■ Corporate profile (as of March 31, 2023)■ Stock information (as of March 31, 2023)

Corporate Name: Airport Facilities Co., Ltd. (AFC)Stock Listings:

Established:

February 1970

Capital:¥6,826.10 million

Employees:

119 (Consolidated) 113 (Non-consolidated)■ Directors and corporate auditors

Tokyo Stock Exchange (TSE)
Prime Market(Ticker Code: 8864)

Total Number of Shares Authorized: 124,800,000
Total Number of Shares Issued: 52,979,350
Number of Shareholders:

10,474

Share Unit Number:

100 sharesFiscal year ended March 31, 2023

(As of July 3, 2023)

Directors

The Company (Treasury Stock)

Shigeo Tamura

Executive Vice President

Hideo Miyake

0.76%

Executive Vice President

Tadao Nishio

ForeignInvestors

Managing Executive Officer

Keisuke Kuma

Executive Officer

Osamu Sasaoka
Takehiko Sugiyama

External Director

Kayo Aoyama

External Director

Toshikatsu Ogura
Corporate Auditors

Full-time Statutory Auditor

Masaaki Komiya

Full-time Statutory Auditor

Takahiro Hama

Statutory Auditor

Sawako Ueno

Statutory Auditor

Hirotomo Suzuki

April 1, 2022 March 31, 2023

Composition of Shareholders

President and Executive Officer

External DirectorA
FC
REPOR T

Securities Companies

5.55%
Individuals

14.40%

14.46%
Financial
Institutions
Other JapaneseCorporations

43.12%

21.71%

Major Shareholders
Shareholder

Number of Shares Owned(thousands)

Ratio of Shareholding(%)

Japan Airlines Co., Ltd.

10,521

21.04

ANA HOLDINGS INC.

10,521

21.04

Development Bank of Japan Inc.

6,920

13.83

The Master Trust Bank ofJapan, Ltd. (Trust Account)

2,654

5.30

NOTHERN TRUST CO., (AVFC) RE IEDP AIF
CLIENTS NON TREATY ACCOUNT

1,600

3.19

AIRPORT FACILITIES CO., LTD.
(Ticker Code: 8864)

■ FY2022 performance highlights

Message from the President

Net sales (¥ Million)

While trying to regain confidence fromour shareholders, we will accelerate our effortsin every quarter for the early achievementof the Medium- to Long-Term Management Plan.
President and CEO

24,155

Profit (loss) attributable toowners of parent (¥ Million)

Operating income (¥ Million)

23,77725,516

3,831

1,564

3,280
2,503

(22,784)*821(2,460)*2021/32022/32023/32021/32022/3-933
2023/32021/32022/32023/3

Review
1 In addition to the termination of the exemption of rent and heating charge claims for air carriers that was implemented for two consecutive fiscal

We would like to ask for further understanding and support from ourshareholders. I am Shigeo Tamura, taking the chair of the president asof June 29.
We offer our heartfelt apologies to our shareholders and parties
involved for causing grave concern and inconvenience over theoccurrence of the governance problem regarding the appointmentof company officials in the past, and the fact that some of the
proposals on the appointment of officials were voted down at the54th general shareholders' meeting.
Our urgent task is to regain confidence from our shareholders andall the stakeholders of the Group, and by doing so, the new officers of
the company will aim to achieve the Medium- to Long-Term Management Plan as early as possible. We would like to ask for further understanding and support from our shareholders.
For the fiscal year ended March 31, 2023, our business achieved
net sales of ¥25.5 billion, due to the termination of the exemption ofrent and heating charges for air carrier customers due to the impactof the COVID-19 pandemic, an increase in the use of area heating
and cooling service, and the recovery of water supply and drainage
service usage. On the other hand, with the start of the Haneda
Airport 1-Chome Project, which is the redevelopment of the placeof the company’s founding, there will be a new burden of depreciation expenses related to asset retirement obligation. Further, there
was also an increase in the raw material expenses for the area
heating and cooling business due to an increase in energy prices,
resulting in operating income of ¥2.5 billion and ordinary income of¥2.1 billion.
1 AIRPORT FACILITIES CO., LTD.

We have also recorded consumption taxes refund in the firstquarter, and an extraordinary income from the sale of the hotels in
Kyoto in the fourth quarter. On the other hand, an impairment loss
was reported as an extraordinary loss due to the expected demolishment and redevelopment of Osaka Sogo Building, resulting in net
income of ¥1.5 billion.
Based on such results, we delivered our committed year-end
dividend of ¥7 per share as we promised. The annual dividend is ¥14
per share.
The Group announced the Medium- to Long-Term Management
Plan in May 2022, marking the end of the first year of the plan.
Regarding the aircraft fund for which we signed an investment
contract last July, we have obtained the first aircraft. Also, regarding
the promotion of the non-asset business, which is one of our priority
measures, we have acquired our first real estate for sales in Hiroshima
City, in order to promote the initiative to acquire real estate, raise theasset value thereof, and gain profit and compose a private REIT. Thiswas followed by the acquisition of second property in Shinjuku. We
believe that we took a step closer to realizing a business portfolio
resilient to risks through the diversified revenue sources and theimprovement of asset efficiency.
We will be engaged in various initiatives in the second year as wellto aim for the early achievement of the Medium- to Long-Term
Management Plan.
We would like to ask for the continuous understanding andsupport of our shareholders and investors.

years, water supply and drainage service usage recovered due to the increase in the number of airport users, resulting in an increase of net sales. In
order to equalize the conditions, the assumption of the exemptions of rent in the fiscal year ended March 2021 (that had been actually reported as
an extraordinary loss) that have not been reported as an extraordinary loss but were deducted from sales, as was the case in the fiscal year ended
March 2022, is shaded in the chart.(*) Comparing the figures of the latest three fiscal years under such conditions, the results show practical increases
in net sales and operating income for three consecutive years.
2 Operating income decreased due to the increase in raw material expenses resulting from soaring energy prices in the area heating and coolingbusiness and a new burden of depreciation expenses related to asset retirement obligations (about ¥1 billion) from the Haneda Airport 1-Chome
Project. Depreciation expenses related to the asset retirement obligations are expenses from the perspective of future investment.
3 We reported an extraordinary income due to the amended declaration of corporate tax as of March 2021 in the first quarter, and an extraordinary income
from the sale of the hotels in Kyoto in the fourth quarter. On the other hand, impairment loss was reported as an extraordinary loss with the expected
demolishing and redevelopment of Osaka Sogo Building in the fourth quarter, resulting in the profit attributable to owners of parent of ¥1.5 billion.

