May 10, 2019

Financial Results for the Year Ended March 31, 2019 [J-GAAP]
Company name:AIRPORT FACILITIES CO., LTD. (AFC)Stock exchange listed on:
Tokyo Stock Exchange (First Section)
Company code:
8864
URL: http://www.afc.jp
Representative: Hiroshi Maruyama, President and CEO
Inquiries: Takahiro Hama, Corporate Officer, General Manager of Accounting Dept. TEL: +81-3-3747-0251
The date of the ordinary general shareholders’ meeting:June 27, 2019
The date of the dividend payment start:
June 28, 2019
The date of filing the securities report:
June 27, 2019
Preparation of earnings presentation material:
Yes
Holding of earnings announcement:
Yes (for analysts)(Figures are rounded off to the nearest million yen.)

1. Consolidated Financial Results for the Year Ended March 2019 (April 1, 2018 - March 31, 2019)(1) Consolidated Business Results(Percentages are changes from the same period of the previous year.)
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
Fiscal year ended

Millions of yen

March 31, 2019
March 31, 2018%24,213
22,791

6.2
5.2(Note) Comprehensive income:Millions of yen

%

4,129
4,103

0.6
7.3

Millions of yen

Fiscal year ended March 31, 2019:
Fiscal year ended March 31, 2018:

Net income
per share

Fiscal year ended

March 31, 2019
March 31, 2018

(Reference) Equity in earnings of affiliates:

Yen(10.4)
6.7

2,008 million yen
3,097 million yen

Diluted net income
per share

Return on equity

42.11
43.23

3.9
4.3

%

Yen

42.28
43.36

%

3,338
3,726

Fiscal year ended March 31, 2019:
Fiscal year ended March 31, 2018:

Millions of yen

%

2,104
2,219

(5.2)
3.2

((35.1%))(29.1%)

Ordinary income toOperating margin
total assets
%

%

3.5
4.3

－ million yen－ million yen

17.0
18.0

(2) Consolidated Financial Position
Total assets
As of March 31, 2019
As of March 31, 2018

(Reference) Equity capital:

Yen

101,384
87,96155,74054,482

52.6
59.4

1,072.90
1,050.69

Cash flows fromfinancing activities

Millions of yen

5,176
7,147

2. Dividends

As of March 31, 2018: 52,277 million yen

Cash flows frominvesting activities

Millions of yen

March 31, 2019
March 31, 2018

Millions of yen(13,490)(5,383)

Q2
Yen

Fiscal year ending

March 31, 2020
(Forecasts)

Q3

Q4

Total
dividends(annual)Annual

―
―

7.00
7.00

Yen

Yen

―
―

7.00
7.00

Yen

14.00
14.00

―

7.00

―

7.00

14.00

Cash and cash equivalents
at year end
Millions of yen

9,524(2,909)Dividends per share

Q1

Net assets per share%

Cash flows fromoperating activities

Fiscal year ended

March 31, 2018
March 31, 2019

Equity ratio

Millions of yen

As of March 31, 2019: 53,387 million yen(3) Consolidated Cash Flows

Fiscal year ended

Net assets

Millions of yen

Yen

5,824
4,608

Payout ratio(consolidated)

Millions of yen

%

710
696

32.3
33.1

Dividends to
net assets(consolidated)

%

1.4
1.3

30.0

3. Forecast of Consolidated Earnings for the Year Ending March 2020 (April 1, 2019 - March 31, 2020)(Percentages are changes from the same period of the previous year.)Net salesFirst half
Full fiscal year

Operating income

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen%

12,36024,780

1.1
2.2

2,280
4,170

0.6
0.8

2,100
3,710

4.0
11.2

- 1 -

Profit attributable toowners of parent
Millions of yen

%

1,320
2,320

0.6
10.2

Basic earnings
per share

Yen

26.52
46.62

＊Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting from changes in scope of consolidation): No(2) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
1) Changes in accounting policies with revision of accounting standards, etc. : Yes
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Restatement of revisions: No(3) Number of issued shares (common shares)
1) Number of issued shares
As of March 31, 2019:
52,979,350 shares As of March 31, 2018:
52,979,350 shares(including treasury stock)2) Number of treasury stock
As of March 31, 2019:
3,219,779 shares As of March 31, 2018:
3,223,911 shares
3) Average number of shares during Year ended March 31,
Year ended March 31,
49,758,606 shares
51,195,843 sharesthe period
2019:
2018:

(Reference) Summary of Non-consolidated Results
1. Non-consolidated Financial Results for the Year Ended March 2019 (April 1, 2018 - March 31, 2019)(Percentages are changes from the same period of the previous year.)(1) Non-consolidated Business Results
Operating income
Ordinary income
Net income
Net sales
Fiscal year ended

March 31, 2019
March 31, 2018

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

20,946
19,630

6.7
5.9

2,960
2,781

6.4
15.8

2,596
2,908

(10.7)
19.0

1,721
1,967

(12.4)
20.8

Net income per
share
Fiscal year ended

March 31, 2019
March 31, 2018

Diluted net income
per share

Yen

Yen

34.60
38.42

34.45
38.31

Total assets

Net assets(2) Non-consolidated Financial Position

As of March 31, 2019
As of March 31, 2018

(Reference) Equity capital

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

88,86877,00751,40850,38257.7
65.3

1,030.84
1,011.01

As of March 31, 2019: 51,294 million yen

As of March 31, 2018: 50,303 million yen

2. Forecast of Non-consolidated Earnings for the Year Ending March 2020 (April 1, 2019 – March 31, 2020)(Percentages are changes from the same period of the previous year.)Net salesFirst half
Full fiscal year

Millions of yen

10,72021,450Ordinary income
%

1.5
2.4

Millions of yen

1,730
2,900

Net income
%

6.9
11.7

Millions of yen

1,170
1,950

Net income per share
%

5.3
13.4

Yen

23.51
39.18

＊Financial Results report is outside the scope of an audit by certified public accountants or an audit corporation.
＊Explanation of the proper use of earnings forecasts and other special notes

The statements about future described on this report such as earnings forecasts have been made based on information currently available andsome conditions that we judge rational, and therefore they do not constitute a guarantee that they will be realized. Actual earnings may differ
greatly from the above forecasts for various reasons. For the assumptions for earnings forecasts and cautions regarding the use of the earnings
forecasts, please refer to page 5 “1. Summary of Operating Results, etc. (5) Future Outlook”.

- 2 -1. Summary of Operating Results, etc.

