Financial Overview

(in millions of JPY)

	Y ended Dec. 31, 2013	FY ended Dec. 31, 2012*	Remarks
Overall
Sales	370,218	291,110	-
Operating income	37,240	15,650	-
Ordinary income	38,293	13,645	-
Net income	11,596	13,218	-
Tire Business
Sales	289,697	228,729	1)
Operating income	33,785	13,014	-
DiverTech Business
Sales	80,450	62,321	2)
Operating income	2,583	2,228	-

*Due to changes made to the Company's accounting term, FY2012 covers a 9-month period from April 1, 2012 through December 31, 2012 in the Group's financial statements for the domestic business, while covering a 12-month period from January 1, 2012 through December 31, 2012 in those for the overseas business.

Remarks
1) Tire Business
-Sales volumes for original equipment (O.E.) tires remained sluggish as domestic vehicle production decreased. However, sales values for original equipment (O.E.) tires as the Company expanded high-value-added products.

2) DiverTech Business
-In transportation equipment, sales for automotive anti-vibration rubber products and automobile seat cushions remained almost flat. While domestic vehicle production fell on the year, vehicle production in the U.S. and other regions remained strong.

Production Items Restructuring

-In November 2013, the Company announced that it will adjust its product lines at its global tire facilities. In the U.S., where demand for SUV tires is growing, the company plans to revamp its existing plant to increase production of SUV tires and reduce output of passenger car tires. Some passenger car tires for the U.S. market will be thereafter supplied from Toyo Tire's plants in Japan, Malaysia, and China. Meanwhile, in China, Toyo Tire & Rubber intends to boost production of premium tires. By flexibly revising its production items in line with market trends, the company is poised to improve its profitability. (From an article in the Nikkan Jidosha Shimbun on November 18, 2013)

Recent Development Outside Japan

-In January 2013, the Company said it is going to increase the percentage of vehicle tires it produces outside Japan from current 20 percent to 47 percent by 2015. Following the establishment of a new tire plant in China last year, the company is currently constructing a production facility also in Malaysia. It is looking to further step up its global tire business, while mulling the possibility of setting up an additional factory in China and building new facilities in India or Latin America. In order to reach the 47 percent target, the company will need to manufacture more than 15 million tires a year at its facilities overseas. The new Malaysian Plant will have the capacity to make 2.5 million tires a year. Based on the company's growth strategy, new plant construction plans in Central and South America, Europe and Asia as well as capacity enhancement projects in China and Malaysia are also possible. (From an article in the Nikkan Jidosha Shimbun on Jan. 9, 2013)

<Malaysia>
-In September 2013, the Company will start producing Nanoenergy 3 fuel-efficient tires at its plant in Malaysia in September 2013. The Malaysian plant will be the company's first production site for the Nano series fuel-saving tires outside Japan. Tires manufactured at the plant will be exported to the European market starting at the end of 2013. The plant has just begun its operations in May 2013. The company will install state-of-the-art equipment in the plant in order to increase the profitability of fuel-efficient tire production. (From an article in the Nikkan Jidosha Shimbun on September 24, 2013)

<Indonesia, Philippines>
-In May 2013, the Company is strengthening its sales operations in Southeast Asia. Up until now, Toyo brand tires have been sold mainly through distributing agents. The company, however, is going to establish additional local sales subsidiaries to conduct marketing activities targeted at Japanese automakers' plants. The new operations, possibly to be set up in Indonesia and the Philippines, are expected to boost sales in the replacement market as well. Based on its strategy to expand its presence in the growing Southeast Asian market, Toyo Tire is poised to increase sales initially, and then shift to local production. (From an article in the Nikkan Jidosha Shimbun on May. 13, 2013)

<Thailand>
-In January 2013, the Company announced on January 15 that Toyo Rubber Chemical Products (Thailand) would start producing high-performance plastic constant velocity (CV) joint boots in April 2014. Based on this plan, Toyo Tire is making an additional investment in the local subsidiary to construct a new production facility at the Amata Nakorn Industrial Estate. The plastic CV joint boots will be supplied to automakers and drive shaft manufacturers operating in Thailand. (From an article in the Nikkan Jidosha Shimbun on Jan. 16, 2013)