■ Cash flows

EBITDA + recovery (¥ Million)
7,835

7,619

Net sales increased and operating income decreased for the fiscal year ended March 2023.
One of the factors was the increase of the burden of depreciation expenses related toasset retirement obligations that did not have an influence on cash flow, according to thestart of the Haneda Airport 1-Chome Project, which is the redevelopment of aircraft
maintenance area in Haneda Airport, the place of our company’s founding. Thus, weconsider that EBITDA + recovery* as a cash flow is showing a steady trend.

7,501* EBITDA + recovery = Operating income + depreciation + recovery + leasing cost
Recovery refers to the principal repaid on the loan.

2019/3 2020/3 2021/3 2022/3 2023/3■ Dividends
For the fiscal year ended March 2023, we delivered year-end
dividend of ¥7 per share, as committed at the beginning of the year,
and an annual dividend of ¥14 per share.
Keeping strong financial and sustainable growth, we will
endeavor to continue our dividend policy of consolidated payout
ratio of 40% or higher (annual).

7,535

7,464

Cash dividends per share(¥)

Cash dividends
per share for 2023/3

14¥(Consolidated payout
ratio: 44.7%)

Q2

Year-end

14

14

14

7

7

7

7

7

7

2021/32022/32023/3Fiscal year ended March 31, 2023 AFC REPORT2

■ FY2022 performance highlights

Message from the President

Net sales (¥ Million)

While trying to regain confidence fromour shareholders, we will accelerate our effortsin every quarter for the early achievementof the Medium- to Long-Term Management Plan.
President and CEO

24,155

Profit (loss) attributable toowners of parent (¥ Million)

Operating income (¥ Million)

23,77725,516

3,831

1,564

3,280
2,503

(22,784)*821(2,460)*2021/32022/32023/32021/32022/3-933
2023/32021/32022/32023/3

Review
1 In addition to the termination of the exemption of rent and heating charge claims for air carriers that was implemented for two consecutive fiscal

We would like to ask for further understanding and support from ourshareholders. I am Shigeo Tamura, taking the chair of the president asof June 29.
We offer our heartfelt apologies to our shareholders and parties
involved for causing grave concern and inconvenience over theoccurrence of the governance problem regarding the appointmentof company officials in the past, and the fact that some of the
proposals on the appointment of officials were voted down at the54th general shareholders' meeting.
Our urgent task is to regain confidence from our shareholders andall the stakeholders of the Group, and by doing so, the new officers of
the company will aim to achieve the Medium- to Long-Term Management Plan as early as possible. We would like to ask for further understanding and support from our shareholders.
For the fiscal year ended March 31, 2023, our business achieved
net sales of ¥25.5 billion, due to the termination of the exemption ofrent and heating charges for air carrier customers due to the impactof the COVID-19 pandemic, an increase in the use of area heating
and cooling service, and the recovery of water supply and drainage
service usage. On the other hand, with the start of the Haneda
Airport 1-Chome Project, which is the redevelopment of the placeof the company’s founding, there will be a new burden of depreciation expenses related to asset retirement obligation. Further, there
was also an increase in the raw material expenses for the area
heating and cooling business due to an increase in energy prices,
resulting in operating income of ¥2.5 billion and ordinary income of¥2.1 billion.
1 AIRPORT FACILITIES CO., LTD.

We have also recorded consumption taxes refund in the firstquarter, and an extraordinary income from the sale of the hotels in
Kyoto in the fourth quarter. On the other hand, an impairment loss
was reported as an extraordinary loss due to the expected demolishment and redevelopment of Osaka Sogo Building, resulting in net
income of ¥1.5 billion.
Based on such results, we delivered our committed year-end
dividend of ¥7 per share as we promised. The annual dividend is ¥14
per share.
The Group announced the Medium- to Long-Term Management
Plan in May 2022, marking the end of the first year of the plan.
Regarding the aircraft fund for which we signed an investment
contract last July, we have obtained the first aircraft. Also, regarding
the promotion of the non-asset business, which is one of our priority
measures, we have acquired our first real estate for sales in Hiroshima
City, in order to promote the initiative to acquire real estate, raise theasset value thereof, and gain profit and compose a private REIT. Thiswas followed by the acquisition of second property in Shinjuku. We
believe that we took a step closer to realizing a business portfolio
resilient to risks through the diversified revenue sources and theimprovement of asset efficiency.
We will be engaged in various initiatives in the second year as wellto aim for the early achievement of the Medium- to Long-Term
Management Plan.
We would like to ask for the continuous understanding andsupport of our shareholders and investors.

years, water supply and drainage service usage recovered due to the increase in the number of airport users, resulting in an increase of net sales. In
order to equalize the conditions, the assumption of the exemptions of rent in the fiscal year ended March 2021 (that had been actually reported as
an extraordinary loss) that have not been reported as an extraordinary loss but were deducted from sales, as was the case in the fiscal year ended
March 2022, is shaded in the chart.(*) Comparing the figures of the latest three fiscal years under such conditions, the results show practical increases
in net sales and operating income for three consecutive years.
2 Operating income decreased due to the increase in raw material expenses resulting from soaring energy prices in the area heating and coolingbusiness and a new burden of depreciation expenses related to asset retirement obligations (about ¥1 billion) from the Haneda Airport 1-Chome
Project. Depreciation expenses related to the asset retirement obligations are expenses from the perspective of future investment.
3 We reported an extraordinary income due to the amended declaration of corporate tax as of March 2021 in the first quarter, and an extraordinary income
from the sale of the hotels in Kyoto in the fourth quarter. On the other hand, impairment loss was reported as an extraordinary loss with the expected
demolishing and redevelopment of Osaka Sogo Building in the fourth quarter, resulting in the profit attributable to owners of parent of ¥1.5 billion.

