Annual Report 201 1

The Yokohama Rubber Co., Ltd.

Year ended March 31, 2011

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Profile
Measures for accelerating growth highlight strategy at The Yokohama
Rubber Co., Ltd. Yokohama, a leading tire manufacturer, is also an industry
leader in several lines of diversified business, including high-pressure hoses,
sealants and adhesives, other industrial products, aircraft components, and
golf equipment. The company is laying the groundwork for strong,
sustainable growth by expanding its global production capacity for tires
and by cultivating global markets for its diversified products. Yokohama
has detailed its strategy for accelerating growth in Grand Design 100, a
medium-term management plan. Launched in April 2006, that plan is a
systematic framework for achieving operating return on sales of 10% and
annual net sales of 1 trillion by 2017.

Contents
Financial Highlights
To Our Stakeholders
Management Perspectives from the New President, Hikomitsu Noji
The BluEarth-1: A New Standard for Fuel-Saving Performance
Yokohama at a Glance
Review of Operations
Tires
Industrial Products
Other Products
Corporate Social Responsibility
Corporate Governance
Directors, Corporate Auditors, and Corporate Officers
Financial Section
Principal Operations in Japan
Overseas Subsidiaries and Affiliates
Investor Information
Stock Information

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On the Cover
Team Yokohama EV Challenges vehicle speeds up Pikes Peak on June 26, 2011. It is
en route to the teams second-consecutive victory in the electric vehicle class of the
Pikes Peak International Hill climb. The vehicle, sponsored by Yokohama and
equipped with Yokohama tires, bettered its own record time over the 20-kilometer
course and reached the 4,301-meter summit of Pikes Peak in just 12 minutes, 20.084
seconds. The Team Yokohama EV Challenge vehicle benefited from Yokohama
breakthroughs in energy-efficient tires. Those same breakthroughs are a centerpiece
of Yokohamas growth strategy in the global tire market.
Forward-Looking Statements
This annual report contains forward-looking estimates and forecasts based on managements plans, which are subject to
unforeseeable risks and uncertainties. The companys business results could differ significantly from those estimates and forecasts.

Financial Highlights
Years ended March 31, 2011 and 2010

Thousands of
U.S. Dollars

Millions of Yen
Percent Change
(2011/2010)

2011

2010

519,742

466,358

11.4%

Operating income

29,491

21,455

37.5

354,670

Income before income taxes and

minority interests

21,880

18,969

15.3

263,139

Net income

13,924

11,487

21.2

167,450

Net sales

2011
$ 6,250,656

Change
(2011/2010)

Total assets

478,916

466,973

170,872

163,382

Total net assets

$ 5,759,659

+ 11,943
+

2,054,980

7,490

Yen

Per share:
Net income: Basic
Cash dividends

U.S. Dollars

2011

2010

41.55

34.27

10.00

10.00

2011
+

7.28

$0.50

0.00

0.12

Note: Here and throughout this report, the U.S. dollar amounts have been translated from Japanese yen, solely for the convenience of readers, at the rate of 83.15 = US$1.00,
the approximate exchange rate on March 31, 2011.

Operating Income and

Operating Margin

Net Sales
Billions of Yen

Billions of Yen, Percent

Yen

6.0
551.4

519.7

517.3

497.4

Net Income (Loss) per Share

466.4

5.7
4.6

4.2

62.81

33.1
29.5

48.79
41.55

2.5

34.27
21.5

21.1

12.8
-16.87

2007

2008

2009

2010

2011

2007

2008

Operating Income

2009

2010

2011

Operating Margin

2007

2008

2009

2010

2011

To Our Stakeholders

ou see a new signature on our message

to you this year. Hikomitsu Noji has
succeeded Tadanobu Nagumo as the
president of Yokohama Rubber, and Nagumo
has assumed the position of chairman and
chief executive officer. Those changes took
effect on approval by the general meeting of
shareholders on June 29, 2011.
We begin our first message to you as
the chairman and president with a word
about the tragic Great East Japan Earthquake
of March 2011. We and our colleagues at
Yokohama grieve for those who lost their
lives in the quake and tsunami. We extend
heartfelt sympathy to everyone who suffered
human or material loss in that disaster. And
we reaffirm the Yokohama commitment to
supporting the recovery effort in every way
possible. We also take this opportunity to
report that the direct effect of the disaster
on our employees and equipment was minimal.

Hefty gains in sales and earnings

Our net income increased 21.2% in the fiscal year
ended March 31, 2011, to 13.9 billion, on a 37.5%
increase in operating income, to 29.5 billion, and an
11.4% increase in net sales, to 519.7 billion. Strong
sales growth in our tire operations and in our
diversified operations more than offset the adverse
effect on earnings of rising prices for raw materials
and the appreciation of the yen. Earnings also
benefited from continuing progress in measures for
streamlining operations and trimming costs. We
maintained the aggregate annual dividend at 10 per
Tadanobu Nagumo (right), Chairman and CEO, and
Hikomitsu Noji, President

sharean interim dividend of 4 and a year-end

dividend of 6.

To Our Stakeholders
A nine-month fiscal term

models, strengthening our position further in the

We will switch our fiscal accounting in 2011 from an

Russian market, expanding production capacity, and

April-to-March basis to a calendar-year basis. That will

integrating our operations locally in each principal

align the fiscal accounting at our Japanese operations

region. We marked important progress in regard to

with the fiscal periods employed at our overseas

each of those emphases in the past fiscal year.

operations, and it will result in a one-time-only

nine-month fiscal term: April 1 to December 31, 2011.
Our fiscal projections for the nine months to

In environmentally friendly products, we

fortified our BluEarth line of fuel-saving tires with three
new products: the BlueEarth-1, our premier offering in

December 2011 call for net income of 11.0 billion on

environmentally friendly tires; the BluEarth RV-01, for

operating income of 21.0 billion and net sales of

minivans; and the BluEarth AE-01, for a broad range of

471.0 billion. We plan to pay an aggregate dividend

model types. We have launched the BluEarth-1 in

of 7 for the nine-month fiscal term: an interim

Europe, as well as in Japan, and we will offer it in a

dividend of 3 and a term-end dividend of 4.

growing range of markets around the world.

Our production capacity, meanwhile,

The concluding year of Grand Design 100

continues to expand. We are undertaking expansion

Phase II

projects at our tire plants in the Philippines, China,

Our blueprint for growth is Grand Design 100, a

Thailand, and the United States and will open a new

medium-term management plan. Launched in April

tire plant this year in Russia. Those projects, along with

2006, that plan covers the years to 2017, our corporate

previous expansion, will increase our annual production

centennial. The plans chief target is to raise operating

capacity to 60 million tires by the end of December

return on sales to 10% on a sustainable basis. We are

2011. That is an 11% increase over the end of March

also working through Grand Design 100 to increase net

2009.

sales to 1 trillion andin accordance with our target

for operating profitabilityto raise operating income to

Growth strategy: diversified products

100 billion by 2017.

In diversified products, our business spans industrial

Grand Design 100 consists of four phases of

products and other products, mainly aircraft products

three years each. We completed the first phase in

and golf equipment. Our chief emphases in industrial

March 2009, and we are now in the third and final year

products are on deploying products globally in growth

of Phase II (shortened to nine months on account of the

sectors and on developing business in new product

change in our fiscal period). Our core emphasis in Phase

sectors, especially in regard to environmental

II of Grand Design 100 has been on quality growth, and

protection.

we continue focusing on reinforcing our corporate

foundation in that spirit.

We have bolstered our global marketing

capabilities in industrial products with the May 2011
establishment of a Chinese sales company for

Growth strategy: tires

high-pressure hoses, conveyor belts, and sealants and

Our chief emphases in our tire business are on

adhesives. In another move in China, we will build a

deploying environmentally friendly products globally,

plant to produce high-pressure hoses for construction

winning factory fitments on a global cast of vehicle

equipment. Chinese demand is growing rapidly in that

product sector, and we plan for our new plant to begin

operation in January 2013.
In new product sectors, we are stepping up

We have been working to secure ISO 14001

certifications for sound environmental management at
all our principal plants worldwide, and we expect to

our marketing effort in sealants for photovoltaic cells

achieve that goal by the end of this year. Our

and in coatings for smart phones and other mobile

environmental commitment includes working to

terminals.

eliminate landfill waste at our operations worldwide.

Our business in golf equipment gained

In public-interest activities, we are working through the

additional momentum with the December 2010 launch

Yokohama Forever Forest project to plant 500,000

of the all-new iD line of golf clubs. We broadened that

trees at Yokohama plants worldwide by 2017. The first

line in February 2011 with the launch of the iD

plantings in that project took place in 2007, and we

WOMANS series for female golfers.

had planted 183,000 trees37% of our goalby

March 31, 2011.

Technology strategy

Rigorous compliance with high standards of

Two recent technological advances that have

corporate ethics is also part of our measures for

buttressed our competitiveness in tires are our nano

reinforcing our corporate foundation. We continue

BLEND compound and our Advanced inner liner. Our

working in every way to earn the confidence of our

nano BLEND compound, which contains orange oil,

friends and neighbors in the global community. And we

resolves traditional tradeoffs and helps minimize rolling

welcome your scrutiny of our progress.

resistance while maximizing grip. Tire manufacturers

use inner liners, meanwhile, to help minimize air
seepage. And we have achieved new progress in

June 2011

preventing air loss in our newly developed Advanced

inner liner. We have secured patent protection
worldwide for our new liner technology.
Measures for reinforcing our corporate
foundation
Recent measures for reinforcing our corporate

Tadanobu Nagumo

foundation have included restructuring our Japanese

Chairman and CEO

sales operations. We have streamlined our industrial

products operations by merging our Japanese sales
subsidiaries into a single company in October 2010.
That followed a similar consolidation of our tire sales
operations in Japan.
Our Muda-dori activities, inaugurated in 2006,
tap employee initiative in identifying and eliminating

Hikomitsu Noji
President

waste. They have yielded cumulative cost savings of

some 44 billion.

Trust

Management perspectives
from the new president,
Hikomitsu Noji

Tackle the next phase in Grand Design 100

Russia will help us maintain our strong sales

We have entered the third and concluding fiscal period

momentum in that fast-growing market. We continue

of Phase II in our Grand Design 100 medium-term

to expand our production capacity in China. Weve got

management plan. My responsibilities as president

the land to build a plant in India when the time is right,

center on finding ways to accelerate our growth as we

and were also keeping an eye on market trends in Brazil.

approach Phase III, which begins next year. Phase III will
be pivotal in positioning us to achieve the Grand Design

Establish footholds in new product sectors

100 targets of raising operating return on sales to 10%

In diversified products, well be more aggressive in

while increasing net sales to 1 trillion and thus

going after business in the global marketplace. We

increasing operating income to 100 billion. I will

have especially strong competitive positions in such

therefore concentrate on laying a solid foundation in

products as high-pressure hoses, conveyor belts, and

Phase III for achieving those goals in Phase IV.

sealants and adhesives. Those product categories will

be the focus of our international push in diversified

Serve the global growth in tire demand

Our most pressing task in regard to achieving further

Well also be stepping up our efforts to

growth is to expand our production capacity in tires.

develop business in new sectors. For example, we have

Global demand for tires is clearly trending upward, and

developed useful products in sealants and adhesives for

were expanding capacity at tire plants in the

photovoltaic generation systems, hydraulic hoses for

Philippines, China, the United States, and Japan.

wind-power generation systems, coatings for mobile

Multistage expansion is under way at our

phones and digital appliances, and pressure-relieving

Philippine tire plant, which has become a crucial export

air-cell cushions for wheelchairs. We will promote those

platform. By 2017, we will expand that plants annual

products vigorously and continue to develop new

production capacity to 17 million tiresa 2.4-fold

products for similar applications and for new ones.

increase over its present capacity. Our new tire plant in

6

products.

Assert a distinctive presence amid escalating

people to translate it into action, and give them ample

competition

authority to get the job done. They need to be firm,

Business outside Japan generates nearly half our sales,

though, in providing direction. For example, they need

and coping with global competition will become

to make sure that the proposals that arise from the

increasingly important for our company. Two crucial

workplace are clear and forthright. The leaders need to

strengths for us in tackling that challenge will be our

reject proposals framed in such uncertainty as maybe

corporate scale and our technological capabilities.

or I think so. They need to insist on definite phrasing

Were small enough that we can mobilize our

resources swiftly as necessary. Were big enough that

based on a solid grasp of the pertinent facts.

Once a leader has signed off on a proposal,

we can undertake R&D programs that keep us in the

he or she then needs to take full responsibility for the

vanguard of fast-evolving product technologies. That is

outcome. This approach fosters trust that is far more

evident in the strong position that we have staked out

important than the outcome of any single proposal.

in the fast-growing global market for fuel-saving tires.

Even proposals that dont turn out as hoped become

Reconciling gains in fuel economy with simultaneous

valuable opportunities for personal growth.

gains in wet grip requires extremely sophisticated

technology. Our technological capabilities have

Raise efficiency by fostering trust

supported world-class attainment in fuel-saving tires

Trust is a crucial precondition for streamlining

that also provide excellent handling, and we will make

operations. We see that, for example, in the way that

the most of our competitive edge in those products.

trust between people in production and their

Another Yokohama strength is our extensive

counterparts in sales can trim inventories. If the

experience in motor sports. That experience has yielded

production people know that each order is for

a lot of insight into matching tire specifications and

replacing goods that really have been sold, theyll

vehicle settings optimally. Such insight makes us a

respond promptly. And if the sales people trust their

highly valued partner for world-leading automakers in

colleagues in production to respond promptly, theyll

vehicle-development projects. Thus do Yokohama tires

be less inclined to maintain extra inventory.

appear as factory equipment on some of the worlds

most prestigious high-performance cars.

Weve reduced our tire inventory steadily in

recent years. And thats testimony to the kind of trust
that Im describing. Our workplace leaders need to

Nurture corporate growth by nurturing

keep up their good work in steering things in the right

personal growth

direction and in letting their people exercise initiative.

I have spent a lot of time in manufacturing, including

assignments as the assistant manager of the Shinshiro

Foster a vibrant workplace

Plant, as the manager of the Mishima Plant, and as the

The workplace atmosphere is fantastic at our

president of our tire manufacturing subsidiary in the

operations in every nation. People are taking the

Philippines. That experience has taught me that

initiative in finding ways to raise efficiency and reduce

corporate growth depends on personal growth by the

waste. That shows that theyve built good relations of

people in the workplace. It has taught me that leaders

trust with their leaders and with each other. Ill be

need to cultivate a workplace environment where

doing everything possible to encourage that kind of

people can fulfill their full potential.

camaraderie. For I love this work, and I want everyone

People dont grow if their leaders simply give

at Yokohama to be able to love his or her work.

orders. Leaders need to present a vision, trust their

7

The BluEarth-1: A New Standard for

Fuel-Saving Performance
We marked a new phase in environmentally sensitive tires with the July 2010 launch of
the first BluEarth tire. The BluEarth product concept provides for accompanying
progress in reducing rolling resistance with advances in handling and in comfort and
quiet. It is yielding a growing line of tires that save fuel, indulge drivers and passengers,
and harmonize transport with the community, all at the same time.

he latest BluEarth tire, the BluEarth-1, debuted in Japan in March 2011 as our new
flagship product in fuel-saving tires. It has earned the top designation under

Japanese tire manufacturers labeling standards for rolling resistance. In addition, it has
become the first BluEarth tire to be sold overseas. We introduced the BluEarth-1 in Europe
in April 2011, and we are preparing to market it in China and in North America.
The BluEarth-1 minimizes the traditional tradeoffs between low rolling resistance,
on one hand, and wet grip and long mileage on the other. It surpasses in that regard even
the DNA dB super E-spec, our former flagship
product in environmental performance. The
BluEarth-1 is superior to the DNA dB super E-spec
in reducing external, pass-by noise, and it is
fully comparable to its predecessor in handling
stability and quiet ride.
Our BluEarth series includes the BluEarth
RV-01, for minivans, and the BluEarth AE-01,

The chemical structure of the tread compound in

the BluEarth-1.

available in sizes for a broad range of model

types, as well as the flagship BluEarth-1. We will
continue to augment the BluEarth series with new
products to serve the growing global demand for
fuel-saving tires.

