Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of change (%)	Factors
Overall
Sales	287,726	328,371	(12.4)	-
Operating income	8,664	(2,964)	-	-
Ordinary income	8,979	(6,179)	-	-
Net income	2,957	(10,722)	-	-
Tire
Sales	214,291	242,054	(11.5)	1)
Operating income	6,933	(1,395)	-	-
DiverTech and others
Sales	73,434	86,555	(15.2)	2)
Operating income	1,760	(1,559)	-	-

Factors
1)
Tire
-The Company enjoyed brisk sales of factory-installed tires in Japan because automobile production was on a track to a recovery, thanks to sales incentives such as tax credits that encouraged consumers to purchase eco-cars. As a result, many vehicles on which the Company's tires were installed saw strong sales.  This led to substantially higher sales, exceeding those of the previous year in terms of both volume and monetary figures.  Unfortunately, total sales decreased because sales of commercial tires were lower than those of the previous year.  

2)
DiverTech and others
-Sales of vibration-reducing rubber designed for automotive applications were lower than those of the previous year because automotive production was still weak, even though there were signs of a recovery.
-Sales of automotive seat cushions remained unchanged from those of the previous year, as the Company received steady orders for rubber used on eco-cars such as hybrid vehicles.

Contracts

-Followings are major contracts from press releases in 2009.

Maker/ Model	Products
Toyota Prius	Tire
Mazda Axela	Tire PROXES R32 (205/50R17), TOYO J48 (205/55R16)
Lexus HS250h (US and Canada )	Tire PROXES A20 (P225/45R18 91W)
Mitsubishi Motors U.K. Lancer Evolution X FQ400	Tire PROXES R1R (245/40 ZR18 93W)
Audi AG	Tire PROXES T1-AO (265/35ZR19 98Y)
Toyota SAI	Tire PROXES J54 (205/60R16)

Business Overview

-The Company has decided to increase tire production capacity and streamline operations in Japan as well as in the U.S., starting this fall. It will issue a corporate bond with a new share subscription right through allocation to a third party to collect approx. five billion yen. It will expand production capacity of environmentally-friendly tires and streamline operations to raise cost competitiveness through investment to be made from Sep. 2009 through the first half of FY 2010. In the U.S., production capacity will be increased at its tire plant. (From an article in the Nikkan Jidosha Shimbun on July 10, 2009)

-The Company will reorganize its supply route for the U.S. market. Following the safeguard measures by the U.S. government against tires made in China, the Company will suspend exporting its tires for the market from its Chinese operations. Approx. 2 million tires being exported from the Company's Chinese facilities will now be switched to both local production in the U.S. and supply from Japan. TheCcompany is going to manufacture about 500,000 tires at its U.S. facilities, while shipping 1.5 million tires from Japan. (From an article in the Nikkan Jidosha Shimbun on Nov. 11, 2009)

-The Company announced that the 5 millionth tire has rolled off the production line at Toyo Tire North America Manufacturing Inc. (TNA), its manufacturing subsidiary based in the State of Georgia, USA. The annual capacity of TNA is expected to reach 2.5 million units in summer 2010 when the planned production expansion programs are due to be completed. (From a press release on Feb. 9, 2010)

New Company

-The Company announced its plan to establish a 100% subsidiary in China, which will manufacture and sell passenger car and light-truck tires in response to the growing demand there. The plant will be constructed in Zhangjiagang, Jiangsu and start operations in Dec. 2011. The combined annual production volume for passenger car and light-truck tires is projected at two million units and the total investment will be US$98 million including the subsidiary's capital of US$50 million. The number of employees is expected to be approx. 500. (From an article in the Nikkan Jidosha Shimbun on Jan. 29, 2010)

Business Partnership

-The Company and Bridgestone Corp. will reconsider the mutual supply of tires in their comprehensive business alliance agreement, including the target areas. They originally planned to produce tires for each other in the Americas, starting in 2009. In response to the recent drastic change in the market, however, they have decided to seek for the best operation for both companies in tire production. As for procurement of materials, they plan to start with areas in which it is relatively easy to produce effects, for instance, increasing target items. The two companies thus aim to achieve their alliance objectives, that is, improved business operations and synergy-effects creation. (From an article in the Nikkan Jidosha Shimbun on Feb. 23, 2010)

Restructuring

-The Company announced reorganization of its operation network in the Fukushima area. The Company's Fukushima Plant manufacturing materials and components for tires, and its subsidiary "Fukushima Rubber" manufacturing chemical and industrial products will be merged as of July 1, 2009. Because the majority of the product items in the Fukushima area are now related to tire materials, the Company is aiming to streamline the operations. (From an article in the Nikkan Jidosha Shimbun on June 30, 2009)

