders, promotes intensive development by nominating approximately 100 talents globally eachyear to participate in various management/executive meetings as well as overseas business school training
programs.

•

Policy for internal workplace environment development concerning the Group’s talents
Based on the belief that the success of diverse talents leads to the creation of value as expressed in the“Bridgestone E8 Commitment,” the Group has created a workplace environment where each and every
employee can play an active role. Positioning the improvement of employee engagement as one of the key
issues in globally promoting culture changes in line with the “Bridgestone E8 Commitment,” we have started
to conduct monitoring through engagement surveys and share good practices from each region. Specifically, inJapan, we have introduced a training program in Kurume, the place of our founding, for newly appointed
managers or new employees, providing an opportunity to further experience the founder’s thoughts, Bridgestone
DNA and the Bridgestone Essence (corporate philosophy). Also in Japan, in order to develop a foundation for18

diverse talents to shine, the Group is implementing a variety of initiatives unique to Bridgestone, including
holding DE & I management workshops for all managerial positions and supporting the use of FemTech toaddress women-specific health issues using technology. At the manufacturing sites, we are also implementing
quick-impact investments that reflect the voices of workers who work at “Genba (on-site)” and are working toenhance benefits, improve the workplace environment, and reduce the workload.
(Notes)1. Scope 1 refers to CO2 emitted directly by a company (emissions from boilers at in-house plants, etc.),
and Scope 2 refers to indirect emissions from energy sources (CO2 emissions from energy, such as
electric power supplied by other companies and consumed in-house). Scope 3 refers to CO2 emissions
during the stages of procurement of materials, logistics, use by customers, and disposal or recycling in
the product lifecycle.
2. Bridgestone Group established the “Bridgestone E8 Commitment,” our corporate commitment, torealize our vision, “Toward 2050, Bridgestone continues to provide social value and customer value asa sustainable solutions company.” With this commitment as the “axis to drive management while earning
the trust of future generations,” we are committed to the realization of a sustainable society by cocreating 8 Bridgestone-like values starting with the letter “E” (Energy, Ecology, Efficiency, Extension,
Economy, Emotion, Ease, and Empowerment) through Bridgestone-like purpose and process, together
with employees, society, our partners and customers.

19

2. Business risks
The following provides an overview of risks concerning the state of business and financial information describedin this Annual Securities Report that may have a bearing on investors’ decisions. The Group is aware of these risks,and systematic efforts are made to prevent or minimize the impact of related adverse events on operations.
Nonetheless, the potential exists for unforeseen or unpredictable risks other than those described below tonegatively affect the operations, business results, and financial position of the Group.
All references to possible future developments in the text are as of March 28, 2023, the filing date of this Annual
Securities Report.

(Processes for evaluating and managing risks)Every year, the Group evaluates and identifies risks faced by various regions and the Group as a whole in terms of
their potential impact and likelihood of occurrence. By allowing management to be conducted in an autonomousand continuous manner through clarifying who is responsible for managing the risk, not only for the Group as awhole, but also for every business, Strategic Business Unit (SBU), and division, our Group’s risk evaluation andmanagement system is able to deal with serious management risks under the direct supervision of the Global CEO.
(1) Risks related to demand and macroeconomic conditions
The Group conducts research and development (R&D), procurement, production, logistics, sales and otherbusiness activities on a global scale. Operating results and financial position are thus subject to trends in demand,interest rates, exchange rates, share prices, and other economic variables in the countries and regions where we
operate. In the current fiscal year, the Group’s revenue by region was 51% from operations in the Americas;
22% from Europe, Russia, Middle East, India and Africa; 14% from Japan; and 13% from China and the AsiaPacific region. An economic downturn in any of these regions could exert a major adverse effect on the operating
results and financial position of the Group.
The Group’s business is closely tied to the automobile industry; therefore, the operating results and financial
position of the Group are strongly affected by business conditions in the global automobile industry. Demand
for replacement tires in each country where the Group operates depends on national trends in consumer spending,automotive fuel prices, and a range of other local market variables. Any combination of trends that might cause
demand for replacement tires to decline, or to grow at a slower rate, could adversely affect the operating results
and financial position of the Group.
Furthermore, some of the Group’s products, such as hydraulic hoses and large and ultra-large off-the-road radialtires for mining and construction vehicles, are affected by business conditions in the resources industry and thecivil engineering and construction industries. If these factors reduce demand or slow its projected rise, theGroup’s operating results and financial position may be adversely affected.
Moreover, demand for winter tires (which make a sizable contribution to sales in regions such as Japan, Europe,and North America) is closely related to seasonal weather trends. A mild winter and a decline in demand in theseregions could adversely affect, to some extent, the operating results and financial position of the Group.
(2) Legal, regulatory, and litigation risk
The Group’s operations around the world are subject to diverse national (and, in Europe, supranational) laws
and regulations, including trade, investment, foreign exchange transactions, taxation systems (including transfer
pricing), anticompetitive practices, environmental protection, and protection of personal information. Laws andregulations that affect the Group’s business activities have been established and introduced. These include
labeling systems and regulations regarding tire performance and regulations regarding chemicals in Japan andoverseas. Accordingly, new or revised laws and regulations could limit the scope of business activities, raise
operating costs, or otherwise adversely affect the operating results and financial position of the Group.
The Group could be subject to lawsuits or to investigations by governmental authorities with regard to its
business activities in Japan or in overseas markets. In the event that an important lawsuit is filed or investigation20

by governmental authorities has commenced, the Group’s operating results and financial position could be
affected.
(3) Risks related to operational disruption
・Natural disasters, wars, terrorist actions, civil strife, and social and political unrest
Globally dispersed operations expose the Group to a broad range of natural and man-made risks that could
constitute force majeure, including natural disasters, such as earthquakes and floods, wars, terrorist actions, civil
strife, boycotts, epidemics, energy supply problems, and general social or political unrest. Such events have thepotential to adversely affect the operating results and financial position of the Group. Also, factors such as
abrupt, substantial fluctuations in political or economic matters in Japan or overseas could hinder thecontinuation of the Group’s business activities. Such events have the potential to affect the Group’s operating
results and financial position.
The risk of earthquakes is particularly high in Japan where the Group has numerous key facilities. Management
systematically promotes the seismic reinforcement of the Group’s facilities in Japan based on an order of priority
determined from the results of site analyses using seismic diagnostics. In addition, a business continuity plan(hereinafter “BCP”) has been created in order to facilitate a swift response in event of an earthquake and thequick restoration of operations. Operation of this BCP is subject to regular review and improvement. The Group
has also formulated a BCP designed to prioritize the wellbeing and safety of employees, families, and all relatedparties while minimizing the Group’s losses stemming from the spread of H1N1 influenza, COVID-19, andother diseases caused by unknown pathogens. The content of this BCP is continuously expanded based on
feedback from its implementation. Despite the preventive measures, such serious risks could disrupt or reduce
the scale of operations or cause damage to facilities, necessitating expensive repairs or restoration work. The
costs involved could adversely affect the Group’s operating results and financial position.
Operational disruptions at those plants where the production of certain products or materials is concentrated
have the potential to cause greater problems due to the increased possibility of a supply interruption, which
could result in claims for compensation based on breach of supply contracts, or in an erosion of customer
confidence in the Group as a reliable source of supply. Any such developments could have a significantly
adverse impact on the operating results and financial position of the Group.
・Information technology (IT) systems failures
With the drastic rise in the importance of information systems in the Group’s business activities, the Group is
striving to protect systems and data through advancing security and other measures. However, failure of suchinformation systems due to external causes, such as natural disasters and cyberattacks, or through human error,
could result in the halt of major operations and services and theft or leakage of confidential or personal
information and data, with the possibility of hindering further business activities. Such incidents bear the
potential to damage the Group’s brand image and lower social trust, adversely affecting its operating results andfinancial position.
・Industrial action
Prolonged strikes or other industrial action due to unfruitful labor-management negotiation could cause
operational disruptions, and thereby adversely affect the operating results and financial position of the Group.
Management strives to minimize the risk of labor unrest by fostering good labor-management relations
throughout global operations.
(4) Risks related to climate change and natural capital loss
We see growing global interest in climate change and natural capital loss, as well as an accelerated move toward
a decarbonized society, as represented by the Paris Agreement, and a nature-positive world as adopted as theKunming-Montreal Global Biodiversity Framework, which aims to halt and reverse ecosystem and nature
capital loss to put nature on a path to recovery. Amid the situation, the Group recognizes the risks and21

opportunities related to climate change and natural capital loss in an integrated manner and reflects them in its
business strategy. The main risks we identify in this category are “transition risks” associated with the transition
to a decarbonized society and a society where nature can coexist, and “physical risks” due to climate change
and natural capital loss. Transition risks in Japan and overseas in response to climate change and natural capital
loss involve the introduction of systems and regulations related to carbon taxes, reduction obligations for CO2
emissions, emissions trading schemes, fuel-efficient tires, the recycling of used tires, water withdrawal, andsustainable natural rubber. If the R&D expenses required to meet the changing needs of society and customers
do not produce sufficient results, there is a risk that the Group’s operating results and financial position may be
adversely affected in ways that include limitations on business activities and increased costs. Physical risks
include the risk of business activity interruption from stronger typhoons and increased frequency of flooding
and drought, risks related to the procurement raw materials from poor harvests of natural rubber due to changes
in rainfall patterns, and the risk that less snowfall will reduce demand for winter tires. On the other hand, we
also see these changes in society and customer needs as new opportunities for growth.
Based on the Group’s awareness of the transition risks and opportunities, the Group has set a long-term goal for2050 of becoming carbon neutral, 100% sustainable materialization, and no net loss of biodiversity, with targets
set for 2030 to reduce absolute CO2 emissions (Scope 1 and 2) by 50% compared with 2011 levels, contributeto global CO2 emissions reductions across the lifecycles and value chain (Scope 3) of the Group’s products andservices that exceeds five times the amount of CO2 emissions (Scope 1 and 2) generated by the Group’s
operations compared with 2020 levels, increase the ratio of our use of raw materials derived from recycled or
renewable resources to 40%, and promote water stewardship plans to reduce water risks at production bases inwater-stressed areas. The Group is working to meet these targets with efforts that include developing newtechnology that helps reduce CO2 emissions, reducing emissions at production bases of the Group, reducing theimpact on natural capital from water withdrawal in water-stressed areas, promoting the development and salesof fuel-efficient tires, expanding our retread tire business, and reducing CO2 emissions across the supply chain
and impact on natural capital through collaboration with suppliers. In making investment decisions, we take
into account the cost of CO2 emissions and the benefits of reduction on internal carbon pricing so that we canevaluate the transition risks and opportunities. We are also working to reduce CO2 emissions across the value
chain and the impact of various environmental burdens on natural capital through efforts to build a recycling
business that converts used tires back into raw materials and to improve productivity in the natural rubber
business.
Concerning physical risks and their associated opportunities, in line with our BCP, we continue to set up systems
to ensure an appropriate response should a crisis occur, as well as support for resumption of business activities.
We are also working to diversify our sources of natural rubber through efforts to commercialize guayule, arubber-producing plant that grows in arid regions.
(5) Risks related to corporate and brand image
The Group strives to enhance its corporate and brand image consistently through global business activities.
Systematic efforts are made to ensure compliance with all applicable laws and regulations and to promote thehighest ethical standards. Programs are in place across the Group to prevent industrial incidents, particularly
fires and any accidents that could cause occupational injuries, and to respond immediately to any accidents that
occur. Despite such preventive measures, serious ethical lapses or industrial accidents, which are by their nature
unpredictable, have the potential to adversely affect the operating results and financial position of the Group bydamaging the image and reputation of the Group, diminishing the general public’s confidence in the Group, or
leading to a drop in share price.
(6) Currency risk
The global distribution of the Group’s R&D, production, logistics, procurement of raw materials and sales
activities requires business transactions in numerous currencies. The Group employs foreign currency forward
contracts to hedge foreign currency-denominated trade receivables and payables, and currency swaps to hedge
foreign currency-denominated loans and borrowings in an effort to minimize the effects of short-term exposure
to exchange rate fluctuations. However, hedging cannot insulate the Group’s operations completely from foreign
22exchange market trends since these operations include extensive import and export activities worldwide.
Fluctuations in exchange rates can thus have an adverse effect on the operating results and financial position of
the Group. Exchange rate fluctuations also affect the consolidated performance of the Group because results arereported in yen. Changes in exchange rates affect the values recorded for revenue, expenses, assets, andliabilities in all countries outside Japan when translated into yen. In general terms, yen appreciation against
other leading currencies tends to depress the financial results, while yen depreciation tends to have a favorable
impact.
(7) Risks related to competition
The Group encounters numerous competitors across its entire product lineup. Competitive price pressures havethe potential to adversely affect the operating results and financial position of the Group. In addition, the Groupfaces a constant risk of demands for price reductions from large corporate clients. The Group strives to maintainprofitability in the face of downward price pressures by continually seeking to reduce the cost, raise productivity,
enhance brand image, develop new markets, and launch new products that provide greater value to customers.
However, management cannot guarantee that such efforts will always be sufficient to offset the effects ofcompetition.
The Group’s strategy is based on maintaining a highly competitive technological edge. The Group targets thedevelopment and introduction of products equipped with new and advanced technologies, and then aims to
persuade customers of the value inherent in such technical advances to secure prices sufficient to ensure thatprofits fully offset the costs of development. Fierce competition in various fields can sometimes prevent theGroup from recovering development costs through pricing, which can also have an adverse effect on operating
results and financial position.
(8) Risks related to product defects
The Group holds customer safety as its highest priority. The Group invests considerable resources in establishingand maintaining high quality standards for all products manufactured and sold. Management is particularly
sensitive to the importance of quality assurance in tires and other products closely associated with human safety.
The Group has honed its quality assurance capabilities by upgrading information systems related to productperformance, collecting pertinent market information, and establishing systems to provide early warning of any
potential safety issues that may arise before they become problems. Nonetheless, such efforts cannot guarantee
the complete prevention of product defects or eliminate the chance of an extensive product recall because
product defects could occur due to unpredictable factors. Any such defects or recalls could result in customer
claims for damages, as well as associated litigation costs, replacement costs, and damage to the Group’s
reputation. Product liability claims, class-action lawsuits, and other litigation pose a particular risk in the U.S.
(9) Risks related to raw materials procurement
Disruption of supplies of raw materials has the potential to affect performance adversely. The Group uses large
quantities of natural rubber in tires and other rubber products, most of which are supplied from Southeast Asia.
The availability of natural rubber supplies in quantities sufficient for manufacturing purposes is subject todisruption due to natural disasters, wars, terrorist actions, civil strife, other social or political unrest, and strikes
in addition to the threat of poor harvests.
Supply shortages due to tight supply of raw materials or capacity constraints are also potential problems withother basic raw materials, and could adversely affect the Group’s operating results and financial position.
The Group relies on in-house upstream raw materials operations and on third-party suppliers for important raw
materials. Any disruption of activity to those operations or suppliers and any other events that impede theGroup’s plants that use those raw materials could adversely affect the Group’s operating results and financial
position.
Increases in the costs of raw materials due to tight supply, trade for speculative purposes, and other reasons arealso potentially detrimental to the operating results and financial position of the Group. Management cannot
23

guarantee that price rises can always be passed on to customers or that ongoing efforts to raise productivity will
be sufficient to compensate for any sharp increases in raw materials costs.
(10) Risks related to pension costs and obligations
Pension-related costs and obligations are reliant on actuarial assumptions concerning discount rates and anumber of other variables. If these assumptions were to change significantly as a result of changes in interest
rates or the fair value of plan assets (including pension assets), or other factors were to necessitate a change inthe underlying assumptions, there could be an increase in pension-related costs and obligations, as well as amaterial impact on the operating results and financial position of the Group.
(11) Risks related to intellectual property
The Group treats intellectual property as an important business resource. Systematic efforts are made to employ
intellectual property effectively in improving the competitive position of the Group, to protect intellectual
property rights from infringement, and to avoid infringing the intellectual property rights of other parties.
Despite such safeguards, any actual or alleged infringement of third-party intellectual property rights by theGroup could have a negative impact on the use of certain materials or technologies by the Group, and could
potentially also trigger the payment of compensatory damages. Any such outcome could have a negative effecton the operating results and financial position of the Group. Conversely, if claims by the Group of intellectual
property rights infringement against third parties are not upheld, the Group could also suffer direct or indirect
losses through the diminished differentiation or competitiveness of its products in global markets.

24

3. Management analysis of financial position, operating results and cash flows
At the end of the previous fiscal year, the Company classified the assets and liabilities of the anti-vibration rubber
business and the chemical products solutions business as assets held for sale and liabilities directly associated withassets held for sale, placing these businesses in the category of discontinued operations.
The Company has accordingly classified the anti-vibration rubber business and chemical products solutions
business as discontinued operations in the fiscal year ended December 31, 2022 as well.
Details are described in “V. Financial Information, 1. Consolidated Financial Statements, etc., (1) Consolidated
Financial Statements, Notes to Consolidated Financial Statements, 6. Operating Segments.”
All references to possible future developments in the text are as of the filing date of this Annual Securities Report.
(1) Overview of operating results, etc.
Overview of the financial position, operating results, and cash flows of the Group for the current fiscal year is
as follows.
1)

Financial position and operating resultsa. Overall performance
2022

Increase (Decrease)

2021

AmountRatio

Yen in billions

Yen in billions

Yen in billions%

4,110.1

3,246.1+864.0+27

Adjusted operating profit

482.6

394.3

+88.3

+22

Operating profit

441.3

376.8

+64.5

+17

Profit before tax

423.5

377.6

+45.9

+12

Profit attributable to owners of parent

300.4

394.0

(93.7)(24)

Revenue

The Group has been working based on its Mid Term Business Plan (2021-2023), released in February 2021,
with the aim of accomplishing its vision of “continuing to provide social value and customer value as asustainable solutions company toward 2050” under its mission of “Serving Society with Superior Quality” of
the Bridgestone Essence (corporate philosophy). Guided by this mission and vision, we have set the“Bridgestone E8 Commitment” as the focus and vector of our corporate activities, and we are moving forward
along the path of the “2030 Long Term Strategic Aspiration,” which depicts the vision we want to achieve in
2031, the 100th anniversary of our founding.
In the operating environment surrounding the Group during the current fiscal year, while restrictions on
economic activity due to COVID-19 have been relaxed in many countries, raw material prices have skyrocketed
and supply chains have been in turmoil due to the prolonged situation in Ukraine and the lockdowns in China,
and accelerating inflation has heightened uncertainty about the outlook for the global economy. With regard to
replacement tires, the economic slowdown, mainly in the US and Europe, gradually materialized, and tire
demand slowed significantly in the fourth quarter. On the other hand, demand for passenger car and light truck
tires remained relatively strong in areas such as high-rim diameter tires (18 inches or more) and premium brands
for truck and bus tires in North America. With regard to new vehicle tires, in the first half of the fiscal year,
demand continued to decline due to the impact of reduced vehicle production caused by semiconductor
shortages. In the second half, however, as the production of new vehicles started to recover, the sluggish demand
showed signs of recovery. Moreover, in terms of costs, in addition to the sharp rise in crude oil prices reflecting
geopolitical risks, persistently surging rates for ocean freight, energy costs, and labor costs put pressure on theGroup’s profitability.
25

In this business environment, the Group worked to respond quickly to the unprecedented sharp rise in raw
material prices and high inflation. In addition to further strengthening “strategic price management” and“premium business strategy” in each region, we responded flexibly to fluctuations in tire demand throughflexible supply management based on our global production system, which is one of the Group’s strengths, andworked to ensure profitability and expand sales at the same time.
As a result, the Group’s revenue in the current fiscal year was 4,110.1 billion yen, a year-on-year increase of27%; adjusted operating profit was 482.6 billion yen, a year-on-year increase of 22%; operating profit was 441.3
billion yen, a year-on-year increase of 17%; profit before tax was 423.5 billion yen, a year-on-year increase of12%; and profit attributable to owners of parent was 300.4 billion yen, a year-on-year decrease of 24%.
The decrease in profit attributable to owners of parent compared to the previous fiscal year is due to therecording of a gain on the sale of the U.S. building materials business in the previous fiscal year.
b. Performance by business segment
Increase (Decrease)

2022

2021

Yen in billions

Yen in billions

Yen in billions%

1,036.3

873.0+163.3

+19

140.3

117.0

+23.3

+20

1,988.0

1,454.6+533.4+37

Adjusted operating profit

251.2

190.6

+60.5

+32

Revenue

870.0

693.9

+176.1+25

India and Africa

Adjusted operating profit

66.4

42.1

+24.2

+58

China, Asia-

Revenue

457.0

386.9

+70.2

+18

Pacific

Adjusted operating profit

39.9

42.0

(2.1)

(5)

Revenue

80.5

66.4

+14.0

+21

Adjusted operating profit

7.3

5.1

+2.2

+44

4,110.1

3,246.1+864.0

+27

482.6

394.3

+88.3

+22

Japan

Revenue
Adjusted operating profit

Americas
Europe, Russia,
Middle East,

Other

Revenue

Consolidated

Revenue

Results

Adjusted operating profit

Amount

Ratio

Looking at the results in each segment for the fiscal year ended December 31, 2022, with regard to replacement
tires, the economic slowdown, mainly in the US and Europe, gradually materialized, and tire demand slowed
significantly in the fourth quarter. On the other hand, demand for passenger car and light truck tires remained
relatively strong in areas such as high-rim diameter tires (18 inches or more) and premium brands for truck andbus tires in North America. With regard to new vehicle tires, in the first half of the fiscal year, demand continued
to decline due to the impact of reduced vehicle production caused by semiconductor shortages. In the second
half, however, as the production of new vehicles started to recover, the sluggish demand showed signs ofrecovery. Results for each segment are as follows.
[Japan]Unit sales of tires for passenger cars and light trucks, and unit sales of tires for trucks and buses trended firmly,
surpassing the unit sales in the previous fiscal year. As a result of the strong performance of the mining andconstruction tire business, revenue was 1,036.3 billion yen, a year-on-year increase of 19%, and adjusted
operating profit was 140.3 billion yen, a year-on-year increase of 20%.
[Americas]
26

In North America, unit sales of tires for passenger cars and light trucks, and unit sales of tires for trucks andbuses trended firmly, surpassing the unit sales in the previous fiscal year. As a result, revenue was 1,988.0 billion
yen, a year-on-year increase of 37%, and adjusted operating profit was 251.2 billion yen, a year-on-year increaseof 32%.
[Europe, Russia, Middle East, India and Africa]
In Europe, unit sales of tires for passenger cars and light trucks trended favorably, surpassing the unit sales in
the previous fiscal year, and unit sales of tires for trucks and buses trended strongly, surpassing the unit sales in
the previous fiscal year. As a result, revenue was 870.0 billion yen, a year-on-year increase of 25%, and adjusted
operating profit was 66.4 billion yen, a year-on-year increase of 58%.
[China, Asia-Pacific]
Unit sales of tires for passenger cars and light trucks, and unit sales of tires for trucks and buses decreased
compared to the previous fiscal year. On the other hand, as a result of a higher selling price caused by priceincreases in various countries and the further depreciation of the yen pushing up revenue, revenue was 457.0
billion yen, a year-on-year increase of 18%, and adjusted operating profit was 39.9 billion yen, a year-on-year
decrease of 5%.
(Note) The amounts for segment results include inter-segment transactions that have been eliminated whencalculating the consolidated results.
c. Financial position(Current assets)
Current assets were 2,512.7 billion yen, increasing by 219.8 billion yen, or 10%, from the end of the previous
fiscal year, as cash and cash equivalents decreased by 268.6 billion yen, but trade and other receivables increased
by 205.0 billion yen and inventories increased by 255.2 billion yen.
(Non-current assets)
Non-current assets were 2,449.2 billion yen, increasing by 167.1 billion yen, or 7%, from the end of the previous
fiscal year, as other financial assets decreased by 35.9 billion yen, but property, plant and equipment increasedby 128.8 billion yen, and intangible assets increased by 23.5 billion yen.
(Current liabilities)
Current liabilities were 1,085.8 billion yen, increasing by 62.4 billion yen, or 6%, from the end of the previous
fiscal year, as bonds and borrowings decreased by 42.1 billion yen and liabilities directly associated with assets
held for sale decreased by 32.9 billion yen, but trade and other payables increased by 90.5 billion yen, and othercurrent liabilities increased by 21.9 billion yen.
(Non-current liabilities)
Non-current liabilities were 863.6 billion yen, decreasing by 12.6 billion yen, or 1%, from the end of theprevious fiscal year, as provisions increased by 11.8 billion yen, but bonds and borrowings decreased by 11.1
billion yen, and retirement benefit liabilities decreased by 16.9 billion yen.
Furthermore, total interest-bearing debt(Note) recorded in both current liabilities and non-current liabilities
decreased by 44.0 billion yen, or 5%, from the end of the previous fiscal year, to 767.2 billion yen.
(Note) Interest-bearing debt includes bonds and borrowings, and lease liabilities.
(Equity)
Total equity was 3,012.5 billion yen, increasing by 337.1 billion yen, or 13%, from the end of the previous fiscal
year, as we recorded profit attributable to owners of parent of 300.4 billion yen, despite a decrease of 119.0
billion yen due to dividends (owners of parent).

27

As a result, total assets at the end of the current fiscal year was 4,961.8 billion yen, increasing by 386.9 billion
yen, or 8%, from the end of the previous fiscal year. Furthermore, the ratio of equity attributable to owners ofparent to total assets for the current fiscal year was 59.8%, increasing by 2.3 percentage points from the end of
the previous fiscal year.

28

2)

Cash flows
Increase (Decrease)

2022

2021

Yen in billions

Yen in billions

Yen in billions

268.5

281.5

(13.1)Net cash provided by (used in) investing
activities(338.0)131.7(469.7)

Net cash provided by (used in) financing
activities(364.1)(379.3)

+15.2

65.2

48.4

+16.8

(368.5)82.3(450.7)

Cash and cash equivalents at beginning of
period

787.5

810.5

(23.0)Net increase (decrease) in cash and cash
equivalents included in assets held for sale

99.8

(105.3)+205.1

Cash and cash equivalents at end of period

518.9

787.5

(268.6)

Net cash provided by (used in) operating
activities

Effect of exchange rate changes on cash andcash equivalents
Net increase (decrease) in cash and cash
equivalents

Amount

The Group’s cash and cash equivalents (hereinafter “net cash”) decreased 268.6 billion yen during the current
fiscal year, to 518.9 billion yen, compared with a decrease of 23.0 billion yen during the previous fiscal year.
(Cash flows from operating activities)
Net cash provided by operating activities decreased 13.1 billion yen compared with the previous fiscal year, to268.5 billion yen. The principal contributors to the cash provided included profit before tax of 423.5 billion yen,
compared with 377.6 billion yen in the previous fiscal year, and depreciation and amortization of 282.1 billion
yen, compared with 250.4 billion yen in the previous fiscal year. These contributors offset an increase in tradeand other receivables of 139.6 billion yen, compared with 69.9 billion yen in the previous fiscal year, an increase
in inventories of 195.4 billion yen, compared with 140.2 billion yen in the previous fiscal year, and income
taxes paid of 86.2 billion yen, compared with 147.7 billion yen in the previous fiscal year.
(Cash flows from investing activities)
Net cash used in investing activities totaled 338.0 billion yen, compared with 131.7 billion yen provided in theprevious fiscal year. The principal contributor to the cash used was payments for purchase of property, plantand equipment of 221.3 billion yen, compared with 161.0 billion yen in the previous fiscal year.
(Cash flows from financing activities)
Net cash used in financing activities decreased 15.2 billion yen compared with the previous fiscal year, to 364.1
billion yen. The principal contributors to the cash used were repayments of short-term borrowings of 182.5
billion yen, compared with 220.3 billion yen in the previous fiscal year, repayments of long-term borrowings of
54.1 billion yen, compared with 109.1 billion yen in the previous fiscal year, redemption of bonds of 40.0 billion
yen (no such redemption in the previous fiscal year), purchase of treasury stock of 100.0 billion yen, comparedwith 10 million yen in the previous fiscal year, and dividends paid to owners of parent of 119.0 billion yen,
compared with 102.1 billion yen in the previous fiscal year. These contributors offset proceeds from short-termborrowings of 204.1 billion yen, compared with 94.7 billion yen in the previous fiscal year.

29

3)

Production, orders received and salesa. Production results
The production results by segment for the current fiscal year are as follows.
Name of segment

Amount (Yen in millions)YoY Change (%)

Japan

768,040+16.5

Americas1,641,896+38.6

Europe, Russia, Middle East, India and Africa

777,383+27.3

China, Asia-Pacific350,181

+12.3

Total

3,537,500+27.9(Note) The amounts are based on selling prices.

b. Orders received
Apart from undertaking made-to-order production for a small number of special products such as special hoses,
all the Group’s production is made to stock.
c. Sales results
The sales results by segment for the current fiscal year are as follows.
Name of segment

Amount (Yen in millions)YoY Change (%)

Japan889,692+16.0

Americas1,970,276+36.5

Europe, Russia, Middle East, India and Africa

856,443+24.8

China, Asia-Pacific376,713

+14.6

Other

16,907(16.2)

40+39.9

4,110,070+26.6

Corporate or elimination
Total

30

(2) Management’s analysis and discussion of the operating results, etc.
The following section describes management’s understanding, analysis and discussion of the Group’s operating
results, etc.
All references to possible future developments in the text are as of March 28, 2023, the filing date of this Annual
Securities Report.
1)

Significant accounting estimates and assumptions used in such estimates
The consolidated financial statements of the Group have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) pursuant to the provisions of Article 93 of the Regulation on
Terminology, Forms, and Preparation Methods of Consolidated Financial Statements (hereinafter the“Regulation on Consolidated Financial Statements”). Significant accounting policies, accounting estimates, andassumptions used in such estimates for preparing the consolidated financial statements are described in “3.
Significant Accounting Policies” and “4. Significant Accounting Estimates and Judgements Involving Estimates”
of “V. Financial Information, 1. Consolidated Financial Statements, etc. (1) Consolidated Financial Statements,
Notes to Consolidated Financial Statements.”

2)

Understanding, analysis and discussion of the operating results, etc. for the current fiscal year
The Group’s operating results, etc. for the current fiscal year are as follows.
Factors that have a material impact on the Group’s operating results and measures taken to address such factors
are described in “1. Management policy, management environment and issues to be addressed.”(Revenue, adjusted operating profit and operating profit)
Revenue increased by 864.0 billion yen (up 27% year-on-year) to 4,110.1 billion yen, driven by strategic pricemanagement and effects of the weak yen.
Adjusted operating profit increased by 88.3 billion yen (up 22% year-on-year) to 482.6 billion yen, driven bystrategic price management and effects of the weak yen. Operating profit increased by 64.5 billion yen (up 17%
year-on-year) to 441.3 billion yen, affected by the above.
As a result, the adjusted operating profit ratio was 11.7%, down 0.4 percentage points from fiscal year 2021.
Status by segment is described in “(1) Overview of operating results, etc.”(Profit attributable to owners of parent)
Profit attributable to owners of parent decreased by 93.7 billion yen (down 24% year-on-year) to 300.4 billion
yen. This was mainly due to a decrease of 91.3 billion yen in profit (loss) from discontinued operations, anincrease of 49.2 billion yen in income tax expense and an increase of 25.7 billion yen in finance costs, despite
an increase of 64.5 billion yen in operating profit.
3)

Capital financing and liquidity
Cash and cash equivalents decreased by 268.6 billion yen to 518.9 billion yen compared to the end of fiscal
year 2021. The status of cash flow by business activity is described in “(1) Overview of operating results, etc.”
Regarding financing, in addition to borrowings from financial institutions, we will continue to diversify ourfunding sources to diversify risks and reduce interest costs with methods such as direct financing throughdomestic corporate bonds and commercial paper, securitization of trade receivable, or leasing.
Funds will primarily be used to strengthen our management structure with sustainability at the core ofmanagement and implement strategic growth investments in the premium tire business, the solutions business,the chemical and industrial products and diversified products business, and the exploratory business. We will31

do this while utilizing funds to maintain a strong financial position and to return an appropriate level of profit
to our shareholders.
4)

Objective indicators for assessing the status of achievement of the management policy, management strategy
and management goals
As described in “1. Management policy, management environment and issues to be addressed,” the Group sees
2023, the base year for our “2030 Long Term Strategic Aspiration” and also the final year of our Mid TermBusiness Plan (2021-2023: revenue of 3,300 billion yen, adjusted operating profit of 450 billion yen, adjusted
operating profit ratio of 13%, ROIC of 10%, and ROE of 12%) which aims to return to a strong Bridgestone
capable of adapting to change, as an important year in building foundations for future growth.
In fiscal year 2022, revenue was 4,110.1 billion yen (up 864.0 billion yen year-on-year), adjusted operating
profit was 482.6 billion yen (up 88.3 billion yen year-on-year), adjusted operating profit ratio was 11.7% (down
0.4 percentage points year-on-year), ROIC was 9.4% (up 0.4 percentage points year-on-year), and ROE was
10.9% (down 2.0 percentage points year-on-year).
(Note) ROE is calculated based on the amount of profit attributable to owners of parent from continuing
operations.

4. Important business contracts
Not applicable.

32

5. Research and development activities
Guided by our vision of “Toward 2050, Bridgestone continues to provide social value and customer value as asustainable solutions company,” and using the “2030 Long Term Strategic Aspiration” as a roadmap, we are taking
on the challenge of amplifying the value of our Dan-Totsu products by positioning the premium tire business as acore business and enhancing its linkage with the solutions business. We are also promoting various initiatives tocreate social value and customer value in the chemical and industrial products and diversified products business,
as well as in the exploratory business. As we strive to realize the “2030 Long Term Strategic Aspiration,”technology innovations will be a new core competency that will be our strength. The Group’s technology
innovations will be conducted through three types of mastering: “mastering rubber,” “mastering road contact,” and“mastering manufacturing.” We will drive R&D activities based on these three types of mastering, and accelerateinnovation by combining our strong “real” capabilities cultivated on-site (genba) over the years, with “digital.”Through this, we will develop Dan-Totsu products and Dan-Totsu solutions.
To promote technology innovations, we redeveloped our R&D base in Kodaira, Tokyo and built the “Bridgestone
Innovation Park,” a global innovation hub. In April 2022, we launched the innovation center “B-Innovation,” aplace for “co-creation” to create new value with various partners and link it to business, and the test course “BMobility,” where we can promptly test and verify technology and product prototypes using actual vehicles. In
order to maximize the value generated from innovation through co-creation with various stakeholders, we willcontinue to develop places for co-creation. At the same time, we will drive culture transformation to value theautonomy of employees, through the introduction of the Activity Based Working (ABW) concept, which allows
each employee to freely design their own diverse work style. In July 2022, “B-Innovation” received the LEED
(Leadership in Energy and Environmental Design) GOLD certification, a program for assessing the environmental
performance of buildings and urban environments. We will also continue promoting ongoing efforts to realize andsupport a sustainable society.
With the Bridgestone Innovation Park at the core, the Group’s innovation sites “Digital Garage” in Europe and“Mobility Lab” in the U.S. will collaborate while drawing on their respective strengths to accelerate innovation.
In our premium tire business, we are promoting the creation of the Group’s unique “new premium,” and aredeveloping innovative tire technologies “ENLITEN” and “MasterCore” that will form the basis of Dan-Totsu
products, with an eye on sustainability and the evolution of mobility.
Tires with ENLITEN technology contribute to resource conservation and reduction of environmental impact byreducing weight, lowering rolling resistance, and improving wear resistance, while at the same time achieving
compatibility with various performance characteristics such as driving performance and durability, which havetraditionally been trade-offs. We will expand the value of ENLITEN from technology to products and businessmodels: by contributing to the extension in driving range of electric vehicles as a “new premium in the EV era”
for passenger car tires, and by combining product strategies and solutions that consider all processes until
retreading as a “new premium in the circular business era” for truck and bus tires. Furthermore, MasterCore, whichis adopted in off-the-road tires for mining vehicles, combines our proprietary new technologies including materials,
structure, and manufacturing technologies such as in-house steel cords to realize outstanding durability
performance. It also enables performance such as durability, vehicle speed, and payload to be customized andimproved in response to each customer’s operational conditions and mine layout without sacrificing otherperformances.
With ENLITEN and MasterCore as core elements of the “new premium,” we will promote the simultaneous
creation of value that can sometimes be contradictory, such as the reduction of environmental impact and businessgrowth, and work to achieve a balance of both social value and customer value.
Furthermore, Bridgestone Commonality Modularity Architecture (BCMA), the technology that supports the “newpremium,” divides the tire into three modules in the development and production processes: carcass (the tireskeleton), belt (which reinforces the tire), and tread (the tire surface). Module 1 (carcass) and Module 2 (belt) areshared among different products to simplify the value chain from development to production and sales, whereas
Module 3 (tread) is used to customize performance and differentiate products. In addition to customizing
performance according to each customer’s situation of use, we will realize the improvement of productivity andthe optimization of costs by streamlining the development and manufacturing processes. Furthermore, by sharing
33

modules, tire production can be flexibly adapted to the market environment and sales strategies of each region,
thereby enabling the maximization of sales opportunities and the streamlining of inventory management anddistribution costs. Through promoting BCMA, we will improve earnings across the entire value chain and build abusiness model that maximizes customer value.
Moreover, to evolve manufacturing that can provide a sustainable and stable supply of premium tires, we will
systematically promote the transition to green and smart factories. We strive to maximize customer value while
reducing environmental impact across the entire value chain, including streamlining development andmanufacturing processes.
In the solutions business, our growth business, we are promoting the development of technologies for tire-centric
solutions for truck and bus tires. We are expanding individual management of tires across their lifecycle from new
products to retread and maintenance from Europe to the global market using Radio Frequency Identification(RFID), an automatic recognition technology that enables contactless reading and writing of information using
wireless communication. We are also developing a next-generation RFID system for tires that maximizes data
communication performance through co-creation with TOPPAN FORMS CO., LTD. Furthermore, we will provide
solutions to contribute to further safety and cost optimization of customers’ operations through a combination ofservices such as “real-time monitoring” utilizing “Tirematics,” a digital tire monitoring tool that encourages abetter way to “use” tires.
In our specialty tire business, we have combined “Bridgestone MasterCore,” our Dan-Totsu product for off-theroad tires for mining vehicles, with digital tools to monitor vehicles and tires, as part of our efforts to develop
mining solutions that optimize mining operations.
Through co-creation with Tier IV, Inc., which provides solutions necessary for the development and operation ofsafe autonomous vehicles with peace of mind, we will contribute to the evolution of mobility such as in the researchand development and practical application of autonomous driving.
In our chemical and industrial products and diversified products business and exploratory business, we launched
the “EVERTIRE INITIATIVE” which encourages co-creation toward the recycling of tires, and have started
implementation of initiatives as our recycle business mainly in Japan and the U.S. In Japan, we are advancing a
joint project with ENEOS Corporation for the social implementation of chemical recycling technologies for usedtires. This project, supported by the Green Innovation Fund established by the Ministry of Economy, Trade andIndustry, aims to contribute to the improvement of resource recycling and carbon neutrality in the value chain of
the tire and rubber, and petrochemical industries through co-creation combining the knowledge and technologicalcapabilities of companies and academia.
In addition, we started a piece-picking (carrying out items one by one) demonstration experiment at a logistics siteusing a soft-robot hand toward the commercialization of the soft-robotics business. We aim to commercialize thesoft-robotics business on a small scale in the next Mid Term Business Plan (2024-2026) through co-creation withvarious partners.
As an initiative to achieve a sustainable and stable supply of natural rubber and improvement of their productivity,
we developed an optimization system for Para rubber tree plantation that utilizes big data through academic advice
from the Institute of Statistical Mathematics, part of the Research Organization of Information and Systems of theInter-University Research Institute, aiming for contribution to the realization of higher yield at rubber farms, andare working on stably increasing the productivity of natural rubber without expanding the plantation area.
Furthermore, to diversify natural rubber sources, we are also working to achieve practical use of natural rubber
derived from the guayule plant, which can be grown in arid regions. In the U.S., where we established the guayule
research and development farm and research center, we will continue to promote research and development
activities and investments with the goal of commercialization. In Japan, we have succeeded in developing atechnology to efficiently and stably increase guayule seedlings from high-quality seeds through joint research with
Kirin Holdings Company, Limited. Through co-creation with various partners, we will continue promoting
activities with the aim of achieving practical use and commercialization.
Based on co-creation, we also focus on promoting Digital Transformation (DX). We are also training and hiring
digital talent, including data scientists who can analyze and develop advanced AI and algorithms. Through a wide
range of exchanges in the digital field, including the establishment of the “Bridgestone × Tohoku University Co34

creation Lab” on the Tohoku University campus, we will foster digital talent and promote Bridgestone’s DX bydeepening collaboration with new partners.
In collaboration with U.S.-based Teledyne Brown Engineering, Inc., we are also developing tires for the crewed
lunar terrain vehicle in the Artemis Project led by the National Aeronautics and Space Administration (NASA).
We will contribute to international space exploration missions that take on the challenge of the harsh lunar
environment while carrying the dreams of humankind.
R&D expenses for the Group as a whole for fiscal year 2022 totaled 112.2 billion yen.
(Note) Since some of the Group’s R&D activities are not tied to specific segments and the results of such activities
may appear in multiple segments, the description of their status and amounts by segment have not been
included.

35

III. Facilities
1. Overview of capital expenditures
When considering capital expenditures, the Group carries out strategic investment activities while limiting
investees to a selected few with an eye toward maximizing return on capital investment. Based on this approach,
we made strategic growth investments in the current fiscal year, including investments to strengthen production atexisting plants to meet our premium strategy and to build our IT infrastructure. Furthermore, we continued toinvest in solution networks and in the technological innovation center Bridgestone Innovation Park. As a result,capital expenditures totaled 317.1 billion yen.
On a per-segment basis, the Group’s capital expenditures consisted of: Japan: 62.0 billion yen; the Americas: 138.8
billion yen; Europe, Russia, the Middle East, India and Africa: 49.9 billion yen; China, Asia-Pacific: 34.8 billion
yen; Other: 31.8 billion yen.
In addition, the transfer of the chemical products solutions business of BRIDGESTONE DIVERSIFIEDCHEMICAL PRODUCTS CO., LTD. and others in the Japan segment to EUF-2, which is organized, managed,
and operated by EU, was planned at the end of the previous fiscal year, and was completed in August 2022.
The Group plans to conduct separate transfer targeting a company at a later time.

36

2. Major facilities(1) The Company(As of December 31, 2022)
Carrying amount (Yen in millions)
Name of business location

Location

Name of Description
Land
Buildings Machinery
segment of facilities(Area inandandthousands ofstructures vehicles
m2)

Other

Kurume Plant

Kurume,FukuokaJapan

Production
facilities

7,942

3,556

1,043
(457)

860

Tokyo AC Tire Plant

Kodaira,
Tokyo

Japan

Production
facilities

1,693

1,092

–

56

Yokohama Plant

Totsuka-ku,
Yokohama

Japan

Production
facilities

9,258

774

Nasu Plant

Nasushiobara,
Japan
Tochigi

Production
facilities

2,539

2,964

Hikone Plant

Hikone,
Shiga

Japan

Production
facilities

10,405

14,664

Shimonoseki Plant

Shimonoseki,Japan
Yamaguchi

Production
facilities

5,221

3,962

Tosu Plant

Tosu, SagaJapan

Production
facilities

1,898

4,079

Tochigi Plant

Nasushiobara,
Japan
Tochigi

Production
facilities

4,512

7,070

Kumamoto Plant

Tamana,KumamotoJapan

Production
facilities

1,865

2,618

Amagi Plant

Asakura,FukuokaJapan

Production
facilities

2,862

4,170

Hofu Plant

Hofu,
Yamaguchi

Japan

Production
facilities

6,044

6,370

Seki Plant

Seki, Gifu

Japan

Production
facilities

1,810

1,444

Iwata Plant

Iwata,
ShizuokaJapan

Production
facilities

2,971

78

Saga Plant

Miyaki-gun,
Saga

Japan

Production
facilities

5,583

3,999

Kitakyushu Plant

WakamatsuKu,
Kitakyushu

Japan

Production
facilities

13,741

6,411

Technical Center

Kodaira,Tokyo

Corporate

Otherfacilities

39,44910,317

Chemical & Industrial
Products Technology
CenterTotsuka-ku,
Yokohama

Japan

Other
facilities

2,854

293

Headquarters and others

Chuo-ku,
Tokyo andothersCorporate

Otherfacilities

11,523

108

37

667
(177)
1,220
(195)
1,166
(658)
4,106
(285)
948
(182)
1,372
(151)
1,690
(142)
911
(376)
1,515
(482)
2,709
(150)
4,299
(115)
2,908
(236)
4,703
(374)
2,047
(3,036)–25,125
(267)

518
688
2,061
1,576
1,367
1,075
411
862
1,765
111
77
426

1,293

7,776

64

822

Right-of-use
assets(Area inthousands of
m2)
98
(11)
0
(0)
3,344
(-)
1,159
(40)
1,017
(-)
66
(-)
11
(-)
3,573
(444)
376
(6)
12
(1)
467
(-)
362
(-)
9
(-)
22
(-)
29
(-)
2,390
(630)
–

2,141
(12)

Total

Number of
employees

13,499

959

2,842

188

14,560

511

8,570

721

29,314

1,426

14,931

722

8,302

706

17,602

848

6,961

560

8,818

847

16,162

904

6,435

227

7,434

106

12,938538

26,177486

61,979

2,396

3,210

341

39,7201,417

(2) Domestic subsidiaries(As of December 31, 2022)
Carrying amount (Yen in millions)Company nameLocation

Name of Description
Land
Buildings Machinery
segment of facilities(Area inandandthousands ofstructures vehicles
m2)

BRIDGESTONE SPORTS
CO., LTD.

