#1Second Quarter of FY18 Earnings Presentation Material (November 13, 2018) * This document has been translated from the Japanese original, for reference purposes only. If there is any discrepancy between this translated document and the Japanese original, the original shall prevail. Big Japan Airport Terminal Co., Ltd. http://www.tokyo-airport-bldg.co.jp/#2Contents Second Quarter of FY18 Earnings Presentation Material 1. Review of Consolidated Financial Results for FY18 2Q (1) Business Environment (2) Initiatives for Management Issues for the Current Term (3) Consolidated Financial Results 2. Consolidated Financial Forecast for FY18 (1) Business Environment P 2 P 3 P 4 (2) Direction in Second Half of the Year for Management Issues for the Current Term P (3) Consolidated Financial Forecast for FY18 P 5 6 P 7 P 9 (4) Forecast of Operating Revenues by Segment 3. Progress under the Medium-Term Business Plan (1) Progress of Business Strategies P10 (2) Expand Business Domains that Leverage Strengths and Diversify Earnings P11 (3) Pursue 'Vision' for Haneda Airport P12 (4) Redevelop Earnings Base and Establish Competitive Position P14 (5) Idea of the Profit-loss Plan and Guidelines P15#3Contents Supplementary Material Reference Material 1. Details of Consolidated Financial Results for FY18 2Q 1. Outline of the Company (1) Changes in Passenger Volume P 17 (1) Business Details P 36 (Haneda, Narita, Kansai and Chubu Centrair) (2) Basic Philosophy and Management Policy P 37 (2) Consolidated Financial Results for FY18 2Q P 18 (3) Company History P 38 (3) Financial Results by Segment (i) Facilities management P 19 (4) Group Companies P 39 (ii) Merchandise sales P 20 (5) Revenue Composition/Details by Segment /Composition of sales P 40 (iii) Food and beverage P 2 1 (6) Changes in Capital Investment P 41 (4) Breakdown of Selling, General and P 22 Administrative Expenses (5) Changes in Non-Operating Income/Expenses P 2 3 and Extraordinary Income/Loss (6) Consolidated Balance Sheets P 24 (7) Consolidated Statements of Cash Flows P 25 2. Summary of Tokyo International Airport (Haneda) (1) Location Map P42 (8) Capital Expenditure and Depreciation Expenses P 26 [Reference] Purchasing Trends of Non-Japanese Passengers by Nationality P 27 2. Details of Consolidated Financial Forecast for FY18 (1) Consolidated Financial Forecast for FY18 (2) Comparison of Passenger Volume (3) Domestic Destinations and Flights (4) International Destinations and Flights (5) Summary of Tokyo International Air Terminal Corporation P4 3 P 44 P 45 P 46 P 29 (2) Financial Forecast by Segment (i) Facilities management (ii) Merchandise sales (6) International Rating of the Haneda Airport Passenger Terminal P 47 P 30 P 3 1 P 32 (iii) Food and beverage 3. Other Information (1) Capital Expenditure and Depreciation Expenses P 33 (2) Changes in Operating Revenues/Ordinary P 3 4 Income/Cash Flows#4Earnings Presentation Material Second Quarter of FY18 (FY18 2Q) 1. Review of Consolidated Financial Results for FY18 2Q 2. Consolidated Financial Forecast for FY18 3. Progress under the Medium-Term Business Plan (1) Progress of Business Strategies (2) Expand Business Domains that Leverage Strengths and Diversify Earnings (3) Pursue 'Vision' for Haneda Airport (4) Redevelop Earnings Base and Establish Competitive Position (5) Idea of the Profit-loss Plan and Guidelines#51. Review of Consolidated Financial Results for FY18 2Q (1) Business Environment Increased passenger volume continues, slowdown in growth after July due to the effects of natural disasters, etc. Spending on shopping among travel consumption by non-Japanese visitors to Japan declines Business Environment ➤ Non-Japanese visitors to Japan up approx. 14% during April to June, slowdown increases approx. 1% during July to September ➤ Significant decline in non-Japanese visitors to Japan from East Asia in September to below the YoY figure for the first time in the last 5 years and 8 months ➤ Decline in spending on shopping by non-Japanese visitors to Japan by approx. 10% YoY for the first half of the year. Large decline after July Effects of natural disasters, etc. < A Haneda domestic flight passenger volume declines YoY in September due to effects of typhoons and earthquakes Substitution demand in terms of passenger volume and goods sales due to increased flights at Narita Airport and Chubu Centrair Airport, despite the effects of natural disasters at Kansai Airport ▸ Another effect of canceled Haneda domestic flights due to engine inspection of ANA aircraft First-half passenger volumes (YoY comparison) Airport First-half passenger volume FY17 Initial forecasts FY18 Rate of change Rate of change Difference (10 thousands) (10 thousands) (%) (%) (P) Haneda Domestic 3,477 3,455 0.6 2.1 -1.5 Haneda International 906 844 7.4 3.3 4.1 Total Haneda 4,383 4,300 1.9 2.3 -0.4 Narita 1,811 1,669 8.5 3.2 5.3 Kansai 1,075 1,059 1.5 8.7 -7.2 Chubu Centrair 304 282 7.6 5.0 2.6 Japan Airport Terminal Co., Ltd. 02#61. Review of Consolidated Financial Results for FY18 2Q (2) Initiatives for Management Issues for the Current Term Management Issues for the Current Term Status of Initiatives for the First Half of the Year • Strengthening of cooperative structure in natural disasters • Seamless CS promotion activities for improved service level Realize concrete benefits from TIAT consolidation and optimize its effects (TIAT: Tokyo International Air Terminal Corporation. The same applies below) • . •Promotion of company-wide information sharing for quick decision making • Seamless promotion of advanced computerization and introduction of IT for domestic and international terminals • Promotion of procurement cost reduction project including TIAT Respond swiftly to changes in environment (respond in terms of facilities and services, establish new company in run-up to 2020) •May 2018: North-side boarding station at Haneda Airport Domestic Passenger Terminal 2 started operation ⚫July 2018: Establishment of Haneda Future Research Institute • July 2018: Flying Visit Japan, a portal site for non-Japanese visitors to Japan opened • Promotion of e-commerce and other services by using IT technology Further improvements to urban duty-free stores • Enhancement of brand cosmetics • Strengthening of advertisement activities in Japan and overseas • Expansion of consumption tax-exempt sales spaces Japan Airport Terminal Co., Ltd. 03#71. Review of Consolidated Financial Results for FY18 2Q (3) Consolidated Financial Results Large increase in operating revenues and operating income due to TIAT consolidation, temporary extraordinary income and losses Growth trend in merchandise sales continues, despite a slowdown in growth seen for duty-free stores after July Main Factors Behind Changes < Differences from previous fiscal year results (Factors other than TIAT consolidation) Sales growth in facilities management operations, mainly reflecting revenues from paid airport lounges for domestic terminal Sales growth in the merchandise sales business, reflecting opening of arrival duty-free stores at Haneda Airport and new stores at Chubu Centrair Airport, in addition to merchandise sales growth for airport duty-free stores and urban duty- free stores O Differences from initial forecasts Facility user charges revenue and operating revenue from merchandise sales beat forecasts, despite effects of decline in passenger volume due to natural disasters, etc. Some repair expenses and commissioned management fees are postponed until the second half of the year Consolidated financial results for FY18 1H Note: Figures shown are rounded down to the nearest 100 million yen. (Billions of yen) Rate of Items 1H Results LY Change Amount affected due to TIAT consolidation change Results amount Initial forecasts Amount affected due Difference to TIAT consolidation (%) Operating revenues 137.4 17.1 108.0 29.3 27.2 131.2 16.2 6.2 (Facilities management) ( 40.6) ( 11.6) ( 28.3) 12.3 43.7 ( 40.5) ( 11.2) 0.1 (Merchandise sales) ( 86.5) (5.4) ( 69.8) 16.6 23.8 ( 80.9) ( 4.9) 5.6 (Food and beverage) ( 10.2) ( 0.1) ( 9.8) 0.3 3.4 ( 9.8) (0.1) 0.4 Operating income 12.9 5.0 6.7 6.2 92.1 11.0 4.6 1.9 Ordinary income 11.7 2.2 8.7 3.0 34.4 9.9 1.8 1.8 Net income 28.2 21.2 6.1 22.0 355.3 27.0 21.1 1.2 Japan Airport Terminal Co., Ltd. 04#82. Consolidated Financial Forecast for FY18 (1) Business Environment Despite uncertainty in overseas economies and effects of natural disasters, a rise in passenger volume is expected Despite decreasing trends in spending on shopping by all non-Japanese visitors to Japan, increased sales for airport duty-free stores expected to continue Business Environment Number of Passengers (ΥΟΥ > The effects of natural disasters are limited to East Asia (China, South Korea, etc.) and a recovery trend is seen recently > Steady growth in non-Japanese visitors from Southeast Asia, Europe and the U.S. to Japan, overall increasing trends projected to continue As merchandise sales for airport duty-free stores are increasing due to opening of arrival duty-free stores at Haneda Airport and new stores at Chubu Centrair Airport, a continued increase in sales is expected to be possible through ongoing efforts to strengthen store renovation and initiatives targeting store operations ➤ Projected growth of 1.7% for the year for Haneda domestic flights, with the increasing trend expected to continue from April to June ➤ Haneda international flights expected to grow by 6.8% for the year, lifted by incorporated information on growth in late-night flights ➤ Forecasts call for continued passenger growth from international flights into Narita and Kansai Airports comparison) The number of passengers forecast for FY18 (YoY comparison) FY18 1H Airport (%) FY18 2H (%) FY18 Full-year initial Revised Difference forecasts (%) forecasts (P) (%) (10 thousands) Haneda 1 Domestic 0.6 2.8 ( 1.8) 1.7 2.0 -0.3 6,974 Haneda International 7.4 6.2 ( 2.7) 6.8 3.0 3.8 1,827 Total Haneda 1.9 3.5 ( 2.0 ) 2.7 2.2 0.5 8,801 Narita 8.5 7.1 ( 3.9) 7.8 3.5 4.3 3,609 Kansai 1.5 11.6 ( 8.7) 6.7 8.7 -2.0 2,336 Chubu Centrair 7.6 4.9 ( 5.0 ) 6.3 5.0 1.3 591 * Figures in ( ) are initial forecasts Japan Airport Terminal Co., Ltd. 