■ Cash flows

EBITDA + recovery (¥ Million)
7,835

7,619

Net sales increased and operating income decreased for the fiscal year ended March 2023.
One of the factors was the increase of the burden of depreciation expenses related toasset retirement obligations that did not have an influence on cash flow, according to thestart of the Haneda Airport 1-Chome Project, which is the redevelopment of aircraft
maintenance area in Haneda Airport, the place of our company’s founding. Thus, weconsider that EBITDA + recovery* as a cash flow is showing a steady trend.

7,501* EBITDA + recovery = Operating income + depreciation + recovery + leasing cost
Recovery refers to the principal repaid on the loan.

2019/3 2020/3 2021/3 2022/3 2023/3■ Dividends
For the fiscal year ended March 2023, we delivered year-end
dividend of ¥7 per share, as committed at the beginning of the year,
and an annual dividend of ¥14 per share.
Keeping strong financial and sustainable growth, we will
endeavor to continue our dividend policy of consolidated payout
ratio of 40% or higher (annual).

7,535

7,464

Cash dividends per share(¥)

Cash dividends
per share for 2023/3

14¥(Consolidated payout
ratio: 44.7%)

Q2

Year-end

14

14

14

7

7

7

7

7

7

2021/32022/32023/3Fiscal year ended March 31, 2023 AFC REPORT

2

Business Outline by Segment
As a business portfolio unique to our company, we areengaged in businesses such as Real Estate Business mainly inairports and regions near the airport, Area Heating andCooling Business that support airport infrastructure, and Water
Supply and Drainage Service and Other Businesses.
While we have been deploying business in Tokyo
International Airport and other major airports across Japan aswell as airports abroad, we are also developing businessoutside airports more recently to expand our fields of activities.
Net Sales by Business Segment

Real EstateBusiness

9.3%

Real Estate Business(23/3)

Area Heating& Cooling Business

77.3%

13.4%

19.7

¥

Net sales/Operating income (¥ Million)

20,000billion (+4.6%)

Net sales

Operating income

2,000

5,000

1,000

21/3

22/3

14.8%

Net Sales by Region

Other regional airports

5.6%(23/3)

Osaka International
AirportTokyo International
Airport

1.3%

76.4%

Kansai International
AirportLeasing of real estate such as multi-purpose generalbuildings, aviation-related facilities, and apartments, etc. in
airports in Japan and abroad and regions along the railway
line connected to the airport, and revolving business● Major companies
Airport Facilities Co., Ltd./AFC Asset Management Co.,
Ltd./AIRPORT FACILITIES ASIA PTE. LTD. /AFS PROPERTIES PTE.
LTD.
● Recent investments
HANEDA INNOVATION CITY/Kanazawa-Hakkei International
Community Plaza/ALPINE STYLE Koshigaya/Hiroshima
Motomachi NS building

21/3

New Chitose

Central Japan Int’l (Centrair)

Canada: Langley
Regional Airport

ALPINE STYLE Koshigaya

Osaka Int’l (Itami)

Hiroshima Motomachi NS building

Operating income

22/3

Net sales/Operating income (¥ Million)

3,000

0

23/3

Despite the termination of the exemption of heating charge claims for air
carriers, implemented as a measure against the COVID-19 pandemic, and a slightincrease in the sales amount, operating income decreased due to an increase in
raw material expenses resulting from soaring energy prices.

● Core business

Provision of cooling and heating functions at Tokyo
International Airport (area heating and cooling business)● Major companies
Tokyo Airport Heating & Cooling Co., Ltd.
● Recent investments
Boiler renewal work

Areas covered by our heating and cooling system
in Tokyo International Airport

21/3

Domestic cargo
area

Energy Centerbillion (+20.1%)

Net sales

22/3

Operating income

23/3

Both net sales and operating income increased due to the recovery of water supply anddrainage service usage resulting from an increase in the number of users of Tokyo
International Airport and an increase in supply destination associated with the openingof hotels and commercial facilities near Terminal 3 in Tokyo International Airport.

● Core business

Water supply and drainage business at Tokyo International
Airport and New Chitose Airport, local area communication
networks business at Tokyo International Airport, and solar
power generation business● Major companies
Airport Facilities Co., Ltd.
● Recent investments
Laying cables for local area communication network

Areas covered by our local area communication network
Runway D

Runway D

Runway C

Former aircraft maintenance area
(1-chome district)

Map of the facilities of our company

Net sales

2.3

¥

1,000

Runway B

1.9%billion (+15.3%)

Net sales (23/3)

2,000

0

23/3

While net sales increased due to the termination of the exemption of rent for air
carries, implemented as a measure against the COVID-19 pandemic, and theacquisition of Hiroshima Motomachi NS Building, operating income decreased due
to an increase in depreciation expenses related to asset retirement obligations.

3.4

¥

4,000
3,000

Water Supply &Drainage Service
and Other BusinessNet sales (23/3)

Net sales/Operating income (¥ Million)

10,000● Core businessOutside Airport/
Overseas

Area Heating &Cooling Business

15,0000

Water Supply& Drainage Service
and Other BusinessNet sales (23/3)

Runway C

Domestic passenger
area

Runway A

New aircraft
maintenance
area

International passenger
and cargo area

Coolant water recycling device

Domestic cargoarea
Runway B

Domestic passenger
area

Runway A

Former aircraft maintenance area
(1-chome district)