Chuo-ku,
Tokyo andothersJapan

Production
facilities
and others

542

286

BRIDGESTONE CYCLE
CO., LTD.

Ageo,
Saitama andothersJapan

Production
facilities
and others

1,948

436

38

1,839
(57)
1,720
(127)

Other

200

183

Right-of-use
assets(Area inthousands of
m2)
642
(-)
1,453
(-)

Total

Number of
employees

3,510

310

5,740

602

(3) Overseas subsidiaries(Americas)(As of December 31, 2022)
Carrying amount (Yen in millions)Company name(Name of business location)

Location

Name of Description
Land
Buildings Machinery
segment of facilities(Area inandandthousands ofstructures vehicles
m2)

BRIDGESTONEAMERICAS TIREOPERATIONS, LLC(La Vergne Plant)

U.S.

Americas

Production
facilities

3,068

9,030

BRIDGESTONEAMERICAS TIREOPERATIONS, LLC(Wilson Plant)

U.S.

Americas

Production
facilities

11,312

27,779BRIDGESTONEAMERICAS TIREOPERATIONS, LLC(Warren Plant)

U.S.

Americas

Production
facilities

8,449

12,930BRIDGESTONEAMERICAS TIREOPERATIONS, LLC(Aiken Plant)

U.S.

Americas

Production
facilities

18,585

21,377

BRIDGESTONEAMERICAS TIREOPERATIONS, LLC(Aiken Off Road Plant)

U.S.

Americas

Production
facilities

37,184

15,076

BRIDGESTONECANADA INC.
(Joliette Plant)

CanadaAmericas

Production
facilities

9,398

19,443

BRIDGESTONE DE
MEXICO, S.A. DE C.V.
(Cuernavaca Plant)

MexicoAmericas

Production
facilities

8,508

16,285

BRIDGESTONE DO
BRASIL INDUSTRIA E
COMERCIO LTDA.
(Sao Paulo Plant)

BrazilAmericas

Production
facilities

3,273

14,552

BRIDGESTONEAMERICAS TIREOPERATIONS, LLC(Technical Center)

U.S.

AmericasOtherfacilities

8,375

3,781

39

45
(550)

18
(1,803)532(3,662)

1,011(2,353)387(2,206)

7
(552)
3
(368)

83
(408)

230
(26,247)

Other

284

421

229

760

422

736

1,158

1,248

171

Right-of-use
assets(Area inthousands of
m2)
65
(-)

152
(-)

26
(-)

111
(-)

50
(-)

131
(-)
7
(-)

2,580
(-)

36
(-)

Total

Number of
employees

12,491980

39,682

1,838

22,166

1,046

41,844

1,590

53,119553

29,716

1,581

25,961

1,465

21,736

3,125

12,593558

(Europe, Russia, Middle East, India and Africa)(As of December 31, 2022)
Carrying amount (Yen in millions)Company name(Name of business location)

BRIDGESTONEPOZNAN SP. Z O.O.
(Poznan Plant)

BRIDGESTONESTARGARD SP. Z O.O.
(Stargard Plant)

BRIDGESTONETATABANYA TERMELO
KFT.
(Tatabanya Plant)

BRIDGESTONEHISPANIAMANUFACTURING
S.L.U.
(Bilbao Plant)
BRIDGESTONEHISPANIAMANUFACTURING
S.L.U.
(Burgos Plant)

BRIDGESTONE INDIA
PRIVATE LTD.
(Pune Plant)

BRIDGESTONE EUROPE
NV/SA(Technical Center)

Location

Name of Description
Land
Buildings Machinery
segment of facilities(Area inandandthousands ofstructures vehicles
m2)

PolandEurope,Russia,MiddleProduction
East,facilities
India andAfrica18,326

14,830PolandEurope,Russia,MiddleProduction
East,facilities
India andAfrica12,923

6,814

Hungary

Europe,Russia,MiddleProduction
East,facilities
India andAfrica10,592

10,542

Spain

Europe,Russia,MiddleProduction
East,facilities
India andAfrica

2,917

9,099

Spain

Europe,Russia,MiddleProduction
East,facilities
India andAfrica4,762

18,767

India

Europe,Russia,MiddleProduction
East,facilities
India andAfrica

6,353

5,715

Italy

Europe,Russia,MiddleOther
East,facilities
India andAfrica

5,798

3,284

40

177
(35)

531
(1,000)

1,169
(659)

9
(150)

–
(301)

–

1,069
(1,749)

Other

1,876

848

2,126

1,383

1,886

821

142

Right-of-use
assets(Area inthousands of
m2)

1,300
(300)

148
(-)

121
(-)

314
(-)

990
(-)

2,976
(759)

198
(-)

Total

Number of
employees

36,5101,984

21,264

1,070

24,551

1,383

13,722866

26,4051,430

15,865

1,912

10,490563

(China, Asia-Pacific)(As of December 31, 2022)
Carrying amount (Yen in millions)Company name(Name of business location)

Location

Name of Description
Land
Buildings Machinery
segment of facilities(Area inandandthousands ofstructures vehicles
m2)

BRIDGESTONE(TIANJIN) TIRE CO.,LTD.
(Tianjin Plant)

China

China,
AsiaPacific

Production
facilities

5,548

15,799–1,817

BRIDGESTONE (WUXI)TIRE CO., LTD.
(Wuxi Plant)

China

China,
AsiaPacific

Production
facilities

6,634

12,479–2,486

THAI BRIDGESTONE
CO., LTD.
(Nong Khae Plant)

ThailandChina,
AsiaPacific

Production
facilities

4,711

3,392

BRIDGESTONE TIRE
MANUFACTURING(THAILAND) CO., LTD.
(Chonburi Plant)

ThailandChina,
AsiaPacific

Production
facilities

4,605

7,318

PT BRIDGESTONE TIRE
INDONESIA(Karawang Plant)

Indonesia

China,
AsiaPacific

Production
facilities

1,685

2,734

BRIDGESTONESPECIALTY TIRE
MANUFACTURING(THAILAND) CO., LTD.

ThailandJapan

Production
facilities
and others

11,320

4,793

2,972
(1,215)

3,243
(611)

152
(368)

4,291
(822)

Other

2,864

2,864

975

1,207

Right-of-use
assets(Area inthousands of
m2)
681
(249)

500
(286)

–

71
(-)

4
(-)

23
(-)

Total

Number of
employees

23,845

1,425

22,0991,374

13,9392,559

18,101

2,137

5,550

1,579

21,634709(Notes) 1. The amounts are based on carrying amounts excluding construction in progress.
2. Land for the Company’s Tokyo AC Tire Plant is presented as part of the Technical Center because theirplots are not separated.
3. Land for the Company’s Technical Center includes 2,497,000 m2 of land, as well as 630,000 m2 of land
recorded as right-of-use assets, for test course sites under its management (located in Shibetsu, Hokkaido
and Nasushiobara, Tochigi).
4. Land for the Company’s Chemical & Industrial Products Technology Center is presented as part of the
Yokohama Plant because their plots are not separated.
5. Land for BRIDGESTONE AMERICAS TIRE OPERATIONS, LLC’s Technical Center includes
24,281,000 m2 of land for test course sites.
6. No major facilities are currently idle.

41

3. Plans for addition and retirement of facilities(1) Plan for expansion of significant facilities as of the end of the current fiscal year
Company name(Name of business location)
BRIDGESTONE AMERICASTIRE OPERATIONS, LLC

Location

Name ofsegment

Description offacilities

U.S.

Americas

Production
facilities(Warren Plant)

Plannedinvestment
Starting timing
amount(Yen in millions)

Plannedcompletion
timingSecond half of2022

Second half of2026

Approx. 70,000(2) Plans for addition and retirement of facilities in the next fiscal year (January 1, 2023 to December 31, 2023)
1)

Additions
The breakdown by segment is as follows.
Name of segment

Amount of planned capital
expenditures(Yen in millions)

Key descriptions and purposes of facilities, etc.
Investment to strengthen production at existing plants toJapan

81,000meet our premium strategy, investment to build our IT
infrastructure, investment in solution networks, etc.

Americas187,000

The same as above

Europe, Russia, Middle East,
India and Africa

66,000The same as above

China, Asia-Pacific54,000The same as above

Other

56,000The same as above

Total

444,000–(Notes)1. The amount of planned capital expenditures in the Japan segment includes the amounts of planned
capital expenditures at tire plants in Japan that produce tires for other segments.
2. Funds required for the planned capital expenditures are scheduled to be covered by funds on hand,borrowings and leases.
2)

Retirements
There are no plans for the retirement or sale of significant facilities, except for the retirement or sale of facilities
for recurring upgrades.

42

IV. Status of the Company
1. Shares of the Company(1) Total number of shares authorized, etc.
1)2)

Total number of shares authorizedClass

Total number of shares authorized to be issued (Shares)

Common stock

1,450,000,000

Total

1,450,000,000

Total number of shares issued

Class

Number of shares issued Number of shares issued
as of the end of the fiscal
as of the filing dateyear (Shares)(Shares)(December 31, 2022)(March 28, 2023)

Common stock

713,698,221

713,698,221

Total

713,698,221

713,698,221

43

Stock exchange on
which the Company islisted or authorized
financial instruments
business association towhich the Company isregistered
Tokyo Stock Exchange(Prime Market)
Fukuoka Stock
Exchange–

Details

Number of shares perunit: 100 shares–(2) Stock acquisition rights
1)

Stock option plans

Date of resolution

March 26, 2009

March 30, 2010

March 29, 2011

Classification and number of
eligible individuals

Members of the Board of theCompany: 9
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 20

Members of the Board of theCompany: 8
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 25

Members of the Board of theCompany: 9
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 36

97 units [77 units]

215 units

547 units

Common stock
9,700 shares [7,700 shares]

Common stock
21,500 shares

Common stock
54,700 shares

Exercise price (Note 1)

1 yen

Same as left

Same as left

Exercise period(Note 1)
Issue price and amount ofcommon stock to be increased
when shares are issued upon
exercise of the stockacquisition rights (Note 1)
Exercise conditions(Note 1)

From May 1, 2009 to April 30,
2029

From May 6, 2010 to April 30,
2030

From May 2, 2011 to April 30,
2031

Number of stock acquisitionrights(Notes 1 and 2)
Type, details, and number ofshares underlying the stockacquisition rights(Notes 1 and 3)

Issue price:
1,265 yen Issue price:
1,401 yen Issue price:
1,657 yenAmount of common stock to
Amount of common stock to
Amount of common stock to
be increased:
633 yen be increased:
701 yen be increased:
829 yen(Note 4)Same as left

Same as left

Matters concerning transfer ofstock acquisition rights (Note1)

Any acquisition of the stockacquisition rights throughtransfer must be approved by
the Company’s Board of
Directors. (Note 5)

Same as left

Same as left

Matters concerning granting ofstock acquisition rights in theevent of reorganization(Note 1)

–

–

44

–

Date of resolution

March 27, 2012

March 26, 2013

March 25, 2014

Classification and number of
eligible individuals

Members of the Board of theCompany: 9
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 35

Members of the Board of theCompany excluding outside
directors: 4
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 36

Members of the Board of theCompany excluding outside
directors: 4
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 46

899 units [840 units]

1,235 units [1,195 units]

1,054 units

Common stock
89,900 shares [84,000 shares]

Common stock
123,500 shares [119,500
shares]Common stock
105,400 shares

Exercise price (Note 1)

1 yen

Same as left

Same as left

Exercise period(Note 1)
Issue price and amount ofcommon stock to be increased
when shares are issued upon
exercise of the stockacquisition rights (Note 1)
Exercise conditions(Note 1)

From May 1, 2012 to April 30,
2032

From May 1, 2013 to April 30,
2033

From May 1, 2014 to April 30,
2034

Number of stock acquisitionrights(Notes 1 and 2)
Type, details, and number ofshares underlying the stockacquisition rights(Notes 1 and 3)

Issue price:
1,649 yen Issue price:
3,314 yen Issue price:
3,154 yenAmount of common stock to
Amount of common stock to
Amount of common stock to
be increased:
825 yen be increased:
1,657 yen be increased:
1,577 yen
(Note 4)Same as left

Same as left

Matters concerning transfer ofstock acquisition rights (Note1)

Any acquisition of the stockacquisition rights throughtransfer must be approved by
the Company’s Board of
Directors. (Note 5)

Same as left

Same as left

Matters concerning granting ofstock acquisition rights in theevent of reorganization(Note 1)

–

–

45

–

Date of resolution

Classification and number of
eligible individuals

Number of stock acquisitionrights(Notes 1 and 2)
Type, details, and number ofshares underlying the stockacquisition rights(Notes 1 and 3)
Exercise price (Note 1)

Exercise period(Note 1)

Issue price and amount ofcommon stock to be increased
when shares are issued upon
exercise of the stockacquisition rights (Note 1)

March 24, 2015

April 21, 2016

April 27, 2017

Members of the Board of theCompany excluding outside
directors: 3
Vice President-Officers notconcurrently serving as
members of the Board of theCompany: 48

Members of the Board of theCompany excluding nonexecutive members of theBoard:
2
Executive officers of theCompany not concurrently
serving as members of theBoard: 8
Vice President-Officers of theCompany not concurrently
serving as executive officers:
41

Plan A
Members of the Board of theCompany excluding nonexecutive members of theBoard:
2
Executive officers of theCompany not concurrently
serving as members of theBoard: 5
Vice President-Officers of theCompany not concurrently
serving as executive officers:
45
Plan B
Executive officers of theCompany not concurrently
serving as members of theBoard: 1
Vice President-Officers of theCompany not concurrently
serving as executive officers:
2

1,179 units [1,161 units]

1,742 units

Plan A 1,785 units
Plan B 71 units

Common stock
117,900 shares [116,100
shares]Common stock
174,200 shares

Common stock
Plan A 178,500 shares
Plan B 7,100 shares

1 yenSame as left

Same as left

Plan A
From May 13, 2017 to May
From May 1, 2015 to April 30, From May 7, 2016 to May 6,
12, 2037
2035
2036
Plan B
From July 6, 2017 to July 5,
2037
Plan A
Issue price:
3,578 yenAmount of common stock to
Issue price:
4,100 yen Issue price:
2,885 yen
be increased:
1,789 yenAmount of common stock to
Amount of common stock toPlan Bbe increased:
2,050 yen be increased:
1,443 yen
Issue price:
3,672 yenAmount of common stock to
be increased:
1,836 yen

Exercise conditions(Note 1)

(Note 4)Same as left

Same as left

Matters concerning transfer ofstock acquisition rights (Note1)

Any acquisition of the stockacquisition rights throughtransfer must be approved by
the Company’s Board of
Directors. (Note 5)

Same as left

Same as left

Matters concerning granting ofstock acquisition rights in theevent of reorganization(Note 1)–––

(Notes) 1. The information is as of the end of the current fiscal year (December 31, 2022). As for the information that has changed
between the end of the current fiscal year and the last day of the month prior to the filing date (February 28, 2023), the46

information as of the last day of the month prior to the filing date is presented in brackets. For all other matters, there has
been no change in the information since the end of the current fiscal year.
2. The number of shares underlying each stock acquisition right is 100.
3. In case of the following events subsequent to the day of allotment, the number of shares to be granted shall be adjusted
accordingly.
(1) If the Company conducts a share split (including a gratis allotment of shares; hereinafter the same for share splits)
or share consolidation, the number of shares to be granted shall be adjusted in accordance with the following formula,and the total number of shares underlying the stock acquisition rights shall be the number of shares to be granted
after adjustment multiplied by the total number of stock acquisition rights yet to be exercised or acquired by theCompany.
Number of shares to be granted after adjustment = Number of shares to be granted before adjustment × Ratio ofshare split or consolidation(Any fractions less than one share shall be rounded down when calculating the number of shares to be granted.)(2) In case of a compelling event that requires an adjustment to the number of shares to be granted, such as the Company
reducing its common stock or conducting a merger or company split, the number of shares to be granted shall be
adjusted to a reasonable extent, taking account of the factors such as the conditions of the reduction in common stock,
the merger or company split, and the total number of shares underlying the stock acquisition rights shall be thenumber of shares to be granted after adjustment multiplied by the total number of stock acquisition rights yet to be
exercised or acquired by the Company. Any fractions less than one share shall be rounded down when calculating
the number of shares to be granted.
4. (1) Even during the exercise period, a stock acquisition right holder may not exercise his/her stock acquisition rights
while he/she is holding a position of member of the Board, executive officer, or vice president-officer of the Company(including the day on which he/she retires).
(2) Stock acquisition rights may not be exercised in part.
(3) Other exercise conditions are prescribed in the stock acquisition right allotment agreement executed between the
Company and the stock acquisition right holder.
5. Other details are prescribed in the subscription requirements and the stock acquisition right allotment agreement executed
between the Company and the stock acquisition right holder.

2)

Shareholder rights plans
Not applicable.

3)

Other stock acquisition rights
Not applicable.

(3) Exercises of moving strike convertible bonds
Not applicable.
(4) Changes in the total number of shares issued, common stock and legal capital surplus

Date

Increase(decrease) in
the total
number ofshares issued(Thousands ofshares)Total number
Increase
Increase
Balance ofof shares
Balance of(decrease) in(decrease) inlegal capitalissuedcommon stock
legal capitalcommon stock
surplus(Thousands of(Yen in millions)surplus(Yen in millions)(Yen in millions)shares)(Yen in millions)January 19, 2018
(Note)(51,565)

761,536–

126,354–

122,079

January 21, 2020
(Note)(47,838)

713,698–

126,354–

122,079(Note) The decreases are due to retirements of treasury stock.

47

(5) Distribution of shares by shareholder category(As of December 31, 2022)
Status of shares (Number of shares per unit: 100 shares)
Category

Number ofshareholders

National
and local
governments

Financial
Financial instruments
institutions business
operators

Other
corporations

Foreign shareholders

Individuals
Other than
Individuals and others
individuals

Total

Number ofshares lessthan one unit
(shares)

1

223

52

885

885

179

91,462

93,687–

8

2,192,182

551,993

1,048,578

1,822,667

1,462

1,516,548

7,133,438

354,421

0.00

30.73

7.74

14.70

25.55

0.02

21.26

100.00–

Number ofshare units
held
Ratio tototal shares(%)(Notes) 1. Treasury stock (29,345,738 shares) is included in “Individuals and others” (293,457 units) and “Number of shares lessthan one unit” (38 shares). All 29,345,738 shares of treasury stock were the shares effectively held as of December 31,
2022.
2. “Other corporations” and “Number of shares less than one unit” include 16 units and 20 shares registered in the name ofJapan Securities Depository Center, Inc., respectively.

48

(6) Major shareholders(As of December 31, 2022)
Ratio of the number ofshares held to the total
number of shares issued(excluding treasury stock)
(%)

Name

Address

Number ofshares held(Thousandsof shares)

The Master Trust Bank of Japan,
Ltd. (Trust account)

2-11-3 Hamamatsucho, Minato-ku, Tokyo

103,655

15.15

Ishibashi Foundation

1-7-2 Kyobashi, Chuo-ku, Tokyo

76,693

11.21

Custody Bank of Japan, Ltd. (Trustaccount)

1-8-12 Harumi, Chuo-ku, Tokyo

39,837

5.82

SMBC Nikko Securities Inc.

3-3-1 Marunouchi, Chiyoda-ku, Tokyo

22,474

3.28

Hiroshi Ishibashi

Minato-ku, Tokyo

21,000

3.07

Nagasaka Corporation

1-7-2 Kyobashi, Chuo-ku, Tokyo

16,325

2.39

Nippon Life Insurance Company

1-6-6 Marunouchi, Chiyoda-ku, Tokyo

13,218

1.93

Japan Securities Finance Co., Ltd.

1-2-10 Nihonbashi Kayabacho, Chuo-ku,
Tokyo11,307

1.65

JPMorgan Securities Japan Co., Ltd. 2-7-3 Marunouchi, Chiyoda-ku, Tokyo

10,846

1.58

STATE STREET BANK WEST
CLIENT - TREATY 505234(Standing proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)

10,6941.56

326,050

47.64

1776 HERITAGE DRIVE, NORTHQUINCY, MA 02171, U.S.A.
(2-15-1 Konan, Minato-ku, Tokyo)

Total

—

(Notes) 1. Ishibashi Foundation is a public interest incorporated foundation, established for the purpose of contributing to the sounddevelopment of society through business that popularizes and improves fine arts as well as through donation and grants
program that support artistic, cultural and educational activities.
2. Shares held by trust banks include shares owned in the trustees’ capacity.
3. The Company holds 29,346 thousand shares of treasury stock, which are not included in the table above.
4. According to the change report of the statement of large-volume holdings, which was made available for public inspection
on January 10, 2023, the shares of the Company were held by Sumitomo Mitsui Trust Asset Management Co., Ltd. andits joint holder as of December 30, 2022 with the detail shown below. The above table is based on the shareholder register,
as the Company was unable to confirm the status of shares effectively held by these companies as of December 31, 2022.
The detail of the change report of the statement of large-volume holdings is as follows:(As of December 30, 2022)
Number of
Ratio of the number ofshares held
Name
Address
shares held to the total(Thousands
number of shares issued (%)
of shares)
Sumitomo Mitsui Trust AssetManagement Co., Ltd.

1-1-1 Shibakoen, Minato-ku, Tokyo

21,555

3.02

Nikko Asset Management Co., Ltd.

9-7-1 Akasaka, Minato-ku, Tokyo

14,4492.02

36,004

5.04

Total

–

49

(7) Voting rights
1)

Total number of shares issued(As of December 31, 2022)
Category

Number of voting rights(Units)Number of shares

Shares without voting rights
Shares with restricted voting rights(Treasury stock, etc.)
Shares with restricted voting rights(Other)

–

–

–

–

–

–

–

–

–

(Own holdings of treasury
stock)
Shares with full voting rights(Treasury stock, etc.)

Commonstock

Details–

29,345,700–(Cross-shareholdings)
CommonShares with full voting rights

Common(Other)stock

Shares less than one unit

Commonstock–

10,000stock

683,988,100

6,839,881–

354,421––

Total number of shares issued

713,698,221––

Total number of voting rights–

6,839,881–(Note) The number of shares in the “Shares with full voting rights (Other)” field includes 1,600 shares registered in the name ofJapan Securities Depository Center, Inc. The number of voting rights includes 16 units of voting rights relating to shares withfull voting rights registered in the name of Japan Securities Depository Center, Inc.

2)

Treasury stock(As of December 31, 2022)
Number of
Ratio of the number
shares held
Total number of shares held to theunder theof shares held total number ofnames ofshares issued (%)
othersAddress

Number ofshares held
under own
name

Bridgestone Corporation

3-1-1 Kyobashi, Chuo-ku,
Tokyo29,345,700–

29,345,700

4.11

Bridgestone Tire Nagano

2-18-20 Koyaminami,

Hanbai Co., Ltd.

Matsumoto City, Nagano

10,000–10,0000.00

29,355,700–

29,355,700

4.11

Name of shareholder

Total

–

50

2. Acquisition of treasury stock, etc.
[Class of stock] Acquisition of common stock pursuant to Article 155, items (iii), (vii), and (xiii) of the Companies
Act(1) Acquisition by resolution of the Shareholders’ Meeting
Not applicable.
(2) Acquisition by resolution of the Board of Directors
Acquisition of common stock pursuant to Article 155, item (iii) of the Companies Act
Category

Number of shares

Resolution at the Board of Directors (February 15, 2022)(Timing: February 17 to December 13, 2022)

Total amount (Yen)

25,000,000 (up to)

100,000,000,000 (up to)––Treasury stock acquired in the current fiscal year

20,225,300

99,999,502,624

Total number of shares and total amount of outstanding sharesof resolution

4,774,700

497,376

19.1

0.0

–

–

19.1

0.0

Treasury stock acquired prior to the current fiscal year

Ratio of non-exercised portion at the end of the current fiscal
year (%)
Treasury stock acquired during the period after the reporting
period to the Filing Date
Ratio of non-exercised portion as of the Filing Date (%)(3) Items not based on resolution of the Shareholders’ Meeting or Board of Directors
Acquisition of common stock pursuant to Article 155, item (vii) of the Companies Act
Category

Number of shares

Treasury stock acquired in the current fiscal year

Total amount (Yen)

870

4,325,187

Treasury stock acquired during the period after the reporting
82
393,610
period to the Filing Date
(Note) Treasury stock acquired during the period after the reporting period to the Filing Date does not include shares acquired
through demand for purchase of shares from shareholders holding less than one unit of shares between March 1, 2023 andthe Filing Date of the Annual Securities Report.

Acquisition of common stock pursuant to Article 155, item (xiii) of the Companies Act
Category

Number of shares

Treasury stock acquired in the current fiscal year

7,200

Treasury stock acquired during the period after the reporting

Total amount (Yen)
29,102,400

800
3,233,600
period to the Filing Date
(Note) This was an acquisition without contribution of some common stock allocated to the corporate executive manager andexecutive managers as restricted stock compensation.
Treasury stock acquired during the period after the reporting period to the Filing Date does not include shares acquired throughacquisition without contribution between March 1, 2023 and the Filing Date of the Annual Securities Report.

51

(4) Status of disposal and ownership of acquired treasury stock
The period after the reporting period to
the Filing Date
Total disposal amount Number of Total disposal amount(Yen)shares(Yen)

Current fiscal year
Category

Number ofsharesAcquired treasury stock that was offered tosubscribers

–

–

–

–

Acquired treasury stock that was cancelled

–

–

–

–

–

–

–

–

142,800

615,991,896

13,70063,870,744

71,200302,931,587––

104,800

423,621,512

78,600366,440,274

46

207,162––

Acquired treasury stock that was transferred due tomerger, share exchange, share issuance andcompany split
Other(Through exercise of stock option)(Through granting of performance-based stockcompensation)(Through granting of restricted stockcompensation)(Sales due to demand for sales of shares fromshareholders holding less than one unit of shares)
Number of treasury stock held

29,345,738–

29,254,320–(Note) The status of disposal and ownership of acquired treasury stock in the period after the reporting period to the Filing Datedoes not include treasury stock caused by the exercise of stock options between March 1, 2023 and the Filing Date of theAnnual Securities Report, and treasury stock from sales due to demand for sales of shares from shareholders holding lessthan one unit of shares.

52

3. Dividend policy
The Company regards the interests of shareholders as an important management priority and follows a basic policyof strengthening our management base in preparation for future business developments while working to improvebusiness results. In regard to distributing profits to shareholders, the Company conducts shareholder returns while
maintaining an appropriate financial position and securing the internal reserves necessary to rebuild earning power
mainly in our core businesses and for strategic growth investments to expand our solutions business, one of our
growth businesses. In determining dividend payments, the Company comprehensively evaluates factors including
business results, financial positions for the relevant fiscal period, medium-term earnings forecasts, investment
plans, and cash flows. Based on these considerations, the Company strives to live up to the expectations ofshareholders by striving to achieve stable and continuous increases of dividend payments targeting a consolidated
payout ratio of 40% by sustainably enhancing our corporate value.
The Company pays dividends of surplus twice a year, comprising year-end and interim dividends. Year-end
dividends are subject to a resolution of the Annual Shareholders’ Meeting, while interim dividends are subject toa resolution of the Board of Directors. In addition, the Articles of Incorporation prescribe that the Company may,by resolution of the Board of Directors, distribute interim dividends with the date of record for such dividends
being June 30 each year.
Based on the above policy, the dividend for the 104th Fiscal Period is set at an annual dividend of 175 yen per
share, comprising an interim dividend of 85 yen per share and a year-end dividend of 90 yen per share.
Further, the Company strives to strengthen the long-term stability of our management base by using internal
reserves to establish and strengthen production and sales systems and advance R&D activities in Japan andoverseas.
The appropriation of surplus through dividends relating to the current fiscal year is as follows.
Date of resolution

Total dividend amount (Yen in millions)

August 10, 2022:
Resolution of the Board of Directors

Dividend per share (Yen)59,18085

61,59290

March 28, 2023:
Resolution of the Annual
Shareholders’ Meeting53

4. Status of corporate governance(1) Overview of corporate governance1)

Basic approach to corporate governance and implementation of measuresa. Basic approach to corporate governance
The Company considers the enhancement of corporate governance to be one of its most important management
priorities. The Company believes that working to increase management quality and enhance the transparency ofdecision-making is indispensable and, accordingly, continually strives to strengthen corporate governance. This
ensures that the Group continues to fulfill its founding mission as stated in the Bridgestone Essence (corporate
philosophy): “Serving Society with Superior Quality.”
Based on this approach, in accordance with the responsibility and authority delineated in the Administrative
Authority Rules, and in line with the Policy Management Rules, the Company is committed to developing,
communicating, and abiding by fair, transparent decision-making and management policies and governs the
behavior of the entire executive organization.
b. Overview of the corporate governance system
In March 2016, the Company transitioned to the “Company with Nominating Committee, etc.” model ofcorporate governance, and has subsequently made continuous efforts to strengthen its corporate governancesystem. As part of these efforts, the Company amended its Articles of Incorporation at the Annual Shareholders’Meeting held on March 26, 2021, abolishing the Chairman of the Board system in favor of a system in which thechairperson of the Shareholders’ Meeting and the chairperson of the Board of Directors are each appointed
according to their respective roles.
These changes were made to continue enriching explanations on the Company’s management to its shareholders
by selecting the chairperson of the Shareholders’ Meeting from among representative executive officers at a
meeting of the Board of Directors, and to further enhance the function of overseeing execution by appointing thechairperson of the Board of Directors from among members of the Board (including outside directors) at a
meeting of the Board of Directors.
These amendments also expressly state in the Articles of Incorporation that the Board of Directors will appoint
the persons that convene the Shareholders’ Meeting and meetings of the Board of Directors.
At the Annual Shareholders’ Meeting held on March 28, 2023, 12 members of the Board (nine men and three
women) were elected, including eight outside directors (five men and three women). In accordance with theaforementioned amendments to the Articles of Incorporation, the chairperson of the Shareholders’ Meeting, thechairperson of the Board of Directors, and the persons that convene Shareholders’ Meeting and meetings of theBoard of Directors are appointed via resolution by the Board of Directors.
In addition, items related to decisions on basic management policies, important business execution matters, andother matters that must be determined by the Board of Directors are stipulated in the Articles of Incorporation,
the Board of Directors’ Rules, and Administrative Authority Rules. These matters are determined after careful
deliberations by the Board of Directors.
The Company has established and maintains a corporate governance system that functions through theappropriate, active performance of duties by the Nominating Committee, the Audit Committee, and theCompensation Committee, in conjunction with oversight of the executive officers and members of the Board by
the Board of Directors. The Nominating Committee has three members, all of whom are outside directors. This
committee determines standards and policies for the fair and transparent appointment and dismissal of membersof the Board and makes appropriate proposals to the Board of Directors for the appointment and dismissal of therepresentative executive officers under a fair and transparent succession plan. The Audit Committee has sevenmembers, consisting of five outside directors and two internal non-executive members of the Board. This
committee conducts audits regarding the business execution of executive officers and the execution of duties ofmembers of the Board. The two internal non-executive members of the Board has been appointed as full-timemembers of the Audit Committee by the Audit Committee. The Compensation Committee has three members,
54all of whom are outside directors. This committee deliberates on such matters as the details of remuneration formembers of the Board and executive officers.
In addition, to further increase the transparency of corporate governance, the Governance Committee and theCompliance Committee have been established as advisory committees to the Board of Directors. These advisorycommittees to the Board of Directors deliberate on the corporate governance system and related matters and on
future compliance activities as a whole and submit reports to the Board of Directors. Both advisory committees
are each composed of all eight outside directors, and the internal non-executive members of the Board, who aremembers of the Audit Committee, participate as observers.
The composition of the Board of Directors and each committee is as follows.
Name

Shuichi Ishibashi
Masahiro Higashi

Position
Member of the Board(Executive Officer)*
Member of the Board(Executive Officer)

CompensaAudit
Governance Compliancetion
Committee Committee Committee
Committee

Board ofDirectors

Nominating
Committee

○

–

–

–

–

–

○

–

–

–

–

–

Scott Trevor Davis

Outside Director

◎

○

○

–

◎

○

Yuri Okina

Outside Director

○

○

◎

–

○

○

Kenichi Masuda

Outside Director

○

◎

○

–

○

◎

Kenzo Yamamoto

Outside Director

○

–

–

◎

○

○

Yojiro Shiba

Outside Director

○

–

–

○

○

○

Yoko Suzuki

Outside Director

○

–

–

○

○

○

Yukari Kobayashi

Outside Director

○

–

–

○

○

○

Yasuhiro Nakajima

Outside Director

○

–

–

○

○

○

○

–

–

○

–

–

○

–

–

○

–

–

Member of the Board
Akira Matsuda

Tsuyoshi Yoshimi(Non-executive
Officer)Member of the Board(Non-executive
Officer)

As of March 28, 2023
(Note) 〇 indicates a member, ◎ indicates the chairperson of the body (the chairperson of the Board of Directors or the chairpersonof the committee).
* indicates the chairperson of the Shareholders’ Meeting.

55

The following indicates attendance at meetings of the Board of Directors of members of the Board and statutory
committees during the current fiscal year (January 1, 2022 to December 31, 2022) as of March 28, 2023.
Name

Board of Directors

Nominating Committee

Compensation
Committee

Audit Committee

Shuichi Ishibashi

13 of 14
(93%)

–

–

–

–

–

–

14 of 1421 of 21

13 of 13

(100%)(100%)(100%)

Yuri Okina

14 of 14
(100%)

21 of 21
(100%)

13 of 13
(100%)–

Kenichi Masuda

14 of 14
(100%)

21 of 21
(100%)

13 of 13
(100%)

–

–

–

–

–

Masahiro Higashi
Scott Trevor Davis

Kenzo Yamamoto
Yojiro Shiba

14 of 14
(100%)

14 of 14
(100%)
14 of 14
(100%)–

21 of 21
(100%)
21 of 21
(100%)

Yoko Suzuki

14 of 14
(100%)––

21 of 21
(100%)

Tsuyoshi Yoshimi

14 of 14
(100%)––

21 of 21
(100%)

Matters considered at the Board of Directors and statutory and advisory committees are as follows:

Board of Directors

During the current fiscal year, while confirming the progress of the Mid Term Business Plan (2021-2023) towardachieving the mid- to long-term business strategies decided at the Board of Directors meeting in April 2020, theBoard received reports and information sharing from operating divisions involved in business execution in atimely and appropriate manner, centered on reports from the Global CEO and Representative Executive Officerof discussions at the Global Executive Committee (hereinafter “Global EXCO”), and through deliberations onquarterly financial results and individual matters. The Board also discussed themes based on proposals fromoutside directors, from diverse perspectives. In the above discussions, particular emphasis was placed onsustainability initiatives, solutions strategy, glocal management structure, and investment in human capital.
<Statutory Committees>

Nominating Committee

While exchanging views on management strategies with executive officers in Japan and abroad, including the
Global CEO, and with management of strategic business units (SBUs), the Committee deliberated on the Board
succession planning and proposals related to the election of representative executive officers, and decided on
proposals for the election of members of the Board, including new nominees for members of the Board, to besubmitted to the Annual Shareholders’ Meeting.


Audit Committee

As described in “4 (3) 1) Audit by the Audit Committee.”

Compensation Committee

As described in “4 (4) 1) d. Activities of the Compensation Committee.”56

<Advisory Committees>

Governance Committee

The Committee deliberates on the evaluation results of the effectiveness of the Board of Directors’ functions andgiven matters, and makes recommendations to the Board of Directors, thereby leading to the continuous
improvement of corporate governance. The Committee also evaluates the Company’s efforts to improve its
governance system and proposes to enhance its effectiveness. Specifically, it deliberates on the contents of the“Report on the Corporate Governance Code,” which explains the Company’s initiatives and views on all theprinciples of the Corporate Governance Code, and reports its findings to the Board of Directors.
Compliance Committee

The Committee oversees compliance-related systems and activities by receiving reports on, and discussing
compliance activities in the Group, the penetration status of the Bridgestone Code of Conduct in the Group on a
global basis, and the operation status of the BridgeLine, a whistleblowing system.
Operating divisions involved in business execution adopts a system where four executive officers, two of whom
are representative executive officers, make decisions on the execution of operations delegated by the Board of
Directors and assume responsibility for the execution of those decisions as Global CEO, Joint Global COO (twopersons) and Global CTO, and together with the Global CFO, are collectively responsible for management.
Moreover, the CEO and COO have been placed in charge of each SBU, which comprise domestic and overseas
Group companies as well as internal companies and employ a system of mutual checks. The Company has
established the Global EXCO, which comprises these executive officers of the Company as well as persons
responsible for major business entities, as the highest global level executive body within the Group. This
committee aims to strengthen the checks and balances of the Group by debating and discussing management
strategy and issues (including sustainability) from a global perspective, which improves the transparency of thedecision-making process.
In addition, each operating division involved in business execution maintains a system for reporting to theappropriate representative executive officers of said divisions regarding the status of execution of duties. This
information is also regularly and promptly reported to the Board of Directors in order to aid in their deliberations,and these actions ensure that the Group maintains an effective supervisory function.

57

Global EXCO Members are as follows.
Name

Position

Shuichi Ishibashi

Global CEO (Representative Executive Officer)

Masahiro Higashi

Joint Global COO (Representative Executive Officer)

Paolo Ferrari

Joint Global COO (Executive Officer)
Global CSO
BSAM CEO

Masato Banno

Global CTO (Senior Vice President and Executive Officer)

Thomas Higgins

Global CBSO (Vice President and Senior Officer)
Secretary General of Global EXCO

Scott Damon

BSAM COO (Vice President and Senior Officer)

Laurent Dartoux

BSEMIA CEO (Vice President and Senior Officer)

Yoshikazu Shida

Global Corporate Strategy and Talent Creativity Enhancement (Vice President and Senior
Officer)

Emilio Tiberio

BSEMIA COO and CTO (Vice President and Senior Officer)

Nizar Trigui

BRIDGESTONE MOBILITY SOLUTIONS CEO (Vice President and Senior Officer)

Nobuyuki Tamura

G-MICA (Vice President and Senior Officer)

Yasuhiro Morita

BSCAP CEO (Executive Director)

Naoki Hishinuma

Global CFO (Executive Director)
As of March 28, 2023

(Note) Meanings of abbreviations are as follows.
CSO: Chief Business Solutions Officer
CTO: Chief Technology Officer
CBSO: Chief Business Strategic Officer

c. Reasons for adopting current corporate governance system
Under the corporate mission, the Group has set forth a vision that states, “Toward 2050, Bridgestone continues
to provide social value and customer value as a sustainable solutions company.” Thus, building an optimal
corporate governance system is a top priority, and we believe that continually improving the quality ofmanagement and ensuring transparency in decision-making are absolutely essential. As part of this enhancementof the governance system, the Company has adopted the current system to both further strengthen internal
controls and evolve into a sustainable solutions company capable of proactively addressing the changing businessenvironment.

58

The following chart provides an overview of the Company’s corporate governance system.

As of March 28, 2023

d. Status of the development and implementation of internal control systems
At the Company’s Board of Directors’ meeting held on December 20, 2021, the following policies were resolved
regarding the development of internal control systems required pursuant to the provisions of Article 416,
paragraph (1), items (i) (b) and (e) of the Companies Act.
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 in2020 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 the vision since.
As part of the initiatives undertaken, segregation between oversight and execution of the duties, oversightby the Board of Directors, and appropriate and more efficient business operations are all regarded as thefundamental 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 fordevelopment and implementation of internal control systems.
In order to further strengthen internal controls, evolve into a sustainable solutions company to be able toproactively address the changing business environment, and continue to implement the ever more effective
and efficient planning and execution of our business activities in accordance with the policies on thedevelopment of the internal control systems, the Company’s Board of Directors delegates the development
and implementation of internal control systems that are in line with the set policies to the Representative
Executive Officers and oversee the implementation work.
2. Matters that are necessary in the execution of duties by the Audit Committee(1) In order to assist the work of the Audit Committee, the Company appoints an Executive Director
dedicated to audit, and under the Executive Director, establishes a department dedicated to assist the
Audit Committee with their duties.
Decisions on the selection and replacement of the Executive Director dedicated to audit are madebased on prior consultations with and consent of the Audit Committee. The same applies when the
Audit Committee requests replacement of the Executive Director.
59

The performance assessment of the Executive Director dedicated to audit takes the performance
evaluations conducted by the Audit Committee into consideration.
(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.
(3) All the expenses associated with the execution of duties by the Audit Committee are fully compensated.
(4) In order to ensure an effective audit by the Audit Committee, opportunities are created for Membersof the Audit Committee to gain an understanding of the flow of important decision-making practices
in the Company and the status of business operations.
3. Systems to ensure that the execution of duties by Executive Officers complies with relevant laws andregulations and the Articles of Incorporation, and matters that are necessary for the appropriate executionof business operations by the Company and the corporate group consisting of the Company and its
subsidiaries.
(1) Information concerning execution of duties by Executive Officers is documented without delay andadequately retained. Any significant information related to the execution of business is reported to theBoard of Directors without delay.
(2) A risk management system is developed and implemented to manage risks of incurring losses.
(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 are reallocated.
(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 of Incorporation, systems
for J-SOX Act compliance are developed and implemented in accordance with “System for Ensuring
Appropriateness of Statements 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”).
(5) In order to ensure proper execution of business operations at subsidiaries, policies are communicatedacross the Group; authorities are appropriately reallocated; a reporting framework for subsidiaries toreport their execution of business to the Company is developed and implemented; and audits are
conducted globally.
Risk management systems, compliance systems, systems against organized crime and other violent
groups, and systems for J-SOX Act compliance are developed and implemented within each subsidiary.
2)

Overview of agreement limiting damage compensation liability

The Company has entered into agreements with Members of the Board (excluding persons who are Executive
Members of the Board, etc.) that limits his/her damage compensation liability of Article 423, paragraph (1) of theCompanies Act, pursuant to Article 25, paragraph (2) of the Articles of Incorporation of the Company based on
the provision in Article 427, paragraph (1) of the Companies Act. The maximum amount of his/her liability basedon said agreement shall be the higher of either 10 million yen or the minimum liability amount prescribed in
Article 425, paragraph (1) of the Companies Act.

3)

Overview of directors and officers liability insurance agreement with directors and officers as insureds

The Company has entered into a directors and officers liability insurance agreement provided for in Article 4303, paragraph (1) of the Companies Act with an insurance company, insuring Members of the Board, Executive
60

Officers, and Vice President-Senior Officers to cover any liability or dispute resolution costs that may result fromclaims for damages related to the performance of their duties. However, certain exclusions apply, including fordamages arising from actions taken with the knowledge that they violate laws or regulations. The insurance
premiums are fully borne by the Company.

4)

Number of Members of the Board

The Articles of Incorporation state that the number of Members of the Board of the Company shall be not morethan 15.
5)Requirements for election of Members of the Board

The Articles of Incorporation state that the resolution for election of Members of the Board shall be made withshareholders present at a meeting who hold shares representing one-third (1/3) or more of the voting rights ofshareholders who are entitled to exercise voting rights, by a majority of the voting rights of the attending
shareholders.

6)

Matters to be resolved at the Shareholders’ Meeting that can be resolved by the Board of Directors

The Articles of Incorporation state that the following matters can be resolved by the Board of Directors without
resolution of the Shareholders’ Meeting.
• The ability to purchase treasury stock(To enable a flexible response)• The ability to exempt Members of the Board from liability(To enable the full demonstration of capabilities expected in their roles)• The ability to exempt Executive Officers from liability(To enable the full demonstration of capabilities expected in their roles)• The ability to distribute interim dividends(To provide stable return of profits to shareholders)
The additional rule in the Articles of Incorporation states that the Company may exempt the liability of any person
who served as a Corporate Auditor prior to the transition to a Company with Nominating Committee, etc.
7)

Special resolution requirements for Shareholders’ Meetings

For the smooth operation of the Shareholders’ Meetings, the Articles of Incorporation state that with respect tospecial resolution requirements for Shareholders’ Meetings set forth in Article 309, paragraph (2) of theCompanies Act, resolutions may be adopted on the condition that shareholders holding at least one-third (1/3) ofthe voting rights granted to all shareholders are present at the meeting and that a majority of at least two-thirds(2/3) of those voting rights is obtained.