A remarkable polymer
Contributing hugely to the BluEarth-1s fuel-saving
performance is a newly developed polymer that we
have incorporated in the tread compound. The
polymers used in conventional silica rubber compounds
are prone to heat generation when the tires are in

motion. That is because the ends of the polymer chains

more supple. It thus maximizes the area of tire contact

move freely in the compound, causing friction with the

with the textured contours of the road surface, which

carbon and silica molecules. And the tire therefore loses

improves grip.

some of its rolling energy to friction-generated heat.

Yet another technological advance in the

The molecular chains of our newly developed

BluEarth-1 is the fine silica that we have adopted in the

polymer bond easily with silica molecules at their ends.

compound. Our fine silica has a greater specific surface

That constrains the movement of the ends of the chains,

areasurface area per unit of massthan the silica in

which reduces friction between the polymer and silica

conventional tires. It therefore helps reduce tread wear.

molecules. It also helps distribute the silica evenly in the

Advances in compounding the tread rubber

rubber compound, which minimizes friction between

have thus enabled us to optimize the BluEarth-1 in regard

the silica molecules.

to reconciling disparate performance criteria. Evidencing

our success is the unprecedented combination of fuel

Orange oil!

economy, wet grip, and wear resistance.

Another important component in the BluEarth-1s tread

compound is orange oil, which we have also used in
other fuel-saving tires. Orange oil makes the rubber

YOKOHAMA

at a

Glance

Tires
Industrial Products
83.8 billion
(16.1% of net sales)

411.6 billion
(79.2% of net sales)

Tires
25.0 billion
(84.6% of operating income)

Other Products
24.3 billion
(4.7% of net sales)

Industrial Products
3.0 billion
(10.3% of operating income)
Other Products
1.5 billion
(5.2% of operating income)

Fiscal 2011 net sales:

519.7 billion

Fiscal 2011 operating income:

29.5 billion

10

Tires

Principal products
Tires for passenger cars and light trucks, for trucks and buses, and for construction and mining equipment,
industrial vehicles, and other applications; aluminum alloy wheels and other peripheral products

A focus on fuel-saving tires

Yokohama takes the initiative in developing fuel-saving products for every tire category. Its BluEarth series, launched in
July 2010, marks a new advance in reconciling fuel economy with wet grip and durability. The tires, which Yokohama will
promote globally, also minimize pass-by noise.
Global scope in high-performance tires
ADVAN, Yokohamas flagship brand in high-performance products, asserts a compelling presence for the company in
markets worldwide. Yokohama continues to win factory fitments for ADVAN tires on prestigious vehicle models, including
the Bentley Continental GT, the Porsche 911 Carrera 4, and the Mercedes-Benz AMG.

Industrial Products

Other Products

Principal products

Principal products

High-pressure hoses, sealants and adhesives,

conveyor belts, antiseismic products, marine hoses,
pneumatic marine fenders

Aircraft fixtures and components, golf equipment

Japans market leader in high-pressure hoses and

in construction and automotive sealants
Yokohama asserts unmatched strengths in
high-pressure hoses for off-the-road equipment, in
sealants for buildings, and in windshield sealants for
automobiles.

Lightweight, high-strength aircraft fixtures and

components
Yokohama supplies lavatory modules for the Boeing
737 airliner and drinking-water and wastewater tanks
for the Airbus A380. Underlying the competitiveness of
Yokohamas aircraft products are the companys unique
strengths in fabricating lightweight, high-strength items
from fiber-reinforced plastic.

The world leader in marine hoses and marine

fenders
The company is the worlds largest supplier of
pneumatic fenders for protecting ship hulls. It is also a
leading supplier of marine hoses for loading and
unloading crude oil.

Pace-setting golf equipment

The head-speed theory adopted in Yokohamas PRGR
line of golf clubs in 1984 has become axiomatic in the
golf world. And Yokohama has continued to earn
plaudits for golf equipment that exhibits breakthrough
insights and a scientific approach to product
development.

11

Review

of

Operations

Tires
Operating income in our tire operations increased 20.9% in the fiscal year ended March
31, 2011, to 25.0 billion, on a 12.0% increase in sales, to 411.6 billion. The sales growth
comprised gains in Japan and overseas and more than offset the adverse earnings effect
of the rising prices for raw materials and the appreciation of the yen.
In Japan, our tire products for improving fuel economy earned a strong market
reception, and our market share in replacement tires expanded. Leading our sales growth
overseas were strong gains in the United States and in China. Note that the sales and
earnings figures for overseas subsidiaries are for the calendar years ended three months
earlier than the parent companys fiscal years.

JA PA N
Sales contributions from fuel-saving tires and from

tires. Demand remained strong for our ZEN truck tires,

studless winter tires

which feature good fuel economy with long-life

In Japan, we posted sales gains in value and in unit

durability, and that improved our sales mix in truck and

volume in replacement tires and in original equipment

bus tires. The ZEN series is especially popular with

tires. We made the most of a recovery in replacement

transport operators, who welcome its multifaceted

demand in passenger car tires by promoting fuel-saving

contributions to cost savings. It also meshes well with

tires and studless winter tires. The launch of the

the mounting sentiment for reducing emissions of

BluEarth series, our new flagship line in fuel-saving

greenhouse gases.

tires, was highly successful, and that stimulated demand

Japanese demand for tires appears unlikely to

for all our offerings in products focused on fuel

grow significantly in the present fiscal period, but we

efficiency.

are aiming to increase our monthly unit sales and

Our strong sales performance in studless

12

We also posted sales gains in truck and bus

operating profitability. Our marketing efforts will

winter tires reflected heavy snowfall and the continuing

include promoting BluEarth tires and other tire offerings

popularity of our Ice GUARD TRIPLE PLUS studless tire.

in the premium and middle-market segments. We will

That product, launched in September 2010, combines

also raise prices as necessary to offset the continuing

excellent grip on icy surfaces with good fuel economy.

upward trend in raw material costs.

Factory fitments on a broadened range of vehicle

models
Winning factory fitments on a broadened range of
models enabled us to expand our market share and
increase our sales in original equipment tires. We
achieved that growth even while sharpening our focus
on sound margins to address the rise in material costs.
Our efforts included working out a sliding-price
arrangement with automakers that links tire prices to
an index of raw material prices.
Japanese automakers remain our biggest
customers in the original equipment sector, and our

This car, the AEROPRIUS YURASTYLE neo, traveled 1,000 miles on

Yokohama BluEarth tires without refueling. Designed and driven by
the prominent racecar designer Takuya Yura, it accomplished the feat
in November 2010.

performance in that sector in the present fiscal year will

hinge on their progress in recovering from the Great

offsetting the adverse earnings impact of the rising cost

East Japan Earthquake. We will continue striving to

of raw materials and the appreciation of the yen.

secure sound margins while pursuing new business in

original equipment tires.

Supporting our sales gains in passenger car

tires was progress in cultivating new sales outlets and in
expanding business in ongoing relationships with large

N o rth America

retailers. Leading our US sales growth in passenger car

US unit sales gains complemented by price hikes and

tires were the AVID Touring-S, our best-selling

cost reductions

all-season tire; the AVID ENVigor, a high-performance

Determined, strategic marketing helped us capture the

all-season tire that features superb handling and excellent

full momentum of recovering demand for tires in the

fuel economy; and tires for sport-utility vehicles.

United States, and we posted sales gains in value and in

We also posted growth in the United States in

unit volume there. Accompanying unit sales growth

unit sales of truck and bus tires. Stepped-up marketing

with price hikes and with cost cutting, we succeeded in

to transport operators contributed to that growth.

Another contributor to sales growth was the continuing
popularity of our ZEN truck tires. Launched in the United
States in 2009, the ZEN tires have won high customer
regard for their wear resistance and fuel savings, and they
have helped raise overall value-added in our sales portfolio.
Tire demand in the United States continues to
expand in the present fiscal year. We project further
gains there in sales momentum, both in value and in
unit volume, and we also project gains in profitability.
Our plans call for business growth in passenger car tires
and in off-the-road tires, though supply constraints
could prevent us from matching the past years sales

The AVID Touring-S all-season tire

offers a remarkably comfortable,
quiet ride.

pace in truck and bus tires.

13

Review

of

Operations

A new production line under construction at

our Salem (Virginia) Plant will help us keep up with US

year was partly a recoil effect of that surge. It also

reflected the light snowfall of a warm winter.
We expect demand for winter tires to return

demand. That line will increase the plants production

capacity to 6,200,000 passenger car tires a year by the

to its historical norm in winter 20112012. And we

end of 2011, from 5,600,000 a year presently.

project sales growth, both in value and in unit volume,

We regard the high and rising prices for raw

and gains in profitability.

materials, meanwhile, as a structural, long-term

phenomenon. In response, we continue working to

Asian Nations besides Japan

earn market acceptance for price increases for our tires

Growth of more than 30% in China

in the United States, to optimize our sales portfolio,

Tire demand in Asias emerging markets was resurgent

and to reduce costs throughout our US operations.

in the past fiscal year, and we achieved solid growth in

unit sales volume. We addressed the rising cost of raw

Canadian business steady

materials and the strengthening yen by accompanying

Our Canadian business was basically steady in the past

our unit sales gains with price hikes and cost cutting.
Our unit sales increased more than 30% in

fiscal year in regard to sales by value and in regard to

profitability. Positive business developments in Canada

China, our largest Asian market outside Japan. We

included sales gains for our AVID ENVigor high-performance

made the most of recovering demand by cultivating

all-season tire and sales growth in truck and bus tires

new sales channels and by working to raise our market

and in off-the-road tires.

profile. Our Chinese business in studless winter tires

Our unit sales in the Canadian tire market

expanded solidly in 2010, and we also posted solid

declined on account of a decline in winter tires. Quebec

growth in other high-value-added tires, such as the

enacted a law in 2009 that requires motorists to equip

AVS dB.

their vehicles with winter tires from December 15 to

Sales of our tires were robust in other Asian

March 15. That occasioned a surge in demand in

markets, too, increasing more than 20% in Malaysia,

Quebec, and the decline in demand in the past fiscal

Thailand, and India. Our Malaysian distributor was

Yokohama has been an official sponsor of the Asia Cross Country Rally for 11 years. That event is the largest cross-country rally
held in Asia under the auspices of the Fdration Internationale de lAutomobile (FIA). The 2011 edition of the competition
unfolded from August 6 to 11 in Thailand and Cambodia. In the photo is a Toyota FJ Cruiser equipped with Yokohama GEOLANDAR
tires and driven in the rally by the actor and sometimes rally driver Show Aikawa.

14

notably successful with marketing measures for

capitalizing on expanding demand. In Thailand, the
sales company that we established in 2008 has made
steady progress in cultivating sales channels, and it
achieved strong sales growth in the past fiscal year with
a strategy focused on high-performance tires. Our sales
in India have grown steadily since we established a
sales company there in 2007. That company has
worked effectively in structuring a logistics framework
and in building a network of affiliated retailers.
Tire demand in Asian markets continues to

The production capacity at Yokohama Tire Philippines, Inc.,

will increase 2.4-fold by 2017, to 17 million tires a year.

rise in the present fiscal period, and we are eyeing

further gains in sales momentum. We are eschewing

E u ro p e

the low end of the market, where imports from China

Gratifying growth

and the Republic of Korea are undercutting prices.

We posted unit sales gains amid recovering demand in

Focusing on up-market business, we are fortifying our

the European tire market. As in other regions, rising

presence in passenger car tires with the

raw material costs and the appreciation of the yen

premium-grade, comfort-oriented ADVAN dB and with

affected earnings adversely. Successful efforts to

the fuel-saving C.drive2. We are also fortifying our

minimize the effect of those negative factors included

market presence by expanding our Yokohama Club

increasing sales of high-value-added products and

Network of affiliated retailers.

raising prices for our lower-priced products.

Sweeping expansion in store for Philippine

manufacturing
The expansion work under way at our Philippine tire
plant will unfold in two phases. In the first phase, we
will increase the plants production capacity to 10 million
tires a year by 2013, from 7 million presently. In the
second phase, we will expand the plants capacity to 17
million tires a year by 2017. We have earmarked 50
billion in aggregate funding for the two-phase expansion.
Our Philippine plant produces tires for
passenger cars, including sport-utility vehicles, in the
size range from 13 inches to 18 inches. It is mainly an
export platform, shipping tires to Europe, to North
America, and to other Southeast Asian nations. North
America will be the destination for most of the
additional output that will result from the increases in
production capacity.

This is a scene from the samurai-themed television

commercial for Yokohama tires, Master of the Road. The
commercial has aired in several nations to wide acclaim.

15

Review

of

Operations

Geographically, our sales growth was

especially strong in Russia, and we also posted growth
in Germany, Italy, and the United Kingdom. We
achieved gratifying sales gains in our flagship ADVAN
line of high-performance tires and in our GEOLANDAR
tires for sport-utility vehicles. Increased supply allocations
to Europe enabled us to increase our sales there in truck
and bus tires, too.
We continue working in the present fiscal
The all-around
GEOLANDAR A/T-S,
for sport-utility vehicles,
provides superior
performance on
and off the road.

period to reinforce our European profitability by

securing market acceptance for price hikes and by
promoting high-value-added products. In passenger car
tires, we are devoting special emphasis to the C.drive2,
which is the successor to the C.drive and which offers
excellent wet-surface handling, and to the GEOLANDAR
series. Another marketing emphasis will be our

past fiscal year. That growth was a tribute to progress

top-of-the-line fuel-saving tire, the BluEarth-1, which

in fostering ties with a growing range of wholesalers

we launched in Europe in April 2011.

and retailers. Affiliated retailers in our Yokohama Club

In truck and bus tires, we are vigorously

promoting our ZEN series, which offers excellent fuel

Network numbered more than 500 at fiscal year-end.

We are building a tire plant in the Lipetsk

efficiency and wear resistance and which we launched

special economic zone, south of Moscow, which is

in Europe in 2010. We are augmenting our ZEN offerings

slated to begin operation in 2011. The plant will have an

in Europe with new sizes and are preparing to launch

initial production capacity of 700,000 tires a year, and

completely new products in truck and bus tires there.

we will soon begin work on doubling that capacity. Our

expanded supply capacity in Russia will enable us to

Double-digit sales gains in Russia

recruit more member retailers for the Yokohama Club

Our sales volume in Russia is well above two million

Network and to broaden our marketing coverage in that

tires a year and expanded at a double-digit pace in the

nation. We are reinforcing our sales organization in

Russia by dispatching technical support engineers and
marketing specialists.

Th e Mid d le E a s t
Middle Eastern tire demand, supported by high oil
prices, was robust despite the disruptions caused by
popular uprisings in several nations. Our sales
increased, even as we raised prices to absorb the
earnings impact of rising raw material costs. Gains in
passenger car tires more than offset a downturn in
Here is one of the hundreds of Russian retail outlets
in the Yokohama Club Network.

16

truck and bus tires, where our price hikes diminished

unit volume.

Demand continues to grow in the Middle East

expanding our directly owned retail chain, Tyres &

in the present fiscal period, and we are increasing our

More. We are also moving to fortify our line of truck

supply allocations to the region to maintain our sales

and bus tires with new products.

momentum there. A version of our A.drive passenger

car tire specially configured for heat resistance is
strengthening our presence in mass-market tires. We

L a t in Am e ric a
Our unit tire sales in Latin America increased, led by

are promoting that product mainly in the Arab Persian

strong growth in Argentina and by strength in

Gulf States. In truck and bus tires, our price competitiveness

high-performance passenger car tires, including the

is improving as competitors begin raising prices.

ADVAN Sport. We improved the profitability of our

Latin American business by raising prices and by

O ceani a

sharpening our focus on high-value-added products.