-The Company announced that it will dissolve its subsidiary T.G.K Co., Ltd based in Kameyama City, Mie Pref. The production of automotive anti-vibration rubber at T.G.K will be transferred and integrated into the group's other facilities. Liquidation process is expected to be completed in late July, 2010. (From a press release on Aug. 6, 2009)

-The Company announced reorganization of its tire manufacturing business in China. It will terminate its joint venture agreements on the two firms in China, switch their operations to consignment manufacturing and construct its wholly-owned new tire plant in the coastal region of China. Production at the new plant is scheduled to begin at the end of 2011. The investment amount of the initial phase is approx. 10 billion yen. The annual production capacity will be two million tires for passenger cars and light trucks for the Chinese market. The two joint ventures to be terminated are: Cheng Shin-Toyo Tire & Rubber (China) Co., Ltd. in Jiangsu, jointly established in 1995 with Cheng Shin Rubber Ind. Co., Ltd., Taiwan, to manufacture tires and tubes for automobiles; and Cheng Shin-Toyo Tire (Xiamen) Co., Ltd. in Xiamen, jointly established in 2002 with Maxxis International Co., Ltd. and other firms to manufacture radial tires for trucks and buses.(From an article in the Nikkan Jidosha Shimbun on Aug. 28, 2009)

-The Company announced that it will sell majority interest in its subsidiary Toyo Rubber (Malaysia) Sdn.Bhd.(TRM) to Showa Holdings Co., Ltd. based in Kashiwa City, Chiba Pref. TRM engages in the manufacturing and sales of industrial rubber products. After the completion of the transaction, The Company's stake in TRM will be reduced from 65.6% to 10.0%. (From a press release on Oct. 13, 2009)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income, etc.)

Outlook for FY2010

(in millions of JPY)

	FY2010 (forecast)	FY2009	Year-on-year Fluctuation
Sales	300,000	287,726	12,274
-Tire	227,800	214,291	13,509
-DiverTech and others	72,200	73,434	1,234
Operating income	10,400	8,664	1,736
Ordinary income	7,700	8,979	1,279
Net income	4,000	2,957	1,043

Sales by Region

(in millions of JPY)

	FY2010 (forecast)	FY2009	Year-on-year Fluctuation
Japan	155,400	159,908	(4,508)
North America	97,100	86,358	10,742
Other regions	47,500	41,458	6,042

R&D Expenditure

(in millions of JPY)

Business segment	FY2009	FY2008	FY2007
Overall	8,315	8,762	9,618
Tire	5,327	5,567	5,829
DiverTech and other	2,102	2,326	2,951
In common	886	869	837

R&D Facilities

Tire Technical Center	Hyogo Pref.,Japan
R&D Center	Osaka, Japan
Automotive Parts Technical Center	Aichi Pref., Japan
Automotive Components Technical Center	Chiba Pref., Japan
Miyazaki Tire Proving Ground	Miyazaki Pref.,Japan
Saroma Tire Proving Ground	Hokkaido,Japan

R&D Activities

Tire
The tire technical center focuses on developing new tires by:
-developing fundamental technology on tire design that incorporates analyzing the behavior of both the tires and the vehicles; and
-developing simulation technology that can analyze noise and abrasion performance of tires.

-The Company built a production technology workshop on the premises of its tire technical center in order to develop elemental technology involved in production processes as a means toward improving its production technology.

DiverTech and other
<Transportation equipment>
-Advanced Technology: As part of its efforts to create suspension systems that feature the most suitable grounding performance, the Company completed development of a product called LF-BUSH that largely improves both passenger comfort and driving performance. The Company is preparing to launch the new product.
-The Company has developed a high-performance, vibration-reducing rubber that is highly heat resistant. This new material responds to temperature rise in the engine room. The Company is working to commercialize it in the future.
-Environment: The Company had been focusing on developing hexahydric-chrome-free products. But its recent focus is on reducing VOC (volatile organic compound) emissions in its production lines as well as in its products by increasing the use of alternative materials.
-Fuel Economy: The Company is trying to develop parts that are not only lighter but also have higher performance, by making use of aluminum and resin materials; and by also developing new methods and new materials.

Capital Expenditure

(in millions of JPY)

Business segment	FY2009	FY2008	FY2007
Overall	13,215	29,221	20,153
Tire	10,842	23,955	14,763
DiverTech and others	2,372	5,266	5,389

Tire
-The Company made a capital investment mainly to streamline production, improve product quality, and enhance production facilities at tire plants in North America.

DiverTech and others
-The Company made a capital investment mainly to streamline production and improve product quality.

Planned Capital Investments

(As of Mar. 31, 2010)

Business division	Planned amount of investment (in million JPY)	Objective of the investment
Tire	22,942	Streamlining production and improving product quality; Responding to increased sales of high-grade tires
DiverTech and Other Businesses	2,287	Streamlining production and improving product quality; enabling operations to respond to the Company's global supply structure
In common	189	Strengthening research on fundamental technology
Total	25,418	-