2012 REGISTRATION DOCUMENT CONTENTS INTERVIEW WITH JEAN-DOMINIQUE SENARD 2 6 MiCHELIN PERFORMANCE AND RESPONSIBILITY 121 1 MiCHELIN At a GLANCE 5 6.1. 2012 Employee, Societal and Environmental Information Published in Compliance with Article 225 1.1. Company Profile 6 of France’s Grenelle II Act 122 1.2. Summary Organization Chart 7 6.2. Employee Information 122 1.3. History and Development of the Company 8 6.3. Societal Information 141 1.4. Facilities 9 6.4. Environmental Information 148 6.5. Attestation and Assurance Report of one of 2 REPORT OF THE MANAGING the Statutory Auditors on Social, Environmental and Societal Information 160 PARTNERS 12 2.1. Challenges and Strategic Vision 14 7 2.2. Tire Markets 18 CONSOLIDATED FINANCIAL 2.3. Net Sales 25 STATEMENTS 163 2.4. Consolidated Income Statement Review 28 7.1. Consolidated Financial Statements December 31, 2012 164 2.5. Consolidated Balance Sheet Review 36 7.2. Statutory Auditors’ Report on the Consolidated 2.6. Consolidated Cash Flow Statement Review 40 Financial Statements 223 2.7. Return on Capital Employed (ROCE) 42 2.8. Outlook 42 2.9. Operating Highlights 43 8 COMPANY 2.10. Risk Factors 47 2.11. Material Contracts 58 FINANCIAL STATEMENTS 225 2.12. Change of Control 58 8.1. Review of the Financial Statements of Compagnie 2.13. Information Concerning Supplier Payments 59 Générale des Établissements Michelin 226 2.14. Material Changes in the Company’s 8.2. Financial Statements of Compagnie Générale Business or Financial Position 59 des Établissements Michelin (Parent Company) 227 2.15. Ownership Structure and Voting Rights 59 8.3. Statutory Auditors’ Report on the Financial Statements 240 2.16. Information Disclosed in Compliance with 8.4. Statutory Auditors’ Special Report on Regulated the Grenelle 2 Act 60 Agreements and Commitments with Third Parties 241 8.5. Statement of Changes in equity 242 8.6. Appropriation of 2012 Net Income 242 3 FiNANCIAL HIGHLIGHTS 61 8.7. Five-year Financial Summary 243 3.1. Sales 62 3.2. Earnings 64 9 3.3. Reporting Segments 66 AddiTIONAL INFORMATION 245 3.4. Cost Structure 69 9.1. Person Responsible for the Registration Document 3.5. Cash Flow and Balance Sheet 74 and Annual Financial Report 246 3.6. Consolidated Key Figures and Ratios 78 9.2. Statutory Auditors 246 9.3. 2010 and 2011 Financial Statements Incorporated by Reference 247 4 CORPORATE GOVERNANCE 80 4.1. Administrative, Management and Supervisory Bodies, 10 and Senior Management 82 ANNUAL SHAREHOLDERS MEETING 4.2. Practices of the Administrative, Management of MAy 17, 2013 249 and Supervisory Bodies 88 10.1. Report of the Managing Chairman 4.3. Management and Supervisory Board Compensation 92 and Proposed Resolutions 250 4.4. Trading in Michelin Shares by Managing Partners 10.2. Report of the Supervisory Board 256 and Supervisory Board Members and their Close 10.3. Statutory Auditors’ Reports 261 Relatives in 2012 98 4.5. Report of the Chairman of the Supervisory Board on the Membership of the Supervisory Board, 11 TABLES OF CONCORDANCE 263 the Application of the Principle of Gender Equality, the Supervisory Board’s Practices and the Company’s 11.1. Table of Concordance with the French Commercial Code 264 Internal Control and Risk Management Procedures 99 11.2. Table of Concordance for Employee, 4.6. Statutory Auditors’ Report, Prepared in Accordance Societal and Environmental Information 265 with Article L.226-10-1 of the French Commercial 11.3. Table of Concordance for the Registration Document 267 Code on the Report Prepared by the Chairman of the Supervisory Board 106 5 INVESTOR RELATIONS 107 5.1. Information about the Company 108 5.2. Share Information 109 5.3. Shareholder Relations 112 This pictogram indicates chapters 5.4. Documents on Display 112 and sections that are also included 5.5. Additional Information about the Capital 113 in the Annual Financial Report 2012 REGISTRAT ION DOCUMENT The original French version of this Registration Document was filed with the Autorité des marchés financiers (AMF) on March 1, 2013, in accordance with the provisions of Article 212-13 of the General Regulation of the AMF. It may be used in connection with an Information Memorandum approved by the Autorité des marchés financiers. It was prepared by the issuer and is the responsibility of the person whose signature appears therein. MICHELIN – 2012 REGISTRATION DOCUMENT 1 INTERVIEW WITH JEAN-DOMINIQUE SENARD INTERVIEW WITH JEAN-DOMINIQUE SENARD “To make Michelin the undisputed leader in sustainable mobility and one of the world’s most innovative, responsible and top-performing companies” You took over for Michel Rollier in May 2012, which We invested a record total of €2 billion, of which two-thirds were represented the beginning of a critical new phase growth investments. This required a considerable effort, but Michelin in Michelin’s