Mar/2014 (FY2013) Results

30 April, 2014
Yoshiharu Ueki, President
Norikazu Saito, Senior Managing Executive Officer

Overview of Full-Year Mar/2014 (FY2013) Results
Operating Revenue

Operating Profit（JPY Bn)（JPY Bn)

1,309.3
1,300

1,238.8

200

Operating Profit Margin

195.2

20%

＋5.7%

166.7
150

16%

15.8%
12.7%

12%

1,000

Mar/2013 Full-Year

Mar/2014 Full-year

100

8%

Mar/2013 Full-year

Mar/2014 Full-year Though we reported lower earnings on higher

Equity Ratio stood 51.5%

revenues due to the weaker yen, operating profit
End of
Mar/2013
2013/3/31

Equity Ratio
(%)

46.4%

End of
Mar/2014
2014/3/31

51.5%

was 166.7 billion yen and operating profit
Difference

margin was 12.7%. We achieved our operating
profit margin target (10%+).

+5.1pt Equity ratio was 51.5%, and we achieved ourequity ratio target (50%+).
1During the reporting period, operating revenue was 1, 309.3 billion yen, and operating
profit was 166.7 billion yen.
Although operating profit margin declined by 3.0% year-on-year, it came to 12.7%, andwe were able to maintain an operating profit margin of over 10%, one of the managementtarget in the Medium Term Management Plan.
We are accumulating the shareholders’ equity steadily, and at the fiscal year-end, theequity ratio reached 51.5% compared to 46.4% of the previous fiscal year.

It means we achieved our 50% equity ratio target as set out in the Medium Term
Management Plan.

Upward Revision of Operating Profit Mar/2014(JPY：Bn)

166.7
158.0

155.0

140.0

FY13 Initial

FY13 Q2

FY13 Q3

Forecast

Forecast

Forecast

Result We initially forecast an operating profit of 140 billion yen, but by steadily
accumulating profit, we achieved an operating profit of 166.7 billion yen for thefull fiscal year, up 26.7 billion yen from our initial forecast.

2We initially forecast an operating profit of 140 billion yen for the full fiscal year. As
operating revenue moved steadily mainly in international passengers, coupled bysteady cost reduction efforts by staff, we were able to report an operating profit of 166.7
billion yen for the full fiscal year, and revise our forecast upward substantially.

Forecast Overview of Full-Year Mar/2015 (FY2014)
Operating Revenue（JPY Bn)

Operating Profit（JPY Bn)

1,350.0

1,400

Operating Profit Margin
20%

200

1,309.3

166.7

＋3.1%
1,200

16%

140.0

150

12%

12.7%
10.4%
1,000

100

Mar/2014 Full-Year

Mar/2015 Full-Year

8%

Mar/2014 Full-Year

Mar/2015 Full-Year In fiscal year 2014 ending March 31, 2015, we expect an operating profit of 140 billion yen andoperating profit margin of 10.4%. We aim to achieve our operating profit margin target of 10%+ as set

out in the Medium Term Management Plan.
 We also aim to achieve our 50%+ equity ratio target as set out in the Medium Term Management Plan.

3

The business environment is expected to see a significant increase in capacity due toadditional flight slots at Tokyo metropolitan airports and an expansion of supply of LCCs.
Therefore, we expect the balance in demand and supply of both international anddomestic passenger operations to ease, resulting in stiffer competition and a tougher
financial environment. We forecast operating revenue of 1,350 billion yen and operating

profit of 140 billion yen for fiscal year 2014 ending March 31, 2015.
We aim for an operating profit margin of 10.4% in order to achieve our operating profit
margin target of 10% and over.
We will also make best effort to maintain the equity ratio of 50% +.

Dividend for Mar/2014
 DPS for Mar/2014 based on
our financial results

160.00JPY
147.00JPY
2014/1/31
Announced
forecast

Dividend Calculation
Policy(1)Approx. 20% of Consolidated
Net Income for the fiscal year

excluding Income TaxDeferred(1)Before: approx. 20% of our Consolidated
Net Income

Increase(JPY Bn)

Mar/2013
ResultMar/2014
New
Announcement

Announced on
2014/1/31

171.6 JPY Bn

166.2 JPY Bn

148.0 JPY Bn－

21.4 JPY Bn

15.0 JPY Bn

171.6 JPY Bn

144.7 JPY Bn

133.0 JPY Bn

Total amount for dividends（x approx. 20%）32.3 JPY Bn(2)29.0 JPY Bn(3)26.6 JPY Bn

Total number of sharesissued181.352 Mn

181.352 Mn

181.352 Mn

Dividends per share

190.00 JPY

160.00 JPY

147.00 JPY

Consolidated Net Income－） Income Tax-Deferred(2) The total amount of dividends for fiscal year 2012 ended March 31, 2013 excludes the amount of dividends equivalent to s hares which JAL refused toregister in the shareholders' list (adjusted shares held by foreigners), pursuant to the Civil Aeronautics Act, as of March 3 1, 2013.
(3) Dividends for fiscal year 2013 ended March 31, 2014 include dividends for adjusted shares held by foreigners as of March 31, 2014.