61

(2) Members of the Board and Executive Officers
1)

List of Members of the Board and Executive Officers

Members of the Board and Executive Officers include 11 males and 3 females. (Percentage of female Membersof the Board and Executive Officers: 21.4%)
a. Members of the Board
Position

Name

Date of birth

Personal history

Term
Number ofofshares held
officeApril 1977

Member of the Board

Shuichi Ishibashi

January 19, 1954

Member of the Board

Masahiro Higashi

February 11, 1961

Joined Bridgestone Tire Co., Ltd.
(currently Bridgestone Corporation)
June 2003
Director, Consumer Tires Business
January 2005 Vice President and Officer
July 2012
Vice President and Senior Officer
January 2014 Senior Vice President
Note
January 2016 Executive Vice President
2
March 2016
Executive Vice President and Executive
OfficerJanuary 2019 Vice Chair and Representative Executive
OfficerMarch 2020 Member of the Board and Representative
Executive Officer and Global CEO(present)
April 1985
Joined Bridgestone Corporation
January 2013 Director, Global Customer and Market
Research Division and Director,
Advanced Business Planning Division
October 2013 Vice President and Officer
March 2017
Vice President and Senior Officer
January 2019 Senior Vice President and Executive
OfficerJanuary 2020 Vice Chair and Representative Executive
Officer
Note
July 2020
Representative Executive Officer, Global
2
COO, and Global CAO
March 2021
Member of the Board, Representative
Executive Officer, Global COO andGlobal CAO
September
Member of the Board, Representative
2021
Executive Officer and Global COO
May 2022

April 1990

April 2001
Member of the Board
Note 1

Scott Trevor
Davis

December 26, 1960 April 2006

March 2011

62

Member of the Board, Representative
Executive Officer and Joint Global COO(present)
Researcher, The Japan Institute ofLabour (currently The Japan Institute forLabour Policy and Training)
Professor, Department of International
Economics, Reitaku University
Note
Professor, Department of Global
2
Business, College of Business, Rikkyo
University (present)
Member of the Board as Outside
Director, Bridgestone Corporation(present)

19,00015,1001,000

Position

Name

Date of birth

Personal history
April 1984
April 1992
April 1994
April 2000

Member of the Board
Note 1

Yuri Okina

March 25, 1960

June 2006
March 2014

June 2014
April 2018
April 1988
January 1997
Member of the Board
Note 1

Kenichi Masuda

January 11, 1963

March 2011
March 2016

April 1976
December
2003
July 2005

July 2006
Member of the Board
Note 1

Kenzo Yamamoto

January 21, 1954
May 2008
June 2012
March 2016

June 2018
April 1974
March 2003
May 2005
April 2009
Member of the Board
Note 1

Yojiro Shiba

August 7, 1950
June 2013
June 2015
March 2018

April 2019

63

Term
Number ofofshares held
officeJoined Bank of Japan
Joined The Japan Research Institute,
LimitedSenior Researcher, The Japan ResearchInstitute, Limited
Chief Researcher, The Japan ResearchInstitute, LimitedCounselor, The Japan Research Institute, Note
Limited2
Member of the Board as Outside
Director, Bridgestone Corporation(present)
Vice Chairman of the Institute, The
Japan Research Institute, Limited
Chairperson of the Institute, The Japan
Research Institute, Limited (present)
Attorney-at-law (present)
Partner, Anderson Mori (Japanese law
firm: currently Anderson Mori &Tomotsune) (present)
Note
Outside Corporate Auditor, Bridgestone2
Corporation
Member of the Board as Outside
Director, Bridgestone Corporation(present)
Joined Bank of Japan
General Manager for the Americas andChief Representative in New York, Bankof Japan
Director-General, Payment andSettlement Systems Department, Bank ofJapan
Director-General, Financial System andBank Examination Department, Bank of NoteJapan
2
Executive Director, Bank of Japan
Chairman, NTT Data Institute ofManagement Consulting, Inc.
Member of the Board as Outside
Director, Bridgestone Corporation(present)
Representative, Office KY Initiative(present)
Joined The Industrial Bank of Japan,
Limited (currently Mizuho Bank, Ltd.)Managing Executive Officer, Mizuho
Bank, Ltd.
Executive Officer, Oriental Land Co.,
Ltd.
Representative Director and Executive
Vice President Officer, Oriental Land
NoteCo., Ltd.
2
External Director, AMUSE INC.
Director and Vice Chairman, AMUSE
INC.
Member of the Board as Outside
Director, Bridgestone Corporation(present)
Representative Director and President,
AMUSE INC.

–

–

2,700

–

Position

Member of the Board
Note 1

Member of the Board
Note 1Name

Yoko Suzuki

Yukari Kobayashi

Member of the Board

Yasuhiro

Note 1

Nakajima

Member of the Board

Akira Matsuda

Date of birth

Personal history
April 1998

Attorney-at-law (present)

April 1998

Joined Takagi Godo Law OfficeNovember
September 21, 1970 2002
March 2018

April 17, 1963

October 13, 1961

January 16, 1963

64

Term
Number ofofshares held
officePartner, Suzuki Sogo Law OfficeNote(present)
2
Member of the Board as Outside
Director, Bridgestone Corporation(present)
April 1987
Joined IBM Japan, Ltd.
July 2002
Senior Manager, Overall Management of
System Products Marketing, IBM Japan,
Ltd.
January 2007 Director in charge of Public Sector,
Global Business Service, IBM Japan,
Ltd.
January 2007 Executive Officer, IBM Business
Consulting Services KK
March 2016
Growth Leader for Mercer Far East
Zone; Chief of Staff, Mercer Japan Ltd.
Note
January 2018 Director, Mercer Investment Solutions
Ltd.
2
February 2018 Chief Operating Officer, Mercer Japan
Ltd.
September
Corporate Officer; Corporate Strategy
2018Management Lead, Area Transformation
Lead, and Chief of Staff, Microsoft Japan
Co., Ltd.
March 2020
Representative Partner, Amanda Life
Consulting LLC (present)
March 2023
Member of the Board as Outside
Director, Bridgestone Corporation(present)
April 1984
Joined Hitachi, Ltd.
March 1995
Certified Public Accountant (present)
July 2007
Representative Partner,
PricewaterhouseCoopers Aarata(currently PricewaterhouseCoopers
Aarata LLC)
July 2012
Executive Officer (Leader of Quality
Management), PricewaterhouseCoopers
AarataNote
July 2014
General Manager, Nagoya Office,2
PricewaterhouseCoopers Aarata LLC
July 2017
Oversight Board Member,PricewaterhouseCoopers Aarata LLC
July 2022
Representative, Nakajima CPA Office(present)
March 2023
Member of the Board as Outside
Director, Bridgestone Corporation(present)
April 1987
Joined Bridgestone Corporation
September
Seconded to
1989
BRIDGESTONE/FIRESTONE INC.
(currently BRIDGESTONEAMERICAS, INC.) (USA)January 2011 Director, eco-Activities Promotion
Division, Bridgestone Corporation
March 2014
Vice President and Officer, Environment
Note
January 2017 Vice President and Senior Officer,
2
Responsible for Global Innovation
January 2019 Vice President and Senior Officer;
CQMO, Responsible for Quality
Management
January 2022 Lead Expert; CQMO; Assistant to
Executive Vice President, Responsible
for Quality Management
March 2023
Member of the Board (present)

2,900

–

–

3,800

Position

Name

Date of birth

Personal history
April 1988
January 2010

Member of the Board

Tsuyoshi Yoshimi

September
2012
October 2013

May 26, 1964

March 2017
March 2019

Term
Number ofofshares held
officeJoined Bridgestone Corporation
Seconded to BRIDGESTONE ASIA
PACIFIC PTE. LTD. (Singapore)
Seconded to BRIDGESTONE (CHINA)Note
INVESTMENT CO., LTD. (Shanghai)
2
Director, Finance Division, Bridgestone
Corporation
Vice President and Officer, Auditing
Member of the Board (present)

Total

2,700

47,200(Notes) 1. Of the Members of the Board, Mr. Scott Trevor Davis, Ms. Yuri Okina, Mr. Kenichi Masuda, Mr. Kenzo Yamamoto, Mr.
Yojiro Shiba, Ms. Yoko Suzuki, Ms. Yukari Kobayashi and Mr. Yasuhiro Nakajima are outside directors.
2. The terms of office of Members of the Board shall expire at the close of the Annual Shareholders’ Meeting relating to thelast business year that ends within one year after their election at the Annual Shareholders’ Meeting held on March 28,
2023.
3. The Company is a Company with Nominating Committee, etc. The structure of committees is described in “4 (1)Overview of corporate governance.”
4. Meanings of abbreviations are as follows.
CAO: Chief Administrative Officer
CQMO: Chief Quality Management Officer

b. Executive Officers
Position

Name

Date of birth

Personal history
April 1977

Representative Executive Officer
Global CEO

Shuichi Ishibashi

January 19, 1954

June 2003
January 2005
July 2012
January 2014
January 2016
March 2016
January 2019
March 2020

April 1985
January 2013
Representative Executive Officer
Joint Global COO (Responsible for
BSJP and BSCAP)
Chairman of the Board,
BRIDGESTONE ASIA PACIFIC PTE.
LTD.
Concurrently responsible for BSJP
Chairman and Representative Board
Member, BRIDGESTONE TIRE
SOLUTION JAPAN CO., LTD.,
Chairman and Representative Board
Member, BRIDGESTONE CYCLE
CO., LTD.

October 2013
March 2017
January 2019
January 2020
Masahiro Higashi

February 11, 1961

July 2020
March 2021

September
2021
May 2022

65

Term
Number ofofshares held
officeJoined Bridgestone Tire Co., Ltd.
(currently Bridgestone Corporation)
Director, Consumer Tires Business
Vice President and Officer
Vice President and Senior Officer
Senior Vice President
Note
Executive Vice President
1
Executive Vice President andExecutive Officer
Vice Chair and Representative
Executive Officer
Members of the Board, Representative
Executive Officer and Global CEO(present)
Joined Bridgestone Corporation
Director, Global Customer and Market
Research Division and Director,
Advanced Business Planning Division
Vice President and Officer
Vice President and Senior Officer
Senior Vice President and Executive
Officer
Vice Chair and Representative
Note
Executive Officer
1
Representative Executive Officer,
Global COO, and Global CAO
Members of the Board, Representative
Executive Officer, Global COO andGlobal CAO
Members of the Board, Representative
Executive Officer and Global COO
Members of the Board, Representative
Executive Officer and Joint Global
COO (present)

19,00015,100Position

Name

Date of birth

Personal history
September
2016

Executive Officer
Joint Global COO(Responsible for BSAM and BSEMIA)
Global CSO
BSAM Member of the Board, CEO
and President

Paolo Ferrari

April 10, 1970

January 2017
January 2018
January 2019
May 2022

Senior Vice President and Executive
Officer
Responsible for Technology, Quality
Management
Global CTO

April 1986
July 2016
Masato Banno

September 18, 1963 January 2017
January 2018
January 2019

Total

Joined BRIDGESTONE EUROPE
NV/SA
Members of the Board, President andCEO
Vice President and Senior Officer
Senior Vice President and Executive
Officer
Executive Vice President andExecutive Officer
Executive Officer and Joint Global
COO (present)
Joined Bridgestone Corporation
Director, Tire Development Division
No. 3
Vice President and Officer
Vice President and Senior Officer
Executive Officer and Senior Vice
President (present)

Term
Number ofofshares held
office

Note
1

5,000

Note
1

8,200

47,300(Notes) 1. The terms of office of Executive Officers shall expire at the close of the first meeting of the Board of Directors convened
after the close of the Annual Shareholders’ Meeting relating to the last business year that ends within one year after theirelection.
2. Meanings of abbreviations are as follows.
CSO: Chief Business Solutions Officer
CTO: Chief Technology Officer

66

2)

Outside Directors and Outside Corporate Auditors

The Company has elected eight outside directors (as of March 28, 2023).
The Company believes that outside directors contribute to the strengthening of corporate governance, including
maintaining appropriate decision-making at meetings of the Board of Directors. To that end, the outside directors
provide independent opinions concerning deliberations, etc. on proposals at the Board of Directors that reflect
their wealth of experience and expertise, which are based on their diverse backgrounds and fields of specialization.
To ensure the appropriate composition of the Board of Directors, the nominees for the Company’s outside
directors are determined through strict appointment procedures at the Company’s Nominating Committee inaccordance with the “Nominating Policy for Appointment to the Board” (described at the end) prescribed by theCompany’s Nominating Committee, and the reasons for appointment are as follows.
Name

Main occupation

Reasons for appointment

Scott Trevor Davis

Professor, Department of Global
Business, College of Business, Rikkyo
University

Mr. Scott Trevor Davis has excellent academic
knowledge in the field of sociology and international
business administration, as well as abundant wisdom
regarding CSR and sustainability in Japan and overseas.
Since his appointment as Outside Director of theCompany, he has been contributing to appropriate
decision making of the Board of Directors. Since 2021,
he has been playing a leading and substantial role as
Chairperson of the Board of Directors in further
enhancing deliberations at the Board meetings, etc. In
addition to participating in active deliberations as amember of the Nominating Committee and a member of
the Compensation Committee, he has also been playing aleading role as Chairperson of the GovernanceCommittee in the discussion to further enhance theCompany’s governance framework. In view of theseexperience, insights and achievements, Mr. Scott Trevor
Davis is expected to continue to fulfill these roles, andthe Company has determined that he would appropriately
execute the duties of an Outside Director.

Yuri Okina

Chairperson of the Institute, The Japan Ms. Yuri Okina has significant research experience
Research Institute, Limited
regarding financial systems and financial administration,
as well as abundant knowledge of economics andfinancial situations. Since her appointment as Outside
Director of the Company, she has been contributing toappropriate decision making of the Board of Directors.
Since 2016, she has been playing a leading andsubstantial role as Chairperson of the Compensation
Committee in developing a compensation design thatpromises a more adequately incentivizing effect, etc.,
while also participating in active deliberations as amember of the Nominating Committee. In view of theseexperience, insights and achievements, Ms. Yuri Okina is
expected to continue to fulfill these roles, and theCompany has determined that she qualifies for Outside
Director.

67

Name

Main occupation

Reasons for appointment

Kenichi Masuda

Attorney-at-law (Partner of Anderson
Mori & Tomotsune)

Mr. Kenichi Masuda has abundant professional careerand experience as an attorney-at-law at law firms inJapan and overseas, as well as his expertise as
represented by his current experience of teaching
corporate law at a graduate school of law. Since his
appointment as Outside Director of the Company, he has
been contributing to appropriate decision making of theBoard of Directors. Since 2021, he has been playing aleading and substantial role as Chairperson of theNominating Committee in the succession planning ofMembers of the Board, etc. In addition to participating in
active deliberations as a member of the Compensation
Committee, he has also been playing a leading role as
Chairperson of the Compliance Committee in thediscussion to further improve the Company’s complianceframework. In view of these experience, insights andachievements, Mr. Kenichi Masuda is expected tocontinue to fulfill these roles, and the Company has
determined that he would appropriately execute theduties of an Outside Director.

Kenzo Yamamoto

Representative, Office KY Initiative

Mr. Kenzo Yamamoto has abundant expertise on
financial market and financial systems, as well as his
deep insight regarding corporate management and risk
management. Since his appointment as Outside Directorof the Company, he has been contributing to appropriate
decision making of the Board of Directors. Since 2018,he has been playing a leading and substantial role as
Chairperson of the Audit Committee in strengthening our
auditing system on a global scale, etc. In view of theseexperience, insights and achievements, Mr. Kenzo
Yamamoto is expected to continue to fulfill these roles,
and the Company has determined that he qualifies for
Outside Director.

Yojiro Shiba–

Mr. Yojiro Shiba has insights into the creation of value
and establishment of business from the perspective ofcustomers based on his deep insight as the result ofabundant corporate management experience in thefinancial industry and entertainment business industry.
Since his appointment as Outside Director of theCompany, he has been contributing to appropriate
decision making of the Board of Directors. As a memberof the Audit Committee, he has been participating in
active deliberations and working to promote thestrengthening of our auditing system on a global scale,etc. In view of these experience, insights andachievements, Mr. Yojiro Shiba is expected to continue tofulfill these roles, and the Company has determined thathe qualifies for Outside Director.

68

Name

Main occupation

Reasons for appointment

Yoko Suzuki

Attorney-at-law (Partner of Suzuki Sogo Ms. Yoko Suzuki has high expertise as an attorney-at-law,
Law Office)and abundant experience and deep insight as an outside
auditor and auditor of other companies and various
associations. Since her appointment as Outside Directorof the Company, she has been contributing to appropriate
decision making of the Board of Directors. As a memberof the Audit Committee, she has been participating in
active deliberations and working to promote thestrengthening of our auditing system on a global scale,etc. In view of these experience, insights andachievements, Ms. Yoko Suzuki is expected to continue tofulfill these roles, and the Company has determined that
she would appropriately execute the duties of an Outside
Director.

Yukari Kobayashi

Representative Partner, Amanda Life
Consulting LLC

Yasuhiro Nakajima

Certified Public Accountant
Mr. Yasuhiro Nakajima has abundant professional career(Representative of Nakajima CPA Office) and experience in accounting audit and advisory services
as a Certified Public Accountant, and possesses expertisesuch as that involved in his teaching of accounting andaudit at a university. In view of these experience andinsights, he is expected to contribute to appropriate
decision making of the Board of Directors, and theCompany has determined that he would appropriately
execute the duties of a new Outside Director.

Ms. Yukari Kobayashi has deep insight regarding thedigital field and business strategy through her extensive
practical and management experience in the IT andconsulting industries. In view of these experience andinsights, she is expected to contribute to appropriate
decision making of the Board of Directors, and theCompany has determined that she qualifies for a new
Outside Director.

As a result of comparison with the Company’s Guidelines for Determining Whether Outside Directors Are
Sufficiently Independent, Mr. Scott Trevor Davis, Ms. Yuri Okina, Mr. Kenichi Masuda, Mr. Kenzo Yamamoto,
Mr. Yojiro Shiba, Ms. Yoko Suzuki, Ms. Yukari Kobayashi, and Mr. Yasuhiro Nakajima, who are outside directors
with no relationship of special interests with the Company, and there is no concern that conflicts of interest withgeneral shareholders would arise, the Company has designated them independent outside directors. The
Company’s Guidelines for Determining Whether Outside Directors Are Sufficiently Independent are describedat the end.
In addition, outside directors’ holdings of the Company’s stock are described under “4 (2) 1) a. Members of theBoard.”

69

[Nominating Policy for Appointment to the Board]
The nominated candidates shall possess the character and insight required to be able to put the Bridgestone
Essence (corporate philosophy) into practice, the experience necessary to supervise the execution of business asa member of the Board, and the tenacity needed to perform the duties expected of a member of the Board of theCompany.

(Outside Directors)
The Company takes into account the following:(1) The candidate’s expertise, experience and ability to make judgments from an independent perspective.
(2) The candidate’s absence of connections with the Group that would undermine their independence from theGroup.**Specifically, the candidate’s ability to meet the conditions for independence as set out in the Company’s“Guidelines for Determining Whether Outside Directors Are Sufficiently Independent”(Members of the Board other than Outside Directors)
The Company takes into account the following:(1) The candidate’s scope of knowledge and experience regarding the business and its operations.
(2) The candidate’s managerial ability to delineate the Company’s ideal direction while taking actions informedby the changing business environment.

[Guidelines for Determining Whether Outside Directors Are Sufficiently Independent]
To ensure that the Company achieves the objectivity and transparency necessary for appropriate corporate
governance, it is best that outside directors be as independent as possible.
The Company has accordingly established these guidelines concerning the requisite independence of Outside
Directors in the Company. If any of the following items applies to an Outside Director (or to a candidate for such
position. The same applies hereafter), they shall be deemed to lack the required level of independence for theCompany. A person who:
1. In the past was an Executing Person of the Company or a consolidated subsidiary of the Company(collectively, the “Group”) (Note 1)
2. Is a major shareholder of the Company (Note 2)
3. Is an Executing Person of a company or entity to which one of the following is applicable:(1)

A major supplier or customer of the Group (Note 3)(2)

A major lender to the Group (Note 4)(3)

A company or entity of which the Group holds 10% or more of the voting shares

4. Is a certified public accountant belonging to an auditing firm that is an accounting auditor of the Group
5. Is a professional, such as a consultant, accountant, tax accountant, attorney-at-law, judicial scrivener, or
patent attorney who has received a large amount (Note 5) of money or other assets from the Group
6. Is a person who has received a large amount of donation from the Group (Note 6)
7. Is an Executing Person of another company, which position constitutes an interlocking director or corporate
auditor position (Note 7) for the Outside Director70

8. Has a close relative (Note 8) to which any of the above items 1 through 7 applies (but other than withrespect to item 4 or 5, limited to a significant person (Note 9))
9. Is a person to which any of the above items 2 through 8 has applied within the last five years
10. Notwithstanding the above, is a person with respect to which any other particular factors exist that could
create a conflict of interest with the Company(Notes) 1. This means one who is currently an executive member of the Board, executive officer, vice presidentofficer or other similar person or employee (each, for purpose of these Guidelines, an “Executing
Person”) or who has been an Executing Person of the Group at any time in the past.
2. A “major shareholder” shall mean a shareholder holding 5% or more of the voting shares, either intheir own name or a third party’s name, as of the end of the Company’s fiscal year. If the major
shareholder is an organization such as a company (or other legal entity) or partnership, it shall meanan Executing Person of the organization.
3. A “major supplier or customer” means a supplier or customer of the Group’s products whose annual
total transactions with the Group exceeds 2% of the Company’s consolidated aggregate sales or 2%of the consolidated aggregate sales of the other party. In addition, automobile manufacturers which
are customers of the Group’s tire products, and synthetic rubber manufacturers and steel cordmanufacturers which are suppliers to the Group are considered major suppliers or customers
regardless of actual annual transaction amounts.
4. A “major lender” means a financial institution from which the Group receives loans where theoutstanding loan amount as of the end of the Company’s fiscal year exceeds 2% of the Company’s
consolidated gross assets or 2% of the financial institution’s consolidated gross assets.
5. “Large amount” means the occurrence of either of the following in response to the professional’s
provision of services:(1) In the event that the professional is providing services to the Group as an individual, the receipt
by the professional from the Group of compensation (excluding remuneration for services as amember of the Board or executive officer) of an amount exceeding 10 million yen per year.
(2) In the event the professional services are provided to the Group by an organization such as acompany (or other legal entity) or a partnership, the receipt by the organization from the Groupof the total amount of compensation exceeding 2% of the annual aggregate income of theorganization. Even if not more than 2%, if the organization receives more than 10 million yen
per year as compensation for services in which the professional was directly involved, it isconsidered a “large amount.”
6. This means the recipient of a donation exceeding 10 million yen per year from the Group. If therecipient is an organization such as a company (or other legal entity) or a partnership, any memberof the organization who is directly involved with the research, education or other activity related tothe donation.
7. “Interlocking director or corporate auditor position” means an Executing Person of the Group who
is an Outside Director or Corporate Auditor for another company, where an Executing Person of suchother company is also an Outside Director of the Company.
8. A “close relative” means a spouse or a relative within two degrees of family relation.
9. A “significant person” means a member of the Board, executive officer, vice president-officer or an
Executing Person who is a division manager or above, or an Executing Person with authority similar
to any of the foregoing.
3)

Mutual cooperation of oversight or audit performed by Outside Directors with internal audit, the Audit
Committee audit and accounting audit, as well as relationship with the internal control department

Outside Directors consider financial statements and policies for development of internal control systems, anddirectly or indirectly receive reports from the internal control department, through deliberation of proposals at
the Board of Directors such as information on operations based on such development policies, providing effective
oversight of executive officers and members of the Board. Mutual cooperation of oversight or audit performed71

by Outside Directors with internal audit, and the Audit Committee audit and accounting audit are described in “4.
(3) Status of audit.”72

(3) Status of audit
1)

Audit by the Audit Committee

The Company’s Audit Committee consists of a total of seven members, comprising five outside directors and two
full-time members. Mr. Yasuhiro Nakajima, a member of the Audit Committee, has abundant professional
experience in accounting audit and consulting as a Certified Public Accountant, as well as considerable
knowledge in finance and accounting. Mr. Tsuyoshi Yoshimi, a full-time member of the Audit Committee, wasin charge of accounting operations of the Company for many years and has considerable knowledge in financeand accounting.
In order to assist with the duties of the Audit Committee, the Company has assigned a corporate executive
manager dedicated to audit, and established a department led by such corporate executive manager that isdedicated to assist the Audit Committee with their duties. Decisions on the appointment and replacement of thecorporate executive manager dedicated to audit are made with the consent of the Audit Committee, while theperformance assessment of such corporate executive manager is determined by taking the performance
evaluations conducted by the Audit Committee into consideration.
The Audit Committee convened a total of 21 meetings during the current fiscal year. The total time of the meetingscame to 73 hours, which works out to around three and a half hours per meeting. The status of attendance by
individual members of the Audit Committee is as follows.
Position

Name

Attendance at Audit Committee meetings

Chairperson of the Audit Committee

Kenzo Yamamoto

21 of 21 (100%)

Member of the Audit Committee (Note)

Keikou Terui

21 of 21 (100%)

Member of the Audit Committee (Note)

Seiichi Sasa

21 of 21 (100%)

Member of the Audit Committee

Yojiro Shiba

21 of 21 (100%)

Member of the Audit Committee

Yoko Suzuki

21 of 21 (100%)

Full-time member of the Audit Committee(Note)

Hideo Hara

21 of 21 (100%)

Full-time member of the Audit Committee

Tsuyoshi Yoshimi

21 of 21 (100%)(Note) Retiring on March 28, 2023.
There were 14 resolutions passed by the Audit Committee during the current fiscal year. The main content ofthese resolutions was related to audit policies and planning, assignment of duties of committee members,
agreement on audit fees of the accounting auditor, and appointment of the accounting auditor. There were also
136 reports. These reports included the audit report from the accounting auditor, reports from the Internal
Auditing Department on internal audits and Group internal audit activities, risk management activity reports fromoperating divisions involved in business execution, and reports on the activities of the full-time members of the
Audit Committee.

The Audit Committee conducts audits through cooperation with the Internal Auditing Department and theaccounting auditors. Key matters considered by the Audit Committee during the current fiscal year were as
follows.

73

a. The auditing policy, audit plans and the distribution of duties
The Audit Committee has formulated an audit plan with the following items as priority issues to confirm
for the current fiscal year: the status of our efforts regarding the Bridgestone E8 Commitment newly
established in March 2022; the impact on our business and internal control systems of the reorganizationof production bases and businesses and strategic growth investments that we are pursuing in our mid- tolong-term business plan; and the status of the improvement of the Group’s risk management system andresponse to business risks such as cyberattacks, war, and COVID-19.
b. Development and implementation status of internal control systems
Based on the “Three Lines of Defense” approach, the Audit Committee checks the status of improvements
made to the monitoring system for the Group’s internal control through cooperation with the Internal
Auditing Department and provides advice accordingly. The committee also receives direct reports on andchecks the status of internal control, including risk management, with respect to IT security, humanresources and labor, quality management, etc.
c. The development status of the Group’s internal audit systems
The Audit Committee checks the development status of the Group’s internal audit systems throughcooperation with local audit committees established at overseas SBUs and internal audit divisions in Japanand abroad as well as reports on the Group’s internal audit activities provided by the Internal Auditing
Department.
d. The appropriateness of the accounting auditor’s audit plans, audit methods, and results
The Audit Committee receives and checks the content of reports on audit plans, quarterly review results,
and accounting audit results provided by the accounting auditor. The committee also receives an
explanation of the key audit matters (KAM) from the accounting auditor and checks the status.
e. Evaluation and appointment of the accounting auditor
The Audit Committee evaluates matters including audit plans, auditing systems, independence,
specialization, and status of performance of duties, based on reports that are received from the accounting
auditor and relevant internal departments. The Committee also reviews the process for appointing a new
accounting auditor and implements it in coordination with relevant internal divisions. As a result, the Audit
Committee has decided to replace the accounting auditor for the 105th Fiscal Period (fiscal year 2023) andhas requested to submit the proposal for the Annual Shareholders’ Meeting. The process for selecting theaccounting auditor is as follows.

74

Process

Timing

Activities
Prepared a request for proposal covering items to be

Sending a request for audit proposal

Information provision from the Company
Receipt of report on audit proposal

June 2021

confirmed by the Company and sent it to the candidate audit
firms.

July 2021 –Provided each audit firm with the information necessary to

September 2021

prepare audit proposals

November 19, 2021

Received presentations of audit proposals from each audit
firm, followed by a question-and-answer session

Discussions among members of the Audit November 2021 –Committee
October 2022

Members of the Audit Committee participating in the process
held multiple discussions on the proposals

November 2021 –Exchanged views with relevant internal divisions multiple
times as discussions among members of the Audit

Exchange of views with the executive side
Resolution at the Audit Committee on thedetails of the proposal for the appointmentof an accounting auditor to be submitted to
the Shareholders’ Meeting

October 2022

Committee progressed
Resolved to appoint KPMG AZSA LLC as a candidate foraccounting auditor for the 105th Fiscal Period (fiscal year

November 8, 2022

2023)

The Audit Committee audits the execution of duties by Members of the Board and Executive Officers as well as
the internal control systems. These duties are performed under the auditing policy and audit plans determined by
the Audit Committee, and, among other actions, and involve inquiry into the status of business execution(including risk management), reviewing reports from the Internal Auditing Department and the full-timemembers of the Audit Committee, engaging in opinion exchanges with Representative Executive Officers,
attending meetings of the Global EXCO and other important meetings, holding onsite visits at major Group
companies and business locations in Japan and overseas, and conducting interviews with members of therespective audit committees and corporate auditors at these sites. The Audit Committee also receives reports andexplanations on audit plans, audit methods, and results from the accounting auditor, and then verifies theappropriateness of the results.
In addition to the duties above, the full-time members of the Audit Committee engage in daily information
gathering in cooperation with the Internal Auditing Department and others to improve audit effectiveness. Other
members of the committee also attend Global EXCO and other meetings, and conduct onsite visits at majordomestic and overseas Group companies.
When there are spikes in COVID-19 infections, the Audit Committee uses web conferencing tools to hold its
meetings as a preventive measure. Some in-person visits to major Group companies overseas have not beenpossible due to COVID-19; however, web conferencing tools have been used to facilitate online interviews as analternative. The accounting auditors have also provided reports regarding the impact of COVID-19 on accounting
audits and the Company has confirmed the status of the accounting auditor’s response to ensure appropriate
auditing. Should another abnormal event that could hinder the performance of audits occur in the future, we will
ensure that proper audits can still be performed by utilizing web conferencing tools and other digital technologies
and by further strengthening cooperation with accounting auditors.
2)

Status of internal audits

The Group’s internal auditing organization is comprised of the Internal Auditing Department and the SBU internal
audit divisions established at each SBU. The Internal Auditing Department receives instructions from and reports
directly to the Audit Committee, independent of any operating divisions involved in business execution, from theperspective of ensuring effective audits. It also reports directly to the Global CEO.
The Internal Auditing Department formulates an annual audit plan, reports to the Audit Committee, and conducts
internal audits primarily of the effectiveness of Group governance and internal control on each function, operating75

division, and Group companies in Japan and overseas. In addition, the Internal Auditing Department supervises
activities of the Group’s internal audit system and works with the internal audit divisions at each SBU on activities
aimed at establishing an optimal internal audit system for the Group. Moreover, in January 2022, the internal
audit functions that had been dispersed among the operating divisions of the Company were consolidated into a
new division to further strengthen the internal audit function within Japan. As of March 28, 2023, the Internal
Auditing Department had 32 employees, and internal audit divisions of overseas SBUs had approximately 80
employees.
The Audit Committee, the Group’s internal auditing organization (comprising the Internal Auditing Department
and SBU internal audit divisions), and the accounting auditor exchange information and opinions as necessary
and generally maintain close contact, thereby working to further increase audit efficiency and effectiveness. Eachdepartment in charge of internal control provides regular reports to the Audit Committee concerning the status of
the development and operational status of their assigned internal control.
3)

Status of accounting auditsa. Auditing firm
Deloitte Touche Tohmatsu LLC
b. Consecutive audit period
Since 2001
c. Certified public accountants who performed the audit
Mr. Yasuhiko Haga
Mr. Takuma Ueki
Ms. Akiko Fujiharu
d. Composition of assistants involved in auditing operations
24 certified public accountants, two associate members of the Japanese Institute of Certified Public
Accountants, and 50 other staff members are involved in the accounting auditing operations.
e. Policy and reasons for appointment of accounting auditor
To ensure the appropriate performance of duties by the accounting auditor, the Audit Committee appoints anappropriate accounting auditor from perspectives such as the quality control system, auditing systems, audit
plans and audit fee levels.
The Audit Committee dismisses the accounting auditor with a unanimous resolution in the event where it
determines the accounting auditor falls under any items of Article 340, paragraph (1) of the Companies Act.
In this case, the members of the Audit Committee appointed by the Audit Committee must report its decisionand the reason for dismissal to the first Shareholders’ Meeting after the dismissal. In addition to the above,in the circumstances where the Audit Committee deems it necessary for securing an appropriate auditing
system or for its improvement, the Audit Committee determines details of the proposal for non-reappointmentof the accounting auditor, based on which the Board of Directors submits the proposal to the Shareholders’Meeting.
According to the above policy, as a result of receiving the necessary reports and evaluation based on
predetermined evaluation criteria concerning the auditing systems, independence, audit plans, and status of
performance of duties of Deloitte Touche Tohmatsu LLC, the current accounting auditor, the Audit
Committee has reappointed the same firm as the accounting auditor for the 104th Fiscal Period (fiscal year2022).
76

At the 104th Annual Shareholders’ Meeting held on March 28, 2023, KPMG AZSA LLC was newly elected
as the Company’s accounting auditor. For reasons for selecting KPMG AZSA LLC, please refer to theextraordinary securities report in “f. Change of accounting auditor.”f. Change of accounting auditor
At the 104th Annual Shareholders’ Meeting held on March 28, 2023, the election of the accounting auditor
was resolved as follows.
104th Fiscal Period (from January 1, 2022 to December 31, 2022) (Consolidated and Non-consolidated)
Deloitte Touche Tohmatsu LLC
105th Fiscal Period (from January 1, 2023 to December 31, 2023) (Consolidated and Non-consolidated)
KPMG AZSA LLC
The matters included in the extraordinary securities report are as follows.

(a) Name of the auditing certified public accountants, etc. pertaining to the changeA) Name of the elected auditing certified public accountant, etc.
KPMG AZSA LLC
B) Name of the retiring auditing certified public accountant, etc.
Deloitte Touche Tohmatsu LLC(b) Date of the change
March 28, 2023 (The date of the 104th Annual Shareholders’ Meeting)(c) Date on which the retiring auditing certified public accountant, etc. assumed the position as auditing
certified public accountant, etc.
March 29, 2001(d) Matters concerning the opinion, etc. on audit reports prepared by the retiring auditing certified public
accountant, etc. during the most recent three years
Not applicable.

(e) Reason and background that led to the decision to make the change or the change
The term of office of the Company’s Independent Auditor, Deloitte Touche Tohmatsu LLC, expired at
the close of the 104th Annual Shareholders’ Meeting held on March 28, 2023. Due to the fact that Deloitte
Touche Tohmatsu LLC has served as the Company’s Independent Auditor for many years, and taking
into consideration the rotation system used for auditing firms in other countries, the Audit Committee
decided to accept proposals from multiple auditing firms on a periodic basis and compare said proposals.
The Audit Committee concluded that the appointment of KPMG AZSA LLC as the new Independent
Auditor would bring a new perspective to auditing. Furthermore, the Audit Committee deemed that
KPMG AZSA LLC’s specialization, independence, quality management system, global auditing structure,and the like all well meet the requirements set by the Audit Committee.

77

(f) Opinion on the reason and background that led to the change set forth in (e) aboveA) Opinions of the retiring auditing certified public accountant, etc.
We have received a reply that they have no particular opinion.
B) Opinion of the Audit Committee
The Committee deems it appropriate.

g. Evaluation of the accounting auditor
The Audit Committee prescribes evaluation criteria that conforms with the practical guidelines prescribed by
the Japan Audit & Supervisory Board Members Association, and evaluates the accounting auditor annuallyin light of such criteria. When conducting such evaluation, the Audit Committee deliberates on reports mainly
on matters, including the auditing systems, independence, specialization, audit plans, and status of
performance of duties that are received from the accounting auditors and relevant internal departments.
From the standpoint of independence of the accounting auditor, the Audit Committee has established a newpolicy unique to the Company to limit non-audit fees provided by the accounting auditor and its group andreceives regular reports from the accounting auditor to verify the status thereof.

78

4)

Audit fees
a. Fees to auditing certified public accountants, etc.
Previous fiscal year
Category

Fees for audit services(Yen in millions)

The Company
Consolidated
subsidiaries
Total

Current fiscal year

Fees for non-audit
services (Yen in
millions)

Fees for audit services(Yen in millions)

Fees for non-audit
services (Yen in
millions)

233

2

239

6

234

–

238

–

467

2

477

6

(Notes) 1. The audit agreement entered into by the accounting auditors and the Company does not separately stipulate the fee
amounts for the audit under the Companies Act, the audit under the Financial Instruments and Exchange Act, and theaudit on consolidated financial statements in the English language. Furthermore, those three amounts cannot be practicallydistinguished from one another, so this report lists the total amount that should be paid to the accounting auditors.
2. The details of non-auditing services provided to the Company by auditing certified public accountants, etc. are as follows.
(Previous fiscal year)
Services (non-auditing services) other than those set forth in Article 2, paragraph (1) of the Certified Public Accountants
Act for which the Company has paid fees to the accounting auditors are the English translation services for consolidated
financial statements and other documents.
(Current fiscal year)
Services (non-auditing services) other than those set forth in Article 2, paragraph (1) of the Certified Public Accountants
Act for which the Company has paid fees to the accounting auditors are the English translation services for annual
securities reports and other documents.
3. In regard to fees for audit services in the previous fiscal year, additional fees other than the above came to 26 million yen.

b. Fees to companies in the same network as the auditing certified public accountants, etc. (i.e., the Deloitte
network) (excluding a.)Previous fiscal year
Category

Fees for audit services(Yen in millions)

Current fiscal year

Fees for non-audit
services (Yen in
millions)

Fees for audit services(Yen in millions)

Fees for non-audit
services (Yen in
millions)

The Company

–

30

–

28

Consolidated
subsidiaries

1,937

964

2,392

522

Total

1,937

994

2,392

550

(Note) The details of non-auditing services provided by companies in the same network as the auditing certified public accountants,
etc. (i.e., the Deloitte network) are as follows.
(Previous fiscal year)
Non-auditing services provided to the Company and consolidated subsidiaries are advisory services concerning tax andIT, etc.
(Current fiscal year)
Non-auditing services provided to the Company and consolidated subsidiaries are advisory services concerning tax andIT, etc.

c. Details of fees for other important audit services
Not applicable.

79d. Policy for determining audit fees
The Company determines audit fees paid to its accounting auditors based on verification of the number ofrequired man-hours and the appropriateness of the amounts according to the audit plans. The consent of the
Audit Committee is obtained for such determination.
e. Reasons for the Audit Committee’s consent to the audit fees
As a result of confirmation and consideration of the details of the accounting auditors’ audit plans, the trendof the previous audits and the actual fees, the basis of calculation for the fee quotation and non-audit fees,
the Audit Committee deems the fees for services set forth in Article 2, paragraph (1) of the Certified Public
Accountants Act to be reasonable and provides the consent pursuant to Article 399, paragraph (1) of theCompanies Act.

80

(4) Remuneration for Members of the Board and Executive Officers
1)

Board Members’ and Executive Officers’ remuneration for the current fiscal year

a. Total amount of remuneration, amount of each type of remuneration, and the number of recipients by thecategories of Members of the Board and Executive Officers
Position category

Fixed
remuneration

Amount of each type of remuneration (Yen in millions)
Performance-based remuneration
Stockcompensation
Stock
Stock
Annual(Special
compensation compensation
bonusesAwards)(PSU)(RSU, etc.)

Total

Number ofrecipients (inpersons)

Members of the Board(Internal)

107

–

–

–

–

107

4

Members of the Board(Outside)

169

–

–

–

–

169

8

Executive Officers

239

287

211

198

156

1,092

5

Total

515

287

211

198

156

1,368

15

(Notes) 1.

Allowance for Executive Officers who hold concurrent positions as Members of the Board (additional allowance forMembers of the Board with concurrent duties) is included in the total amount of remuneration for Members of theBoard.

2.

3.

The amount of fixed remuneration in the above table (total amount of base remuneration, additional allowance forMembers of the Board with concurrent duties, additional allowance for the chairpersons, and additional allowance forcommittee chairs) is the total amount of remuneration paid during fiscal year 2022 (fully paid in cash).
Of the annual bonuses in the above table, Group-wide performance-based bonus is the amount expected to be paid in
March 2023 based on the results of business performance, etc. of fiscal year 2022 (fully paid in cash), and performancebased bonus (area of responsibility) is the total amount of the actual payment during fiscal year 2022 (reflecting theprevious fiscal year’s business performance) and the standard amount expected to be paid in March 2023 (fully paid in
cash; including the amount of actual payment to Directors who retired at the end of January 2023).

4.

The stock compensation of the performance-based remuneration in the above table represents the total amount expensed
up to fiscal year 2022 (including amount of actual payment to Directors who retired at the end of January 2023;
excluding the portion disclosed in prior years).
- The Performance Share Unit (PSU) is awarded in the form of shares of the Company’s common stock or othersecurities according to Group-wide performance over a three-year period. (50% is paid in cash equivalent to themarket value; however, those retiring before the relevant period ends are paid fully in cash equivalent to the market
value.)- The Restricted Stock Unit, etc. (RSU, etc.) is a system introduced in fiscal year 2022, under which RSU and
Restricted Stock (RS) are granted according to the evaluation of initiatives related to sustainability, including ESG,
and transformation in each fiscal year. Transfer restriction for RS will be lifted at the time of retirement, and for
RSU, cash is paid equivalent to the market value of the number of stock units at the time of the lifting of the RS
transfer restriction. The ratio of emphasis on RS and RSU is set at 50:50.

5.

Special Awards were specially provided in RS and RSU in February 2022, in appreciation of the fact that over the past
two years starting in 2020, although COVID-19 has dramatically changed the business climate unexpectedly and withina short period of time, the Company has steadily implemented various measures faster than originally planned while
formulating business strategies for Bridgestone 3.0 and setting specific targets, and at the same time, with the
expectation that these management initiatives will continue to contribute to further enhancement of corporate value.
RS has a three-year restriction, and for RSU, cash is paid equivalent to the market value of the number of stock units
at the time of the lifting of the RS transfer restriction. The ratio of emphasis on RS and RSU is set at 50:50. There are
no plans to provide Special Awards in 2023.

6.

Two Executive Officers who hold concurrent positions as Members of the Board are included in the numbers ofMembers of the Board (Internal) and Executive Officers, respectively.

81

b. Total amount of consolidated remuneration for persons received consolidated remuneration of 100 million
yen or more.
Total amount of consolidated remuneration (Yen in millions)Names and principal
positions related to thecurrent fiscal year

Company
category

Shuichi Ishibashi,
Global CEO

The
Company

Masahiro Higashi,
Joint Global COO

TheCompany

Performance-based remuneration
Position category

Fixed
remuneration

Annualbonuses

Stockcompensation
(PSU)

Stock
compensation(RSU, etc.)

Stockcompensation(SpecialAwards)

Total

Member of the
Board

11

–

–

–

–

Executive Officer

84

111

70

69

50

Member of the
Board

11

–

–

–

–

Executive Officer

63

86

49

53

40

The
Company

Executive Officer

–

–

51

37

35

BSAM
(Note 1)

Member of theBoard, CEO andPresident

171

567(Note 2)11––

Masuo Yoshimatsu,
Global CFOTheCompany

Executive Officer

47(Note 3)43
(Note 4)27
(Note 4)19
(Note 4)–136

Masato Banno,
Global CTO

TheCompany

Executive Officer

46

46

19

21

30

162

Paolo Ferrari,
Joint Global COO(Notes) 1.

2.

3.
4.