history. How did the transition go? generated substantial free cash flow in 2012. As a result, our balance It went very well because Michel Rollier had thoroughly prepared sheet is more robust than ever, with debt-to-equity at a record-low his succession. I worked with him closely for eight years, including 12%. In today’s environment, this represents a precious asset. five as Managing Partner. Michel Rollier announced he was stepping Backed by these very solid results, we will recommend that shareholders down in February 2011 and we managed the Group together for approve the payment of a dividend of €2.40 per share, an increase a year, so the transition went smoothly. Thanks to the outstanding of 14% over last year. accomplishments made since the crisis in 2008-2009 and the successful share issue in 2010, Michel Rollier built a solid foundation How do you explain these very good results? on which Michelin launched a New Era of Dynamic Growth, with We are reaping the rewards of our strategic focus on innovation, major spending projects in Brazil, China and India. Today, we are international growth, competitiveness and continuous improvement stronger than ever before and I am proud to have shared this in corporate management that we deployed consistently and adventure with him. successfully thanks to the expertise, professionalism and commitment of our teams. Long-term vision is one of Michelin’s key strengths. Our diversified product portfolio allows us to smooth over the ups Will you be able to deploy such a strategy with and downs of the business cycle while our international presence, a four-year term? with sales evenly divided between Western Europe, North America Yes, I firmly believe so. It’s only natural for corporate executives to and the rest of the world, enabled us to withstand declining demand have their performance regularly monitored and assessed. It’s the in Europe. Supervisory Board’s responsibility to evaluate the quality of corporate We introduced new tires whose superior technical performance sets governance, to decide whether or not my term will be renewed, them apart from the competition. Their remarkable success in new and to ensure that my decisions are in the Group's lasting interest. I markets is due in large part to their robustness and outstanding think this approach is solid, balanced and focused on responsibility longevity. over the long term. Thanks to our premium positioning and effective pricing policy, we How would you sum up 2012? stabilized operating margin for our car tires at a high level despite a decline in unit sales. Our priority focus on turning around the Michelin teams once again demonstrated their ability to honor truck tire business led to a sharp improvement in operating margin commitments. Despite an unstable international environment that even though sales volumes have dropped by more than 10%. This saw a clear decline in demand in Europe and considerable volatility represents an outstanding performance on the part of our teams, in most regions, we deployed the road map for our New Phase of who have made a truly remarkable effort. We also benefited from Dynamic Growth in line with expectations. the substantial contribution of our specialty tire businesses, which Our revenue rose with lower sales volumes. Our operating income generate structurally high margins. Lastly, we continued to enhance rose by 25% to €2.4 billion, which represents more than 11% of our productivity and competitiveness through the 2012-2016 sales, and our net income surpassed €1.5 billion. Efficiency plan. 2 MICHELIN – 2012 REGISTRATION DOCUMENT INTERVIEW WITH JEAN-DOMINIQUE SENARD You’re pursuing major investment programs in Brazil, China, What is your outlook for 2013 and beyond? India and the United States. How are they coming along? In an environment shaped by growth in new markets but uncertainty 2013 will open an important new era in our global development. in mature markets, we’re aiming for stable sales volumes in 2013 The ramp-up of our new car and light truck tire in Itatiaia, Brazil is and operating income on a par with 2012. proceeding very nicely. In China, the Shenyang 2 plant launched Growth should pick up again in 2014 and we’re confirming our production of truck tires in late January and will begin manufacturing objective of approximately €2.9 billion (1) in operating income in car tires in May. The truck tire plant in Chennai, India will be brought 2015, while generating positive free cash flow every year. on stream in the second half. In the United States, the new earthmover Our objectives are ambitious in today’s demanding environment but tire plant in Anderson and the new line to increase capacity at the I have full confidence in our assets and in our ability to innovate Lexington plant will be operational at the end of the year.