Sales of Yokohama tires in Australia and other nations

Supply constraints could prevent us from

of Oceania increased. That increase reflected a strong

increasing our sales momentum in Latin America in the

recovery from the previous fiscal year in shipments to

present fiscal period, but we will continue working to

automakers in Australia. Supply constraints undercut our

improve our profitability in the region. That will include

business in the replacement market for passenger car

introducing new products to improve our sales portfolios

tires, and our sales also declined in truck and bus tires.

in passenger car tires and in truck and bus tires.

We are working in the present fiscal period to

rebuild our sales momentum in the replacement tire
market in Oceania. Our measures include bolstering our

Af ric a
We posted unit sales growth in South Africa, the

market presence in passenger car tires with the

principal market for our products in Africa. Tire demand

fuel-saving C.drive2 and the premium-grade,

in South Africa recovered strongly as the nations

comfort-oriented ADVAN dB. In addition, we are

currency, the rand, regained strength, and as international

prices for the nations natural resources rose. Our sales
of passenger car tires surged, though our business in
truck and bus tires was weak amid intense price
competition.
An African nation where we are cultivating
demand as our second main market on the continent is
Egypt. The lifting of an antidumping duty in 2009 made
Egypt a viable market for imports, and our unit sales have
grown rapidly since we began working with a newly
contracted Egyptian distributor in September 2010.

This retail outlet in Argentina is

part of the growing Yokohama
Club Network in that nation.

We expect our sales momentum to remain

strong in South Africa and in Egypt in the present fiscal
period. To strengthen our market presence, we will
augment our product line with the C.drive2 and the
ADVAN dB, and we will expand our retailing networks.

17

Review

of

Operations

Industrial
PRODUCTS
Our industrial products operations center on high-pressure hoses, sealants and adhesives,
conveyor belts, antiseismic products, marine hoses, and pneumatic marine fenders.
Operating income in those operations increased 5.2-fold in the fiscal year ended March
31, 2011, to 3.0 billion, on a 13.3% increase in sales, to 83.8 billion. Especially strong
gains in high-pressure hoses and growth in sealants and adhesives more than offset
weakness in antiseismic products, in marine hoses, and in pneumatic marine fenders.

H i gh-Pressure Hoses

business with construction equipment manufacturers,

Strong growth in hoses for construction equipment

including Chinese-owned operations and the Chinese

Sales of high-pressure hoses increased 35.8%, to 37.5

operations of our traditional Japanese manufacturers.

billion, led by strong growth in hoses for construction

equipment. Japanese manufacturers of construction

A new plant to produce high-pressure hoses in China

equipment expanded production capacity at their

We will start work in late 2011 on a plant to produce

plants in Japan and in China, and increased demand at

high-pressure hoses in the Chinese city of Hangzhou.

those plants was the chief factor in our sales growth in

The plant will produce hoses for medium- to

this product sector. Another positive factor was the

high-pressure applications. We will invest about 3.0

recovery in vehicle manufacturing in the United States

billion in building the plant, and our plans call for it to

and Thailand and an accompanying increase in demand

begin operation in January 2013. The plant will have an

for our automotive hoses.

initial production capacity of about 400,000 meters of

We project that our sales of high-pressure

hoses will remain steady in the present fiscal period. In

18

hose per month.

Chinese demand for construction equipment

Japan, capacity utilization rates have declined in the

slumped amid the global financial crisis precipitated by

construction equipment industry and in the automobile

the collapse of Lehman Brothers in 2008, but it has

industry, and that will undercut our sales momentum.

since recovered strongly. In addition to serving

We will address that adversity by cultivating demand

Japanese and Chinese manufacturers of construction

associated with the recovery effort and by positioning

equipment in China, we serve the surging demand in

ourselves to serve the expected rebound in demand in

China for replacement hoses. We expect Chinese

construction equipment and automobiles. Overseas,

demand for high-pressure hoses for construction

our largest market for high-pressure hoses is China.

equipment to continue to grow, and our new Chinese

And we will cultivate demand there by developing

plant will help us serve that demand.

Seal ant s and Adhesives

Growth in architectural sealants for residential
construction
Our sales of sealants and adhesives grew 7.4%, to
24.6 billion. We achieved robust growth in architectural
sealants and in sealants for double-pane windows,
spurred by Japanese government incentives for
energy-saving residential architecture. Another
contributor to sales growth in sealants and adhesives

Y-coat, a vacuum-deposition coating for mobile phones and digital

cameras, is a highlight of Yokohamas progress in developing markets
in new sectors. In the photo is an example of Y-coat on metal-imprinted
plastic panels.

was our line of urethane waterproofing materials.

Growth contributors also included our new line of

I n d u s t ria l Ma te ria ls

flexible adhesives for electrical appliances and our

Growth in conveyor belts and in roadway joints

coatings for mobile phones and digital cameras.

We posted a 7.3% decline in sales, to 21.7 billion, in

Despite the growth in sales, profitability

industrial materials. The sales decline occurred despite

declined in sealants and adhesives. That decline was

sales gains in conveyor belts and in roadway joints and

partly the result of the upward movement in raw

resulted from weakness in marine hoses, pneumatic

material costs. It also reflected sales declines in

marine fenders, and antiseismic products. In the present

high-margin architectural sealants and automotive

fiscal year, we project sales growth in industrial materials.

window sealants.
We project that the pace of sales in sealants

Our business in conveyor belts expanded in

Japan and overseas. Japanese demand reflected a

and adhesives will remain steady in the present fiscal

recovery in production volume at the nations

year. Demand for architectural sealants is rising, partly

steelmakers. Shipments to mining operations in

on account of reconstruction and repairs associated

Australia led the growth in our overseas sales. Our

with the Great East Japan Earthquake. In the automotive

overseas business expanded notably in steel-cord

sector, we aim to maintain our large market share in

conveyor belts and heat-resistant conveyor belts.

the original equipment market for window sealants and

Cost-competitive conveyor belts from our Chinese plant

hot-melt adhesives for lamps, and we are also working

buttressed profitability in this product category.

to expand our share of the replacement market for

windshield sealants. We have developed structural

Japan presents a trying business environment

for conveyor belts in the present fiscal year amid the

adhesives for automobile bodies, meanwhile, and will

begin promoting them to automakers in the present
fiscal period.
Bolstering profitability will remain a heavy
emphasis throughout our sealants and adhesives
operations. Our measures will include continuing
efforts to reduce costs and, as possible, raising the
prices for our products.
Yokohamas conveyor belt operations posted especially
strong growth in the past fiscal year in steel-cord belts for
large-volume, long-distance conveyance.

19

Review

of

Operations

aftereffects of the Great East Japan Earthquake. We will

Those competitive dynamics remain an issue for us in

make the most of that environment by promoting our

the present fiscal period. We are seeking to restore our

products in reconstruction and repair projects. Overseas,

sales momentum by appealing to core customers with

we will cultivate demand for high-value-added products

products of especially high quality.

in nations that are important sources of natural resources.

The sales decline in antiseismic products

That will include promoting distinctive products, such as

reflected reduced public-sector investment in new

flame-resistant conveyor belts and energy-saving conveyor

bridge construction. Demand remains weak in regard

belts. We will continue working, meanwhile, to cope with

to new bridge construction, but we are augmenting

the rising cost of raw materials by raising prices and by

our business in this product category by promoting

focusing on profitable business in our marketing.

compact products as replacement fittings for

Our sales of marine hoses declined sharply

bridge-refurbishing projects.
Our sales gains in roadway joints comprised

amid slumping demand. The number of orders and

product inquiries increased in the fiscal fourth quarter,

sales growth in large joints for road surfaces on newly

however, and we anticipate a strong sales rebound in

constructed bridges and in general-purpose joints for

the present fiscal period.

road-maintenance projects. We have augmented our

Sales declined in pneumatic marine fenders as

product line with new offerings in simple steel joints,

the strong yen diminished our cost competitiveness,

and we are stepping up our marketing of

especially in comparison with Korean competitors.

road-maintenance products.

Technological Support for the Physically Disabled

Medi-Air1 cushions for preventing wheelchair pressure sores
We launched a line of pressure-relieving air-cell

Medi-Air1 is the first product line of its kind

cushions in September 2010 for preventing pressure

to incorporate such an automated pressure-maintenance

sores on persons confined to wheelchairs. Dubbed

function. It has received a certification for coverage

Medi-Air1 (Medi-Air One), the new product line

under Japans guidelines for geriatric-care insurance.

combines original Yokohama technologies for rubber

Medi-Air1 also qualifies for payments under a Japanese

cushioning and for pressure sensing. It is a promising

program for helping disabled persons attain self-reliance.

foothold for us in personal-welfare products.

A unique sensory-and-control function
automatically regulates the air pressure inside the cells
of the Medi-Air1 cushions. That helps prevent pressure
sores and allows for occupying wheelchairs comfortably
for extended periods. A sensor detects a shift in posture
that would cause the hip bones to press directly on
the wheelchair seat and increases the air pressure as
necessary to maintain protective cushioning.

20

The Medi-Air1s pressure-relieving air-cell technology will help

prevent discomfort for people confined to wheelchairs.

Review

of

Operations

OTHER PRODUCTS
Operating income in other productsprincipally aircraft fixtures and
components and golf equipmentincreased 6.9-fold in the fiscal year ended
March 31, 2011, to 1.5 billion, on a 2.0% decline in sales, to 24.3 billion. The decline in
sales resulted from weakness in golf equipment. Driving the surge in profitability were
price increases for aircraft lavatory modules and progress in trimming costs.

A i rcraft Products

products in our sales portfolio in golf equipment. In the

New business in onboard stairways

fiscal second half, we launched a promising line of

We posted a 6.4% increase in sales of aircraft products,

clubs, named iD, that emphasizes ease of striking. Also

to 16.3 billion. Our profitability in this sector also

promising was the growth in our overseas business in

improved, despite the appreciation of the yen. New

golf equipment. We solidified our market footholds in

business in onboard stairways for the Boeing 747-8I

the Republic of Korea, our largest market outside

jumbo airliner contributed to that improvement, as did

Japan; in China, where we began a serious marketing

improved profitability in our business in lavatory

effort in 2010; and in Southeast Asian nations.

modules for the Boeing 737 airliner.

Our projections call for the pace of sales in

Adding a new dimension to our business in

golf equipment is Science Fit, a diagnostic system for

aircraft products to increase in the present fiscal period.

golf swings. A leading operator of sports facilities has

We anticipate continuing growth in orders from Boeing

installed the system at facilities in Tokyo, Yokohama,

Company for lavatory modules for the B737, and

and Osaka. PRGR-accredited instructors use the Science

demand for replacement modules is poised to rise as

Fit diagnoses at those facilities to analyze golfers

earnings improve in the airline industry.

swings and to help the golfers choose clubs of optimal

length and specifications. We will promote the Science

G ol f Equipment and Ot h e r
Pro d ucts
Shrinking demand for golf equipment
Our business in golf equipment, marketed under the
PRGR brand, and other products declined 15.5%, to
8.0 billion. That decline reflected shrinking
demand for golf equipment in Japan,
our principal market for golf
products. It also reflected a
diminished weighting for new

Fit system to the sports-facility operators facilities in

cities throughout Japan and will also promote the
system to other operators of golf schools.
Japanese demand for golf equipment has
weakened in the wake of the Great East Japan
Earthquake. We are showcasing innovative strengths
through our new iD line and through other products.
Overseas, we are expanding our sales coverage in the
Republic of Korea and broadening our line of products
developed especially for Korean golfers. We are also
stepping up our marketing effort in China and are
studying the possibility of deploying products tailored

Yokohamas new iD line of golf clubs

combines shooting ease with long distance.
Pictured is the iD435, a driver for serious
amateurs.

to the Chinese market.

21

Corporate Social Responsibility

We at Yokohama are committed to earning and retaining confidence in our company by fulfilling our
corporate social responsibility. In that spirit, we dedicate ourselves especially to environmental
protection and public-interest activities.

Adopting original criteria for green products

between the photovoltaic cells and their frames and (2)

Product development at Yokohama includes a focus on

FLASH ONE (photo) adhesive to use on current-collection

improving environmental performance across our entire

boxes. Our LEVEX hydraulic hoses render service,

product line. We have established four original criteria

meanwhile, in the drive mechanisms for wind-power

for environmental performance: preventing global

electrical generation systems. In the personal welfare

warming, recycling resources, reusing and conserving

sector, our Medi-Air1 pressure-relieving air-cell cushions

resources, maximizing safety and amenability. Each new

help prevent pressure sores on persons confined to

Yokohama product must excel its predecessor by at

wheelchairs (see page 20).

least 5% in the average value for those four criteria,

and no backsliding is allowable in any criterion. In
addition, we are pursuing the goal of adopting
environmentally beneficial features in all our products
by December 2017. Our attainment was 84% as of
March 2011.
Planting trees at operations worldwide
Installing on-site systems for efficient electrical

The Yokohama Forever Forest project got under way in

generation

2007 as an initiative for planting 500,000 trees around

Yokohama participates in Japanese initiatives for

our manufacturing operations worldwide. We had

reducing the output of greenhouse gases. That includes

planted 183,000 by March 2011. In another initiative,

working to reduce the output of carbon dioxide 25%

we are helping to raise environmental awareness in the

by 2020, from the 1990 level. Our measures include

community by providing oak seedlings for planting.

undertaking rigorous energy conservation, including

Yokohama employee volunteers grow the seedlings

the installation of highly energy-efficient production

from seeds, and we supply the seedlings for planting by

equipment. We also continue to expand our on-site

public-sector organizations, nonprofit groups, and

capacity for efficient electrical generation. That has

private-sector corporations. We also participate in the

included installing photovoltaic generating systems at

Green Wave, an international campaign conducted

our Hiratsuka, Mishima, and Shinshiro-Minami plants,

in Japan. In China, Hangzhou Yokohama Tire Co., Ltd.,
completed a large photovoltaic generating system in
February 2011.
Offering products for clean energy and for personal welfare
For photovoltaic generation, we supply (1) our M-155
and M-155P edge sealants to ensure airtight sealing

22

Photovoltaic panels are visible

atop this building at Hangzhou
Yokohama Tire.

In the United States, elementary

school children take part in a tree
seed sowing event sponsored by
Yokohama Tire Corporation.

under the Convention on Biological Diversity to

Helping to preserve biodiversity

promote tree planting.

We have begun conducting surveys to monitor the

potential effect of our operations on biodiversity at 15

Eliminating landfill waste at manufacturing operations

sites in Japan and at 15 sites overseas. Where we

We had eliminated landfill waste at all our plants in

determine a possible adverse effect, we will take

Japan by March 2006, and we have maintained a

countermeasures. We will conduct three surveys, for

100% recycling rate for waste at all of those plants

example, of river ecosystems near our Mie Plant, in

since March 2010. Overseas, we had eliminated landfill

Japan, from April to December 2011. The Yokohama

waste at 5 plants in China, the Philippines, and

Forever Forest project (above) is another important

Thailand by November 2010. Work continues to

contribution to preserving biodiversity, and we are

eliminate or reduce landfill waste at our other 10

moving to maximize that contribution by conducting

overseas plants.

surveys of wildfowl in and around the planting zones.

Part of the community everywhere we operate.

Financial support for schools and child-welfare centers;
sponsorship of an outdoor learning program for teaching
elementary school children about environmental protection.
May 2011
Yokohama Tire Manufacturing (Thailand) Co., Ltd.

Donations to a fund for

fighting cancer; donations
of Christmas presents
through a charitable
organization to families that
have children afflicted by
serious health problems.
December 2010
YH America, Inc.

Sponsorship of events for fostering a shared

awareness of environmental issues with people in the
plant community (pictured: plant employees
explaining the environmental benefits of electric cars
to children).
November 2010
Hiratsuka Factory

Funding for scholarships at a local

high school; participation in a
charity soccer tournament.

State of Virginias highest, E4, recognition for

environmental stewardship (pictured: Tadashi
Suzuki, then general manager of the Salem Plant
[right], at the awards ceremony).
December 2010
Yokohama Tire Corporation (Salem Plant)

November 2010
Yokohama Tyre Vietnam Inc.