Water supply & drainage facilities
in the reclaimed land area offshore

New aircraft
maintenance
area

International passenger
and cargo area

Shared communication server

Sendai

Kobe

Tokyo Int’l Airport, Tokyo
Metropolitan area

Kitakyushu

Singapore: Seletar Airport

Kansai Int’l Airport
Hiroshima

FukuokaKagoshimaNaha

3 AIRPORT FACILITIES CO., LTD.

Fiscal year ended March 31, 2023 AFC REPORT

4

Business Outline by Segment
As a business portfolio unique to our company, we areengaged in businesses such as Real Estate Business mainly inairports and regions near the airport, Area Heating andCooling Business that support airport infrastructure, and Water
Supply and Drainage Service and Other Businesses.
While we have been deploying business in Tokyo
International Airport and other major airports across Japan aswell as airports abroad, we are also developing businessoutside airports more recently to expand our fields of activities.
Net Sales by Business Segment

Real EstateBusiness

9.3%

Real Estate Business(23/3)

Area Heating& Cooling Business

77.3%

13.4%

19.7

¥

Net sales/Operating income (¥ Million)

20,000billion (+4.6%)

Net sales

Operating income

2,000

5,000

1,000

21/3

22/3

14.8%

Net Sales by Region

Other regional airports

5.6%(23/3)

Osaka International
AirportTokyo International
Airport

1.3%

76.4%

Kansai International
AirportLeasing of real estate such as multi-purpose generalbuildings, aviation-related facilities, and apartments, etc. in
airports in Japan and abroad and regions along the railway
line connected to the airport, and revolving business● Major companies
Airport Facilities Co., Ltd./AFC Asset Management Co.,
Ltd./AIRPORT FACILITIES ASIA PTE. LTD. /AFS PROPERTIES PTE.
LTD.
● Recent investments
HANEDA INNOVATION CITY/Kanazawa-Hakkei International
Community Plaza/ALPINE STYLE Koshigaya/Hiroshima
Motomachi NS building

21/3

New Chitose

Central Japan Int’l (Centrair)

Canada: Langley
Regional Airport

ALPINE STYLE Koshigaya

Osaka Int’l (Itami)

Hiroshima Motomachi NS building

Operating income

22/3

Net sales/Operating income (¥ Million)

3,000

0

23/3

Despite the termination of the exemption of heating charge claims for air
carriers, implemented as a measure against the COVID-19 pandemic, and a slightincrease in the sales amount, operating income decreased due to an increase in
raw material expenses resulting from soaring energy prices.

● Core business

Provision of cooling and heating functions at Tokyo
International Airport (area heating and cooling business)● Major companies
Tokyo Airport Heating & Cooling Co., Ltd.
● Recent investments
Boiler renewal work

Areas covered by our heating and cooling system
in Tokyo International Airport

21/3

Domestic cargo
area

Energy Centerbillion (+20.1%)

Net sales

22/3

Operating income

23/3

Both net sales and operating income increased due to the recovery of water supply anddrainage service usage resulting from an increase in the number of users of Tokyo
International Airport and an increase in supply destination associated with the openingof hotels and commercial facilities near Terminal 3 in Tokyo International Airport.

● Core business

Water supply and drainage business at Tokyo International
Airport and New Chitose Airport, local area communication
networks business at Tokyo International Airport, and solar
power generation business● Major companies
Airport Facilities Co., Ltd.
● Recent investments
Laying cables for local area communication network

Areas covered by our local area communication network
Runway D

Runway D

Runway C

Former aircraft maintenance area
(1-chome district)

Map of the facilities of our company

Net sales

2.3

¥

1,000

Runway B

1.9%billion (+15.3%)

Net sales (23/3)

2,000

0

23/3

While net sales increased due to the termination of the exemption of rent for air
carries, implemented as a measure against the COVID-19 pandemic, and theacquisition of Hiroshima Motomachi NS Building, operating income decreased due
to an increase in depreciation expenses related to asset retirement obligations.

3.4

¥

4,000
3,000

Water Supply &Drainage Service
and Other BusinessNet sales (23/3)

Net sales/Operating income (¥ Million)

10,000● Core businessOutside Airport/
Overseas

Area Heating &Cooling Business

15,0000

Water Supply& Drainage Service
and Other BusinessNet sales (23/3)

Runway C

Domestic passenger
area

Runway A

New aircraft
maintenance
area

International passenger
and cargo area

Coolant water recycling device

Domestic cargoarea
Runway B

Domestic passenger
area

Runway A

Former aircraft maintenance area
(1-chome district)

Water supply & drainage facilities
in the reclaimed land area offshore

New aircraft
maintenance
area

International passenger
and cargo area

Shared communication server

Sendai

Kobe

Tokyo Int’l Airport, Tokyo
Metropolitan area

Kitakyushu

Singapore: Seletar Airport

Kansai Int’l Airport
Hiroshima

FukuokaKagoshimaNaha

3 AIRPORT FACILITIES CO., LTD.

Fiscal year ended March 31, 2023 AFC REPORT

4

Special Topic

Medium- to Long-Term Management Plan

■ Business strategy
Non-asset business

In May 2022, our company announced the Medium- to Long-Term Management Plan covering the period from FY2022 to FY2028.
We would like to explain our previous efforts based on our business strategy.

Establishment of AFC Asset Management Co., Ltd.,and the acquisition of our first real estate for sales

Maximizing and continuous implementation of strategies affecting key resources
to support growth and development

Basic Policy

Provision of facilities andservices that meet the needsof customers and society

Non-airport and foreign businesses

Priority measure I

Priority measure II

Priority measure III

Haneda Airport
1-Chome project

Expansion of non-asset
businesses

Improvement of the profitabilityof existing businesses

Creation of value

Optimization of the business portfolio centering on three priority measures

Strengthening of governanceEnd of FY2028
Foreignbusiness
Non-asset
business
Non-airport
business

End of FY2021

Airport-related
real estatebusiness

7

Non-airport

Airport-related

3

5

:

1.1times
Airport-related
real estatebusiness

56%
Airport-related infrastructure business5 AIRPORT FACILITIES CO., LTD.