395

302

872

The remuneration of executives at BRIDGESTONE AMERICAS, INC. (BSAM) is determined taking into accountbusiness performance, etc. of BSAM, following investigation, analysis and consideration of matters such as market
levels for remuneration of directors and executive officers in the incumbent’s location of the United States when
determining remuneration. Fixed remuneration includes an amount equivalent to fringe benefits.
In addition to annual bonuses, the followings are listed: the confirmed amount paid for the long-term incentive planpertaining to FY2020 to FY2022; the amount recorded as expense relating to FY2021 to FY2022 for the long-term
incentive plan pertaining to FY2021 to FY2023; and the amount recorded as expense relating to FY2022 for the longterm incentive plan pertaining to FY2022 to FY2024. (However, this excludes the portion disclosed in prior years.)
The amount includes an unaccompanied duty allowance.
The amount is the actual amount paid upon retirement at the end of January 2023.

c. Calculation method and evaluation results of performance-based remuneration(a) Short-term incentives (annual bonuses)<Group-wide performance-based bonus> The Group-wide performance-based bonus for fiscal year 2022 was paid at 133.9% of the standard amount,in accordance with the evaluation of the performance indicators as follows.
(Recipients: Global CEO and Representative Executive Officer, Joint Global COO and Representative
Executive Officer, Senior Vice Presidents and Executive Officers)
Performanceindicator
Amount ofconsolidated
adjusted operating
profitFluctuation rangeof payment rate

0-150%

Results for fiscal
year 2022(Yen in billions)Target for fiscal year 2022*(Yen in billions)
Maximum:

510.0

Target:425.0

Threshold:

340.0

482.63

Payment rate

133.9%* In its Mid Term Business Plan and other initiatives, the Company aims to become a more resilient andhighly profitable company, and accordingly, has positioned adjusted operating profit as one of its key
management indices and selected it as an appropriate indicator for the annual evaluation of executive
remuneration.
Standard amount by position
Bonus payment by individual =(Group-wide performancebased bonus)

×

Payment rate
133.9%<Performance-based bonus (area of responsibility)>
The amount of bonus payment for Senior Vice Presidents and Executive Officers for fiscal year 2022 hasbeen determined by the Compensation Committee at a meeting held in March 2023, based on the individual
performance evaluation for the functions for which they are responsible.
(Recipients: Senior Vice Presidents and Executive Officers)82

Bonus payment by individual =Standard amount by position(Performance-based bonus

×(area of responsibility))

Payment rate (Individual
performance evaluation)(0~150%) Since Senior Vice Presidents and Executive Officers have important roles and responsibilities not only for
improving consolidated financial performance but also for improving Group-wide functions over the
medium to long term, the ratio of emphasis on Group-wide performance bonus (based on evaluation of
consolidated financial performance) and performance-based bonus for area of responsibility (based on
individual performance evaluation) is set at 60:40 on a standard amount basis.
(b) Mid- to long-term incentives (stock compensation)<Performance Share Unit (PSU)>
 The 2020 Plan (evaluation period: 2020 to 2022), for which the evaluation was finalized in fiscal year 2022,
resulted in a payment of 73.9% of the standard number of shares, based on the evaluation of performanceindicators as follows. 50% is delivered in the form of the Company’s common stock, and the remaining
50% is paid in cash equivalent to the market value.
(Recipients: Global CEO and Representative Executive Officer, Joint Global COO and Representative
Executive Officer, Joint Global COO and Executive Officer, Senior Vice Presidents and Executive Officers)
Performanceindicator

Evaluation ratio

Fluctuation
range ofpayment rate

Consolidated
ROE

80%

0-200%

Amount ofconsolidated
adjusted
operating profit

20%

Number of shares by
individual

0-200%=

Target for fiscal years 2020 to2022 (Three-year average)(*1)
Maximum:

14%

Target:

10%

70.0%

366.63 billion
yen

89.6%

Payment rate (weighted-average)

73.9%

6%

Maximum:

459.1 billion
yenTarget:382.6 billion
yen

Threshold:306.1 billion
yenposition(*2)×

Payment rate

7.6%

Threshold:Standard number of shares by

Results(Three-year
average)

Payment rate
73.9%

*1. As the Company placed emphasis on ROA, operating profit ratio, and ROE as mid-term management index until 2020,
ROE and operating profit (amount and ratio) were selected as performance indicators in the PSU 2020 Plan. However,from fiscal year 2021, the Company changed performance indicators for the PSU 2021 Plan (evaluation period: 2021 to2023) to consolidated ROIC and consolidated ROE in the final fiscal year of the evaluation period, based on the
management index listed in the Mid Term Business Plan, etc.
*2. The “standard number of shares by position” above is calculated by dividing the standard amount by position by theCompany’s stock price at the beginning of the performance evaluation period.

<Restricted Stock Unit (RSU, etc.)>
 To promote transformation from a long-term perspective and encourage the achievement of thesustainability business framework, the Company has adopted sustainability incentives as new mid- to longterm incentives from fiscal year 2022. Since the amount of RSU, etc. provided based on this framework
varies from 0% to 120% in accordance with the evaluation of sustainability and transformation initiatives
in each fiscal year, and the results of these efforts are reflected in the corporate value (price of Company
shares) over the mid- to long-term, vesting of RSU, etc. shall be at the time of retirement. 50% of the amountto be paid shall be delivered as RSU, and cash equivalent to the market value of the number of stock units
shall be paid at the time of retirement. The remaining 50% shall be delivered in the form of the Company’s
stock (RS), on which transfer restriction shall be lifted at the time of retirement.
 The payment of RSU, etc. for fiscal year 2022 was 110% of the standard amount, in overall considerationof achievement status of the sustainability targets ((1) establishment of “Bridgestone E8 Commitment” as83

corporate commitment to evolve into a sustainable solutions company toward 2050 and communication
with stakeholders both inside and outside of the Company, (2) investment in and development of people toincrease added value and job satisfaction, (3) carbon neutrality, including reduction of CO2 emissions, and(4) circular economy, including increasing the ratio of recycled and renewable resources). The
Compensation Committee commended the achievement of the targets for fiscal year 2022, specifically the
major quantitative targets set forth in the Mid Term Business Plan (such as reducing CO2 emissions andincreasing the ratio of recycled and renewable resources). The Compensation Committee also commended
the establishment of “Bridgestone E8 Commitment,” which serves as the axis to drive the Company’s
management from a long-term perspective. Through the commitment, the Company promotes activities tofacilitate understanding and permeation on a global basis, which steadily links corporate measures to thedevelopment of young people and human resources who will lead the future of the Company. The numberof individual stock units to be provided as RSU and the number of individual shares to be delivered as RS
are calculated by dividing the “Amount of RSU, etc. payments by individual” stated below by theCompany’s stock price at the time of the share unit provision and share delivery.
(Recipients: Global CEO and Representative Executive Officer, Joint Global COO and Representative
Executive Officer, Joint Global COO and Executive Officer, Senior Vice Presidents and Executive Officers)
Amount of RSU, etc.
payments by individual=Standard amount by position

×

Payment rate110%

d. Activities of the Compensation Committee(a) The number of meetings of the Compensation Committee and attendance of members
In fiscal year 2022, the Compensation Committee held 13 meetings mainly regarding the amount ofexecutive compensation, with full attendance for every meeting. In addition, a third-party human resources
and remuneration consultant provided objective and specialized input necessary for deliberations, asnecessary.
(b) Specific matters to be deliberated and considered at the Compensation Committee
The Compensation Committee mainly deliberated, decided, or confirmed the following during fiscal year2022.
 Discussed the evaluation of performance-based remuneration for the previous fiscal year (consolidated
financial performance evaluation for Group-wide performance-based bonus, individual performance
evaluation for performance-based bonus (area of responsibility), and consolidated financial
performance evaluation for PSU) and determined the amount to be paid to each individual and thenumber of shares to be delivered.
 Determined the standard amount and the number of stock units to be granted to each individual under
the new remuneration system including new mid- to long-term incentives (RSU, etc.) introduced infiscal year 2022 and the single-year individual remuneration (Special Award) for fiscal year 2022.
 Discussed and decided on the performance-based remuneration targets for fiscal year 2022
(consolidated financial performance targets related to Group-wide performance-based bonus and PSU,
and sustainability-related initiative targets related to RSU, etc.).
 Deliberated the appropriateness of the current remuneration level and composition of Joint Global COO
and Executive Officer Paolo Ferrari for fiscal year 2022, in light of the size of his role andresponsibilities as well as the remuneration level and practices of his place of residence. Deliberated thereview of his remuneration in connection with his appointment as Joint Global COO.
 Deliberated the appropriateness of remuneration, etc. paid by major overseas Group companies to their
Chair, CEO, and COO based on reports received on such remuneration, etc.
 In reviewing the remuneration system for the subsequent fiscal year, the Committee compared the level
and composition of remuneration for Members of the Board and Executive Officers with those of major
companies in Japan operating globally to verify their appropriateness, and confirmed that the current
remuneration is in line with the Company’s remuneration principles and is appropriate in terms of level
and composition. Meanwhile, the Committee discussed redefining the incentives for the Joint Global
84

COO and Representative Executive Officer for the subsequent fiscal year, and reflecting a portion of
the annual bonus in the performance-based bonus (area of responsibility).
(c) Adequacy and appropriateness of individual remuneration for Members of the Board and Executive Officers
Individual remunerations for Members of the Board and Executive Officers for the current fiscal year are
set by the Compensation Committee, composed solely of Independent Outside Directors, by carrying out
multifaceted discussions including consistency of remunerations with the policy for setting remunerations
based on objective and specialized information necessary for deliberations, as described in paragraphs (a)and (b) above. Therefore, the Committee has determined that the individual remunerations for Members of
the Board and Executive Officers are in line with the policy and are adequate.
2)

Policy for setting Board Members’ and Executive Officers’ remuneration for the subsequent fiscal year

a. Method for deciding the policy for setting Board Members’ and Executive Officers’ remuneration and key
points for the subsequent fiscal year(a) Method for deciding the policy for setting Board Members’ and Executive Officers’ remuneration
The policy for setting remuneration by position and individual remunerations to the Company’s Board
Members and Executive Officers is determined by the Compensation Committee, composed solely of
Independent Outside Directors, by taking into account changes in the business environment and opinionsof our shareholders and investors, upon obtaining the information necessary for deliberations from thirdparty human resources and remuneration consultants who possess abundant global experience and insight.
(b) Key points for the policy for setting Board Members’ and Executive Officers’ remuneration
With regard to remuneration of Joint Global COO and Representative Executive Officer, in the course of
re-discussing the importance of his responsibility for the performance of his responsible areas, theCommittee has decided to redefine the nature of incentives for the subsequent fiscal year and to reflect a
portion of the annual bonus in the performance-based bonus (area of responsibility). There are no otherparticular matters that require mentioning regarding the policy for setting Board Members’ and Executive
Officers’ remuneration for the subsequent fiscal year.
b. Policy for setting Board Members’ and Executive Officers’ remuneration(a) Principles of remuneration
The Company designs the remuneration system for Board Members and Executive Officers based on thefollowing remuneration principles.
1. Attract and cultivate superior talent
2. Support a competitive remuneration level
Principles of remuneration
3. Provide motivation for the execution of businessstrategies
4. Provide motivation for enhancing shareholder value(b) Remuneration system<Executive Officers>
Remuneration of Executive Officers consists of the following.

85

Type of remuneration
Fixed

Overview
Base remuneration
Performance-based
bonus (Group-wide)

Short-term incentives

Performance-based
bonus (area of
responsibility)

 Monthly cash remuneration determined based on role andresponsibilities (position, etc.) of each Executive Officer

 Cash remuneration paid based on the evaluation of Group-wide
performance (consolidated adjusted operating profit) for each fiscalyear Cash remuneration paid based on the individual performance
evaluation for each fiscal year
(Recipients: Executive Officers other than the Global CEO)

 Remuneration provided for sharing value with shareholders andPerformance Share
Unit (PSU)
VariableMid- to long-term
incentives

raising motivation to contribute to achievement of mid-term
performance targets and the improvement of corporate value Shares, etc. delivered according to Group-wide performance (ROICand ROE) over a three-year period (50% is paid in cash equivalent
to the market value) Remuneration provided for sharing value with shareholders andencouraging executive officers to realize the mid- to long-termbusiness strategies with sustainability at the core
 RSU, etc. are provided according to the evaluation of sustainability
Restricted Stock Unit,
and transformation initiatives in each fiscal year, and vest at time of
etc. (RSU, etc.)
retirement.
(50% is provided as stock units, and cash equivalent to the market
value is paid at time of retirement. The remaining 50% is provided
as restricted stock, and the transfer restriction is lifted uponretirement.)<Members of the Board> Remuneration for Members of the Board who do not concurrently serve as Executive Officers consists of a
fixed “base remuneration,” “additional allowance for the chairpersons” when an Outside Director assumes
the position of Chairperson of the Board of Directors, and “additional allowance for committee chairs”
when an Outside Director assumes the position of chairperson of statutory or voluntary committees. This is
in view of their role to contribute to the improvement of corporate performance and value over the mediumto long-term by supervising overall execution from an independent and objective perspective.
 If an Executive Officer concurrently serves as a Member of the Board, he/she will receive, in addition to
his/her remuneration as an Executive Officer, “additional allowance for Members of the Board withconcurrent duties” for his/her role and responsibilities as a Member of the Board.
(c) Method of setting remuneration levels and composition ratio of remuneration<Executive Officers>
 The Company sets remuneration for Executive Officers at an appropriate amount according to each
Executive Officer’s role and position by referring to remuneration levels, etc. of other major companies inJapan, which are equal or greater in size (net sales and market capitalization) and profitability (operating
profit ratio) than the Company and operate globally in the same manner as the Company (hereinafter the“Peer Companies”).
 While base remuneration is set at a middle level of the Peer Companies, the ratio of variable remunerationis, in principle, set higher for higher positions with greater responsibility for business performance andcorporate value, by referring to European companies. The Company aims to set the total remuneration at alevel that ensures a certain level of competitiveness among the Peer Companies.

86 The following charts show the composition ratio of remuneration for Executive Officers by position if thevariable remuneration is the standard amount.
<Global CEO and Representative<Joint Global COO and<Senior Vice President andExecutive Officer>
Representative Executive Officer>
Executive Officer><Members of the Board> Remuneration for Members of the Board who do not concurrently serve as Executive Officers is set inconsideration of factors such as remuneration levels at the Peer Companies and companies with Nominating
Committee, etc., the roles and functions expected of each Member of the Board, and the workload involvedin executing their duties.
(d) Performance indicators of performance-based remuneration and reasons for the selection
 The Company selects the following as performance indicators of performance-based remuneration basedon the mid- to long-term business strategies and the Mid Term Business Plan.
Short-term incentives(*1)
Performance-based bonus (Group-wide)

Performance-based bonus (area of responsibility)<Enhancement of earning power and profitability>
Consolidated adjusted operating profit<Achievement in area of responsibility/strategic targets>
Individual performance evaluation

100%

100%
Mid- to long-term incentives(*2)

PSU

RSU, etc.

<Review of business portfolio><Improvement of profitability over mid-term><Realization of transformation/sustainability businessframework>

ROIC

ROE

Evaluation of sustainability

80%

20%

100%

*1. The ratio of emphasis on Group-wide performance-based bonus and performance-based bonus (area of responsibility) is
set at 60:40 in view of the roles and responsibilities Executive Officers bear. (The Global CEO and Representative
Executive Officer only receives Group-wide performance-based bonuses).
*2. The ratio of emphasis on PSU (financial evaluation) and RSU, etc. (non-financial evaluation) is set at 50:50 uniformly
for all Executive Officers.

(e) Short-term incentives (annual bonuses)<Group-wide performance-based bonus> The amount of individual performance-based bonus is determined within a range of 0% to 150% of thestandard amount, according to the degree to which targets of consolidated adjusted operating profit areachieved.
(Recipients: Global CEO and Representative Executive Officer, Joint Global COO and Representative
Executive Officer, Senior Vice Presidents and Executive Officers)
Bonus payment by individual =Standard amount by position(Group-wide performancebased bonus)

87

×

Evaluation of consolidated
adjusted operating profit(0-150%)<Target for fiscal year 2023>
Evaluation (payment rate)

Consolidated adjusted operating profit

Threshold:Target:Maximum:
408.0
510.0
612.0
(Yen in billions) Target: Full-year forecast amount publicly-announced in February 2023
 Maximum: Target + 20% (the payment rate is 150% if the actual profit exceeds the forecast
amount) Threshold: Target - 20% (the payment rate is 0% if the actual profit falls below the forecast
amount) The Compensation Committee may adjust (increase or decrease) the payment rate of the Group-wide
performance-based bonus if it determines that performance, corporate value or brand value have been or
could potentially be significantly impacted by an event (including changes in the external environment) thatwas not anticipated at the beginning of the period.
<Performance-based bonus (area of responsibility)> The amount of individual bonuses for Joint Global COO and Representative Executive Officers and SeniorVice Presidents and Executive Officers is Group-wide performance-based bonus plus performance-based
bonus (area of responsibility), which is variable within a range of 0% to 150% of the standard amount,determined according to the individual performance evaluation related to their area of responsibility andfunctions. The ratio of emphasis on Group-wide performance-based bonus and performance-based bonus(area of responsibility) is set at 60:40 for Executive Officers, in consideration of the roles andresponsibilities of each.
(Recipients: Joint Global COO and Representative Executive Officer, Senior Vice Presidents and Executive
Officers)
Bonus payment by individual =Standard amount by position(Performance-based bonus(area of responsibility))×

Individual performance
evaluation(0-150%) The individual performance evaluation of Joint Global COO and Representative Executive Officer is basedon the achievement of performance in the responsible areas as the person in charge of the business. The
Compensation Committee determines the final evaluation by comprehensively considering important
initiatives in light of the business environment in the area of responsibility.
 The individual performance evaluation of Senior Vice President and Executive Officers is designed toevaluate the efforts and results of each individual, as they play an important role and responsibility inimproving Group-wide functions over the medium to long term as functional managers.
(f) Mid- to long-term incentives (stock compensation)<Performance Share Unit (PSU)>
 The Company’s PSU is a plan in which the Company’s common stock, etc. are delivered in a number
calculated based on its consolidated results (ROIC and ROE) at the end of the performance measuring
period (a three-year period). The number of shares, etc. to be delivered to each Executive Officer isdetermined within a range of 0% to 200% of the preset standard number of shares by position. 50% of thenumber of shares calculated is paid in cash equivalent to the market value (those retiring before theevaluation period ends are paid fully in cash equivalent to the market value).
(Recipients: Global CEO and Representative Executive Officer, Joint Global COO and Representative
Executive Officer, Joint Global COO and Executive Officer, Senior Vice Presidents and Executive Officers)
88Number of sharesby individual*=Standard numberof shares by
position*

Evaluation of
consolidated
ROIC(0-200%)

×

×

80%

Evaluation of+ consolidated ROE ×(0-200%)20%

The “standard number of shares by position” above is calculated by dividing the standard amount by position by theCompany’s stock price at the beginning of the performance evaluation period.

<Image of the performance measuring period of the PSU plan by year>
Plan

2021

2021 Plan

2022

2023

Performance measuring period2022 Plan

2024

2026

● Provision of shares/cash

Performance measuring period2023 Plan

2025● Provision of shares/cash

Performance measuring period● Provision ofshares/cash<Target for 2023 Plan>(Evaluation) payment rate

Final year (fiscal year 2025) performance

Threshold:Target:Maximum:
Consolidated
6%
10%
14%
ROIC
Consolidated
8%
12%
16%
ROE
 Target: Figure set as a medium- to long-term target* Maximum: Target + 4 points (the payment rate is 200% if the actual performance exceeds the target
figure) Threshold: Target - 4 points (the payment rate is 0% if the actual performance falls below the target
figure)* *If the target figure for fiscal year 2025 is changed in the Mid Term Business Plan (2024-2026), the Company willconsider and discuss again the need to revise the target figure.

<Restricted Stock Unit, etc. (RSU, etc.)>
 The number of RSU, etc. of the Company to be granted is determined within a range of 0% to 120% of thestandard amount, according to the evaluation of the efforts related to transformations and sustainability,
including ESG, in each fiscal year. Since achievement in sustainability and transformation initiatives arereflected in the corporate value (the Company’s stock price) over the medium- to long-term, vesting of RSU,
etc. shall be at the time of retirement. 50% of the amount to be paid shall be delivered as RSU, and cash
equivalent to the market value of the number of stock units shall be paid at the time of retirement. The
remaining 50% shall be delivered in the form of the Company’s stock (RS), on which transfer restriction
shall be lifted at the time of retirement. In order to ensure objectivity, fairness, and effectiveness as anincentive, the Compensation Committee, composed of Outside Directors, will make the final evaluation
after verifying the appropriateness of self-evaluation of executive side. The number of individual stock units
to be provided as RSU and the number of individual shares to be delivered as RS are calculated by dividing
the “Amount of RSU, etc. payments by individual” stated below by the Company’s stock price at the timeof the share unit provision and share delivery.
(Recipients: Global CEO and Representative Executive Officer, Joint Global COO and Representative
Executive Officer, Joint Global COO and Executive Officer, Senior Vice Presidents and Executive Officers)
Amount of RSU, etc.
payments by individual=Standard amount by position

89

×

Sustainability evaluation(0-120%)<Image of the sustainability evaluation period and transfer restriction period of the RSU, etc. plan by year>Plan
2022 Plan

2023 Plan

2022
Sustainability
evaluation

2023

2024

...

20XX

 50%: Provision of RSU
 50%: Delivery of RS
Sustainability  50%: Provision of RSU
evaluation  50%: Delivery of RS

Time ofretirement
 Cash payment
 Lifting of thetransfer
restriction
 Cash payment
 Lifting of thetransfer
restriction(g) Other important matters<Remuneration of foreign Executive Officers> Notwithstanding the provisions set forth in (b) through (e) above, the remuneration, etc. of foreign
Executive Officers shall be determined individually, based on “(a) Principles of remuneration,” taking into
consideration the remuneration levels and practices in the human resources market that are assumed in lightof their place of residence. However, in light of their responsibilities for the entire Group as an Executive
Officer of the Company, the same structure as other Executive Officers will be applied to them with respect
to “(f) Mid- to long-term incentives (stock compensation).”<Process for deciding individual remuneration> The details of individual remunerations to the Company’s Members of the Board and Executive Officers
are determined by the Compensation Committee, composed solely of Independent Outside Directors, inaccordance with the policy for setting Board Members’ and Executive Officers’ remuneration. If any
Members of the Board or Executive Officers of the Company hold concurrent positions as executives forany subsidiaries, the Compensation Committee also deliberates on the remuneration to be paid by thosesubsidiaries. The main roles and powers of the Compensation Committee are as follows.
<Main roles and powers of the Compensation Committee>
Matters for resolution

Matters for deliberation

 Policy for setting Board Members’ and Executive

 In the event that Member of the Board or Executive

Officers’ remuneration
 Details of remuneration for individual Members of theBoard and Executive Officers based on the
aforementioned policy

Officer is concurrently an executive of a Group
company, the remuneration paid by such Group company
 Remuneration paid by Group companies for the Chair,
CEO and COO of key overseas Group companies Report on the status of execution of duties by theCompensation Committee reported to Members of theBoard(h) Reference: Statement pertaining to performance-related remuneration as prescribed in Article 34, paragraph(1), item (iii) of the Corporation Tax Act
Group-wide performance-based bonus and Performance Share Unit (PSU) for the Company’s Executive
Officers are designed as performance-related remuneration as prescribed in Article 34, paragraph (1), item(iii) of the Corporation Tax Act in order to allow the full amount to be treated as a deductible expense. The
calculation method for these is determined by a resolution of the Compensation Committee, composed
solely of Independent Outside Directors. The details of the calculation method are as follows.
A. Group-wide performance-based bonus for fiscal year 2023
Individual amount of group-wide performance-based bonus is to be calculated by position and determinedin accordance with the following calculation method at the meeting of the Compensation Committee
scheduled for the first quarter of 2024. The performance indicator used as the basis for calculating the pay
amount is consolidated adjusted operating profit, and the performance measuring period for this indicator
is from January 1, 2023 to December 31, 2023.
(A) Calculation method
Amount of payment by individual = Standard amount by position(*1) × Payment rate(*2)

90*1 Standard amounts by position are as follows:
PositionStandard amount by position(per person)

Global CEO and Representative
Executive Officer
83.23 million yen

Joint Global COO and
Representative Executive
Officer
38.59 million yen

Senior Vice President andExecutive Officer
22.46 million yen*2 The payment rate is calculated by the following formula, and any fraction after the decimal point resulting from thecalculation is rounded off to the first decimal place.
Consolidated adjusted operating
Between 408.0 billion yen andprofitLess than 408.0 billion yen
612.0 billion yen(fiscal year 2023 results)
50% + {100% × (Consolidated
adjusted operating profit - 408.00%billion yen) ÷ 204.0 billion
yen}

Payment rate

612.0 billion yen or more

150%(B) Upper limit for payment by individual
Position
Upper limit for payment by
individual(*3)

Global CEO and Representative
Executive Officer
124.85 million yen

Joint Global COO and
Representative Executive
Officer
57.89 million yen

Senior Vice President andExecutive Officer
33.69 million yen*3 The upper limit for payment by individual is the “defined amount” prescribed in Article 34, paragraph (1), item (iii)(a) 1. of the Corporation Tax Act.

(C) Timing of payment
Payments will be made in a lump sum in March following the end of the performance measuring period,
based on the payment amounts by individual calculated using the above calculation method.
B. PSU 2023 Plan (performance measuring period: 2023 to 2025)
The number of shares of the Company’s common stock to be delivered as PSU (“Number of PSU Shares to
Be Delivered”) and the amount of money to be paid (“Amount of PSU Cash to Be Paid”) to each individual
will be calculated and determined in accordance with the following calculation method at the first meetingof the Compensation Committee following the finalization of the consolidated financial statements for the
fiscal year ending December 31, 2025.
(A) Overview of the Company’s PSU
The Company determines the Number of PSU Shares to Be Delivered and the Amount of PSU Cash to
Be Paid to each Executive Officer according to the results of performance indicators (actual results)
during a predetermined performance measuring period. The performance indicators used as the basis
for calculating the Number of PSU Shares to Be Delivered and the Amount of PSU Cash to Be Paid
under the 2023 Plan are consolidated ROIC and consolidated ROE, and the performance measuring
period for these indicators is from January 1, 2023 to December 31, 2025.
The Company shall pay “monetary compensation claims to provide in-kind contributions” to each
Executive Officer in order to deliver shares of the Company’s common stock to each Executive Officer.
The amount of such monetary compensation claims is determined by the Compensation Committee tothe extent that is not particularly favorable to each Executive Officer subscribing to the Company’scommon stock.
The Company will deliver shares of common stock of the Company to each Executive Officer by issuing
new shares or disposing of treasury stock. Each Executive Officer shall be granted the Company’scommon stock by making in-kind contribution to the Company of the aforementioned monetarycompensation claims to provide in-kind contributions.
(B) Calculation method
The Number of PSU Shares to Be Delivered and the Amount of PSU Cash to Be Paid by individual arecalculated and determined by position as follows. Any fraction of less than 100 shares in the Numberof PSU Shares to Be Delivered and any fraction of less than 10,000 yen in the Amount of PSU Cash to
Be Paid shall be rounded up to 100 shares and 10,000 yen, respectively.
91

 Number of PSU Shares to Be Delivered = Standard number of shares by position(*1) × 50% × Payment
rate(*2)
 Amount of PSU Cash to Be Paid = Standard number of shares by position(*1) × 50% × Payment
rate(*2) × the Company’s stock price(*3)*1 Standard number of shares by position is as follows: In the period between the determination of this calculation
method by the Compensation Committee and the determination by the Compensation Committee of the Number of
PSU Shares to Be Delivered and the Amount of PSU Cash to Be Paid to each Executive Officer according to theresults of the performance indicators, if the total number of shares issued by the Company changes due toconsolidation of stock or stock split (including a free distribution of the Company’s stock; the same definition applies
to stock splits described below), the below standard number of shares by position shall be adjusted by multiplying
the ratio of such consolidation of stock or stock split, and the number of shares after the adjustment will be used in

Positionthe calculation.
Global CEO and
Joint Global COO and
Representative Executive Representative Executive
Officer
OfficerStandard number ofshares by position(per person)

12,600 shares

Joint Global COO and
Executive Officer

9,700 shares

9,700 shares

Senior Vice President
and Executive Officer
3,800 shares*2 The payment rate is calculated by the following formula, and any fraction after the decimal point resulting from thecalculation is rounded off to the first decimal place.
・ Payment rate = Payment rate A(*a) × 0.8 + Payment rate B(*b) × 0.2*a The payment rate A is calculated by the following formula based on consolidated ROIC results (%) for fiscal
year 2025, and any fraction after the decimal point resulting from the calculation is rounded off to the firstdecimal place.
Consolidated ROIC
results(%, fiscal year 2025)

Less than 6%

From 6% to 10%
50% + {50% ×0% (Consolidated ROIC
results(%) - 6%) ÷ 4%}

Payment rate A

From 10% to 14%

14% or more

100% + {100% ×(Consolidated ROIC
results(%) - 10%) ÷ 4%}200%*b The payment rate B is calculated by the following formula based on consolidated ROE results (%) for fiscal
year 2025, and any fraction after the decimal point resulting from the calculation is rounded off to the firstdecimal place.
Consolidated ROE
results(%, fiscal year 2025)

Less than 8%

From 8% to 12%
50% + {50% ×0% (Consolidated ROE
results(%) - 8%) ÷ 4%}

Payment rate B

From 12% to 16%
100% + {100% ×(Consolidated ROE
results(%) - 12%) ÷ 4%}

16% or more

200%

*3 The Company’s stock price uses the daily average closing price of the Company’s stock on the Tokyo Stock
Exchange for the month preceding the day of the resolution made by the Company’s Board of Directors concerning
the new issuance of common stock of the Company or disposal of treasury stock for delivery according to this plan,following the performance measuring period.

(C) Maximum Number of PSU Shares to Be Delivered and maximum Amount of PSU Cash to Be Paid toeach individual
Position(*4)

Global CEO and
Representative
Executive Officer

Maximum Number of PSU
Shares to Be Delivered(*5)
Maximum Amount of PSU Cashto Be Paid(*5)

Joint Global COO and
Representative
Executive Officer

Joint Global COO and
Executive Officer

Senior Vice President
and Executive Officer

12,600 shares

9,700 shares

9,700 shares

3,800 shares

90.33 million yen

69.54 million yen

69.54 million yen

27.25 million yen*4 Positions are based on the position held by each Executive Officer immediately following the conclusion of theAnnual Shareholders’ Meeting for the fiscal year preceding the beginning of the performance measuring period(fiscal year 2022).

92

*5 The “maximum Number of PSU Shares to Be Delivered” and “maximum Amount of PSU Cash to Be Paid” arerespectively the “defined number” and “defined amount” as prescribed in Article 34, paragraph (1), item (iii) (a) 1.
of the Corporation Tax Act.

(D) Conditions for delivery and payment
The Company shall deliver and pay in May 2026 to each Executive Officer who meets the following
three conditions, shares of the Company’s stock and cash equivalent to the Number of PSU Shares to
Be Delivered and the Amount of PSU Cash to Be Paid to each individual calculated based on the above
calculation method.
 Hold a position of Executive Officer of the Company during the period from the day of the Annual
Shareholders’ Meeting convened on March 28, 2023 until the day of the Annual Shareholders’Meeting scheduled to be convened in March 2026 (hereafter “Relevant Period”), and during theperformance measuring period corresponding to the Relevant Period.
 No engagement in illegal acts (criminal conduct related to professional duties, breach of trust against
the Company, and acts that incur serious disciplinary measures or require censure).
 Other matters that the Company’s Compensation Committee and its Board for Directors deems asnecessary to be achieved for the stock compensation plan
Treatment if an Executive Officer changes roles during the Relevant Period(E) If a person becomes an Executive Officer or is promoted or demoted, or otherwise subject to a change
in position during the Relevant Period, the standard number of shares by position for such person shallbe the number calculated with the following formula.
 Standard number of shares by position of the person who changes roles = Standard number of sharesby position prior to the change of roles(*6) + (Standard number of shares by position after the changeof roles - Standard number of shares by position prior to the change of roles(*6)) × Number of months
after the change of roles in Relevant Period(*7) ÷ 36
*6 In the event of assuming office as a new Executive Officer, calculated with the “Standard number of shares by
position prior to the change of roles” set at 0.
*7 Fractions of less than one month are to be rounded up to one full month.

Similarly, the maximum Number of PSU Shares to Be Delivered and the maximum Amount of PSU
Cash to Be Paid will be proportionally divided according to the position prior to and after the changeof roles and the number of months after the change of roles.
 If a person retires as an Executive Officer during the Relevant Period, the standard number of sharesby position for such person shall be the number calculated with the following formula.
 Standard number of shares by position of the person who retires = Standard number of shares by
position during tenure(*8) × Number of months in office in Relevant Period(*9) ÷ 36
*8 In the event of promotion, demotion, or change in position during the term of office of an Executive Officer, thestandard number of shares by position shall be calculated in accordance with the treatment in (E) above.
*9 Fractions of less than one month are to be rounded up to one full month.

(F) If an Executive Officer retires during the Relevant Period and all mandate or employment relationshipwith the Company is terminated, the Company will provide a cash payment equivalent to the Amountof PSU Cash to Be Paid in lieu of the delivery of shares of the Company’s stock equivalent to the
Number of PSU Shares to Be Delivered. That is, regardless of the calculation method stated in (B)above, the total amount of cash to be paid in PSU will be calculated based on the following calculation
method and will be paid upon retirement if the conditions for delivery and payment set forth in (D)above are met. The maximum amount of cash to be paid in PSU shall be an amount equal to twice the“maximum Amount of PSU Cash to Be Paid” set forth in (C) above. Any fraction of less than 10,000
yen in the Amount of PSU Cash to Be Paid shall be rounded up.
 Amount of PSU Cash to Be Paid = Standard number of shares by position of the retiring officer ×
Payment rate (*10) × Price of Company shares (*11)*10 The payment rate is for the standard amount regardless of the most recent performance within the performancemeasuring period.
*11 The Company’s share price shall be the average closing price of the Company’s stock on the Tokyo Stock Exchange
for the month preceding the month of the date of retirement.

93

If an Executive Officer retires during the Relevant Period and continues to hold a position other than
Executive Officer until the end of the Relevant Period, the calculation method for the Number of PSU
Shares to Be Delivered and the Amount of PSU Cash to Be Paid, and the timing of delivery of sharesof the Company’s stock and cash equivalent thereto shall be in accordance with the provisions of (A)through (F) above, as with other incumbent Executive Officers.
Treatment if there is a restructuring of the organization or abolition of the PSU during the Relevant Period(G) If, during the Relevant Period, a resolution concerning a merger with the Company being the nonsurviving company, a company split with compensation for the split granted to the Company’s
shareholders, a share exchange or share transfer whereby the Company becomes a wholly-owned
subsidiary, the consolidation of stock for only the fractions held by Eligible Executive Officers, theacquisition of shares or sale of shares pursuant to whole acquisition clause is approved at the
Shareholders’ Meeting (or at the Board of Directors, if not convened) and becomes effective or if theabolition of the PSU is approved by the Company’s Compensation Committee and becomes effective,
regardless of the calculation method stated in (B) above, the Company shall pay cash in the amountobtained by multiplying the number of months from the first month of the Relevant Period to the monthin which such approval was made divided by 36 by the standard number of shares by position(*12) for
each Executive Officer on the day of such approval, the payment rate(*13) calculated at the time of suchapproval, and the daily average closing price of the Company’s stock on the Tokyo Stock Exchange forthe month preceding the day of such approval, as long as the conditions for delivery and paymentprescribed in (D) above are reached. The maximum amount of cash to be paid in PSU shall be an amountequal to twice the “maximum Amount of PSU Cash to Be Paid” set forth in (C) above. Any fraction ofless than 10,000 yen in the amount of cash paid shall be rounded up.
*12 If (E) or (F) above applies to an Executive Officer (in the case of a retired Executive Officer, only if he/she continues
to hold a position other than Executive Officer at the Company after retirement until the date of approval), the result
based on the calculation method described in (E) or (F) above shall be applied as the standard number of shares by
position of such Executive Officer.
*13 The payment rate is calculated according to the method described in (B)*2 above, but the consolidated ROIC results(%) and consolidated ROE results (%), which are the basis for the calculation, shall be the results for the most recent
fiscal year listed in the Annual Securities Report filed by the date of such approval instead of the results for fiscal
year 2025.

94

(5) Stock holdings
1)Standards and approach for classification of investment stocks

The Company distinguishes between investment stocks for pure investment purposes—shares held for gaining
profit through changes in share value and dividends—and strategic shareholdings, which are all other shares heldin accordance with the Company shareholding policy. The Company does not hold any investment stocks forpure investment purposes.
2)

Investment stocks held for purposes other than pure investmenta. Shareholding policy and method for verifying appropriateness for holding as well as details regarding
verification of the appropriateness of holding shares for each individual security performed by the Board of
Directors and other parties(a) Shareholding policy for strategic shareholdings
The Company defines strategic shareholdings as holdings that contribute toward increased corporate valueof the Company and are held out of necessity from the Company’s business strategy perspective or withthe goal of maintaining or strengthening relationships with businesses or collaborative industries. The
Company will not hold strategic shareholdings for reasons outside of this definition.
(b) Verifying appropriateness of strategic shareholdings
The Company confirms the appropriateness of its holdings on an annual basis, including an assessment of
securities for which there are holdings, number of shares held, holding ratios, and other factors. These
assessments are then verified by the Board of Directors. Appropriateness of holding is comprehensively
determined by operating divisions involved in business execution in accordance with the shareholding
policy of the Company, taking into account a quantitative evaluation of the economic rationale
corresponding to the cost of capital and other relevant factors for each individual stock holding.
Shareholdings that are not judged as appropriate based on the results of this verification process are
reduced after establishing a dialogue and gaining the understanding of the business partner for the holdingin question. As a result, the number of strategic shareholdings is decreased year on year.
b. Number of securities and balance sheet amounts

Unlisted shares
Shares other than unlisted
sharesNumber of
securities

Balance sheet amounts (Yen in
millions)

40

1,464

32

58,646(Securities for which the number of shares increased during the current fiscal year)
Total acquisition cost for the
Number ofincrease in the number of shares
securities(Yen in millions)
Unlisted shares

2

1,000

Shares other than unlisted
shares––Reason for increasing number of shares
To co-create further social and customer
value and improve corporate value(Securities for which the number of shares decreased during the current fiscal year)

Unlisted shares

Number of
securities

Total sale value related to thedecrease in the number ofshares (Yen in millions)

5

2

95

–

Shares other than unlisted
4
3,279
shares(Note) Decrease or increase in the number of shares of the above securities does not include changes due to consolidationof stock, stock splits, stock transfers, stock exchanges, mergers, and others.

96

c. Information on the number of specific investment stocks and deemed shareholdings by security, and theamount recorded on the balance sheet
Specific Investments Stocks

Name

Current fiscal year

Previous fiscal year

Number of shares

Number of shares

Balance sheet amount Balance sheet amount(Yen in millions)(Yen in millions)Toyota Motor

9,799,450

9,799,450

Corporation

17,762

20,633

6,325,160

6,525,160

16,37028,5485,000,000

5,000,000

7,485

8,970

4,167,653

4,167,653

5,743

18,162

Sumitomo Mitsui
Financial Group, Inc.

562,224562,224

2,978

2,217

FUJI KYUKO CO.,LTD.

244,510244,5101,169

JSR Corporation

Toyo Tire Corporation

Nokian Tyres PLC

Purpose of holding, quantitative effect ofOwnership ofholding (Note 1) and reasons for the increase the Company’s
in the number of sharesshares

Maintain/strengthen business andcollaborative relationships
Maintain/strengthen business andcollaborative relationships
Maintain/strengthen business andcollaborative relationships

Yes

No

Yes

Business strategy

No

Business strategy

Yes

No

998

Maintain/strengthen business andcollaborative relationships

527,076

527,076

Maintain/strengthen business and

946

871

200,000

200,000

861

834

200,162

200,162613

786

Kintetsu Group
Holdings Co., Ltd.

124,281

124,281541

400

Idemitsu Kosan Co.,Ltd.

171,200

171,200526

503

Nishi-Nippon
Railroad Co., Ltd.

212,237

212,237

524

Seino Holdings Co.,

Yellow Hat Ltd.

Otsuka Holdings Co.,Ltd.
Fukuyama
Transporting Co., Ltd.

Ltd.
AUTOBACS SEVEN
Co., Ltd.

collaborative relationships
Maintain/strengthen business andcollaborative relationships
Maintain/strengthen business andcollaborative relationships

Yes

No

No

Maintain/strengthen business andcollaborative relationships

No

Maintain/strengthen business andcollaborative relationships

No

No

554

Maintain/strengthen business andcollaborative relationships

391,229391,229

Maintain/strengthen business and

459

456

313,632

313,632

453

440

97

collaborative relationships
Maintain/strengthen business andcollaborative relationships

No

No

Name

Current fiscal year

Previous fiscal year

Number of shares

Number of shares

Balance sheet amount Balance sheet amount(Yen in millions)(Yen in millions)
SENKO Group
Holdings Co., Ltd.

366,888366,888354

340

Niigata kotsu Co.,Ltd.

163,870

163,870

339

337

270,970

270,970318

Purpose of holding, quantitative effect ofOwnership ofholding (Note 1) and reasons for the increase the Company’s
in the number of sharesshares

Maintain/strengthen business andcollaborative relationships

No

Maintain/strengthen business andcollaborative relationships

No

Yes

374

Maintain/strengthen business andcollaborative relationships

51,51451,514Maintain/strengthen business and

249

246

Hankyu Hanshin

57,98357,983

Holdings, Inc.

227

189

153,550

153,550

192

205

ITOCHU ENEX CO.,LTD.

101,386

101,386

106

101

Hiroshima Electric
Railway Co., Ltd.

120,000

120,000

98

96

5,000

5,000

81

ISEKI & CO., LTD.

Sankyu Inc.

SAN-AI OBBLI CO.,LTD.
(Note 2)Central Japan Railway
Company
Mie Kotsu Group
Holdings, Inc.

Ltd.
Inoue Rubber(Thailand) Public Co.,Ltd.

collaborative relationships
Maintain/strengthen business andcollaborative relationships

No

No

No

Maintain/strengthen business andcollaborative relationships

No

No

77

Maintain/strengthen business andcollaborative relationships

121,536

121,536

Maintain/strengthen business and

59

59

50,00050,00045

46

42,00042,00034

32597,100

2,781,600

32

171

29,70029,700

24

27

5,808

5,808

20

16

S LINE CO., LTD.

SAKAI HEAVY
INDUSTRIES, LTD.

Maintain/strengthen business andNo

Maintain/strengthen business andcollaborative relationships

Nissin Shoji Co., Ltd.
Daiwa Motor
Transportation Co.,collaborative relationships

98

collaborative relationships
Maintain/strengthen business andcollaborative relationships
Maintain/strengthen business andcollaborative relationships

No

No

No

Maintain/strengthen business andcollaborative relationships

No

Maintain/strengthen business andcollaborative relationships

No

Maintain/strengthen business andcollaborative relationships

No

Name

Current fiscal year

Previous fiscal year

Number of shares

Number of shares

Balance sheet amount Balance sheet amount(Yen in millions)(Yen in millions)
10,00010,000

15

18

KAMEI
CORPORATION

12,10012,100

15

13

ORIX
CORPORATION

5,000

5,000

11

12

Mitsubishi UFJ–

2,780,580

Financial Group, Inc.
(Note 3)–

1,738

Mizuho Financial
Group, Inc.

–

212,072–310

AIR WATER INC.

Purpose of holding, quantitative effect ofOwnership ofholding (Note 1) and reasons for the increase the Company’s
in the number of sharesshares

Maintain/strengthen business andcollaborative relationships

No

Maintain/strengthen business andcollaborative relationships

No

Maintain/strengthen business andcollaborative relationships

No

–

No

–

Yes

(Note 3)(Notes) 1. Although the quantitative effect of holding shares for each security is not published for the purpose of business
confidentiality, the appropriateness of each individual holding is comprehensively determined by operating divisions
involved in business execution in accordance with the shareholding policy of the Company, taking into account a quantitativeevaluation of the economic rationale corresponding to the cost of capital and other relevant factors, and is then verified by
the Board of Directors.
2. SAN-AI OIL Co., Ltd. changed its name to SAN-AI OBBLI CO., LTD. effective April 1, 2022.
3. A dash (“-”) signifies that there are no holdings for the security in question.

Deemed Shareholdings
Not applicable.
3)

Investment stocks for pure investment purposes
Not applicable.

4)

Investment stocks for which the purpose of holding was changed from pure investment purposes during thecurrent fiscal year
Not applicable.

99

V. Financial Information
1. Method for preparation of the consolidated financial statements and the non-consolidated financial statements(1) The consolidated financial statements of the Company have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) pursuant to the provisions of Article 93 of the Regulation on
Terminology, Forms, and Preparation Methods of Consolidated Financial Statements (Ministry of Finance
Order No. 28 of 1976; the “Regulation on Consolidated Financial Statements”).
(2) The non-consolidated financial statements of the Company have been prepared in accordance with theRegulation on Terminology, Forms, and Preparation Methods of Financial Statements (Ministry of Finance
Order No. 59 of 1963; the “Regulation on Financial Statements”).
The Company is allowed to file specified financial statements under the Financial Instruments andExchange Act and prepares non-consolidated financial statements pursuant to Article 127 of the Regulation
on Financial Statements.
2. Audit certification
The consolidated financial statements and the non-consolidated financial statements for the fiscal year fromJanuary 1, 2022 to December 31, 2022 were audited by Deloitte Touche Tohmatsu LLC in accordance with
Article 193-2, paragraph (1) of the Financial Instruments and Exchange Act.
3. Special effort to ensure the appropriateness of consolidated financial statements, etc., and development of asystem for preparing consolidated financial statements, etc. appropriately in accordance with IFRSThe Company makes special effort to ensure the appropriateness of the consolidated financial statements, etc.,
and develop a system for preparing consolidated financial statements, etc. appropriately in accordance with
IFRS. The details are as follows:(1) In order to develop a system that ensures a proper understanding of the contents of accounting standards,
etc. and apply them to the consolidated financial statements, etc., the Company joins the Financial
Accounting Standards Foundation to gather information, and attends various seminars hosted by said
Foundation.
(2) In addition, the Company develops the Group’s accounting policy in accordance with IFRS and practices
accounting procedures based on the policy to appropriately prepare the consolidated financial statements inaccordance with IFRS. The Company obtains press releases and standards published by the International
Accounting Standards Board as needed, understands the latest standards and weighs their implications to
the Company, and updates the Group’s accounting policy in a timely manner.