23

Corporate Governance

We are committed to positioning Yokohama to achieve continuing growth in corporate value and to
earn the unwavering confidence of all our stakeholders. In that spirit, we have built a framework
of corporate governance for achieving sound management characterized by transparency and fairness.
We continue to reinforce that framework in accordance with our Basic Philosophy, which calls for
enriching life through beneficial products.
Yokohamas Framework for Corporate Governance

General Meeting of Shareholders

Independent
public accountants

Board of Directors

Corporate auditors

Representative Directors

Risk Management Committee

Director Personnel and

Remuneration Committee

Basic

Management Council

Philosophy
and Action

Compliance Committee

Guidelines

Corporate Social Responsibility

and Environment Council
Central Disaster Preparedness
Council, other
Audit Office
Corporate officers and the divisions
under their management

Framework

of Directors and other executives, reviews overall

Our management framework differentiates clearly

operational policy and matters crucial to the performance

between operational responsibility, invested in the

of work. It reports its findings to the Board of Directors,

corporate officers, and oversight responsibility, invested

and the directors discuss and act on the councils

in the Board of Directors. That helps maximize our

recommendations in accordance with the pertinent

responsiveness in management. Presently, the senior-

corporate guidelines.

management team comprises 8 directors, headed by

the chairman and president and including four members

emphases in appointing directors and corporate officers

who serve concurrently as corporate officers, and 14

and in determining their compensation. Appointments

corporate officers, not including officers who serve

and compensation receive thorough consideration in

concurrently as directors.

the Director Personnel and Remuneration Committee and

The Management Council, which comprises

the chairman and other selected members of the Board

24

Transparency and fairness are overriding

then go to the Board of Directors for decisions.

Auditing

cross-sector perspective and devises precautionary

Auditing at Yokohama is a tripartite undertaking by our

measures. We have also established committees to

corporate auditors, an independent public accounting

manage risk, respond to incidents, and establish

firm, and our Audit Office. We reinforce the auditing

guidelines in regard to ethical compliance, disaster

function by maintaining autonomy among those units.

preparedness, information security, personal conduct,

The corporate auditors number five, including

and exports. Our Board of Directors, Management

three recruited from outside the company to help ensure

Council, and corporate auditors receive timely reports

objectivity in the auditing function. They participate in

from all of those committees.

meetings of the Management Council and of other

management gatherings where important matters are

Ethical compliance

discussed. They also obtain important information from

Our Compliance Committee, chaired by the president,

the independent public accounting firm and from the

oversees activity at the company with an eye to ensuring

Audit Office. The independent public accounting firm

compliance with laws and regulations. Responsible for

monitors the companys financial accounting, and the

enforcing ethical compliance is our Corporate

Audit Office monitors operations and accounting at the

Compliance Department. In addition, we assign compliance

parent company and at subsidiaries. We assign an

monitors for each sector of operations at the parent

assistant to the auditors to help them carry out their

company and for each subsidiary in Japan to help foster

work smoothly and effectively.

awareness of our ethical guidelines. They report to the

Compliance Committee, which evaluates ethical

Risk management

infractions and potential problems and adopts appropriate

Spearheading risk-preparedness measures at Yokohama

countermeasures. We also maintain hotlines to handle

is our Risk Management Committee, chaired by the

reports of suspected infractions from persons inside and

general manager of the Corporate Social Responsibility

outside the company.

Division. That committee evaluates risk from a

How the Compliance Hotline Works

Employees who call attention to possible infractions
Consultation
and reporting

Reporting*: results of investigation

and remedial measures

Compliance hotlines
Compliance consultation office

Independent legal office

Notification

Reporting

Corporate Compliance Department

Directive to implement
remedial measures

Reporting: details of
remedial measures taken

Divisions concerned

Reporting

Compliance Committee

*Employees who leave their names when reporting suspected infractions receive reports of subsequent investigations and remedial measures.

25

Directors, Corporate Auditors,

and

Corporate officers

As of June 29, 2011

Board of Directors
Tadanobu Nagumo

Chairman and CEO and Representative Director

Hikomitsu Noji

President and Representative Director

President of Tire Group

Yuji Goto

Director and Managing Corporate Officer

General Manager of Tire Global Business Planning Div.

Takao Oishi

Director and Managing Corporate Officer

General Manager of Industrial Products Business Group

Norio Karashima

Director and Vice President

Fumio Morita

Tooru Kobayashi

In charge of Corporate Finance & Accounting Dept., Internal Audit

Dept., General Manager of Corporate Finance & Accounting Dept.,
in charge of Global Procurement Div., President of Yokohamagomu
Finance Co., Ltd.

Chairman and President of Yokohama Rubber (China) Co., Ltd.,

Chairman of Yokohama Tire Sales (Shanghai) Co., Ltd.

Director and Vice President

Director and Corporate Officer

President of Multiple Business Group, General Manager of Electric

Material Div.

Kinya Kawakami

Director and Managing Corporate Officer

In charge of Global HR Dept., General Manager of Corporate Social

Responsibility Div.

Board of Corporate Auditors

Takashi Fukui

Yoshiki Sato

Hideo Fujiwara

Go Kajitani

Naozumi Furukawa

Corporate Officers
Koichi Tanaka

Takaharu Fushimi

Deputy President of Tire Group,

President of Yokohama Tire Japan Co., Ltd.

General Manager of Tire Overseas Sales & Marketing Div.

Shinichi Suzuki

Corporate Officer

Senior Managing Corporate Officer

Managing Corporate Officer

General Manager of Tire Global Production Div., General Manager of

Russia Tire Plant Div., General Manager of Tire Production HR Dept.

Misao Hiza

Managing Corporate Officer

General Manager of Aerospace Div., General Manager of R&D Center

Hirohiko Takaoka

Managing Corporate Officer

In charge of Sports Business Div., Corporate Planning Dept.,

Secretariat, GD100 Promotion Dept., President of Acty Corporation

Shigeo Komatsu
Corporate Officer

Tadashi Suzuki

In charge of MIS Dept., General Manager of Tire Global Logistics Div.

Hideto Katsuragawa
Corporate Officer

General Manager of Global O.E. Tire Sales & Marketing Div., President
of Yokohama Continental Tire Co., Ltd.

Hirohisa Hazama
Corporate Officer

General Manager of Tire Global Technical Div., General Manager of

Tire R&D Dept.

Tetsuya Kuze

Corporate Officer

President of Yokohama Tire Philippines, Inc.

General Manager of Tire Global Product Planning Div., General

Manager of Tire Global Marketing Research and Planning Dept.

Yasushi Kikuchi

Yasushi Tanaka

General Manager of Global Procurement Div.

Corporate Officer

President of Yokohama Tire Corporation, President of Yokohama

Corporation of America, President of Yokohama Corporation of North
America

Toshiyuki Nishida
Corporate Officer

Deputy General Manager of Industrial Products Business Group,

General Manager of Industrial Products Technical Div., General
Manager of Hiratsuka Factory

26

Corporate Officer

Corporate Officer

Kazuya Nakazawa
Corporate Officer

General Manager of Industrial Products Sales Div., General Manager of

Industrial Products Sales Planning Dept.

Financial section

28. Financial Review

31. Risk

32. Eleven-Year Summary

34. Consolidated Balance Sheets

36. Consolidated Statements of Operations

37. Consolidated Statement of Comprehensive Income

38. Consolidated Statements of Changes in Net Assets

40. Consolidated Statements of Cash Flows

41. Notes to Consolidated Financial Statements

58. Report of Independent Auditors

27
27

Financial Review
Net sales increased 11.4%, to 519.7 billion, in the
fiscal year ended March 31, 2011. Leading that growth
was vigor in Yokohamas core business, tire operations.
Sales in tires rose in Japan and overseas, bolstered by
price increases in most principal markets. In diversified
operations, Yokohama posted strong sales growth in
high-pressure hoses and also registered growth in
sealants and adhesives and in aircraft products.

Expenses and Earnings

Cost of sales increased 11.0%, to 359.2 billion,
reflecting the growth in unit sales volume and the
upward movement in prices for natural rubber and
other raw materials. Gross return on sales rose to
30.9%, from 30.6% in the previous fiscal year, on
account of improvement in capacity utilization rates.
Selling, general and administrative expenses
increased 8.1%, to 131.0 billion, mainly on account
of increases in sales commissions and logistics expenses
in connection with the growth in sales volume.
Progress in trimming costs helped reduce selling,
general and administrative expenses as a percentage of
net sales to 25.2%, from 26.0% in the previous fiscal
year. Research and development expenses, included in
cost of sales and in selling, general and administrative

expenses, declined 4.0%, to 12.7 billion.

Operating income increased 37.5%, to 29.5
billion, and the operating profit margin rose to 5.7%,
from 4.6% in the previous fiscal year. The principal
reasons for the improvement in operating profitability
were the improvement in capacity utilization rates and
the progress in trimming costs.
Other expenses, net of other income,
increased 5.1 billion, to 7.6 billion. That increase is
attributable mainly to the appreciation of the yen,
which resulted in increased translation losses on
foreign currency denominated receivables.
Income before income taxes and minority
interests increased 15.3%, to 21.9 billion, reflecting the
improvement in operating profitability. Net income
increased 21.2%, to 13.9 billion, and net return on sales
rose to 2.7%, from 2.5% in the previous fiscal year.

Results by Business Segment

Sales increased 12.0% in Yokohamas tire operations,
to 411.6 billion, and operating income increased
20.9%, to 25.0 billion. Sales increased in Japan and
overseas, and the efficiencies engendered by increased
volume more than offset the adverse earnings effect of
rising prices for raw materials and the appreciation of

Operating Income by Business Segment

Operating Income and Net Income (Loss)

Billions of Yen

Billions of Yen

33.1

26.1

25.0

29.5

20.6
21.1

21.5

21.1

16.4

14.7

13.9

12.8

11.5

9.9
6.8

7.0
-5.7

4.6
3.4
0.8
2007
Tires

28

2008

2009

2010

2011

Industrial Products and Others

2007

2008

Operating Income

2009

2010

2011

Net Income (Loss)

the yen. Yokohama tire products distinguished by

fuel-saving performance earned high regard in the
Japanese marketplace, and the Companys share of the
market for replacement tires increased. Overseas,
Yokohama posted notably strong sales growth in tires
in the United States and in China.
Yokohamas diversified operations comprise
industrial products, including high-pressure hoses,
sealants and adhesives, conveyor belts, antiseismic
products, marine hoses, and pneumatic marine
fenders, and other products, consisting mainly of
aircraft components and golf equipment. Sales in
industrial products increased 13.3%, to 83.8 billion,
and operating income increased 5.2-fold, to 3.0
billion. Sales and earnings increased strongly in
high-pressure hoses and also increased in sealants and
adhesives, more than offsetting weakness in
antiseismic products, marine hoses, and pneumatic
marine fenders.
In other products, sales declined 2.0%, to
24.3 billion, and operating income increased 6.9-fold,
to 1.5 billion. The sales decline resulted from
weakness in golf equipment, and the increase in
earnings resulted from price increases for aircraft
lavatory modules and from progress in trimming costs.

Capital Spending

Return on Shareholders Equity

Capital Expenditures and Depreciation

Percent

Billions of Yen

Capital spending increased 42.8%, to 24.9 billion.

Yokohama allocated most of its capital spending,
22.2 billion, to expanding and upgrading production
capacity in its tire operations. That included 6.6 billion
of investment at the parent company for expanding
production capacity, for raising productivity, and for
improving product quality. It also included 6.5 billion
of investment at Yokohamas Russian subsidiary,
Yokohama R.P.Z., for building a plant to produce tires
for passenger cars and light trucks. In diversified
operations, Yokohama allocated 2.2 billion to capital
spending, mainly to expand production capacity for
high-pressue hoses. Yokohama funded its capital
spending with internally generated funds and
borrowings.

Financial Position
Total assets increased 11.9 billion, to 478.9 billion at
fiscal year-end. Current assets increased 24.7 billion,
to 223.2 billion, reflecting an increase in cash deposits
at overseas subsidiaries for future capital spending and
an increase in accounts receivable in connection with
sales growth.

43.3
40.6
11.8

7.7

9.3

8.6
28.7

27.3 27.2

28.2
25.9
24.9

22.2
17.5

-3.6

2007

2008

2009

2010

2011

2007

2008

2009

Capital Expenditures

2010

2011

Depreciation

29

Financial Review
Total property, plant and equipment, net,
declined 6.6 billion, to 177.4 billion at fiscal
year-end, as depreciation outpaced new investment.
Total investments and other assets declined 6.2
billion, to 78.3 billion, mainly because of the first-time
inclusion of Yokohama R.P.Z. as a consolidated
subsidiary.
Total liabilities increased 4.5 billion, to
308.0 billion. That increase resulted mainly from an
increase in accounts payable, which was attributable to
the growth in business volume, and to the effect of
rising raw material costs on accounts payable. Total net
assets increased 7.5 billion, to 170.9 billion, mainly
because of an increase in retained earnings.

Cash Flow
Net cash provided by operating activities declined 8.7
billion, to 41.2 billion. Offsetting the increase in
before income taxes and minority interests were an
increase in inventories and other factors.
Net cash used in investing activities declined
4.7 billion, to 20.6 billion, as a decline in purchases
of marketable securities and investment securities
exceeded the increase in purchases of property, plant
and equipment.

Free cash flow declined 4.0 billion, to 20.6

billion. Yokohama used its free cash flow for
repayments of borrowings and long-term debt and for
dividend payments.
Net repayments of borrowings and long-term
debt were smaller than in the previous fiscal year, and
net cash used in financing activities declined 22.1
billion, to 7.3 billion. Cash and cash equivalents at
fiscal year-end increased 16.6 billion over the previous
fiscal year-end, to 28.2 billion.

Fiscal Outlook
Yokohama will switch its fiscal accounting in 2011
from an April-to-March basis to a calendar-year basis.
That will align the fiscal accounting at the Companys
Japanese operations with the fiscal periods employed
at its overseas operations, and it will result in a
one-time-only nine-month fiscal term: April 1 to
December 31, 2011. The Companys fiscal projections
for the nine months to December 2011 call for net
income of 11.0 billion on operating income of 21.0
billion and net sales of 471.0 billion.

Net Cash Provided by Operating Activities

and Free Cash Flow*

Interest-Bearing Debt, Net Assets*, and

Debt-to-Equity Ratio**

Billions of Yen

Billions of Yen, Times

49.8
1.3
41.6

41.2

36.7

0.9

1.0

0.9

181.8
176.3 179.4
167.5
165.6

24.6
20.6

19.7

159.3
154.7

139.9

0.9

163.9
146.8

7.9
1.6

-19.3

* Less minority interests

** Interest-bearing debt

divided by net assets

less minority interests

2007

2008

2009

2010

2011

2008

2009

Interest-Bearing Debt

Free Cash Flow

Debt-to-Equity Ratio

* Net cash provided by operating activities less net

cash used in investing activities

30

2007

Net Cash Provided by Operating Activites

2010

2011

Net Assets

Risk
Below is a partial listing of risks that could adversely
affect the Companys business performance, financial
position, or share price. All references to possible
future events are from the standpoint of the fiscal
year ended March 31, 2011.
Economic conditions
Vehicle tires account for most of the Companys
worldwide revenues. Demand for those tires reflects
economic conditions in nations and regions where the
Company sells its products. Therefore, economic trends
and developments that diminish demand in the
Companys main marketsincluding Japan, North
America, Europe, and Asian nations besides Japan
could adversely affect the Companys business
performance and financial position.
Exchange rates
The Company conducts most of its business
transactions and investment in yen, but it conducts
some transactions and investment in dollars and in
other currencies. The Company continues to expand its
operations globally. That expansion will increase the
Companys exposure to fluctuations in currency
exchange rates. The Company hedges its exposure to
currency exchange rates with forward exchange
contracts and with other instruments, but hedging
cannot fully offset the effect of fluctuations in currency
exchange rates on the Companys business
performance and financial position.
Seasonal factors
Historically, the Companys sales and earnings
performance has tended to be stronger in the fiscal
second half (October to March) than in the first half
(April to September). That is partly because sales of
studless snow tires are an important contributor to
the Companys sales and earnings. It is also partly
because purchases of warm-weather tires are most
vigorous during the fiscal second half. A
later-than-usual onset of winter or lighter-than-usual
snowfall could diminish demand for snow tires and
thereby adversely affect the Companys business
performance and financial position.
Raw material prices
Yokohamas principal raw materials are natural
rubber and petrochemical products, including synthetic
rubber and carbon black. Sharp increases in prices for
natural rubber or for crude oil could adversely affect
the Companys business performance and financial
position.