Airport-related
infrastructurebusiness:

Non-airport

1.7 times
Non-airport
business

Haneda Airport
1-Chome project

Airport-related
real estatebusiness

Non-asset
business
Non-airport
business

Airport-related
infrastructurebusiness
Haneda Airport
1-Chome project

1.3

times

23.7billion

32.0

billionFY2021 Results

Start of the temporary operation of the fresh products centerin the domestic cargo terminal area of Tokyo International Airport

Profit attributable to owners of parent

4.0

0.82billion

times

3.3

Airport-related real estate businessbillionFY2021 Results
Airport-related
real estatebusiness

Restructuring projects

FY2021

Net sales

5

Foreign business

Foreign business

Foreignbusiness
Restructuring
projects
Non-airport
business

Airport-related

59%

In July 2022, our company signed an investment contract for“MACH I,” an aircraft fund, as a major investor. It is the first aircraft
fund for domestic investors since the occurrence of the COVID-19
pandemic.
We obtained the first aircraft in February 2023. We will aim todiversify the company's revenue sources.

Consolidated numericaltargets for FY2028

FY2028

ROA

1.5

3.4%
FY2021 Results

times

5.0

%

*Business profit = operating income + non-operating income*Areas inside the red square is being
temporarily operated

Utilizing the know-how we acquiredin the real estate businesses within
airports, our company supported thedesigning and construction
management (CM) of hangars in
Sapporo Okadama Airport.

Foreign business

Signed an investment contract for “MACH I,”
an aircraft fund, and invested as a major investor

Use of IT

Targets for business profit* growthand business mix

Asset mix target

Foreign business

Creation of value forstakeholders anda sustainable society

Further strengthening of the business foundation

Human resource and organization
development strategy

Construction Management (CM)
Hangar completed at Sapporo Okadama Airport

AFC Asset Management Co., Ltd. was established in May 2022 forthe promotion of non-asset business developed outside airports,
which is one of the priority measures in the Medium- to Long-Term
Management Plan. The company is currently engaged in businessof acquiring properties and acquired our first real estate in March
2023.

Businesses that support AFC’s growth
Airport-related businesses

Non-asset businessA fresh products center specializing inhandling fresh products was establishedand is being temporarily operated within
the domestic cargo terminal area ofTokyo International Airport, maintained
and operated by our company. We aim
to increase the value of the area throughincreased convenience and safety.

Equipped with solar power generation facilities
Seletar Airport Engine Plant (Singapore)
Solar power generation facility was
installed on the rooftop of theengine plant that the company
owns in Seletar Airport, Singapore.

Creation of new businesses towards future prosperity

Considering the introduction ofhydrogen forklifts
Towards achieving carbon neutrality
by 2050, our company held atest-ride event within the domesticcargo terminal area of Tokyo
International Airport to consider
introducing fuel cell forklifts usinghydrogen as a fuel.
Fiscal year ended March 31, 2023 AFC REPORT

6

Special Topic

Medium- to Long-Term Management Plan

■ Business strategy
Non-asset business

In May 2022, our company announced the Medium- to Long-Term Management Plan covering the period from FY2022 to FY2028.
We would like to explain our previous efforts based on our business strategy.

Establishment of AFC Asset Management Co., Ltd.,and the acquisition of our first real estate for sales

Maximizing and continuous implementation of strategies affecting key resources
to support growth and development

Basic Policy

Provision of facilities andservices that meet the needsof customers and society

Non-airport and foreign businesses

Priority measure I

Priority measure II

Priority measure III

Haneda Airport
1-Chome project

Expansion of non-asset
businesses

Improvement of the profitabilityof existing businesses

Creation of value

Optimization of the business portfolio centering on three priority measures

Strengthening of governanceEnd of FY2028
Foreignbusiness
Non-asset
business
Non-airport
business

End of FY2021

Airport-related
real estatebusiness

7

Non-airport

Airport-related

3

5

:

1.1times
Airport-related
real estatebusiness

56%
Airport-related infrastructure business5 AIRPORT FACILITIES CO., LTD.

Airport-related
infrastructurebusiness:

Non-airport

1.7 times
Non-airport
business

Haneda Airport
1-Chome project

Airport-related
real estatebusiness

Non-asset
business
Non-airport
business

Airport-related
infrastructurebusiness
Haneda Airport
1-Chome project

1.3

times

23.7billion

32.0

billionFY2021 Results

Start of the temporary operation of the fresh products centerin the domestic cargo terminal area of Tokyo International Airport

Profit attributable to owners of parent

4.0

0.82billion

times

3.3

Airport-related real estate businessbillionFY2021 Results
Airport-related
real estatebusiness

Restructuring projects

FY2021

Net sales

5

Foreign business

Foreign business

Foreignbusiness
Restructuring
projects
Non-airport
business

Airport-related

59%

In July 2022, our company signed an investment contract for“MACH I,” an aircraft fund, as a major investor. It is the first aircraft
fund for domestic investors since the occurrence of the COVID-19
pandemic.
We obtained the first aircraft in February 2023. We will aim todiversify the company's revenue sources.

Consolidated numericaltargets for FY2028

FY2028

ROA

1.5

3.4%
FY2021 Results

times

5.0

%

*Business profit = operating income + non-operating income*Areas inside the red square is being
temporarily operated

Utilizing the know-how we acquiredin the real estate businesses within
airports, our company supported thedesigning and construction
management (CM) of hangars in
Sapporo Okadama Airport.

Foreign business

Signed an investment contract for “MACH I,”
an aircraft fund, and invested as a major investor

Use of IT

Targets for business profit* growthand business mix

Asset mix target

Foreign business

Creation of value forstakeholders anda sustainable society

Further strengthening of the business foundation

Human resource and organization
development strategy

Construction Management (CM)
Hangar completed at Sapporo Okadama Airport

AFC Asset Management Co., Ltd. was established in May 2022 forthe promotion of non-asset business developed outside airports,
which is one of the priority measures in the Medium- to Long-Term
Management Plan. The company is currently engaged in businessof acquiring properties and acquired our first real estate in March
2023.

Businesses that support AFC’s growth
Airport-related businesses

Non-asset businessA fresh products center specializing inhandling fresh products was establishedand is being temporarily operated within
the domestic cargo terminal area ofTokyo International Airport, maintained
and operated by our company. We aim
to increase the value of the area throughincreased convenience and safety.