05#9☐ 2. Consolidated Financial Forecast for FY18 (2) Direction in Second Half of the Year for Management Issues for the Current Term Management Issues for the Current Term Direction in Second Half of the Year Realize concrete benefits from TIAT consolidation and optimize its effects Aim to further enhance user convenience for both international and domestic flights under an even more integrated relationship with TIAT • Establish an efficient structure for business promotion through further advancing even more integrated operations toward 2020 Respond swiftly to changes in the environment (respond in terms of facilities and services, establish a new company in run-up to 2020) Further improvements in urban duty-free stores Fully prepare for 2020 in terms of facilities and services; respond to the risk of a downturn due to the effects of damage from the typhoon to Kansai Airport and the Hokkaido Earthquake • • October 2018: · • Launch of construction for renovation of Domestic Passenger Terminal 1 December 2018: Start of operation of Domestic Passenger Terminal 2 North Satellite Opening of "THE HANEDA HOUSE" at Domestic Passenger Terminal 1 Promote operations without delay by taking into account external environmental risks and with emphasis on maintaining the balance in ensuring the cost level and the profit plan Develop initiatives targeting store operations toward achieving planned figures for 2020 • Use diverse advertisement methods to further enhance the ability to attract the main target customers (Chinese passengers) • Continue to review merchandising through expanding consumption tax-exempt sales spaces or taking other initiatives Japan Airport Terminal Co., Ltd. 06#102. Consolidated Financial Forecast for FY18 (3) Consolidated Financial Forecast for FY18 Projected further increase in sales, with continuation of increased passenger volume anticipated Full scale internationalization construction at Haneda Airport and construction for renovating Passenger Terminal 1 will increase expense burden Main Factors Behind Changes A Projected additional sales growth reflecting facility user charges revenue and operating revenue from merchandise sales due to increased passenger volume at Haneda domestic and international terminals ➤ Expenses exceed the initial plan reflecting increased repair expenses due to new construction projects for the improvement of passenger terminal facilities and increased personnel expenses to secure personnel amid progress on various initiatives for 2020 in full scale, in addition to some expenses from the first half of the year Consolidated financial forecast for FY18 Note: Figures shown are rounded down to the nearest 100 million yen. (Billions of yen) FY18 2H Revised Initial forecasts forecasts FY18 1H FY18 Items Results Initial forecasts Change Change Revised Initial forecasts forecasts Change Previous fiscal year results Change (FY17) Operating revenues (*1) 137.4 ( 108.0) 131.2 6.2 139.6 ( 117.8) 134.8 4.8 277.1 266.0 11.1 225.9 51.1 12.9 8.7 Operating income 11.0 1.9 9.5 -0.7 21.7 20.5 1.2 13.4 8.2 ( 6.7) (6.6) (Operating income ratio) 9.4% 8.4% 1.0P 6.3% 7.0% -0.7P 7.8% 7.7% 0.1P 5.9% 1.9P 11.7 7.6 Ordinary income 9.9 1.8 8.2 -0.5 19.4 18.1 1.3 16.6 2.7 ( 8.7) (7.9) Net income 28.2 (6.1) 4.1 27.0 1.2 4.3 -0.1 32.4 31.3 1.1 11.7 20.6 (5.5) *1 Figures in ( ) are results for the previous fiscal year Dividend Payout ratio(+2) \23.0 \21.0 27.1% 29.9% ¥21.0 ¥21.0 *2 Calculated primarily from "gain on negative goodwill," comprised of temporary income and expenses arising from the consolidation of TIAT, excluding the tax effect amount. Japan Airport Terminal Co., Ltd. ¥44.0 ¥42.0 ¥44.0 32.2% 34.1% 30.4% Capital expenditures 54.7 60.7 Depreciation expenses 24.8 23.6 EBITDA 46.5 44.1 07#112. Consolidated Financial Forecast for FY18 (3) Consolidated Financial Forecast for FY18 (Amount affected due to consolidation of TIAT) Consolidated financial forecast for FY18 Items Revised forecasts Amount affected due to TIAT consolidation Note: Figures shown are rounded down to the nearest 100 million yen. (Billions of yen) FY18 Initial forecasts Rate of Previous fiscal year Amount Change change results affected due to (FY17) Rate of Change change (%) TIAT consolidation (%) Operating revenues 277.1 31.3 266.0 31.4 11.1 4.2 225.9 51.1 22.6 Operating income 21.7 8.8 20.5 8.7 1.2 5.9 13.4 8.2 61.6 (Operating income ratio) 7.8% 7.7% 0.1P 5.9% 1.9P Ordinary income 19.4 3.7 18.1 3.6 1.3 7.2 16.6 2.7 16.2 Net income Japan Airport Terminal Co., Ltd. 32.4 21.1 31.3 20.9 1.1 3.5 11.7 20.6 175.1 08#122. Consolidated Financial Forecast for FY18 (4) Forecast of Operating Revenues by Segment Note: Figures shown are rounded down to the nearest 100 million yen. (Billions of yen) FY18 Revised forecasts Initial forecasts Previous fiscal year Items Change Rate of change Amount affected due to TIAT Amount affected due to TIAT Change Rate of change (%) results (FY17) (%) consolidation consolidation Facilities management 81.0 20.5 80.6 20.5 0.4 0.5 58.4 22.5 38.6 Rent revenue 17.5 4.0 17.5 3.9 0.0 0.0 13.2 4.2 31.8 Facility user charges revenue 43.7 24.7 42.9 23.9 0.8 1.9 18.7 24.9 133.0 Other revenues *1 19.8 -8.2 20.1 -7.3 -0.3 -1.5 26.4 -6.6 -25.0 Merchandise sales 176.2 10.7 166.1 10.7 10.1 6.1 147.7 28.4 19.2 Sales at domestic terminal 35.7 35.2 0.5 1.4 35.1 0.5 1.6 stores Sales at international 102.1 62.4 94.8 58.3 7.3 7.7 35.4 66.6 187.6 terminal stores Other sales *1 38.4 -51.7 36.0 -47.6 2.4 6.7 77.1 -38.7 -50.2 Food and beverage 19.9 0.2 19.1 0.1 0.8 4.2 19.7 0.1 0.9 Sales from restaurants 12.4 3.0 11.8 2.7 0.6 5.1 9.8 2.5 25.9 Sales from in-flight meals 6.7 6.5 0.2 3.1 6.5 0.1 1.7 Other sales *1 0.8 -2.8 0.7 -2.5 0.1 14.3 3.2 -2.4 -75.7 *1 Main item for "Other Revenues"/"Other Sales" in each segment • Facilities management: Subcontracted work revenues, income from parking lots, income from hotel business, income from advertising and lounges, etc. Merchandise sales: . Food and beverage: Income from wholesaling (Duty-free goods, others to Narita Airport and other airports) Income from catering airline lounges, etc. Japan Airport Terminal Co., Ltd. 09#133. Progress under the Medium-Term Business Plan (1) Progress of Business Strategies "To Be a World Best Airport 2020" "Create business and earnings opportunities in pursuit of our 'Vision' for Haneda Airport and redevelop earnings base by staking out a competitive position" Three Core Strategies • . Expand Business Domains that Leverage Strengths and Diversify Earnings Increasing Earnings of Urban Duty-Free Stores Development of business in Zone 1 at former Haneda site Steady promotion for starting Palau International Airport operations Consideration of opportunities for participating in other airport operations Increasing advertising revenue through new advertisement development, etc. • Pursue 'Vision' for Haneda Airport Promotion of domestic/international shared use terminal plan (T2 internationalization) Redevelop Earnings Base and Establish Competitive Position • Opening of THE HANEDA HOUSE • Vacant space utilization measures • Lounge renovation • Business promotion for Haneda Future Research Institute • Procurement cost reduction project • Borderless EC business initiatives • Expansion of P4 parking structure · • • Start of operation of T2 north-side domestic terminal facilities Improvement of environment inside the T1 building through renovation Promote readiness for Tokyo Olympics/Paralympics • Acquire SKYTRAX 5 Star rating for fifth consecutive year Increasing T2 office space area • Incorporate robotics and other cutting-edge technologies Japan Airport Terminal Co., Ltd. 10#143. Progress under the Medium-Term Business Plan (2) Expand Business Domains that Leverage Strengths and Diversify Earnings (i) Urban Duty-free Business Progress FY18 first-half results and revised full-year forecasts Change Items 1H Results LY Results amount Rate of change (%) Full-year Initial Forecasts forecasts Difference 5.2 3.6 1.5 42.2 10.1 9.5 0.6 Operating revenues (billion yen) Operating income 0.4 0.0 0.3 (billion yen) 29 Per-unit purchases 29 32 (thousand yen) No. of purchasing 941 613 customers (people/day) 0.4 0.2 0.1 (FY18 first-half status) Rising figures for purchasing customers from China continue • Advertising in Japan and overseas strengthened, in addition to expansion of consumption tax-exempt sales spaces and new brand development (Initiatives going forward) Further improve ability to attract customers through advertising such as distribution of advertising movies on the Internet • Improve convenience with diversified payment methods (ii) Per-unit Purchasing by Chinese Passengers, Operating Revenue from Merchandise Sales (Yen) 20,000 16,000 12,000 Haneda International (Million yen) (Yen) 8,000 20,000 7,000 16,000 6,000 5,000 12,000 4,000 8,000 3,000 2,000 4,000 1,000 0 0 1Q 2Q 30 4Q 1Q FY15 2Q FY16 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY17 FY18 Operating revenue from merchandise sales Per-unit purchasing 8,000 4,000 Narita (Million yen) 3,000 2,500 2,000 0 0 1Q 2Q 3Q 4Q FY15 1Q 2Q 3Q 4Q 1Q 20 3Q 4Q 1Q 20. FY16 FY17 FY18 Operating revenue from merchandise sales Per-unit purchasing 1,500 1,000 500 (Key Points) - At both Haneda and Narita, slowdown in growth in the second quarter and YoY increasing trend for the first half of the year continues Japan Airport Terminal Co., Ltd. 11#153. Progress under the Medium-Term Business Plan (3) Pursue 'Vision' for Haneda Airport (i) Progress on Internationalization Construction at Haneda Airport Terminal 2 North Satellite started operation - Purpose: Boarding gate for departing flights at Domestic Passenger Terminal 2 - Start of operation: December 2018 Terminal 1 renovation - Target area: Passenger area 1st basement level and 1st floor - Completion of construction: End of September 2019 (tentative) - Total investment: ¥9.4 billion Domestic flight area Terminal 2 - Total investment: ¥5.0 billion International flight area Terminal 1 International flight terminal (Terminal 3) * Included in the investment plan below DE Progress of investment plan Strategic Pillar Capital expenditure 2018 2018 Change (Main factors) (Initial