October 25, 2018

Financial Results for the Second Quarter of the Year Ending March 31, 2019 [J-GAAP](Consolidated)
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: Tomoyuki Takahashi, Chairman
Inquiries: Takahiro Hama, Corporate Officer, General Manager of Accounting Dept. TEL: +81-3-3747-0251
The date of filing the quarterly securities report:
November 5, 2018
The date of the dividend payment start:
November 22, 2018
Preparation of quarterly earnings presentation material:
Yes
Holding of quarterly earnings announcement:
Yes (for analysts)(Figures are rounded off to the nearest million yen.)

1. Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending March 2019 (April 1, 2018 - September 30, 2018)(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
First six months ended

Millions of yen

September 30, 2018
September 30, 201712,214
11,420(Note) Comprehensive income:First six months ended% Millions of yen

6.9
5.3

4.2
6.1

First six months ended September 30, 2018:
First six months ended September 30, 2017:

Basic earnings per
share% Millions of yen

2,020
2,049

(1.3)
(2.0)

1,311
1,218

1,322 million yen
1,805 million yen

%

7.6
(3.4)

((26.7 %))(198.5%)

Diluted earnings
per share

Yen

September 30, 2018
September 30, 2017

% Millions of yen

2,264
2,171

Yen

26.35
23.58

26.24
23.51

(2) Consolidated Financial Position
Total assets
As of September 30, 2018
As of March 31, 2018

(Reference) Equity capital:

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

99,36787,961

55,40254,48253.4
59.4

1,067.44
1,050.69

As of September 30, 2018: 53,115 million yen

2. Dividends

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

Dividends per share

Q1

Q2

Q3

Q4

Annual

Yen

Yen

Yen

Yen

Yen

－
－

7.00
7.00

－

7.00

14.00

－

7.00

14.00

FY ended March 31, 2018
FY ending March 31, 2019
FY ending March 31, 2019 (Forecasts)(Note) Changes in the latest forecasts released: No

3. Forecast of Consolidated Earnings for the Year Ending March 2019 (April 1, 2018 - March 31, 2019)(Percentages are changes from the same period of the previous year.)Net sales
Full fiscal year

Operating income

Profit attributable toowners of parent

Ordinary income

Basic earnings
per share

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

23,690

3.9

4,180

1.9

3,850

3.3

2,290

3.2

46.03

(Note) Changes in the latest forecasts released: No- 1 -＊ Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting from changes in scope of
consolidation): No(2) Application of specific accounting treatments in preparing the quarterly consolidated financial statements: Yes

Note: For details, please refer to “2. Quarterly Consolidated Financial Statements and Major Notes (3) Notes on Quarterly Consolidated
Financial Statements (Application of Specific Accounting Treatments in Preparing the Quarterly Consolidated Financial Statements)” on
page 9.

(3) 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(4) Number of issued shares (common shares)
1) Number of issued shares (including
As of September 30, 2018:
treasury stock)2) Number of treasury stock
As of September 30, 2018:
3) Average number of shares during
the period

First six months ended
September 30, 2018:

52,979,350 shares As of March 31, 2018:

52,979,350 shares

3,219,631 shares As of March 31, 2018:

3,223,911 shares

49,757,576 shares First six months ended
September 30, 2017:

51,673,993 shares* Financial Results report is outside the scope of a quarterly review by certified public accountants or an audit corporation.
* Explanation of the proper use of earnings forecasts and other special notes(Remarks on forward-looking statements)
The statements about future described on this report such as earnings forecasts have been made based on information currently available andcertain assumptions considered reasonable, and it is not intended to assure that we will achieve such results. Actual earnings may differ
significantly from the above forecasts for various reasons. For the assumptions for earnings forecasts and cautions regarding the use of theearnings forecasts, please refer to “1. Qualitative Information on Consolidated Financial Results for the Quarter Ended September 30, 2018 (3)Qualitative Information on Consolidated Earnings Forecast” on page 4.

