5 _453 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 5 FINANCIAL PERFORMANCE Financial statements Note 1. GENERAL INFORMATION The financial year of Compagnie Générale des Établissements Michelin (the Company) covers the 12 months from January 1 to December 31. The following notes and tables form an integral part of the financial statements. The financial statements were approved for publication by the Managing Chairman on February 12, 2024 after being reviewed by the Supervisory Board. Unless otherwise specified, all amounts are presented in thousands of euros. Note 2. SIGNIFICANT EVENTS OF THE YEAR 2.1 Transfer pricing policy: In 2023, the Group updated its transfer pricing policy to comply with the revised OECD transfer pricing rules. Compared with the previous practice, the new policy means that all Group companies are remunerated on the basis of their businesses’ contribution to the Group. Under this new transfer pricing policy, the Company acts as an intermediary in the billing of the costs incurred by the Group for the provision of services to the various subsidiaries. The amount concerned, totaling €915 million in 2023, is reported under “External charges” (costs incurred) and “Revenue” (amounts billed to subsidiaries). 2.2 In March 2023, the Company provided a €47 million capital injection to Camso, Inc. 2.3 In June 2023, Multistrada paid a dividend of €17 million. 2.4 Significant changes in shares in subsidiaries and affiliates: in October 2023, the Company transferred all the shares in Manufacture Française des Pneumatiques Michelin, Spika and Michelin Ventures SAS to Compagnie Financière Michelin at net book value (€2,445 million). The contra entry for the disposal of the shares is reported under “Non-recurring expense” and the sale price to Compagnie Financière Michelin is reported under “Non-recurring income”. The purpose of the transfer is for the shares in these operating subsidiaries to be held by an intermediate holding company. 2.5 The 2018-2023 convertible bonds were redeemed in November 2023 for an amount of €565 million. 2.6 In December 2023, Camso International S.à.r.l. repaid €28 million to Compagnie Générale, deducted from paid-in capital in excess of par, and also paid a dividend of €64 million. A provision for impairment in value of Camso International S.à.r.l. shares was recorded at December 31, 2023 in the amount of €80 million. 2.7 The portfolio of marketable securities included in current assets was decreased by €356 million during the year. Note 3. BASIS OF PREPARATION The financial statements of Compagnie Générale des Établissements Michelin have been prepared and presented in accordance with French generally accepted accounting principles, including regulation ANC 2016-07 dated November 4, 2016 and the guidance and recommendations issued since that date by the French Accounting Standards Board (ANC). These principles have been applied consistently in all periods presented unless otherwise specified. Note 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 4.1 Intangible assets “Brands, patents and other rights” are stated at historical cost. Brands have an indefinite life and are not amortized. Patents and other rights are amortized on a straight-line basis over seven years. If there is any indication that the value of brands, patents or other rights may be impaired, a provision for impairment is recorded. Expenses incurred for the creation and protection of brands are recognized as expenses for the year.
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