4Returning value to our shareholders is one of our greatest goals of management, and we
aim to achieve stable earnings and pay dividends.
As for the dividends, as I mentioned in our announcement of financial results for the first
three quarters of the fiscal year, our dividend policy is to apply approximately 20% of

Consolidated Net Income excluding Income Tax-Deferred, based on Tax EffectAccounting. Dividends per share based on estimated profit were seen to decline from lastyear, but we have revised it upward to 160.00 yen from the previously announced 147
yen.
We will continue to run the company with an emphasis on profitability so that we may

share returns with our shareholders.

Positioning of Each Fiscal Year
Steadily Achieve Our Management Targets to Realize Growth from FY2015
Review

Future Plan

FY2012-2013
A period that our ability to
execute the high-profitability
was tested
We achieved operating profit marginof 10%+ in FY2013, but lower
earnings on higher revenues

FY2014FY2015-2016

A period of establishing a firmbusiness foundation to achieve“growth” in revenue and profit

A period to achieve Management
Targets and start new growth

ASK Plan
2,500

2,000

Operatingprofit

17.0%
Total
16.0%

Operatingprofit margin
Image of growth

106

108

International
Flight

15.0%
14.0%

1,500

113

126

13.0%

113

12.0%
1,000

107

11.0%
10.0%

500

9.0%

104

8.0%
0

FY2011=100

102

7.0%
FY2012FY2013
FY2014FY2015FY2016
2012年度
2013年度
2014年度
2015年度
2016年度97
FY2011FY2013

FY2014FY2016

Domestic
Flight5

 Regrettably, we reported lower earnings on higher revenues in fiscal year 2013. Fiscal
year 2014 is defined in the Medium Term Management Plan as being a period to improvebusiness operations so that we may achieve higher earnings on higher revenue. Fiscal
years 2015 and 2016 are defined as a period to achieve Management Targets and start
new growth, and we will strive to achieve higher earnings on higher revenue.

Mar/2014 (FY2013) Results
Details

Norikazu Saito,
Senior Managing Executive Officer

Overview of Consolidated Financial Results
Consolidated Financial Results(JPY Bn)

Mar/2013

Revenue
Air Transportation Segment

Operating Expense
Air Transportation Segment

Operating Profit
Air Transportation Segment

Operating Profit
Margin(%)
Ordinary Income
Net Income
ASK (MN seat km)
RPK (MN passenger km)
EBITDA Margin (%) (2)
EBITDAR Margin (%) (3)UNIT COST (Yen) (4)Incl. Fuel
1.
2.
3.
4.

Mar/2014

y/y

4Q(Jan-Mar)
Mar/2014(1)y/y1,238.8
1,113.7
1,043.5
935.2
195.2
178.4

1,309.3
1,166.6
1,142.5
1,017.5
166.7
149.1

+5.7%
+4.8%
+9.5%
+8.8%
▲14.6%▲16.4%

319.4
283.0
290.1
257.7
29.2
25.2

+7.6%
+6.9%
+11.7%+11.5%▲21.0%▲24.8%

15.8%

12.7%

▲3.0pt9.2%▲3.3pt185.8
171.6
81,18957,049157.6
166.2
83,31959,135▲15.2%
▲3.2%
+2.6%
+3.7%

26.4
42.7
20,063
14,483▲16.4%+37.7%
▲0.3%
+3.2%

22.3%
24.8%
8.5
11.5

19.1%
21.5%
8.8
12.2

▲3.2pt▲3.3pt
+0.3
+0.7

15.7%
18.1%
9.3
12.8

▲3.3pt▲3.4pt+0.8+1.4

The results for 4Q (January to March) are calculated by deducting the results of 3Q (April to December) from Full-Year (April to March)
EBITDA Margin = EBITDA / Revenue EBITDA=Operating Profit + Depreciation
EBITDAR Margin = EBITDAR / Revenue EBITDAR=Operating Profit + Depreciation+ Aircraft Leases
Unit Cost = Air Transportation Segment Operating Cost (excluding fuel cost) / ASK
Unit Costs are calculated based on 32 consolidated companies for both previous and current year.

 Operating revenue

reached 1,309.3 billion
yen,+5.7% year-on-year.
 Operating profit was
166.7 billion yen,
▲14.6% year-on-year.
 Operating profit margin
was 12.7%
 Unit Cost increased by

0.1 yen from theprevious forecast due toreduction of ASK owing
to snow, an increase incosts associated withrevenues, an increasein maintenance costs,etc.