Access to funding
Instability in any of the worlds principal financial
markets could affect the Companys access to funding
adversely. In addition, the lowering of the Companys
credit rating by leading credit-rating agencies could
adversely affect the Companys access to debt
financing and could increase the Companys cost of
funds. That could adversely affect the Companys
financial performance and financial position.
Interest rates
As of March 31, 2011, the Companys interest-bearing
debt was equivalent to 31.3% of its total assets. An
increase in interest rates could adversely affect the
Companys financial performance and financial position.
Securities
The Company owns marketable securities, mainly
Japanese equities. A decline in the value of those
securities could adversely affect the Companys
financial performance and financial position.
Investment
In response to growing demand for automobile tires,
the Company is investing in expanding its tire
production capacity, especially in Asia. Changes in the
regulatory environment, in economic conditions, in
industrial circumstances, or in political and social
stability in the host nations for the Companys
investment could adversely affect the Companys
business performance and financial position.
Retirement benefit obligations
The Company calculates retirement benefit obligations
and retirement benefit expenses according to
predetermined criteria, including expected returns on
pension assets. If actual return on the Companys
pension assets declined substantially below the
expected return, that could adversely affect the
Companys financial performance and financial
position. Similarly, if the Company revised its
retirement plan in a manner that increased future
payment obligations as a result of unforeseen changes
in actuarial calculations or for any other reason, that
could adversely affect the Companys financial
performance and financial position.
Natural disasters
Earthquakes and other natural disasters could damage
the Companys plants and other facilities and could
limit the Companys access to essential raw materials
and services. That could adversely affect the Companys
business performance and financial position.

31

Eleven-Year Summary
The Yokohama Rubber Co., Ltd., and Consolidated Subsidiaries
Fiscal Years Ended March 31

2011

2010

2009

2008

519,742

466,358

517,263

551,431

Operating income

29,491

21,455

12,808

33,119

Income (loss) before income taxes and minority interests

21,880

18,969

(3,166)

20,478

Net income (loss)

13,924

11,487

(5,654)

21,060

Depreciation

25,885

28,184

28,684

27,238

Capital expenditures

24,944

17,471

43,341

27,292

R&D expenditures

12,748

13,280

15,277

15,289

Interest-bearing debt

146,773

154,675

179,379

165,614

Total net assets

170,872

163,382

144,159

181,538

Total assets

478,916

466,973

473,376

526,192

41.55

34.27

(16.87)

62.81

489.27

475.26

417.45

525.96

10.00

10.00

10.00

13.00

Operating margin (%)

5.7

4.6

2.5

6.0

Return on shareholders equity (%)

8.6

7.7

(3.6)

11.8

Capital turnover (times)

1.1

1.0

1.0

1.0

Interest-bearing debt to shareholders equity (times)

0.9

1.0

1.3

0.9

13.4

8.0

4.3

9.0

18,465

17,566

16,772

16,099

Net sales

Per share (yen):

Net income (loss): basic
Net assets
Cash dividends
Key financial ratios:

Interest coverage (times)

Number of employees

32

Millions of Yen

2007

2006

2005

2004

2003

2002

2001

497,396

451,911

419,789

401,718

400,448

399,824

387,855

21,070

21,947

20,955

21,073

23,184

22,701

19,845

26,038

22,673

16,337

16,931

18,778

16,076

7,052

16,363

21,447

11,322

10,331

10,144

7,363

96

22,166

20,491

19,616

19,199

19,040

19,247

20,083

40,638

29,067

27,533

23,735

22,708

16,940

18,118

14,649

14,557

14,265

13,818

12,520

12,298

11,827

167,474

163,022

151,758

159,700

167,832

179,098

191,289

186,528

174,609

139,534

130,622

114,719

116

114,205

536,322

502,014

432,717

429,350

412,626

437,771

448,130

48.79

62.75

32.95

29.95

29.38

21.32

0.28

542.10

508.64

398.24

373.23

327.61

334.24

328.81

12.00

10.00

8.00

8.00

8.00

6.00

4.2

4.9

5.0

5.2

5.8

5.7

5.1

9.3

14.0

8.6

8.6

8.9

6.5

0.1

1.0

1.0

1.0

1.0

0.9

0.9

0.9

0.9

1.0

1.1

1.2

1.5

1.6

1.7

7.0

10.1

11.2

9.2

7.9

4.9

3.5

15,423

14,617

13,464

13,264

12,979

13,130

13,362

33

Consolidated Balance Sheets

The Yokohama Rubber Co., Ltd. and Consolidated Subsidiaries
As of March 31, 2011 and 2010



Millions of Yen

Assets

Thousands of
U.S. Dollars
(Note 1)

2011

2010

2011

28,161

11,561

$ 338,678

111,702

103,400

1,343,374

68,435

67,612

823,034

Deferred income taxes (Note 17)

6,269

7,990

75,395

Other current assets

9,621

8,890

115,705

Current Assets:
Cash and deposits
Trade receivables:
Notes and accounts
Inventories (Note 3)

Allowance for doubtful receivables

Total current assets

(960)
223,228

(916)
198,537

(11,546)
2,684,640

Property, Plant and Equipment, at Cost (Notes 4, 5 and 12):

34,571

34,413

415,767

Buildings and structures

138,092

138,442

1,660,767

Machinery and equipment

399,495

403,587

4,804,508

2,536

2,082

30,498

16,172

6,620

194,491

Land

Leased assets
Construction in progress
Less accumulated depreciation
Total property, plant and equipment, net

590,866

585,144

7,106,031

(413,496)

(401,191)

(4,972,893)

177,370

183,953

2,133,138

59,360

59,257

713,888

Investments and Other Assets:

Investment securities (Note 14)

4,820

5,970

57,966

Other investments and other assets

14,834

20,169

178,401

Allowance for doubtful receivables

(696)

Deferred income taxes (Note 17)

Total investments and other assets

Total assets
See accompanying Notes to Consolidated Financial Statements.

34

(913)

(8,374)

78,318

84,483

941,881

478,916

466,973

$5,759,659




Millions of Yen

Liabilities and Net Assets

Thousands of
U.S. Dollars
(Note 1)

2011

2010

2011

70,349
8,220
3,000
79,611
1,167
28,961
453
12,490

74,770
23,295

69,858
1,942
25,457

10,665

$ 846,048
98,859
36,079
957,433
14,045
348,293
5,449
150,214

204,251

205,987

2,456,420

65,204
8,873
16,281
13,435

56,610
8,425
16,913
15,656

784,178
106,712
195,798
161,571

Total long-term liabilities

103,793

97,604

1,248,259

Total liabilities

308,044

303,591

3,704,679

Current Liabilities:
Bank loans
Current maturities of long-term debt (Note 4)
Commercial paper
Trade notes and accounts payable
Accrued income taxes
Accrued expenses
Allowance for loss on disaster
Other current liabilities (Note 17)

Total current liabilities

Long-Term Liabilities:
Long-term debt (Note 4)
Deferred income taxes (Note 17)
Reserve for pension and severance payments (Note 16)
Other long-term liabilities

Contingent liabilities (Note 6)

Net Assets
Shareholders Equity:
Common stock:
Authorized: 700,000,000 shares in 2011 and 2010
Issued: 342,598,162 shares in 2011 and 2010
Capital surplus
Retained earnings (Note 9)
Treasury stock, at cost: 7,533,081 shares in 2011 and 7,492,603 shares in 2010
Total shareholders equity
Accumulated Other Comprehensive Income (Loss):
Unrealized gains on securities
Foreign currency translation adjustments
Adjustment related to pension obligations
of consolidated overseas subsidiaries
Total accumulated other comprehensive income (loss)
Minority Interests
Total net assets

Total liabilities and net assets

38,909
31,953
108,083
(4,746)

38,909
31,953
92,740
(4,730)

174,199

158,872

16,426
(21,829)

16,402
(16,010)

467,939
384,280
1,299,858
(57,082)
2,094,995

197,542
(262,527)

(4,860)

(58,445)

(10,263)

392

(123,430)

6,936

4,118

83,415

170,872

163,382

2,054,980

478,916

466,973

$5,759,659
35

Consolidated Statements

of

Operations

The Yokohama Rubber Co., Ltd. and Consolidated Subsidiaries

For the Years Ended March 31, 2011, 2010 and 2009



Millions of Yen

2011

2010

Thousands of
U.S. Dollars
(Note 1)

2009

2011

519,742

466,358

517,263

$6,250,656

Cost of sales (Notes 5 and 7)

359,210

323,681

368,933

4,320,023

Gross profit

160,532

142,677

148,330

1,930,633

Selling, general and administrative expenses (Notes 5 and 7) 131,041

121,222

135,522

1,575,963

29,491

21,455

12,808

354,670

1,548

1,332

2,053

18,609

Interest expense

(2,316)

(2,848)

(3,479)

(27,853)

Loss on disaster (Note 8)

(1,003)

Other, net

(5,840)

(970)

(14,548)

(70,229)

(7,611)

(2,486)

(15,974)

(91,531)

21,880

18,969

(3,166)

263,139

Current

4,144

2,775

2,975

49,844

Deferred

2,954

4,337

7,098

7,112

2,064

85,370

14,782

177,769

Net sales

Operating income
Other income (expenses)
Interest and dividend income

Income (loss) before income taxes and minority interests

(12,058)

Income taxes (Notes 2 and 17):

Income before minority interests

Minority interests in net income of
consolidated subsidiaries
Net income (loss)

(858)
13,924

See accompanying Notes to Consolidated Financial Statements.

36

(370)
11,487

(911)

(424)
(5,654)

35,526

(10,319)
$ 167,450

Consolidated Statement

of

Comprehensive Income

The Yokohama Rubber Co., Ltd. and Consolidated Subsidiaries

For the Years Ended March 31, 2011



Millions of Yen

2011
14,782

Income before minority interests

Thousands of
U.S. Dollars
(Note 1)

2011
$177,769

Other comprehensive income (loss)

23

Unrealized gains on securities

272

(6,060)

(72,879)

(96)

(1,153)

(143)

(1,718)

Total other comprehensive income (loss) (Note 10)

(6,276)

$(75,478)

Comprehensive income

8,506

$102,291

8,033

96,600

473

5,691

Foreign currency translation adjustments

Adjustment related to pension obligations
of consolidated overseas subsidiaries
Share of other comprehensive income of associates
accounted for by the equity method

Comprehensive income attributable to owners of the Company

Comprehensive income attributable to minority interests

Yen

Per Share Amounts:

2 0 1 1

Net income (loss): Basic

41.55

Net income: Diluted

Cash dividends

U.S. Dollars
(Note 1)

2009

2011

34.27

(16.87)

$0.50

10.00

10.00

2010

10.00

$0.12

See accompanying Notes to Consolidated Financial Statements.

37

Consolidated Statements

Changes

of

in

Net Assets

The Yokohama Rubber Co., Ltd. and Consolidated Subsidiaries

For the Years Ended March 31, 2011, 2010 and 2009

Millions of Yen

Total Accumulated

Shares of
Total
Other
Total

Common
Common
Capital
Retained
Treasury Shareholders Comprehensive Minority
Income (Loss) Interests
Net Assets

Stock
Stock
Surplus
Earnings
Stock
Equity

Balance at March 31, 2008

342,598,162 38,909 31,953 94,856 (4,681) 161,037 15,287 5,214 181,538

Effect of changes in accounting policies

applied to overseas subsidiaries

(163)

(163)

(163)

(1,398)

(1,398)

(1,398)

Adjustment for employee benefit obligations

in overseas subsidiaries
Net income

(5,654)

(5,654)

(5,654)

Cash dividends paid

(4,358)

(4,358)

(4,358)

Repurchase of treasury stock, net

(10)

(19)

(29)

(29)

Accumulated other comprehensive income (loss)

Net unrealized gains and losses on securities

(11,366)

(11,366)

Foreign currency translation adjustments

(13,433)

(13,433)

(978)

(978)

Decrease in minority interests

Balance at March 31, 2009

342,598,162 38,909 31,953 83,273 (4,700) 149,435

(9,512) 4,236 144,159

Adjustment for employee benefit obligations

in overseas subsidiaries

663

663

663

Net income

11,487

11,487

11,487

Cash dividends paid

(2,681)

(2,681)

(2,681)

Repurchase of treasury stock, net

(2)

(30)

(32)

(32)

Accumulated other comprehensive income (loss)

Net unrealized gains and losses on securities

8,436

8,436

Foreign currency translation adjustments

1,468

1,468

(118)

Decrease in minority interests

Balance at March 31, 2010

342,598,162 38,909 31,953 92,740 (4,730) 158,872

(118)

392 4,118 163,382

Adjustment for employee benefit obligations

in overseas subsidiaries

4,763

4,763

4,763

Net income

13,924

13,924

13,924

Cash dividends paid

(3,351)

(3,351)

(3,351)

inclusion of a consolidated subsidiary

Repurchase of treasury stock, net

(1)

(16)

(17)

(17)

Net unrealized gains and losses on securities

24

Foreign currency translation adjustments

(5,819)

(5,819)

(4,860)

(4,860)

Increase in retained earnings due to

Accumulated other comprehensive income (loss)

24

Adjustment related to pension obligations

of consolidated overseas subsidiaries

Increase in minority interests

Balance at March 31, 2011

2,818

342,598,162 38,909 31,953 108,083 (4,746) 174,199 (10,263) 6,936 170,872

See accompanying Notes to Consolidated Financial Statements.

38

2,818

Thousands of U.S. Dollars (Note 1)

Shareholders

Common
Capital
Retained
Treasury

Stock
Surplus
Earnings
Stock
Equity

Balance at March 31, 2010

Total
Total Accumulated
Comprehensive Other Minority
Total
Income (Loss)
Interests
Net Assets

$467,939 $384,280 $1,115,333 $(56,885) $1,910,667 $

4,715 $49,531 $1,964,913

Adjustment for employee benefit obligations

in overseas subsidiaries

57,288

57,288

57,288

Net income

167,450

167,450

167,450

Cash dividends paid

(40,298)

(40,298)

(40,298)

Increase in retained earnings due to

inclusion of a consolidated subsidiary

95

95

95

Repurchase of treasury stock, net

(10)

(197)

(207)

(207)

Net unrealized gains and losses on securities

286

286

Foreign currency translation adjustments

(69,986)

(69,986)

of consolidated overseas subsidiaries

(58,445)

(58,445)

Increase in minority interests

33,884

Accumulated other comprehensive income (loss)

Adjustment related to pension obligations

Balance at March 31, 2011

33,884

$467,939 $384,280 $1,299,858 $(57,082) $2,094,995 $(123,430) $83,415 $2,054,980

39

Consolidated Statements

of

Cash Flows

The Yokohama Rubber Co., Ltd. and Consolidated Subsidiaries

For the Years Ended March 31, 2011, 2010 and 2009



Millions of Yen

Thousands of
U.S. Dollars
(Note 1)

2011

2010

21,880

18,969

(3,166)

$263,139

25,885

28,184

28,684

311,311

(638)

(526)

(1,052)

2009

2011

Operating Activities:
Income (loss) before income taxes and minority interests
Adjustments to reconcile income before income taxes and minority
interests to net cash provided by operating activities:

Depreciation and amortization (Notes 2 and 5)

Reserve for pension and severance payments

Gain on sale of investment securities

(718)

(303)

Loss on revaluation of investment securities

33

2,914

Other, net

1,831

1,103

5,210

22,011

(7,678)

Changes in operating assets and liabilities:

Trade notes and accounts receivable

(10,883)

(9,709)

18,140

(130,881)

Inventories

(3,677)

20,701

(12,618)

(44,216)

Notes and accounts payable

11,442

(3,575)

(9,413)

137,610

Other, net

55

(497)

(759)

657

1,597

1,295

2,175

19,209

Interest paid

(2,329)

(2,845)

(3,488)

(28,012)

Income taxes paid

(3,996)

(2,570)

(6,445)

(48,062)

Interest and dividends received

Compensation for damage paid

Net cash provided by operating activities

(188)

41,167

49,845

19,691

495,088

(20,429)

(19,690)

(42,041)

(245,690)

(189)

(6,268)

(2,213)

(2,276)

211

1,230

2,234

2,540

2,000

Investing Activities:
Purchases of property, plant and equipment
Purchases of marketable securities and investment securities
Proceeds from sales of marketable securities,
investment securities and property
Proceeds from redemption of investment securities
Other, net

Net cash used in investing activities

Financing Activities:
Increase (decrease) in short-term bank loans
Increase (decrease) in commercial paper
Proceeds from long-term debt
Decrease in long-term debt
Proceeds from issuance of bonds
Redemption of bonds
Payment of cash dividends

(168)

(502)

989

(2,023)

(20,575)

(25,230)

(39,031)

(247,449)

(3,470)

(3,782)

761

(41,731)

3,000

(19,000)

18,000

36,079

18,602

13,167

7,439

223,717

(13,891)

(16,363)

(4,708)

(167,056)

(10,000)
(3,348)

10,000

(10,000)

(120,265)

(4,357)

(40,263)

(2,728)

(397)

21,237

Net cash provided by (used in) financing activities

(7,341)

(29,435)

16,738

(88,282)

Effect of exchange rate changes on cash and cash equivalents

(1,456)

140

(2,922)

(17,503)

Increase (decrease) in cash and cash equivalents

11,795

(4,680)

(5,524)

141,854

Cash and cash equivalents at beginning of year

11,559

16,239

19,530

139,013

Other, net

1,766

(729)

Effect of changes in consolidation scope on

cash and cash equivalents

40

Cash and cash equivalents at end of year

4,807

2,233

57,811

28,161

11,559

16,239

$338,678

See accompanying Notes to Consolidated Financial Statements.