Equipped with solar power generation facilities
Seletar Airport Engine Plant (Singapore)
Solar power generation facility was
installed on the rooftop of theengine plant that the company
owns in Seletar Airport, Singapore.

Creation of new businesses towards future prosperity

Considering the introduction ofhydrogen forklifts
Towards achieving carbon neutrality
by 2050, our company held atest-ride event within the domesticcargo terminal area of Tokyo
International Airport to consider
introducing fuel cell forklifts usinghydrogen as a fuel.
Fiscal year ended March 31, 2023 AFC REPORT

6

Recent Efforts

Initiatives for ESG/SDGs■ Acquisition of Hiroshima Motomachi NS Building, the company's
first real estate for sales■ Donation of lunch boxes made by an in-flight meal factory
to children’s cafeterias providing free or inexpensive meals

In March 2023, we acquired Hiroshima Motomachi NS Building, thecompany's first real estate for sales, in Hiroshima City, Hiroshima
Prefecture.
The Group established AFC Asset Management Co., Ltd. in order topromote the initiative to acquire real estate, raise the asset value thereof,
and gain profit and compose a private REIT, as a part of thedevelopment and promotion of the non-asset business. Through thecompany, we have been engaged in acquiring excellent properties
located in or nearby major cities in Japan. This acquisition is the firstproject for our non-asset business. The acquisition was realized basedon the decision that it is possible to further increase the value of theproperty through the development of its potential by our company. We
aim to further improve our corporate value from a mid- to long-term
perspective through the diversification of revenue sources and theimprovement of capital efficiency, by accumulating excellent properties
with the new acquisition of real estate for sale and increasing the value
thereof, and steadily developing and promoting non-asset businesses.

As a part of activities to contribute to society, we donated lunch boxes
made by an in-flight meal factory to “Ota Ramen Kodomo Cafeteria” and“Tomoshibi at Dandan,” a general incorporated association, in cooperation
with TFK Corporation (TFK) (location: Narita City, Chiba Prefecture;
Representative Director and President: Hirohito Sato), a tenant in the facilityof our company providing in-flight meals.
This donation was realized through empathy for the activities ofrestaurants providing free or inexpensive meals to children, where people
in a wide range of age groups from children to adults gather as a place forcommunication. It contributes to the vitalization of the entire region andsociety, while raising interests among people towards the area of aviation
and airports, which is our company's main field, by providing in-flightmeals. We will continue with activities to contribute to the region andsociety, aiming to realize a sustainable society.

Hiroki Osawa

President and CEO
AFC Asset Management Co., Ltd.

HIROSHIMA MUSEUM OF ART

RIHGA ROYAL HOTELHIROSHIMA

Jona

n Str
eet

Bank of Japan
Hiroshima Branch

Hiroshima Prefectural
Government
SOGO HIROSHIMA
Hiroshima Motomachi
NS Building

Atomic Bomb Dome

Hond

ori

Rijo-dHiroshima
Peace MemorialPark

ori street

Cenotaph for the
Atomic Bomb Victims

One year has passed since the foundation of our company. We were able to acquire the above-mentioned
Hiroshima Motomachi NS Building as the company's first real estate for sale. This property is reasonable in termsof age and is categorized as a middle-sized building. There is a very large number of this kind of buildings in thecapital stock of Japan, so it is an area where we have many business opportunities. Our company aims to secure
primary profits by rediscovering and improving the values of such kind of real estate through collecting
information and making moves actively in FY2023.

■ Acquired the first aircraft fundWe signed an investment agreement in July 2022 and participated as a major investor in anaircraft fund (operated by Mercuria Investment Co., Ltd., the core company of Mercuria
Holdings Co., Ltd.), through which we purchased the first aircraft. The acquired aircraft is an
Airbus A320ceo. Through this fund, we will aim to diversify the company's revenue sourcesand develop a business portfolio that is resilient to risks.
7 AIRPORT FACILITIES CO., LTD.

Green Arena■ Participating in the model survey for utilizing hydrogenin Tokyo International Airport and the surrounding area
Conceptual image of CO2-free hydrogen utilization model in Tokyo International Airport
The Group participates in the Study of CO2-free Hydrogen in
and the surrounding area
Tokyo International Airport and the Surrounding Area, which
is a commissioned project by the New Energy and Industrial
Kawasaki coastal area
Area surrounding the airport
Technology Development Organization (NEDO), jointly withfive other public and private organizations.
Mobility
Factory Commercial Public
Tank Truck
The six organizations including our company are
Pipelinefacility
facilities
engaged in a survey on the potential demand for hydrogen
TokyoInternationalenergy in the region, assuming the provision of CO2-free
Airporthydrogen imported to the base in the coastal areas ofStorage tank
AirportTerminal 3
Terminal 2
Terminal 1
Kawasaki to Tokyo International Airport and the surrounding
Facilities
Co., Ltd.
area, towards the achievement of carbon neutrality by 2050.
Further, ways of providing the energy and the policy for
Hydrogen station
GSE Vehicles*
Mobility/railway
introducing facilities that is necessary for realizing the idea
* GSE vehicle: Ground Support Equipment vehicle
will be streamlined, and the economic efficiency and theeffect of greenhouse gas reduction will be verified. In thissurvey, the Group is in charge of the utilization of hydrogen in facilities in Tokyo International Airport.
The report on the survey is scheduled to be compiled by the end of September 2023.
Fiscal year ended March 31, 2023 AFC REPORT

8

Recent Efforts

Initiatives for ESG/SDGs■ Acquisition of Hiroshima Motomachi NS Building, the company's
first real estate for sales■ Donation of lunch boxes made by an in-flight meal factory
to children’s cafeterias providing free or inexpensive meals

In March 2023, we acquired Hiroshima Motomachi NS Building, thecompany's first real estate for sales, in Hiroshima City, Hiroshima
Prefecture.
The Group established AFC Asset Management Co., Ltd. in order topromote the initiative to acquire real estate, raise the asset value thereof,
and gain profit and compose a private REIT, as a part of thedevelopment and promotion of the non-asset business. Through thecompany, we have been engaged in acquiring excellent properties
located in or nearby major cities in Japan. This acquisition is the firstproject for our non-asset business. The acquisition was realized basedon the decision that it is possible to further increase the value of theproperty through the development of its potential by our company. We
aim to further improve our corporate value from a mid- to long-term
perspective through the diversification of revenue sources and theimprovement of capital efficiency, by accumulating excellent properties
with the new acquisition of real estate for sale and increasing the value
thereof, and steadily developing and promoting non-asset businesses.

