ANNUAL REPORT 2013 Year Ended March 31, 2013

Transcription

1 WE SUPPORT AVIATION INDUSTRY ANNUAL REPORT Year Ended March, AIRPORT FACILITIES CO., LTD. Sogo No. 5, -6-5 Haneda Airport, - TEL: FAX: AIRPORT FACILITIES CO., LTD.

2 Our Mission Message from the President Our Mission Our mission is to play a vital role in the progress of aviation as a pivotal private company operating mainly at airports, through creating and providing necessary facilities and functions at airports. Corporate Philosophy We will continually advance ahead of the demands and changes of the times by producing creative innovation and we will endeavor to raise corporate value. We make effort to be a reliable and trusted company that always provides value which satisfies customers and complies with public expectation. We will foster our staff, and encourage and reward the efforts they make and the challenges they tackle. As a member of civil society, we observe rules and respect fairness. CONTENTS CONTENTS Message from the President/ Changes in Annual Dividend per Share and Payout Ratio Business Review Airport Facilities at a Glance Highlights of the Previous Year s Business Result and Outlook for the Current Fiscal Year 5 Focus: Position and Prospects of 6 Our Business in the 7 Recent Business Activities (Outside of ) 9 Future Business Direction Our Website Timely Updated Corporate Information Subsidiary Company Consolidated Financial Data & Industry Related Data (Ten-year Summary) List of Facilities 5 Since, airline companies have been showing high-level performance due to management effort and recovering flights demand. In addition, airline companies are making further cost cutting effort to cope with such issues as the emerging of low-cost carriers (LCC), weak yen, and high fuel costs, and also are prepared for the increasing number of slots to 7, at the scheduled for next spring. Given the business condition surrounding airline companies have reached a new phase, responding to these trends became an important issue for us. It is challenging for us to confront these changes in surrounding. For the past few years, our Group, including its consolidated subsidiaries has been focusing on three points: increase in occupancy rates of rented facilities, cost saving through streamlining of management, and acquisition of new customers. Our concretized efforts in line with these points consists of a lease on a vacant large-size hangar in the to an emerging airline company, construction of apartments near the for employees of an airline company, acquisition of an international airfreight logistics center near the Kansai International Airport, construction of an aircraft maintenance facility in Kobe Airport and a flight training facility in Kitakyushu Airport, as well as acquisition of high standard office buildings in Tokyo Metropolitan area. As a result, both net sales and operating income moved back into an uptrend in the fiscal year ended March,. In the fiscal year ending March,, we started construction of a new facility for catering service and also decided to build the third apartment building near the in response to the expected flight increase in the future. Also, we are planning to build a maintenance hangar for disaster prevention helicopters and a logistics facility in, and to set up a solar power plant near Narita International Airport. Last but not least, our Group is, as part of our mid- to long-term challenges, putting up united energy to give full consideration to the redevelopment project in the -chome district and the vacant lot in the, as well as to the overseas business responding to demand for aviation related facilities in emerging countries in Asia, leading up to our business expansion. We highly appreciate your continued support for our Group. August, Tomoyuki Takahashi, President and CEO Changes in Annual Dividend per Share and Payout Ratio We recognize the prompt return to the shareholders as top corporate priority, intending to repay the due return to shareholders while considering various factors such as the internal reserves prepared for new business and investment opportunities, the mid- to long-term business outlook. This policy has led to 6. year-end dividend to pay for the year ended March,, the same as the previous fiscal year-end, resulting in an annual. dividend, the same as the previous fiscal year. Dividends per share ( ) Payout ratio (consolidated) (%) Dividends per share 76. Payout ratio Corporate Governance 7 Corporate Profile, Stock Information 8 5/ 6/ 7/ 8/ 9/ / / / / The statements about future described on this report such as earnings forecasts have been made based on information currently available and some conditions that we judge rational. Actual earnings may differ greatly from the above forecasts for various reasons. AFC Annual Report