- 2 -1. Qualitative Information on Consolidated Financial Results for the Quarter Ended September 30, 2018
(1) Explanation about Business Results

During the six months ended September 30, 2018, the Japanese economy showed a moderate recovery trend overall due toa steady growth of domestic capital investments and production. The Bank of Japan expressed its intention to continue themonetary easing policy to achieve its price stability target.
However, there remain global uncertainties arising from the further confusion in the international politics and economy aswell as a hike in crude oil prices and interest rates and fluctuations in exchange rates, amid the accelerating protectionism
in the U.S. In Japan, there are concerns over adverse impacts on the economy of sluggish consumption and corporate
activities as a consequence of the recent series of abnormal climate conditions and natural disasters.
The aviation industry witnessed a strong international flight demand supported by an increase in inbound tourists.
However, the growth of certain domestic flights slowed down as Northern Osaka Prefecture Earthquake in June and the
Heavy Rain Event in western Japan in July suppressed demands for inbound tourists. Moreover, the damage to KansaiInternational Airport by Typhoon Jebi (No. 21) in early September and the damage to New Chitose Airport by the
Hokkaido Eastern Iburi Earthquake forced airline companies to cancel a large number of flights, which affected sightseeing
and cargo flights. In addition, a hike in crude oil prices increased jet fuel costs. To deal with these situations, domestic
airline companies are working on implementing advanced equipment, expanding network and enhancing LCC businesswhile making efforts to increase cost competitiveness.
Under such economic conditions, the Group (the Company and its consolidated subsidiaries) is committed to expanding
business domains based on the Medium-term Management Plan, and a dispersed hotel with 5 buildings in Kyoto, which theGroup acquired and started leasing in late June as part of the initiatives targeting inbound tourists, started operation in midOctober.
The Group recorded net sales of ¥12,214 million (up 6.9% from the same period of the previous year) as a result of solid
growth in sales at Tokyo International Airport and steady operation of new facilities in local airports as well as theconsolidation of a Canadian subsidiary. Operating income was ¥2,264million (up 4.2%) despite an increase in real estate
acquisition tax and depreciation expense associated with the acquisition of the hotel in Kyoto. However, ordinary income
was ¥2,020 million (down 1.3%) due to provision for removal cost associated with renewal of certain aging facilities at
Tokyo International Airport and bond issuance cost although a subsidiary in Singapore recorded foreign exchange gains, animprovement from losses in the previous year. Profit attributable to owners of parent was ¥1,311 million (up 7.6%).
Performance by business segment is as follows:(i) Real Estate Business
Real Estate Business recorded net sales of ¥9,026 million (up 7.0% from the same period of the previous year), due
to an improved occupancy ratio of tenants at Tokyo International Airport, the commencement of operation of new
facilities in local airports and outside airports, and consolidation of a Canadian subsidiary. Operating income was¥1,587 million (up 6.2%).
(ii) Area Heating & Cooling Business
Area Heating & Cooling Business recorded net sales of ¥1,702 million (up 2.1% from the same period of theprevious year) as Tokyo Airport Heating & Cooling Co., Ltd., a consolidated subsidiary, showed a steady growth in
the Area Heating & Cooling Business in the reclaimed land area offshore Tokyo International Airport due toextremely hot summer. However, operating income was ¥484 million (down 13.8%) due to an increase in fuel costs.
(iii) Water Supply & Drainage Service and Other Business
Water Supply & Drainage Service and Other Business recorded net sales of ¥1,485 million (up 12.4% from the same
period of the previous year) as a result of a solid growth in sales of water supply and drainage usage due to anincrease in water supply to various constructions at Tokyo International Airport, and smooth operation of the solar- 3 -power facility that started electric power selling in Heiwajima, Ota-ku from February. Operating income was ¥192
million (up 67.0%).
(2) Qualitative Information on Consolidated Financial Position(Assets)
Total assets as of September 30, 2018 amounted to ¥99,367 million, an increase by ¥11,405 million compared to March 31,
2018, mainly due to the acquisition of the hotel in Kyoto.
(Liabilities)
Liabilities as of September 30, 2018 amounted to ¥43,965 million, an increase by ¥10,485 million from March 31, 2018,
due to bond issuance associated with acquisition of the hotel in Kyoto and an increase in long-term loans payable.
(Net assets)
Net assets as of September 30, 2018 increased by ¥919 million compared to March 31, 2018 to ¥55,402 million mainly due
to an increase in retained earnings.
As a result, equity ratio as of September 30, 2018 decreased by 6.0 points to 53.4% compared to March 31, 2018.
(3) Qualitative Information on Consolidated Earnings Forecast
There is no change as to Consolidated Earnings Forecast for the Year Ending March 2019 which was announced in the
Financial Results for the Year Ended March 31, 2018 [J-GAAP] dated May 10, 2018.