(1) Summary of operating results for the year ended March 2019
During the year ended March 31, 2019, the Japanese economy continued to show a gradual recovery supported by solid
personal consumption and an increase in capital investments. However, the global economic slowdown triggered by trade
friction between the U.S. and China resulted in sluggish export since late 2018 and started affecting production andcorporate performance. In addition, worldwide fall in stock prices originating in the U.S. in December 2018 led to temporal
lower stock prices and yen’s appreciation in Japan, and stock prices and exchange rates remain unstable under thecontinuing global monetary easing policy.
There are concerns over the impact on the Japanese economy of uncertain outlook for trade negotiation between the U.S.
and China and the economic slowdown in China, as well as destabilizing factors for global economy including political andeconomic uncertainty and economic downturn in Europe.
In the aviation industry, strong demands of domestic and international passengers continued despite a temporary decline
due to natural disasters in Hokkaido and Kansai area in last September. In particular, demands of international flights
continued to be strong with the number of foreign passengers visiting Japan over the year exceeding 31 million and remainstrong in this year.
With the Tokyo Olympic and Paralympic Games coming next year, in order to achieve the government target of thenumber of foreign passengers visiting Japan of 40 million in 2020, efforts to enhance airport functions are in progress suchas an increase in arrival and departure slots at Tokyo International Airport by 39 thousand, and major domestic and foreign
airlines and LCCs are expected to increase the number of flights. On the other hand, with concerns over pilot shortage, wildswing in crude oil prices and fluctuations in exchange rates, domestic airline companies are continuing to work onenhancing cost competitiveness while implementing advanced equipment, expanding network and strengthening LCC
business.
Under such economic conditions, the Group (the Company and its consolidated subsidiaries) recorded net sales of¥24,213 million (up 6.2% from the previous fiscal year) due to an improved occupancy ratio of our tenants in Tokyo
International Airport, full-year operation of aviation related facilities in local airports and the start of leasing of the hotel in
Kyoto acquired at the end of June 2018. Operating income was ¥4,129 million (up 0.6%) despite increased rates ofelectricity and gas in Area Heating & Cooling Business and increases in depreciation expense and real estate acquisition tax
associated with the acquisition of the hotel in Kyoto.
Ordinary income was ¥3,338 million (down 10.4%) due to recording of provision for removal cost for ARC Building in
relation to extension or reconstruction for a new in-flight meal factory in Tokyo International Airport although a subsidiaryin Singapore recorded foreign exchange gains in non-operating income. Also in extraordinary income or loss, although thedamage by typhoon was covered by insurance income, loss on retirement was recorded for one cargo facility which wasrecently withdrawn due to establishment of a new VIP Room by the government; and as a result, profit attributable toowners of parent was ¥2,104 million (down 5.2%).
Performance by business segment is as follows:(i) Real Estate Business
Real Estate Business recorded net sales of ¥18,116 million (up 6.8% from the previous fiscal year), due to an
improved occupancy ratio of our tenants in Tokyo International Airport, full-year operation of a hangar at Kitakyushu
Airport, start of supply of a new apartment, start of operation of the hotel in Kyoto and inclusion of a Canadiansubsidiary in the scope of consolidation. Operating income was ¥3,105 million (up 6.3%).
(ii) Area Heating & Cooling Business
Area Heating & Cooling Business recorded net sales of ¥3,242 million (up 1.0 % from the previous fiscal year),about the same level as last year due to an extremely hot summer followed by a warm winter. Meanwhile, operating
income was ¥787 million (down 23.9%) due to an increase in cost attributable to increased rates of electricity and
gas.

- 3 -

(iii) Water Supply & Drainage Service and Other Business
Water Supply & Drainage Service and Other Business recorded net sales of ¥2,854 million (up 8.4% from theprevious fiscal year) as a result of a solid growth in sales of water supply and drainage usage due to increases in thenumber of passengers and water supply to tunnel and road constructions at Tokyo International Airport, and steady
operation of the solar power facility which started electric power selling in Heiwajima, Ota-ku since February 2018.
Operating income was ¥237 million (up 59.2%).
(2) Summary of financial position as of March 31, 2019
(Assets)
Total assets as of March 31, 2019 amounted to ¥101,384 million, an increase by ¥13,422 million from March 31, 2018,
mainly due to the acquisition of the hotel in Kyoto.
(Liabilities)
Liabilities as of March 31, 2019 amounted to ¥45,644 million, an increase by ¥12,165 million from March 31, 2018, due tothe Company’s first bond issuance associated with acquisition of the hotel in Kyoto and an increase in long-term loans
payable.
(Net assets)
Net assets as of March 31, 2019 increased by ¥1,257 million compared to March 31, 2018 to ¥55,740 million mainly due
to an increase in retained earnings. As a result, equity ratio as of March 31, 2019 decreased by 6.7 points to 52.6%
compared to March 31, 2018.
(3) Summary of cash flows for the fiscal year ended March 31, 2019
Cash and cash equivalents (“cash”) as of March 31, 2019 amounted to ¥5,824 million, an increase of ¥1,216 million fromMarch 31, 2018.
(Cash flows from operating activities)
Net cash provided by operating activities was ¥5,176 million (previous fiscal year: ¥7,147 million provided), mainly
attributable to cash inflow from recording income before income taxes and cash outflows from an increase in operatingloans in an overseas subsidiary and purchase of other assets.
(Cash flows from investing activities)
Net cash used in investing activities was ¥13,490 million (previous fiscal year: ¥5,383 million used), mainly attributableto purchase of non-current assets, the hotel in Kyoto.
(Cash flows from financing activities)
Net cash provided by financing activities was ¥9,524 million (previous fiscal year: ¥2,909 million used), mainly
attributable to proceeds from issuance of bonds associated with the acquisition of the hotel in Kyoto and an increase inproceeds from long-term debt.
(Reference) Cash Flow Indicators
FY2017/3