3 Airport Facilities at a Glance Outside Airport Water Supply & Drainage Service and Other Business We create and provide airport functions, thereby contributing to the progress of aviation industry. Other Regional Airports.7% Net Sales by Business Segment Area Heating & Cooling Business We create and manage the facilities and functions indispensable to ensure the appropriate management of airport ( /).% leading up to the safety operation of airline companies. 9.%.7% New Chitose International Airport.% Real Estate Business Net Sales by Region Osaka International Airport 68.% Tokyo International Airport ( /).6% 8.% Kansai International Airport.% Domestic Air Cargo Terminal () Utility Center () Real Estate Business Airports where we deploy our business New Chitose Airport Nagoya Based in, we construct multi-purpose buildings (Sogo buildings), hangars, maintenance shops, aircraft cleaning facilities, sanitary disposal plants (SD plants), and domestic air cargo terminals and lease them to airlines and airline-related companies in thirteen airports in Japan. Central Japan Int l (Centrair) Kobe Fukuoka Kagoshima Naha Kansai Int l Hiroshima Heliport Energy Center () Areas covered by our heating and cooling system in Runway D Offshore Development Area / Cargo District Runway C Passenger Terminal No. Offshore Development Area / Maintenance District Corporate Information Passenger Terminal No. Runway A Runway B Our Energy Center supplies the facilities such as Sogo buildings, hangars, or plants in the former Aircraft Maintenance Area in with cooling, heating, steam, and hot water through pipelines on a round-the-clock basis. Aircrafts Maintenance Area (-chome district) Water supply & drainage facilities in the reclaimed land area Shared Communication Service () International Area Business Review Energy Center (Tokyo Airport Heating & Cooling Co., Ltd.) In the newly reclaimed land area offshore, Tokyo Airport Heating & Cooling, our Group company, supplies thermal energy through a district pipeline network to facilities including government offices and Passenger Terminals No. and No.. Water Supply & Drainage Service and Other Business Tokyo Int l Airport, Tokyo Metropolitan area Kitakyushu We are also going to develop the business beyond airports, for example, in Tokyo Metropolitan area, as well as adjacent areas to the and the Kansai International Airport. Area Heating & Cooling Business Sendai Osaka Int l (Itami) Air Cargo Terminal Passenger Terminal Areas covered by our local area communication network offshore Runway D We operate and manage water supply & drainage service in Tokyo International Airport. Offshore Development Area / Cargo District In the reclaimed land area offshore, we have established the local area network for the airport related companies. We provide communication network for local area telecommunications and data communications. Passenger Terminal No. Aircrafts Maintenance Area (-chome district) Number of facilities(968 ) Volume of Thermal Energy Supplied (unit: GT) 8 Cooling (THC) 57,7 6,, 97 AFC Annual Report 98 99,56 6,6 5,6 5,5 9/ 9,99 9,795 9, 9, Heating (THC) Heating (AFC),,5 9,95,96 7,5, Air Cargo Terminal Lines, 5, 87,5 International Area Passenger Terminal Number of Contracted Lines in Our Local Area Network *AFC: Airport Facilities Co., Ltd. THC: Tokyo Airport Heating & Cooling Co., Ltd. 6, Number of facilities 968 Offshore Development Area / Maintenance District Runway A Runway B We provide local area network in s International Area. Runway C Passenger Terminal No. 8,8 8, Cooling (AFC) 6,5 7,7 7,96 7, 79,67 6,9,6 6,59 9,8 / / / 5,55,5,76 / 6, 9/ / / / / AFC Annual Report

4 Highlights of the Previous Year s Business Result and Outlook for the Current Fiscal Year Highlights of the Consolidated Business Results for the Year Ended March, Consolidated Business Results ( Million) ( Million), 6, Net sales 5, Operating income Ordinary income,86 Net income,68,,,9,6 5,,,, 5,, 5, / /,77,7,78,79 / / / / / / The Group's net sales increased only.% from the previous fiscal year due to a fall in the revenue attributable to the several expiration and modifications on the agreement of water supply and drainage contract, despite the revenue increase from the lease of the West and No. 7 Sogo in the, improvement in the occupancy rate, the year-long rent income contributed by the full-year lease of Rinku International Logistics Center and Kobe Airport purchased and completed respectively in the fiscal year ended March,, and the new rent income from Kitakyushu Airport Training Center completed in the fiscal year ended March,. 