6 Operating revenue for the reporting period was 1, 309.3 billion yen, an increase of 5.7% compared to theprevious fiscal year, mainly due to an increase in passenger traffic on both international and domestic
flights.
 We incurred operating expenses of 1,142.5 billion yen, an increase of 9.5% year-on-year, due to thedepreciation of the yen, and others. We will continue to raise staff awareness for profitability through theAmoeba Management system, and put a downward pressure on expenses.
 As a result, operating profit came to 166.7 billion yen and operating profit margin was 12.7% for fiscal
year 2013 ended March 31, 2014. Our EBITDAR margin was 21.5%, and we maintained a high level ofprofitability.
 Unit Cost during the reporting period was 8.8 yen, compared to 8.7 yen as mentioned in Rolling Plan
2014. Increasing factors mainly included a reduction in ASK owing to snow, an increase in expenses

associated with revenues, and an increase in engine maintenance costs. As all these factors will be
resolved in FY2014, we expect Unit Cost to end at 8.8 yen in FY2014 as well.

Changes in Operating Profit
Mar/2014(FY2013)
ASK y/y： +2.6%
RPK y/y： +3.7%（JPY：Bn）▲28.4 Bn(▲14.6%)Int’lPassenger

+30.9

195.2

Other Revenue Fuel
Domestic▲37.0
Passenger Cargo & Mail +30.3

+2.1
+0.5%

+7.0
+8.3%

Operation
CoupledCost▲6.2+11.6%▲15.0%▲7.3%

Revenue
Coupled
Cost▲5.1

Other Cost

▲50.5

▲11.4%

166.7

+7.6%
▲7.6%

Mar/2013 Full-Year

Revenue +70.5 Bn

Expenses +98.9 Bn

Mar/2014 Full-Year7

 As we attracted more demand than the increase in supply compared to the previous
fiscal year, international and domestic passenger revenues increased by 30.9 billion yen
and 2.1 billion yen respectively. Combined with other revenues, total revenues
increased by 70.5 billion yen.
 As for expenses, fuel costs increased by 37 billion yen due to an increase in supply andforex effect. Costs for new products and services, and maintenance costs due to cabin
modifications also increased, but we kept cost increases down as much as possible.

 As a result, operating profit amounted to 166.7 billion yen, a decrease of 28.4 billion yen
from the previous fiscal year.

Impact From Currency Market
Breakdown of the Impact on Our Operating Profit
Increased Other Profit+16.5 Bn

Forex Impact▲45.0 Bn

195.2

Revenue

Expenses（Excl. Fuel）

+22.5

▲19.3

Fuel

▲48.2

Other
Revenue

Other
Expenses

+48.0

▲31.5

150.2

Mar/2013 Full-Year（82.4JPY/USD）

Estimated Operating Profit
including FX impact ONLY

（99.9JPY/USD）（JPY：Bn）

166.7

Mar/2014 Full-Year（99.9JPY/USD）
8 Revenue denominated in foreign currencies increased by 22.5 billion yen due
to the weak yen. However, as fuel costs totaled 48.2 billion yen and costs
excluding fuel costs totaled 19.3 billion yen, profit decreased by 45 billion yen
due to the impact of exchange rates.
 When calculating operating profit reflecting the effects of exchanges rates
only, it is estimated to come to 150.2 billion yen compared to 195.2 billion yen
in operating profit the year before. Revenues and expenses excluding theimpact of exchange rates were 48 billion yen and 31.5 billion yen increase
respectively, resulting in an increase in operating profit of 16.5 billion yen.

International Passenger Operations (Operating Results)
Mar/2014(FY2013)
Mar/2013
Passenger Revenue(JPY Bn)

406.6

Mar/2014

437.5

% y/y

+7.6%

4Q(Jan-Mar)
Mar/2014(1)

106.2

% y/y

 Passenger revenue was 437.5

billion yen, +7.6% year-on-year.
+8.1%
 The load factor was 76.5%

ASK (MN seat km)

44,745

46,235+3.3%

11,392+0.3%

RPK (MN passenger
km)

34,03635,390

+4.0%

8,832

+2.6%

 Revenue per Passenger was+4.8% year-on-year, andPassengers (’000)

7,525

7,723

+2.6%

1,936

+1.6%

contributed to increasing
revenue.

L/F (%)

76.1%

76.5%

+0.5pt77.5%+1.8ptYield (JPY) (2)

11.9

12.4

+3.5%

12.0

+5.3%

Unit Revenue (JPY)

9.1

9.5

+4.1%

9.3

+7.7%

Revenue per
Passenger (JPY) (4)54,041

56,657+4.8%

54,871+6.4%(3)

Notes:
1. The results for 4Q (January to March) are calculated by deducting the results of 3Q (April to December) from Full-Year (April to March)
2. Yield = Passenger Revenue / RPK
3. Unit Revenue=Passenger Revenue / ASK
4. Revenue per Passenger = Passenger Revenue / Passengers

9 International passenger revenue came to 437.5 billion yen, an increase of
7.6% from the previous fiscal year.

 For ASK grew by 3.3% and RPK grew 4.0%, our load factors increased by
0.5 points year-on-year to 76.5%. As a result, our yield increased by 3.5%
year-on-year, and contributed to the revenue increased by 7.6% the year
before to 437.5 billion yen.