Notes

to

Consolidated Financial Statements

The Yokohama Rubber Co., Ltd. and Consolidated Subsidiaries

1. Basis of Presentation of Financial Statements

The accompanying consolidated financial statements of The Yokohama Rubber Co., Ltd. (the Company), and its
domestic consolidated subsidiaries were prepared on the basis of accounting principles generally accepted in
Japan, which are different in certain respects as to the application and disclosure requirements of International
Financial Reporting Standards, and are compiled from the consolidated financial statements prepared by the
Company as required by the Financial Instruments and Exchange Law of Japan. The Companys subsidiaries in the
United States of America (the USA) prepared their financial statements in accordance with accounting principles
generally accepted in the USA.
In preparing these statements, certain reclassifications and rearrangements have been made to the
consolidated financial statements prepared domestically to present these statements in a form that is more familiar
to readers outside Japan. In addition, the accompanying notes include information that is not required under
accounting principles generally accepted in Japan.
The U.S. dollar amounts included herein are solely for the convenience of the reader and have been translated
from the Japanese yen amounts at the rate of 83.15 = US$1.00, the approximate exchange rate prevailing on
March 31, 2011.

2. Summary of Significant Accounting Policies

a. Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its significant
majority-owned domestic and foreign subsidiaries (together, the Companies). Investment in significant
unconsolidated subsidiaries and affiliated companies (companies owned 20 to 50) is accounted for by the
equity method.
All significant intercompany transactions and balances have been eliminated in consolidation. The excess of the
cost of the Companies' investments in subsidiaries and affiliated companies over their equity in the net assets at the
dates of acquisition was not material and was fully written off when acquired.
b. Foreign Currency Translation
Foreign currency receivables and payables are translated at the year-end spot rates. The resulting exchange gains
and losses are charged or credited to income.
The assets and liabilities of the consolidated subsidiaries outside Japan are translated at the fiscal year-end rates
of those companies, and the income and expense accounts of those companies are translated at the average
rates of those companies.
Differences arising from such translation are recorded in foreign currency translation adjustments and minority
interests in net assets.
c. Cash Equivalents
For purposes of the consolidated statements of cash flows, highly liquid investments with a maturity of three months
or less are considered cash equivalents.
d. Marketable Securities and Investment Securities
Securities classified as available for sale and whose fair value is readily determinable are carried at fair value with
unrealized gains or losses included as a component of net assets, net of applicable taxes. Costs are determined by
the moving-average method.
Securities whose fair value is not readily determinable are carried at cost. Costs are determined by the movingaverage method.
e. Derivative Instruments
Derivative instruments whose fair value is readily determinable are carried at fair value.
f. Inventories
Inventories of the Company and domestic subsidiaries are stated at cost determined by the moving-average
method, and inventories of certain foreign subsidiaries are valued at the lower of cost based on the first-in first-out
method or market. The book value of inventories of the Company and its domestic consolidated subsidiaries reflects
a write-down due to declines in profitability.
F

i n a n c i a l

e c t i o n

41

 Effective as of the fiscal year ended March 31, 2011, certain domestic subsidiaries changed their valuation
method from the most recent purchase price method to the moving-average method.
The effect of this change on the consolidated financial statements was immaterial.
g. Allowance for Doubtful Receivables
The allowance for doubtful receivables is provided at an estimated amount of probable bad debts plus an amount
based on past credit loss experience.
h. Depreciation
Depreciation of property, plant and equipment is computed principally by the declining-balance method based on
the estimated useful lives of the respective assets.
i. Reserve for Severance Payments and Employee Benefit Plans
Employees who terminate their service with the Companies are, under most circumstances, entitled to lump-sum
severance payments determined by reference to their current basic rate of pay and length of service. The
Company and certain consolidated subsidiaries have noncontributory pension plans for termination caused by age
limit.
The Companies accounted for these liabilities based on the projected benefit obligations and plan assets at the
balance sheet date.
Unrecognized actuarial gain and loss are amortized starting in the year following the year in which the gain or
loss is recognized primarily by the straight-line method over a period of 10 years, which is shorter than the average
remaining service period of employees.
Unrecognized prior service cost is amortized by the straight-line method over 10 years.
j. Allowance for Loss on Disaster
The allowance for loss on disaster is provided at an estimated amount for expenses related to the restoration and
repair of tangible fixed assets damaged due to the Great East Japan Earthquake.
k. Income Taxes
Income taxes in Japan comprise a corporate tax, an enterprise tax and prefectural and municipal inhabitants'
taxes.
Provision is made for deferred income taxes arising from temporary differences between assets or liabilities
for financial and tax reporting purposes.
l. Revenue Recognition
Sales of products are recognized upon product shipments to customers.
m. Research and Development Costs
Research and development costs are charged to income as incurred.
n. Earnings per Share
Basic net income per share is computed by dividing net income available to common shareholders by the average
number of common shares outstanding during each period. Diluted net income per share is not disclosed because
there were no dilutive securities in the years ended March 31, 2011, 2010, and 2009.
o. Adoption of New Accounting Standards
(1) Accounting Standard for Asset Retirement Obligations
Effective as of the fiscal year ended March 31, 2011, the Company adopted the Accounting Standard for Asset
Retirement Obligations (ASBJ Statement No. 18, March 31, 2008) and revised implementation guidance Guidance
on Accounting Standard for Asset Retirement Obligations (ASBJ Guidance No. 21, March 31, 2008) and made
requisite adjustments.
The effect of these changes on the consolidated financial statements was immaterial.

42

(2) Accounting Standard for Presentation of Comprehensive Income

Effective as of the fiscal year ended March 31, 2011, the Company adopted the Accounting Standard for
Presentation of Comprehensive Income (ASBJ Statement No. 25, June 30, 2010). In accordance with this new
standard, consolidated statements of comprehensive income for the year ended March 31, 2010 and 2009 are not
presented. The comparative information for the year ended March 31, 2010 is disclosed in Note 10. However, the
amounts of Accumulated other comprehensive income and Total accumulated other comprehensive income
F i n a n c i a l S e c t i o n

are stated at the amounts of Valuation and translation adjustments and Total valuation and translation
adjustments.
p. Changes in Presentation
Effective as of the fiscal year ended March 31, 2011, the Company adopted the Cabinet Office Ordinance
Partially Revising Regulations on Terminology, Form and Presentation of Financial Statements (Cabinet Office
Ordinance No. 5, March 24, 2009) based on the Accounting Standard for Consolidated Financial Statements
(ASBJ Statement No. 22, December 26, 2008). As a result, Income before minority interests is presented on the
consolidated statements of operations.

3. Inventories
Inventories at March 31, 2011 and 2010 consisted of the following:


Millions of Yen

Finished products

2011

2010

2011

44,838

47,229

$539,239

8,184

7,523

98,426

15,413

12,860

185,369

68,435

67,612

$823,034

Work in process
Raw materials and supplies

Thousands of
U.S. Dollars

4. Long-Term Debt
Long-term debt at March 31, 2011 and 2010 consisted of the following:


Millions of Yen

2011

2010

Thousands of
U.S. Dollars

2011

10,000

1.688 straight bonds due 2013

10,000

10,000

120,265

0.84 straight bonds due 2010

1.68 straight bonds due 2014

10,000

10,000

120,265

Loans, principally from banks and

insurance companies

53,424

49,904

642,507

73,424

79,904

883,037

8,220

13,295

98,859

65,204

66,609

$784,178

Less current maturities

Assets pledged to secure bank loans and long-term debt at March 31, 2011 and 2010 were as follows:


Millions of Yen

Property, plant and equipment

Thousands of
U.S. Dollars

2011

2010

2011

51,832

58,479

$623,352

5. Depreciation and Amortization

Depreciation and amortization expenses for the years ended March 31, 2011, 2010 and 2009 were allocated as
follows:


Millions of Yen

Thousands of
U.S. Dollars

2011

2010

2009

2011

Selling, general and administrative expenses

2,649

2,964

3,137

$ 31,866

Manufacturing costs

23,236

25,220

25,547

$279,445

i n a n c i a l

e c t i o n

43

6. Contingent Liabilities
Contingent liabilities at March 31, 2011 and 2010 were as follows:


Millions of Yen

Thousands of
U.S. Dollars

2011

2010

2011

Guarantees

3,662

1,912

$44,040

7. Research and Development Expenses

Research and development expenses charged to manufacturing costs and selling, general and administrative
expenses for the years ended March 31, 2011, 2010, and 2009 were 12,748 million ($153,309 thousand), 13,280
million and 15,277 million, respectively.

8. Loss on Disaster
Loss on disaster related to the Great East Japan Earthquake for the year ended March 31, 2011 included the
following:


Millions of Yen

Thousands of
U.S. Dollars

2011

2011

Repair expenses

399

$ 4,797

Costs on suspended operations

210

2,530

Others

394

4,731

1,003

$12,058

The provision for allowance for loss on disaster was 453 million ($5,449 thousand) as of March 31, 2011.

9. Retained Earnings and Dividends

The amount of retained earnings available for dividends under the Corporate Law of Japan is based on the amount
stated in the nonconsolidated financial statements of the Company. Dividends are approved by the shareholders
at a meeting held subsequent to the fiscal year for which the dividends are applicable.

10. Other Comprehensive Income

The other comprehensive income for the year ended March 31, 2010 for comparative purpose consisted of the
following:

8,439

Foreign currency translation adjustments

1,693

Adjustment related to pension obligations

of consolidated overseas subsidiaries

664
14

Total other comprehensive income

10,810

Comprehensive income

22,668

Comprehensive income attributable to owners of the Company

22,054

Comprehensive income attributable to minority interests

2010

Unrealized gains on securities

Share of other comprehensive income of associates

accounted for by the equity method

44

Millions of Yen

i n a n c i a l

e c t i o n

614

11. Supplementary Cash Flow Information

A reconciliation of cash and deposits presented in the consolidated balance sheets as of March 31, 2011, 2010 and
2009 and cash and cash equivalents reported in the consolidated statements of cash flows for the years ended
March 31, 2011, 2010 and 2009 was as follows:


Millions of Yen

Cash and deposits
Time deposits with maturities of
more than three months
Cash and cash equivalents

Thousands of
U.S. Dollars

2011

2010

2009

2011

28,161

11,561

16,274

$338,678

(0)
28,161

(2)

(0)

(35)

11,559

$338,678

16,239

12. Leases
Leased assets under finance lease agreements include molds and warehouse equipment. Depreciation of leased
assets is computed by the straight-line method over the term of the leases.
Future lease obligations under noncancelable operating leases subsequent to March 31, 2011 and 2010 were as
follows:


Millions of Yen

Thousands of
U.S. Dollars

2011

2010

2011

Within one year

692

741

$ 8,320

After one year

2,318

3,033

27,881

3,010

3,774

$36,201

13. Financial Instruments

a. Policies for the Status of Financial Instruments
The Companies raise funds through bank loans and the issuance of corporate bonds, mainly in accordance with
their capital investment plans for manufacturing and selling tires, and raise short-term working capital through
commercial paper.
Derivative transactions are carried out to reduce risks, as mentioned below, and not for speculative trading.
b. Matters and Risks of Financial Instruments
Trade receivables, which are notes and accounts receivable, are subject to customer credit risk. Also, some trade
receivables denominated in foreign currencies as a result of global business are subject to exchange rate
fluctuation risk. Therefore, the Companies use forward exchange contracts for hedging purposes.
Securities, principally corporate equities, are subject to market price fluctuation risk.
Trade liabilities, which are notes and accounts payable, are mostly due within one year. Some trade liabilities
denominated in foreign currencies in relation to imported raw materials are subject to exchange rate fluctuation risk.
Bank loans and corporate bonds are for the purpose of capital investment. The longest maturity is five and half
years after March 31 2011. Some of the bank loans and corporate bonds have floating interest rates and are subject
to interest rate fluctuation risk.
Derivative transactions are forward exchange contracts and currency swaps for the purpose of hedging against
exchange rate fluctuation risk in relation to trade receivables and trade liabilities denominated in foreign currencies
and interest rate swaps for the purpose of hedging against interest rate fluctuation risk in relation to bank loans.
c. Risk Management of Financial Instruments
(1) Credit Risk Management (Customer Credit Default)
Under credit management standards, the Companies manage due dates and balances of trade receivables for
customers to assess and reduce collection risks.
Derivative transactions are only carried out with highly rated financial institutions to reduce credit risks.
The amounts of the largest credit risks as of March 31, 2011 and 2010 are indicated in the balance sheets as part
of allowance for doubtful receivables.

i n a n c i a l

e c t i o n

45

(2) Market Risk Management (Fluctuation Risk of Foreign Currency Exchange Rates and Interest Rates and Others)
The Company and some of its consolidated subsidiaries use forward exchange contracts and currency swaps to
hedge against exchange rate fluctuation risk in connection with trade receivables and trade liabilities denominated
in foreign currencies.
They assess the amount of risk monthly by currency. Some consolidated subsidiaries also use interest swaps to
hedge against interest rate fluctuation risk in connection with bank loans.
The Companies regularly assess the fair market value of their holdings of securities issued by entities with which
they have business relationships. They also assess the financial condition of the issuers of those securities and review
the holdings in light of the status of their business relationships with the issuers.
Derivative transactions are carried out under internal regulations that specify trading authority and limits, and
details of transactions are reported to the responsible executive officers. Consolidated subsidiaries also manage their
derivative transactions in accordance with the regulations.
(3) Liquidity Risk in Fund-Raising Management (Risk of Being Unable to Make Payment at Due Date)
Based on reports from each department, the corporate finance and accounting department prepares a cash flow
plan and revises as appropriate to reduce liquidity risk.
d. Supplementary Information about the Fair Value of Financial Instruments
The fair value of financial instruments is the market price or, for instruments that do not have a market price, a value
calculated by appropriate means. The calculation of fair values incorporates variables, and the values are therefore
subject to change, depending on diverse factors. The contract amounts for derivative transactions cited in 15.
Derivative Instruments do not indicate the market risk related to derivative transactions.
e. Fair Value of Financial Instruments
The book value and fair value of financial instruments and the differences between them as of March 31, 2011 and
2010 were as follows.
However, financial instruments whose fair value is extremely difficult to ascertain are not included in the table
below (see Note 2).