6,,, Cash and cash equivalents at end of / twenty-four hour operation and internationalization in is seeking to be a hub airport in Asia. With the expansion of international flights, the yearly number of passengers for increased by 6.7% from the previous year to 66,79 thousand, which ranks top in Japan and fourth in the international ranking. The airport is expected to further grow and develop as a major hub for aviation network. Highest ranking in Japan and number four in the world in terms of number of passengers Airport (Country) Hartsfield-Jackson Atlanta International Airport (USA) Beijing Capital International Airport (China) London Heathrow Airport (UK) (Japan) 5 Chicago O'Hare International Airport (USA) 6 Los Angeles International Airport (USA) 7 Charles de Gaulle International Airport (France) Net cash earmarked for investment amounted to,8 million, mainly attributable to acquisition of fixed assets. 8 Dallas/Fort Worth International Airport (USA) 58,59 9 Soekarno Hatta International Airport (Indonesia) 57,77 Net cash allotted for financing activities was,56 million, mainly attributable to repayment of loans. Dubai International Airport (UAE) 57,68 Income before income taxes and minority interests plus non-cash items such as depreciation and less trade receivables amounted to an in-flow of 5,5 million. (Thousand people), Cash flows from financing activities For more detailed financial statements, please refer to our website, Financial Results, on "IR Library". Home Investor Relations IR Library Financial Results Outlook for the fiscal year ending March, Consolidated Business Results ( Million) ( Million), 6, Net sales 5, Operating income Ordinary income Net income 5,,7,, Year on year +,,8,,, Year on year 7 Year on year -6,7 Year on year 5, Canada Apr. 9 concluded USA Dec. 9 concluded -5, / (plan) / (plan) / (plan) / (plan) For the fiscal year ending March,, we expect only slight year-on-year increase in our net sales by.5% (up million) and in our operating income by.5% (up 7 million), estimating a decrease in sales from the cancellation of New Engine Maintenance Shop and the relocation of customers in Area Heating & Cooling service although we expect an increase in sales through the full-year occupancy and increased square meters at West in the, the addition of Crew Training Center to Maintenance Center Annex areas, and the year-long occupancy of Kitakyushu Airport Training Center completed in the previous fiscal year. We expect our ordinary income to fall by.% (down 6 million) and net income to drop by.9% (down 5 million) from the previous fiscal year due to a decrease in dividend income and the planned removal of obsolete facilities despite of our cost cutting effort. Seoul/Busan Aug. 8 concluded Shanghai Aug. concluded UAE May concluded Guangzhou Aug. concluded Qatar Jun. concluded 5, Germany Apr. 9 concluded Germany Feb. concluded Beijing Under negotiation Search 6,6 France Oct. 8 concluded UK Nov. 8 concluded 6, Airport Facilities Co., Ltd. 66,6 6,688 Favorable aviation agreements towards the expansion of international flights Cash and cash equivalents at end of / Netherlands Feb. 9 concluded Cash flows from investing activities 7,7 66,795 Source Preliminary World Airport Traffic Airports Council International, 95,6 8,99 Corporate Information Taking advantage of its proximity to Tokyo Metropolitan area, (Haneda Airport) which started its Business Review Cash flows from operating activities Position and Prospects of Rank Operating income rose by.% in comparison with the previous fiscal year due to the year-long rent income from the newly leased facilities, and the decrease in general, and administrative costs. Consolidated Cash Flows ( Million) Focus Thailand Jan. 9 concluded Hong Kong Mar. 9 concluded Tokyo International Airport Flights in daytime Flights in early morning and night Taipei Dec. 9 concluded Thailand Nov. concluded Malaysia Jul. 8 concluded Singapore Sep. 8 concluded Indonesia Aug. concluded Source: Ministry of, Infrastructure, Transport, and Tourism (including "agreement" to conclusion in the published documents) Expected arrival and departure slot increase 7, slots (Outlook for the year ending March ) 85, slots (Year ended March ) Photo: Aflo 5 AFC Annual Report AFC Annual Report 6