As a part of activities to contribute to society, we donated lunch boxes
made by an in-flight meal factory to “Ota Ramen Kodomo Cafeteria” and“Tomoshibi at Dandan,” a general incorporated association, in cooperation
with TFK Corporation (TFK) (location: Narita City, Chiba Prefecture;
Representative Director and President: Hirohito Sato), a tenant in the facilityof our company providing in-flight meals.
This donation was realized through empathy for the activities ofrestaurants providing free or inexpensive meals to children, where people
in a wide range of age groups from children to adults gather as a place forcommunication. It contributes to the vitalization of the entire region andsociety, while raising interests among people towards the area of aviation
and airports, which is our company's main field, by providing in-flightmeals. We will continue with activities to contribute to the region andsociety, aiming to realize a sustainable society.

Hiroki Osawa

President and CEO
AFC Asset Management Co., Ltd.

HIROSHIMA MUSEUM OF ART

RIHGA ROYAL HOTELHIROSHIMA

Jona

n Str
eet

Bank of Japan
Hiroshima Branch

Hiroshima Prefectural
Government
SOGO HIROSHIMA
Hiroshima Motomachi
NS Building

Atomic Bomb Dome

Hond

ori

Rijo-dHiroshima
Peace MemorialPark

ori street

Cenotaph for the
Atomic Bomb Victims

One year has passed since the foundation of our company. We were able to acquire the above-mentioned
Hiroshima Motomachi NS Building as the company's first real estate for sale. This property is reasonable in termsof age and is categorized as a middle-sized building. There is a very large number of this kind of buildings in thecapital stock of Japan, so it is an area where we have many business opportunities. Our company aims to secure
primary profits by rediscovering and improving the values of such kind of real estate through collecting
information and making moves actively in FY2023.

■ Acquired the first aircraft fundWe signed an investment agreement in July 2022 and participated as a major investor in anaircraft fund (operated by Mercuria Investment Co., Ltd., the core company of Mercuria
Holdings Co., Ltd.), through which we purchased the first aircraft. The acquired aircraft is an
Airbus A320ceo. Through this fund, we will aim to diversify the company's revenue sourcesand develop a business portfolio that is resilient to risks.
7 AIRPORT FACILITIES CO., LTD.

Green Arena■ Participating in the model survey for utilizing hydrogenin Tokyo International Airport and the surrounding area
Conceptual image of CO2-free hydrogen utilization model in Tokyo International Airport
The Group participates in the Study of CO2-free Hydrogen in
and the surrounding area
Tokyo International Airport and the Surrounding Area, which
is a commissioned project by the New Energy and Industrial
Kawasaki coastal area
Area surrounding the airport
Technology Development Organization (NEDO), jointly withfive other public and private organizations.
Mobility
Factory Commercial Public
Tank Truck
The six organizations including our company are
Pipelinefacility
facilities
engaged in a survey on the potential demand for hydrogen
TokyoInternationalenergy in the region, assuming the provision of CO2-free
Airporthydrogen imported to the base in the coastal areas ofStorage tank
AirportTerminal 3
Terminal 2
Terminal 1
Kawasaki to Tokyo International Airport and the surrounding
Facilities
Co., Ltd.
area, towards the achievement of carbon neutrality by 2050.
Further, ways of providing the energy and the policy for
Hydrogen station
GSE Vehicles*
Mobility/railway
introducing facilities that is necessary for realizing the idea
* GSE vehicle: Ground Support Equipment vehicle
will be streamlined, and the economic efficiency and theeffect of greenhouse gas reduction will be verified. In thissurvey, the Group is in charge of the utilization of hydrogen in facilities in Tokyo International Airport.
The report on the survey is scheduled to be compiled by the end of September 2023.
Fiscal year ended March 31, 2023 AFC REPORT

8

Initiatives for ESG/SDGs

Environment●●●

Power generation with renewableenergy and self-consumption
Installation of electric vehicle
recharging stations
Installation of LED lighting

Outlook for FY2023 Performance

Society
●
●

●
●

●

Providing safe and secure infrastructure
Providing services related tostockpiles against disasters
Installing AED in each facility
Conducting a comprehensive disaster
drill within Tokyo International Airport
Improving proficiency throughparticipation in a disaster drill andexamination meeting of private firebrigadeGovernance
●

●
●

●

Establishing a framework forcompliance with laws and regulations
through the organization ofCompliance Committee
Implementing internal audit
Risk control through theorganization of Risk Management
Committee
Improving governance by holding ameeting of the Board of Directors
once a monthInstalling solar panels on the rooftop of the domesticcargo terminal in Tokyo International Airport●

Providing a facility to treat aircraft
sewage (SD plant)

Scene from the disaster drill examination meetingof private fire brigade

Donating stockpiles fordisaster prevention

●

●
●

●

Tokyo International Airport SD Plant
●

●

●

●
●

●

9 AIRPORT FACILITIES CO., LTD.

❶

26,05425,516

Donation to Ikeda City, Osaka Prefecture●●

Donating in-flight meals
to children’s cafeterias
providing free or
inexpensive meals tochildren
Promoting diversity andinclusion (implementing
training sessions)

2023/32024/32,503 ❷
2,111

2,121 1,984

Operating income

Ordinary income❸

1,564 ❹
1,296

Profit attributableto owners of parent

Scene from a meeting of the Board of Directors●

Purifying discharged water at aircraftwashing facilities
Reducing water use through the usageof water-saving devices and the useof recycled water
Promoting the paperless
movement
Use of green bonds
Supporting TCFD
recommendations
Participating in NEDO
projects(¥ Million)

Net sales●●■ Forecast on the consolidated
performance

Responding to the Corporate
Governance CodeGovernance (harassment) training
Establishing a contact for
whistleblowing
Securing business continuity
through the formulation andcontinuous review of BCP
Timely and appropriate disclosure of
information
Ensuring the transparency ofmanagement through dialogues infinancial results briefings, small
meetings, etc.