forecasts) (Revised forecasts) - Investment in existing TIAT facilities Pursue 'Vision' for Haneda Airport (including Haneda internationalization related items) 53.0 49.0 -4.0 ( 34.0) ( 34.0) 0.0 - Waste treatment facility expansion, etc. Redevelop Earnings Base and Establish 8.0 6.0 -2.0 Competitive Position Change in the time of implementation Realignment and Enhancement of 0.0 0.0 0.0 Organization, Human Capital and Governance Other investment Expand Business Domains that Leverage 3.0 2.0 -1.0 Strengths and Diversify Earnings Realignment and Enhancement of 0.0 0.0 0.0 Organization, Human Capital and Governance Subtotal 64.0 57.0 -7.0 Japan Airport Terminal Co., Ltd. 12 (Billions of yen) Medium-Term Business Plan 2016-2020 149.0 ( 104.0) 16.0 2.0 No change 7.0 in total 1.0 through to FY20 175.0#163. Progress under the Medium-Term Business Plan (3) Pursue 'Vision' for Haneda Airport (ii) Business Promotion for Haneda Future Research Institute Creation of new value leveraging Haneda Airport's "location" Promotion of Haneda Airport as a base for transmitting information on regional specialties, art and culture of Japan By capitalizing on Haneda Airport's "location" (real) and "Flying Visit Japan" (*) (virtual) and through product planning and sales promotions using Haneda Airport as the place for presentation, promote Haneda Airport as a base for transmitting information on regional specialties, art and culture of Japan. (*) Flying Visit Japan: Portal site for non-Japanese visitors to Japan opened in July 2018 Disaster prevention Industry Culture Art Advanced technology Education Art and science Regional revitalization Strengthening of business and expansion of business domains by leveraging JAT Group's management resources and expertise Contract consulting services, etc. By leveraging various information and data on Haneda Airport and taking advantage of the experience and expertise accumulated by the JAT Group, plan programs and provide consulting services Effect on the JAT Group Strengthening existing business X Creating new business Maximizing value of Haneda Japan Airport Terminal Co., Ltd. 13#173. Progress under the Medium-Term Business Plan (4) Redevelop Earnings Base and Establish Competitive Position (i) Vacant Space Utilization Measures Promotion of vacant space utilization measures by increasing leasable space available to airline companies and luring tenants Lure food and beverage tenants (Marketplace on the 5th fl. of Passenger Terminal 1) - Develop golf studio tenant (Marketplace on the 5th fl. of Passenger Terminal 1) 新宿案永 Grand opening of "THE HANEDA HOUSE" in mid-December this year THE HANEDA HOUSE Features: Rental office, golf studio, café, tailor-made suit, head spa salon, massage fitness club, etc. Expected effects of the initiative Provision of new airport services Improved vacancy rate (End of Sep. 2018) 3.8% (Target indicator for FY20) Max. 2.5% * Domestic Passenger Terminals only Japan Airport Terminal Co., Ltd. DO Gollins UNIS 11 14 Yakiniku Shinjuku Koei (opened on Sep. 25, 2018) GDO Golfers LINKS HANEDA (opened on Oct. 1, 2018) New value added to Haneda Airport Profit in the real estate business maximized#183. Progress under the Medium-Term Business Plan (5) Idea of the Profit-loss Plan and Guidelines Promote business strategy with a view to achieving the profit-loss plan and the guidelines for FY20 (Operating revenues: ¥300 billion; ROA (EBITDA): 12%: Operating income ratio: 8%) (Business environment that serves as opportunities) > Increase in the number of air passengers due to an increase in in-bound demand and growth in late-night international flights at Haneda Airport > Steady increase in sales for merchandise sales business through opening of new stores at other airports and outside airports (Business environment to note) > Impact on in-bound demand and the number of air passengers due to natural disasters ➤ Uncertainty in trends of consumption by Chinese visitors to Japan and economic trends in Japan The profit-loss plan for FY18 is forecast to exceed the initial plan The plans for FY19 and FY20 require closer examination due to a high level of uncertainty regarding the business environment. However, we will aim to develop plans that exceed the operating revenue at the FY18 level. FY18 Japan Airport Terminal Co., Ltd. 15 FY19-20#19Earnings Explanatory Meeting Second Quarter of FY18 Supplementary Material 1. Details of Consolidated Financial Results for FY18 2Q 2. Details of Consolidated Financial Forecast for FY18 3. Other Information * This document has been translated from the Japanese original, for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Japan Airport Terminal Co., Ltd. http://www.tokyo-airport-bldg.co.jp/#201. Details of Consolidated Financial Results for FY18 2Q (1) Changes in Passenger Volume (Haneda, Narita, Kansai and Chubu Centrair) (Thousand passengers) 69,741 (+1.7%) 68,559 (+3.7%) 66,093 (Thousand passengers) 20,000 18,276 17,120 (+6.8%) (+9.5%) 72,000 Haneda Airport - domestic flights 70,000 FY18 forecast +1.7% 68,000 (Initial forecast +2.0%) 66,000 64,000 62,000 62,656 62,553 60,000 61,410 58,000 56,000 54,000 52,000 1H results 2H forecast + up 2.8% up 0.6% Initial forecasts + up 2.1% Initial forecasts + up 1.8% FY 50,000 2012 2013 2014 2015 2016 2017 2018 ← Results Forecast → (Thousand passengers) Narita Airport - international flights 36,092 (+7.8%) 37,000 FY18 forecast +7.8% (Initial forecast +3.5%) 35,000 33,479 (+3.3%) 32,410 33,000 31,055 30,862 31,000 29,302 29,000 27,000 1H results 25,000 up 8.5% 2H forecast + up 7.1% Initial forecasts + up 3.2% Initial forecasts + up 3.9% FY 23,000 2012 2013 2014 2015 2016 2017 ← Results 2018 Forecast → 17 Haneda Airport - international flights 18,000 FY18 forecast +6.8% 15,642 16,000 (Initial forecast +3.0%) 13,434 14,000 11,558 12,000 Oct. 2016 Flights to and from the U.S. up from 8 to 12-flights/day Oct. 2015 Flights to and from China up from 8 to 20 flights/day-- 10,000 Mar. 2014. 8,039 Increase in the number of landing slots (30,000/year) 8,000 6,000 4,000 1H results + up 7.4% 2H forecast up 6.2% Initial forecasts + up 3.3% Initial forecasts up 2.7% 2,000 0 2012 2013 2014 2015 2016 2017 ← Results (Thousand passengers) 30,000 25,000 [Kansai Airport - international flights FY18 forecast +6.7% (Initial forecast +8.7%) 1H results up 1.5% Initial forecasts + up 8.7% 2H forecast + up 11.6% Initial forecasts + up 8.7% 19,151 20,000 15,000 10,000 17,275 13,523 12,051 FY 2018 Forecast (+14.4%) 21,905 (+6.7%) 23,369 - Chubu Centrair Airport international flights FY18 forecast +6.3% (Initial forecast +5.0%) 5,234 (+6.3%) (+6.3%) 5,564 5,914 4,467 4,503 4,900 5,000 0 2012 Passenger volume 2013 1H results + up 7.6% 2H forecast + up 4.9% + + 2014 + 2015 Initial forecasts + up 5.0% Initial forecasts + up 5.0% + FY 2016 2017 ← Results 2018 Forecast → Results: Figures published by Minister of Land, Infrastructure, Transport and Tourism, Narita International Airport Corporation, Kansai International Airport Co., Ltd. And Central Japan International Airport Co., Ltd. Forecast: Created by the Company#211. Details of Consolidated Financial Results for FY18 2Q (2) Consolidated Financial Results for FY18 2Q FY18 2Q (Results) FY17 2Q (Results) Initial forecast (May 2018) Items Change Amount affected due Rate of Change Ratio Ratio Ratio to TIAT consolidation Pensioenen Set, Stats, Stres, Difference Amount affected due to TIAT consolidation Millions of yen % Millions of yen Millions of yen % Millions of yen % Millions of yen % Millions of yen Millions of yen Operating revenues 137,423 100.0 17,195 108,066 100.0 29,356 27.2 131,200 100.0 16,200 6,223 Facilities management 40,661 29.6 11,601 28,305 26.2 12,356 43.7 40,500 30.8 11,200 161 Merchandise sales 86,560 63.0 5,484 69,895 64.7 16,665 23.8 80,900 61.7 4,900 5,660 Food and beverage 10,201 7.4 109 9,866 9.1 335 3.4 9,800 7.5 100 401 Cost of sales 66,729 48.6 58,047 53.7 8,681 15.0 62,600 47.7 4,129 Cost of sales of merchandise (Ratio) Cost of sales of food and beverage 61,112 44.5 52,573 48.6 8,539 16.2 57,200 43.6 3,912 ( 70.6%) ( 75.2%) (-4.6P) ( 70.7%) (-0.1P) 5,616 4.1 5,473 5.1 142 2.6 5,400 4.1 216 (Ratio) ( 55.1%) ( 55.5%) (-0.4P) ( 55.1%) Gross profit 70,694 51.4 50,019 46.3 20,675 41.3 68,600 52.3 2,094 Selling, general and 57,732 42.0 43,270 40.1 14,461 33.4 57,600 43.9 132 administrative expenses Operating invome 12,961 9.4 5,015 6,748 6.2 6,213 92.1 11,000 8.4 4,600 1,961 Non-operating income/loss Ordinary income Extraordinary income/loss -1,200 -0.8 11,761 23,162 16.9 1,999 1.9 -3,199 -160.0 -1,100 -0.9 -100 8.6 2,223 8,748 8.1 3,013 34.4 9,900 7.5 1,800 1,861 -11 -0.0 23,173 23,000 17.5 Net income attributable to owners of parent 28,202 20.5 21,231 6,193 5.7 22,008 355.3 27,000 20.6 21,100 1,202 * Ratio: Cost of sales of merchandise / Operating revenues of merchandise Ratio: Cost of sales of food and beverage / Operating revenues of food and beverage 18 Note: Figures shown are rounded down to the nearest million yen.#221. Details of Consolidated Financial Results for FY18 2Q (3) Financial Results by Segment (i) Facilities management FY18 2Q (Results) FY17 2Q (Results) Initial forecast (May 2018) Items Change Amount affected due Rate of Change Difference Ratio Ratio Ratio to TIAT consolidation Amount affected due to TIAT consolidation Millions of yen % Millions of yen Millions of yen % Millions of yen % Millions of yen % Millions of yen Millions of yen Sales to external customers Rent revenues 8,693 20.0 1,974 6,639 22.7 2,053 30.9 8,800 21.1 2,000 -106 Facility user charges revenues 21,663 50.0 12,179 9,448 32.2 12,215 129.3 21,500 51.4 11,900 163 Other revenues 10,303 23.8 -2,551 12,217 41.7 -1,913 -15.7 10,200 24.4 -2,700 103 Subtotal 40,661 93.8 11,601 28,305 96.6 12,356 43.7 40,500 96.9 11,200 161 Intersegment sales 2,682 6.2 1,767 989 3.4 1,692 171.0 1,300 3.1 400 1,382 Total 43,343 100.0 13,368 29,294 100.0 14,048 48.0 41,800 100.0 11,600 1,543 Operating expenses 34,897 80.5 8,821 25,507 87.1 9,389 36.8 35,800 85.6 9,200 -902 Operating income 8,446 19.5 4,546 3,787 12.9 4,659 123.0 6,000 14.4 2,400 2,446 (Ratio) 19.5%) ( 12.9%) ( 6.6P) 14.4%) (5.1P) ⚫ Rent revenues: International terminal rental income +1.9 billion Increase in space leased to airline companies, etc. +0.1 billion . • Facility user charges revenues: Fees for use of passenger facilities for international flights, etc. +12.1 billion . Other revenues: Revenues from parking fees, paid airport lounges, advertising fees, etc. for international terminal Revenues from paid airport lounges, advertising fees, etc. for domestic terminal +2.3 billion Decrease in Haneda international terminal commissioned facility management revenues from consolidation +0.2 billion - 4.1 billion * Upon distributing expenses between the facilities management and the merchandise sales segments, differences between the initial forecasts and the results affected the operating income of the segment. 