5 Focus: Our Business in the Since its establishment, our Group s stronghold has been. Through experiences in Aircrafts Maintenance Area and Reclaimed Area offshore the former airport site, we have established a solid business base in real estate and infrastructure development business. Also, taking advantage of full-scale internationalization and expansion of airports capacity currently in progress in the Tokyo International Airport as business field, we are deploying various efforts targeting at new demands and new customers. Engine Maintenance (South Wing) Component Maintenance Business Related to Re-expansion and Internationalization (from 8) International Passengers and Air Cargo Area Opened Oct. Runway D Came into operation Oct. Facilities / Services Completion date Major use / Functions Engine Maintenance (South Wing) Feb. 8 Engine maintenance shop Maintenance shop of aircraft engines Maintenance shop of aircraft electrical components Component Maintenance Apr. 9 Maintenance of aircraft components 5 Sogo No. 5 May Flight simulator 6 Expanded local area communication networks Oct. Telecommunication service 7 Thermal energy supply to the addition of Passenger Terminal No. Oct. Thermal energy 8 Sogo No. Oct. In-flight meal preparation 9 Large-size hangar (the second training facility for Skymark Airlines) Nov. Flight simulator/sedentary studies Tokyu Stay Kamata Mar. Hotel Sky Residence Minami Kamata Nov. Apartments Sogo No. 7 Feb. Training facility for flight crew Maintenance Center Annex and Headquarters of Skymark Airlines May Headquarter of Skymark Airlines West Jun. Skymark Airlines 5 Sky Residence Omori Higashi Nov. (plan) Apartments 6 Addition to Maintenance Center No. Mar. (plan) Providing in- flight services 7 Higashi-Kojiya Apartment House Nov. (plan) Apartments Business in Former Aircraft Maintenance Area and Newly Reclaimed Area Offshore Former Airport Site (as of 7) Aircrafts Maintenance Area Near Tokyo International Airport Area heating & cooling expanded to the addition of Passenger Terminal No. Energy Center 6 Addition to Maintenance Center No. Facility to prepare in-flight meals Near Tokyu Stay Kamata 7 Higashi Kojiya Apartment House Reclaimed Area Offshore Airport/New Aircraft Maintenance Area Hotel for airline employees and passengers 5 Sky Residence Omori Higashi Apartment house for an airline-related company Apartment house for an airline-related company Business Review Corporate Information Facilities Completion (acquisition) date Major use Facilities Completion (acquisition) date Major use Sogo No. (Apr. 97) Large-size hangar Apr. 97 Sogo No. Jul Utility Center Apr. 99 Maintenance Center Annex Jun. 99 /Vehicle Maintenance shop 5 West Jul. 99 Energy Center Sept. 97 Thermal energy supply 6 Ground Support Equipment (GSE) Maintenance Shop (Mar. ) Vehicle Maintenance 5 Sogo No. Feb. 976 /Plant 6 Engine Shop No. Aug. 979 Plating plant 7 Sogo No. Jun Sogo No. 5 Nov. 98 /Plant 9 Dec. 987 Plant for treatment sewage from aircrafts Sogo No. 6 May 989 Sogo No. 7 May 99 Flight simulator /Sedentary studies Sogo No. 8 Mar. 995 /Maintenance shop Technical Center No. (Mar. ) Training facility for flight crew 8 Technical Center No. Dec. Training facility for flight crew 9 Large-aircraft cleaning facility Mar. 7 Aircraft cleaning facilities Reclaimed Area Offshore Airport/ Cargo Handling Area Facilities Completion (acquisition) date Major use ARC Jul. 99 Cargo Center Annex Aug. 99 /Substation Domestic Air Cargo Terminal E- wing to E- wing, W- wing to W- wing Aug. 99 Cargo handling E-5 wing Mar. 998 Cargo handling E-6 wing Dec. Cargo handling 7 AFC Annual Report AFC Annual Report 8

6 Recent Business Activities (Outside of ) Future Business Direction We are trying to renew and expand facilities and deploy our business beyond area. Upgradable Reconstruction of an Existing Kagoshima Ibusuki Makurazaki Line Kyushu Expressway Aira Kagoshima Bay Kokubu To be completed in March Reconstruction of a small size hangar in No. Existing hangar Completion: No. in November, 97, and No. in October, 98 Upgrading reconstruction of No. was planned to deal with latest aircrafts. Upgradable Reconstruction Completion Image To be completed in March Environmentally friendly solar panels installed [Facility Summary] Function: for helicopters, etc. Solar Power Plant Making good use of the idle land we own near the Narita International Airport We tackle the new challenges in the changing business environment surrounding us, such as further development of, activation of local airports, streamlining and management of airline companies, and offshore movement of airport business. Number of arrivals and departures, passengers, and amount of cargoes at Number of passengers / Number of arrivals and departures (Million people) 8 6 Our Approach to the New Development of Tokyo International