Millions of Yen

2011

Book Value Fair Value

(1) Cash and deposits

28,161 28,161

(2) Trade receivables: Notes and accounts

111,702

Book Value Fair Value

Difference

11,561 11,561

103,400

103,400

53,928

53,928

53,727

53,727

193,791

168,688

168,688

(1) Trade notes and accounts payable

79,611

79,611

69,858

69,858

(2) Short-term loans payable

78,569

78,569

88,065

88,065

(3) Accrued expenses

28,961

28,961

25,457

25,457

Total assets

3,000

3,000

(5) Bonds

20,000

20,315

315

30,000

30,075

75

(6) Long-term loans payable

53,424

53,991

567

49,904

50,020

116

3,194

3,498

304

3,194

3,450

256

266,759

267,945

1,186

266,478

266,925

447

(4) Commercial paper

(7) Long-term deposits received

Total liabilities

Derivative transactions (*)

Difference

193,791

(3) Investment securities

46

111,702

2010

i n a n c i a l

e c t i o n

(283)

(283)

(62)

(62)

Thousands of U.S. Dollars

2011

(1) Cash and deposits

(2) Trade receivables: Notes and accounts

Book Value

Fair Value Difference

$ 338,678 $ 338,678 $
1,343,374

1,343,374

648,560

648,560

2,330,612

2,330,612

(1) Trade notes and accounts payable

957,433

957,433

(2) Short-term loans payable

944,907

944,907

(3) Accrued expenses

348,293

348,293

(3) Investment securities

Total assets

36,079

36,079

(5) Bonds

240,529

244,323

3,794

(6) Long-term loans payable

642,507

649,320

6,813

38,414

42,075

3,661

(4) Commercial paper

(7) Long-term deposits received

Total liabilities

Derivative transactions (*)

3,208,162
(3,400)

3,222,430 14,268
(3,400)

* The net amount of the assets and liabilities arising from derivatives is shown. If the net amount is a liability it is presented in
parentheses.

Note 1. Method of fair value of financial instruments and securities and derivative transactions
Assets
(1) Cash and deposits and (2) trade receivables: notes and accounts
The fair value of these assets is approximately equivalent to their book value because of short-term settlement, so
the book values are indicated.
(3) Investment securities
The fair value of securities is based on the market price on the stock exchanges.
See 14. Securities regarding the variances between the amounts booked on the consolidated balance sheets
and the acquisition costs.
Liabilities
(1) Trade notes and accounts payable, (2) short-term loans payable, (3) accrued expenses, and (4) commercial
paper
The fair value of these liabilities is approximately equivalent to their book values because of short-term settlement,
so the book values are indicated.
(5) Bonds
The fair value of bonds is calculated based on the present value of the sum of principal and interest discounted
by an interest rate determined taking into account the remaining period of each bond and credit risk.
(6) Long-term loans payable
The fair value of long-term loans payable is calculated based on the present value of the sum of principal and
interest discounted by an interest rate determined taking into account the remaining period of each loan and
credit risk.
(7) Long-term deposits received
The fair value of long-term deposits received is calculated based on the present value of the sum of principal
and interest, which are handled together with currency swaps, discounted by an interest rate determined taking
into account the remaining period of each deposit and credit risk, because long-term deposits received is the
subject of the allocation method of currency swaps.
Derivative transactions
See 15. Derivative instruments.

i n a n c i a l

e c t i o n

47

Note 2. Financial instruments whose fair value is extremely difficult to ascertain were as follows:

Millions of Yen

2011

Thousands of
U.S. Dollars

2010

2011

Book Value

Book Value

5,432

5,530

Book Value

$65,328

Unlisted stocks and others

Note: T hese financial instruments are not included in (3) Investment securities. It is extremely difficult to
ascertain the fair values because they do not have market prices.

Note 3. The amount of monetary claims and securities with maturities to be redeemed after the consolidated closing
date was as follows:


Millions of Yen

2011

Thousands of
U.S. Dollars

2010

Within One Year

2011

Within One Year

Within One Year

Deposits
Trade receivables: Notes and accounts

27,244
111,702

11,556
103,400

$ 327,655
1,343,374

Total

138,946

114,956

$1,671,029

Note 4. The amount of bonds, long-term loans payable and other liabilities with interest to be repaid after the
consolidated closing date was as follows:

Millions of Yen

2011

Over One Over Two

Within One Year within Years within

Year
Two Years Three Years

10,000

10,000

Long-term loans payable

8,220

8,567

6,565

22,394

2,608

5,070

Other liabilities with interest

73,349

3,194

81,569

8,567

16,565

35,588

2,608

5,070

Bonds

Total

2010

Over One Over Two

Within One Year within Years within

Year
Two Years Three Years

Bonds

10,000

10,000

10,000

13,295

8,599

6,372

6,067

6,908

8,663

Other liabilities with interest

88,065

3,194

111,360

8,599

6,372

16,067

20,102

8,663

Total

i n a n c i a l

e c t i o n

Over Three Over Four

Years within Years within Over Five
Four Years Five Years
Years

Long-term loans payable

Millions of Yen

48

Over Three Over Four

Years within Years within Over Five
Four Years Five Years
Years

Thousands of U.S. Dollars

2011

Over One Over Two

Within One Year within Years within

Year
Two Years Three Years

Over Three Over Four

Years within Years within Over Five
Four Years Five Years
Years

Bonds

$120,265

Long-term loans payable

Other liabilities with interest

Total

$120,265

269,322

31,362

98,859

103,032

78,954

60,977

882,128

38,414

$980,987 $103,032 $199,219

$428,001

$31,362

$60,977

The Accounting Standard for Financial Instruments (ASBJ Statement No. 10, March 10, 2008) and the Guidance
on Disclosures about the Fair Value of Financial Instruments (ASBJ Guidance No. 19, March 10, 2008) were adopted
from the consolidated fiscal year ended March 31, 2010.

14. Securities
Cost, carrying amount and unrealized gains and losses pertaining to available-for-sale securities at March 31, 2011
and 2010 were as follows:

Millions of Yen

2011

Cost

Carrying
Amount

Unrealized
Gains

53,928

28,322

2010
Unrealized
Losses
Cost

Carrying
Amount

Unrealized
Gains

53,727

27,647

Unrealized
Losses

Securities classified as
available for sale:

Stock

26,400

(794)

26,278

(198)

Thousands of U.S. Dollars

2011

Cost

Carrying
Amount

Unrealized
Gains

Unrealized
Losses

Securities classified as
available for sale:

Stock

$317,495 $648,560

$340,608

$(9,543)

Sales of securities classified as available-for-sale securities and an aggregate gain and loss for the year ended
March 31, 2011 are immaterial.
The corresponding amounts for the year ended March 31, 2010, were 896 million, with an aggregate gain of
718 million and loss of 32 million.
Note: U
 nlisted stock, whose book value as of March 31, 2011 on the consolidated balance sheet is 1,246 million
($14,991 thousand), is not included in the above table. It is extremely difficult to ascertain the fair values
because they do not have market prices.
In the preceding table for fiscal year 2011, cost is the book value after impairment. Loss for the year ended March
31, 2011 from revaluation of securities is immaterial.
The corresponding amount for the year ended March 31, 2010 was 33 million.

i n a n c i a l

e c t i o n

49

15. Derivative Instruments

Fair value information of derivative instruments, for which deferral hedge accounting has not been applied, at
March 31, 2011 and 2010 was as follows:

Millions of Yen

2011

Contract
Amount Fair Value

Thousands of U.S. Dollars

2010
Unrealized
Losses

2011

Contract
Unrealized Contract
Amount
Fair Value Gains (Losses) Amount Fair Value

Unrealized
Losses

Forward exchange
contracts:

Ruble

2,296

(103)

(103)

$27,611

Euro

2,485

(95)

(95)

3,114

109

109

29,886

(1,138)

(1,138)

U.S. dollar

1,452

(25)

(25)

3,761

(110)

(110)

17,468

(303)

(303)

Others

1,590

(60)

(60)

1,560

(60)

(60)

19,124

(718)

(718)

7,823

(283)

(283)

8,435

(61)

(61)

$94,089

Millions of Yen

2011

Contract
Amount Fair Value

$(3,400) $(3,400)

Thousands of U.S. Dollars

2010
Unrealized
Losses

$(1,241) $(1,241)

Contract
Amount
Fair Value

2011
Unrealized
Losses

Contract
Amount Fair Value

Unrealized
Losses

Interest rate swap

agreements

25

(0)

(0)

33

(1)

(1)

$301

$(5)

$(5)

(0)

(0)

(1)

(1)

$(5)

$(5)

Fair value information of derivative instruments, for which deferral hedge accounting has been applied, at March
31, 2011 and 2010 was as follows:

Millions of Yen

2011

Forward exchange contracts Contract
with allocation method: Amount

Over
One Year Fair Value

Long-term deposits received

3,194

3,194

Total

2010

3,194

3,194

Thousands of U.S. Dollars

2011
Over
One Year Fair Value

$38,414

$38,414

Unrealized
Losses

Unrealized
Losses

Long-term deposits received

Total

Over
One Year Fair Value

Forward exchange contracts Contract

with allocation method: Amount

Unrealized Contract
Losses
Amount

*Amounts settled by the allocation method of currency swaps are handled together with long-term deposits received regarded as the hedged items.
See 13. Financial instruments for their fair value.

50

i n a n c i a l

e c t i o n

16. Pension and Severance Plans

a. The projected benefit obligations, plan assets and composition of amounts recognized in the consolidated
balance sheets at March 31, 2011 and 2010 were as follows:


Millions of Yen

Projected benefit obligations
Fair value of plan assets
Funded status
Unrecognized actuarial gain and loss
Unrecognized prior service cost
Net amount recognized

2011

Thousands of
U.S. Dollars

2011

2010

(28,429)

(29,564)

$(341,895)

10,461

10,462

125,806

(17,968)

(19,102)

(216,089)

1,240

1,642

14,910

447

547

5,381

(16,281)

(16,913)

$(195,798)

b. The components of net pension and severance costs for the years ended March 31, 2011 and 2010 were as
follows:


Millions of Yen

Thousands of
U.S. Dollars

2011

2010

2011

Service cost

1,767

1,851

$21,252

Interest cost

575

604

6,915

Recognized actuarial losses

402

577

4,844

Recognized prior service cost

100

100

1,198

2,844

3,132

34,209

496

492

5,960

3,340

3,624

$40,169

c. Assumptions used as of March 31, 2011 and 2010 were as follows :

2011

2010

2.5

2.5

0.00%

0.00

Expected return on plan assets

Net periodic benefit cost

Contribution of defined contribution benefit plan

Discount rate
Expected return rate on plan assets

i n a n c i a l

e c t i o n

51

17. Deferred Income Taxes

a. Significant components of the deferred income tax assets and liabilities at March 31, 2011 and 2010 were as
follows:


Millions of Yen

Thousands of
U.S. Dollars

2011

2010

2011

11,384

11,615

$136,909

Deferred tax assets:

Liabilities for pension and severance payments

Net operating loss carry forwards

1,098

3,650

13,210

Unrealized profits

3,085

4,489

37,102

Accrued expenses

2,375

2,389

28,561

Loss on revaluation of investment securities

54

51

653

Other

Gross deferred tax assets

Less valuation allowance

Total deferred tax assets

7,251

7,886

87,197

25,247

30,080

303,632

(3,364)

(4,549)

(40,455)

21,883

25,531

263,177

Deferred tax liabilities:

Unrealized gains on securities

(11,040)

(11,025)

(132,777)

Liabilities for pension and severance payments

(3,446)

(3,446)

(41,449)

Gain on receipt of stock set by pension plan

(2,103)

(2,103)

(25,288)

Property, plant and equipment

(1,610)

(1,684)

(19,365)

Other

(1,510)

(1,786)

(18,150)

(19,709)

(20,044)

(237,029)

Total deferred tax liabilities

Net deferred tax assets

2,174

5,487

$ 26,148

b. A reconciliation of the statutory income tax rate to the effective income tax rates for the year ended March 31,
2011 and 2010 was as follows:

Years ended March 31

2011

2010

Statutory income tax rate

40.3%

40.3

(1.7)

1.4

2.5

Permanently nontaxable income

(1.6)

(5.7)

Valuation allowance

(5.4)

0.6

Other

(2.3)

1.5

Effective income tax rate

32.4%

37.5

Valuation allowance for net operating loss carry forwards

Permanently nondeductible expenses

52

i n a n c i a l

e c t i o n

18. Business Combinations

Transactions under common control for the year ended March 31, 2011
A domestic consolidated subsidiary, Yokohama Rubber MBE Co., Ltd. and seven other domestic consolidated
subsidiaries that sell industrial products merged on October 1, 2010. An outline of the merger is as follows:
a. Outline of the business combination

1. Name of the company

Yokohama Rubber MBE Co., Ltd. and seven other consolidated subsidiaries

2. Description of the business

Sales of various industrial products

3. Date of the business combination

October 1, 2010

4. Legal form of the business combination

T he business combination was a merger by absorption, with Yokohama Rubber MBE Co., Ltd. as the
surviving company

5. Name of the company after the business combination

Yokohama Industrial Products Japan Co., Ltd. (a consolidated subsidiary)

6. Reason for the business combination

The purpose of this business combination is to reinforce its domestic sales performance by

reorganizing eight subsidiaries and a part of the industrial sales department of the Company.


This merger improves customer service, establishes a more strategic management system, and

reinforces sales connected to communities by introducing an in-house company system.
b. Outline of accounting method
Based on Accounting Standard for Business Combinations (ASBJ statement No. 21, December 26, 2008) and
revised implementation guidance Guidance on Accounting Standard for Business Combinations and
Accounting Standard for Business Divestitures (ASBJ Guidance No. 10, December 26, 2008), the above
business combination is accounted for as transactions under common control.
Transactions under common control for the year ended March 31, 2010
A consolidated subsidiary, Yokohama Tire Sales Tokyo Co., Ltd. and eighteen other domestic tire sales companies
that are also consolidated subsidiaries merged on July 1, 2009. An outline of the merger is as follows:

a. Outline of the business combination
1. Name of the company

Yokohama Tire Sales Tokyo Co., Ltd. and eighteen other consolidated subsidiaries
2. Description of the business

Sales of tires and related goods
3. Date of the business combination

July 1, 2009
4. Legal form of the business combination

The business combination was a merger by absorption, with Yokohama Tire Sales Kanagawa Co., Ltd. as

the surviving company
5. Name of the company after the business combination

Yokohama Tire Japan Co., Ltd. (a consolidated subsidiary)
6. Reason for the business combination

T he Company is gradually carrying out the reorganization of its domestic replacement tire sales and
marketing business for the purpose of reinforcing its sales system and network and effective
management.


As the first step, Yokohama Tire Japan Co., Ltd. has been established by merging eighteen

domestic tire sales companies and one marketing company.


b. Outline of accounting method
Based on Accounting Standard for Business Combinations (the Business Accounting Council issued on
October 31, 2003) and revised implementation guidance Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No. 10, November 15,
2007), the above business combination is accounted for as transactions under common control.

i n a n c i a l

e c t i o n

53

19. Segment Information

(1) Outline of reportable segments
The Companys reportable segments are the organizational units for which the Company is able to obtain
individual financial information in order for the Board of Directors to regularly review performance to determine
distribution of management resources and evaluate its business results.

The Company classifies organizational units by products and services. Each organizational unit plans
domestic or overseas general strategies for its products and services and operates its business.
Therefore, the Company is organized by business segments, and its reportable segments are Tires and
Industrial Products.
(2) Methods of calculating the amount of sales, income (loss), assets, liabilities, and other items by reportable
segments

Accounting methods for reportable segments are mostly the same as 2. Summary of Significant
Accounting Policies.