19 Note: Figures shown are rounded down to the nearest million yen.#231. Details of Consolidated Financial Results for FY18 2Q (3) Financial Results by Segment (ii) Merchandise sales FY18 2Q (Results) FY17 2Q (Results) Initial forecast (May 2018) Items Change Amount affected due Rate of Change Difference Ratio Ratio Ratio to TIAT consolidation Amount affected due to TIAT consolidation Millions of yen % Millions of yen Millions of yen % Millions of yen % Millions of yen % Millions of yen Millions of yen Sales to external customers Domestic terminal stores 17,956 20.6 17,564 25.0 391 2.2 17,900 22.0 56 International terminal stores 50,200 57.7 29,779 16,903 24.0 33,296 197.0 45,800 56.3 27,700 4,400 Other sales 18,404 21.2 -24,294 35,427 50.4 -17,023 -48.1 17,200 21.2 -22,800 1,204 Subtotal 86,560 99.5 5,484 69,895 99.4 16,665 23.8 80,900 99.5 4,900 5,660 Intersegment sales 473 0.5 28 415 0.6 58 14.0 400 0.5 73 Total 87,034 100.0 5,512 70,310 100.0 16,723 23.8 81,300 100.0 4,900 5,734 Operating expenses 78,931 90.7 3,888 65,095 92.6 13,836 21.3 73,200 90.0 2,000 5,731 Operating income 8,102 9.3 1,624 5,215 7.4 2,886 55.4 8,100 10.0 2,900 * 2 (Ratio) ( 9.3%) ( 7.4%) ( 1.9P) (10.0%) (-0.7P) ⚫ Domestic terminal stores: • International terminal stores: Increase in sales of directly managed stores at Haneda domestic terminal, etc. Increase in sales of duty-free stores at Haneda international terminal Increase in sales of directly managed stores at Narita Airport Decrease in sales of boutique store at Kansai Airport Sales of directly managed stores at Chubu Centrair Airport Increase in sales of urban duty-free stores . Other sales: Increase in wholesale sales to Narita Airport, Chubu Centrair Airport and other regional airports +0.3 billion +29.7 billion +1.4 billion 0.4 billion +0.6 billion +1.5 billion +2.7 billion Decrease in Haneda international terminal duty-free store wholesale sales from consolidation -19.8 billion * Upon distributing expenses between the facilities management and the merchandise sales segments, differences between the initial forecasts and the results affected the operating income of the segment. 20 Note: Figures shown are rounded down to the nearest million yen.#241. Details of Consolidated Financial Results for FY18 2Q (3) Financial Results by Segment (iii) Food and beverage FY18 2Q (Results) FY17 2Q (Results) Initial forecast (May 2018) Items Change Amount affected due Rate of Change Difference Ratio Ratio Ratio to TIAT consolidation Amount affected due to TIAT consolidation Millions of yen % Millions of yen Millions of yen % Millions of yen % Millions of yen % Millions of yen Millions of yen Sales to external customers Sales from restaurants 6,423 55.7 1,500 5,011 44.9 1,411 28.2 6,100 54.5 1,400 323 Sales from in-flight meals 3,405 29.6 3,277 29.3 127 3.9 3,300 29.5 105 Other sales 372 3.2 -1,391 1,577 14.1 -1,204 -76.4 400 3.5 -1,300 -27 Subtotal 10,201 88.5 109 9,866 88.3 335 3.4 9,800 87.5 100 401 Intersegment sales 1,322 11.5 1,303 11.7 19 1.5 1,400 12.5 -77 Total 11,523 100.0 109 11,169 100.0 354 3.2 11,200 100.0 100 323 Operating expenses 11,031 95.7 130 10,727 96.0 303 2.8 10,700 95.5 100 331 Operating income 492 4.3 -20 441 4.0 50 11.5 500 4.5 -7 (Ratio) 4.3%) (4.0%) ( 0.3P) (4.5%) (-0.2P) . Sales from restaurants: • Sales from in-flight meals: Other sales: Revenues from international terminals restaurants Decrease from closure of some domestic terminal restaurants Increase in sales from new customer agreements, etc. Decrease in commissioned facility management revenues for international terminal stores + 0.1 billion 1.2 billion +1.5 billion - 0.0 billion 21 Note: Figures shown are rounded down to the nearest million yen.#251. Details of Consolidated Financial Results for FY18 2Q (4) Breakdown of Selling, General and Administrative Expenses Items FY17 2Q (Results) Change FY18 2Q (Results) Rate of change Ratio Ratio Millions of yen % Millions of yen % Millions of yen % Operating revenues 137,423 100.0 108,066 100.0 29,356 27.2 Selling, general and administrative 57,732 42.0 43,270 40.1 14,461 33.4 expenses Salaries and wages 5,202 3.8 4,571 4.2 631 13.8 Provision for employees' bonuses 1,627 1.2 1,462 1.4 164 11.3 Provision for directors' bonuses 118 0.1 114 0.1 3 3.3 Expenses for retirement benefits 481 0.3 493 0.5 -11 -2.3 Rent expenses 8,530 6.2 6,105 5.7 2,424 39.7 Business consignment expenses 14,701 10.7 12,621 11.7 2,080 16.5 Depreciation expenses 11,998 8.7 5,233 4.8 6,765 129.3 Other costs and expenses 15,071 11.0 12,668 11.7 2,403 19.0 22 22 Note: Figures shown are rounded down to the nearest million yen.#261. Details of Consolidated Financial Results for FY18 2Q (5) Changes in Non-Operating Income/Expenses and Extraordinary Income/Loss Items FY17 2Q (Results) FY18 2Q (Results) Change Rate of Change Ratio Ratio Millions of yen % Millions of yen % Millions of yen % Operating revenues 137,423 100.0 108,066 100.0 29,356 27.2 Operating income 12,961 9.4 6,748 6.2 6,213 92.1 Non-operationg income 948 0.7 2,212 2.1 -1,263 -57.1 Interest income and 239 0.2 541 0.5 -301 -55.6 dividend Return on investment by 169 0.1 1,371 1.3 -1,202 -87.7 the equity method Others 539 0.4 300 0.3 239 79.8 Non-operationg expenses 2,148 1.5 212 0.2 1,936 910.8 Interest expenses 1,517 1.1 159 0.1 1,358 852.4 Miscellaneous expenses 630 0.4 53 0.1 577 Ordinary income/loss 11,761 8.6 8,748 8.1 3,013 34.4 Extraordinary income 25,960 18.9 1 0.0 25,959 Extraordinary loss 2,798 2.0 12 0.0 2,785 Income taxes 5,279 3.8 2,454 2.3 2,824 115.1 Net income attributable to 28,202 20.5 6,193 5.7 22,008 355.3 owner's of parent 23 Note: Figures shown are rounded down to the nearest million yen.#271. Details of Consolidated Financial Results for FY18 2Q (6) Consolidated Balance Sheets Cash and deposit +56.1 billion Account receivable Merchandise Others - 2.4 billion + 3.1 billion +4.1 billion 132,943 Current Tangible fixed assets (depreciable assets) Buildings, etc. Accumulated depreciation Construction in progress Others Intangible fixed assets +163.3 billion - 71.5 billion + 29.8 billion Investments and other assets Investment securities Long-term loans receivable +33.1 billion +38.8 billion Others assets +60,958 Total assets increased due to consolidation of TIAT 45,788 (Millions of yen) Accounts payable 0.5 billion Current liabilities +8,103 Income taxes payable Short-term borrowings +1.4 billion +5.5 billion Others +1.6 billion 229,967 Bonds payable Long-term loans payable Others +11.1 billion +132.8 billion + 20.4 billion 14.6 billion. 6.6 billion 37,685 + 1.2 billion Fixed liabilities +164,420 71,985 340,916 Fixed assets +173,512 65,547 Retained earnings Deferred gains or losses on hedges Non-controlling interest +26.2 billion + 1.5 billion +34.0 billion 167,404 Total assets 473,860 Total assets 239,389 FY18 2Q FY17 24 136,156 FY17 Equity ratio 198,103 FY2018 2Q 34.0% Net assets +61,947 FY18 2Q FY2017 55.7% (21.7 P) Note: Figures shown are rounded down to the nearest million yen.#281. Details of Consolidated Financial Results for FY18 2Q (7) Consolidated Statements of Cash Flows Items FY18 2Q (Results) Millions of yen FY17 2Q (Results) Change Millions of yen Millions of yen Cash flows from operating activites 16,671 11,116 5,555 Income before income taxes and minority interests 34,923 8,736 26,186 Depreciation and amortization 12,047 5,269 6,778 Gain on negative goodwill -20,126 -20,126 Offsetting gains of assets and liabilities -5,626 -5,626 Loss on step acquisitions 2,725 2,725 Other current assets -2,591 -1,969 -622 Other current liabilities Other fixed liabilities Others Income and other taxes paid Cash flows from investing activites Purchase of tangible fixed assets Purchase of intangible fixed assets Proceeds from purchase of investments in subsidiaries resulting in change in scope of consolidation Others 924 1,299 -375 45 -15 60 -871 -842 -29 -4,777 -1,361 -3,416 18,130 -5,356 23,487 -27,670 -4,945 -22,724 -302 -274 -28 46,211 46,211 -108 -137 28 Cash flows from financing activites 21,352 -4,492 25,845 Short-term borrowings Long-term loans payable Dividends payment 100 200 -100 23,322 -1,949 -3,120 -1,380 26,442 -568 Others -120 -192 71 Effect of exchange rate change on cash and cash equivalents Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period -5 -2 -2 56,149 1,263 54,885 42,329 39,108 3,221 98,479 40,372 58,107 25 Note: Figures shown are rounded down to the nearest million yen.#291. Details of Consolidated Financial Results for FY18 2Q (8) Capital Expenditure and Depreciation Expenses Items FY13 2Q (Results) Millions of yen FY14 2Q (Results) Millions of yen FY15 2Q (Results) Millions of yen FY16 2Q (Results) FY17 2Q (Results) FY18 2Q (Results) Millions of yen Millions of yen Millions of yen Capital expenditure 1,845 1,489 1,591 3,548 5,284 24,706 Depreciation expenses 6,258 5,847 5,525 5,714 5,233 11,998 • Breakdown of major capital expenditures FY18 2Q (Results) Building 2 internationalization construction PBB upgrade and bridge repair Repair and upgrade of various equipment and facilities ¥20.9 billion ¥1.0 billion ¥0.9 billion • Breakdown of main depreciation expenses Note: Figures shown are rounded down to the nearest million yen. FY13 2Q (Results) FY14 2Q (Results) FY15 2Q (Results) Millions of yen Millions of yen Millions of yen FY16 2Q (Results) Millions of yen FY17 2Q (Results) FY18 2Q (Results) Millions of yen Millions of yen Terminal 1 1,900 1,900 1,900 2,100 2,100 1,800 Terminal 2 2,600 2,400 2,200 2,000 1,900 1,900 P4 Parking 200 200 200 100 100 100 26 Note: Figures shown are rounded down to the nearest hundred million yen.