Airport Our Approach to the Activation of Local Airports Our Approach to Innovation to Business Research on Overseas Business 5 New Business Making Use of Our Idle s Cargoes. Our Challenges to the Evolution of Changes and Developments of Aviation Industry Number of domestic passengers Number of international passengers Number of domestic flight arrivals and departures Number of international flight arrivals and departures (Thousand times) 85 9/ / / / / / (forecast) Our Approaches to Various Airline Related Facilities (Thousand ton) Domestic cargoes International cargoes / / / / Build-up of airline related facilities such as in-flight meal catering facilities responding to the increasing passengers in the company housings near the for airline companies Upgrading hangars to accommodate larger-size aircrafts used by news media, construction of logistic facilities Novel methods to raise occupancy rates of our facilities inside and outside airports Promotion to attract customers to facilities renovated to meet tenants needs Overseas business growth to capture demand for airport-related facilities in rapidly growing Asian countries Construction of solar energy plant and selling energy on our idle land Our Cost Cutting through Streamlining Operation at 76 / Business Review Corporate Information To be completed in September Constructing a solar power plant and starting electric power selling business Narita line Narita 8 Narita Drastic Business Review in the -chome District Streamlining operation by dismantling non-operating facilities Further maintenance cost cutting through thorough review of Area Heating & Cooling Business Keisei main line Shin-Kuko. The Outlook of the Development Plan of Tomisato 96 9 Tomisato Shibayama Redevelopment of the -chome District Zone of the Former Airport Site (5ha) We proposed a specific plan for the efficient use of limited airport satisfying required airport functions accompanied by the airport capacity increase We are ready to cope with the review of the governmental zoning plan (commercial zone, etc.) for Zone Our Company's idle land, adjacent to the Narita International Airport Utilization of idle land we own Installation image [Facility Summary] Site Area: Around,m Use: Solar Power Plant Annual Electric-Power Generation: 68, kwh (planned). Other Activities Dealing with the Government-Led Airport Management We closely watch and investigate the enforcement of "the law regarding the Reform Plan operation of the airports under government administration making the most of private sectors initiative" and cope with the new situation thereafter 9 AFC Annual Report AFC Annual Report

7 Our Website Timely Updated Airport Facilities Co., Ltd. Search We continue enriching the contents of our website serving our stakeholders including shareholders and investors as communication platform. Our website contains various useful information facilitating your understanding our Subsidiary Company Tokyo Airport Heating & Cooling Co., Ltd. (THC) business. You can see how our facilities are used through video titled Backstage of Airport. In addition to IR Since its establishment in June 99, Tokyo Airport Heating & Cooling Co., Ltd. (THC) has been engaged in area heating and information continuously enriched. cooling operations for the in the reclaimed area offshore former, giving safe and stable supply of thermal energy the top priority. Heating and cooling energy is generated at the Energy Center and supplied to various facilities in the airport including government offices, Terminal s No. and No.. As years have passed since it started its service, the Company started to carry out a -year plan, incorporating eco-friendly and energy-saving measures, to renew equipments such as freezers and boilers from the fiscal year ended March,. Corporate Profile (As of March, ) Facilities Company Name: Tokyo Airport Heating & Cooling Co., Ltd. (THC) Established: August, 989 Description of Business: Energy Center () Providing various facilities in the with air conditioning Site area:,m area:,7m Total floor space: 9,55m 5-story reinforced concrete building () All businesses related to the above Shareholders: Airport Facilities Co., Ltd. (6.%), Other (9.7%) Boilers,5RT x,rt x Absorption chiller,5rt x 7 Water-pipe boiler 5 T/H x Flue boiler 5 T/H x In public conduit Pipeline About 5,5 m pipe system Suspended About m Buried Pipe diameter About 7 m Cooling pipes φ5, Steam and circulating-water pipes φ65 5 Backstage of Airport presents dynamic images and sounds of Hangers, Maintenance s, Aircraft Cleaning Facilities, and Multi-purpose s (Sogo s). Top interview Energy-saving high efficiency freezer Water-saving cooling water recycling equipment Pipeline (in public conduit) Maintenance s Aircraft Cleaning Facilities -hour control room Corporate Information Main customers: Japan Airport Terminal Co., Ltd. All Nippon Airways Co., Ltd. Airport Facilities Co., Ltd. Freezer Turbo chiller Business Review Location: Headquarters Energy Center -5-9, Haneda Airport,,- TEL (Main),5RT x Thermal energy generators Capital:,9 million yen AFC Annual Report Multi-purpose (Sogo ) AFC Annual Report