Profits from reportable segments are operating income, and inter-segment income and transfers are based
on prevailing markets prices.
(3) Information concerning the amount of sales, income (loss), assets, liabilities, and other items by reportable
segments for the years ended March 31, 2011 and 2010 were outlined as follows:

Millions of Yen

Tires

Industrial
Products

Reportable
Segment
Consolidated
Total
Others
Total
Adjustments
Amount

Year ended March 31, 2011

Sales to third parties

411,574

83,835

495,409

24,333

519,742

1,798

79

1,877

4,310

6,187

Intergroup sales and transfers

413,372

83,914

497,286

28,643

525,929

Segment income

24,953

3,034

27,987

1,519

29,506

Segment assets

368,083

59,316

427,399

64,519

21,340

3,214

24,554

1,161

22,221

2,297

Total sales

519,742

(6,187)

(6,187)

519,742

(15)

29,491

491,918

(13,002)

478,916

845

25,399

486

25,885

1,161

1,161

1,161

24,518

138

24,656

288

24,944

466,358

Other items

Depreciation and amortization

Investment in equity method

affiliates

Increase of tangible and

intangible fixed assets

Year ended March 31, 2010

Sales to third parties

367,571

73,967

441,538

24,820

466,358

1,639

93

1,732

4,391

6,123

(6,123)

369,210

74,060

443,270

29,211

472,481

(6,123)

466,358

Intergroup sales and transfers

Total sales
Segment income

20,647

580

21,227

219

21,446

Segment assets

353,681

59,234

412,915

75,596

488,511

(21,538)

466,973

21,455

23,113

3,511

26,624

1,031

27,655

529

28,184

1,303

1,303

1,303

1,303

14,708

2,116

16,824

272

17,096

375

17,471

Other items

Depreciation and amortization

Investment in equity method

54

affiliates

Increase of tangible and

intangible fixed assets

i n a n c i a l

e c t i o n

Thousands of U.S. Dollars

Industrial

Tires
Products

Reportable
Segment
Consolidated
Total
Others
Total
Adjustments
Amount

Year ended March 31, 2011

Sales to third parties

$4,949,782 $1,008,238 $5,958,020

Intergroup sales and transfers

Total sales

21,625

954

22,579

4,971,407 1,009,192

5,980,599

Segment income

$ 300,091 $

36,488 $ 336,579

Segment assets

$4,426,733 $ 713,357 $5,140,090

$292,636 $6,250,656
51,828

74,407

344,464

6,325,063

$ 18,268 $ 354,847

$6,250,656
(74,407)

(74,407)

6,250,656

(177) $ 354,670

$775,940 $5,916,030 $(156,371) $5,759,659

Other items

Depreciation and amortization $ 256,650 $

Investment in equity method

affiliates

$13,967

38,655 $ 295,305
$

13,967

$ 10,159 $ 305,464
$

5,847 $ 311,311

13,967

13,967

Increase of tangible and

intangible fixed assets $ 267,234 $

27,633 $ 294,867

$ 1,656 $ 296,523

3,469 $ 299,992

Notes:
1. The Others category incorporates operations not included in reportable segments, including aircraft
products and sports products.
2. Adjustments are as follows:
(1) Segment income adjustments are the elimination of inter-segment transactions.
(2) Segment assets adjustments for the year ended March 31, 2011 of 13,002 million ($156,371 thousand) were
the elimination of inter-segment transactions of 35,485 million ($426,760 thousand) and Corporate assets
of 22,483 million ($270,389 thousand). Corporate assets primarily consist of accumulated working capital
and investments in securities.

The corresponding amounts for the year ended March 31, 2010 of 21,538 million ($259,023
thousand) were the elimination of inter-segment transactions of 40,329 million ($485,018 thousand) and
Corporate assets of 18,791 million ($225,995 thousand). Corporate assets primarily consist of
accumulated working capital and investments in securities.

3. Segment income was adjusted with operating income presented in the consolidated statements of income.
The Revised Accounting Standard for Disclosures about Segments of an Enterprise and Related information
(ASBJ Statement No. 17, March 27, 2009) and the Guidance on Accounting Standard for Disclosures about
Segments of an Enterprise and Related Information (ASBJ Guidance No. 20, March 21, 2008) were adopted
from the fiscal year ended March 31, 2011.

Related information for the year ended March 31, 2011

1. Product and service information
Information has been omitted, as the classification is the same as that for reportable segments.
2. Information about geographic areas
(1) Sales


Millions of Yen

Thousands of
U.S. Dollars

2011

2011

Japan
The United States of America
Others

281,330
105,961
132,451

$3,383,407
1,274,330
1,592,919

Total

519,742

$6,250,656

Note: Sales are based on the location of clients and classified by country.
F

i n a n c i a l

e c t i o n

55

(2) Property, plant and equipment

Millions of Yen

2011

Thousands of
U.S. Dollars

2011

Japan
Thailand
Others

113,000
23,357
41,013

$1,358,996
280,900
493,242

Total

177,370

$2,133,138

3. External customer information

The Company is not required to disclose information on external customers, since there are no sales to a single
external customer amounting to 10% or more of the Companys net sales.
Impairment losses on fixed assets by reportable segment for the year ended March 31, 2011
The Company omitted this information because of its immateriality.
Amortization of goodwill and the remaining amounts by reportable segment for the year ended March 31,
2011
The Company omitted this information because of its immateriality.
Gains on negative goodwill by reportable segment for the year ended March 31, 2011
The Company omitted this information because of its immateriality.

Segment information under the previous accounting standard

The business and geographical segment information and overseas sales for the Companies for the years ended
March 31, 2010 and 2009 are outlined as follows:

Business Segments

Millions of Yen

Tires

Multiple
Business
Total

Year ended March 31, 2010

Sales to third parties

367,517

98,841

466,358

48

11,497

11,545

Intergroup sales and transfers

(11,545)

466,358

Total sales

367,565

110,338

477,903

(11,545)

466,358

347,103

109,458

456,561

(11,658)

444,903

Operating income

20,462

880

21,342

Total assets at end of year

351,715

133,754

485,469

(18,496)

466,973

Depreciation and amortization

23,404

4,486

27,890

294

28,184

Capital expenditures

14,832

2,394

17,226

245

17,471

113

21,455

517,263

Year ended March 31, 2009

Sales to third parties

399,729

117,534

517,263

73

19,113

19,186

(19,186)

399,802

136,647

536,449

(19,186)

517,263

Intergroup sales and transfers

Total sales
Operating expenses

Operating expenses

56

Eliminations
and Corporate Consolidated

389,912

133,228

523,140

9,890

3,419

13,309

(501)

12,808

362,011

132,867

494,878

(21,502)

473,376

Operating income

Total assets at end of year

(18,685)

504,455

Depreciation and amortization

23,669

4,615

28,284

400

28,684

Capital expenditures

38,425

5,309

43,734

(393)

43,341

i n a n c i a l

e c t i o n

Geographical Areas

Millions of Yen

Japan North America
Asia
Other
Total

Sales to third parties
Inter-area sales and transfers

Eliminations
and Corporate Consolidated

Year ended March 31, 2010

324,015

90,551

21,966

29,826

466,358

53,761

38

31,950

85,749

466,358

(85,749)

Total sales

377,776

90,589

53,916

29,826

552,107

(85,749)

466,358

Operating expenses

360,934

88,430

50,512

29,343

529,219

(84,316)

444,903

Operating income

16,842

2,159

3,404

483

22,888

(1,433)

21,455

Total assets at end of year

382,593

55,277

71,286

17,051

526,207

(59,234)

466,973

517,263

Sales to third parties

Year ended March 31, 2009

359,319

101,789

23,640

32,515

517,263

71,154

392

40,849

112,395

(112,395)

Total sales

430,473

102,181

64,489

32,515

629,658

(112,395)

517,263

Operating expenses

426,031

98,144

62,495

30,972

617,642

(113,187)

504,455

Inter-area sales and transfers

Operating income

4,442

4,037

1,994

1,543

12,016

Total assets at end of year

388,034

57,586

72,170

14,204

531,994

(58,618)

792

12,808
473,376

Overseas Sales
Millions of Yen

(A) Overseas sales

North America

Other

Total

Year ended March 31, 2010

110,336

207,906

(B) Consolidated net sales

466,358

(C) (A) / (B)100

(A) Overseas sales

97,570
20.9

23.7

44.6

Year ended March 31, 2009

122,733

227,773

(B) Consolidated net sales

517,263

(C) (A) / (B)100

105,040
20.3

23.7

44.0

i n a n c i a l

e c t i o n

57

Report

58

of Independent

Auditors

Principal Operations

in

Japan

16

15
9
11 12 13 14

10
2
3

1
6

Production Facilities
1
2
3
4
5
6
7
8

9
10

Mie Plant
Mishima Plant
Onomichi Plant
Shinshiro Plant
Shinshiro-Minami Plant
Hiratsuka Factory
Hamatite Plant
Hiratsuka-Higashi Plant

Tires for trucks, buses, light trucks, passenger cars

Tires for passenger cars and light trucks, racing tires
Off-the-road tires
Tires for passenger cars and light trucks
Tires for passenger cars
Industrial products, aerospace products, sporting goods
Sealing materials, adhesives
Couplings for air-conditioning equipment, oil pressure hose joints,
oil pressure hose assemblies

Ibaraki Plant
Nagano Plant

High-pressure hoses, sealing materials

Oil pressure hose joints, oil pressure hose assemblies

Head Office and Principal Marketing Subsidiaries and Affiliates

11
12
13
14

Head Office
Yokohama Continental Tire Co., Ltd.
Comprehensive import sales distributor for Continental AG
Yokohama Tire Japan Co., Ltd.
Sales of tires and related products
Yokohama Industrial Products Japan Co., Ltd. Sales of industrial products and related products
Proving Grounds

15
16

D-PARK
T MARY

Comprehensive tire proving ground

Comprehensive tire proving ground

59

Overseas Subsidiaries
and

Affiliates

9
16

14
7

17

10 11 12
8

13

15
27
23
39
19

18

30

20 21 22

24 25 26

35 36 37

33 34

28 29
31 32
40

38

41

42

Americas
United States

1
2
3
4

Canada
Brazil

5
6

Yokohama Tire Corporation

SAS Rubber Company
YH America, Inc.
Yokohama Aerospace America, Inc.
Yokohama Tire (Canada) Inc.
Yokohama Rubber Latin America Indstria e
Comrcio Ltda.

Production and sales of tires and related products

Production and sales of hoses
Production and sales of windshield sealants and hoses
Sales of aircraft components
Sales of tires and related products
Marketing support and services for
Latin American distributors

Yokohama H.P.T Ltd.

Yokohama Suisse SA
Yokohama Scandinavia AB
Yokohama Reifen GmbH
Yokohama Europe GmbH
Yokohama Industrial Products Europe, Gmbh
Yokohama Austria GmbH
Yokohama Danmark A/S
Yokohama Iberia, S.A.
Yokohama Russia L.L.C.
N.V. Yokohama Belgium S.A.

Sales of tires and related products

Sales of tires and related products
Sales of tires and related products
Sales of tires and related products
Marketing support and services for European distributors
Sales of hoses and marine products
Sales of tires and related products
Sales of tires and related products
Sales of tires and related products
Sales of tires and related products
Sales of tires and related products

Dubai Head Office

Jeddah Office

Business coordination
Business coordination

Europe
United Kingdom
Switzerland
Sweden
Germany

7
8
9
10
11
12

Austria
Denmark
Spain
Russia
Belgium

13
14
15
16
17

Middle East
Dubai
Saudi Arabia

60

18
19

5
4
3

Asia
China

20
21
22
23
24
25
26
27

Taiwan

28

South Korea
Philippines

30

29

31
32

Thailand

33
34
35
36
37
38

India
Vietnam
Singapore

39
40
41

Hangzhou Yokohama Tire Co., Ltd.

Yokohama Hoses & Coupling (Hangzhou) Co., Ltd.
Yokohama Hamatite (Hangzhou) Co., Ltd.
Suzhou Yokohama Tire Co., Ltd.
Yokohama Tire Sales (Shanghai) Co., Ltd.
Yokohama Rubber (China) Co., Ltd.
Yokohama Industrial Products Sales - Shanghai Co., Ltd.
Shandong Yokohama Rubber Industrial Products Co., Ltd.
Yokohama Tire Taiwan Co., Ltd.
SC Kingflex Corporation
Yokohama Tire Korea Co., Ltd.
Yokohama Tire Philippines, Inc.
Yokohama Tire Sales Philippines, Inc.
Yokohama Tire Sales (Thailand) Co., Ltd.
Yokohama Asia Co., Ltd.
Yokohama Tire Manufacturing (Thailand) Co., Ltd.
Yokohama Rubber (Thailand) Co., Ltd.
Tire Test Center of Asia
Y.T. Rubber Co., Ltd.
Yokohama India Pvt. Ltd.
Yokohama Tyre Vietnam Inc.
Singapore Branch

Production and sales of tires and related products

Production and sales of hoses
Production and sales of windshield sealants
Production and sales of tires and related products
Sales of tires and related products
Management company for Chinese operations
Sales of hoses, sealants, conveyor belts, and related products
Production and sales of conveyor belts
Sales of tires and related products
Production and sales of hoses
Sales of tires and related products
Production and sales of tires and related products
Sales of tires and related products
Sales of tires and related products
Marketing support and services for Asian distributors
Production and sales of tires and related products
Production and sales of windshield sealants and hoses
Comprehensive tire proving ground
Processing of natural rubber
Sales of tires and related products
Production and sales of tires and related products
Business coordination

Oceania
Australia

42

Yokohama Tyre Australia Pty., Ltd.

Sales of tires and related products

61

I nvestor I nformation
As of March 31, 2011

Company Name:
The Yokohama Rubber Co., Ltd.
Head Office:
36-11, Shimbashi 5-chome, Minato-ku, Tokyo 105-8685, Japan
Established:
October 13, 1917
Paid-in Capital:
38,909 million
Fiscal Year-end:
March 31 (changing in 2011 to December 31)
General Meeting of Shareholders:
June (changing in 2012 to March)
Transfer Agent:
The Chuo Mitsui Trust and Banking Company, Limited
33-1, Shiba 3-chome, Minato-ku, Tokyo 105-8574, Japan
Stock Exchange Listings:
Tokyo, Osaka, Nagoya
Contact Points for Investors:
PR/IR section, Corporate Communications Dept.
36-11, Shimbashi 5-chome, Minato-ku, Tokyo 105-8685, Japan
Phone: 81-(0)3-5400-4531 Facsimile: 81-(0)3-5400-4570
Investor Relations Web Site:
http://www.yrc-pressroom.jp/ir_en/

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Stock I nformation
As of March 31, 2011

Authorized number of shares:

Number of shares issued and outstanding:
Number of shareholders:

700,000,000
342,598,162 (Unchanged from fiscal 2010 year-end)
15,855 (down 902 from fiscal 2010 year-end)

Ownership
Financial institutions

2009

52.3

2010

48.9

2011

47.5

Individuals
and others Securities
companies

Other domestic
companies

Foreigners

22.1

10.6

21.2

12.7

21.2

13.9

Treasury
stock

1.3
11.5
12.3
11.9

2.2%
2.7
2.2
2.2
3.3

Principal Shareholders
Name

Percentage of Voting Rights

ASAHI MUTUAL LIFE INSURANCE COMPANY

8.0%

Japan Trustee Services Bank, Ltd. (trust account)

7.5

ZEON CORPORATION

7.1

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

4.7

Tokio Marine & Nichido Fire Insurance Co., Ltd.

3.5

Common Stock Price Trends

2011

2010

2009

2008

2007

High

480

542

658

944

790

Low

318

314

301

436

439

Fiscal Year-End

403

440

409

477

724

342,598,162

342,598,162

342,598,162

342,598,162

342,598,162

Stock Price (Yen):

Shares of Common Stock

Issued and Outstanding

Stock Price Range and Trading Volume on the Tokyo Stock Exchange
1,000

Stock Price ()

900
800
700
600
500
400
300
200
80

Trading Volume (Million Shares)

40
0
Apr. 2006

Apr. 2007

Apr. 2008

Apr. 2009

Apr. 2010

63

The Yokohama Rubber Co., Ltd. 36-11, Shimbashi 5-chome, Minato-ku, Tokyo 105-8685, Japan Phone: 81-(0)3-5400-4531

Printed in Japan