FY2018/3

FY2019/3

Equity ratio (%)

58.7

59.4

52.6

Equity ratio at market value (%)

35.2

38.1

28.8

Debt repayment period (years)

7.9

3.2

6.5

Interest coverage ratio (times)

8.3

21.1

12.8

Equity ratio: Equity capital / Total assets
Equity ratio at market value: Market capitalization / Total assets
Debt repayment period: Interest-bearing debt / Operating cash flows
Interest coverage ratio: Operating cash flows / Interest expense(Notes)1. All indicators are calculated using financial figures on a consolidated basis.

- 4 -2. Interest-bearing debt includes all debt recorded on the consolidated balance sheets on which interest ispaid.
3. Operating cash flows and interest expense are based on “Cash flows from operating activities” and“Interest paid” presented on the consolidated statement of cash flows.
(4) Progress Status of the Medium-term Management Plan
As for the progress status of the Medium-term Management Plan developed in October 2016, net sales for the year ended
March 31, 2019 was ¥24,213 million, significantly increased by 16.9% in three years from ¥20,697 million for the year
ended March 31, 2016, and exceeded the target in the Medium-term Management Plan by 7.4% mainly due to an improved
occupancy ratio of existing facilities and the favorable results of new investments exceeding the initial plan. Also,
operating income increased 40.2% from three years ago and exceeded the target in the Medium-term Management Plan by
4.3%.
Profit attributable to owners of parent increased 8.7% from three years ago but fell below the target in the Medium-termManagement Plan by 7.3%. This is mainly attributable to unexpected non-operating expenses in the fiscal year ended
March 31, 2019 such as bond issuance cost associated with the acquisition of the hotel in Kyoto and unexpected increase inprovision for removal cost for ARC Building in relation to extension or reconstruction for a new in-flight meal factory tomeet increasing needs due to an increase in international flights. However, we consider them forward-looking expenses
necessary for the future.
(5) Future Outlook
With factors including the start of operation of in-flight meal factory at Tokyo International Airport, start of operation of
new aviation related facilities at Tokyo International Airport and local airports such as Kobe, and full-year operation of thehotel in Kyoto acquired in 2018, the forecast for the fiscal year ending March 31, 2020 is consolidated net sales of ¥24,780
million (up 2.2% from the previous fiscal year), operating income of ¥4,170 million (up 0.8%), ordinary income of ¥3,710
million (up 11.2%), and profit attributable to owners of parent of ¥2,320 million (up 10.2%).
(6) Development of the New Medium-term Management Plan
The Company has developed “Medium-term Management Plan for FY ending March 2020 to March 2022.” Under theplan, we will further improve the profitability of existing business in response to increasing aviation related demandsurrounding the Company and also make proactive investment of ¥30 billion inside and outside airports exceeding cash
flows in the next three years. We aim to achieve the targets of net sales of ¥27.5 billion, operating income of ¥4.6 billion,
and profit attributable to owners of parent of ¥2.6 billion for steady increase both in sales and profit.
(7) Basic Policy Regarding Distribution of Earnings and Dividends for the Year Ended March 31, 2019 and the YearEnding March 31, 2020
We plan distribution of earnings taking into consideration maintenance of stable management base and enhancement offinancial strength, and our dividend policy is to stably return profits to shareholders based on the comprehensive
consideration over the current performance and future outlook, with the dividend payout ratio of over 30% in principle.
Based on the above policy and the performance, the dividend for the year ended March 31, 2019 is expected to be ¥14 pershare consisting of interim dividend of ¥7 per share and year-end dividend of ¥7 per share. The dividend for the next fiscal
year is expected to be ¥14 per share (including interim dividend of ¥7 per share).

2. Basic Policy Regarding Selection of Accounting Standards

The Group adopts Japanese Accounting Standards to ensure comparability with domestic sector peers.