International Passenger Operations (Operating Results)
Mar/2014(FY2013)
 Robust demand on European andSouth East Asia routes（JPY：Bn）

Load Factor+30.9 Bn(+7.6%)

EUR routes 78.3%(+1.4% vspy)
SE Asia routes 76.1%(+1.7% vspy)

437.5
9.0

406.6

from overseas
Increase of revenue per

21.9-Strong demand on
Europe, Southeast Asia
‐FX
-Passenger mix

Mar/2013 Full-Year

Revenue per
Passenger

Number of
Passengers

 Increase of inbound passengers

Mar/2014 Full-Yearpassenger due to the weaker yen
 Expand JAL SKY SUITE services

contributed to increasing theload factor and yield.
Aircraft

Route(～Mar,2014)

JAL SKY
SUITE 777

Narita=London, New
York, Paris, Los Angels,
ChicagoJAL SKY
SUITE 767

Narita=Kuala Lumpur,
Singapore, Hanoi, Dalian

30Mar2014～ expand from Haneda /Narita routes

10 In our international passenger operations, demand was robust especially on
European and Southeast Asia flights. The load factor of European andSoutheast Asia flights was 78.3% and 76.1% respectively. The factors forthriving demand on international flights were the increase in overseas
passengers to Japan and an increase in revenue per passenger influenced
by the weak yen.
 The expansion of JAL SKY SUITE services contributed to increasing the loadfactor and yield. From March 30, 2014, JAL SKY SUITE will be deployed on
various routes from Haneda and Narita.

Domestic Passenger Operations (Operating Results)
Mar/2014(FY2013)
Mar/2013
Passenger
Revenue(JPY Bn)

485.2

Mar/2014

487.4

% y/y

+0.5%

4Q (Jan-Mar)
Mar/2014(1)

112.4

% y/y

 Passenger revenue was487.4 billion yen, +0.5%
year-on-year.

+0.7%
 Unit price was ▲3.4% year-

ASK (MN seat km)

36,44337,084

+1.8%

8,670

▲1.0%

RPK (MN
passenger km)

23,012

23,745

+3.2%

5,650

+4.0%

Passengers (’000)

30,02031,218

+4.0%

7,377

+4.3%

L/F (%)

63.1%

64.0%

+0.9pt65.2%

Yield (JPY) (2)

21.1

20.5

▲2.6%

19.9

+3.1pt  Passenger traffic was +4.0%
year-on-year and contributed
to increasing revenue.
▲3.2%

Unit Revenue (JPY)

13.3

13.1

▲1.3%

13.0

+1.7%

Revenue per
Passenger (JPY) (4)16,163

15,613▲3.4%

15,247▲3.5%(3)Notes:
1. The results for 4Q (January to March) are calculated by deducting the results of 3Q (April to December) from Full-Year (April to March)
2. Yield = Passenger Revenue / RPK
3. Unit Revenue=Passenger Revenue / ASK
4. Revenue per Passenger = Passenger Revenue / Passengers

on year due to an increase ingroup passengers andincrease of promotional fares
to boost demand11 On domestic routes, while ASK increased by 1.8%, RPK increased by 3.2%
and this rose our load factor by 0.9 points to 64.0%. Though our yield
declined by 2.6%, domestic passenger revenue came to 487.4 billion yen, an
increase of 0.5% from the previous fiscal year.

Domestic Passenger Operations (Operating Results)
Mar/2014(FY2013)
 Robust demand of group passengers（JPY：Bn）

to boost demand-Inbound passengers from regional areas+2.1 Bn(+0.5%)

487.4

485.2

▲17.1

19.3

in Japan to Tokyo metropolitan area dueto Tokyo Disney Resort® 30th Anniversary-The Sengu Ceremony of Izumo Taisha
Shrine attracted many passengers to the
Sanin district.

 Started selling “JAL Jalan Pack”（the dynamic package product）-Passenger mix-Increase in supply-Other Measures Offered discount fare ”Tokubin 21” toboost demand Incrase the supply of discount fares
Mar/2013 Full-Year

Revenue per
Passenger

Number of
Passengers

Mar/2014 Full-Year

Sakitoku and Super Sakitoku in highseasons12

 In our domestic passenger operations, we increased promotional fares toboost demand and we also saw an increase in group passengers, especiallythose to the Tokyo metropolitan area from regional Japan to enjoy the 30th
anniversary of Tokyo Disney Resort, and strong demand to the San-in district
prompted by events celebrating the Sengu of the Heisei Period of Izumo
Taisha Grand Shrine.
 Passenger Demand also grew as we started selling JAL Jalan Pack, a free
tour to choose the JAL flight and accommodation of the customer’s choice,and increased flights which could be booked using Sakitoku and Super
Sakitoku discount airfares, and such.