#301. Details of Consolidated Financial Results for FY18 2Q [Reference] Purchasing Trends of Non-Japanese Passengers by Nationality (1) (1) The number of departing non-Japanese visitors by airport (monthly average) FY17 FY18 2Q Japan No. of passenger Composition volume (person) ratio (%) 2,348,539 2,625,916 100.0 100.0 Other Haneda Narita Kansai No. of passenger Composition volume (person) ratio (%) No. of passenger Composition volume (person) ratio (%) 319,013 13.6 27.8 622,811 No. of passenger Composition volume (person) ratio (%) 26.5 No. of passenger Composition volume (person) ratio (%) 754,627 32.1 351,460 13.4 757,889 28.9 687,871 26.2 828,696 31.6 652,088 Notes: Passenger data has been aggregated by the company using immigration statistics from the Ministry of Justice. FY17: Average for April 2017 to March 2018, FY18 2Q: Average for April 2018 to August 2018 (2) The number of departing non-Japanese visitors by airport and nationality (monthly average) Volume ranking and change in departing passengers by nationality for FY18 1H Haneda Airport >> Narita Airport >> Kansai Airport >> No. of passenger Composition volume (person) ratio (%) 120 No. of passenger volume (person) Composition ratio (%) Change (%) No. of passenger volume (person) China (incl. Hong Kong) 112,106 31.9% 22.3% China (incl. Hong Kong) South Korea 43,952 12.5% -3.9% Taiwan 215,113 108,277 Composition ratio (%) 28.4% 14.3% Change (%) 19.1% China (incl. Hong Kong) 9.9% South Korea U.S.A. 36,071 10.3% 8.8% South Korea Taiwan 27,657 7.9% -4.1% U.S.A. 87,724 77,786 11.6% 5.0% Taiwan 10.3% 10.9% U.S.A. No. of passenger Composition Change (%) Non-Japanese Japanese Total volume (person) 351,460 395,550 53.0% 747,011 100.0% ratio (%) 47.0% 9.7% Non-Japanese 4.5% Japanese 6.9% Total No. of passenger volume (person) 757,889 573,987 1,331,876 Composition ratio (%) 56.9% Change (%) 14.0% Non-Japanese No. of passenger volume (person) 43.1% 4.1% Japanese 100.0% 9.5% Total Change (%) 274,950 40.0% 24.6% 179,151 26.0% 1.5% 100,319 14.6% -3.1% 20,306 3.0% 22.4% Composition Change (%) ratio (%) 687,871 70.0% 11.4% 295,155 30.0% 12.2% 983,026 100.0% 11.7% Number of departing non-Japanese passengers China (incl. Hong Kong) -South Korea --Taiwan 100 South-East Asia --Europe/U.S.A. 80 Others 60 40 20 (No. of travelers: thousands) Figures in ( ) denote percent change compared to FY17 1H 300 (+19.1%) 250 (+24.6%) (+13.8%) 200 (+16.8%) (+1.5%) 150 (+9.9%) (+5.0%) (+14.3%) (-3.1%) 100 (+12.8%) 50 (+15.1%) 0 (+18.3%) 1H 2H 1H 2H 1H FY16 FY17 FY18 (+22.3%) 240 (+9.3%) 200 160 (+7.5%) 120 3.9%) (-4.1%) 80 40 (+9.6%) 0 1H 2H 1H 2H 1H FY16 FY17 FY18 0 1H 2H 1H 2H 1H FY16 FY17 FY18 Notes: Passenger data has been aggregated by the company using immigration statistics from the Ministry of Justice. Transit passengers are not included in passenger number. Passenger numbers utilize April to August data from the first half of FY16, FY17 and FY18, respectively. 27#311. Details of Consolidated Financial Results for FY18 2Q [Reference] Purchasing Trends of Non-Japanese Passengers by Nationality (2) (3) Company duty-free store sales and number of departing passengers by airport and nationality (monthly average) <<Haneda>> (Net sale: millions of yen) (No. of travelers: thousands) Figures in ( ) are percent change <<Narita >> 5,500 700 1,500 Others Foreign travelers (Change) 800 757 (+14.0%) 5,000 1,350 171 700 Taiwan 600 708 4,500 665 1,200 S. Korea 44 50 175 600 4,000 151 Japan 642 309 500 1,050 Japanese 551 219 573 (+4.1%) 41 3,500 China 185 322 travelers (Change) 1,456 (+2.2%) 395 (+4.5%) 50 travelers Japanese (-15.3%) 500 900 400 (Change) 3,000 378 259 351 (+9.7%) 750 400 2,500 320 1,424 2,000 Foreign travelers (Change) 300 600 1,500 1,000 1,659 500 300 450 200 927 (+39.2%) 200 666 2,310 (+39.2%) 300 100 100 150 FY17 1H FY18 1H 0 FY17 1H FY18 1H 0 Notes: "Net sales" denote all store sales (excluding taxable stores). Haneda: all duty-free stores; Narita: directly managed stores and boutiques. Sales by nationality include estimates. Passengers numbers utilize April to August data from the first half of FY17 and FY18, respectively. (4) Main factors in the fluctuation of sales of duty free shops and purchasing trends <<Haneda» > Operating revenues continued to grow, with a high rate of growth particularly among Chinese passengers. ➤ Despite an increase in per-unit purchases, its growth rate fell after July this year as a consequence of distributed store space due to renovation of a comprehensive duty-free store, etc. > Could due to the effects of natural disasters, operating revenues and per-unit purchases in Korean passengers fell from the previous term. <Duty-free Store Per-unit Purchasing> (Rounded down to the nearest hundred yen) FY18 1H Amount per customer Change Y on Y comparison Rate of change <<Narita≫ ➤ Decrease in purchasing passenger volume among Japanese passengers and growth among Chinese passengers, with an increasing ratio of Chinese passengers. Haneda 8,900 541 6.5% > Continuation of not only purchasing passenger volume, but per-unit purchases among Chinese passengers. Narita 12,700 1,317 11.6% 28#322. Details of Consolidated Financial Forecast for FY18 (1) Consolidated Financial Forecast for FY18 FY18 (Forecast) FY17 (Results) Initial forecast (May 2018) Items Change Amount affected due Rate of Change Difference Ratio Ratio Ratio Millions of yen % to TIAT consolidation Millions of yen Amount affected due to TIAT consolidation Operating revenues 277,100 100.0 31,300 Millions of yen 225,953 % Millions of yen % 100.0 51,146 22.6 Millions of yen 266,008 % Millions of yen Millions of yen 100.0 31,477 11,091 Facilities management 81,000 29.2 20,400 58,443 25.9 22,556 38.6 Merchandise sales 176,200 63.6 10,700 147,787 65.4 28,412 19.2 80,646 166,168 62.5 30.3 20,563 353 10,738 10,031 Food and beverage 19,900 7.2 200 19,722 8.7 177 0.9 19,193 7.2 175 706 Cost of sales 135,900 49.0 122,226 54.1 13,673 11.2 127,466 47.9 8,433 Cost of sales of merchandise 125,000 45.1 111,480 49.3 13,519 12.1 116,974 44.0 8,025 (Ratio) ( 70.9%) ( 75.4%) (-4.5P) ( 70.4%) ( 0.5P) Cost of sales of food and beverage 10,900 3.9 10,746 4.8 153 1.4 (Ratio) ( 54.8%) ( 54.5%) ( 0.3P) Gross profit 141,200 51.0 103,726 45.9 37,473 36.1 10,492 ( 54.7%) 138,541 3.9 407 ( 0.1P) 52.1 2,658 Selling, general and 119,500 43.2 90,296 40.0 administrative expenses 29,203 32.3 117,998 44.4 1,501 Operating invome 21,700 7.8 8,800 13,429 5.9 8,270 61.6 20,542 7.7 8,791 1,157 Non-operating income/loss -2,300 -0.8 3,266 1.4 -5,566 -170.4 -2,360 -0.9 60 Ordinary income 19,400 7.0 3,700 16,696 7.3 2,703 16.2 18,182 6.8 3,619 1,217 Extraordinary income/loss 22,900 8.3 -172 -0.1 23,072 23,027 8.7 -127 Net income attributable to 32,400 11.7 21,100 11,776 5.2 20,623 175.1 31,369 11.8 20,935 1,030 owners of parent * Preconditions: Forecast of number of passengers Haneda domestic (full-year) +1.7% YoY Haneda international (full-year) + 6.8% YoY Narita international (full-year) +7.8% YoY Kansai international (full-year) Central Japan international (full-year) + 6.7% YoY + 6.3% YoY * Ratio: Cost of sales of merchandise / Operating revenues of merchandise Ratio: Cost of sales of food and beverage / Operating revenues of food and beverage 29 Note: Figures shown are rounded down to the nearest million yen.#332. Details of Consolidated Financial Forecast for FY18 (2) Financial Forecast by Segment (i) Facilities management FY18 (Forecast) FY17 (Results) Initial forecast (May 2018) Items Change Amount affected due Rate of Change Difference Ratio Ratio Ratio to TIAT consolidation Amount affected due to TIAT consolidation Millions of yen % Millions of yen Millions of yen % Millions of yen % Millions of yen % Millions of yen Millions of yen Sales to external customers Rent revenues 17,500 20.3 4,000 13,278 22.0 4,221 31.8 17,594 21.1 3,983 -94 6. Facility user charges revenues 43,700 50.6 24,700 18,754 31.0 24,945 133.0 42,946 51.6 23,968 753 Other revenues 19,800 23.0 -8,200 26,410 43.7 -6,610 -25.0 20,105 24.1 -7,388 -305 Subtotal 81,000 93.9 20,500 58,443 96.7 22,556 38.6 80,646 96.8 20,563 353 Intersegment sales 5,300 6.1 3,500 2,007 3.3 3,292 163.9 2,693 3.2 839 2,606 Total 86,300 100.0 24,000 60,451 100.0 25,848 42.8 83,339 100.0 21,403 2,960 Operating expenses Operating income 72,900 84.5 16,200 53,736 88.9 19,163 35.7 75,079 90.1 18,334 -2,179 13,400 15.5 7,800 6,714 11.1 6,685 99.6 8,260 9.9 3,068 5,139 (Ratio) (15.5%) ( 11.1%) 4.4P) 9.9%) (5.6P) ⚫ Rent revenues: . International terminal rental income Increase in leasable space from opening of "THE HANEDA HOUSE" etc. • Facility user charges revenues: Fees for use of passenger facilities for international flights, etc. O Other revenues: Increase in fees for use of passenger facilities for domestic flights Revenues from parking fees, paid airport lounges, advertising fees, etc. for international terminal +3.9 billion +0.2 billion +24.7 billion +0.2 billion Revenues from paid airport lounges, advertising fees, etc. for domestic terminal Increase in income from hotel business Decrease in subcontracted work revenues, etc. Decrease in Haneda international terminal commissioned facility management revenues from consolidation + 4.6 billion +0.4 billion +0.1 billion 0.7 billion 9.8 billion * Upon distributing expenses between the facilities management and the merchandise sales segments, differences between the initial forecasts and the results were corrected in the full-year forecast. 30 Note: Figures shown are rounded down to the nearest million yen.