- 5 -3. Consolidated Financial Statements and Major Notes(1) Consolidated Balance Sheets(Thousands of yen)
FY3/18(As of March 31, 2018)

FY3/19(As of March 31, 2019)

AssetsCurrent assets
Cash and deposits

4,608,382

4,324,573

Notes and accounts receivable-trade

1,210,390

1,208,590－

1,500,000

Lease receivables and investment assets

5,991,149

6,600,080

Operating loans

5,422,908

5,741,839

Raw materials and supplies

14,676

12,908Others284,004

1,456,944

17,531,512

20,844,937

157,631,924

162,722,788(113,097,579)(115,363,210)

Buildings and structures, net

44,534,344

47,359,577

Machinery, equipment and vehicles

18,173,305

18,826,372(12,789,035)(13,430,679)

5,384,270

5,395,693

Tools, furniture and fixtures

424,337

1,059,644

Accumulated depreciation(267,996)(490,837)

Tools, furniture and fixtures, net

156,341

568,807Land

10,307,875

14,596,026

Construction in progress

1,422,667

3,299,425

Total property, plant and equipment

61,805,499

71,219,530

49,90741,9297,483,456

7,671,946

2,217

1,732

Securities

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation and impairment loss

Accumulated depreciation
Machinery, equipment and vehicles, net

Intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets

259,037

320,447

Net defined benefit asset

218,585

203,945

Others646,334

1,090,548

Allowance for doubtful accounts(34,567)(10,267)

Total investments and other assets

8,575,064

9,278,352

Total non-current assets

70,430,471

80,539,812

87,961,984

101,384,749

Total assets- 6 -(Thousands of yen)
FY3/18(As of March 31, 2018)

FY3/19(As of March 31, 2019)

Liabilities
Current liabilities
Notes and accounts payable-trade

1,023,054

1,532,544

Short-term loans payable

5,879,559

5,974,226

Accounts payable

674,381

1,064,205

Income taxes payable651,257

557,004

Accrued expenses

93,808109,744

Unearned revenue

977,315

1,045,001

Provision for bonuses

128,398

131,094

Provision for directors’ bonuses

27,98030,058Provision for removal cost of property, plant and equipment

173,200

364,598

Others421,549

384,329

10,050,504

11,192,806－

6,000,000

Long-term loans payable

17,279,899

21,729,366

Long-term guarantee deposited

5,638,318

5,915,755

Long-term accounts payable-other311,526

476,128

6,846

1,044

－

6,379

192,311323,237

23,428,901

34,451,910

33,479,405

45,644,717

Capital stock

6,826,100

6,826,100

Capital surplus

6,982,890

6,982,890

Total current liabilities
Non-current liabilities
Bonds payable

Provision for directors’ retirement benefits
Deferred tax liabilities
Provision for removal cost of property, plant and equipment
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Retained earnings

37,381,745

38,777,424

Treasury stock(1,786,417)(1,784,131)

Total shareholders’ equity

49,404,317

50,802,282

2,853,576

2,817,756

19,613(232,638)

2,873,189

2,585,117

Subscription rights to shares

79,896

113,808

Non-controlling interests

2,125,175

2,238,823

Total net assets

54,482,578

55,740,032

87,961,984

101,384,749

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income

Total liabilities and net assets- 7 -(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Thousands of yen)
FY3/18(April 1, 2017 –March 31, 2018)

FY3/19(April 1, 2018 –March 31, 2019)

Net sales
Cost of sales

22,791,701
16,862,420

24,213,529
18,098,758

Gross profit
Selling, general, and administrative expenses
Directors’ compensations
Salaries and bonuses
Provision for bonuses
Provision for directors’ bonuses
Transportation and communication expenses
Depreciation
Taxes and dues
OthersTotal selling, general, and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Commission fee
Foreign exchange gains
Others5,929,280