Major Operating Expense Items
Breakdown of Operating Expenses（JPY Bn）

Mar/2013

Mar/2014

4Q (Jan-Mar)
Mar/2014(1)

% y/y

% y/y

246.3

283.3

+15.0%

71.0+16.9%

Landing fees and other rent

75.1

80.2

+6.7%

19.3

+4.5%

Maintenance

30.4

41.1

+35.2%

9.4+38.7%

Sales Commissions(Air Transport)

20.3

22.5

+10.8%

5.6+12.8%

Aircraft Depreciation

60.0

62.5

+4.1%

15.9

+11.2%

Aircraft Leases

30.9

31.5

+1.8%

7.7

+3.5%

Personnel

226.7

235.2

+3.7%

58.8

+2.6%

Other

353.4

385.9

+9.2%

102.0

+14.1%

1,043.5

1,142.5

+9.5%

290.1

+11.7%

Fuel

Total Operating Expenses

ASK FY2013 y/y：+2.6%

Fuel/FX sensitivity(impact on operating profit / without hedge)

Exchange Rates and Fuel PriceMar/2013

Mar/2014y/y

4Q (Jan-Mar)
Mar/2014

y/y（JPY Bn)
Crude Oil
(Change in 1USD/bbl)

2.0 BnFX(Change in 1JPY/USD)

2.5 BnSingapore Kerosene (USD/bbl)

127.1

121.5

▲4.4%

123.7

▲4.3%

CIFJ (USD/bbl)

114.4

110.3

▲3.6%

112.1

▲0.5%

FX Rate: (JPY/USD)

82.4

99.9

+21.3%

103.3+15.9%(1) The results for 4Q (January to March) are calculated by deducting the results of 3Q (April to December) from Full-Year (April to March)

FY13FY12

13

 Of operating expense items, the weak yen pushed fuel costs upward by
15.0% year-on-year to 283.3 billion yen. And as I explained on the previous
page, effects of exchange rates pushed expenses excluding fuel costs
upward by 67.5 billion yen.

 Expenses for maintenance increased due to intensive cabin modifications,and costs for new products and services increased. Personnel costs alsorose due to an increase in bonus standards from the year before.
 Sensitivity of costs to fuel prices and exchange rates was approximately 2billion yen and 2.5 billion yen respectively.

Major Balance Sheet Items
Consolidated Balance Sheet Summary as of Mar/2014(JPY Bn)

Total Assets

End of FY2012
2013/3/31

End of FY2013
2014/3/31

difference Shareholders' equity

1,216.6

1,340.1+123.5

ratio increased by 5.1pt

Cash and Deposits

347.9

368.7

+20.7

to 51.5%

Balance ofInterest-bearing Debt

160.1

134.2

▲25.8

Off-balance Sheet
Lease Payments

207.1

145.5

▲61.6

Shareholder’s Equity

565.0

690.2

+125.2

Shareholder’sEquity Ratio(%)

46.4%

51.5%

+5.1ptD/E Ratio（x） (2)

0.3x

0.2x

▲0.1

(1)

Notes:
1. Accounts Payable-installment Purchase included
2. D/E Ratio ＝ On-balance sheet Interest-bearing Debt / Shareholders' Equity（Reference） ※End of FY2013
D/E ratio including Off-Balance Sheet Lease Payment: 0.4x

14 The balance of interest-bearing debt decreased by 25.8 billion yen year-onyear to 134.2 billion yen through steady repayments of long-term loans andleasing obligations.
 Furthermore, our off-balance sheet remaining lease payments decreased by
61.6 billion yen year-on-year to145.5 billion yen.
 The equity ratio improved by 5.1 points year-on-year to 51.5%, and weachieved the 50% equity ratio target as set out in the Medium Term
Management Plan. We will continue to maintain an equity ratio of 50% andabove.

Major Cash Flow Items(JPY Bn)

Net income before income taxes andminority interests

End of FY2012
2013/3/31

End of FY2013
2014/3/31

Difference

190.4

160.0

▲30.4

Depreciation

81.0

82.7

+1.7

Other

▲6.6

5.1

+11.8

Cash Flow from Operating Activities

264.8

247.9

▲16.9

▲121.8▲ 164.5

▲42.6

▲7.1

▲2.1

+5.0

▲129.0▲ 166.7▲37.6

Free Cash Flow (3)

135.8

81.2

▲54.5

Repayment of Interest-bearing Debt (4)▲62.9▲ 45.9▲16.9

2.3▲ 15.9

▲18.2

▲60.6

▲ 61.9

▲1.2

75.1

19.3

▲55.8

EBITDA

276.2

249.5

▲26.7

EBITDAR

307.1

281.0

▲26.1

Capital Expenditure (1)OtherCash Flow from Investing Activities (2)OtherCash Flow from Financing Activities

Total Cash Flow (5)Notes:
1. Expense due to purchases of fixed assets
2. Exclude deposits and withdrawals from deposit accounts
3. Cash Flow from Operating Activities + Cash Flow from Investing Activities
4. Repayment of Long Term Debt + Repayment of Lease Debt
5. Cash flow from Operating Activities + Cash Flow from Investing Activities + Cash Flow from Financing Activities15 Cash flow from operations totaled 247.9 billion yen.
 Cash flow from investing totaled 166.7 billion yen due to cash outflows for thelaunch of new aircraft and purchase of leased aircraft, and such. Subsequently,
free cash flow for fiscal year 2013 amounted to 81.2 billion yen.
 Cash flow for financing totaled 61.9 billion yen due to cash outflows according
to interest-bearing debts paid. As a result, cash flows reached 19.3 billion yen.

