Bridgestone Americas Holding, Inc. Business report FY2005,FY2006

Business Highlights

Financial overview
(in billion yen) FY2006 FY2005 Rate of Change (%)
Sales 1,333.5 1,157.9 15 -In the Americas, the Companies' sales increased due to higher sales, better brand and product mix and higher selling prices, as well as the exchange gain on the weaker Japanese Yen. Operating income increased, despite the impact of increasing raw materials costs. In North America, unit sales of passenger car and light truck tires declined in both the original equipment and replacement sectors due to an industry-wide decrease in demand. Unit sales of truck and bus tires increased mainly in the original equipment sectors, led by "pre-buy" activities in anticipation of new 2007 environmental regulations (engine emission requirements). Sales also improved in the diversified and Latin American operations over the prior year.
Operating income 42.0 38.9 8
* The above financial figures are based upon the consolidated business and financial results announced on Feb. 20, 2007, by Bridgestone Corporation, Tokyo. Therefore, unless otherwise indicated, financial figures provided in this report is shown in Japanese Yen. Bridgestone Corporation mentioned in its report that the US dollar figures were calculated at US$1 = ツ・119.11.


-In March 2005, the Company announced its Turanza EL40002 in size P245/50R18 99H tires will be original equipment on the 2006 Cadillac DTS. These Turanza EL40002 tires carry an H speed rating, a UTQG rating of 300 for treadwear, an A for traction, and an A for temperature.
-Also in March 2005, the Company announced that BFNT will supply both Bridgestone and Firestone brand tires on several models of the 2005 Toyota Tacoma light truck. Firestone brand Destination LE tires in size P215/70R15 97S will be original equipment on the Regular Cab 4x2 and Access Cab (extended cab) 4x2 model trucks; Bridgestone brand Dueler H/T 684II tires in size P265/65R17 110S are available as an option on the Access Cab and Double Cab model Tacoma, both for the 4x2 and 4x4 versions; and Bridgestone brand Potenza RE050A tires in size P255/45R18 99V will outfit the Toyota Tacoma X-Runner.
-In April 2005, the Company announced it will be supplying both all-season Bridgestone brand Turanza EL42 Run-Flat Tires and summer Bridgestone brand Potenza RE050A Run-Flat Tires as original equipment for the 2006 BMW 3 Series performance sedan.
-In May 2005, Firestone North American Tire announced that Bridgestone brand Insignia SE20002 tires will be the primary original equipment tire on the new 2006 Buick Lucerne CX. The Company will supply the all-new entry-level luxury sedan with Insignia SE20002 tires in size P225/60R16 97S for the standard 16-inch wheels on the CX model.
-Also in May 2005, Bridgestone Firestone announced that Bridgestone brand Potenza RE92 tires will be original equipment on the 2006 Mitsubishi Eclipse. The Company will supply the vehicle with the Bridgestone Potenza RE92A tire in size P225/50R17 93V. This tire carries a V speed rating and a UTQG rating of 260 for treadwear, an A for traction, and an A for temperature.
-In June 2005, Bridgestone Firestone announced Bridgestone brand Potenza RE050A2 tires will be original equipment on 100 percent of Mazda's new 2006 all-wheel drive high performance sedan, the Mazda Speed 6. The Company supplies the tires to Mazda's Hofu, Japan manufacturing facility in a 215/45R18XL 93Y size. The Bridgestone Potenza RE050A carries a UTQG rating of 140 for treadwear, an A for traction, and an A for temperature.
-In October 2005, Bridgestone announced it will be supplying Bridgestone brand Potenza RE9 tires as original equipment on the 2006 Subaru Impreza.
-In February 2006, Bridgestone announced "Dueler H/T 840" tires will be original equipment on the 2007 Toyota FJ Cruiser. It will supply the tires in size P265/70R17 113S for the vehicle.

-In October 2005, Goodyear announced it has completed the previously announced sale of its stake in Goodyear Sumatra Plantations (GSP) to Bridgestone for approximately $62 million. The Company said the decision to sell its 95 percent stake in GSP is consistent with its strategy to focus on core business activities.
-In December 2006, Bridgestone Americas Holding, Inc. and Bandag, Incorporated jointly announced that they have entered into a merger agreement pursuant to which Bridgestone Americas will acquire the outstanding shares of each class of stock of Bandag for US$50.75 per share in cash. The transaction is valued at approximately US$1.05 billion. Bandag is a leading manufacturer of tire retreading materials and equipment. Based in Muscatine, Iowa, Bandag has a global network of more than 900 franchised dealers that produce and market retread tires and provide tire management services. In 2005 Bandag had worldwide sales of US$921 million. Following completion of the transaction, Bandag will operate as a wholly owned subsidiary of Bridgestone Americas Holding, Inc. The transaction is expected to close in the middle of 2007.


(1) Location
The Corporate Research Center is located near Firestone Park on a scenic 15-acre campus in Akron, Ohio. The Center actively collaborates with the staff of the Company's other two technical centers located respectively in Tokyo and Rome. This tripolar framework of technical centers underlies the Group's global R&D programs in tires. In addition, a fourth large technical center, in Yokohama, spearheads its development work in diversified products.

(2) Outline
The center has the reputation of being one of the leading laboratories in the world in the field of polymers. It has a rich history and can look back at many accomplishments, among them:
-First "synthetic natural" polyisoprene rubber ("Coral rubber")
-Process for acrylonitrile-butadiene-styrene (ABS) high-impact plastics
-Lithium-initiated, anionic, batch and continuous solution polymerization process for polybutadiene and styrene-butadiene rubber used in tires, plastics, and adhesives
-Polyphosphazene "semi-organic" elastomers for applications with low/high temperature and flame-resistant requirements
-Pioneering work on the radiation chemistry of elastomers leading to prevulcanization technology now used in the tire industry.
-Head-tail fictionalized elastomers from heteroatomic initiators for tires with improved wear and fuel economy.

The Company's scientist continue to work at the frontiers of catalysis, polymer science, and materials science to impart improved and unique performance characteristics to products made by the Company.

(3) BIRD
This is Bridgestone's revolutionary new tire production system and the world's first production system for tires that completely automates all stages of tire manufacturing, from the initial processing of materials up to final inspection of the finished tires. In addition to its ability to fully automate the tire production process, BIRD is also capable of producing several different types and sizes of tires simultaneously.

Investment Activities

-In January 2005, the Company announced that the first installation of BIRD, its revolutionary new tire production system, outside Japan would be completed at a new plant to be constructed in the state of Nuevo Leon, Mexico. The facility will be located in the city of Monterrey and will produce high performance, ultra-high performance, and large-rim-diameter passenger and light-truck tires, primarily for the North American tire market.
Site work on the plant is expected to begin in the near future, with operations targeted to begin in July 2007. The plant will have a production capacity of about 8,000 tires per day and expects to employ about 200 workers. Investment in the plant is expected to total approximately 220 million dollars. Once completed, the new facility will be the 49th tire plant in the Bridgestone Group of companies worldwide, and the third such plant located in Mexico. The two other existing plants are located in Mexico City and Cuernavaca.