6,114,770

305,538
491,488
80,18027,980105,672
14,510163,901
636,245
1,825,517
4,103,762

329,881
527,022
81,46330,058107,075
28,687
170,252
710,551
1,984,991
4,129,778

1
162,625
53,119－69,3391
171,384
21,83944,75390,650Total non-operating income
Non-operating expenses
Interest expenses
Removal cost of property, plant and equipment
Provision for removal cost
Foreign exchange losses
Bond issuance cost
Others285,086

328,629

339,284
103,498
16,566
184,194－
19,180421,116
61,142495,524－
119,788
22,508662,724
3,726,125

1,120,079
3,338,328－－－

617,417
2,541

171,720555,531

Total extraordinary loss
Income before income taxes
Income taxes
Income taxes - deferred

27,902－
27,902
3,698,222
1,143,500
94,187727,251
3,231,036
1,009,965(34,964)

Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

1,237,688
2,460,534
240,755
2,219,779

975,001
2,256,035
151,978
2,104,057

Total non-operating expenses
Ordinary income
Extraordinary income
Insurance income
OthersTotal extraordinary income
Extraordinary loss
Loss on retirement of non-current assets
Loss on disaster- 8 -619,959

(Consolidated statements of comprehensive income)(Thousands of yen)
FY3/18(April 1, 2017 –March 31, 2018)

FY3/19(April 1, 2018 –March 31, 2019)2,460,534

2,256,035

ProfitOther comprehensive income
Valuation difference on available-for-sale securities

435,146(35,820)

Foreign currency translation adjustment

201,403(211,647)

Total other comprehensive income

636,549(247,467)

3,097,084

2,008,567

2,856,328

1,856,589

240,755

151,978

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests- 9 -(3) Consolidated Statements of Changes in Net Assets
For the Year ended March 31, 2018 (April 1, 2017 to March 31, 2018)(Thousands of yen)

Shareholders’equity

Capital stock

Balance at the beginning of current period

Capital surplus

6,826,100

Retainedearnings

6,983,993

Treasury stock

Total
shareholder'sequity(1,559,198)

49,200,635

36,949,740

Changes of items during the period
Dividends from surplus(723,436)(723,436)

Profit attributable to owners of parent

2,219,779

2,219,779

Purchase of treasury stock
Disposal of treasury stock

676

Retirement of treasury stock(1,780)(1,064,337)(1,299,156)(1,299,156)

5,820

6,496

1,066,117－

Net changes of items other than shareholders’ equity－

Total changes of items during the period
Balance at the end of current period－(1,103)432,004(227,218)

203,6826,826,100

6,982,890

37,381,745(1,786,417)

49,404,317

Subscription
rights toshares

Noncontrollinginterests

Total
net assets

55,022

1,922,748

53,415,045

Accumulated othercomprehensive income
Valuationdifference on
available-forsale securities
Balance at the beginning of current period

2,418,429

Total
accumulated
othercomprehensive
income(181,790)
2,236,639

Foreigncurrencytranslation
adjustment

Changes of items during the period
Dividends from surplus－

Profit attributable to owners of parent(723,436)－

2,219,779

Purchase of treasury stock－(1,299,156)

Disposal of treasury stock

－

6,496

Retirement of treasury stock
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance at the end of current period－
201,403435,146

201,403

636,549

24,874202,426

1,067,532

2,853,576

19,6132,873,189

79,8962,125,175

54,482,578- 10 -

636,549－

435,146

24,874202,426

863,850

For the Year ended March 31, 2019 (April 1, 2018 to March 31, 2019)(Thousands of yen)

Shareholders’equity

Capital stock

Balance at the beginning of current period

Capital surplus

6,826,100

Retainedearnings

6,982,890

Treasury stock

Total
shareholder'sequity(1,786,417)

49,404,317

37,381,745

Changes of items during the period
Dividends from surplus(696,606)

Profit attributable to owners of parent

2,104,057

Purchase of treasury stock(696,606)
2,104,057(95)

Disposal of treasury stock(38)

Change in scope of consolidation

2,382(11,734)－－－

1,395,678

2,286

1,397,965

6,826,100

6,982,890

38,777,424(1,784,131)