Earnings Forecast for Mar/2015 (FY2014,Consolidated)
Mar/2014
Result(JPY Bn)

Mar/2015
Forecast

Difference

Operating Revenue

1,309.3

1,350.0+40.6

Operating Expense

1,142.5

1,210.0+67.4

Operating Profit

166.7

140.0

▲26.7

Operating Profit Margin

12.7%

10.4%

▲2.4ptOrdinary Income

157.6

135.0

▲22.6

Net Income

166.2

115.0

▲51.2

Mar/2014
Result（JPY：Bn）
Operating
Revenue

OperatingExpenseMar/2015
Forecast

Difference

International
Passenger

437.5

451.0

+13.4

Domestic
Passenger

487.4

487.0

▲0.4

Cargo/Mail

91.9

94.0

+2.0

Other

292.4

318.0

+25.5

Fuel

283.3

316.0

+32.6

Excluding Fuel

859.1

894.0

+34.8

8.8

8.8

▲0.0

Unit Cost(JPY, excluding fuel cost)（1)

Mar/2014
ResultMar/2015
Forecast

ASK* Int’l

+3.3%

+4.9%

Doms

+1.8%

▲2.1%

RPK* Int’l

+4.0%

+2.7%

Doms

+3.2%

▲0.8%

Singapore
Kerosene(USD/bbl)

121.5

125

FX (JPY/USD)

99.9

107

*y/y

1. = Air Transportation Segment Operating Cost
(excluding fuel cost) / ASK
Our Unit Cost forecast for fiscal year 2014 ending
March 31, 2015 excludes 0.2 yen relating to transactions
between Group companies(reported as revenues andexpenses).

16

 In fiscal year 2014 ending March 31, 2015, we forecast operating revenue toincrease by 40.6 billion yen year-on-year to 1,350 billion yen.
 Operating profit and ordinary profit are forecast to decrease by 26.7 billion yen
and 22.6 billion yen respectively year-on-year to 140 billion yen and 135 billion
yen.
 Net profit is expected to decrease by 51.2 billion yen year-on-year to 115 billion
yen. We do not foresee any Income Tax-Deferred at present.
 The assumptions for the market for our forecast are Singapore kerosene prices
at 125 dollars per barrel and an exchange rate of 107 yen to a US dollar.

Changes in Operating Profit/ Forecast Mar/2015
ASK y/y： +1.8%
RPK y/y ： +1.3%▲26.7 Bn(▲16.1%)Int’lPassenger

Domestic
Passenger

Cargo & Mail

+13.4

▲0.4

+2.0

▲0.1%

+2.3%

（JPY：Bn）

Other Revenue

Fuel

+25.5

▲32.6
Other Cost
(Excl. Fuel)

▲34.8

166.7
+8.9%

▲11.5%

140.0

+3.1%
▲4.1%

Mar/2014 Full-Year

Revenue +40.6 Bn

Expenses +67.4 Bn

Mar/2015 Full-Year
Forecast17 With respect to revenues, international passenger revenue is expected toincrease by 13.4 billion yen due to an increase in business and leisuretravelers spurred by a robust Japanese economy, additional flights on the
Narita and New York route, Narita and Jakarta route, and Haneda and Ho Chi
Minh City route. Combined with other revenue, we forecast an increase inrevenue of 40.6 billion yen.
As for expenses, we forecast fuel costs to increase by 32.6 billion yen due tochanges in exchange rates and market conditions, and an increase in loading
volume. In other expenses excluding fuel, we expect an increase inmaintenance costs and supply, resulting in an increase in expenses totaling
34.8 billion yen.

Impact From Currency Market Forecast Mar/2015
FOREX to為替影響により▲185億円の収支影響を見込む
have impact of ▲17.5 billion yen on profitability
Mar/2015
2014年度Forecast
計画

Mar/2014
2013年度Result実績
為替（円/USD）
FX（JPY/USD）

99.9

107

（JPY：Bn）▲26.7 Bn
Other
Revenue

166.7

Revenue

Fuel

226
+9.0

▲18.5

Expenses(Excl. Fuel)

+110

▲185

▲8.0

Mar/2014 Full-Year

Results（99.9JPY/USD）FX impact ▲17.5 Bn YEN

+31.8

Other
Expenses

▲41.0

140.0

▲110

Increased Other expenses▲9.2 Bn YEN

Mar/2015 Full-Year

Results（107JPY/USD）

18

 While revenues are expected to increase by 9 billion yen, the impact of
exchange rates is expected to push fuel costs and expenses excluding
fuel upward by 18.5 billion yen and 8 billion yen respectively.
 Excluding the impact of exchange rates, while revenues are expected toincrease by 31.8 billion yen, expenses are expected to increase by 41
billion yen. As a result, we forecast a decrease in operating profit of 26.7
billion yen from the end of the previous fiscal year.