8 Consolidated Financial Data & Industry Related Data (Ten-year Summary) Primary Consolidated Financial Data Charts (Five-year Trend) Net Sales Ordinary Income / Net Income Net Sales by Segment ROE Equity Ratio Debt to Equity ( Million) ( Million) ( Million) (%) (%) (Times), 6,, ,, 5,, 5, 5,6,69,55,86,68 9/ / / / / 9/ / / / / 9/ / / / / 9/ / / / / 9/ / / / / 9/ / / / / Ordinary Income Net Income Real Estate Business Area Heating & Cooling Business ROE = Net income / Equity capital (average) Debt to equity = Interest-bearing debt (year end) / Equity capital (year end) Water supply & Drainage and Other Ten-year Financial Summary & Industry Related Data 5,,,,, 5,,,5 99,7,96,5,79,9,78 5,, 5,, 5,,967,758 7,58,896,79 6,6,5, 5,68,99,57,58,68,, For the Year Net Sales ( Million) Operating Income ( Million) Ordinary Income ( Million) Net Income ( Million) EBITDA ( Million) Cash Flows from Operating Activities ( Million) Cash Flows from Investing Activities ( Million) Cash Flows from Financing Activities ( Million) Depreciation Expense ( Million) Business Investment in Plant and Equipment ( Million) At the Year End Net Assets ( Million) Total Assets ( Million) Interest-bearing Debt ( Million) Equity Capital ( Million)* Per Share Data Net Income per Share ( ) Net Assets per Share ( )* Dividends per Share ( ) Average Number of Shares during the Period (Shares) Management Index Equity Ratio (%) Debt to Equity (Times) ROE (%) Ordinary Income to Total Assets (%) Operating Margin (%) Payout Ratio (%)* Dividends to Net Assets (%)* Employees (Consolidated)* 5 Data Related to Number of Domestic Passengers Number of International Passengers Volume of Domestic Cargoes (ton) Volume of International Cargoes (ton) / 5/ 6/ 7/ 8/ 9/ / / / / 8,5,866,,5,55 8,999 (,) (6,8) 6,59,998 5, 87,55 7,87 5, ,7, % 7.% ,96,96 5,58 65,7 6,8 5,,88,7,868 8,7 (,6) (7,6) 6,69,98 6,66 8,,78 6, ,56, % 9.5% ,66,9 89,59 65,9,8 5,7,87,687,787 8,66 (,) (6,7) 5,6, 9,75 77, 6,9 9, ,668, %.8% ,9,65,,76 678,9,89,588 5,9,765,6, 7,575 (,) (5,76) 5,9,89,85 7,85,, ,666, %.% ,65,79,67,8 7,6 5,7 5, 5,,868,99,8 8,5 (6,996) 5,8 6,,6 76,86,96, ,665, %.9% ,95,,95,769 78,5 6,595 5,6,86 5,,,76 8, (,9) (,77) 5, 5,95 5,78 75,8 9,566, ,66, % 9.% ,57,57,8, 757,8,59,69,8,5 99 6,7 7, (,59) (,9) 5,5,7,897 7, 6,57, ,66, % 6.% ,,75,756,5 7,59 5,56,55,86,96,5 8,757 7,659 (,95) (,975) 5,7,55 6,6 7,8,, ,66, %.% ,88,7,88, 7,787 6,7,86,77,7,79 7,,86 (,699),7,8 7,77 7,7 7,86 8,9 5, ,66, %.% ,,6 7,67,7 696,8,5,68,6,9,78 6,5 5,5 (,8) (,56),,66 7,6 7,7 5,9 5, ,66, % 6.%.8. 8 Business Review Corporate Information * Shareholders' equity until the fiscal year ended March, 6 * Shareholders' equity per share until the fiscal year ended March, 6 * Non-consolidated basis until the fiscal year ended March,. Consolidated basis from the fiscal year ended March, 5. * Dividend on equity ratio (non-consolidated basis) until the fiscal year ended March, 6, and, dividend on net assets ratio from the fiscal year ended March, 7 (consolidated basis) *5 Narita Airport Facilities Co., Ltd. was subject to the consolidation until the fiscal year ended March,. AFC Annual Report AFC Annual Report

9 List of Facilities (AS of March, ) Location Type Facility name Date of completion Major use Total Major tenants Location Type Facility name Date of completion Major use (acquisition) floor space (acquisition) Total floor space Major tenants Sogo No. (Apr. 97),887 m ALL NIPPON AIRWAYS CO., LTD., etc. Kansai International Airport Large size aircraft hangar at the Kansai International Airport Mar. 5, m Sogo No. Jul. 97 9,5 m ALL NIPPON AIRWAYS CO., LTD., etc. Kobe Airport Vacant land for hangar 6,85 m Sogo No. Feb. 976 /Workshop,6 m Japan Airport Terminal Co., Ltd. Kobe Airport Nov. 8,65 m Eurocopter Japan Co., Ltd. Sogo No. Jun. 98,677 m HAZAMA ANDO CORPORATION, etc. Hiroshima heliport Small size aircraft hangar No. Oct m Aero Asahi Corporation, etc. Sogo No. 5 Nov. 98 /Workshop,9 m ALL NIPPON AIRWAYS CO., LTD., etc. Hiroshima heliport Small size aircraft hangar No. Jun m Nakanihon Air Service CO., LTD. Sogo No. 6 May 989,886 m Shin Nippon Air Technologies Co., Ltd., etc. Hiroshima