1001. Consolidated Financial Statements, etc.
(1) Consolidated Financial Statements
1) Consolidated Statement of Financial Position
Notes

Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other current assets

8,20
9,35
10
11,35
12

787,542
741,612630,140
11,76987,029518,905
946,608
885,305
15,107118,031

Subtotal
Assets held for sale13

2,258,092
34,7782,483,956
28,6942,292,870

2,512,650

1,427,903

1,556,665

294,065
123,680
136,432

301,278
136,406
159,920

25,131

38,894140,376
76,79057,644

104,50981,62569,8712,282,022

2,449,168

4,574,892

4,961,818

Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Investments accounted for using
equity method
Other financial assets
Deferred tax assets
Other non-current assets

14,16,
20
17
15,16
15,16

11,35
18
12,23

Total non-current assets
Total assets

101NotesLiabilities and equity
Liabilities
Current liabilities
Trade and other payables
Bonds and borrowings
Lease liabilities
Income taxes payable
Other financial liabilities
Provisions
Other current liabilities

Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

517,010
149,976
54,85340,32026,656
48,691
151,417607,498
107,866
56,03353,78034,074
51,615
173,340

988,923

1,084,204

34,4781,596

1,023,401

1,085,800

356,672
249,638
15,339171,981
25,54043,81013,157345,584
257,684
18,075
155,11237,302
38,712
11,092

Total non-current liabilities

876,137

863,560

Total liabilities
EquityCommon stock
Capital surplus
Treasury stock
Other components of equity
Retained earnings

1,899,538

1,949,360

126,354
122,126(38,123)
111,859
2,307,667

126,354
119,517(136,814)
358,523
2,498,226

2,629,883

2,965,806

Subtotal
Liabilities directly associatedwith assets held for sale
Total current liabilities
Non-current liabilities
Bonds and borrowings
Lease liabilities
Other financial liabilities
Retirement benefit liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities

19,35
20,35
20,35
20,35
21
22
13

20,35
20,35
20,35
23
21
18

24
24
24
24
24

Total equity attributable to ownersof parent
Non-controlling interests
Total equity
Total liabilities and equity

102

45,471

46,651

2,675,354

3,012,458

4,574,892

4,961,818

2) Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income
Consolidated Statement of Profit or Loss
Notes
Continuing operations
Revenue
Cost of sales

Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

6,26
10,14,
15,17,
23

3,246,057

4,110,070

1,929,612

2,516,821

1,316,444

1,593,249

928,620

1,158,523

14,565

39,111

25,59032,538376,799
10,807
16,219441,298
18,28341,898

6,207

5,775

377,594
63,234423,458
112,452

314,360

311,006

86,168(5,141)

400,528

305,865

394,037
6,491

300,3675,497

400,528

305,86532
32437.19122.37439.69(7.40)

32

559.56432.2932
32436.53122.18439.09(7.39)

32

558.71431.70Gross profit
Selling, general and administrative
expenses
Other income
Other expenses
Operating profit
Finance income
Finance costs
Share of profit (loss) of investments
accounted for using equity method
Profit before tax
Income tax expense

14,15,
17,23,
27,34
6,28
6,16,
23,28
29
23,29

18

Profit from continuing operations
Discontinued operations
Profit (loss) from discontinued
operations

14,15,
16,17,
23,31

ProfitProfit attributable to
Owners of parent
Non-controlling interests
ProfitEarnings (loss) per share
Basic earnings (loss) per share (Yen)Continuing operations
Discontinued operations
Total
Diluted earnings (loss) per share (Yen)Continuing operations
Discontinued operations
Total

103

Consolidated Statement of Comprehensive Income
Notes

Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions
400,528

Yen in millions
305,865

14,446(19,733)

16,316

8,057

(18)

(0)

30,743(11,677)30

163,596258,117

30

264

2,704

30

(3,576)

10,220Total of items that may be reclassified to
profit or loss

160,285

271,041

Other comprehensive (loss) income, netof tax191,028

259,364

Comprehensive (loss) income

591,557

565,229

Comprehensive income attributable to
Owners of parent
Non-controlling interests

581,7319,826

556,793
8,436

Comprehensive (loss) income

591,557

565,229

ProfitOther comprehensive income
Items that will not be reclassified to
profit or loss
Net change in fair value of financial
assets measured through other
30,35
comprehensive income
Remeasurements of defined benefit
23,30
plans
Share of other comprehensive
income of investments accounted for 30
using equity method
Total of items that will not bereclassified to profit or loss
Items that may be reclassified to profit
or loss
Exchange differences on translationof foreign operations
Effective portion of change in fairvalue of cash flow hedges
Share of other comprehensive
income of investments accounted forusing equity method1043) Consolidated Statement of Changes in Equity
Previous fiscal year (Year ended December 31, 2021)
Equity attributable to owners of parent
Other components of equity

Note

Balance at January 1, 2021
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury stock
Disposal of treasury stock
Dividends
Changes in ownership interests ofowners in subsidiaries undercontrol
Transfer from other components ofequity to retained earnings
Other changes

24
24
25

Total transactions with owners, etc.
Balance at December 31, 2021

Effective
portion ofchange infair value ofcash flow
hedgesNet change
in fair valueof financial
assetsmeasuredthroughothercomprehensive income

Commonstock

CapitalsurplusTreasury
stock

Stock
acquisitionrightsExchangedifferencesontranslationof foreign
operations

Yen inmillions
126,354––

Yen inmillions
122,116––

Yen inmillions(38,657)––

Yen inmillions
3,125––

Yen inmillions(112,257)–
156,939

Yen inmillions(9)–753

Yen inmillions
49,290–14,428––––

156,939753

14,428

–
–
–

–
–
–

(11)
544
–

–
(128)
–

–
–
–

–
–
–

–
–
–

–

10

–

–

–

–

–

–

–

–

–

–

–

(281)

–

–

–

–

–

–

–

–

10

533

(128)

–

–

(281)

126,354

122,126(38,123)

2,997

44,682744

63,436Equity attributable to owners of parent
Other components of equity
Total

Noncontrollinginterests

Total

Yen inmillions
1,999,996
394,037–

Yen inmillions
2,149,958
394,037
187,694

Yen inmillions
45,333
6,491
3,334

Yen inmillions
2,195,291
400,528
191,028

187,694

394,037

581,7319,826

591,557

–
–
–

–
(128)
–

–
(114)
(102,107)(11)
302(102,107)––(9,217)(11)
302(111,324)

–

–

–

10

(124)

(114)

(15,574)(15,855)

15,855–––Note Remeasurements ofdefinedbenefit plans

Balance at January 1, 2021
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury stock
Disposal of treasury stock
Dividends
Changes in ownership interests ofowners in subsidiaries undercontrol
Transfer from other components ofequity to retained earnings
Other changes
Total transactions with owners, etc.
Balance at December 31, 2021

24
24
25

Total

Retainedearnings

Yen inmillions––
15,574

Yen inmillions(59,851)–
187,694

15,574

–

–

–

–

(347)

(347)

(15,574)(15,983)(86,366)(101,806)(9,688)(111,494)–

111,859

2,307,667

2,629,883

45,471

2,675,354

105

Current fiscal year (Year ended December 31, 2022)
Equity attributable to owners of parent
Other components of equity

Note

Balance at January 1, 2022
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury stock
Disposal of treasury stock
Dividends
Changes in ownership interests ofowners in subsidiaries undercontrol
Transfer from other components ofequity to retained earnings
Transactions with non-controllinginterests and other
Other changes

24
24
25

35

Total transactions with owners, etc.
Balance at December 31, 2022

Commonstock

CapitalsurplusTreasury
stock

Stock
acquisitionrightsExchangedifferencesontranslationof foreign
operations

Effective
portion ofchange infair value ofcash flow
hedgesNet change
in fair valueof financial
assetsmeasuredthroughothercomprehensive income

Yen inmillions
126,354––

Yen inmillions
122,126––

Yen inmillions(38,123)––

Yen inmillions
2,997––

Yen inmillions
44,682–
265,629

Yen inmillions
744
–
2,237

Yen inmillions
63,436–(19,734)

–

–

–

–

265,629

2,237(19,734)

–
–
–

–
–
–

(100,033)
1,343
–

–
(324)
–

–
–
–

–
–
–

–
–
–

–

(303)

–

–

–

–

–

–

–

–

–

–

–

(1,144)–(2,306)

–

–

–

–

–

–

–

–

–

–

–

–

–

(2,609)(98,690)

(324)

–

–

(1,144)

126,354

119,517(136,814)

2,673

310,3112,980

42,558Equity attributable to owners of parent
Other components of equity
Total

Noncontrollinginterests

Total

Yen inmillions
2,307,667
300,367–

Yen inmillions
2,629,883
300,367
256,425

Yen inmillions
45,471
5,497
2,939

Yen inmillions
2,675,354
305,865
259,364

256,425

300,367

556,7938,436

565,229

–
–
–

–
(324)
–

(5)
(198)
(119,042)(100,038)
820(119,042)––(4,709)(100,038)
820(123,751)

–

–

–

(303)

(1,708)(2,012)(8,293)(9,437)

9,437

–

–

–

–

–

–

(2,306)–(2,306)Note Remeasurements ofdefinedbenefit plans

Balance at January 1, 2022
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury stock
Disposal of treasury stock
Dividends
Changes in ownership interests ofowners in subsidiaries undercontrol
Transfer from other components ofequity to retained earnings
Transactions with non-controllinginterests and other
Other changes
Total transactions with owners, etc.
Balance at December 31, 2022

24
24
25

35

Total

Retainedearnings

Yen inmillions––
8,293

Yen inmillions
111,859–
256,425

8,293

–

–

–

–

(839)

(839)

(8,293)(9,762)(109,808)(220,869)(7,256)(228,125)–

358,523

2,498,226

2,965,806

46,651

3,012,458

1064) Consolidated Statement of Cash Flows
Note

Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
Yen in millions

Cash flows from operating activities
Profit before tax
Profit (loss) before tax from discontinued operations
Depreciation and amortization
Impairment losses
Loss recognized upon having measured the disposalgroup consisting of discontinued operations at fairvalue less cost to sell
Increase (decrease) in retirement benefit liabilities
Interest and dividend income
Interest expenses
Foreign currency exchange loss (gain)
Share of loss (profit) of investments accounted forusing equity method
Loss (gain) on sale of fixed assets
Business and plant restructuring income
Business and plant restructuring expenses
Loss on retirement of fixed assets
Decrease (increase) in trade and other receivables
Decrease (increase) in inventories
Increase (decrease) in trade and other payables
Increase (decrease) in consumption tax payables
Increase (decrease) in provision for productwarranties
Other

31

31

Yen in millions

377,594
140,506
250,448
5,495

423,458(24,815)
282,108
18,216

142,712

19,161(7,111)(10,888)
11,625(8,813)(22,008)(18,679)
14,858(3,894)(6,207)(5,775)(3,480)(2,562)25,2694,090(69,927)(140,209)
91,617(12,136)(14,296)(4,942)7,435
2,625(139,608)(195,404)
52,515(13,733)(2,357)

15,427(355,491)(44,332)

SubtotalInterest and dividends received
Interest paid
Income taxes paid

430,173
12,418(13,372)(147,680)

348,317
20,898(14,570)(86,162)

Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments for purchase of property, plant andequipment
Proceeds from sale of property, plant and equipment
Payments for purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investments in securities
Payments of long-term loans receivableCollection of loans receivable
Payments for sale of discontinued operations
Proceeds from sale of discontinued operations
Other281,538

268,483(161,040)(221,293)

9,999(23,951)(4,356)466(12,262)
14,102–363,754(55,011)

27,685(33,433)(3,719)2,856(28,943)
19,494(115,720)–
15,068

131,701(338,004)

Net cash provided by (used in) investing activities

107

Note

Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Redemption of bonds
Repayments of lease liabilities
Purchase of treasury stock
Dividends paid to owners of parent
Dividends paid to non-controlling interests
Other

Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

33
33
33
33
33
33

94,667(220,281)
26,534(109,073)–(59,689)(10)(102,118)(9,218)(133)

204,077(182,482)
554(54,114)(40,000)(65,810)(100,004)(119,021)(4,709)(2,600)(379,321)(364,109)

48,35365,15882,271
810,546(368,473)
787,542

13(105,275)

99,836

8

787,542518,905

Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Net increase (decrease) in cash and cash equivalents
included in assets held for sale
Cash and cash equivalents at end of period

108Notes to Consolidated Financial Statements
1. Reporting Entity
Bridgestone Corporation (the “Company”) is a stock company located in Japan. The Company’s consolidated
financial statements, which were prepared for the reporting period ended December 31, represent the Company
and its subsidiaries (the “Group”) as well as the Company’s interests in its associates and joint ventures.
The detail of the Group’s business is stated in Note “6. Operating Segments”.
2. Basis of Preparation(1) Statement of compliance with IFRSThe consolidated financial statements of the Group have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) pursuant to the provisions of Article 93 of the Regulation on
Terminology, Forms, and Preparation Methods of Consolidated Financial Statements (Ministry of Finance
Order No. 28 of 1976), as the Group satisfies the requirements for “specified company complying withdesignated international accounting standards” set forth in Article 1-2 of the same regulation.
The consolidated financial statements were approved on March 28, 2023 by Shuichi Ishibashi, Member ofthe Board, Global CEO and Representative Executive Officer of the Company, and Naoki Hishinuma,
Executive Director and Global CFO of the Company.
(2) Basis of measurement
The consolidated financial statements of the Group have been prepared based on historical cost, except foritems such as financial instruments that are measured at fair value as stated in Note “3. Significant
Accounting Policies”.
(3) Functional currency and presentation currency
The consolidated financial statements of the Group are presented in Japanese yen, which is the functional
currency adopted by the Company, and figures less than one million yen are rounded off to the nearest
million yen.
(4) Changes in presentations(Consolidated statement of cash flows)“Increase (decrease) in accounts payable – bonuses,” “Gains on sale of discontinued operations,” and“Increase (decrease) in provision related to business and plant restructuring expenses” that were stated as
separate line items under “Cash flows from operating activities” for the previous fiscal year, are included in“Other” under “Cash flows from operating activities” from the current fiscal year, as their amounts havebecome immaterial. “Increase (decrease) in provision for product warranties” included in “Other” under“Cash flows from operating activities” for the previous fiscal year, is separately stated from the current
fiscal year, as its amount has become material. The consolidated financial statements of the previous fiscal
year have been reclassified to reflect these changes in presentation.
As a result, 9,086 million yen stated in “Increase (decrease) in accounts payable – bonuses,” (303,521)
million yen stated in “Gains on sale of discontinued operations,” (21,340) million yen stated in “Increase(decrease) in provision related to business and plant restructuring expenses,” and (42,073) million yen
under “Other” were reclassified for the previous fiscal year, as “Increase (decrease) in provision for productwarranties” in the amount of (2,357) million yen and “Other” in the amount of (355,491) million yen.
“Proceeds from sales of investments in securities” included in “Other” under “Cash flows from investing
activities” for the previous fiscal year, is separately stated from the current fiscal year, as its amount has
become material. The consolidated financial statements of the previous fiscal year have been reclassified toreflect this change in presentation.
As a result, (54,545) million yen stated in “Other” under “Cash flows from investing activities” for theprevious fiscal year was reclassified as “Proceeds from sales of investments in securities” in the amount of
466 million yen and “Other” in the amount of (55,011) million yen.
109

“Purchase of treasury stock” included in “Other” under “Cash flows from financing activities” for theprevious fiscal year, is separately stated from the current fiscal year, as its amount has become material.
The consolidated financial statements of the previous fiscal year have been reclassified to reflect thischange in presentation.
As a result, (143) million yen stated in “Other” under “Cash flows from financing activities” for theprevious fiscal year was reclassified as “Purchase of treasury stock” in the amount of (10) million yen and“Other” in the amount of (133) million yen.

110

3. Significant Accounting Policies(1) Basis of consolidation
1)

Subsidiaries
A subsidiary is an entity under the control of the Group. The Group controls an entity when it is
exposed to or 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 thedate the Group gains control until the date that control is lost. If any accounting policies applied by a
subsidiary differ 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 and transactions 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 areaccounted for as equity transactions, and the difference between the amount by which non-controllinginterests are adjusted and the fair value of the consideration is directly recognized in equity as
interests attributable to the shareholders of the Company.
If the Group loses control over a subsidiary, gains and losses derived from the loss of control arerecognized in profit or loss.

2)

Associates
An associate is an entity which the Group does not control, but exerts significant influence on
financial and operating policies thereof. The equity method is applied to associates from the date that
the Group has significant 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
when strategic financial and operating decisions related to the relevant activities require unanimous
consent of the parties 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 ismeasured as the sum of the acquisition-date fair values of the assets transferred, liabilities assumed, andequity 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 statement of financial position. Conversely, if the consideration is less than thefair value, the difference is immediately recognized in profit or loss in the consolidated statement of profit
or loss. Acquisition costs that are attributable to a 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 thebusiness combination 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 toreflect 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 haveaffected the measurement of the amounts recognized. Additional assets or liabilities are recognized if this111

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, andaccordingly, it does not recognize goodwill attributable to such transactions.
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 businesscombination and the common control is not transitory) are accounted for at carrying amount.
(3) Foreign currency translation1)

Foreign currency transactions
Foreign currency transactions are translated into the functional currency of each entity of the Groupby 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
into functional 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 datewhen their fair values 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 fromfinancial assets measured through other comprehensive income as well as from cash flow hedges arerecognized in other comprehensive income.

2)

Financial statements of foreign operations
Assets and liabilities of foreign operations, including any goodwill arising on the acquisition of aforeign operation and any fair value adjustments, are translated into presentation currency using theexchange 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.
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 andpartial disposals of interests resulting in loss of control or loss of significant influence, translationdifferences are recognized in profit or loss as part of the gain or loss on disposal.

(4) Financial instruments
1)

Financial assets other than derivatives
a. Initial 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 thecontract on such 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 areclassified as financial assets measured at fair value.
・ The assets are held based on the business model whose objective is to hold the assets inorder to collect contractual cash flows.
・ The contractual terms of the financial asset give rise on specified dates to cash flows thatare 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 infair values after acquisition are recognized in profit or loss (“financial assets measured at fairvalue through profit or loss”) and financial assets whose changes in fair values after acquisition
are recognized in other comprehensive income (“financial assets measured at fair value throughother comprehensive income”).
At initial recognition, equity instruments that are not designated as financial assets measured atfair value through other comprehensive income and debt instruments that do not meet the112requirements for the amortized cost measurement are classified as financial assets measured at fairvalue 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
through profit or loss, are measured at fair value plus transaction costs directly attributable to theacquisition of the assets.
b. Subsequent measurement
Financial assets after the initial recognition are 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 values and dividends arerecognized in profit or loss.
(c) Financial assets measured at fair value through other comprehensive income
Changes in fair values 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 or loss as finance income in the period when the Group’s right to receive payment of thedividends is established.
c. Derecognition
Financial assets are derecognized when the right to receive benefits expires or all the risk andrewards of 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 incredit risk on financial instruments since initial recognition.
If credit risk on a financial instrument has not increased significantly since initial recognition, theallowance for 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 associatedwith 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 thereporting date about past events, current conditions and forecasts of future economic
conditions.
The amounts of these measurements are recognized in profit or loss. If an event occurs after
recognition of an impairment loss that results in a decrease of the impairment loss, such decrease isreversed in profit or loss.

113

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 derivatives
a. Initial recognition and measurement
Debt securities issued by the Group are initially recognized at the date of issuance. All otherfinancial liabilities are recognized on the date when the Group becomes a party to the contract onsuch 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 initialrecognition.
All the financial liabilities are initially measured at fair value, while financial liabilities measured
at amortized cost are measured at fair value less directly attributable transaction costs.
b. Subsequent measurement
Financial liabilities after the initial recognition are as follows, depending on respectiveclassifications:(a) Financial liabilities measured at amortized cost
After initial recognition, financial liabilities measured at amortized cost are measured atamortized cost 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 values being
recognized in profit or loss.
c. Derecognition
Financial liabilities are derecognized when the obligation is discharged, canceled or expired.

4)

Derivatives and hedge accounting
The Group uses derivatives, including forward exchange contracts and interest rate swap transactions,for the purpose of hedging foreign currency fluctuation risk and interest rate fluctuation risk.
At the inception of the hedge, the Group designates and documents the hedging relationship between
a hedging instrument and a hedged item as well as the Group’s risk management objective andstrategy 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, on an ongoing basis, whether they actually remained highly
effective throughout the hedge period.
Derivatives are initially recognized at fair value. After initial recognition, derivatives are measured atfair 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 the carrying 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 or loss.
114

For the ineffective portion of hedge, the changes in fair value are recognized in profit or loss.
The Group discontinues hedging accounting when the hedging instrument is expired, sold,terminated, or exercised, when the hedge no longer qualifies for hedge accounting, or when thehedge designation is revoked.
c. Derivatives not designated as hedging instruments
Fair value changes on derivatives are recognized in profit or loss.
5)

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 isdetermined based on market information, such as quoted market price or valuation techniques including themarket 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 withmaturities not exceeding three months from the acquisition date, that are readily convertible into cash andsubject to insignificant risk of changes in value.
(7) Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories includes costsof purchase, costs of conversion and other costs incurred in bringing the inventories to their present
location and condition. 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 lessestimated costs of completion and 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, plantand equipment includes any costs directly associated with its acquisition, and the costs of dismantling andremoving the item and restoring the site on which it is located, as well as the borrowing costs eligible forcapitalization.
The depreciation of property, plant and equipment other than land and construction in progress is calculatedusing the straight-line method over the following estimated useful lives. The estimated useful life of eachmain asset item is as follows.
Buildings and structures:
10 to 50 years
Machinery and vehicles:
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,
and any change thereof is accounted for as a change in accounting estimate.

115

(9) Goodwill and intangible assets
1)

Goodwill
The Group recognizes goodwill arising from business combinations as an asset as of the date whencontrol is obtained (the acquisition date). The measurement of goodwill at initial recognition ispresented 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 purposeof impairment test, goodwill obtained in business combinations is allocated to a cash-generating unit
or groups of cash-generating units that are expected to benefit from the synergies of the combination
on and after the acquisition 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
for internally generated intangible assets are recognized as an expense incurred during the period,
except for development costs eligible for capitalization.
Intangible assets with finite useful lives are amortized by using the straight-line method over theirrespective estimated useful lives. If there is an indication of impairment, they are tested for
impairment. The estimated useful 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 eachreporting 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, andstated at cost 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)
1)

LeasesLesseeAt 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
the commencement date, the Group measures the right-of-use asset at cost and the lease liability at thepresent 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
covered by 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 toexercise 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” indepreciating the right-of-use asset. The Group also applies IAS 36 “Impairment of Assets” todetermine 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, theGroup depreciates 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 earlier of 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
116

•

2)

(11)

remeasuring the carrying amount to reflect changes to the lease payments or a leasemodification, or to 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.
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 therecoverable amount of 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 an asset or a cash-generating unit is measured at the higher of its fair value lesscosts 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 other factors such as the risks specific to the asset. The fairvalue less costs to sell is calculated by using an appropriate valuation model supported by indications offair 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 therecoverable amount of the asset or the cash-generating unit. Then if such recoverable amount exceeds the
carrying amount of the asset or the cash-generating unit, the Group reverses an impairment loss to theextent not exceeding the lower of the estimated recoverable amount and the carrying amount that would
have been determined (net of amortization or depreciation) had no impairment loss been recognized for theasset 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 throughcontinuing 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 isavailable for immediate sale in its present condition; and the management of the Group is committed tosuch sale. An asset held for sale is 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 acomponent 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 geographical area, and is part of a plan to dispose of a separate line ofbusiness 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
in which the employees render related services. The bonuses and paid absences are recognized as aliability and an expense when the Group has a present legal or constructive obligation to pay thebenefits in return for 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 is117determined by first setting the discount period based on the periods until the dates on which thebenefits for each fiscal year will be paid, and then by referencing to market yields on high-grade
corporate bonds and the like at the end of the reporting period corresponding the discount period. The
defined benefit plan liability or asset is determined by subtracting the fair value of the plan assets
from the present value of the defined benefit obligation. Remeasurements of defined benefit plans arerecognized in a lump sum in other comprehensive income when they arise, and reclassified to retained
earnings immediately. Past service cost is recognized in profit or loss for the period in which it isincurred.
The Group accounts for the defined contribution plan by recognizing an expense when the Groupmakes 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 tothe 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 pre-delivery type restricted share-based remuneration
plan as an equity-settled share-based payment plan as well as the Performance Share Units (PSU) plan andthe Restricted Stock Units (RSU) plan 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 the vesting periods in the consolidated statement of profit or loss while
corresponding increases to equity are recognized in the consolidated statement of financial position. Fairvalue of stock options granted is calculated, in accordance with various terms of such options, using theBlack-Scholes model. Pre-delivery type restricted share-based remuneration is measured at fair value on
the grant date and recognized in the consolidated statement of profit or loss as expenses over the vesting
period from the grant date, and the same amount is recognized as an increase in equity in the consolidated
statement of financial position. The fair value of pre-delivery type restricted share-based remuneration ismeasured 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
the fair value of the liability and recognizes any changes in fair value in profit or loss. The RSU plan ismeasured at the standard amount of compensation by position and recognized in the consolidated statementof profit or loss as expenses over the vesting period, and the same amount is recognized as an increase inliabilities in the consolidated statement of financial position. As of the date of allotment and the day oflifting of transfer restriction of the Company’s shares, the Group remeasures the fair value of the liability
and recognizes any changes in fair value in profit or loss.
(15)

Provisions

The Group recognizes provisions when it has a present obligation (legal or constructive) as a result of apast event; when it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation; 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 thepresent value of the expenditures expected to be required to settle the obligation. The present value of theexpenditures is calculated by using a pre-tax discount rate that reflects current market assessments of thetime value of money and the risks specific to the liability with uncertainty of the occurrence of obligating
events being reflected in the estimated 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. The expected timing of future outflow of economic benefits is mainly after one
year from the end of the current fiscal year.

118

2)

Provision for loss on litigation
To prepare for the expenditures of litigation-related expenses, the Group estimates and records anamount of compensation for damages, settlement package, etc. that is currently expected to be
incurred in the future. The outflow of the economic benefits is supposed to occur mainly within one
year from the end of the current fiscal year.

3)

Provision for product warranties
To prepare for the expenditures for after-sales and other services for products sold, the Groupestimates and records an amount to be incurred based on past experience. Also, this was the recordingof a related liability included in the provision for product warranties following the recall of certain
models of standard and power assisted bicycles manufactured by BRIDGESTONE CYCLECORPORATION, a consolidated subsidiary of the Company. The expected replacement costs arecalculated by multiplying the number of rims subject to the recall, replacement costs per unit and an
expected replacement rate based on past recalls. The outflow of the economic benefits is supposed tooccur mainly within one year from the end of the current fiscal year.

(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 thefollowing 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 production and sale of tires and tubes, sale of wheels and accessories, production andsale of retread material and provision of related technology, auto maintenance and repair services, andbusiness of chemical and industrial products, etc.
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 recognizedat the time of delivery of the product.
In addition, consideration for performance obligations is mainly received within one year from satisfactionof the performance obligations, and contains no significant financing component.
Revenue is measured at an amount of consideration promised in a contract with a customer less estimatedfuture 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.
When government grants are related to the items of expense, government grants are recognized in profit orloss on a systematic basis over the periods in which the Group recognizes as expenses the related costs forwhich the grant is intended to compensate. For grants related to assets, the amount of the grant is deductedfrom the cost of the asset.

119

(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 asubstantial 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
arising from the items recognized in other comprehensive income or directly in equity, and tax arising frombusiness combinations.
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 substantially enacted by the reporting date.
Deferred taxes are recognized for the temporary differences between the carrying amount of assets andliabilities 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 thatare not business combinations and affect neither accounting profit nor taxable income (loss)• Deductible temporary differences arising from investments in subsidiaries and associates, andinterests in joint arrangements when it is probable that the temporary difference will not reverse in theforeseeable future or when it is not probable that taxable profit will be available against which thetemporary difference can be utilized.
• Taxable temporary differences arising from investments in subsidiaries and associates, and interests injoint 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 is recognized for all deductible temporary differences to the extent that it is probable that taxable
income will be available 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 toapply to the 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 estimatedamount if 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 tooffset current tax assets against current tax liabilities and when either of the following are met: income
taxes are levied by the same taxation authority on the same taxable entity; or income taxes are levied by thesame 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.

120

(20)

Treasury stock

Treasury stock is measured at cost and presented as a deduction from equity. No gain or loss is recognizedon the purchase, sale or retirement of treasury stock. The difference between the carrying amount and theconsideration 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 aliability 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 theweighted-average number of shares of ordinary shares outstanding adjusted by the number of shares oftreasury stock during the period. Diluted earnings per share are calculated taking into consideration theeffect of all potential shares with dilutive effect.
(23)

Adjusted operating profit

Adjusted operating profit is determined by adding or subtracting certain adjustment items to or from preadjusted metrics.
Reconciliations: Business and plant restructuring income and expenses, impairment losses, gain on
reversal of impairment losses, loss on disaster, insurance claim income, and other gains
and losses with large amounts related to one time event
Management of the Group determines the adjustment items based on whether they can help provide
effective comparative information on the Group performance and appropriately reflect how the businesses
are managed. The adjusted operating profit is presented in Note “6. Operating Segments”.
Adjusted operating profit is not defined by IFRS and not necessarily comparable to metrics similarly namedby other companies.
4. Significant Accounting Estimates and Judgements Involving Estimates
In preparing the consolidated financial statements in accordance with IFRS, the Group is required to establish
judgments, estimates and assumptions that affect the application of accounting policies and the reported amountof assets, liabilities, revenues and expenses. Actual results may differ from those estimates.
The estimates and their underlying assumptions are reviewed on an ongoing basis. The effect of any changes inaccounting estimates is recognized in the reporting period in which the change was made and in future periods.
The items involving estimates and judgments that significantly affect the amounts in the consolidated financial
statements are listed as follows:• Impairment of non-financial assets (Note “16. Impairment of Non-financial Assets”)• Recoverability of deferred tax assets (Note “18. Income Taxes”)• Provisions (Note “21. Provisions”)• Measurements of defined benefit obligations (Note “23. Employee Benefits”)• Fair value measurement of financial instruments (Note “35. Financial Instruments”)• Uncertain income tax positions (Note “18. Income Taxes”)• Measurement of disposal groups classified as held for sale (Note “13. Assets Held for Sale”)

121

5. New Standards and Interpretations Not Yet Adopted
While there are newly issued or revised standards and interpretations that were issued on or before the date of
approval of the consolidated financial statements but have not yet been early adopted by the Group, none ofthem have a material impact on the Group’s consolidated financial statements.
6. Operating Segments(1) Description of reportable segments
The Group’s reportable segments are components of the Group for which separate financial information isavailable, and which are subject to regular review by the Board of Directors for the purpose of making
decisions about the allocation of management resource and assessing the segments’ performance.
The Group has four reportable segments: “Japan,” “Americas,” “Europe, Russia, Middle East, India andAfrica,” and “China, Asia-Pacific”. The reportable segments have been organized for the purpose of
disclosing business results more appropriately based on the Strategic Business Units (SBU)—theclassification of the Group’s businesses for management control purposes. In the aforementioned segment
structure, the Group engages in production and sale of tires and tubes, sale of wheels and accessories,
production and sale of retread material and provision of related technology, auto maintenance and repair
services, and products business of chemical and industrial products, etc.
The Group has classified its US building materials business, anti-vibration rubber business, and chemical
products solutions business as discontinued operations, thereby deducting such discontinued operations
from monetary amounts of the previous and current fiscal years. Details on discontinued operations arepresented in Note “31. Discontinued Operations”.
(2) Revenues and performances of reportable segment
Revenue and business results of the continuing operations by reportable segment of the Group are detailed
in the table below. The Board of Directors assesses the segment performance and determines resource
allocation after reviewing revenues and adjusted operating profit. Internal sales or transfers between
segments are determined primarily at selling prices based on arm’s length transaction prices or total cost.
Previous fiscal year (Year ended December 31, 2021)(Yen in millions)Japan

Revenue
External revenue
Inter-segment revenue
Total revenue
Segment profit (loss)
Adjusted operating profit
Other items
Depreciation andamortization
Impairment losses

Reportable segments
Europe,Russia,China,
AmericasMiddleAsia-PacificEast, India
and Africa

Total

Other

Corporate
Consolior
dated totalelimination

28 3,246,057(228,825)–(228,797) 3,246,057

767,138 1,443,758
105,903
10,865873,041 1,454,624

686,140
7,781
693,921328,817 3,225,853
58,033
182,582
386,851 3,408,436

20,17546,243
66,418116,966

190,646

42,104

41,999391,715

5,071(2,447)394,340

61,98588,73143,14231,001

224,859

7,122

13,918245,899

962

1,111

–

1,662

3,734

–

–

3,734

122

Current fiscal year (Year ended December 31, 2022)(Yen in millions)
Reportable segments
Europe,Russia,China,
AmericasMiddleAsia-PacificEast, India
and Africa

Japan

Revenue
External revenue
Inter-segment revenue
Total revenue
Segment profit (loss)
Adjusted operating profit
Other items
Depreciation andamortization
Impairment losses
Gain on reversal of
impairment losses on fixed
assets889,692 1,970,276
146,599
17,756
1,036,291 1,988,032

Total

Other

Corporate
Consolior
dated totalelimination

856,443
13,577870,020

376,713 4,093,124
80,292
258,224
457,005 4,351,348

16,90763,55980,466

40 4,110,070(321,783)–(321,744) 4,110,070

140,251

251,183

66,35039,937497,720

7,299(22,390)482,629

67,606113,139

45,15831,378257,281

7,474

17,353

282,108

1,959

155

13,581

1,797

17,492––

17,492

–

–

–

36

36

–

–

36

Reconciliation from adjusted operating profit to profit before tax(Yen in millions)
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Adjusted operating profit (Note 1)
Adjustment items (income) (Note 2)

394,340
3,567

482,629
6,193

Adjustment items (expenses) (Note 5)
Operating profit

21,107376,799

47,524441,298

Finance income
Finance costs

10,807
16,21918,28341,898

Share of profit (loss) of investments accounted forusing equity method

6,207

5,775

377,594

423,458

Profit before tax(Note 1)

For adjusted operating profit, adjustment items (income and expenses) are excluded from operating
profit.

(Note 2)The major breakdown of adjustment items (income) is as follows:(Yen in millions)
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

1,005(Note 3) 2,562

1,216(Note 4) 4,942

–

36

3,567

6,193

Insurance claim income
Business and plant restructuring income
Gain on reversal of impairment losses on fixed
assetsAdjustment items (income)(Note 3)This was primarily the recording of gain on sale of fixed assets, etc. due to the closure of bicycle
manufacturing plants in Japan.

(Note 4)Mainly reversal of impairment losses and gain on sale of fixed assets associated with thereorganization of overseas tire plants are recorded.

123

(Note 5)

The major breakdown of adjustment items (expenses) is as follows:(Yen in millions)
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

3,734

17,492

637
419

5,979
211

(Note 7) 13,757(Note 8) 7,435(Note 9) 2,560(Note 10) 16,407

21,10747,524

Impairment losses (Note 6)
Cost of sales (loss on disaster)
Other expenses (loss on disaster)Business and plant restructuring expenses
Other expense with large amounts related to one
time event
Adjustment items (expenses)(Note 6)The major breakdown of impairment losses is presented in Note “16. Impairment of Non-financial
Assets”.

(Note 7)This was primarily the recording of expenses related to the closure of overseas tire plants, expenses
due to the withdrawal from the conveyor belt business and expenses related to the sale of an overseas
raw materials plant.

(Note 8)This was primarily the recording of expenses relating to the reorganization of overseas tire plants.

(Note 9)This was the recording of expenses relating to inspections, repairs, etc. of the affected standard andpower assisted bicycles following the recall of certain models of standard and power assisted bicycles
manufactured by BRIDGESTONE CYCLE CORPORATION, a consolidated subsidiary of theCompany.

(Note 10) This was the recording of expenses relating to parts replacement, etc. of the affected standard andpower assisted bicycles following the recall of certain models of standard and power assisted bicycles
manufactured by BRIDGESTONE CYCLE CORPORATION, a consolidated subsidiary of theCompany.
(3) Information about geographical areas
The breakdown of revenue from external customers and non-current assets by geographical area is asfollows:
Revenue from external customers(Yen in millions)
Previous fiscal year
(Year ended December 31, 2021)
Japan
Americas[of which, the U.S.]

537,879

575,517

1,518,554[1,223,980]

2,094,941[1,660,688]

743,607446,016

909,980
529,632

3,246,057

4,110,070

Europe, Russia, Middle East, India and Africa
China, Asia-Pacific
Total(Note) Revenues are broken down by location of sales destination.

124

Current fiscal year
(Year ended December 31, 2022)

Non-current assets(Yen in millions)
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)Japan

522,891

524,189

Americas
Europe, Russia, Middle East, India and Africa

829,166
405,778

991,792
421,165

China, Asia-Pacific

253,636

267,560

2,011,470

2,204,706

Total(Note) Non-current assets are broken down by location of each asset and do not include financial instruments,
deferred tax assets and assets associated with employee benefits.
(4) Information about major customers
Disclosures are omitted because there are no external customers for which sales account for 10% or moreof revenue in the consolidated statement of profit or loss.
7. Business Combinations
Previous fiscal year (Year ended December 31, 2021)
As stated in Note “37. Subsidiaries and Associates, etc. (2) Loss of control of subsidiaries”.
Current fiscal year (Year ended December 31, 2022)
As stated in Note “37. Subsidiaries and Associates, etc. (2) Loss of control of subsidiaries”.
8. Cash and Cash Equivalents
The breakdown of “Cash and cash equivalents” is as follows:
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Cash and deposits (maturing within three months)

787,542518,905

Total

787,542518,905

125

9. Trade and Other Receivables
The breakdown of “Trade and other receivables” is as follows:
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Notes and accounts receivable

721,796911,246

Accounts receivable - other
Other

50,6386,920

65,399
8,684

Allowance for doubtful accounts(37,742)(38,720)

741,612946,608

Total

Trade and other receivables are presented net of allowance for doubtful accounts in the consolidated statementof financial position.
Trade and other receivables are classified as financial assets measured at amortized cost.
The changes in allowance for doubtful accounts are presented in Note “35. Financial Instruments (3) Credit risk
management 2) Changes in allowance for doubtful accounts”.
10. Inventories
The breakdown of “Inventories” is as follows:
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Finished products

401,545562,245

Work in process
Raw materials and supplies

35,604
189,80246,200273,283

Other
Total

3,189

3,577

630,140

885,305

The amounts of inventories recognized as expenses during the previous fiscal year and the current fiscal year
are 1,894,207 million yen and 2,445,276 million yen, respectively.
11. Other Financial Assets(1) Breakdown of other financial assets
The breakdown of “Other financial assets” is as follows:
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Equity instruments
Long-term loans receivable
Derivative assets
Other
Total
Current assets
Non-current assets
Total

126

107,81456,120

7,158
2,586

17,45011,07934,58834,968152,146

119,617

11,76915,107140,376

104,509152,146

119,617Equity instruments are classified as financial assets measured at fair value through other comprehensive
income, long-term loans receivable are measured at amortized cost, and derivative assets are measured atfair value through profit or loss, respectively.
(2) Financial assets measured at fair value through other comprehensive income
Major issuers of financial assets measured at fair value through other comprehensive income and their fairvalue are as follows:
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Issuers
Toyota Motor Corporation

20,633

17,762

8,970
2,217

7,485
2,978

Fuji Kyuko Co., Ltd.
Yellow Hat Ltd.

998
871

1,169
946

Otsuka Holdings Co., Ltd.

834

861

Toyo Tire Corporation
Sumitomo Mitsui Financial Group, Inc.

These stocks are designated as financial assets measured at fair value through other comprehensive income
as they are held for the purpose of mainly maintaining and strengthening business and collaborative
relationship and for their strategic importance to the Group.
(3) Derecognition of financial assets measured at fair value through other comprehensive income
To improve its asset efficiency and to review its business relationship and for other purposes, the Groupderecognizes the financial assets measured at fair value through other comprehensive income by selling a
portion of those assets.
The fair values at the time of sale and cumulative gains (losses) recognized in other comprehensive income
are as follows:(Yen in millions)
Previous fiscal year
(Year ended December 31, 2021)
Fair value

Current fiscal year
(Year ended December 31, 2022)

Cumulative gains (losses)
78

Fair value

71

Cumulative gains (losses)
3,327

1,654

When financial assets measured at fair value through other comprehensive income are derecognized or thefair value declines significantly, cumulative gains (losses) recognized in other comprehensive income arereclassified to retained earnings. The amounts of cumulative gains (losses), net of tax, which wererecognized in other comprehensive income and subsequently reclassified into retained earnings, are 281
million yen and 1,144 million yen for the previous fiscal year and the current fiscal year, respectively.

127

12. Other Assets
The breakdown of “Other current assets” and “Other non-current assets” is as follows:(1) Other current assets
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Prepaid expenses

32,59042,552

Consumption tax receivables
Other

27,87826,561

44,02931,450Total

87,029118,031(2) Other non-current assets
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Retirement benefit assets (Note 1)

28,254

19,434

Other (Note 2)

29,38950,43757,64469,871

Total(Note 1) The details of retirement benefit assets are presented in Note “23. Employee Benefits (1) Postemployment benefits 3) Reconciliation of defined benefit obligations and plan assets”.
(Note 2) “Other” mainly consists of spare parts and income taxes receivable.
13. Assets Held for Sale
The breakdown of assets held for sale and liabilities directly associated with assets held for sale is as follows.
(1) Assets held for sale
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Cash and cash equivalents
Trade and other receivables

105,275
24,955

5,440
1,382

Inventories
Property, plant and equipment

16,511
24,594

1,089
6,729

Other financial assets (non-current)
Other

51
6,103

22,112828(142,712)(8,887)

34,77828,694

Accumulated loss recognized upon having
measured the disposal group consisting of
discontinued operations at fair value less cost to
sell
Total

128

(2) Liabilities directly associated with assets held for sale
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Trade and other payables
Other
Total

18,314
16,164

1,291
304

34,478

1,596

Assets held for sale and directly associated liabilities for the previous fiscal year, which were mainly in the antivibration rubber business and the chemical products solutions business, have been classified as assets held forsale as the Group decided to sell those operations.
Assets held for sale and directly associated liabilities for the current fiscal year, which were mainly in the antivibration rubber business, the chemical products solutions business and part of other financial assets (shares)
held by the Company have been classified as assets held for sale as the Group decided to sell those operations.
Details for the anti-vibration rubber business and the chemical products solutions business are provided in Note“31. Discontinued Operations”.
For the disposal groups classified as assets held for sale, the anti-vibration rubber business and the chemical
products solutions business are measured at fair value less cost to sell as the fair value less cost to sell is lessthan the carrying amount. As a result, a recognized loss of 19,161 million yen was recorded in “loss fromdiscontinued operations”. The fair value has been classified as Level 3 in the hierarchy because it was assessed
based on the selling price. Other financial assets (shares) are listed stocks, and the fair value thereof has beenclassified as Level 1 in the hierarchy.

12914. Property, Plant and Equipment
The changes in the carrying amount of “Property, plant and equipment,” as well as cost, accumulated
depreciation and accumulated impairment losses are as follows:
Buildings
andstructures
Yen inmillions

Machineryandequipment
Yen inmillions

Tools,
furniture andfixtures
Yen inmillions

Land

Constructionin progress

Other

Total

Yen inmillions

Yen inmillions

Yen inmillions

Yen inmillions

Balance at January 1, 2021
Acquisition

530,452–

425,028–

79,944–

166,621–

178,552
177,335

11,545–

1,392,141
177,335

Depreciation (Note 1)
Impairment losses(37,643)(2,655)(96,453)(4,939)(40,267)
(964)

–
(620)

2,158
(314)

(4,125)(54)(176,330)(9,546)

Sale or disposal
Decrease by sale of(2,383)(1,704)(1,755)(916)(2,331)(313)(9,402)(3,955)(10,335)(1,454)(957)(2,181)(19)(18,901)

60,451

111,00333,883–(208,533)

3,196

–

34,594

31,526

4,185

5,134

11,542676

87,656(9,886)(8,228)(1,172)(3,396)

(702)

(136)

(23,520)

(304)

3,364

3,324

(216)

2,458

(157)

8,470

Balance at December 31,
2021

568,671449,262

75,724

165,650

157,984

10,613

1,427,903

Acquisition
Depreciation (Note 1)–(42,318)–(108,717)–(43,417)––

231,293344–(4,844)

231,293(198,952)

Impairment losses
Sale or disposal(5,503)(2,681)(6,851)(2,314)(1,098)(1,077)(59)(4,614)(3,128)
(779)

(100)
(253)

(16,739)(11,718)

Transfer from constructionin progress

33,26595,502

41,642

1,175(175,882)

4,298

–

Foreign exchange
differences

47,85045,317

7,349

8,880

16,202

520

126,117

Other changes (Note 2)(3,364)(1,511)

5,858

367

(2,806)215(1,239)595,920

470,688

84,981

171,399

223,228

10,4491,556,665

Carrying amountsubsidiary
Transfer from constructionin progress
Foreign exchange
differences
Transfer to assets held for
sale
Other changes

Balance at December 31,
2022(Note 1) Depreciation of property, plant and equipment is included in “Cost of sales,” “Selling, general andadministrative expenses” and “Profit (loss) from discontinued operations” in the consolidated statementof profit or loss.
(Note 2) “Decrease by sale of subsidiary” and “Transfer to assets held for sale” in the current fiscal year are
included in “Other changes”.