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

Second quarter of FY3/19(As of September 30, 2018)

AssetsCurrent assets
Cash and deposits

4,608,382

4,854,533

Notes and accounts receivable-trade

1,210,390

1,232,611

Lease receivables and investment assets

5,991,149

6,782,194

Operating loans

5,422,908

6,230,157

Raw materials and supplies

14,676

12,464

Others284,004

1,788,352

17,531,512

20,900,313

Buildings and structures, net

44,534,344

48,841,766

Machinery, equipment and vehicles, net

5,384,270

5,161,143

Total current assets
Non-current assets
Property, plant and equipment

Tools, furniture and fixtures, net

156,341

680,711Land

10,307,875

14,596,026

Construction in progress

1,422,667

774,421

Total property, plant and equipment

61,805,499

70,054,069

Software34,85130,545

Others

15,055

14,980Total intangible assets

49,90745,526

7,483,456

7,348,251

2,217

1,932

Intangible assets

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

259,037

202,736

Net defined benefit asset

218,585

199,193

Others646,334

650,038

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

Total investments and other assets

8,575,064

8,367,584

70,430,471

78,467,179

87,961,984

99,367,492

Total non-current assets
Total assets- 5 -(Thousands of yen)
FY3/18(As of March 31, 2018)

Second quarter of FY3/19(As of September 30, 2018)

Liabilities
Current liabilities
Notes and accounts payable-trade

1,023,054

684,539

Short-term loans payable

5,879,559

5,033,635

Accounts payable

674,381309,728

Income taxes payable651,257

694,923

Accrued expenses

93,808108,262

Unearned revenue

977,315

2,205,141

Provision for bonuses

128,398

142,059

Provision for directors’ bonuses

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

173,200

172,370

Others421,549

498,706

10,050,504

9,879,423－

6,000,000

Long-term loans payable

17,279,899

21,553,757

Long-term guarantee deposited

5,638,318

5,870,831

Long-term accounts payable-other311,526

325,976

6,846

348

192,311334,835

23,428,901

34,085,748

33,479,405

43,965,172

Capital stock

6,826,100

6,826,100

Capital surplus

6,982,890

6,982,851

Total current liabilities
Non-current liabilities
Bonds payable

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

Retained earnings

37,381,745

38,332,852

Treasury stock(1,786,417)(1,784,048)

Total shareholders’ equity

49,404,317

50,357,755

2,853,576

2,989,939

19,613(232,029)

2,873,189

2,757,909

79,896

113,808

Non-controlling interests

2,125,175

2,172,846

Total net assets

54,482,578

55,402,320

87,961,984

99,367,492

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

Total liabilities and net assets- 6 -(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Thousands of yen)First six months of FY3/18(April 1, 2017 – September 30, 2017)

First six months of FY3/19(April 1, 2018 – September 30, 2018)