heliport Annex building Sept m All Nippon Helicopter Co., Ltd., etc. Sogo No. 7 May 99 Simulator room/lecture room, m panda Flight Academy Inc. Fukuoka Airport Small size aircraft hangar Feb m NishiNipponAirLines Co., Ltd., etc. Sogo No. 8 (Mar. 995) /Maintenance shop,66 m Fukuoka Airport Sept m Large hangar Apr. 97,88 m Skymark Airlines Inc. Fukuoka Airport, etc. /Materials & oil storage 9 m NishiNipponAirLines Co., Ltd., etc. Engine Shop No. Aug. 979 Plating plant,6 m Kitakyushu Airport Kitakyushu Airport Training Center Aug. Simulator room/lecture room,965 m Star Flyer Inc. Energy Center Sept. 97 Chiller room/boiler room,6 m Vacant land 9,9 m Dec m Common hangar No. Nov. 97, m Utility Center Apr. 99 /Substation 8,78 m ALL NIPPON AIRWAYS CO., LTD., etc. Common hangar No. Oct. 98,7 m All Nippon Helicopter Co., Ltd. West Maintenance Center Annex Jul. 99 Jun. 99 /Vehicle Maintenance,9 m 9,99 m Skymark Airlines Inc. Skymark Airlines Inc. Kagoshima Center Transmitting station/, etc. Sept. 989 Apr. 97 Transmitting station 8 m m Kyushu Electrical Safety Inspection Association, etc. Ground Support Equipment (GSE) Maintenance Shop (Mar. ) Vehicle Maintenance, etc., m JAL Ground Service Co., Ltd., etc. Parts storage Jul. 998 Storage 5 m Gas governor station Technical Center No. Technical Center No. Technical Center No. extended Domestic Air Cargo Terminal (E- to wing, W- to wing) Domestic Air Cargo Terminal (E-5 wing) Domestic Air Cargo Terminal (E-6 wing) Domestic Air Cargo Terminal (E- wing) extended ARC Cargo Center Annex Eastern ultrahigh voltage sub station Apr. 99 (Mar. ) Dec. Mar. 7 Aug. 99 Mar. 998 Dec. Sept. 7 Jul. 99 Aug. 99 Aug. 99 Gas governor room Maintenance shop for aircraft parts, etc. Maintenance shop for aircraft parts, etc. Maintenance shop for aircraft parts, etc. Cargo handling Cargo handling Cargo handling Cargo handling /Substation Substation 6 m 8, m,7 m,86 m 67,5 m,7 m,6 m 65 m,88 m,77 m 5 m TOKYO GAS Co., Ltd. ALL NIPPON AIRWAYS CO., LTD., etc. Skynet Asia Airways Co., Ltd. FUKUYAMA TRANSPORTING Co., Ltd. Nagai Co., Ltd. TFK CORPORATION, etc. ANA Airport Handling Co., Ltd., etc. Naha Airport Naha Airport Naha Airport Naha Airport Naha Airport Small size aircraft hangar Oil and fat storage building wing at small size hangar Tokyu Stay Kamata Tokyu Stay Kamata Sky Residence Minami Kamata Sky Residence Minami Kamata Maison Otorii Maison Otorii Mar. 996 Mar. 996 Jun. 999 Aug. 6 Jun. Mar. Nov. (Mar. 8) Oil storage Hotel Apartments Apartments 565 m m 5 m m 85 m 6 m, m 98 m,7 m 97 m,7 m Ilas Air Co., Ltd., etc. Ilas Air Co., Ltd., etc. Ilas Air Co., Ltd. All Nippon Helicopter Co., Ltd. Tokyu Relocation Co., Ltd. ANA FACILITIES CO., LTD. YANASE&CO., LTD. Business Review Corporate Information Large size cleaning facilities Mar. 7 Aircraft cleaning facilities 5 m Minato-ku, Tokyo Aviation (Koku Kaikan) (Feb. ) 6,68 m Japan Aeronautic Association Engine Maintenance, South Wing Feb. 8 Engine maintenance shop 9,768 m ALL NIPPON AIRWAYS CO., LTD. Chuo-ku, Tokyo Kyodo (Muromachi -chome) 879 m Component Maintenance Apr. 9 Maintenance shop for aircraft parts, etc.,7 m ALL NIPPON AIRWAYS CO., LTD. Chuo-ku, Tokyo Kyodo (Muromachi -chome) (Dec. ) 5,5 m KYODO SHISETSU Co., Ltd., etc. T, etc. 6 m JAL facilities Co., Ltd. Chuo-ku, Tokyo Kyodo (Muromachi -chome) 9 m Subtotal,7 m Chuo-ku, Tokyo Kyodo (Muromachi -chome) (Dec. ) 5, m Unitika Trading Co., Ltd., etc. New Chitose International Airport No. Nov. 97, m ALL NIPPON AIRWAYS CO., LTD. Narita city, Chiba, etc. (Off-site),67 m New Chitose International Airport Administration office Dec m Kimitsu city, Chiba,89 m New Chitose International Airport Jun m Izumisano city, Osaka Rinku International Logistics Center 9,5 m New Chitose International Airport Warehouse, etc. Dec. 97 Equipment storage/ 8 m Skymark Airlines Inc. Izumisano city, Osaka Rinku International Logistics Center (Sept. ) /Cargo handling 5,85 m Kintetsu World Express, Inc., etc. Sendai Airport Small size aircraft hangar No. Jun m Kyoritsu Air Survey Co., Ltd. Total 86,859 m 7,8 m Sendai Airport Small size aircraft hangar No. Nov. 99,86 m TOHO AIR SERVICE Co., Ltd. Sendai Airport Annex building Jun m TOHO AIR SERVICE Co., Ltd., etc. Sendai Airport Feb. 996 Sendai Airport Warehouse, etc. Dec. 97 Materials and oil storage 9 m TOHO AIR SERVICE Co., Ltd., etc. Nagoya Airport Feb., m J-AIR Corporation Central Japan International Airport Feb. 5 9 m Osaka International Airport Osaka Sogo Dec. 968,66 m J-AIR Corporation, etc. Osaka International Airport May m Kansai International Airport Jul. 99,886 m 5 AFC Annual Report AFC Annual Report 6