#342. Details of Consolidated Financial Forecast for FY18 (2) Financial Forecast by Segment (ii) Merchandise sales Items FY18 (Forecast) FY17 (Results) Initial forecast (May 2018) Change Amount affected due Rate of Change Difference Ratio Ratio Ratio Amount affected due to TIAT consolidation to TIAT consolidation Millions of yen Millions of yen % Millions of yen % Millions of yen % Millions of yen Millions of yen Millions of yen % Sales to external customers Domestic terminal stores 35,700 20.2 35,153 23.6 546 1.6 35,239 21.1 460 International terminal stores 102,100 57.6 62,400 35,497 23.9 66,602 187.6 94,862 56.8 58,364 7,237 Other sales 38,400 21.7 -51,700 77,136 51.9 -38,736 -50.2 36,067 21.6 -47,626 2,332 Subtotal 176,200 99.5 10,700 147,787 99.4 28,412 19.2 166,168 99.5 10,738 10,031 Intersegment sales 900 0.5 860 0.6 39 4.6 842 0.5 57 Total 177,100 100.0 10,700 148,647 100.0 28,452 19.1 167,011 100.0 10,738 10,088 Operating expenses 161,100 91.0 7,400 137,324 92.4 23,775 17.3 148,668 89.0 3,966 12,431 Operating income 16,000 9.0 3,300 11,322 7.6 4,677 41.3 18,342 11.0 6,771 -2,342 (Ratio) ( 9.0%) ( 7.6%) ( 1.4P) ( 11.0%) (-2.0P) . • · Domestic terminal stores: International terminal stores: Increase in sales of directly managed stores at Haneda domestic terminal, etc. Sales of Haneda international terminal duty-free stores Increase in sales of directly managed stores at Narita Airport Decrease in sales of directly managed stores at Kansai Airport Increase in sales of directly managed stores at Chubu Centrair Airport Increase in sales of urban duty-free stores +0.4 billion +62.3 billion +1.5 billion 0.6 billion +1.0 billion • Other sales: +1.7 billion Increase in wholesale sales to Narita Airport, Chubu Centrair Airport and other regional airports +4.4 billion Decrease in Haneda international terminal duty-free store wholesale sales from subsidiary consolidation -43.0 billion * Upon distributing expenses between the facilities management and the merchandise sales segments, differences between the initial forecasts and the results were corrected in the full-year forecast. 31 Note: Figures shown are rounded down to the nearest million yen.#352. Details of Consolidated Financial Forecast for FY18 (2) Financial Forecast by Segment (iii) Food and beverage FY18 (Forecast) FY17 (Results) Initial forecast (May 2018) Items Change Amount affected due Rate of Change Difference Ratio Ratio Ratio to TIAT consolidation Amount affected due to TIAT consolidation Millions of yen % Millions of yen Millions of yen % Millions of yen % Millions of yen % Millions of yen Millions of yen Sales to external customers Sales from restaurants 12,400 54.9 3,000 9,846 44.2 2,553 25.9 11,885 54.2 2,768 514 Sales from in-flight meals 6,700 29.7 6,588 29.6 111 1.7 6,585 30.1 114 Other sales Subtotal 800 3.5 -2,800 3,286 14.7 -2,486 -75.7 722 3.3 -2,593 77 19,900 88.1 200 19,722 88.5 177 0.9 19,193 87.6 175 706 Intersegment sales 2,700 11.9 2,563 11.5 136 5.3 2,712 12.4 -12 Total 22,600 100.0 200 22,285 100.0 314 1.4 21,905 100.0 175 694 Operating expenses 21,800 96.5 200 21,389 96.0 410 1.9 21,117 96.4 117 682 Operating income 800 3.5 (Ratio) 3.5%) ) 896 4.0 4.0%) -96 -10.8 788 3.6 58 11 (-0.5P) 3.6%) (-0.1P) • Sales from restaurants: • Sales from in-flight meals: Other sales: Revenues from international terminal restaurants Decrease from closure of some domestic terminal restaurants Increase in sales from new customer agreements, etc. Decrease in commissioned facility management revenues from international terminal restaurants + 3.0 billion 0.4 billion + 0.0 billion 2.5 billion 32 Note: Figures shown are rounded down to the nearest million yen.#36Items 3. Other Information (1) Capital Expenditure and Depreciation Expenses FY13 (Results) FY14 (Results) FY15 (Results) Millions of yen Millions of yen Millions of yen FY16 (Results) Millions of yen FY17 (Results) Millions of yen FY18 (Forecast) Millions of yen Capital expenditure 5,765 4,830 8,379 6,853 27,885 54,791 Depreciation expenses 12,680 11,872 11,232 11,609 10,806 24,838 • Breakdown of Major Capital Expenditures Note: Figures shown are rounded down to the nearest million yen. FY18 (Forecast) FY17 (Results) Building 2 internationalization construction ¥27.7 billion Building 1 renovation ¥3.0 billion Building 2 internationalization construction ¥19.2 billion Repair and upgrade of various equipment and facilities Lounge renovation construction Parking Lot 4 expansion ¥1.1 billion ¥2.7 billion ¥1.0 billion Upgrade of crime prevention/disaster-readiness equipment Construction of dormitory for single employees ¥0.9 billion ¥2.3 billion PBB upgrade and bridge repair ¥2.3 billion (TIAT investment plan ¥12.5 billion) • Breakdown of main depreciation expenses Terminal 1 Terminal 2 P4 Parking (Reference) FY13 (Results) Millions of yen 4,000 FY14 (Results) Millions of yen FY15 (Results) Millions of yen 3,900 5,000 4,000 4,400 500 400 400 5,400 FY16 (Results) Millions of yen 4,400 4,100 FY17 (Results) Millions of yen 4,300 3,800 FY18 (Forecast) Millions of yen 4,000 4,000 ΤΙΑ Τ FY13 (Results) Millions of yen 6,600 FY14 (Results) Millions of yen 10,060 FY15 (Results) Millions of yen 10,202 33 300 300 300 Note: Figures shown are rounded down to the nearest hundred million yen. FY16 FY17 (Results) (Results) Millions of yen 9,748 Millions of yen 9,492 Note: Figures shown are rounded down to the nearest million yen.#373. Other Information (2) Changes in Operating Revenues/Ordinary Income/Cash Flows Billions (left) Operating revenues (results) (left) Operating revenues (forecast) (right) Cash flows (results) of yen • (right) Cash flows (forecast) (right) Ordinary income (results) (right) Ordinary income (forecast) 3,200 2,800 2,400 started operation Narita Airport Terminal 2 Airport opened Kansai International 2,000 Haneda Airport Terminal 1 started operation (Sep. 1993) 1,600 1,200 800 400 0 90 91 13 92 92 93 94 95 Voluntary closure of Yamaichi Securities 90 96 97 Y2K task Financial realignment 9-11 Terrorist Attack in the US Iraq war SARS outbreak Haneda Airport Terminal 2 started operation (Dec. 2004) Airport opened Chubu International Hikes in the price of crude oil Financial crisis being triggered by the US H1N1 influenza outbreak Great East Japan Earthquake The extended part of Haneda Airport Terminal 2 and TIAT Haneda Airport started operation (Oct. 2010) 98 98 99 99 00 01 02 60 60 03 0 90 10 04 05 06 07 34 Billions of yen Subsidiary consolidation of TIAT (Apr. 2018) 450 400 350 300 321 250 196/ 200 181 157 194 171 150 166 151 146 139 133 136 128 118 100 107 49 31 36 57 57 50 50 80 08 09 90 L 10 11 12 33 13 14 15 16 17 18 Results Forecast 0 (Cash flows Net income + Depreciation expenses - Dividends)#38Second Quarter of FY18 Reference Material 1. Outline of the Company 2. Summary of Tokyo International Airport (Haneda) * This document has been translated from the Japanese original, for reference purposes only. If there is any discrepancy between this translated document and the Japanese original, the original shall prevail. Big Japan Airport Terminal Co., Ltd. http://www.tokyo-airport-bldg.co.jp/#391. Outline of the Company (1) Business Details A company responsible for construction, maintenance and operation of Haneda Airport passenger terminals Terminal 2 Terminal 1 • . • . Terminal 1 ■Terminal 2 Construction, management, and operation of terminal buildings Real estate leasing (offices, stores and other spaces for airline companies and airport-based businesses) Merchandise sales (direct management) Food and beverage services (direct management) • Passenger services • Preparation/sales of in-flight meals • Management of parking lots E 111) International Passenger Terminal ■International Passenger Terminal Built and managed by Tokyo International Air Terminal Corporation (TIAT), established through investment with airline companies and other entities and centered on Japan Airport Terminal Co., Ltd. . International passenger terminal building management and operation Real estate leasing (office space, stores, etc. for airline companies and airport-based businesses) Operation of duty-free stores, others ⚫ Food and beverage services Passenger services • Management of parking lots Offering high-quality services at domestic airports Narita, Kansai and Chubu, and at airports outside of Japan, leveraging expertise honed at Haneda Airport. Narita International Airport • Merchandise sales (duty-free stores, etc.) • Wholesale, commissioned management of duty-free stores • Food and beverage service • Travel accident insurance agency business • Preparation/sales of in-flight meals Kansai International Airport • Commissioned management of duty-free stores • Merchandise sales (duty-free stores) • Wholesale Chubu Centrair International Airport • Wholesale •Merchandise sales (duty-free stores) At overseas Airport •Merchandise sales at Chengdu Shuangliu International Airport • Operation of Palau International Airport 36#401. Outline of the Company (2) Basic Philosophy and Management Policy Basic philosophy "Balancing Public Good and Business Success" Passenger terminal buildings serve as public infrastructure of enormous importance. Utilizing private-sector business approaches to properly achieve this highly public mission is our basic management philosophy. Management policy Establish absolute safety in passenger terminals • Operate passenger terminals for the benefit of customers (convenience, comfort and functionality) • Operate passenger terminals stably and efficiently • Reinforce corporate structure and improve the combined competence of the Group companies Our Business Model Since Establishment ⚫ Since its establishment, Japan Airport Terminal has optimally leveraged private-sector knowledge and financing to build, manage and operate passenger terminal buildings, which have enormously important public value, as a purely private enterprise spanning nearly 60 years. • Based on the Japanese government's policies governing airports and airlines, Japan Airport Terminal is engaged in facilities installation, including expansion, the provision of appropriate services, and measures to insure the safety and stability of passenger terminal buildings. • Japan Airline Terminal contributes to the development of the airline industry, guided by a consistent dedication to shared prosperity with airline companies. 