130

Cost

Balance at January 1, 2021
Balance at December 31,
2021
Balance at December 31,
2022
Accumulated depreciation andaccumulated impairment loss

Balance at January 1, 2021
Balance at December 31,
2021
Balance at December 31,
2022

Buildings
andstructures
Yen inmillions

Machineryandequipment
Yen inmillions

Tools,
furniture andfixtures
Yen inmillions

Land

Constructionin progress

Other

Total

Yen inmillions

Yen inmillions

Yen inmillions

Yen inmillions

1,163,103

2,187,209

573,326

172,392

195,80953,857

4,345,696

1,228,916

2,255,923

567,266

171,359

172,456

56,2544,452,174

1,331,732

2,460,890

624,511

177,087

241,006

60,5884,895,815

Buildings
andstructures
Yen inmillions

Machineryandequipment
Yen inmillions

Tools,
furniture andfixtures
Yen inmillions

Land

Constructionin progress

Other

Total

Yen inmillions

Yen inmillions

Yen inmillions

Yen inmillions

632,651

1,762,182

493,383

5,771

17,25642,313

2,953,555

660,246

1,806,661

491,542

5,709

14,47145,642

3,024,270

735,812

1,990,202

539,530

5,688

17,77850,1393,339,150

131

15. Goodwill and Intangible Assets(1) Changes during the period
The changes in the carrying amount of “Goodwill” and “Intangible assets” as well as cost, accumulated
amortization and accumulated impairment losses are as follows:
Goodwill

Trademarks

Software

Other(Note 3)Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Balance at January 1, 2021
Acquisition

97,646–

15,2262

48,013–54,242
23,949215,127
23,951

Acquisition due to businesscombinations (Note 1)

31,7402,959

253

14,92849,880

–
–

(400)
–

(11,350)(657)(4,804)(85)(16,554)(742)

Impairment losses
Decrease by sale of subsidiary–(11,980)–(4,710)

(78)
(184)

(75)
(5,132)(153)(22,006)

Transfer of accounts
Foreign exchange differences

–
6,283

–
1,230

16,4791,543(16,479)
2,705–
11,761

(10)

(22)

6,226

(7,345)(1,152)

123,68092

14,285
11

60,245–61,90433,330260,11233,433

–
–

(427)
–

(15,749)(253)(6,269)(134)(22,445)(387)(1,433)
14,021

–
1,677

(67)
3,394

(9)
6,154

(1,509)25,246–46–(1,569)24,7892,376(24,789)
1,020

–
1,875

136,406

13,97774,735

71,207296,325

Carrying amountAmortization (Note 2)
Sale and retirement

Other
Balance at December 31, 2021
Acquisition
Amortization (Note 2)
Sale and retirement
Impairment losses
Foreign exchange differences
Transfer of accounts
Other (Note 4)
Balance at December 31, 2022

(Note 1) In the current fiscal year, the provisional accounting treatment for the business combinations was
finalized, and the figures for the previous fiscal year have been retrospectively adjusted.
(Note 2) Amortization of intangible assets is included in “Cost of sales,” “Selling, general and administrative
expenses” and “Profit (loss) from discontinued operations” in the consolidated statement of profit orloss.
(Note 3) “Software in progress” is included in “Other”.
(Note 4) “Acquisition due to business combinations” and “Decrease by sale of subsidiary” in the current fiscal
year are included in “Other”.
Cost

Goodwill

Trademarks

Software

Other

Total

Yen in millions
99,776

Yen in millions
16,520

Yen in millions
82,761

Yen in millions
81,580

Yen in millions
280,637

Balance at December 31, 2021

125,888

16,018104,589

91,296

337,791

Balance at December 31, 2022

140,238

16,302

136,603110,702403,845

Balance at January 1, 2021

Accumulated amortization andimpairment losses

Goodwill

Trademarks

Software

Other

Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Balance at January 1, 2021

2,130

1,294

34,74827,33865,510

Balance at December 31, 2021

2,209

1,733

44,34429,392

77,679Balance at December 31, 2022

3,832

2,325

61,86839,495

107,520132

(2) Material goodwill and intangible assets
The material goodwill and intangible assets recorded in the consolidated statement of financial position
primarily represents the goodwill recognized through the acquisition of BRIDGESTONE MOBILITY
SOLUTIONS B.V. and the carrying amounts of the goodwill are 57,768 million yen and 62,619 million yen
as of the previous fiscal year-end and the current fiscal year-end, respectively. In addition, the goodwill
recognized by this acquisition was allocated to cash generating units which were expected to benefit fromthe synergies and belongs to WEBFLEET SOLUTIONS cash-generating unit and BRIDGESTONEEUROPE cash-generating unit.
16. Impairment of Non-financial Assets(1) Impairment losses
For measuring impairment losses, the Group groups assets for business based on the categories, which are
adopted for internal management purposes, while grouping assets to be disposed of (assets planned to bedisposed of by retirement, sale, etc.) and idle assets individually.
Impairment losses of 10,651 million yen recognized in the previous fiscal year consisted of 7,689 million
yen recorded as “other expenses” (of which, “business and plant restructuring expenses” are 3,955 million
yen) and 2,962 million yen recorded as “profit (loss) from discontinued operations”. In recording these
impairment losses, the carrying amounts have been reduced to the recoverable amounts mainly for
operating assets with reduced profitability, assets to be disposed of through retirement or sale, and idle
assets with no plans for use. The recoverable amounts of the assets are principally measured at their fairvalue. The fair value has been classified as Level 3 in the hierarchy.
Loss recognized upon having measured the disposal group consisting of discontinued operations at fairvalue less cost to sell is presented in Note “31. Discontinued Operations”.
Impairment losses of 19,333 million yen recognized in the current fiscal year consist of 18,610 million yen
recorded as “other expenses” (of which, “business and plant restructuring expenses” are 1,118 million yen)and 724 million yen recorded as “profit (loss) from discontinued operations”.
The components of the impairment losses of 19,333 million yen by item are 16,739 million yen forproperty, plant and equipment, 1,538 million yen for goodwill and intangible assets, and 1,056 million yen
for others. The breakdown by segment (excluding the amount recorded in business and plant restructuring
expenses and profit (loss) from discontinued operations) is as follows:(Yen in millions)Cash-generating unit

Russian tire business
Other
Total

Japan

–
1,959
1,959

Segments
Europe,Russia,China, AsiaAmericas Middle East,
Pacific
India andAfrica–13,581
–
155
–
1,797
155
13,581
1,797

Total

13,581
3,911
17,492

Consolidated
total

Other

–
–
–

13,581
3,911
17,492The major reasons for the impairment losses are as follows:
As announced on March 14, 2022, the Company resolved to suspend production in Russia and tire exports
to Russia. Accordingly, the carrying amount of assets for business use in the Russian tire business was
reduced by 13,581 million yen to the recoverable amount because at this point in time, the revenue
previously estimated for the Russian tire business is uncertain. The recoverable amount of the asset wasmeasured by its value in use, which was calculated by discounting future cash flows at a discount rate of133

15% or more. In addition, this impairment loss was recorded in “other expenses” in the consolidated
statement of profit or loss.
The breakdown of these impairment losses is as follows:(Yen in millions)Cash-generating unit

Segment

Type of assets

Russian tire business

Europe, Russia, Middle East, India andAfricaTotal

AmountBuildings and structures

4,948

Machinery and vehicles

5,051

Other

3,582
13,581(2) Impairment test of goodwill
The Group conducts an impairment test on goodwill every period or whenever there is any indication of
impairment.
Among goodwill allocated to each cash-generating unit in the current fiscal year, the principal goodwill isrecognized in WEBFLEET SOLUTIONS cash-generating unit and the impairment test was conducted asfollows.
The recoverable amount of goodwill in the impairment test is calculated based on value in use. The value in
use reflects past experience and external sources of information and is based on the Group’s business planfor the next three years as approved by the management. After the three-year plan, the Company discounts
the future cash flows to the present value using a discount rate of 8.9% of the cash-generating unit, using
the future growth rate reduced from 13.8% in the fourth year to 2.3% in the tenth year and the same 2.3%
on and after the eleventh year as the continuous growth rate considering inflation.
The value in use in the previous fiscal year reflects past experience and external sources of information andis based on the Group’s business plan for the next two years as approved by the management. After the
two-year plan, the Company discounts the future cash flows to the present value using a discount rate of
8.1% of the cash-generating unit, using the future growth rate reduced from 9.9% in the third year to 2% in
the ninth year and the same 2% on and after the tenth year as the continuous growth rate considering
inflation.
There is a risk of impairment when key assumptions used for the impairment test change. However, as thevalue in use sufficiently exceeds the carrying amount of the cash-generating unit, the Group determines that
it is highly unlikely that value in use falls below the carrying amount even if key assumptions used in the
impairment test fluctuates by a reasonably foreseeable extent.
In addition, out of the total goodwill related to the acquisition of BRIDGESTONE MOBILITY
SOLUTIONS B.V. of 62,619 million yen (as of the previous fiscal year-end: 57,768 million yen), thecarrying amount allocated to WEBFLEET SOLUTIONS cash-generating unit as of the current fiscal yearend is 56,065 million yen (as of the previous fiscal year-end: 51,722 million yen). The group determinesthat the amount of the goodwill allocated to cash-generating units other than WEBFLEET SOLUTIONS is
not material compared to the amount recorded in the consolidated financial statements.

13417. Lease Transactions
LesseeThe Group enters into lease contracts for buildings and structures, etc.
(1) Items related to right-of-use assets
The carrying amount, depreciation and additions to “Right-of-use assets” are as follows:
Carrying amount

Buildings and structures

Other

Total

Yen in millions

Yen in millions

Yen in millions

Balance at December 31, 2021

235,404

58,662

294,065

Balance at December 31, 2022

244,282

56,996301,278

Depreciation (Note)

Buildings and structures

Other

Total

Yen in millions

Yen in millions

Yen in millions

Previous fiscal year
(Year ended December 31, 2021)

45,284

12,201

57,485Current fiscal year
(Year ended December 31, 2022)

50,945

12,87363,818(Note) Depreciation of right-of-use assets is included in “Cost of sales,” “Selling, general and administrative
expenses” and “Profit (loss) from discontinued operations” in the consolidated statement of profit or loss.

Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Additions to right-of-use assets

60,27557,326

Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions(2) Expenses and cash outflows for leases
The lease expenses are as follows:

Interest expense on lease liabilities

5,707

7,480

Recognition exemptions: expenses for short-term leases
Recognition exemptions: expenses for leases of low-value

1,555

1,473

482

342

2,747

4,243

Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

assetsExpense relating to variable lease payments not included in
the measurement of lease liabilities

Total cash outflows for leases are as follows:

Total cash outflow for leases

64,507(3) Maturity analysis for lease liabilities
The details are presented in Note “35. Financial Instruments (4) Liquidity risk management”.
135

71,886

18. Income Taxes(1) Deferred tax assets and deferred tax liabilities
The breakdown of items giving rise to “Deferred tax assets” and “Deferred tax liabilities” and the changes
thereof are as follows:
Previous fiscal year (Year ended December 31, 2021)

Deferred tax assets
Accrued expenses

As of January 1, Recognized in
2021
net profit or loss

Recognized inothercomprehensive
incomeOther

As of December
31, 2021

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

12,531

(7)

–

1,847

14,371Retirement benefit liabilities
Unrealized gains

40,45912,331(1,975)
4,081(3,425)–

1,479–

36,53816,412

Unused tax losses carryforward
Other

7,536
44,2795,797
23,843

–
(143)

651
(5,884)

13,98462,095

Total deferred tax assets

117,136

31,739(3,568)(1,907)

143,400

60,056

4,121

–

6,397

70,574

16,364

–

5,994

–

22,35817,262(3,145)––

14,118

2,536

1,051

(21)

(197)

3,369

Deferred tax liabilities
Property, plant and equipment, andintangible assets
Financial assets
Reserve for advanced depreciation of
fixed assets
Other
Total deferred tax liabilities
Net deferred tax assets

96,218

2,027

5,973

6,201

110,419

20,91829,712(9,541)(8,108)32,981

Current fiscal year (Year ended December 31, 2022)

Deferred tax assets
Accrued expenses

As of January 1, Recognized in2022
net profit or loss

Recognized inothercomprehensive
incomeOther

As of December
31, 2022

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

14,371(1,344)–

3,182

16,209Retirement benefit liabilities
Unrealized gains

36,53816,412(1,309)10,871(3,275)–

3,056–

35,01027,283

Unused tax losses carryforward
Other

13,98462,095(3,089)(8,440)

–
1,480

(332)
2,123

10,56357,258

Total deferred tax assets

143,400(3,311)(1,795)

8,029

146,323

70,574(9,903)–

8,995

69,66622,358–(6,708)–15,650

14,118

(714)

–

–

13,404

3,369

477

572

271

4,689

110,419(10,140)(6,136)

9,266

103,409

32,981

6,829

4,341

(1,237)42,914

Deferred tax liabilities
Property, plant and equipment, andintangible assets
Financial assets
Reserve for advanced depreciation of
fixed assets
Other
Total deferred tax liabilities
Net deferred tax assets

136

The breakdown of deferred tax assets and liabilities in the consolidated statement of financial position is asfollows:
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Deferred tax assets
Deferred tax liabilities

76,79043,81081,62538,712

Net deferred tax assets

32,98142,914

Deferred tax assets recognized by taxable entities that have suffered a loss in either the previous fiscal yearor the current fiscal year are 6,215 million yen and 972 million yen as of December 31, 2021 and 2022,
respectively. For recognizing these deferred tax assets, the Group considers if deductible temporary
differences and a part or all of unused tax losses carryforward can be used for future taxable income. For anassessment of the recoverability of deferred tax assets, the Group considers deferred tax liabilities planned
to be reversed and expected future taxable income and tax planning. As for recognition of deferred tax
assets, the Group determines it is highly probable that these tax benefits will be realized based on the
taxable income level in the past and the prediction of future taxable income in the period during which
deferred tax assets can be recognized.
The deductible temporary differences and unused tax losses carryforward for which deferred tax assets
were not recognized are as follows:(Yen in millions)
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Deductible temporary differences

101,371

133,241

Unused tax losses carryforward

182,290

190,404

283,661

323,645

Total

The unused tax losses carryforward and unused tax credits carryforward for which deferred tax assets were
not recognized will expire as follows:(Yen in millions)
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Unused tax losses carryforward
Within five years

27,50036,089After five years

154,790

154,315

182,290

190,404

Within five years

4,679

1,105

After five years

6,902

5,788

11,580

6,893

Total unused tax losses carryforward
Unused tax credits carryforward

Total unused tax credits carryforward

Total temporary differences arising from the investments in subsidiaries and associates or interests in joint
arrangements, which are not recognized as deferred tax liabilities as of the previous fiscal year-end and thecurrent fiscal year-end amount to 330,749 million yen and 423,009 million yen, respectively.
Deferred tax liabilities related to the above temporary differences are not recognized as the Group is able tocontrol the timing of the reversal of the temporary differences and it is probable that they will not reverse it
in the foreseeable future.
137

(2) Income tax expense
The breakdown of “Income tax expense” is as follows.
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Current income tax expense

68,552

131,651

Deferred income tax expense(5,318)(19,198)

63,234112,452

Total income tax expense

Income taxes recognized on sale of the financial assets measured at fair value through other comprehensive
income are as follows:
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Income tax expense

95

148

(3) Reconciliation of effective tax rate
The breakdown of the primary factors contributing to differences between the statutory effective tax rates
and the effective income tax rates after adjustments for tax effect accounting is as follows:
The Company is subject to corporation tax, inhabitant tax and business tax. The statutory effective tax rates
calculated based on these taxes are 30.6% and 30.6% for the previous fiscal year and the current fiscal year,
respectively. However, overseas consolidated subsidiaries are subject to local corporate and other taxes.
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)%%

Statutory effective tax rate
(Adjustments)
Differences in applicable tax rates of consolidated
subsidiaries
Tax adjustments for overseas subsidiaries

30.6

30.6

(3.9)

(4.1)

1.2

(1.2)

Repayment of capital from a consolidated subsidiary
Other

(8.2)
(3.0)

–
1.3

Effective income tax rates after adjustments for tax effectaccounting

16.7

26.6

Effective income tax rates after adjustments for tax effect accounting, which factors in discontinued
operations for the previous fiscal year and the current fiscal year were 22.7% and 23.3%, respectively.
(4) Uncertain income tax positions
As for the repayment of capital received from BRIDGESTONE AMERICAS, INC., a consolidated
subsidiary, in the previous fiscal year, the Company accounted for the transaction by recognizing deductible
expenses as loss on transfer of shares for tax purposes. In the previous fiscal year, the Company excluded
some deductible expenses to calculate its taxable income, for accounting purposes, with respect to thismatter 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 consideringvarious scenarios and assumptions. As a result, although deferred tax assets would be 91,100 million yen
higher if all the deductible expenses were included in calculating taxable income, the Company has
lowered its deferred tax assets by 60,000 million yen, relative to amounts under the aforementioned
138

treatment. There has been no change in the judgement on the treatment of this matter, and the Company
continues the same treatment as the previous fiscal year.
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 thesubsequent fiscal year.
19. Trade and Other Payables
The breakdown of “Trade and other payables” is as follows:
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Notes and accounts payable

237,516

296,619

Accounts payable - otherAccrued expenses

171,203108,292

189,108
121,771

517,010

607,498

Total

Trade and other payables (excluding accrued expenses) are classified as financial liabilities measured atamortized cost.
20. Bonds and Borrowings (Including Other Financial Liabilities)(1) Breakdown of financial liabilities
The breakdown of “Bonds and borrowings,” “Lease liabilities” and “Other financial liabilities” is asfollows:
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions
62,996

Yen in millions
92,247

Current portion of longterm borrowings

46,985Current portion of bonds

Short-term borrowings

Average interest
rate(Note 1)

Repayment
deadline%
2.3–

15,6200.7–

39,995––Long-term borrowings

47,11235,9281.5–
January 2024 –Bonds

309,560

309,656

0.3

Short-term lease liabilities

54,85356,033

2.6

Long-term lease liabilities

249,638

257,684

2.7

January 2024 –October 2105

Other

41,99552,148––853,134

819,315––

231,485621,649

197,973
621,343––––

853,134

819,315

–

–

Total
Current liabilities
Non-current liabilities
Total

November 2027
April 2024 –April 2029–

(Note 1)

“Average interest rate” represents the weighted average interest rates for the interest rates andbalances as of the end of the current fiscal year.

(Note 2)

Bonds and borrowings are categorized as financial liabilities measured at amortized cost.

139

The terms for the different bonds that have been issued are summarized below:(Yen in millions)Company
namePrevious fiscal year Current fiscal year Interest
Issuance date (As of December 31, (As of December 31,
rate
2021)
2022)
(%)

Issue

The 9thBridgestone
unsecured
Corporation
bonds

Collateral

Maturity date

April 21, 2017

39,995

–

0.1

None

April 21, 2022

April 21, 2017

49,95949,9770.2

None

April 19, 2024

April 21, 2017

59,91459,9300.3

None

April 21, 2027

The 12th
Bridgestone
unsecured
Corporation
bonds

April 19, 2019

49,954

49,9740.1

None

April 19, 2024

The 13th
Bridgestone
unsecured
Corporation
bonds

April 19, 201949,92449,941

0.2

None

April 17, 2026

April 19, 2019

99,80899,8340.4

None

April 19, 2029–

349,554309,656––

Bridgestone

The 10th

Corporation

unsecuredbonds

Bridgestone

The 11th
unsecured

Corporation

Bridgestone
Corporation

bonds

The 14th
unsecured
bonds
Total

–

(2) Assets pledged as collateral for liabilities
Assets pledged as collateral are as follows:
Assets pledged as collateralPrevious fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Cash and cash equivalents
Property, plant and equipment
Total

140

209
494

219
493

703

712

21. Provisions“Provisions” is recorded as current liabilities and non-current liabilities in the consolidated statement offinancial position.
The breakdown of “Provisions” and the changes are as follows:
Previous fiscal year (Year ended December 31, 2021)
Provision forcompensation for Provision for loss
Provision forindustrial
product warranties
on litigation
accidents

Other

Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Balance at January 1, 2021

11,73916,1398,975

51,682

88,536

Increase during period
Decrease (used)

8,229(8,231)

9,557(5,405)

3,904(6,030)23,346(31,123)

45,036(50,789)

Decrease (reversed)
Exchange difference

(972)
1,253

(2,306)
1,696

(306)
189

(6,387)2,324(9,971)
5,461

–

(80)

65

(4,027)(4,042)

12,01819,601

6,797

35,81574,231

Other
Balance at December 31, 2021

Current fiscal year (Year ended December 31, 2022)
Provision forcompensation for Provision for loss
Provision forindustrial
product warranties
on litigation
accidents

Other

Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Yen in millions

Balance at January 1, 2022

12,01819,601

6,797

35,81574,231

Increase during period
Decrease (used)

9,089(11,377)

12,081(9,291)

21,181(5,469)9,180(10,977)

51,531(37,114)

Decrease (reversed)
Exchange difference

(594)
1,837

(2,366)
667

(138)
229

(2,724)
2,088(5,822)
4,821

879

413

(72)

50

1,270

11,852

21,10522,52833,432

88,917

Other
Balance at December 31, 2022

(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. The outflow of the economic benefits is supposed to occur mainly during the period
one year after the end of the current fiscal year.
(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. The outflow of the economic benefits is supposed to occur mainly within one year from the end of
the current fiscal year.
(3) Provision for product warranties
To prepare for the expenditures for after-sales and other services for products sold, the Group estimates andrecords an amount to be incurred based on past experience. Also, the amount of repair costs relating to thereplacement of stainless steel rim products of the affected standard and power assisted bicycles, which is141currently expected to be incurred in the future, is recorded as 15,416 million yen in other expenses in the
consolidated statement of profit or loss, and the related liability is included in the provision for productwarranties following the recall of certain models of standard and power assisted bicycles manufactured by
BRIDGESTONE CYCLE CORPORATION, a consolidated subsidiary of the Company. The expected
replacement costs are calculated by multiplying the number of rims subject to the recall, replacement costs
per unit and an expected replacement rate based on past recalls. The expected timing of future outflow of
economic benefits is mainly after one year from the end of the current fiscal year.
(4) Other“Other” includes asset retirement obligations, provision for environmental expenses, etc.
22. Other Current Liabilities
The breakdown of “Other current liabilities” is as follows:
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Bonuses to officers and employees
Refund liabilities

46,60633,34750,16642,028Provision for unused paid absences
Contract liabilities

23,125
14,54825,137
18,532

Consumption tax payables
Other

9,228
24,563

10,34327,134

151,417173,340Total

The details of contract liabilities are presented in Note “26. Revenue”.
23. Employee Benefits(1) Post-employment benefits
The Group has adopted both funded and unfunded defined benefit plans and defined contribution plans as
retirement benefits for its employees. The funded defined benefit plans are managed by pension funds thatare legally segregated from the Group. The board of directors of pension funds and pension trustees are
required by law to act in the best interests of the participants and are responsible for managing the plan
assets in accordance with the prescribed policies.
The Group’s defined benefit plans are exposed to the following risks:(i) Investment risk
The present value of the defined benefit obligations is calculated based on a discount rate that isdetermined by reference 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.
(ii) Interest rate risk
In the event that the discount rate is reduced due to a decline in market yields on high-grade
corporate bonds, the present value of the defined benefit obligations increases, resulting in a risk of
reduction in equity because of the worsened funded status.

1421) Reconciliation of defined benefit obligations
The changes in the defined benefit obligations are as follows:
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Present value of defined benefit obligations at beginning of
period (Note 1)
Service cost
Interest expense
Remeasurements
Actuarial gains and losses arising from changes indemographic assumptions
Actuarial gains and losses arising from changes infinancial assumptions
Actuarial gains and losses arising from experience
adjustments
Past service cost and settlement of plan

870,802737,616

15,872
12,76916,041
15,654

6,306

1,422

(20,456)(138,925)

1,191

1,681

(Note 2) (119,466)(18,635)

Benefits paid
Exchange differences on translation of foreign operations(71,681)
58,674(71,314)71,884Other(16,395)

1,050

737,616

616,474

Present value of defined benefit obligations at end of period(Note 1)

(Note 1)

The weighted-average durations of the defined benefit obligations of the Group are 13.0 years and10.9 years as of the previous fiscal year-end and the current fiscal year-end, respectively.

(Note 2)The decrease was mainly due to a buyout of part of retirement benefits conducted by a US subsidiary.

2) Reconciliation of plan assets
The changes in the plan assets are as follows:
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Fair value of the plan assets at beginning of period
Interest revenue

700,882
10,089594,285
12,513

6,235(115,046)

Contribution from employers (Note 1) (Note 2)
Benefits paid

22,545(67,740)

14,697(66,676)

Settlement of plan (Note 3)
Exchange differences on translation of foreign operations(115,097)
49,830–60,860Other(12,459)(10,056)594,285

490,577

Remeasurements
Return on plan assets

Fair value of the plan assets at end of period(Note 1)The Group and its pension funds, in accordance with the laws and regulations, periodically conduct
financial verifications and recalculate the amount of contributions for the purpose of appropriating
funds for future benefit accruals and maintaining a balanced pension fund in case of a deficit.

(Note 2)The Group plans to make contribution of 15,053 million yen in the subsequent fiscal year.

(Note 3)The decrease was due to a buyout of part of retirement benefits conducted by a US subsidiary.

1433) Reconciliation of defined benefit obligations and plan assets
The relationship between the defined benefit obligations, the plan assets and the defined benefit
liabilities (assets) in the consolidated statement of financial position is as follows:
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Present value of the funded defined benefit obligations
Fair value of the plan assets

658,773(594,285)

549,374(490,577)

Subtotal

64,48858,797

Present value of the unfunded defined benefit obligations
Effect of asset ceiling

78,843396

67,099
9,782

Defined benefit liabilities (assets)

143,727

135,678

Amounts on the consolidated statement of financial position
Retirement benefit liabilities

171,981

155,112(28,254)(19,434)

143,727

135,678

Retirement benefit assets
Defined benefit liabilities (assets) in the consolidated
statement of financial position

4) Major components of plan assets
The major components of plan assets by category are as follows:
Previous fiscal year
(As of December 31, 2021)
Quoted price in active markets
QuotedCurrent fiscal year
(As of December 31, 2022)
Total

Unquoted

Quoted price in active markets
QuotedTotal

Unquoted

Yen in millions Yen in millions Yen in millions Yen in millions Yen in millions Yen in millions
Debt instruments
Japan
Overseas
Equity instruments
Japan
Overseas
Cash and cash equivalents
Alternative investments (Note)
Other
Total

(Note)

294,715
10,034
284,681
29,373
1,157
28,21625,08751,7541,010
401,939

5,222
1,066
4,156
12,853–
12,85332,56090,312
51,399192,346

299,937
11,100288,837
42,226
1,157
41,06957,647142,066
52,409594,285

221,6498,495
213,154
26,776856
25,92020,987
51,123851
321,386

7,107
2,434
4,673
9,770
–
9,770
20,91978,616
52,779169,191

228,756
10,929217,827
36,546856
35,69041,906
129,739
53,630490,577

Alternative investments include investments, such as trusteed pension assets, real estate fund, andhedge fund, etc.
The investment management policy of the Group for the major plans is as follows:(Japan)The Company’s policy aims for managing plan assets to secure stable returns over the medium to longterm so that it can ensure payment of defined benefit obligations in the future, in accordance withinternal regulations. More specifically, the Group sets a target return and asset allocation that is within
the range of tolerable risk defined annually, and it manages its managing assets by keeping suchallocation. When assessing the asset allocation, the Group examines whether to introduce the type ofplan assets that is closely linked to changes in defined benefit obligations.
Furthermore, in the event of an unexpected event in the market environment, the Group is able totemporarily adjust the weighting of risk assets in accordance with the internal regulations.

144

(Overseas)
The policies for managing plan assets of these foreign subsidiaries are established by pension trustees
and the managements of these foreign subsidiaries in accordance with the laws of each country. The
objective of such policies is to secure investment income that exceeds the changes in the value of
liabilities while managing the risks arising from defined benefit obligations.
The core part of the plan assets is invested in bonds linked to the defined benefit obligations. The
remaining part of the plan assets is invested mainly in the stocks to earn long-term income.
5) Reconciliation of the effect of the asset ceiling
The changes in the effect of the asset ceiling are as follows:
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Effect of asset ceiling at beginning of period

367

396

Remeasurements
Change in the effect of asset ceiling

(8)

9,367

Exchange differences on translation of foreign operations

37

19

396

9,782

Effect of asset ceiling at end of period6) Items related to actuarial assumptions
Significant actuarial assumptions for each fiscal year are as follows:
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)%%

Discount rate

(Note)

2.1

4.0

Valuation of the defined benefit obligations includes a judgment of future uncertain events.
Sensitivity of the defined benefit obligation to changes in the major base rate as of the end of the
fiscal year is as follows: Although the sensitivity assumes that all the other variables remain constant,practically they do not always change independently. Negative figures represent a decrease in thedefined benefit obligations and positive figures an increase in them.
Changes in base rate

Discount rate

0.5% increase
0.5% decrease

Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions(58,154)
61,552(45,285)
55,755

7) Defined contribution plan
The amounts of contributions paid to the defined contribution plan are 14,819 million yen and 19,439
million yen for the previous fiscal year and the current fiscal year, respectively.

145

(2) Employee benefit expenses
Employee benefit expenses that are included in “Cost of sales,” “Selling, general and administrative
expenses,” “Other expenses,” “Finance costs” and “Profit (loss) from discontinued operations” in the
consolidated statement of profit or loss are as follows:
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Employee benefit expenses

14,1838,915

24. Equity and Other Components of Equity(1) Common stock and capital surplus
The Companies Act provides that at least half of the paid-in capital shall be appropriated as common stock,and the remaining amount may be appropriated as legal capital surplus within capital surplus. The
Companies Act also provides that legal capital surplus may be appropriated as common stock pursuant to a
resolution at the shareholders’ meeting.
1) Number of shares authorized
The numbers of authorized shares are 1,450,000,000 shares and 1,450,000,000 shares as of the previous
fiscal year-end and the current fiscal year-end, respectively.
2) Number of shares issued and fully paid
The changes in the number of shares issued and the balances of common stock and capital surplus are
as follows:

Beginning of the previous fiscal year
(As of January 1, 2021)

Number of issued shares ofcommon stock

Common stock

Capital surplus

SharesYen in millions

Yen in millions

713,698,221

126,354

122,116––10

713,698,221

126,354

122,126––(2,609)713,698,221

126,354

119,517

Increase (decrease)
Previous fiscal year
(As of December 31, 2021)
Increase (decrease)
Current fiscal year
(As of December 31, 2022)(Note)The shares issued by the Company are shares of common stock with no par value and have norestrictions on any rights.

146

(2) Treasury stock
The changes in the number of shares and balance of treasury stock are as follows:
Number of shares

AmountSharesYen in millions

Beginning of the previous fiscal year
(As of January 1, 2021)
Increase (decrease) (Note 2)Previous fiscal year
(As of December 31, 2021)
Increase (decrease) (Note 3)
Current fiscal year
(As of December 31, 2022)

9,566,508

38,657(132,294)(533)

9,434,214

38,123

19,914,524

98,69029,348,738

136,814(Note 1)The Company has adopted the stock option and appropriated shares of treasury stock for the deliveryof shares upon exercise of these options. The terms of the contract and the amounts, etc. are presented
in Note “34. Share-based Payment”.

(Note 2)The main factors of the increase (decrease) in treasury stock during the previous fiscal year were an
increase due to the purchase of shares less than one unit and a decrease due to the exercise of stock
options.

(Note 3)The main factors of the increase (decrease) in treasury stock during the current fiscal year were an
increase due to acquisition based on a resolution of the Board of Directors, a decrease due to exerciseof stock options, and a decrease due to disposal as PSUs and restricted share-based remuneration.
Note, the number of treasury stock acquired based on the resolution of the Board of Directors in thecurrent fiscal year was 20,225,300 shares and the total acquisition amount was 100,000 million yen.

(3) Other components of equity
1) Stock acquisition rights
The Company has adopted the stock option plan and issued stock acquisition rights in accordance with
the Companies Act. The terms of the contract and the amounts, etc. are presented in Note “34. Sharebased Payment”.
2) Exchange differences on translation of foreign operations
The exchange differences on translation of foreign operations occur when the financial statements ofthe foreign operations prepared using foreign currencies are consolidated.
3) Effective portion of change in fair value of cash flow hedges
The Company hedges the fluctuation risk of variability in future cash flows through hedges, and this is
the portion of the changes in fair value of the derivative instruments designated as cash flow hedges,
which are deemed to be effective.
4) Net change in fair value of financial assets measured through other comprehensive income
This is the valuation difference of the fair values of financial assets measured through othercomprehensive income.
5) Remeasurements of defined benefit plans
Remeasurements of defined benefit plans include actuarial gains and losses that arise from the present
value of defined benefit obligations, the return on plan assets (except for amounts included in net
interest), and changes in the effect of the asset ceiling (except for amounts included in net interest).
147

They are recognized in other comprehensive income when they arise, and reclassified from othercomponents of equity to retained earnings immediately.
(4) Retained earnings
The Companies Act provides that an amount equal to 10% of the dividends paid from surplus shall betransferred to legal capital surplus and legal retained earnings until the aggregate amount of legal capitalsurplus and legal retained earnings equals 25% of the nominal value of common stock. The amountaccumulated in legal retained earnings may be used to offset deficit. Furthermore, such legal retained
earnings may be reversed pursuant to a resolution at the shareholders’ meeting.
25. Dividends(1) The amount of dividends paid
Previous fiscal year (Year ended December 31, 2021)
Class of stock(Resolution)

Total amount ofdividends

Dividend per share

Yen in millions

Yen

Record date

Effective date

Annual Shareholders’ Meeting,March 26, 2021

Common stock

42,24860

December 31,
2020

March 29, 2021

Board of Directors’ Meeting,
August 10, 2021

Common stock

59,85985

June 30, 2021

September 1,
2021

Total amount ofdividends

Dividend per share

Record date

Effective date

Yen in millions

Yen

Current fiscal year (Year ended December 31, 2022)
Class of stock(Resolution)
Annual Shareholders’ Meeting,March 23, 2022

Common stock

59,86385

December 31,
2021

March 24, 2022

Board of Directors’ Meeting,
August 10, 2022

Common stock

59,18085

June 30, 2022

September 1,
2022(2) Dividends that will be effective in the subsequent fiscal year of the record datePrevious fiscal year (Year ended December 31, 2021)
Class of stock(Resolution)
Annual Shareholders’ Meeting,March 23, 2022

Common stock

Total amount ofdividends

Dividend per share

Yen in millions

Yen

Record date

Effective date85

December 31,
2021

March 24, 2022

Total amount ofdividends

Dividend per share

Record date

Effective date

Yen in millions

Yen
December 31,
2022

March 29, 2023

59,863Current fiscal year (Year ended December 31, 2022)
Class of stock(Resolution)
Annual Shareholders’ Meeting,March 28, 2023

Common stock

61,592148

90

26. Revenue(1) Disaggregation of revenue
The breakdown of revenue from continuing operations is as follows.
Previous fiscal year (Year ended December 31, 2021)(Yen in millions)
Reportable segments

Japan

Europe,Russia,China, AsiaAmericas Middle East,
Pacific
India andAfrica567,266

1,404,814

686,140

328,817

2,987,038

19,15928

3,006,225

199,871

38,944––

238,816

1,016–

239,832

Total external revenue

767,138

1,443,758

686,140

328,8173,225,853

20,17528

3,246,057

Revenue recognized fromcontracts with customers

750,688

1,439,323

677,524

328,817

3,196,352

20,17528

3,216,555

16,450

4,436

8,616

–

29,502––29,502

Tires
Other (Note 1)

Revenue recognized fromother sources (Note 2)

Total

Corporate or Consolielimination dated total

Other(Note 1)“Other” includes businesses such as chemical and industrial products, sporting goods and bicycles
that the Company operates in.

(Note 2)

Revenue recognized from other sources includes lease income based on IFRS 16.

Current fiscal year (Year ended December 31, 2022)(Yen in millions)
Reportable segments

Tires
Other (Note 1)

Japan

Europe,Russia,China, AsiaAmericas Middle East,
Pacific
India andAfrica669,476

1,921,055

856,443376,713

Total

3,823,688

Corporate or Consolielimination dated total

Other

15,81340

3,839,540

220,215

49,221––

269,436

1,094–

270,530

Total external revenue

889,692

1,970,276

856,443376,713

4,093,124

16,90740

4,110,070

Revenue recognized fromcontracts with customers

867,200

1,964,477

843,522376,713

4,051,912

16,90740

4,068,858

22,492

5,799

12,921–

41,212––

41,212

Revenue recognized fromother sources (Note 2)(Note 1)“Other” includes businesses such as chemical and industrial products, sporting goods and bicycles
that the Company operates in.

(Note 2)

Revenue recognized from other sources includes lease income based on IFRS 16.

149

(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 fromcontracts with customers are presented as “Trade and other receivables,” while the contract assets andcontract liabilities are as follows:
Beginning of theprevious fiscal year
(As of January 1, 2021)

Previous fiscal year
(As of December 31,
2021)(Yen in millions)
Current fiscal year
(As of December 31,
2022)

Contract assets

1,184

1,851

4,953

Contract liabilities

39,277

18,404

23,117

A significant change in the balance of contract liabilities during the previous fiscal year, was due to the saleof FSBP classified as discontinued operations which accounted for a decrease of 25,643 million yen.
Details are presented in Note “31. Discontinued Operations” and Note “37. Subsidiaries and Associates,etc. (2) Loss of control of subsidiaries”. The beginning balances of 13,267 million yen and 14,548 million
yen of contract liabilities for the previous fiscal year and the current fiscal year are recognized as revenue
in each fiscal year. The amount of revenue recognized in the current fiscal year from performanceobligations 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 toconsideration 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, except for contract liabilities related to FSBP, which were reduced by sales,
primarily relate to advances received from customers in association with maintenance services forautomobiles.
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.
(3) Transaction price allocated to the remaining performance obligations
The amounts of revenue from continuing operations related to the unsatisfied (or partially unsatisfied)
performance obligations that is expected to be recognized in the future at the end of the fiscal year are as
follows:(Yen in millions)
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Within one year

25,72529,719Over one year and within five years

36,50351,799As 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 notincluded in transaction price.

150

27. Selling, General and Administrative Expenses
The breakdown of “Selling, general and administrative expenses” is as follows:(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
Freight

187,315

264,847

Advertising and sales promotional expenses

84,409106,913

Employee benefit expenses

279,533

325,507

Depreciation and amortization

89,785

101,406

Research and development expenses (Note)

95,480112,192

Other

192,099

247,660

928,620

1,158,523

Total(Note) All research and development expenses recognized as expenses are included in “Selling, general andadministrative expenses”.
28. Other Income and Other Expenses
The breakdown of “Other income” and “Other expenses” is as follows:(1) Other income(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
Gain on sale of fixed assets

3,470

14,246

Business and plant restructuring income (Note 1)

2,562

4,942

Other

8,532

19,923

14,565

39,111

Total(Note 1) The breakdown of “Business and plant restructuring income” is presented in Note “6. Operating
Segments”.
(2) Other expenses(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
Impairment losses (Note 2)

3,734

17,492Business and plant restructuring expenses (Note 3)

13,757

7,435

Loss on retirement of fixed assets

4,031

2,576

Other

4,068

5,035

25,59032,538

Total(Note 2) The breakdown of “Impairment losses” is presented in Note “16. Impairment of Non-financial
Assets”.
151

(Note 3) The breakdown of “Business and plant restructuring expenses” is presented in Note “6. Operating
Segments”.
29. Finance Income and Finance Costs
The breakdown of “Finance income” and “Finance costs” is as follows:(1) Finance income(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
Interest income (Note)

8,502

15,708Dividend income (Note)

2,222

2,224

83

351

10,80718,283

Other
Total

(2) Finance costs(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
11,29914,122899

19,059Net interest of defined benefit plans

2,481

3,041

Other

1,539

5,676

16,21941,898Interest expenses (Note)
Foreign currency exchange loss

Total

(Note)“Interest income” and “Interest expenses” arise from financial assets and financial liabilities
measured at amortized cost respectively.
In addition, “Dividend income” arises from financial assets measured at fair value through othercomprehensive income.

15230. Other Comprehensive Income
The analysis of “Other comprehensive income” by item in terms of the amount that occurred during each fiscal
year, the amount reclassified to profit or loss and the impact of tax effects are as follows:
Previous fiscal year (Year ended December 31, 2021)
Amount that
occurred during
the period

Reclassification
Before tax effectadjustment

Yen in millions

Yen in millions

19,701

Tax effect

After tax effectYen in millions

Yen in millions

Yen in millions–

19,701(5,255)

14,446

19,741–

19,741(3,425)

16,316

(18)

–

(18)

–

(18)

39,424–39,424(8,681)30,743

163,596–

163,596–

163,596(2,612)

2,974

362

(98)

264

(3,489)(87)(3,576)–(3,576)

157,496

2,887

160,383(98)

160,285

196,920

2,887

199,807(8,779)191,028

Items that will not be reclassified to
profit or loss
Net change in fair value of financial
assets measured through othercomprehensive income
Remeasurements of defined benefit
plans
Share of other comprehensive incomeof investments accounted for using
equity method
Total of items that will not bereclassified to profit or loss
Items that may be reclassified to profit
or loss
Exchange differences on translationof foreign operations
Effective portion of change in fairvalue of cash flow hedges
Share of other comprehensive incomeof investments accounted for using
equity method
Total of items that may bereclassified to profit or loss
Total

153

Current fiscal year (Year ended December 31, 2022)
Amount that
occurred during
the period

Reclassification
Before tax effectadjustment

Yen in millions

Yen in millions(28,340)

Tax effect

After tax effectYen in millions

Yen in millions

Yen in millions–(28,340)

8,607(19,733)

11,332–

11,332(3,275)

8,057

(0)

–

(0)

–

(0)

(17,009)–(17,009)

5,332(11,677)

Exchange differences on translationof foreign operations

258,117–

258,117–

258,117

Effective portion of change in fairvalue of cash flow hedges(8,312)

12,105

3,793(1,089)2,704

10,449(230)

10,220–

10,220260,255

11,875272,130(1,089)271,041

243,246

11,875

255,1214,243

259,364

Items that will not be reclassified to
profit or loss
Net change in fair value of financial
assets measured through othercomprehensive income
Remeasurements of defined benefit
plans
Share of other comprehensive incomeof investments accounted for using
equity method
Total of items that will not bereclassified to profit or loss
Items that may be reclassified to profit
or loss

Share of other comprehensive incomeof investments accounted for using
equity method
Total of items that may bereclassified to profit or loss
Total

154

31. Discontinued Operations(1) US building materials business
BRIDGESTONE AMERICAS, INC., a U.S. subsidiary of the Company, has concluded an agreement with
LafargeHolcim Ltd., a Swiss building materials manufacturer, regarding the sale of FSBP, a subsidiary of
BRIDGESTONE AMERICAS, INC. in the Americas segment, to Holcim Participations (US) Inc., the U.S.
subsidiary of LafargeHolcim Ltd., on January 6, 2021 (local time), and the sale was completed on March
31, 2021.
Therefore, FSBP and its subsidiaries are classified as discontinued operations.
1) Profit or loss from discontinued operations
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Profit or loss from discontinued operations
Income (Note)
Expenses352,134(41,822)(620)–

Profit (loss) before tax from discontinued operations

310,312(620)

Income tax expense (Note)(78,331)

27

Profit (loss) from discontinued operations

231,980(594)(Note)A gain on sale of 303,521 million yen relating to the transfer of FSBP was included in the previous
fiscal year.
The income tax expense corresponding to that was (71,045) million yen.
An adjustment of (620) million yen on gain on sale relating to the change in the sales price of FSBP
was included in the current fiscal year.
The income tax expense corresponding to that was 157 million yen.

2) Cash flow from discontinued operations

Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Cash flow from discontinued operations
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities(307)
356,520

Net cash provided by (used in) financing activities
Total–(1,359)––356,213(1,359)(2) Anti-vibration rubber business
On December 10, 2021, the Company made the decision to transfer its anti-vibration rubber business(hereinafter the “Business Operations”) to AZ. This entails the Company establishing a new wholly owned
subsidiary (hereinafter “PROSPIRA CORPORATION”) to which it would transfer the Business Operations
by carrying out an absorption-type demerger (hereinafter the “Corporate Demerger”), then integrating theBusiness Operations of the Group into PROSPIRA CORPORATION, and subsequently transferring all
shares of PROSPIRA CORPORATION to AZ (hereinafter 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.
155

The Group has accordingly classified the Business Operations of the Company, BRIDGESTONE APM
COMPANY, and BRIDGESTONE NCR CO., LTD. (hereinafter BSNCR; Note) as discontinued operations
as well as PROSPIRA CORPORATION, PROSPIRA MANUFACTURING JAPAN CO., LTD, PROSPIRANTEC JAPAN CO., LTD, PROSPIRA INDIA AUTOMOTIVE PRODUCTS PRIVATE LIMITED,PROSPIRA (THAILAND) CO., LTD., PROSPIRA AMERICA CORPORATION and PROSPIRA CHINA
CO., LTD.
(Note) BRIDGESTONE NCR CO., LTD. changed its name to BRIDGESTONE INDUSTRIALPRODUCTS (THAILAND) CO., LTD. effective January 4, 2023.
1) Profit or loss from discontinued operations
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Profit or loss from discontinued operations
IncomeExpenses (Note)

58,583(173,471)

49,901(64,856)

Loss before tax from discontinued operations(114,888)(14,955)

Income tax expense (Note)

18,3949,350

Loss from discontinued operations(96,494)(5,605)(Note)

Expenses for the previous fiscal year included a loss on business transfer of 7,452 million yen and aloss of 97,715 million yen recognized upon having measured the disposal group consisting of
discontinued operations at fair value less cost to sell, both of which were recognized upon having
concluded a contract with AZ. Income tax expense includes effects of 18,372 million yen recognized
as deferred tax assets against a loss on business transfer incurred upon having concluded a contract
with AZ and a loss recognized upon having measured the disposal group consisting of discontinued
operations at fair value less cost to sell.
Expenses for the current fiscal year included a loss on business transfer to AZ of 4,254 million yen
and a loss of 6,147 million yen recognized upon having measured the disposal group consisting of
discontinued operations at fair value less cost to sell. The income tax expense corresponding to that is
4,294 million yen.
In addition, the Company consulted with external tax professionals to determine whether loss for tax
purposes against loss on business transfer incurred when executing the business transfer should berecognized (applicability of deductible temporary difference).