Mar/2015 Earnings Forecast(Consolidated Balance Sheet / Cash Flow)
Consolidated Balance Sheet（JPY:Bn）

Mar/2014
ResultMar/2015
Forecast

Difference

1,340.1

1,402.0+61.8Interest-bearing Debt

134.2

101.0

▲33.2

Shareholders' Equity

690.2

744.0

+53.7

Shareholders' Equity Ratio
(%)

51.5%

53.1%

+1.6ptROA (%) (1)

13.0%

10.2%

▲2.8ptTotal Assets

Consolidated Cash Flow
（JPY:Bn）

Mar/2014
ResultMar/2015
Forecast

Difference

Cash Flow fromOperating Activities

247.9

226.0

▲21.9

Cash Flow from
Investing Activities (2)▲166.7▲195.0▲28.3

Free Cash Flow (2)

81.2

31.0

▲50.2

Cash flow from
Financing Activities

▲61.9

▲62.0

▲0

EBITDA

249.5

227.0

▲22.5

EBITDAR

281.0

253.0

▲28.0

Notes:
1. ROA = Operating
Profit / (((Total
Assets at
beginning of year
+ Total assets at
end of year) +Off-balance
Lease atbeginning of year
+ Off-balance
Lease at end ofyear))/2), usedaircraft lease forforecast
2. Excludes deposit
and withdrawal
from deposit
accounts

19We forecast shareholder’s equity of 744 billion yen, resulting in an equity ratioof 53.1%, and subsequently, we expect to achieve our 50% equity ratio target
as set out in the Medium Term Management Plan.

In consolidated cash flows, we forecast cash flows for operations andinvesting of 226 billion yen and 195 billion yen respectively in our operating
profit forest of 140 billion yen. As a result, free cash flow is projected to be 31
billion yen.
For your reference, at the end of the handout we have provided results ofrevenue of international routes by geographic segment and a Number ofAircraft in Service Mar/2014, and also the effects of fuel prices and exchange
rates, and our international and domestic passenger revenue forecasts forfiscal year 2014. Please take the time to refer to them.

《Supplemental Reference》
Revenue of International Routes by Geographic segment
Passenger Revenue (% of the whole int’l revenue)

Passengers(%)

FY2012FY2013y/y

4Q FY2013y/y(‘000)

Trans Pacific

34.0%

34.0%

+0.0pt33.5%+0.5ptTrans Pacific

Europe

18.0%

18.5%

+0.5pt16.0%+0.5ptEuropeAsia/Oceania

37.0%

36.5%

▲0.5pt38.5%▲2.0pt

China

11.0%

11.0%

▲0.0pt12.0%+1.0pt

FY2012FY2013

1,692

1,775

+4.9%

453

+7.8%

664

690

+3.9%

166

+5.7%

Asia/Oceania

4,052

4,083

+0.8%

1,018

▲4.4%

China

1,116

1,173

+5.1%

297

+13.2%ASK

y/y

4Q FY2013y/y

Load Factor(MN seat km)

FY2012FY2013y/yTrans Pacific

16,087

17,099+6.3%

Europe

8,157

8,160

Asia/Oceania

17,130

China

3,369

4Q FY2013

y/y

(%)

FY2012FY2013y/y

4Q FY2013

y/y

4,221

+2.2%

Trans Pacific

80.1%

79.4%

81.1%

+4.1pt

+0.0%

1,939

+0.2%

Europe

76.8%

78.3%

▲0.7pt+1.4pt79.1%+2.3pt17,431

+1.8%

4,357

▲1.4%

Asia/Oceania

74.6%

75.9%

+1.3pt76.1%▲1.9pt

3,542

+5.1%

873

+0.3%

China

62.1%

61.9%

▲0.2pt63.6%+7.2ptRPK(MN passenger km)

FY2012FY2013y/yTrans Pacific

12,894

13,578

+5.3%

3,426

+7.7%

Europe

6,268

6,387

+1.9%

1,533

+3.2%

Asia/Oceania

12,781

+3.5%

3,316

▲3.7%

China

2,091

13,230
2,192

+4.8%

555

+13.1%

4Q FY2013y/y20

《Supplemental Reference》
Number of Aircraft in Service Mar/2014
End of Mar/2013
Owned

Boeing 777-200
Boeing 777-200ER
Boeing 777-300
Boeing 777-300ER
Large-sized Total
Boeing 787-8
Boeing 767-300
Boeing 767-300ER
Middle-sized Total
MD90

Boeing 737-400
Boeing 737-800
Small-sized Total
Embraer 170
Bombardier CRJ200
Bombardier D8-400
SAAB340B
Bombardier D8-300
Bombardier D8-100

Regional Total
TOTAL

15
11
7
13
46
7
16
14
37
2
14
18
34
12
9
9
9
1
4
44
161

LeasedEnd of Mar/2014
Total

0
0
0
0
0
0
0
18
18
0
2
31
33
0
0
2
2
0
0
4
55

Owned

15
11
7
13
46
7
16
32
55
2
16
49
67
12
9
11
11
1
4
48
216

LeasedDifference
Total

15

0

11

0

7

0

13

0

46

0

15

0

15

0

15
11
7
13
46
15
15

18

14

32

--

48

14

62

+7

0

0

0

-2

11

2

13

-3

21

29

50

+1

32

31

63

-4

15

0

15

+3

9

0

9

--

9

2

11

--

10

1

11

--

1

0

1

--

4

0

4

--

48

3

51

+3

174

48

222

+6

--

----+8-1

21

《Supplemental Reference》
Impact from Fuel and Currency Markets Mar/2015
Hedging Ratio for Fuel Costs (As of End of Mar/2014)

Sensitivity for Fuel Costs 1(Without Hedging)100%

Effect on Fuels (year)

Approx
80%

80%

Fuel
#REF!