50,802,282

Subscription
rights toshares

Noncontrollinginterests

Total
net assets

79,8962,125,175

54,482,578

Accumulated othercomprehensive income

Balance at the beginning of current period

2,344(11,734)

Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance at the end of current period(95)

Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

2,853,576

19,613

Total
accumulated
othercomprehensive
income2,873,189

Changes of items during the period
Dividends from surplus－(696,606)

Profit attributable to owners of parent－

2,104,057

Purchase of treasury stock

－

(95)

Disposal of treasury stock
Change in scope of consolidation

－

2,344

(40,604)(40,604)(52,338)

Net changes of items other than shareholders’ equity(35,820)(211,647)(247,467)

33,912

113,648(99,906)

Total changes of items during the period(35,820)(252,252)(288,072)

33,912

113,648

1,257,454

Balance at the end of current period

2,817,756(232,638)

2,585,117

113,8082,238,823

55,740,032- 11 -

(4) Consolidated Statements of Cash Flows(Thousands of yen)
FY3/18(April 1, 2017 –March 31, 2018)

FY3/19(April 1, 2018 –March 31, 2019)

Cash flows from operating activities
Income before income taxes

3,698,222

3,231,036

Depreciation and amortization

3,547,173

4,033,394－

555,531(21,727)

322,324(40,451)

14,6395,802(5,802)18

2,696

Loss on disaster
Increase (decrease) in provision for removal cost of
property, plant and equipment
Decrease (increase) in net defined benefit asset
Increase (decrease) in provision for directors’
retirement benefits
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’ bonuses
Interest and dividend income

3,683

2,078

(162,626)(171,385)

Increase (decrease) in allowance for doubtful accounts－(24,300)

Insurance income－(617,417)

Share-based compensation expenses

31,35836,252

Interest expenses

339,284

421,116－

119,788(8)27,902－
171,720(103,362)

1,372(1,206)

1,768

Bond issuance cost
Interest on securities
Loss on retirement of non-current assets
Decrease (increase) in notes and accounts receivable
Decrease (increase) in inventories
Net decrease (increase) in lease receivables andinvestment assets
Decrease (increase) in operating loans receivable(220,626)

349,646

1,244,094(548,764)

Increase (decrease) in notes and accounts payable

70,90230,712

Increase (decrease) in unearned revenue

32,53361,725

Increase (decrease) in accrued expenses

10,214(32,961)

Increase (decrease) in accrued consumption taxes

232,705(347,067)

Decrease (increase) in other assets(49,128)(1,615,550)

Increase (decrease) in other liabilities(76,631)(92,790)

Subtotal

8,568,124

5,899,762

Interest and dividends received
Interest paid

162,635(338,680)

171,385(402,820)

Proceeds from insurance income－

617,417

Payments for loss on disaster－(76,746)

Income taxes paid

(1,245,015)(1,032,790)

Net cash provided by operating activities

7,147,064

5,176,209

Cash flows from investing activities
Purchase of non-current assets(4,752,703)(12,733,042)

Purchase of investment securities(325,266)(758,050)

Purchase of shares of subsidiaries(305,830)－

1－

Proceeds from sales of investment securities
Collection of long-term loans receivable
Net cash used in investing activities- 12 -

606

485(5,383,192)(13,490,607)

(Thousands of yen)
FY3/18(April 1, 2017 –March 31, 2018)

FY3/19(April 1, 2018 –March 31, 2019)

Increase in short-term loans payable

4,400,000

3,598,051

Decrease in short-term loans payable(3,111,376)(4,898,051)

Proceeds from long-term debt

1,044,218

9,022,513

Payments of long-term debt

(3,414,347)(3,621,076)－

5,880,211

Cash flows from financing activities

Proceeds from issuance of bonds
Proceeds from guarantee deposits received

283,400

490,112

Repayments of guarantee deposits received(47,083)(212,675)

12

4

Proceeds from sales of treasury stock
Purchase of treasury stock(1,299,156)(95)

Payment of cash dividends(727,224)(696,504)

Cash dividends paid to non-controlling interests(38,329)(38,329)