2) Cash flow from discontinued operations
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Cash flow from discontinued operations
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities(12,973)(2,527)(10,197)(86,825)

Net cash provided by (used in) financing activities

(142)

(66)

(15,642)(97,088)

Total(3) Chemical products solutions business
On December 10, 2021, the Company made the decision to transfer its chemical products solutions
business (hereinafter the “Business Operations”) to EUF-2. This entails the Company establishing a newwholly owned subsidiary (hereinafter “ARCHEM INC.”) to which it would transfer the Business
Operations by carrying out an absorption-type demerger (hereinafter the “Corporate Demerger”), then156

integrating the Business Operations of the Group into ARCHEM INC., and subsequently transferring all
shares of ARCHEM INC. to EUF-2, which is structured, managed, and operated by EU (hereinafter 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 August 1, 2022. The Groupplans to conduct separate transfer targeting a company at a later time.
The Group has accordingly classified Business Operations of the Company, BSNCR, and BRIDGESTONEPRECISION MOLDING PHILIPPINES, INC., as discontinued operations as well as BRIDGESTONECHEMITECH 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., BRIDGESTONEELECTRONIC MATERIALS (HONG KONG) Ltd. (BEM), BRIDGESTONE (KAIPING) DIVERSIFIEDPRODUCTS CO., LTD., GUANGZHOU ARCHEM AUTO COMPONENT CO., LTD., and ARCHEM(WUHAN) CO., LTD.
1) Profit or loss from discontinued operations
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Profit or loss from discontinued operations
Income (Note)
Expenses (Note)

56,132(111,049)

42,295(51,534)

Loss before tax from discontinued operations(54,918)(9,239)5,600

10,297(49,317)

1,058

Income tax expense (Note)
Profit (loss) from discontinued operations(Note)

Expenses for the previous fiscal year included a loss on business transfer of 4,056 million yen
incurred upon having concluded a contract with EU, and a loss of 44,996 million yen recognized
upon having measured the disposal group consisting of discontinued operations at fair value less costto sell. Income tax expense includes effects of 5,362 million yen recognized as deferred tax assets
against a loss on business transfer incurred upon having concluded a contract with EU and a loss
recognized upon having measured the disposal group consisting of discontinued operations at fairvalue less cost to sell.
Expenses for the current fiscal year included a gain on business transfer to EU of 5,691 million yen
and a loss of 13,014 million yen recognized upon having measured the disposal group consisting of
discontinued operations at fair value less cost to sell. The income tax expense corresponding to that is
5,080 million yen.
In addition, the Company consulted with external tax professionals to determine whether loss for tax
purposes against loss on business transfer incurred when executing the business transfer should berecognized (applicability of deductible temporary difference).

2) Cash flow from discontinued operations
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Cash flow from discontinued operations
Net cash provided by (used in) operating activities(5,225)(2,949)Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities(3,459)(846)(37,854)(368)(9,530)(41,172)

Total

157

32. Earnings per Share(1) Basic earnings (loss) per share
Basic earnings (loss) per share and its basis for the calculation are as follows:
Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
Profit attributable to owners of parent (Yen in millions)

394,037

300,367––

394,037

300,367

307,868

305,508

86,168(5,141)

704,192

694,823

Continuing operations (Yen)

437.19439.69

Discontinued operations (Yen)

122.37(7.40)

Basic earnings (loss) per share (Yen)

559.56432.29Profit not attributable to common shareholders of parent (Yenin millions)
Profit used for calculating basic earnings per share (Yen in
millions)
Profit from continuing operations used for calculating basic
earnings per share (Yen in millions)
Profit (loss) from discontinued operations used for calculating
basic earnings per share (Yen in millions)
Weighted-average number of shares of common stock(Thousands of shares)
Basic earnings (loss) per share158

(2) Diluted earnings (loss) per share
Diluted earnings (loss) per share and its basis for the calculation are as follows:
Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
Profit used for calculating basic earnings per share (Yen in

394,037

300,367––

394,037

300,367

307,868

305,508

86,168(5,141)

704,192

694,823

1,067

953

705,258

695,776

Continuing operations (Yen)

436.53439.09

Discontinued operations (Yen)

122.18(7.39)

Diluted earnings (loss) per share (Yen)

558.71431.70

millions)
Adjustment to profit (Yen in millions)
Profit used to calculate diluted earnings per share (Yen in
millions)
Profit from continuing operations used to calculate diluted
earnings per share (Yen in millions)
Profit (loss) from discontinued operations used to calculate
diluted earnings per share (Yen in millions)
Weighted-average number of shares of common stock(Thousands of shares)
Increase in common stock
Increase from stock options (Thousands of shares)
Weighted-average number of shares of common stock after
dilution (Thousands of shares)
Diluted earnings (loss) per share159

33. Cash Flow Information
Changes in liabilities arising from financing activities
The changes in liabilities arising from financing activities are as follows:
Previous fiscal year (Year ended December 31, 2021)
Changes without cash flows
As of January
1, 2021

Changes withcash flows

Acquisition

Exchangedifferences ontranslation offoreign
operations

As ofDecember 31,
2021

Other

Yen inYen inYen inYen inYen inYen inmillions(82,539)

millions–

millions
5,734

millions

Long-term borrowings

millions
170,902–

millions
94,097

Short-term borrowings
Bonds

185,693
349,442(125,614)
–

–
–

2,918
–

–
112

62,996
349,554

Lease liabilities

300,153(59,689)

62,354

12,124(10,451)

304,491

1,006,190(267,842)

62,354

20,775(10,339)

811,139

Total liabilities related tofinancing activities

Current fiscal year (Year ended December 31, 2022)
Changes without cash flows
As of January
1, 2022

Changes withcash flows

Yen inmillions

Yen inmillions

Acquisition

Exchangedifferences ontranslation offoreign
operations

Other

As of
December 31,
2022

Yen inmillions

Yen inmillions

Yen inmillions

Yen inmillions

Long-term borrowings
Short-term borrowings

94,09762,996(53,560)
21,595––

11,0107,655––

51,54892,247

Bonds
Lease liabilities

349,554304,491(40,000)(65,810)–59,651–
21,752102(6,368)309,656
313,716

Total liabilities related tofinancing activities

811,139(137,775)

59,65140,418(6,266)

767,167160

34. Share-based Payment
The Company has adopted the stock option plan, the PSU plan, the RSU, etc. plan and restricted share-based
remuneration plan. The details of the stock option plan are presented in “1. Information on Stock, etc.” of “IV.
Information about Reporting Company,” and those of the PSU, the RSU, etc. in “4. Corporate Governance,etc.” of “IV. Information about Reporting Company”.
(1) Stock option plan
The Group has not granted any new stock options since July 5, 2017.
1) Terms of the contracts, etc.
Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March
26, 2009

Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March
30, 2010

Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March
29, 2011

Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March
27, 2012

Persons granted

Nine directors of theCompany and 20
corporate officers notconcurrently serving as
directors of the Company

Eight directors of theCompany and 25
corporate officers notconcurrently serving as
directors of the Company

Nine directors of theCompany and 36
corporate officers notconcurrently serving as
directors of the Company

Nine directors of theCompany and 35
corporate officers notconcurrently serving as
directors of the Company

Class and number ofshares granted

Common stock: 110,000
sharesCommon stock: 118,500
sharesCommon stock: 154,500
sharesCommon stock: 202,000
sharesDate of grantMay 1, 2009

May 6, 2010

May 2, 2011

May 1, 2012

Vesting conditions

No vesting condition

No vesting condition

No vesting condition

No vesting condition

Target service period

No specified service
periodNo specified service
periodNo specified service
periodNo specified service
periodExercise period

From May 1, 2009 to
April 30, 2029

From May 6, 2010 toApril 30, 2030

From May 2, 2011 toApril 30, 2031

From May 1, 2012 toApril 30, 2032

Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March
26, 2013

Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March
25, 2014

Resolution at Annual
Shareholders’ Meeting
and Board of Directors’Meeting held on March24, 2015

Resolution at Board of
Directors’ Meeting heldon April 21, 2016

Four directors of theCompany and 36
corporate officers notconcurrently serving as
directors of the Company

Four directors of theCompany and 46
corporate officers notconcurrently serving as
directors of the Company

Three directors of theCompany and 48
corporate officers notconcurrently serving as
directors of the Company

Two directors of theCompany excluding nonexecutive directors, eightexecutive officers notconcurrently serving as
directors and 41
corporate officers

shares granted

Common stock: 196,000
sharesCommon stock: 131,900
sharesCommon stock: 142,500
sharesCommon stock: 208,800
sharesDate of grantMay 1, 2013

May 1, 2014

May 1, 2015

May 6, 2016

Vesting conditions

No vesting condition

No vesting condition

No vesting condition

No vesting condition

Target service period

No specified service
periodNo specified service
periodNo specified service
periodNo specified service
periodExercise period

From May 1, 2013 toApril 30, 2033

From May 1, 2014 toApril 30, 2034

From May 1, 2015 toApril 30, 2035

From May 7, 2016 to
May 6, 2036

Persons granted

Class and number of161

Resolution at Board of
Directors’ Meeting heldon April 27, 2017
Plan A

Resolution at Board of
Directors’ Meeting heldon April 27, 2017
Plan B

Persons granted

Two directors of theCompany excluding nonexecutive directors, fiveexecutive officers notconcurrently serving as
directors and 45
corporate officers

One executive officer notconcurrently serving as
director and two
corporate officers

Class and number ofshares granted

Common stock: 206,500
sharesCommon stock: 14,300
sharesDate of grantMay 12, 2017

July 5, 2017

Vesting conditions

No vesting condition

No vesting condition

Target service period

No specified service
periodNo specified service
periodExercise period

From May 13, 2017 to
May 12, 2037

From July 6, 2017 to July
5, 20372) Changes in the number of stock options
Previous fiscal year
(Year ended December 31, 2021)

Balance at beginning of period
Effect of share split

Current fiscal year
(Year ended December 31, 2022)

Number of shares

Weighted-average
exercise price

Number of shares

Weighted-average
exercise price

SharesYen

SharesYen

1,084,000–

1–

1,025,200–

1–

GrantedExercised–
58,800–1–
142,800–
1

Forfeited

–

–

–

–

Balance at end of period

1,025,200

1

882,400

1

Exercisable balance as of end of period

1,025,200

1

882,400

1(Note 1)

The number of stock options is presented by converting it into the number of shares.

(Note 2)All the stock options have been granted at an exercise price of 1 yen per share.

(Note 3)

The weighted-average stock price of the exercised stock options at exercise during the period is 4,855
yen for the current fiscal year. As for the previous fiscal year, it was 4,991 yen.

(Note 4)

The weighted-average remaining contractual lives of the outstanding stock options as of the previous
fiscal year-end and the current fiscal year-end were 12.5 years and 11.8 years, respectively.

(2) PSUAs previously mentioned, the Company has introduced the PSU.
Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
Number of shares granted (Shares)

37,20071,200Weighted-average fair value at grant date (Yen)

4,393

5,052

(Note) The carrying amounts of liabilities arising from share-based remuneration transactions are 1,243 million
yen and 1,224 million yen as of the previous fiscal year-end and the current fiscal year-end, respectively.
162

(3) RSU, etc.
As previously mentioned, the Company has introduced the RSU, etc.
There were no carrying amounts of liabilities arising from share-based remuneration transactions as of theend of the previous fiscal year. As of the end of the current fiscal year, it was 260 million yen.
(4) Restricted share-based remuneration plan
The Company has introduced a share-based remuneration plan to grant restricted shares to corporate
executive managers and executive managers from January 2021 with the aim of sharing values withshareholders regarding stock price fluctuation, thereby incentivizing them to make a contribution toward anincrease in the stock price and corporate values of the Company.
This plan grants allotment of the Company’s common stock to those eligible for the allotment by providing
monetary remuneration claims, and those eligible persons pay all of said monetary remuneration claims in
the form of contribution in kind. The Company concludes a restricted share allotment agreement with thoseeligible for the allotment whereby they are restricted to transfer the allotted common stock of the Company
to a third party, pledge them as collateral and dispose of them for a certain period prescribed in theallotment agreement (hereinafter, the “Transfer Restriction Period”) (such restrictions are hereinafterreferred to as the “Transfer Restriction”).
The Transfer Restriction shall be lifted for all of the restricted shares as of the expiry of the Transfer
Restriction Period on the condition that those eligible for the allotment continued to assume the positions ofcorporate executive manager and executive manager (hereinafter, the “Positions Eligible for Allotment”)
during the Transfer Restriction Period. However, when those eligible for the allotment lose the status of
Positions Eligible for Allotment of the Company before the expiry of the Transfer Restriction Period with areason deemed valid by the Global CEO following the deliberations of Officer Nomination andCompensation Meeting of the Company, the Transfer Restriction shall be lifted at a point in time
immediately following the said loss of the positions. Meanwhile, when there are shares for which theTransfer Restriction is not lifted as of the expiry of the Transfer Restriction Period, the Company will
acquire such restricted shares without consideration per its scheme.
Previous fiscal year
Current fiscal year (Note 2)(Year ended December 31, 2021) (Year ended December 31, 2022)
Date of grantMay 31, 2021

From February 28, 2022 toMarch 31, 2022

Number of shares granted (Shares)

38,700104,800

Fair value at grant date (Yen) (Note 1)

3,578

4,915

Equity-settled

Equity-settled

From May 31, 2021 to December

From February 28, 2022 to

31, 2023

February 28, 2025

Settlement method
Transfer Restriction Period(Note 1) Fair value is measured based on the average of the daily closing prices of the Company’s common
stock on the Tokyo Stock Exchange for the one month immediately preceding the resolution date of
the Board of Directors.
(Note 2) This includes Special Award granted in February 2022 to the executive officers.

163

(5) Share-based remuneration expenses
Share-based remuneration expenses included in the “Selling, general and administrative expenses” in the
consolidated statement of profit or loss are as follows:
Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
Stock option
PSU
RSU, etc.
Restricted share-based remuneration

164

–

–

1,407

997

–

260

138

515

35. Financial Instruments(1) Capital management
The Group conducts capital management with the aim of increasing capital efficiency to realize
maintaining a proper financial constitution and return to stockholders, while securing the internal reserves
necessary for “Restructuring of the earning power on our core business,” “Strategic investments for growth
for the expansion of our growing solution business” and “Strategic investments for growth on exploringbusinesses”.
As management indicators, the Group utilizes ROE and ROIC as items to be managed for measuring
capital efficiency. The Group will also enhance to restructuring and actions based on a financial strategic
foundation which supports the Mid-Term Management Plan through the realization of portfolio
management by “Restructuring of the earning power” using ROIC and conducting a financial assessment at
the planning and acting stage of investments.
(2) Matters related to risk management
The Group is exposed to financial risks (e.g., credit risk, liquidity risk, foreign exchange fluctuation risk,interest rate fluctuation risk and market price fluctuation risk) in the process of its management activities
and it manages risks based on a specific policy in order to avoid said risks.
(3) Credit risk management
The Group is exposed to credit risk such as a counterparty’s default on contractual obligations resulting in
financial losses to the Group. With respect to trade receivables, the Group regularly monitors the financial
position of significant customers and manage the due dates and the receivables balance of each customer topromptly detect and minimize the risk of defaults resulting from deterioration 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 only with highly rated
financial institutions in order to minimize counterparty risk.
The carrying amounts after impairment presented in the consolidated statement of financial position
represent the Group’s maximum exposure to credit risk of financial assets.
The Group’s credit risk exposure related to notes and accounts receivable, etc. is as follows: The Groupmeasures the future expected credit losses to record allowance for doubtful accounts on notes and accounts
receivable, etc., taking into account probability of recoverability and if there has been a significant increasein credit risk, etc. Whether credit risk increases significantly or not, it is assessed based on the changes inthe default risk. For this purpose, the financial condition of the counterpart, past experience, provisions thathave already been recorded and past due information are taken into consideration. Allowance for doubtful
accounts on trade receivables is always measured at an amount equal to lifetime expected credit losses,
which may be measured either on an individual or collective basis, depending on the nature and size of thetransaction. If one or several of the following events that can affect the estimated future cash flows of the
trade receivables adversely occur, the Group assesses expected credit losses on an individual receivablebasis as credit-impaired trade receivables. The Group does not expose itself to significant concentrations ofcredit risk from specific supplier or customer.
• significant financial difficulty of the debtor• a breach of contract such as a default or past due event• the probability that the debtor will enter bankruptcy or other financial reorganization

1651) Credit risk exposure related to trade and other receivables, etc.
Notes and accounts receivable, etc.
(Yen in millions)
Financial assets for whichallowance for doubtful
accounts is always
Credit-impaired financial
measured at an amountassetsequal to lifetime expectedcredit losses

Total

Previous fiscal year
(As of December 31, 2021)

714,695

17,146

731,840

Current fiscal year
(As of December 31, 2022)

905,535

18,930924,465

Other financial assets(Yen in millions)
Allowance for doubtful accounts
Financial assets formeasured at an amount equal towhich allowance
lifetime expected credit losses
for doubtful
accounts is
Financial assets formeasured at an
which credit risk
Credit-impaired
amount equal tohas increased
financial assets
12-month expected significantly sincecredit losses
initial recognition
Previous fiscal year
(As of December 31, 2021)
Current fiscal year
(As of December 31, 2022)

Total

87,2232,364

600

90,188114,959

145

649

115,7532) Changes in allowance for doubtful accounts
Allowance for doubtful accounts against notes and accounts receivable, etc.
(Yen in millions)
Financial assets for whichallowance for doubtful
accounts is always
Credit-impaired financial
measured at an amountassetsequal to lifetime expectedcredit losses

Total

Balance at January 1, 2021

21,184

16,70537,889

Increase during period

3,179

998

4,177

Decrease during period (utilized)(1,001)(1,074)(2,075)Decrease during period (reversed)(3,021)(1,132)(4,153)

754

1,591

2,345

Balance at December 31, 2021

21,09417,08838,182

Increase during period

2,090

3,573

5,663

Decrease during period (utilized)(1,433)(942)(2,375)Decrease during period (reversed)(2,861)(4,099)(6,960)

Other

2,647

2,027

4,674

Balance at December 31, 2022

21,53817,64739,185

Other

166

Allowance for doubtful accounts against other financial assets(Yen in millions)
Allowance for doubtful accounts
Financial assets formeasured at an amount equal towhich allowance
lifetime expected credit losses
for doubtful
accounts is
Financial assets formeasured at an
which credit risk
Credit-impaired
amount equal tohas increased
financial assets
12-month expected significantly sincecredit losses
initial recognition

Total

Balance at January 1, 2021

67

348

620

1,035

Increase during period

–

118

–

118

Decrease during period (utilized)

–

–

(37)

(37)

Decrease during period (reversed)

(1)

(146)

–

(147)

Other

–

–

17

17

Balance at December 31, 2021

66

320

600

987

Increase during period

124

96

–

220

Decrease during period (utilized)

–

(139)

–

(139)

Decrease during period (reversed)

(1)

(145)

–

(147)

Other

1

–

49

51

190

131

650

971

Balance at December 31, 2022

167

(4) Liquidity risk management
The Group is exposed to liquidity risk when it is not able to repay liabilities on the due date due todeterioration of the financing environment. Payment terms of payables, such as notes and accounts payable,
and accounts payable - other are approximately within one year.
Based on a cash flow plan that incorporates estimated cash inflows and outflows arising from businessactivities, the Group practices fund management effectively by recognizing the future fund position inadvance. The Group also strives to diversify sources of financing such as borrowings or bonds in order toreduce liquidity risk. In addition, the Group keeps necessary credit facilities to manage liquidity risk by
having commitment lines with several financial institutions.
Balances of financial liabilities (including derivative financial instruments) by due date as of the end ofeach fiscal year are as follows:
Previous fiscal year (As of December 31, 2021)(Yen in millions)Due after
Due after one Due after two
Due after four
three years
Due after five
year through years throughyears throughthrough fouryears
two years
three years
five years
years

Carrying
amountContractual
cash flows

Due within
one year

Trade and other payables

517,010517,010517,010

–

–

–

–

–

Bonds and borrowings

506,648

507,093

149,981

16,044

126,322

4,584

50,000160,162

Lease liabilities

304,491

343,981

59,52950,09740,16732,27725,932

135,979

1,328,149

1,368,084

726,520

66,141

166,489

36,86175,932

296,141

Forward exchange contracts

2,570

2,570

2,570

–

–

–

–

–

Currency swap contracts

3,561

3,561

(1,041)

74

4,528

–

–

–

Commodity swap contracts

(54)

(54)

(54)

–

–

–

–

–

Interest rate swap contracts

(124)

(124)

–

–

(124)

–

–

–

Subtotal

5,953

5,953

1,475

74

4,404

–

–

–

Total

1,334,102

1,374,037

727,995

66,215

170,893

36,86175,932

296,141

Non-derivative financial liabilities

Subtotal
Derivative financial liabilities (Note)

168

Current fiscal year (As of December 31, 2022)(Yen in millions)Due after
Due after one Due after two
Due after four
three years
Due after five
year through years throughyears throughthrough fouryears
two years
three years
five years
years

Carrying
amountContractual
cash flows

Due within
one year

Trade and other payables

607,498

607,498

607,498

–

–

–

–

–

Bonds and borrowings

453,451

453,795

107,866

132,196

1,042

50,03362,501

100,157

Lease liabilities

313,716

351,572

62,64155,00742,85835,014

27,625

128,427

1,374,665

1,412,865

778,005

187,203

43,90085,047

90,126

228,584

Forward exchange contracts(5,062)(5,062)(5,062)

–

–

–

–

–

Currency swap contracts

7,848

7,848

(358)

8,207

–

–

–

–

Commodity swap contracts

592

592

592

–

–

–

–

–

Interest rate swap contracts(1,297)(1,297)–(1,297)

–

–

–

–

Subtotal

2,081

2,081

(4,828)

6,910

–

–

–

–

Total

1,376,746

1,414,946

773,177

194,11343,90085,047

90,126

228,584

Non-derivative financial liabilities

Subtotal
Derivative financial liabilities (Note)(Note) Receivables and payables incurred by derivative transactions are presented in net amount.
Total amount of committed line and the amount undrawn are as follows:(Yen in millions)
Previous fiscal year
(As of December 31, 2021)
Total amount of committed line
The amount drawn
The amount undrawn

Current fiscal year
(As of December 31, 2022)

153,385

170,926

863

2,720

152,522168,206(5) Foreign currency risk management
The Group engages in business, such as development, purchase, production, distribution and sales, globallyand conducts international transactions in regions around the world, and therefore, the fluctuation offoreign currency rates has an impact on the Group’s performance.
The Company and certain subsidiaries use mainly forward exchange contracts to hedge foreign currency
fluctuation 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,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 demand under internal regulations and does not enter into
derivative transactions for speculative purposes.
Foreign currency sensitivity analysis
For the financial instruments held by the Group at each fiscal year-end, the impact of appreciation of theforeign currencies against the yen by 1 yen on profit before tax is as follows:
The figures below do not include the impact of translation of financial instruments denominated infunctional currencies, assets and liabilities as well as revenues and costs of foreign operations into yen.
169

This analysis is based on the assumption that other variable factors (such as balances, interest rate, etc.)
are constant.
(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
Profit before tax

(104)

(54)

(6) 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 fluctuation risk
on borrowings.
The Group limits derivative transactions to actual demand under internal regulations and does not enter into
derivative transactions for speculative purposes.
Interest rate sensitivity analysis
As for the financial instruments held by the Group at each fiscal year-end, the impact of interest rate
hikes by 1% on profit before tax is as follows:This analysis is applicable to the financial instruments subject to the effects of changes in interest rates,
assuming other variable factors such as the effects of the changes in currency rates remain constant.
(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
Profit before tax

(270)

(238)

(7) Market price fluctuation risk management
Investment securities in the Group consist primarily of equity securities of business partners and are
exposed to market 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 considering the relationships with
the issuers.
Sensitivity of share price fluctuation risk
The sensitivity analysis of the listed stocks the Group holds to share price fluctuation risk is as follows:
The analysis shows the impact of drops in market prices of the listed stocks by 1% on othercomprehensive income before tax effect, assuming other variables remain constant.
(Yen in millions)
Previous fiscal year
Current fiscal year
(Year ended December 31, 2021) (Year ended December 31, 2022)
Other comprehensive income

(912)

170

(384)

(8) Fair value measurement
The fair value hierarchy of the financial instruments is categorized into the following three levels based on
the inputs to the valuation techniques used.
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
The methods for measuring of major financial instruments measured at fair value are as follows:(i) Derivative assets and derivative liabilities
Derivative assets and derivative liabilities are included in other financial assets and other financial
liabilities, respectively, and those 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.
(ii) Shares, etc.
Shares, etc. are included in other financial assets, classified into financial assets measured at fairvalue through profit or loss, or financial assets measured at fair value through other comprehensive
income. The shares categorized in Level 1 are the listed stocks traded in active market, which aremeasured at a quoted price on the exchange. The shares categorized in Level 3 are unlisted stocks,
which are primarily measured by using the net asset-based 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).
The fair value hierarchy of financial instruments measured at fair value is as follows:
Previous fiscal year (As of December 31, 2021)

Derivative assets
Shares, etc.
Total

Level 1

Level 2

Level 3Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions–
91,164

2,586––
16,6502,586
107,814

91,164

2,586

16,650110,400

–

8,538

–

8,538

–

8,538

–

8,538

Derivative liabilities
Total

Current fiscal year (As of December 31, 2022)

Derivative assets
Shares, etc.
Total
Derivative liabilities
Total

Level 1

Level 2

Level 3Total

Yen in millions–

Yen in millions
11,079

Yen in millions–

Yen in millions
11,07938,399–19,251

57,65038,39911,07919,251

68,729–13,160–13,160–13,160–13,160Transfers between levels of the fair value hierarchy are recognized at the end of each fiscal year. There
was no transfer between Level 1 and Level 2 for the previous fiscal year and the current fiscal year.
171

The changes in assets and liabilities measured at fair value by using Level 3 inputs on a recurring basis
from the beginning to the end of the previous and current fiscal years are as follows:
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Balance at beginning of period

10,891

Gains and losses
Profit or loss (Note 1)

16,650–97

Other comprehensive income (Note 2)
Purchases

1,637
3,870

(1,971)
3,668

Sale and collection
Other

(117)
368

(220)
1,026

16,65019,251

Balance at end of period(Note 1)

Amount is included in “finance income” and “finance costs” in the consolidated statement of profit orloss.

(Note 2)

Amount is included in “Net change in fair value of financial assets measured through othercomprehensive income” in the consolidated statement of comprehensive income.
The financial instruments categorized as Level 3 in the fair value hierarchy financial assets, areclassified into financial assets measured at fair value through profit or loss, or financial assets measured
at fair value through other comprehensive income for which quoted market prices are not readily
available. The fair values of such financial instruments are calculated based on the Group’s accounting
policy. When measuring the fair values, the Group determines the most appropriate valuation techniqueconsidering the nature of the assets, etc. with reasonably estimated input.
In addition, for written put options on shares of a subsidiary granted by the Group to owners of noncontrolling interests, the present value of their exercise price is recognized as financial liabilities(current liabilities). At initial recognition, the amount is reduced from capital surplus.
The written put options are measured at the present value of their exercise price, and the carrying
amount at the end of the current fiscal year was 3,771 million yen and included in other financial
liabilities in the consolidated statement of financial position.
These financial liabilities are not included in the table above.

2) Financial instruments measured at amortized cost
The valuation technique for the fair value of the financial instruments measured at amortized cost is asfollows:
The table below does not include financial instruments where the carrying amounts of which
reasonably approximate the fair values and it is not material.
Bonds and borrowings
The fair values of bonds are based on the market prices. The fair values of the borrowings arecalculated based on the present value and by discounting the total principal and interest over theremaining term at an interest rate that would be applied if similar borrowings were newly made.
Previous fiscal year (As of December 31, 2021)
Carrying amount

Level 1

Level 2

Level 3

Total

Bonds and borrowings

Yen in millions
356,672

Yen in millions–

Yen in millions
358,550

Yen in millions–

Yen in millions
358,550

Total

356,672–358,550–

358,550172

Current fiscal year (As of December 31, 2022)
Carrying amount

Level 1

Level 2

Level 3

Total

Bonds and borrowings

Yen in millions
345,584

Yen in millions–

Yen in millions
342,020

Yen in millions–

Yen in millions
342,020

Total

345,584–

342,020–

342,020(9) Hedge accounting
Risk management strategy
The Group uses, as derivative transactions, such as forward exchange contracts and currency option
contracts to mitigate foreign currency fluctuation risk associated with the foreign currency-denominatedreceivables and payables as well as foreign currency-denominated forecast transaction. It uses currency
swap contracts, if required, to mitigate risk of changes in currency rate and interest rate associated with theforeign currency-denominated loans and borrowings. The Group also engages in interest rate swap
contracts, if required, to mitigate risk of changes in interest rate of the borrowings. It uses commodity swap
contracts, if required, to mitigate price fluctuation risk from raw materials. With respect to the execution
and management of derivative transactions, the Group complies with the internal regulations that stipulatetransaction authority, and engages in the derivative transactions with only highly rated financial institutions
to mitigate counterparty credit risk. Hedge ratio is appropriately determined based on the economic
relationship between the hedging instrument and hedged item as well as its risk management strategies.
There is no material ineffective portion of hedge as the Group applies hedge accounting only when thecritical terms of hedging instruments and hedged items match exactly.
The Group uses derivatives when it is economically rational to do so, including the cases where thehedging relationship does not meet the requirements to qualify for hedge accounting.
The carrying amounts and changes in fair value of the hedging instruments that qualify for hedge
accounting in each fiscal year are as follows:
Previous fiscal year (As of December 31, 2021)(Yen in millions)
Carrying amount (Note)
Hedging typeHedging instruments

Contract amount
AssetsForeign currency
Cash flow hedges

derivatives
Interest rate derivatives

Total

173

Liabilities

35,7485535

26,102

124–

61,850129535

Current fiscal year (As of December 31, 2022)(Yen in millions)
Carrying amount (Note)
Hedging typeHedging instruments

Contract amount
AssetsCash flow hedges

Liabilities

Foreign currency
derivatives

53,281

1,765

105Interest rate derivatives

28,294

1,297–

81,575

3,062

105

Total

(Note) The carrying amounts of these derivatives are recorded in “Other financial assets” or “Other financial
liabilities” in the consolidated statement of financial position, and the amounts due for more than one
year are categorized as non-current assets or non-current liabilities.
The expected duration of cash flows from the cash flow hedges is approximately four months to eightmonths for foreign currency contracts, which is expected to be largely the same as the expected duration of
the impact on net profit or loss.
For the previous and current fiscal years, there are no material amounts recognized in profit or loss, which
are related to the ineffective portions of hedges and portions excluded from assessment of hedge
effectiveness.
The changes in the cash flow hedge reserve arising from the hedging instruments designated as cash flow
hedges are as follows:
Previous fiscal year (Year ended December 31, 2021)
Effective portion of change in fair value of cash flow hedges

Balance at January 1, 2021
Other comprehensive income

Foreign currency
riskInterest rate risk

Commodity-related
risk

Total

Yen in millions

Yen in millions

Yen in millions

Yen in millions

(13)

–

4

(9)

(2,284)
2,974

165
–

(4)
–

(2,123)
2,974

Tax effect

(57)

(41)

–

(98)

Balance at December 31, 2021

620

124

–

744

Amount that occurred during the period (Note 1)
Amount of reclassification adjustment (Note 2)

Current fiscal year (Year ended December 31, 2022)
Effective portion of change in fair value of cash flow hedges
Foreign currency
riskInterest rate risk

Yen in millions
620

Yen in millions
124

Other comprehensive income
Amount that occurred during the period (Note 1)(10,344)1,564–(8,780)

Amount of reclassification adjustment (Note 2)
Tax effect

12,105
(698)

–
(391)

–
–

12,105(1,089)Balance at December 31, 2022

1,683

1,297

–

2,980

Balance at January 1, 2022

(Note 1)

Commodity-relatedrisk
Yen in millions–

Total
Yen in millions
744

The changes in fair value of the hedged items used as the basis for recognizing the ineffective portion
matches the changes in fair value of the hedging instruments.
174

(Note 2)

The amount was reclassified as the hedged items affected net profit or loss, and it was recognized as“Other income,” “Other expenses” or “Finance income” and “Finance costs” in the consolidated
statement of profit or loss.

(10)

Transfer of financial instruments

The Group liquidates a part of its trade receivables. Some of these trade receivables entail a payment
obligation on the Group if the debtor fails to make a payment. The Group does not derecognize those tradereceivables because they do not qualify for derecognition of financial assets.
The trade receivables transferred in such a way that did not qualify for derecognition are recorded as “Tradeand other receivables” at the amount of 108,876 million yen as of the end of the previous fiscal year. In
addition, the proceeds arising upon the transfer of the assets are recorded at the amount of 23,004 million
yen, as the related liabilities in “Bonds and borrowings” as at the above date.
36. Related Party(1) Related party transactions
Previous fiscal year (Year ended December 31, 2021)
Not applicable.
Current fiscal year (Year ended December 31, 2022)
Not applicable.
(2) Remuneration for key management personnel
The remuneration for key management personnel of each fiscal year is as follows:
Previous fiscal year
(Year ended December 31, 2021)

Current fiscal year
(Year ended December 31, 2022)

Yen in millions

Yen in millions

Remuneration and bonuses

647

Share-based payment

215

565

862

1,368

Total

175

802

37. Subsidiaries and Associates, etc.
(1) Information on significant subsidiaries
The significant subsidiaries and associates of the Group as of the end of the current fiscal year arepresented in “4. Subsidiaries and associates” of “I. Overview of the Company” of “Part I Information on
the Company”.
(2) Loss of control of subsidiaries
Previous fiscal year (Year ended December 31, 2021)
1) Sale of subsidiaries
BRIDGESTONE AMERICAS, INC., a U.S. subsidiary of the Company, has concluded an agreementwith LafargeHolcim Ltd., a Swiss building materials manufacturer, regarding the sale of FSBP, asubsidiary of BRIDGESTONE AMERICAS, INC. in the Americas segment, to Holcim Participations(US) Inc., the U.S. subsidiary of LafargeHolcim Ltd., on January 6, 2021 (local time), and the sale wascompleted on March 31, 2021.
As a result of the sale, BRIDGESTONE AMERICAS, INC. has lost its control of FSBP and its
subsidiaries.
The breakdown of assets and liabilities at the time of loss of control of FSBP, consideration received andthe balance of proceeds from sale are as follows.
2) Major breakdown of assets and liabilities as of the current date of loss of control(Yen in millions)
Previous fiscal year
(Year ended December 31, 2021)
Breakdown of assets at time of loss of control
Current assets
Non-current assets

64,084
52,118

Breakdown of liabilities at time of loss of control
Current liabilities

31,777

Non-current liabilities

30,834

3) Cash flows arising from the loss of control(Yen in millions)
Previous fiscal year
(Year ended December 31, 2021)
Consideration received in cash
Of assets at time of loss of control, cash and cash

383,374
2,708

equivalents
Proceeds from sale of discontinued operations

380,666(Note 1)

Cash flows associated with loss of control are recorded in “Proceeds from sale ofdiscontinued operations” under cash flows from investing activities in consolidated statementof cash flows.

(Note 2)

Gains arising from loss of control of 303,521 million yen and the associated income tax
expense of 71,045 million yen are recorded under “Profit (loss) from discontinued
operations” in consolidated statement of profit or loss.

176

Current fiscal year (Year ended December 31, 2022)
1) Anti-vibration rubber businessa. Sale of subsidiaries
On December 10, 2021, the Group made the decision to transfer its anti-vibration rubber business(hereinafter the “Business Operations”) to AZ. This entails the Group establishing a new PROSPIRACORPORATION to which it would transfer the Business Operations by carrying out an absorptiontype demerger (the “Corporate Demerger”), then integrating the Business Operations of the Group
into PROSPIRA CORPORATION, and subsequently transferring all shares of PROSPIRACORPORATION to AZ (hereinafter the “Share Transfer,” with the Corporate Demerger and theShare Transfer hereinafter referred to as the “Business Transaction”). The Group completed theBusiness Transaction on September 1, 2022. The Group plans to conduct separate transfer targeting acompany at a later time.
As a result of the sale, the Group has lost its control of PROSPIRA CORPORATION and its
subsidiaries.
The breakdown of assets and liabilities at the time of loss of control of anti-vibration rubber business,consideration received and the balance of proceeds from sale are as follows.
b. Major breakdown of assets and liabilities as of the current date of loss of control(Yen in millions)
Current fiscal year
(Year ended December 31, 2022)
Breakdown of assets at time of loss of control
Current assets
Non-current assets

108,705
11,407

Breakdown of liabilities at time of loss of control
Current liabilities
Non-current liabilities

12,972
2,848

c. Cash flows arising from the loss of control(Yen in millions)
Current fiscal year
(Year ended December 31, 2022)
Consideration received in cash
Of assets at time of loss of control, cash and cash
equivalents
Payments for sale of discontinued operations

082,655(82,655)(Note 1)

Cash flows associated with loss of control are recorded in “Payments for sale ofdiscontinued operations” under cash flows from investing activities in consolidated
statement of cash flows.

(Note 2)

Details on the transactions are presented in Note “31. Discontinued Operations”.

2) Chemical products solutions businessa. Sale of subsidiaries
On December 10, 2021, the Group made the decision to transfer its chemical products solutions
business (hereinafter the “Business Operations”) to EUF-2. This entails the Group newly
establishing ARCHEM INC. to which it would transfer the Business Operations by carrying out anabsorption-type demerger (hereinafter the “Corporate Demerger”), then integrating the Business
Operations of the Group into ARCHEM INC., and subsequently transferring all shares of ARCHEM
177

INC. to EUF-2, which is structured, managed, and operated by EU (hereinafter the “Share Transfer,”with the Corporate Demerger and the Share Transfer hereinafter referred to as the “BusinessTransaction”). The Group completed the Business Transaction on August 1, 2022. The Group plans
to conduct separate transfer targeting a company at a later time.
As a result of the sale, the Group has lost its control of ARCHEM INC. and its subsidiaries.
The breakdown of assets and liabilities at the time of loss of control of the chemical products solutions
business, consideration received and the balance of proceeds from sale are as follows.
b. Major breakdown of assets and liabilities as of the current date of loss of control(Yen in millions)
Current fiscal year
(Year ended December 31, 2022)
Breakdown of assets at time of loss of control
Current assets
Non-current assets

55,92518,761

Breakdown of liabilities at time of loss of control
Current liabilities

22,309Non-current liabilities

3,670

c. Cash flows arising from the loss of control(Yen in millions)
Current fiscal year
(Year ended December 31, 2022)
Consideration received in cash0

Of assets at time of loss of control, cash and cash
equivalents

32,932

Payments for sale of discontinued operations(32,932)(Note 1)

Cash flows associated with loss of control are recorded in “Payments for sale ofdiscontinued operations” under cash flows from investing activities in consolidated
statement of cash flows.

(Note 2)

Details on the transactions are presented in Note “31. Discontinued Operations”.

(3) Significant associates and jointly controlled entities
There are no significant associates and jointly controlled entities of the Group.
38. Commitments
Commitments for the acquisition of assets after the closing date of each fiscal year are as follows:
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Yen in millions

Yen in millions

Acquisition of property, plant and equipment

39,66587,196

Acquisition of intangible assets

1,510

5,406

Total

41,17592,602178

39. Subsequent Events
Not applicable.

179

(2) Other
Quarterly information for the current fiscal year
Three months ended
March 31, 2022

Six months ended
June 30, 2022

Nine months ended
September 30, 2022

Fiscal year ended
December 31, 2022

Revenue (Yen in millions)

891,011

1,886,341

2,976,923

4,110,070

Profit before tax (Yen in millions)93,109180,164

304,305

423,458

53,836

92,942

188,748300,367

76.63

132.70270.48432.29(Cumulative period)

Profit attributable to owners of parent(Yen in millions)
Basic earnings per share (Yen)(Accounting period)
Basic earnings per share (Yen)First quarter

Second quarter

76.63

180

56.05

Third quarter
138.25

Fourth quarter
162.73

2. Non-consolidated Financial Statements, etc.
(1) Non-consolidated Financial Statements
1) Non-consolidated Balance Sheet(Yen in millions)
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

349,998
1,251*1 301,816
41,822
7,323
31,415100,571596*1 320,482
47,2898,406
57,996*1

38,527*1

19,439
8,872
*1
4,648
(12,719)792,392*1

AssetsCurrent assets
Cash and deposits
Notes receivable
Accounts receivable
Finished products
Work in process
Raw materials and supplies
Short-term loans receivable for subsidiaries andassociates
Accounts receivable - other
Income taxes refund receivable
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings, net
Structures, net
Machinery and equipment, net
Vehicles and carriers, net
Tools, furniture and fixtures, net
LandConstruction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment in securities
Investments in subsidiaries and associates
Investments in subsidiaries and associates,
other than stockLong-term loans receivable for subsidiaries
and associates
Deferred tax assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets*1*1

25,175–*1 19,556(16,895)
592,106

104,726
8,187
43,6301,082
12,35363,426
24,798258,203
14,582

101,108
8,632
44,138
1,441
15,21359,733
22,881
253,146
22,27890,615
799,371

61,580801,974

55,02452,55786,89335,6202,904(26)1,070,402
1,343,187
2,135,579

181

28,929*1

93,231

31,2023,315(28)
1,043,831
1,319,255
1,911,361

(Yen in millions)
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)*1 105,258
40,000163*1 74,400*1 29,941–
6,061
133,565–4,744
394,133*1 102,547–
107*1 63,995*1 30,610
18,152
5,617
5,923
536
13,179240,667

310,000
242

310,000
139

47,78244,028

263
2,910
6,435
367,633
761,766

57
2,401
9,713
366,338
607,005

126,354

126,354

122,079
122,079

122,079
122,079

31,27931,27931,80629,859789,311
259,445
1,111,840(38,123)
1,322,151

789,311306,534
1,156,982(136,813)
1,268,602

48,95031,783

(285)

1,298

48,66533,081

2,997
1,373,813
2,135,579

2,673
1,304,356
1,911,361

Liabilities
Current liabilities
Accounts payable
Current portion of bonds
Lease obligations
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
Allowance for losses on business transfer
Asset retirement obligation
Other current liabilities
Total current liabilities
Long-term liabilities
Bonds
Lease obligations
Accrued pension and liability for retirement
benefits
Provision for environmental remediation
Asset retirement obligation
Other long-term liabilities
Total long-term liabilities
Total liabilities
EquityShareholders’ equity
Common stock
Capital surplus
Capital reserve
Total capital surplus
Retained earnings
Legal reserve
Other retained earnings
Reserve for advanced depreciation of fixed
assetsGeneral reserve
Retained earnings brought forward
Total retained earnings
Treasury stock
Total shareholders’ equity
Net unrealized gain (loss) and translation
adjustments
Net unrealized gain (loss) on available-for-salesecurities
Deferred gain (loss) on derivative instruments
Total net unrealized gain (loss) and translation
adjustments
Stock acquisition rights
Total equity
Total liabilities and equity

182

2) Non-consolidated Statement of Profit or Loss
(Yen in millions)
Previous fiscal year
(Year ended December 31,
2021)

Current fiscal year
(Year ended December 31,
2022)*1 839,528*1 527,034
312,493*2 208,539
103,954*1 981,660*1 623,412
358,248*2 250,960
107,288*1
1,141*1 194,960*1
2,146
198,247*1
1,577*1 130,382*1
4,408
136,367

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating Income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expenses
Interest expense
Removal and disassembly expense
Foreign currency exchange loss
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of fixed assets
Total extraordinary income
Extraordinary loss
Impairment loss
Loss on business transfer
Loss on business of subsidiaries and associates
Loss on valuation of investment securities
Total extraordinary loss
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit

*1

988
1,469
1,624
5,205
9,286
292,915
–
–

*4
2,025
*4,*5 141,074*6 10,816–
153,915
139,000
1,689(29,714)(28,025)
167,024

183

842
1,311
5,969
3,614
11,736
231,918
*3

*1,*5
*6

6,189
6,189
–
24,561
15,995
6,656
47,213
190,894
18,057
8,497
26,553
164,341

3) Non-consolidated Statement of Changes in Equity
Previous fiscal year (Year ended December 31, 2021)(Yen in millions)Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Common stock

Beginning balance

126,354

Capital reserve Legal reserve

122,079

Reserve for
specialdepreciation

Reserve foradvanceddepreciationof fixed
assets026,43031,279Reserve for
specialaccount foradvanced General reserve
depreciationof fixed
assets10,037789,311Retainedearnings
brought
forward
189,979

Changes in the year
Cash dividends(102,107)

Reversal of reserve for
special depreciation
Provision of reserve foradvanced depreciation of
fixed assets
Reversal of reserve for
special account foradvanced depreciation of
fixed assets

(0)

0
5,375

(5,375)(10,037)

10,037

Profit167,024

Purchase of treasury stock
Disposal of treasury stock(114)

Net changes in items otherthan shareholders’ equity
Total changes in the year
Ending balance

–

–

–

(0)

5,375

(10,037)–

69,466

126,354

122,079

31,279–31,806–789,311

259,445

Net unrealized gain (loss) andtranslation adjustments
Net
Deferred gain
unrealized(loss) on
gain (loss) on
derivative
available-forinstruments
sale securities

StockacquisitionrightsShareholders’ equity
Total
Treasury stock shareholders’equityBeginning balance(38,656)

1,256,814

34,558

(414)

3,125

14,392

128(128)

Changes in the year
Cash dividends(102,107)

Reversal of reserve for
special depreciation
Provision of reserve foradvanced depreciation of
fixed assets
Reversal of reserve for
special account foradvanced depreciation of
fixed assets–––

Profit167,024

Purchase of treasury stock

(11)

(11)

Disposal of treasury stock

544

431

Net changes in items otherthan shareholders’ equity
Total changes in the year
Ending balance

533

65,336

14,392

128(128)(38,123)

1,322,151

48,950

(285)

2,997

184

Current fiscal year (Year ended December 31, 2022)(Yen in millions)Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Common stock

Beginning balance

126,354

Capital reserve Legal reserve

122,079

31,279Reserve foradvanceddepreciationof fixed
assetsGeneralreserve

Retainedearnings
brought
forward31,806789,311

259,445

Cumulative effects ofchanges in accounting
policies
Restated balance

Total
Treasury stock shareholders’equity(38,123)(9)
126,354

122,079

31,27931,806789,311

259,437

1,322,151(9)(38,123)

1,322,142

Changes in the year
Cash dividends
Reversal of reserve foradvanced depreciation of
fixed assets(1,947)

Profit(119,042)(119,042)

1,947

–

164,341

164,341

Purchase of treasury stock(5)(100,033)(100,038)

Disposal of treasury stock

(143)

1,343

1,199

Net changes in items otherthan shareholders’ equity
Total changes in the year
Ending balance

Beginning balance

–

–

–

(1,947)–47,097(98,690)(53,540)

126,354

122,079

31,27929,859789,311306,534(136,813)

1,268,602

Net unrealized gain (loss) andtranslation adjustments
Net
Deferred gain
unrealized(loss) on
gain (loss) on
derivative
available-forinstruments
sale securities

Stockacquisitionrights48,950

(285)

2,997

48,950

(285)

2,997

(17,168)

1,583

(324)

Total changes in the year

(17,168)

1,583

(324)

Ending balance

31,783

1,298

2,673

Cumulative effects ofchanges in accounting
policies
Restated balance
Changes in the year
Cash dividends
Reversal of reserve foradvanced depreciation of
fixed assets
ProfitPurchase of treasury stock
Disposal of treasury stock
Net changes in items otherthan shareholders’ equity

185

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 based on the market price, etc., at the closing date(unrealized gain and loss, net of tax is recorded in equity, and the movingaverage 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 otherorganizations are based on the most recent available financial statements
according to the financial reporting date specified in contracts with thepartnership. 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
future is 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 abenefit formula basis.
186

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(10 years) within the average remaining years of service of the employees in the year in which thepast service costs occur.
Actuarial gain/loss is treated as an expense using the straight-line method over a fixed number ofyears (10 years) within the average remaining years of service of the employees in the year in which
the gain/loss occurs, recorded from the subsequent fiscal year.