#REF!
FX

60%
Approx40%

40%

ApproxApprox
10% 10%20%

Crude Oil
(Change in 1
USD/bbl）

2.3 Bn JPY
Per Year

FX(Change in 1
JPY/USD)

2.6 Bn JPY
Per YearApproxApprox
5%
5%

0%
Mar/2015

Mar/2016

Mar/2017

Assumptions
FY2013 Result

Singapore Kerosene (USD/bbl)
FX Rate (JPY/USD)＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿

1.

Based on Rolling Plan 2014

121.5
99.9

FY2014 Plan

125
107
22

《Supplemental Reference》
FY14 Earnings Forecast（ Air transportation Segment ）International Passenger Operations
End of Mar/2014
ResultEnd of Mar/2015
Forecasty/y （%）
1H(Forecast)

2H(Forecast)

Passenger Revenue(JPY Bn)

437.5

+3.1%

+3.4%

+2.8%

ASK (MN seat km)

46,235

+4.9%

+4.8%

+4.9%

RPK (MN passenger km)

35,390

+2.7%

+2.4%

+2.9%

Passengers (’000)

7,723

+0.5%

+0.0%

+1.0%

L/F (%)

76.5%

74.9%

74.5%

75.4%

12.4

+0.4%

+1.0%

▲0.1%

9.5

▲1.7%

▲1.3%

▲2.0%

56,657

+2.6%

+3.4%

+1.8%

Yield 1（JPY）

Unit Revenue 2（JPY）
Revenue per passenger 3（JPY）

Notes:
1. Yield = Passenger Revenue / RPK
2. Unit Revenue=Passenger Revenue / ASK
3. Revenue per Passenger = Passenger Revenue / Passengers

23

《Supplemental Reference》
FY14 Earnings Forecast（ Air transportation Segment ）Domestic Passenger Operationsy/y （%）End of Mar/2014
ResultEnd of Mar/2015
Forecast

Passenger Revenue(JPY Bn)

487.4

▲0.0%

▲1.4%

+1.4%

ASK (MN seat km)

37,084

▲2.1%

▲3.9%

▲0.1%

RPK (MN passenger km)

23,745

▲0.8%

▲1.2%

▲0.4%

Passengers (’000)

31,218

▲0.8%

▲1.2%

▲0.5%

L/F (%)

64.0%

64.9%

64.1%

65.6%

Yield 1（JPY）

20.5

+0.7%

▲0.2%

+1.8%

Unit Revenue 2（JPY）

13.1

+2.1%

+2.5%

+1.6%

15,613

+0.8%

▲0.3%

+1.9%

Revenue per passenger 3（JPY）

Notes:
1. Yield = Passenger Revenue / RPK
2. Unit Revenue=Passenger Revenue / ASK
3. Revenue per Passenger = Passenger Revenue / Passengers

1H(Forecast)

2H(Forecast)24

Contact:
Finance, Japan Airlines+81-3-5460-3068

Disclaimer

This contents contains descriptions of the future expectations, outlooks, objectives and plans etc. of Japan Airlines
Co., Ltd. (hereafter "the company") and related Group companies (hereafter "the Group"). These are based on
information available at the time when these materials were created by the company (or as otherwise specified), andare created based on the forecasts at such time. These statements were created based on certain assumptions.
These statements and assumptions include the subjective projections and judgments of our management, and due tovarious risks and uncertainties, these may be found to be inaccurate or unrealized in the future. Therefore, the actual
results, earnings and financial conditions, etc. of the Group may differ from the projections of the company. Theserisks and uncertainties include, but are not limited to, the economic and social conditions of Japan and other countries
and regions, soaring fuel costs, changes in the exchange rates between the yen and the dollar or other currencies,
terrorist attacks or wars, infectious disease outbreaks, and various other risks related to the aviation business.
Statements on this contents regarding future information are, as mentioned above, valid at the time of creation (oras otherwise specified), and our company has no obligation to ensure that this information is updated with the latest
available information.
The information contained in this contents is for informational purposes only, and is not intended as arecommendation, solicitation or request for the purchase of or trade in any securities or financial products.
Although every effort has been made to ensure that the information posted on this contents regarding the Group iscorrect, it includes unaudited financial information for which we provide no guarantee of its accuracy, completeness,fairness or reliability. The Company does not have any responsibility for any damages resulting from the use of thiscontents.
It should be noted that all rights with this contents and other copyright of this material belongs to Japan Airlines Co.,
Ltd.