37#411. Outline of the Company (3) Company History Haneda Airport was re-launched as Japanese air gateway after being returned by the U.S. in 1952. However, on account of a lack of financial resources after the war, only the costs for paving the taxiway and apron were included in the national budget. Therefore, it was decided to build the terminal with private funds (cabinet approved), and in 1953 the Company was founded with the cooperation of major institutions (with capital 150 million yen), and the terminal was opened in May 1955. Established with private sector capital of 150 million yen. 1953 (July) 1955 (May) 1964 (April) (October) 1978 (May) The terminal building opened and launched operation. Separate domestic arrival terminal building completed in time with the Tokyo Olympic Games. Duty-free sales operations commenced. Commenced merchandise sales including duty-free articles, hotel reservation services and other operations with the opening of Narita International Airport. 1990 (February) Listed on second section of the Tokyo Stock Exchange. 1991 (September) Listed on first section of the Tokyo Stock Exchange. 1993 (September) Haneda Airport Terminal 1 (Big Bird) started operation. 1994 (September) 1998 (March) 2001 2002 (April) (February) 2003 (November) 2004 (December) 2005 (February) 2006 (April) (June) 2007 (February) (September) 2008 (April) 2009 (April) 2010 2011 (October) (August) (October) (January) (November) 2013 (April) 2014 (March) 2018 (April) Launched commissioned operation of duty-free stores and wholesale of duty-free goods accompanying opening of the Kansai Airport. The temporary international terminal at Haneda Airport started operation. International charter flights commenced at Haneda Airport. Terminated periodic international flights from Haneda Airport (transfer of China Airlines and the EVA Airways to Narita). International charter flights between Haneda and Seoul (Gimpo) commenced. Terminal 2 at Haneda Airport started operation. Wholesale of duty-free goods commenced with the opening of Central Japan International Airport. Participated in the project of the maintenance and operation of terminal at international flight area of the Tokyo International Airport. Invested in the special purpose company (SPC) "Tokyo International Air Terminal Corporation." South Pier in Terminal 2 at Haneda Airport started operation. International charter flights between Haneda and Shanghai (Hongqiao Airport) commenced. International charter flights between Haneda and Hong Kong commenced (during specific hours). Designated as an Airport Facilities Operator under the revised Airport Act. International charter flights between Haneda and Beijing commenced. P4 multi-story parking main building started operation (full-scale operation in October). The extended part of Terminal 2, Haneda Airport started operation. The new International Passenger Terminal (TIAT) started operation. Established Japan Airport Terminal Trading (Chengdu) Co., Ltd. Renewal of Terminal 1 building, Haneda Airport completed. The extended part of South Pier in Terminal 2 at Haneda Airport started operation. Start of usage of international passenger terminal building expansion. Terminal 1 Haneda Airport Terminal when opened Haneda Airport Terminal 1 Subsidiary consolidation of Tokyo International Air Terminal Corporation. Haneda Airport Terminal 2 38#421. Outline of the Company (4) Group Companies Food and beverage operations Facilities management operations Big JAPAN AIRPORT TERMINAL Total: 20 companies Food and beverage operations ■Tokyo Airport Restaurant Co., Ltd. Merchandise sales operations 5 companies Restaurant business, light meal production and sales, paid waiting room management Cosmo Enterprise Co., Ltd. Preparation and loading of in-flight meals, production and sale of frozen food CTT Co., Ltd. Cleaning of in-flight goods and eating utensils ■LANI KE AKUA PACIFIC, INC. Restaurant business ■KAIKAN KAIHATSU Co., Ltd. Restaurant business, management and operation of lodging, halls and meeting rooms Facilities management operations Tokyo International Air Terminal Co., Ltd. 8 companies Management and operation of international passenger terminal building. ■BIG WING Co., Ltd. Advertising agency business, event planning and management Japan Airport Techno Co., Ltd. Installation, upkeep and management of passenger terminal facilities and environmental and sanitation management of facilities Haneda Airport Security Co., Ltd. Security services and parking lot service management ■Haneda Passenger Service Co., Ltd. Passenger services operations ■ Japan Airport Ground Handling Co., Ltd. Passenger handling services ■ Haneda Future Research Institute Inc. Further improvement of value in existing airport operation, development of new business model, etc. ■Sakura Shokai Co., Ltd. Airport cleaning center management and waste treatment Merchandise sales operations 7 companies Japan Duty Free Fa-So-La Isetan Mitsukoshi Co., Ltd. Development of airport duty-free stores (bonded stores) in urban areas International Trade Inc. Wholesale business and merchandise sales to Japanese airport retail stores and other clients ■ Japan Airport Logitem Co., Ltd. Merchandise transport, delivery and inspection Air BIC INC. Retail sales of home appliances ■Haneda Airport Enterprise Co., Ltd. Store operation business ■ Japan Airport Terminal Trading (Chengdu) Co., Ltd. Merchandise sales and wholesale business at Chengdu Shuangliu International Airport ■Hamashin Co., Ltd. Wholesale and retail sales of marine products 39#431. Outline of the Company (5) Revenue Composition/Details by Segment, Composition of Sales Category Facilities management operations Revenue details Office lease (fixed rent); store lease Rent revenue (fixed rent + percentage commission) at Haneda domestic and international terminals Fees for use of passenger facilities (Haneda domestic and international flights: PSFC), international terminal PBB user charges, others Facility user charges revenue Others Parking fee revenue, advertising revenue and sales from paid airport lounge at Haneda domestic and international terminals Expenses details Depreciation; water, heating, energy expenses; repairs expenses; lease fee (such as national property usage fee); taxes and public charges; cleaning expenses; outsourcing fees <<FY18 2Q Results>> Food and beverage operations 7.4% (-1.3p) Others 0.3% (-1.2p) In-flight meals 2.5% (-0.4p) Lease fee (such as national property usage fee); taxes and public charges (fixed asset tax); outsourcing fees Restaurants Stores at domestic terminal Merchandise sales for stores at Haneda domestic terminal stores 4.7 % (+0.4p) Cost of sales; supply expenses Facilities management operations Rent revenue 29.6 % (+3.7p) 6.3% (+0.4p) Facility user charges revenue 15.8% (+7.5p) Others 7.5 % (-4.2p) Merchandise sales operations Stores at international terminal Others Restaurants Food and beverage operations Merchandise sales for stores at Haneda international terminal stores; Merchandise sales from airport duty-free stores, etc. at Narita International Airport, Kansai International Airport and Chubu Centrair International Airport, urban duty-free store sales Wholesale sales to Narita International Airport, Kansai International Airport, and Chubu Centrair International Airport; Commissioned management revenues at Narita International Airport and Kansai International Airport. Restraurant sales at Haneda Airport domestic and international terminal and Narita International Airport In-flight meals Production and sales of in-flight meals Others Cost of sales; supply expenses; percentage of business; agent service fee Cost of sales; agent service fee Food expenses (cost of sales for food and beverage); percentage of business; outsourcing costs Food expenses (cost of sales for food and beverage) Wholesale of products such as frozen foods, box Food expenses (cost of sales for food meals, etc. and beverage); outsourcing costs Others 13.4% (-20.7p) Stores at international terminal 36.5% (+20.8p) Merchandise sales operations 63.0% (-2.4p) Stores at domestic Terminal 13.1% (-2.5p) * Figures in ( ) denote percentage change from the end of March 2018 before consolidation of TIAT 40#441. Outline of the Company (6) Changes in Capital Investment FY 1955 1963 1970 1977 1978-1981 Construction of former terminal building Details Major expansion and renovation (Measures for jet aircraft and the Olympics) Construction for accommodating jumbo jets (domestic and international terminal buildings) Construction for disaster safety measures Construction to repurpose domestic terminal accompanying shift to international flights at Narita Airport 1984 1993 Construction for domestic terminal redeployment Construction to build Terminal 1 building Construction to remove old terminal building 1997 Expansion construction to build South/North Bus Lounge in Terminal 1 building New construction of boarding station 1998 Construction to build international terminal building 1999-2002 Renovation of Terminal 1 building (barrier-free measures) 2002 2004 Expansion and renovation of international terminal building Construction to build Terminal 2 building 2004-2005 2006 2007 Renovation of Terminal 1 building (including marketplace revitalization) International terminal building expansion and renovation Construction for expansion of Terminal 2 building (Second Stage of the Plan) International terminal building expansion and renovation 2007 Construction to build P4 simplified parking structure 2008 International terminal building expansion and renovation 2008-2010 Terminal 2 building expansion (Third Stage of the Plan) 2011 2013 2017-2020 Construction to convert P4 parking lot to multi-story parking lot Terminal 1 building renovation (departure lobby, departure lounge, observation deck, etc.) Terminal 2 building expansion (Fourth Stage of the Plan) Expansion in 3 spots Construction of international flight facility for Terminal 2 building (expansion, renovation of existing building) 41 Investment (at time of construction) ¥1.0 billion ¥3.5 billion ¥3.2 billion ¥8.0 billion ¥11.5 billion ¥15.0 billion ¥130.0 billion ¥6.0 billion ¥1.0 billion ¥1.0 billion ¥1.5 billion ¥3.4 billion ¥1.0 billion ¥67.0 billion ¥15.0 billion ¥0.6 billion ¥11.5 billion ¥2.1 billion ¥2.0 billion ¥1.5 billion ¥19.0 billion ¥6.0 billion ¥7.0 billion ¥7.6 billion ¥75.0 billion Total ¥400.4 billion#452. Summary of Tokyo International Airport (Haneda) (1) Location Map ■Total area of airport 1,516 ha ■ Apron Total area/268 ha Spots/232 ■Runway . Runway A 3,000 mx60 m 1 • Runway B 2,500 mx60 m 2 . Runway C 3,360 mx60 m 3 • Runway D 2,500 mx60 m 3 Runway capacity Approx. 