10 Corporate Governance Corporate Profile Basic Philosophy Corporate Name: Airport Facilities Co., Ltd. (AFC) Directors (as of June 7, ) We are fully aware of the managing duties entrusted by our shareholders as well as our social corporate responsibilities in doing our business which handles a large number of passenger traffic and a large volume of cargo. With our mission and corporate philosophy in mind, we strive to complete our corporate governance to improve our corporate value and for the common benefit of our shareholders. Structure of Organization Our corporate governance system is controlled by the Board of Directors and Board of Corporate Auditors and we adopt the Corporate r System aiming at rapid decision-making, etc. Furthermore, we strive to ensure managerial compliance, Diagram of Internal Control System Supervision Business Execution Accounting Auditors Board of Executive Directors Board of Corporate rs Managers Meeting General Meeting of Shareholders Board of Directors President appropriateness and efficiency by maintaining and enhancing the internal control system shouldered by the Audit monitoring our business activities, Compliance Committee, and Risk Management Committee. Board of Corporate Auditors Compliance Committee Risk Management Committee Audit Bureau: General Affairs Department, etc. Internal Control Established: February 97 President and CEO Capital: 6,86. million yen Executive Vice President Employees: 8 (Consolidated as of March, ) Executive Vice President Main Banks: Development Bank of Japan Resona Bank Mizuho Corporate Bank The Bank of Tokyo-Mitsubishi UFJ Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Trust Bank Executive Vice President Senior managing director Senior managing director Managing Director Managing Director Managing Director Director Director Director Director Full-time Statutory Auditor Full-time Statutory Auditor Statutory Auditor Statutory Auditor Senior Corporate r Senior Corporate r Stock Information (as of March, ) Stock Listings: Tokyo Stock Exchange (TSE) st Section (Ticker Code: 886 ) Total Number of Shares Authorized:,8, Total Number of Shares Issued: 5,9,75 Number of Shareholders: 5, Tomoyuki Takahashi Hiroshi Maruyama Susumu Fukushima Kenji Inaoka Toshiyuki Nagayoshi Hiroyuki Hoshi Yoshiharu Iwami Yukio Abe Kousei Ashikaga Keisuke Komatsu Kazuhiko Muraishi Hayao Hora Toshiaki Norita Akihiko Yamada Yoshimitsu Amemiya Kiyoshi Terashima Akihiko Shiba Mineo Tsuguchi Hiroki Osawa Business Review Corporate Information Departments and Consolidated Subsidiary Major Shareholders Shareholder Number of Shares Owned (thousands) Ratio of Shareholding (%) Japan Airlines International Co., Ltd.,5 9.6 Internal Control System Compliance Risk Management Internal Control over Financial Reporting We have set up a Compliance Committee chaired by the president and composed of all representative directors and fulltime statutory auditors. The Committee examines important matters necessary to ensure our executive and employees the due execution of duty in compliance with laws and ordinances, the articles of corporation or in-house rules, bringing our whole group proper operations, prevention of compliance violations, legal risk avoidance or reduction. Our Group which builds, and manages functional facilities indispensable for airports, is responsible for supporting the safe airport operation as well as flight operation. In this context, our Group has set up a Risk Management Committee comprised of directors, department heads, and representatives of subsidiaries, and strives to maintain and improve its comprehensive risk management system in order that no attendant risk on our business activities may hinder smooth airport operation and flight. The Audit, under the direct control of the president, handles responding to the internal control reports required by the Financial Instruments Exchange Act, audits and evaluates our business from a wide-ranging perspective in order to ensure proper operations. Our Group is aware of the value of trustworthy disclosures, financial reports, etc., and it will continuously strive to work internal control system effectively and ameliorate it. ALL NIPPON AIRWAYS CO., LTD,5 9.6 Development Bank of Japan Inc. 6,9.6 KOKUSAI KOGYO HOLDINGS CO., LTD.,7. Tomio Banno,.5 Composition of Shareholders Foreign Investors.5% Securities Companies.7% Other Japanese Corporations The Company (Treasury Stock) 5.9% 5.7% Individuals 7.% Financial Institutions.% Stock Price and Trading Volume (Monthly) ( ) Stock price 8 6 (Thousand shares) Trading volume,,, / /5 /6 /7 /8 /9 / / / / / / 7 AFC Annual Report AFC Annual Report 8