(4) Provision for environmental remediation
In order to reserve for outlays for legally required removal and disposal of PCB, etc., the estimated amountof future obligations is recorded.
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 thefollowing 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 production and sale of tires and tubes, production and sale of retread material andprovision of related technology, and business of chemical and industrial products, etc.
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
the performance 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 income.
6. Hedge accounting(1) Hedge accounting method
Deferred hedge accounting is applied.

187

(2) Hedging instruments and items covered
Instruments

Items covered

Forward foreignexchange contracts

Foreign currency-denominated monetary claims andobligations and forecasted foreign currencydenominated transactions

Foreign currency swaps

Borrowings and bonds

Interest rate swaps

Borrowings

Commodity swaps

Raw materials(3) Hedging policy
Forward exchange contracts are used only to cover actual foreign exchange needs, and foreign currency
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 total fluctuations in the cash flow or
fluctuations in the market value of the hedged item with the total fluctuations in the cash flow or
fluctuations in the market value of the hedging instrument.
(Significant accounting estimates)
1.

Impairment on fixed assets(1) Amount recorded in the financial statements for the current fiscal year
(Yen in millions)
Previous fiscal year

Current fiscal year

Property, plant and equipment

258,203

253,146

Intangible assets

14,582

22,278(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 “3. Significant Accounting
Policies (11) Impairment of non-financial assets” in the notes to the consolidated financial statements.
2.

Recoverability of deferred tax assets(1) Amount recorded in the financial statements for the current fiscal year
(Yen in millions)
Previous fiscal year

Deferred tax assets

Current fiscal year
35,62031,202(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 “3. Significant Accounting
Policies (19) Income taxes” in the notes to consolidated financial statements. In addition, as for the188repayment of capital received from BRIDGESTONE AMERICAS, INC., a subsidiary of the Company, inthe previous fiscal year the Company accounted for the transaction by recognizing deductible expenses asloss on transfer of shares for tax purposes, while the Company’s investments in subsidiaries and associates
were reduced by the same amount for accounting purposes. In the previous fiscal year, the Company
excluded some deductible expenses to calculate its taxable income 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 estimate reasonably its taxable income
considering various scenarios and assumptions. As a result, although deferred tax assets would be 91,100
million yen higher if all the deductible expenses were included in calculating taxable income, the Company
has lowered its deferred tax assets by 60,000 million yen, relative to amounts under the aforementioned
treatment. There has been no change in the judgement on the treatment of this matter, and the Company
continues the same treatment as the previous fiscal year. 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 the amount of taxable profit 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
(Yen in millions)
Previous fiscal year

Accrued pension and liability for retirement
benefits

Current fiscal year
47,78244,028(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 “3. Significant Accounting
Policies (13) Employee benefits 2) Post-employment benefits” in the notes to the consolidated financial
statements.
4.

Allowance for losses on business transfer(1) Amount recorded in the financial statements for the current fiscal year
(Yen in millions)
Previous fiscal year

Allowance for losses on business transfer

Current fiscal year
133,565

5,923(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 and the chemical products solutions business, the amount expected to be incurred in the
future was recorded for such losses that can be reasonably 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.

189

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
(Yen in millions)
Previous fiscal year

Non-marketable investments in subsidiaries
and associates and investments in subsidiaries
and associates

Current fiscal year
839,150

854,531(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
based on 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 anychange in the external environment and other factors materially affects the actual value, this may also affectvaluation of investments in subsidiaries and associates and investments in subsidiaries and associates, otherthan stock for the subsequent fiscal year.
(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition, etc.)
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020) and relevant ASBJ regulations from the beginning of the current fiscal year, and it hasrecognized revenue at the time the control of promised goods or services is transferred to the customer at theamount expected to be received upon exchange of said goods or services.
The application of the Accounting Standard for Revenue Recognition and relevant ASBJ regulations is subject
to the transitional treatment provided for in the proviso to paragraph 84 of the Accounting Standard for
Revenue Recognition. The cumulative effect of the retrospective application of the new accounting policy,
assuming it has been applied to the periods prior to the beginning of the current fiscal year, has been added toor subtracted from retained earnings at the beginning of the current fiscal year, and the new accounting policy
has been applied from the said beginning balance.
Major changes due to the application of the Accounting Standard for Revenue Recognition and relevant ASBJ
regulations are as follows.
Revenue recognition relating to subcontract processing with supply of materials for value (the “transaction”)
As for the transaction that falls under a repurchase agreement, the method was changed to recognize supplied
products as financial assets and recognize only the net amount equivalent to the processing fee as revenue at thetime of resale to the supplier, when the Company is the receiver.
As a result, in the current fiscal year, net sales decreased by 2,519 million yen and cost of sales decreased by
2,524 million yen, compared to amounts before the application of the Accounting Standard for Revenue
Recognition and relevant ASBJ regulations. Effects on the beginning balance of retained earnings and per share
information for the current fiscal year are insignificant.
(Application of Accounting Standard for Fair Value Measurement, etc.)
From the beginning of the current fiscal year, the Company has applied the “Accounting Standard for Fair
Value Measurement” (ASBJ Statement No. 30, July 4, 2019) and relevant ASBJ regulations, and the new
accounting policies prescribed in the Accounting Standard and relevant ASBJ regulations are applied
prospectively in accordance with the transitional treatment prescribed in paragraph 19 of the “AccountingStandard for Fair Value Measurement” and paragraph 44-2 of the “Accounting Standard for Financial
Instruments” (ASBJ Statement No. 10, July 4, 2019). There is no effect of this application on the financial
statements.

190

(Changes in presentations)(Non-consolidated statement of profit or loss)
In the previous fiscal year, “Loss on retirement of fixed assets” was disclosed separately in “Non-operating
Expenses” section. During the current fiscal year, the amount has become less material and such an amount isincluded in “Other”. The non-consolidated financial statements of the previous fiscal year have been
reclassified to reflect these changes in presentation.
As a result, 987 million yen presented as “Loss on retirement of fixed assets” in the “Non-operating Expenses”
section in the non-consolidated statement of profit or loss for the previous fiscal year has been restated as“Other”.

191

(Non-consolidated balance sheet)*1 Monetary receivables from and payables to subsidiaries and associates(Yen in millions)
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

Short-term monetary receivables

298,794

307,558

Long-term monetary receivables
Short-term monetary payables

86,893

93,23173,51864,623

2 Guarantees(Yen in millions)
Previous fiscal year
(As of December 31, 2021)(1) Guarantees on commercial papers
issued by BRIDGESTONE

Current fiscal year
(As of December 31, 2022)
40,980EUROPE NV/SA(2) Guarantees on bank borrowings of
employees in consolidated subsidiary(mortgages), etc.
Total(1) Guarantees on commercial papers
issued by BRIDGESTONE

70,735EUROPE NV/SA(2) Guarantees on bank borrowings of21

18

employees in consolidated subsidiary(mortgages), etc.

41,001

Total

70,7533 Balance of trade notes (without letter of credit) discounted(Yen in millions)
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)
129

192

–

(Non-consolidated statement of profit or loss)*1 Transactions with subsidiaries and associates(Yen in millions)
Previous fiscal year
(Year ended December 31, 2021)
Net sales
Purchases, etc.
Transactions other thanoperating transactions

Current fiscal year
(Year ended December 31, 2022)

637,949

776,009

252,685296,699214,233

154,590*2 Selling, general and administrative expenses
Major items and amounts are as follows:(Yen in millions)
Previous fiscal year
(Year ended December 31, 2021)
Freight
Retirement benefit expenses
Depreciation
Research and development
expenses

Current fiscal year
(Year ended December 31, 2022)

75,859107,739

924
4,038

796
4,371

63,91670,788In the previous fiscal year, selling expenses accounted for approximately 40% of selling, general andadministrative expenses, and in the current fiscal year, selling expenses again accounted for approximately
50%.
*3 Gain on sale of fixed assets
Current fiscal year (Year ended December 31, 2022)
Mainly relates to gain on the sale of land.
*4 Impairment losses
Previous fiscal year (Year ended December 31, 2021)
The Company classifies the assets it uses for its business based on the categories used within the Company tomanage those assets. Assets to be disposed of (assets that are scheduled to be scrapped, sold off, etc.) and idle
assets are grouped by property.
In the fiscal year 2021, the carrying amount of business-use assets whose profitability decreased and assets tobe disposed of which are scheduled to be scrapped or sold off were reduced to recoverable amounts. Those
reductions were recognized as an impairment loss of 2,025 million yen and a loss on business transfer of 545
million yen, totaling 2,570 million yen.
A breakdown of that impairment loss is: 1,619 million yen for machinery and equipment; 343 million yen forbuildings and structures; 214 million yen for tools, furniture and fixtures; 209 million yen for construction inprogress; and 185 million yen for others.

193

(Yen in millions)PurposeType of assets

Assets used in thecourse of business

LocationsTotsuka, Yokohama; andMachinery and equipment; and some others

othersoperations
Assets to bedisposed of

Totsuka, Yokohama;
Kodaira, Tokyo; andMachinery and equipment; and some others

Amount

1,551

1,020

others

The recoverable amounts for business-use assets were primarily estimated based on their value-in-use andmemorandum value. Future cash flows in measurement of the value-in-use were calculated using the discountrate of 7.0%. Of the assets to be disposed of, the recoverable amount for assets to be sold off was measured
based on their net selling price. The recoverable amount for assets to be scrapped was evaluated based on theirmemorandum value.
*5 Loss on business transfer
Previous fiscal year (Year ended December 31, 2021)
Based on the decision to transfer the anti-vibration rubber business and the chemical products solutions
business, the related following expenses were recorded.
(Yen in millions)
Anti-vibration rubber business
Provision of allowance for losses on
business transfer
Loss on valuation of shares ofsubsidiaries and associates
Impairment losses
Other
Total

Chemical products solutions business

105,762

27,803

2,586

1,675

545

–

1,572

1,130

110,465

30,609Current fiscal year (Year ended December 31, 2022)
Based on the decision and execution to transfer the anti-vibration rubber business and the chemical products
solutions business, the related following expenses were recorded.
(Yen in millions)
Anti-vibration rubber business
Related loss due to business transfer
Loss on valuation of shares ofsubsidiaries and associates
Provision of allowance for doubtful
accounts
Total

Chemical products solutions business

10,231

4,005

3,569

2,787

1,555

2,413

15,3569,205*6 Loss on business of subsidiaries and associates
Previous fiscal year (Year ended December 31, 2021)
Taking into consideration the financial condition of certain subsidiaries and associates, related losses have beenrecorded.
194

Current fiscal year (Year ended December 31, 2022)
Taking into consideration the financial condition of certain subsidiaries and associates, related losses have beenrecorded.
(Tax effect accounting)1

Major components of deferred tax assets and liabilities(Yen in millions)
Previous fiscal year
(As of December 31, 2021)

Current fiscal year
(As of December 31, 2022)

14,621

13,473

Deferred tax assets
Accrued pension and liability for retirement
benefits
Investments in subsidiaries and associates
Depreciable assets
Accrued expenses
Allowance for losses on business transfer
Unused tax losses carryforward (Note 2)
Other(Note 1)

14,988(Note 1)

11,944
5,357(Note 1)

20,259(Note 1)

21,541
6,189(Note 1)

1,813
3,858

13,815(Note 1)

17,746

11,005
5,723

Deferred tax assets subtotal
Valuation allowance

88,45673,875(19,786)(14,784)

Total deferred tax assets

68,67059,092(14,024)(13,165)

Deferred tax liabilities
Reserve for advanced depreciation of fixed assets
Net unrealized gain on available-for-sale securities(18,221)
(806)

Other

(Note 1)

(13,444)(1,280)Total deferred tax liabilities(33,051)(27,890)

Deferred tax assets, net

35,62031,202(Note 1)This includes deferred tax assets associated to loss on business transfer recorded in the previous fiscal
year, which consist of the anti-vibration rubber business of 18,171 million yen and the chemical
products solutions business of 5,362 million yen. Also, the breakdown for the current fiscal year forthe anti-vibration rubber business was 8,179 million yen and the chemical products solutions business
was 4,703 million yen.

(Note 2)

The result of reasonably estimating tax deductible expenses arising from the repayment of capitalfrom BRIDGESTONE AMERICAS, INC. was taken into consideration. For details, please refer to“(Significant accounting estimates), 2. Recoverability of deferred tax assets”.

195

2

Reconciliation of the statutory effective tax rate and the effective income tax rates after adjustments for tax
effect accounting
Previous fiscal year
(As of December 31, 2021)
Statutory effective tax rate
(Adjustments)
Items not categorized as temporary differences
Valuation allowance
Repayment of capital from a subsidiary (Note 1)
Loss on business transfer (Note 2)
Adjustment due to the Advance Pricing Agreement
systemOther
Effective income tax rates after adjustments for tax
effect accounting

Current fiscal year
(As of December 31, 2022)

30.6%

30.6%

(40.2)(3.0)(19.5)(2.6)(22.3)
13.9

–
(2.4)

1.3

7.9

(0.5)

(0.1)

(20.2)

13.9(Note 1)This is due to the repayment of capital from BRIDGESTONE AMERICAS, INC.

(Note 2)This is due to losses on the transfer of the anti-vibration rubber business and the chemical
products solutions business.

(Changes in presentations)“Adjustment due to the Advance Pricing Agreement system,” which was included in “Other” in the previous
fiscal year was disclosed separately as a line item in the current fiscal year because the amount becamematerial. The notes of the previous fiscal year have been reclassified to reflect these changes in presentation.
As a result, the 0.8% that was displayed as “Other” in the previous fiscal year has been reclassified as“Adjustment due to the Advance Pricing Agreement system” 1.3% and “Other” (0.5%).
(Revenue recognition)
As for information that serves as the basis for understanding revenue arising from contracts with customers, thenotes have been omitted since the same information has been provided in “(Significant accounting policies) 4.
Accounting policies for revenue and expenses.”1964) Non-consolidated supplementary schedules
Schedule of property, plant and equipment, etc.
(Yen in millions)Category

Property,plant andequipment

Type of assets

Beginningbalance

Increase

Decrease

Depreciation
andamortization

EndingbalanceAccumulated
depreciation

Buildings

104,726

6,949

1,957

8,611

101,108

201,786

Structures

8,187

1,957

211

1,301

8,632

30,562

Machinery andequipment

43,63017,803548

16,74644,138665,377

Vehicles and carriers

1,082

1,001

43

601

1,441

11,064Tools, furniture andfixtures12,353

16,237290

13,087

15,213

159,962Land

63,426

84

3,777

–

59,733–

Construction in progress

24,79842,58744,504–22,881–

Total

258,20386,61951,33040,345

253,146

1,068,750

Total

14,582

11,79844

4,059

22,278

11,448Intangible
assetsSchedule of allowances(Yen in millions)
Account item
Allowance for doubtful accounts
Allowance for losses on business
transfer
Provision for environmental
remediation

Beginning balance

Increase

Decrease

Ending balance

12,7464,303

126

16,923

133,565

1,234

128,876

5,923

263

37

244

57

(2) Details of Major Assets and Liabilities
This information is omitted as the consolidated financial statements are prepared.
(3) Other
Not applicable.

197

VI. Administrative Information on the Company’s SharesBusiness year

From January 1 to December 31

Annual Meeting of
Shareholders

March

Record date

December 31

Record dates for dividendsof surplus

June 30 (Interim dividend)
December 31 (Year-end dividend)

Number of sharesconstituting one unit
Sale or purchase of sharesless than one unit

100 shares

Handling office(Special account)
Sumitomo Mitsui Trust Bank, Limited
Stock Transfer Agency Business Planning Department
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Administrator ofshareholders’ register(Special account)
Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Forwarding office–Handling charge forselling or purchase

The amount separately stipulated as the amount equivalent to share brokerage fees

Method of public notice

The method of public notices of the Company shall be electronic public notices;
provided, however, that if the Company is unable to give an electronic public noticebecause of an accident or any other unavoidable reason, public notices of theCompany may be given in “The Nikkei” newspaper published in Tokyo.
(URL for public notice: https://www.bridgestone.co.jp/)

Special benefits forNoneshareholders(Note) With regard to shares less than one unit held by the shareholder, a shareholder of the Company may not
exercise any rights other than rights provided in each item of Article 189, paragraph (2) of the Companies
Act, and the right to claim that which is set forth in the Company’s Articles of Incorporation (to claim theright to make additional purchase of shares less than one unit).

198

VII.

Reference Information on the Company

1. Information on the parent company or equivalent of the Company
The Company does not have a parent company or equivalent.

2. Other reference information
From the beginning of the current fiscal year until the filing date of this securities report, the Company has filed
the following documents.
(1) Annual securities report andappendices, and written
confirmation(The 103rd Fiscal
Period)From January 1, 2021
to December 31, 2021

(2) Internal control system
report and appendices(3) Quarterly securities reports
and written confirmations

Filed to DirectorGeneral of Kanto Local
Finance Bureau on
March 23, 2022.
Filed to DirectorGeneral of Kanto Local
Finance Bureau on
March 23, 2022.

(First quarter of the104th Fiscal Period)

From January 1, 2022
to March 31, 2022

Filed to DirectorGeneral of Kanto Local
Finance Bureau on May
11, 2022.

(Second quarter ofthe 104th Fiscal
Period)From April 1, 2022 toJune 30, 2022

Filed to DirectorGeneral of Kanto Local
Finance Bureau on
August 10, 2022.

(Third quarter of the104th Fiscal Period)

From July 1, 2022 toSeptember 30, 2022

Filed to DirectorGeneral of Kanto Local
Finance Bureau on
November 10, 2022.

(4) Extraordinary securities
reportExtraordinary securities report based on Article
19, paragraph (2), item (ix)-2 of the Cabinet
Office Ordinance on Disclosure of Corporate
Affairs, etc.

Filed to DirectorGeneral of Kanto Local
Finance Bureau on
March 28, 2022.

(5) Extraordinary securities
reportExtraordinary securities report based on Article
19, paragraph (2), item (xii) of the Cabinet
Office Ordinance on Disclosure of Corporate
Affairs, etc.

Filed to DirectorGeneral of Kanto Local
Finance Bureau on
September 29, 2022.

(6) Extraordinary securities
reportExtraordinary securities report based on Article
19, paragraph (2), item (ix)-4 of the Cabinet
Office Ordinance on Disclosure of Corporate
Affairs, etc.

Filed to DirectorGeneral of Kanto Local
Finance Bureau on
November 8, 2022.

(7) Securities registration
statement (Disposal oftreasury stock as restricted
share-based remuneration)
and appendices

Filed to DirectorGeneral of Kanto Local
Finance Bureau on
January 26, 2023.

(8) Securities registration
statement (Disposals oftreasury stock as
Performance Share Units
and Restricted Stock Units)
and appendices

Filed to DirectorGeneral of Kanto Local
Finance Bureau on
March 28, 2023.

199

(9) Notification for revision of
securities registration
statement

Notification for revision pertaining to thesecurities registration statement filed on
January 26, 2023

Filed to DirectorGeneral of Kanto Local
Finance Bureau on
February 16, 2023.

(10) Shelf registration statement(Straight bonds) andappendices

Filed to DirectorGeneral of Kanto Local
Finance Bureau on May
20, 2022.

(11) Amended shelf registration
statement (Straight bonds)

Filed to DirectorGeneral of Kanto Local
Finance Bureau on
August 1, 2022;
September 29, 2022;
November 8, 2022; andNovember 10, 2022.

(12) Share buyback report

Filed to DirectorGeneral of Kanto Local
Finance Bureau on
April 15, 2022; May 13,2022; June 15, 2022;
July 15, 2022; August
10, 2022; September
15, 2022; October 14,2022; November 15,2022; December 15,2022; and January 13,
2023.

200

Part II Information About Company Which Provides Guarantee to Reporting Company
Not applicable.

201

(TRANSLATION)

INDEPENDENT AUDITOR'S REPORTMarch 28, 2023
To the Board of Directors ofBridgestone Corporation:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Engagement Partner,
Certified Public Accountant:
Yasuhiko Haga
Designated Engagement Partner,
Certified Public Accountant:
Takuma Ueki
Designated Engagement Partner,
Certified Public Accountant:
Akiko Fujiharu
Audit of Financial Statements
OpinionPursuant to the first paragraph of Article 193 2 of the Financial Instruments and Exchange Act, we have audited
the consolidated financial statements of Bridgestone Corporation and its consolidated subsidiaries (the "Group")
included in the Financial Information, namely, the consolidated statement of financial position as of December
31, 2022, and the consolidated statement of profit or loss, consolidated statement of comprehensive income,consolidated statement of changes in equity and consolidated statement of cash flows for the fiscal year fromJanuary 1, 2022 to December 31, 2022, and a summary of significant accounting policies and other explanatory
information, and the consolidated supplementary schedules.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position of the Group as of December 31, 2022, and its consolidated financial
performance and its consolidated cash flows for the year then ended in accordance with International Financial
Reporting Standards pursuant to the provisions of Article 93 of the Ordinance on Terminology, Forms andPreparation Methods of Consolidated Financial Statements.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the provisionsof the Code of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of ouraudit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do notprovide a separate opinion on these matters.
Reasonableness of the accounting for the transfer of the anti-vibration rubber business and the chemical
products solutions business
Key Audit Matter Description
As described in sections "(2) Anti vibration rubber
business" and "(3) Chemical products solutions business"of Note 31, "Discontinued Operations," to theconsolidated financial statements, on December 10,
2021, Bridgestone Corporation (the "Company") enteredinto a contract to transfer the Group's anti vibration
rubber business to Anhui Zhongding Holding (Group)Co., Ltd., and on the same date, entered into a contract totransfer its chemical products solutions business to
Endeavor United II Investment Business Limited
Partnership, a fund that was structured, managed andoperated by Endeavor United Co., Ltd. With the
exception of certain subsidiaries that were subject to thetransfer, the transfer of the anti vibration rubber businessand the chemical products solutions business wascompleted on September 1, 2022, and August 1, 2022,
respectively.

How the Key Audit Matter Was
Addressed in the Audit
Our audit procedures related to the accounting
treatment for the business transfer included thefollowing, among others:(1) Evaluation of internal controls
We tested the design and operating
effectiveness of the Company's internal
controls over the accounting treatment for thebusiness transfers. Specifically, we focusedon the following controls:• Controls to assess the economic rationaleof the business transfers• Controls to review the appropriateness of
the accounting treatment of the loss on
business transfer

In the consolidated statement of profit or loss of thecurrent fiscal year, due to the contract of the transfer of(2) Validation of the accounting treatment for thethe anti vibration rubber business, the Bridgestone Groupbusiness transfers(the "Group") recognized a loss on business transfer of
4,254 million yen, and a loss recognized upon having
To evaluate the appropriateness of themeasured the disposal group consisting of discontinued
accounting treatment of the loss on business
operations at fair value less cost to sell of 6,147 million
transfer, the following procedures wereyen, which were recorded in "Profit (loss) fromperformed:
discontinued operations." Due to the contract of thetransfer of the chemical products solutions business, the• We inspected relevant supporting
Group recognized a gain on business transfer of 5,691
documents including the contracts for the
million yen, and a loss recognized upon having measured
business transfers and the board of
the disposal group consisting of discontinued operations
directors' meeting minutes to understandat fair value less cost to sell of 13,014 million yen, which
the outline of the transactions andwere also recorded in "Profit (loss) from discontinued
evaluated the economic rationale of theoperations."
terms of the transactions based on thecontracts, such as the transaction prices.
For the purpose of business transfers, the Company• In order to test the reasonableness of theestablished PROSPIRA CORPORATION and ARCHEM
calculation method for the carrying
INC. as wholly owned subsidiaries (hereinafter
amounts of transferred businesses, whichcollectively referred to as the "New Companies") towere used as the basis for determining thewhich each of its business operation was transferred via
profit or loss on each business transfer, wean absorption type demerger, then integrated the businessexamined if the transferred assets andoperations of the Group into the New Companies. In both
liabilities were properly classified andtransfers, the process to calculate the carrying amounts ofaggregated. Specifically, we inspected thetransferred assets and liabilities for the New Companies,
contract of business transfer and relevantwhich is used as a basis for the computation of the profit
or loss on business transfers, is complex, as the businessintegration involved the Company's specification oftransferred assets and liabilities in the divesture oftransferred business from several businesses as well as
execution of several capital increases and loans to the
New Companies and other consolidated subsidiaries.
Therefore, we identified the accounting for the transfer of
the anti vibration rubber business and the chemical
products solutions business as a key audit matter.

supporting documents, inquired ofmanagement to understand a series oftransactions from the transfer of businessto the New Companies through the sale ofshares of the New Companies. We also
assessed if the transferred assets andliabilities were appropriately classified andaggregated in accordance with theapplicable accounting standards throughinspection of supporting calculations andby performing independent re computationor agreeing to other relevant documents.

Reasonableness of the valuation of the provision for product warranties related to the recall
Key Audit Matter Description

How the Key Audit Matter Was
Addressed in the Audit

As described in section "(3) Provision for productwarranties" of Note 21, "Provisions" to the consolidated
financial statements, the Company recognized 15,416
million yen of other expenses on its consolidated
statement of profit or loss along with the related
provision for product warranties to account for the
product recall of the stainless steel rim products forcertain models of standard and power assisted bicycles
manufactured by BRIDGESTONE CYCLECORPORATION, a consolidated subsidiary, ("theconsolidated subsidiary"), which started on October 11,
2022. Such expenses were estimated at the amount of
replacement costs expected to be incurred in the future
related to the recall.

Our audit procedures, with the assistance of thecomponent auditor, for the reasonableness ofvaluation of the provision for product warranties
related to the recall included the following, among
others:The provision for product warranties related to the recall
was recognized based on a reasonably expected amountof replacement costs that would be incurred and paid by
the consolidated subsidiary upon customers’ requests for
replacing the rim products subject to the recall that were
manufactured by the consolidated subsidiary.

• Control by personnel responsible forfinance to ensure that supporting
documents for the expected replacement
rate and the replacement costs are preparedand verified by each responsible
department, and determine that the amountof the provision is calculated based on theassumptions and data included in the
supporting documents, and approve theamount with the written approval form

The expected replacement costs are calculated bymultiplying the number of rims subject to the recall,replacement costs per unit and an expected replacement
rate. Estimates of the replacement costs per unit and the
expected replacement rate are affected by the key
assumptions involving judgments made by management.
Specifically, the expected replacement rate is determinedby considering historical data of past recall cases thatdiffer from the ongoing recall with respect to the period
from production to date of recall. Accordingly, it is noteasy to estimate and involves a high degree of estimation
uncertainty.
As the estimation of the provision for product warranties
related to the recall is quantitatively material andinvolves significant assumptions and judgment made bymanagement, we identified the valuation of the provision
for product warranties related to the recall as a key audit
matter.

(1) Evaluation of internal controls
We tested the design and operating
effectiveness of the Company's internal
controls over the evaluation of the provision
for product warranties related to the recall.
Specifically, we focused on the following
control:(2) Test of valuation of the provision for productwarranties related to the recall
To evaluate the reasonableness of thevaluation of the provision for productwarranties related to the recall, the following
procedures were performed:• We inspected relevant supporting
documents including “the notice of starting
product recall” submitted to the Ministryof Economy, Trade and Industry and theboard of directors' meeting minutes andmade inquiries of the personnel
responsible for the quality control tounderstand the outline of the recall and thecause of the product malfunction.
• Inspected internal approval materials, “thenotice of starting product recall” submitted
to the Ministry of Economy, Trade andIndustry and available external information
to test the consistency of the estimatednumber of rims subject to recall.
• Assessed the reasonableness of thereplacement costs per unit and other costs
incurred related to the recall by inquiring

of the personnel responsible for the quality
control, inspecting relevant supporting
documents, and comparing with trackrecord of other recall cases.
• Assessed the reasonableness ofmanagement’s key assumption of the
expected replacement rate by comparing
with the historical replacement rates by theperiod from production to date of recall inpast recall cases.
• Compared the actual results with thereplacement costs per unit and thereplacement rate initially expected for the
past recall case in order to assess thereasonableness of management’s key
assumptions used for the provision.

Other Information
Management is responsible for the other information. The Audit Committee is responsible for overseeing the
Officers and Directors’ execution of duties relating to the design and operating effectiveness of the controls over
the other information. The other information comprises the information included in the Annual Securities
Report, but does not include the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with International Financial Reporting Standards, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability
to continue as a going concern, disclosing, as applicable, matters related to going concern in accordance with
International Financial Reporting Standards.
The Audit Committee is responsible for overseeing the Officers and Directors’ execution of duties relating to thedesign and operating effectiveness of the controls over the Group's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes
our opinion. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis ofthese consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks. The procedures selected dependon the auditor's judgment. In addition, we obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Group's ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with International Financial Reporting Standards, as well as the overall presentation, structure andcontent of the consolidated financial statements, including the disclosures, and whether the consolidated
financial statements represent the underlying transactions and events in a manner that achieves fairpresentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with it all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Audit Committee, we determine those matters that were of mostsignificance in the audit of the consolidated financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor's report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Audit of Internal Control
OpinionPursuant to the second paragraph of Article 193 2 of the Financial Instruments and Exchange Act, we have audited
management's report on internal control over financial reporting of Bridgestone Corporation as of December 31,
2022.
In our opinion, management's report on internal control over financial reporting referred to above, which
represents that the internal control over financial reporting of Bridgestone Corporation as of December 31, 2022,
is effectively maintained, presents fairly, in all material respects, the results of the assessment of internal control
over financial reporting in accordance with assessment standards for internal control over financial reporting
generally accepted in Japan.
Basis for Opinion
We conducted our internal control audit in accordance with auditing standards for internal control over financial
reporting generally accepted in Japan. Our responsibilities under those standards are further described in the
Auditor's Responsibilities for the Internal Control Audit section of our report. We are independent of the Group inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our other ethicalresponsibilities as auditors. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Responsibility of Management and the Audit Committee for Report on Internal Control
Management is responsible for designing and operating effective internal control over financial reporting and forthe preparation and fair presentation of its report on internal control in accordance with assessment standards forinternal control over financial reporting generally accepted in Japan. The Audit Committee is responsible foroverseeing and verifying the design and operating effectiveness of internal control over financial reporting. Thereis a possibility that misstatements may not be completely prevented or detected by internal control over financial
reporting.
Auditor's Responsibilities for the Internal Control Audit
Our objectives are to obtain reasonable assurance about whether management's report on internal control overfinancial reporting is free from material misstatement and to issue an auditor's report that includes our opinion.
As part of an audit in accordance with auditing standards for internal control over financial reporting generally
accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the audit.
We also:• Perform audit procedures to obtain audit evidence regarding the results of the assessment of internal control
over financial reporting in management’s report on internal control. The procedures selected depend on theauditor's judgment, including the significance of effects on reliability of financial reporting.
• Examine representations on the scope, procedures and results of the assessment of internal control over financial
reporting made by management, as well as evaluating the overall presentation of management's report oninternal control.
• Obtain sufficient appropriate audit evidence regarding the results of the assessment of internal control overfinancial reporting. We are responsible for the direction, supervision and performance of the internal control
audit. We remain solely responsible for our audit opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of theinternal control audit, result of the internal control audit, including any identified material weakness which should
be disclosed and the result of remediation.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with it all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor's Report
This is an English translation of the independent auditor's report as required by the Financial Instruments andExchange Act of Japan for the conveniences of the reader.

(TRANSLATION)
INDEPENDENT AUDITOR'S REPORTMarch 28, 2023
To the Board of Directors ofBridgestone Corporation:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Engagement Partner,
Certified Public Accountant:
Yasuhiko Haga
Designated Engagement Partner,
Certified Public Accountant:
Takuma Ueki
Designated Engagement Partner,
Certified Public Accountant:
Akiko Fujiharu
OpinionPursuant to the first paragraph of Article 193 2 of the Financial Instruments and Exchange Act, we have audited
the non consolidated financial statements of Bridgestone Corporation (the "Company") included in the Financial
Section, namely, the non consolidated balance sheet as of December 31, 2022, and the non consolidated
statement of profit or loss and non consolidated statement of changes in equity for the 104th fiscal year fromJanuary 1, 2022 to December 31, 2022, and a summary of significant accounting policies and other explanatory
information, and the supplementary schedules.
In our opinion, the accompanying non consolidated financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2022, and its financial performance for the year thenended in accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the Nonconsolidated Financial Statements section of our report. We are independent of the Company in accordance withthe provisions of the Code of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities
as auditors. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matter
A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the nonconsolidated financial statements of the current period. The matter was addressed in the context of our audit of
the non consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on the matter.

Reasonableness of the accounting for the transfer of the anti-vibration rubber business and the chemical
products solutions business
Key Audit Matter Description
On December 10, 2021, the Company enteredinto a contract to transfer Bridgestone group's
anti vibration rubber business to Anhui
Zhongding Holding (Group) Co., Ltd., and on
the same date, entered into an agreement totransfer its chemical products solutions business
to Endeavor United II Investment Business
Limited Partnership, a fund that was structured,
managed, and operated by Endeavor United Co.,
Ltd. With the exception of certain groupcompanies that were subject to the transfer, thetransfer of the anti vibration rubber business andthe chemical products solutions business wascompleted on September 1, 2022, and August 1,
2022, respectively.
As described in "*5 Loss on business transfer"of "Non-consolidated statement of profit or loss"
in Notes to non-consolidated financial
statements, as a result of the decision andexecution of business transfers, the Company
recognized a loss on business transfer of 15,356
million yen from the transfer of the anti
vibration rubber business, 9,205 million yen
from the transfer of the chemical products
solutions business in extraordinary loss of thenon consolidated statement of profit or loss forthe current fiscal year.
For the purpose of business transfers, theCompany established PROSPIRACORPORATION and ARCHEM INC. as wholly
owned subsidiaries (hereinafter collectively
referred to as the "New Companies") to which
each of its business operation was transferred via
an absorption type demerger, then integrated thebusiness operations of the group into the New
Companies. In both transfers, the process tocalculate the loss on business transfer based on
the carrying amounts of transferred shares of the
New Company is complex, as the businessintegration involved the Company’s
specification of transferred assets and liabilities
in the divesture of transferred business fromseveral businesses as well as execution ofseveral capital increases and loans to the New
Companies and other affiliated companies.
Therefore, we identified the accounting for thetransfer of the anti vibration rubber business andthe chemical products solutions business as a
key audit matter.

How the Key Audit Matter Was
Addressed in the Audit
Our audit procedures related to the accounting treatment
for the business transfer included the following, among
others:(1) Evaluation of internal controls
We tested the design and operating effectiveness of
the Company's internal controls over the accounting
treatment for the business transfers. Specifically, we
focused on the following controls:• Controls to assess the economic rationale of thebusiness transfers• Controls to review the appropriateness of theaccounting treatment of the business transfers(2) Validation of the accounting treatment for thebusiness transfers
To evaluate the appropriateness of the accounting
treatment for the business transfers the following
procedures were performed:• We inspected relevant supporting documents
including the contracts for the business transfers
and the board of directors' meeting minutes tounderstand the outline of the transactions andevaluated the economic rationale of the terms of thetransactions based on the contracts, such as thetransaction prices.
• In order to test the reasonableness of the calculation
method for the loss on business transfer, we
examined if the transferred assets and liabilities
were properly classified and aggregated.
Specifically, we inspected the contract of business
transfer and relevant supporting documents,
inquired of management to understand a series oftransactions from the transfer of business to the
New Companies through the sale of shares of the
New Companies. We also assessed if thetransferred assets and liabilities were appropriately
classified and aggregated in accordance with theapplicable accounting standards through inspectionof supporting calculations and by performing
independent re-computation as well as agreeing toother relevant documents.

Other Information
Management is responsible for the other information. The Audit Committee is responsible for overseeing the
Officers and Directors' execution of duties relating to the design and operating effectiveness of the controls over theother information. The other information comprises the information included in the Annual Securities Report, butdoes not include the non consolidated financial statements and our auditor's report thereon.
Our opinion on the non consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the non consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with the nonconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and the Audit Committee for the Non consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the non consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as management
determines is necessary to enable the preparation of non consolidated financial statements that are free frommaterial misstatement, whether due to fraud or error.
In preparing the non consolidated financial statements, management is responsible for assessing the Company's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern in accordance withaccounting principles generally accepted in Japan.
The Audit Committee is responsible for overseeing the Officers and Directors' execution of duties relating to thedesign and operating effectiveness of the controls over the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Non consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the non consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis ofthese non consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the non consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks. The procedures selected dependon the auditor's judgment. In addition, we obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company's ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the nonconsolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions

are based on the audit evidence obtained up to the date of our auditor's report. However, future events orconditions may cause the Company to cease to continue as a going concern.
• Evaluate whether the overall presentation and disclosures of the non consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, as well as the overall presentation, structure
and content of the non consolidated financial statements, including the disclosures, and whether the nonconsolidated financial statements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with it all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Audit Committee, we determine those matters that were of mostsignificance in the audit of the non consolidated financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicatedin our report because the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor's Report
This is an English translation of the independent auditor's report as required by the Financial Instruments andExchange Act of Japan for the conveniences of the reader.

Cover[Document Submitted][Article of the Applicable Law Requiring
Submission of This Document][Filed to][Date of Submission][Company Name][Company Name (in English)][Position and Name of Representative][Position and Name of Chief Financial
Officer][Location of Head Office][Place Where Available for Public
Inspection]

Internal Control System Report
Article 24-4-4, paragraph (1) of the Financial Instruments andExchange Act
Director of the Kanto Local Finance Bureau
March 28, 2023
Bridgestone Corporation
BRIDGESTONE CORPORATION
Shuichi Ishibashi
Member of the Board
Global CEO and Representative Executive Officer
Naoki Hishinuma
Executive Director
Global CFO
3-1-1 Kyobashi, Chuo-ku, Tokyo
Tokyo Stock Exchange, Inc.
(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Fukuoka Stock Exchange(2-14-2 Tenjin, Chuo-ku, Fukuoka)

1 Basic Framework of Internal Control over Financial Reporting
Member of the Board, Global CEO and Representative Executive Officer Shuichi Ishibashi, as well as
Executive Director and Global CFO Naoki Hishinuma are responsible for designing and operating theCompany’s internal control over financial reporting. They design and operate internal control over financial
reporting in accordance with the basic framework of internal control presented in “On the Setting of theStandards and Practice Standards for Management Assessment and Audit concerning Internal Control Over
Financial Reporting (Council Opinions)” issued by the Business Accounting Council.
Internal control achieves its objectives to a reasonable extent given that all individual components of internal
control are integrated and function as a whole. Therefore, internal control over financial reporting may not fully
prevent or detect misstatements.

2 Scope of Assessment, Assessment Date and Assessment Procedure
Assessment of internal control over financial reporting was carried out as of December 31, 2022, which is the
final day of the current fiscal year, in accordance with generally accepted assessment standards for internal
control over financial reporting.
In this assessment, the business processes to be assessed are selected after an assessment of internal control thathas a significant impact on overall financial reporting on a consolidated basis (company-level internal control)
is carried out, and in consideration of the results of the said assessment. In assessing the said businessprocesses, an assessment of the effectiveness of internal control is conducted by identifying the key controlsthat would have a material impact on the reliability of financial reporting after analyzing the selected businessprocesses and by assessing the status of design and operation of the said key controls.
The scope of assessment of internal control over financial reporting is determined to be the scope that isnecessary from the viewpoint of materiality of the impact on the reliability of financial reporting regarding theCompany, its consolidated subsidiaries and its equity-method affiliates. The materiality of the impact on thereliability of financial reporting is determined in consideration of the materiality of quantitative and qualitative
impacts. The scope of assessment of business process-level internal control is determined reasonably in light of
the results of an assessment of company-level internal control carried out with respect to all business locations
excluding immaterial locations.
To determine the scope of assessment of business process-level internal control, “significant business locations”
are selected. They are composed of business locations whose revenue (before elimination of intra-grouptransactions) reaches approximately two thirds of the revenue in the previous fiscal year, as well as otherqualitatively significant business locations. At the selected significant business locations, business processes
leading to revenue, accounts receivable and inventories which are deemed as accounting items that are closely
associated with a company’s business purpose, are included in the scope of the assessment. In addition, thescope of assessment includes other business locations as well as selected significant business locations withrespect to certain business processes. Specifically, business processes that have a high risk of misstatement andrelate to significant accounting items involving estimates and forecasts, and business processes relating to abusiness or operation dealing with high-risk transactions, are added to the scope of assessment as businessprocesses with substantial significance in terms of effects on financial reporting, regardless of whether theyoccur at selected significant business locations.

3 Assessment Result
As a result of the above assessment, we judge that the Company’s internal control over its financial reporting iseffective as of the end of the current fiscal year.

4 Additional Matters
Not applicable.

5 Significant Matters
Not applicable.

Cover[Document Submitted][Article of the Applicable Law Requiring
Submission of This Document][Filed to][Date of Submission][Company Name][Company Name (in English)][Position and Name of Representative][Position and Name of Chief Financial
Officer][Location of Head Office][Place Where Available for Public
Inspection]

Written Confirmation
Article 24-4-2, paragraph (1) of the Financial Instruments andExchange Act
Director of the Kanto Local Finance Bureau
March 28, 2023
Bridgestone Corporation
BRIDGESTONE CORPORATION
Shuichi Ishibashi
Member of the Board
Global CEO and Representative Executive Officer
Naoki Hishinuma
Executive Director
Global CFO
3-1-1 Kyobashi, Chuo-ku, Tokyo
Tokyo Stock Exchange, Inc.
(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Fukuoka Stock Exchange(2-14-2 Tenjin, Chuo-ku, Fukuoka)

1 Appropriateness of Descriptions in Annual Securities Report
Member of the Board, Global CEO and Representative Executive Officer Shuichi Ishibashi, as well as
Executive Director and Global CFO Naoki Hishinuma have confirmed that this Annual Securities Report forthe 104th fiscal year (January 1, 2022 through December 31, 2022) is reasonably and fairly stated inaccordance with the Financial Instruments and Exchange Act.

2 Significant Matters
There are no significant matters to report.