447,000 flights/year ■Terminal building • Terminal building 1 Floor space/292,400 m Spots (stationary boarding bridge present)/24 locations ⚫ Terminal building 2 Floor space/255,600 m Spots (stationary boarding bridge present)/23 locations ⚫ International terminal building Floor space/approx. 236,000 m Spots (stationary boarding bridge present)/18 locations ■ Parking lot 5 7 2 1 7 • P1 Capacity/2,350 vehicles 8 • P2 Capacity/2,343 vehicles 9 • P3 Capacity/2,450 vehicles 10 • P4 Capacity/2,425 vehicles 11 13 (includes 2 microbus spaces) • Parking lot for international flights Capacity/approx. 3,000 vehicles 12 ■ Haneda airport wharf 13 42 6 11 10 9 8 5 12 3333 3333 4#462. Summary of Tokyo International Airport (Haneda) (2) Comparison of Passenger Volume Japan Airport Passenger Volume Ranking (FY17) Global Airport Passenger Volume Ranking (2017 calendar year) Airport 1 Haneda Code HND 85,679 (68,559) Annual (thousand people) Annual Daily average (thousand people) Share (%) City/Airport Code (thousand people) 234 27.3 (Tokyo International) 1 Atlanta ATL 103,902 2 Narita NRT 38,962 (7,460) 106 12.4 International 2 Beijing Capital International PEK 95,786 3 Kansai KIX 28,710 (6,901) 78 9.1 International 3 Dubai DXB 88,242 4 Fukuoka FUK 23,979 (17,645) 65 7.6 4 Tokyo (Haneda) HND 85,408 5 New Chitose CTS 23,092 (19,597) 63 7.3 5 Los Angeles LAX 84,557 6 Naha OKA 21,161 (17,524) 57 6.7 6 7 Osaka Chicago (O'Hare) ORD 79,828 International 8 Chubu Centrair ITM NGO 11,523 (5,975) 15,677 (15,677) 42 5.0 7 London (Heathrow) LHR 78,014 31 3.7 International 9 Kagoshima KOJ 5,686 (5,351) 15 8 15 1.8 Hong Kong HKG 72,664 10 Sendai SDJ 3,439 (3,158) 9 1.1 9 Shanghai (Pudong) PVG 70,001 International 78 other airports 56,474 (53,200) 18.0 10 Paris (Charles De Gaulle) CDG 69,471 Figures in parentheses are airport passenger volume for domestic flights. Material: Airport ranking chart for FY17, Japan Civil Aviation Bureau (MLIT) Source: ACI (Airports Council International) publication "Annual World Airport Traffic Report 2018 Edition" 43#47Shikoku Chugoku Chubu 2. Summary of Tokyo International Airport (Haneda) (3) Domestic Destinations and Flights Domestic flights 48 routes Approx. 497 flights (departures)/day (excluding code share flights) City Code Flights/day Okayama OKJ 10 Hiroshima HIJ 17 Yamaguchi Ube UBJ 10 Tottori TTJ Yonago YGJ Izumo IZO | Iwakuni IWK Hagi Iwami IWJ 056552 Takamatsu TAK 13 Tokushima TKS 11 Matsuyama MYJ 12 Kochi KCZ 10 Fukuoka FUK 54 Kitakyushu KKJ 16 Saga HSG 5 Oita OIT 14 Kumamoto KMJ 18 Nagasaki NGS 14 Miyazaki KMI 18 Kagoshima KOJ 23 Amami Oshima ASJ 1 Okinawa (Naha) OKA 31 Miyako MMY | Ishigaki ISG 24 Okinawa Kyushu Kinki City Code Flights/day Toyama ΤΟΥ 4 Noto NTQ 2 Komatsu KMQ 10 Nagoya (Chubu) NGO 3 Osaka (Itami) ITM 30 Osaka KIX 13 (Kansai Airport) Kobe UKB 9 Nanki Shirahama SHM 3 JAPAN JAL AIRLINES ANA STARFLYER 44 Kanto City Hachijojima Code Flights/day HAC 3 Solaseed Air SKY Hokkaido City Code Flights/day Sapporo (Chitose) CTS 52 Wakkanai WKJ 1 Asahikawa AKJ 7 Obihiro OBO 7 ས Kushiro KUH 6 Mombetsu MBE Memanbetsu MMB 15 Nakashibetsu SHB 1 Hakodate HKD 8 Aomori AOJ Misawa Hachinohe MSJ Odate-Noshiro ONJ Akita AXT Yamagata GAJ Shonai SYO 632924 Tohoku (As of November 2018) JTA JAPAN TRANSOCEAN AIR AIR DO SKYMARK AIRLINES#482. Summary of Tokyo International Airport (Haneda) (4) International Destinations and Flights International flights to 30 cities, 33 routes Approx. 118 flights departing per day London Paris Frankfurt Munich Doha Dubai Beijing Seoul (Gimpo) Tianjin Seoul (Inchon) Shanghai (Pudong) Haneda Shanghai (Hongqiao) Taipei (Songshan) Taipei (Taoyuan) Guangzhou Hanoi Hong Kong Bangkok Manila Ho Chi Minh City Kuala Lumpur Singapore Jakarta Sydney 6:00-23:00 23:00-6:00 Both daytime flight and late night/early morning flight hours Honolulu Kona 45 Vancouver San Francisco Los Angeles City name East Asia Code Slots/day 8 Beijing PEK 1 6 Hong Kong HKG 2 China Shanghail (Honggiao) SHA 4 Shanghail (Pudong) 5 PVG 4 Guangzhou CAN 4 Tianjin Seoul TSN 2 GMP 12 (Gimpo ) Korea 1 Seoul (Incheon) INC 2 Taiwan Taipei (Songshan) Taipei (Taoyuan) TSA 8 TPE 2 South East Asia Hanoi HAN 2 Vietnam Ho Chi Minh City SGN 1 Minneapolis Toronto 5 Singapore Singapore SIN 2 Chicago New York 2 Philippines Manila MNL 1 2 Indonesia Jakarta CGK 1 3 Thailand Bangkok BKK 4 Malaysia Kuala Lumpur KUL 2 Oceania Australia Sydney SYD 2 North America Vancouver YVR 1 Canada Toronto YYZ 1 2 Honolulu HNL 1 Kona KOA 1 San Francisco SFO 2 USA Los Angeles LAX 3 New York JFK 2 Minneapolis Chicago MSP 1 ORD 1 Europe France Paris CDG 4 3 UK London LHR 1 2 Frankfurt FRA Germany 1 Munich MUC 2 Middle East UAE Dubai DXB 1 Qatar Dohal DOH 1 International departure total 118 (As of November 2018)#492. Summary of Tokyo International Airport (Haneda) (5) Summary of Tokyo International Air Terminal Corporation Summary of TIAT 1. Company Name Tokyo International Air Terminal Corporation 2. Date Founded June 20, 2006 3. Headquarters Location 4. Capital 5. Businesses Haneda Airport, Ota-ku, Tokyo 13,265,000,000 yen Maintenance and management of the terminal building in the international section of Tokyo International Airport 6. Representative Katsuji Doi, President (Former Vice President of Japan Airport Terminal Co., Ltd.) 7. Composition of Shareholders Japan Airport Terminal Co., Ltd. (51.00%); Japan Airlines Corporation; ANA HOLDINGS INC.; Narita International Airport Corporation; TEPCO Energy Partner, Incorporated; SECOM Co., Ltd.; Tokyo Gas Co., Ltd.; Keihin Electric Express Railway Co., Ltd.; Tokyo Monorail Co., Ltd.; NTT Data Corporation; Development Bank of Japan Inc.; Mizuho Bank, Ltd.; The Bank of Tokyo-Mitsubishi UFJ, Ltd. 8. Corporate Philosophy As the gateway to the nation's capital, Tokyo, we will endeavor to continue providing cutting-edge terminal facilities and services to customers from across the world and thus contribute to the development of the international aviation network. Background of Receipt of Increased Private Allotment of Shares Proper provision of information primarily through explanatory meetings held by the Ministry of Land, Infrastructure, Transport and Tourism to promote understanding among as many residents as possible of efforts to enhance the functionality of Tokyo-area airports (increase in schedule of international flight departures and arrivals). Given these conditions, TIAT embarked on a terminal building upgrade and expansion plan to cope with projected growth in international flight passengers, with a portion of the required funds to be procured through the issuance of new shares. To fulfill its duties as the representative company of TIAT, and to cooperate on ensuring more solid implementation of this project, Japan Airport Terminal acquired additional shares. After the payment process was complete, Japan Airport Terminal holds an equity stake of 51%, converting TIAT from an equity- method affiliate into a subsidiary. 46#502. Summary of Tokyo International Airport (Haneda) (6) International Rating of the Haneda Airport Passenger Terminal (evaluated by SKYTRAX) Earned "5 Star Airports" status in the "Global Airport Rating" for a fifth consecutive year 5 STAR AIRPORT SKYTRAX (Haneda Airport domestic and international passenger terminals) Haneda Airport passenger terminals earned "5 Star Airports" rating, the world highest status, according to the "Global Airport Ranking" by UK-based evaluator SKYTRAX for a fifth consecutive year. Over the last year, by ascertaining diversifying needs of both domestic and international flight customers, we have pursued further convenience and comfort of passengers, such as enhancing the ease of use of stores and facilities for Japanese as well as non-Japanese passengers. As a result, we continued to be ranked high regarding various items, including staff service level, facilities' ease of use and airport's cleanliness. Last year Last year, Haneda Airport's passenger volume exceeded 85 million and it is expected that the figure will further increase ahead of the 2020 Tokyo Olympics and Paralympics. Serving as an air gateway to the Tokyo metropolitan area, all our highly motivated airport staff will always strive to provide facilities and services from the perspective of customers and pursue a "Vision" for Haneda Airport with the aim of becoming an airport that continues to be trusted by customers worldwide. Ranked 1st in "The World's Cleanest Airports" category for a third consecutive year (Haneda Airport domestic and international passenger terminals) Ranked 1st in "The World's Cleanest Airports" category for a third consecutive year (Haneda Airport domestic passenger terminals) WORLD AIRPORT SKYTRAX AWARDS 2018 In "The World's Cleanest Airports" category, which evaluates airport cleanliness, comfort and other features, Haneda Airport was ranked first for the fifth time and for the third year in a row. In "The World's Best Domestic Airports" category - an overall ranking of domestic airports - Haneda Airport ranked first in the world for a sixth consecutive year, with the rating praising elements such as the airport's ease of use and comfortability. Meanwhile, in "The World's Best Airports" category, Haneda Airport placed third in the world in this omnibus ranking. 47#51Notes regarding projections Items such as plans, targets, policies, strategies, decisions, financial forecasts, future figures and monetary amounts in this presentation that is not historical data are projections of the future. These are based on management's projections, assumptions, evaluations, judgments, and conditions on information obtainable at the present time. Realizing these items entail uncertainty and various risks. This presentation material is not intended to solicit investments. We request you to make own decision regarding investments. Contact Japan Airport Terminal Co., Ltd., Investor Relations Division Big TEL: 03 (5757) 8409 FAX: 03 (5757) 8029 Email: [email protected]