Contracts

Carmaker	モデル	製品
Toyota	Highlander	Original equipment (O.E.) tires
Toyota	Corolla Axio Hybrid	Original equipment (O.E.) tires
Toyota	Corolla Fielder Hybrid	Original equipment (O.E.) tires
Toyota	Crown	Original equipment (O.E.) tires
Mazda	Axela	Original equipment (O.E.) tires
Mazda	Atenza (Mazda6)	Original equipment (O.E.) tires
Mitsubishi	Outlander PHEV	Original equipment (O.E.) tires

Mid-term Management Plan

-The Company announced its management plan, called Vision 20, setting 2020 as the final year to achieve the objectives set forth under the plan. At the same time, the Company is also operating under a five-year management plan called "Mid-term Plan 11", which set 2015 as the final year. Also, 2015 is the midway point under its newest management plan, Vision 2020, which has set a target of 600 billion yen for operating revenue and a 10% profit margin for operating profit.

- Mid-term Plan 11 has the following four main strategies in place in order to achieve its objectives by March 2016. The objective are as follows: 400 billion yen or more in operating revenue and 10% or higher in operating profit margin.

• Concentrate management resources in strategic businesses in growing markets.
• Build a business model that improve revenue and profits
• Develop new customer demand based on proprietary technologies
• Continuously create corporate innovation

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

R&D Expenditure

(in millions of JPY)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	FY ended Mar. 31, 2012
Tire Business	5,742	3,956	4,999
DiverTech Business	1,773	1,605	2,457
In common	972	648	856
Overall	8,488	6,211	8,312

R&D Facilities

Tire Technical Center	Itami, Hyogo Pref., Japan
Corporate Technology Center	Kawanishi, Hyogo Pref., Japan
Tire Testing Course	Koyu, Miyazaki Pref., Japan
Tire Testing Course	Saroma, Hokkaido, Japan

-In 2013, the Company opened a new research center in Kawanishi, Hyogo Prefecture. It relocated its technical center in Ibaraki and its engineering center in Itami, Hyogo Prefecture, to the new research center in Kawanishi.

R&D Activities

DiverTech Business
<Transportation equipment>
-The Company has won a considerable number of orders from OEMs for highly functional parts such as engine mounts for high-end, luxury vehicle models.

-In the area of advanced technology, the Company is working to develop new products designed for eco-friendly vehicles, aiming to expand its business in this market sector.

-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)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	FY ended Mar. 31, 2012
Tire Business	23,813	18,553	26,564
DiverTech Business	2,831	2,502	2,800
Others	2,354	1,902	402
Overall	28,999	22,958	29,767

Tire Business
-The Company made a capital investment mainly to streamline production, improve product quality and enhance production facilities at Toyo Tire (Zhangjiagang) Co., Ltd.in China and Tyre Malaysia Sdn Bhd in Malaysia.

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

Investment Outside Japan

<U.S.>
-In December 2013, its U.S. subsidiary, Toyo Tire North America Manufacturing Inc. (TNA) held a groundbreaking ceremony for a new addition to its plant. Construction of the new building requires a JPY 20 billion investment. TNA will introduce facilities in the new building which will generate half of the plant’s total capacity. TNA expects that this will initially add 2.5 million tires annually to its current production capacity. (From an article in the Nikkan Jidosha Shimbun on December 20, 2013)

Planned Capital Investments

(As of Mar. 31, 2013)

Business division	Planned amount of investment (in million JPY)	Objective of the investment
Tire Business	26,770	Streamlining production and improving product quality; enabling operations to respond to the Company's global supply structure
DiverTech Business	4,048	Streamlining production and improving product quality; enabling operations to respond to the Company's global supply structure
In common	2,336	Strengthening research on fundamental technology
Total	33,154	-