11,420,409

12,214,580

Net sales
Cost of sales

8,343,407

8,931,772

Gross profit

3,077,001

3,282,807

Directors’ compensations

140,229

144,939

Salaries and bonuses

202,604

220,092

Provision for bonuses

79,45088,058Provision for directors’ bonuses

27,98030,058Transportation and communication expenses

54,762

55,989Taxes and dues

79,552

92,631

Selling, general, and administrative expenses

Depreciation
OthersTotal selling, general, and administrative expenses

6,537

13,970314,182

372,108905,299

1,017,847

2,171,702

2,264,960

90Dividends income

135,770

141,149

Commission fee

47,281

7,323－

44,664

Operating income
Non-operating income
Interest income

Foreign exchange gains
Others47,52350,356

Total non-operating income

230,585

243,494

Interest expenses

174,086

203,052

Removal cost of property, plant and equipment

64,97722,411－

142,524

113,307－

Bond issuance cost－

119,788

Others696－

Non-operating expenses

Provision for removal cost of property, plant and equipment
Foreign exchange losses

Total non-operating expenses
Ordinary income

353,068

487,775

2,049,219

2,020,679

366

4,289

Extraordinary loss
Loss on retirement of non-current assets
Total extraordinary loss

366

4,289

Income before income taxes

2,048,852

2,016,389

691,347

619,259

1,357,505

1,397,129

138,986

86,0001,218,519

1,311,129

Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent- 7 -(Quarterly Consolidated Statements of Comprehensive Income)(Thousands of yen)First six months of FY3/18(April 1, 2017 – September 30, 2017)

First six months of FY3/19(April 1, 2018 – September 30, 2018)

1,357,505

1,397,129

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

416,492

136,362

Foreign currency translation adjustment

31,474(211,038)

Total other comprehensive income

447,967(74,675)

1,805,472

1,322,454

Comprehensive income attributable to owners of parent

1,666,486

1,236,453

Comprehensive income attributable to non-controlling interests

138,986

86,000Comprehensive income
Comprehensive income attributable to- 8 -(3) Notes on Quarterly Consolidated Financial Statements(Notes on Premise of Going Concern)
Not applicable.
(Notes on Significant Changes in Shareholders’Equity)
Not applicable.
(Changes in Accounting Policies)(Application of Practical Solution on Transactions Granting Employees and Others Stock Acquisition Rights, which
Involve Considerations, with Vesting Conditions)“Practical Solution on Transactions Granting Employees and Others Stock Acquisition Rights, which Involve
Considerations, with Vesting Conditions” (Practical Issues Task Force No.36, January 12, 2018; hereinafter, “PITF
No.36”), etc. has become available for application from the date of its publication. Accordingly, the Group has adopted
PITF No.36 on or after the date of publication and decided to apply accounting methods conforming to the AccountingStandards for Stock Options (Corporate Accounting Standards No. 8, December 27, 2005) for transactions granting
employees and others stock acquisition rights, which involve considerations, with vesting conditions.
In applying PITF No.36, the Group followed the transitional treatments provided in Paragraph 10 (3) of PITF No.36.
Accordingly, transactions in which stock acquisition rights, which involve considerations, with vesting conditions, were
granted to employees and others prior to the date of application of PITF No.36 have continued to be accounted for using thepreviously adopted accounting treatment.
(Application of Specific Accounting Treatments in Preparing the Quarterly Consolidated Financial Statements)
Tax expenses are calculated as income before income taxes for the period multiplied by the estimated effective tax rate. The
effective tax rate is reasonably estimated taking into consideration deferred tax accounting as the rate applicable to income
before income taxes for the consolidated fiscal year including the period ended September 30, 2018.
(Additional information)(Application of the Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.)
Effective April 1, 2018, the Group applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting,etc.” (Accounting Standards Board of Japan (“ASBJ”) Statement No.28, February 16, 2018), and accordingly, deferred tax
assets are presented in investments and other assets.

- 9 -