Net cash (used in) provided by financing activities(2,909,886)

9,524,159

Effect of exchange rate change on cash and cash equivalents

40,556(42,498)

Net increase (decrease) in cash and cash equivalents(1,105,458)

1,167,262

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly
consolidated subsidiary
Cash and cash equivalents at end of period

5,713,841

4,608,382－

48,927

4,608,382

5,824,573- 13 -

(Segment Information)a. Segment information
1. Overview of reportable segments
The reportable segments of the Company are units for which separate financial information is available and whose operating
results are regularly reviewed by the Board of Directors in order to decide how to allocate management resources andevaluate their performances.
The Company’s head office develops comprehensive business strategies of each segment and pursues business activities.
The Company is, therefore, composed of three business segments with different services determined by the head office asfollows: “Real Estate Business,” “Area Heating & Cooling Business”, and “Water Supply & Drainage Service and Other
Business.”“Real Estate Business” leases office buildings, “Area Heating & Cooling Business” supplies cooling and heating services,and “Water Supply & Drainage Service and Other Business” operate and manage waterworks, drainage, and sharedtelecommunications network business.
2. Method of calculations of sales, profit (loss), assets, liabilities, and other items by reportable segments
Accounting treatments applied to reportable segments are, in general, consistent with those described in “Significant Basis for
Preparation of Consolidated Financial Statements.”
Inventories are valued at amount before write-off of book value to reflect decline in profitability.
Segment income is based on operating income.
Intersegment sales and transfers are based on prevailing market price.
3. Sales, profit (loss), assets, liabilities, and other items by reportable segments
Fiscal year ended March 2018 (April 1, 2017 – March 31, 2018)(Thousands of yen)

Reportable segment
Water Supply &Area Heating &Real Estate
Drainage
Cooling
Business
Service andBusiness
Other Business

Total

Adjustments(Note)

Carrying amounton consolidated
statements ofincomeNet sales
Net sales to outside
customers

16,950,039

3,208,872

2,632,788

22,791,701－

22,791,701

Inter-segment
net sales/transfers

244,354

832,629

228,324

1,305,307(1,305,307)－

17,194,393

4,041,502

2,861,112

24,097,008(1,305,307)

22,791,701

Segment income

2,919,882

1,034,925

148,955

4,103,762－

4,103,762

Segment assets

66,820,155

6,351,665

1,801,930

74,973,751

12,988,232

87,961,984

Segment liabilities

7,904,315

533,378

183,794

8,621,488

24,857,917

33,479,405

Depreciation andamortization

2,853,384

470,343

208,933

3,532,662

14,5103,547,173

Increase in property, plantand equipment andintangible assets

3,261,072

746,008

441,759

4,448,840

55,843

4,504,683

Total

Other items(Note)

Adjustments represent elimination of intersegment transactions.

- 14 -

Fiscal year ended March 2019 (April 1, 2018 – March 31, 2019)(Thousands of yen)

Reportable segment
Area Heating &Real Estate
Cooling
Business
Business

Water Supply &Drainage
Service andOther Business

Total

Adjustments(Note)

Carrying amounton consolidated
statements ofincomeNet sales
Net sales to outside
customers

18,116,348

3,242,281

2,854,899

24,213,529－

24,213,529

Inter-segment
net sales/transfers

244,428

858,712257,411

1,360,553(1,360,553)－

18,360,777

4,100,993

3,112,310

25,574,082(1,360,553)

24,213,529

Segment income

3,105,139

787,387

237,252

4,129,778－

4,129,778

Segment assets

78,186,213

7,026,093

1,500,805

86,713,112

14,671,637

101,384,749

Segment liabilities

9,284,757

1,135,945

186,950

10,607,654

35,037,062

45,644,717

Depreciation andamortization

3,264,384

507,878

232,444

4,004,707

28,687

4,033,394

Increase in property, plantand equipment andintangible assets

12,398,513

1,175,920

21,125

13,595,559

15,608

13,611,167

Total

Other items(Note) Adjustments represent elimination of intersegment transactions.

- 15 -