Scene from interview by the media■ EBITDA + recovery<Outlook for FY2023>
Although there will be an increase in expenses towards the future as was
the case in the previous fiscal year, we aim to improve our businessperformance by further promoting our Medium- to Long-Term
Management Plan, including an increase in water supply and drainage
usage due to a further recovery in aviation demand and the non-asset
business, which aims to form a private REIT.
❶(Net sales) Due to the full-year operation of Hiroshima Motomachi NS
Building, the acquisition of new real estate for sale, and increase in thenumber of air travelers and airport users, it is expected that water andsewage use will return to the level seen before the COVID-19 pandemic
and that net sales will increase by 2.1% from the previous term.
❷(Operating income) Following the previous term, there will be a new
burden of depreciation expenses related to asset retirement obligations
associated with the start of the Haneda Airport 1-Chome project. In
addition, it is expected that repair expenses and raw material expenses
for the area heating and cooling business will increase. Thus, we are
expecting a decrease by 15.6% from the previous term.
❸(Ordinary income) Although there is an income gain from the aircraft
fund, it is expected to decrease by 6.4% from the previous term due to adecrease in operating income.
❹(Profit attributable to owners of parent) Unlike the previous term
where the effective tax rate was low, we are expecting a normal tax rate
for the current term, and we expect a decrease by 17.1% from theprevious term.
<Dividend for fiscal year ending March 2024>
Although we are expecting a decrease in profit, there will be no effect on
cash flows, and with the aim of achieving stability and a consolidated
payout ratio of 40% or higher, we are expecting an annual dividend of¥14 per share.

(¥ Million)

7,501

19/3

7,835

20/3

❶

7,619

7,464

7,535

21/3

22/3

23/3

❷

6,949

24/3

(Forecast)❶(Fiscal year ended March 2023) As for the fiscal year ended March
2023, an increase by 0.9% from the previous term is expected due to anincrease in net sales and operating income before depreciation
resulting from the termination of the exemption of rent and heating
charge claims and recovery in water supply and drainage service.
❷(Fiscal year ending March 2024) As for the fiscal year ending March
2024, a decrease by 7.8% from the previous term is expected due to adecrease in operating income before depreciation resulting from anincrease in repair expenses and a decrease in depreciation expenses
owing to the sale of hotels in Kyoto, etc. Although we expect a decreasein profit for the fiscal year ending March 2024 in the consolidated
financial statement, we consider that EBITDA + recovery* as a cash flow
is showing a steady trend.
* EBITDA + recovery = Operating income + depreciation + recovery + leasing cost
Recovery refers to the principal repaid on the loan.
Fiscal year ended March 31, 2023 AFC REPORT

10

Initiatives for ESG/SDGs

Environment●●●

Power generation with renewableenergy and self-consumption
Installation of electric vehicle
recharging stations
Installation of LED lighting

Outlook for FY2023 Performance

Society
●
●

●
●

●

Providing safe and secure infrastructure
Providing services related tostockpiles against disasters
Installing AED in each facility
Conducting a comprehensive disaster
drill within Tokyo International Airport
Improving proficiency throughparticipation in a disaster drill andexamination meeting of private firebrigadeGovernance
●

●
●

●

Establishing a framework forcompliance with laws and regulations
through the organization ofCompliance Committee
Implementing internal audit
Risk control through theorganization of Risk Management
Committee
Improving governance by holding ameeting of the Board of Directors
once a monthInstalling solar panels on the rooftop of the domesticcargo terminal in Tokyo International Airport●

Providing a facility to treat aircraft
sewage (SD plant)

Scene from the disaster drill examination meetingof private fire brigade

Donating stockpiles fordisaster prevention

●

●
●

●

Tokyo International Airport SD Plant
●

●

●

●
●

●

9 AIRPORT FACILITIES CO., LTD.

❶

26,05425,516

Donation to Ikeda City, Osaka Prefecture●●

Donating in-flight meals
to children’s cafeterias
providing free or
inexpensive meals tochildren
Promoting diversity andinclusion (implementing
training sessions)

2023/32024/32,503 ❷
2,111

2,121 1,984

Operating income

Ordinary income❸

1,564 ❹
1,296

Profit attributableto owners of parent

Scene from a meeting of the Board of Directors●

Purifying discharged water at aircraftwashing facilities
Reducing water use through the usageof water-saving devices and the useof recycled water
Promoting the paperless
movement
Use of green bonds
Supporting TCFD
recommendations
Participating in NEDO
projects(¥ Million)

Net sales●●■ Forecast on the consolidated
performance

Responding to the Corporate
Governance CodeGovernance (harassment) training
Establishing a contact for
whistleblowing
Securing business continuity
through the formulation andcontinuous review of BCP
Timely and appropriate disclosure of
information
Ensuring the transparency ofmanagement through dialogues infinancial results briefings, small
meetings, etc.

Scene from interview by the media■ EBITDA + recovery<Outlook for FY2023>
Although there will be an increase in expenses towards the future as was
the case in the previous fiscal year, we aim to improve our businessperformance by further promoting our Medium- to Long-Term
Management Plan, including an increase in water supply and drainage
usage due to a further recovery in aviation demand and the non-asset
business, which aims to form a private REIT.
❶(Net sales) Due to the full-year operation of Hiroshima Motomachi NS
Building, the acquisition of new real estate for sale, and increase in thenumber of air travelers and airport users, it is expected that water andsewage use will return to the level seen before the COVID-19 pandemic
and that net sales will increase by 2.1% from the previous term.
❷(Operating income) Following the previous term, there will be a new
burden of depreciation expenses related to asset retirement obligations
associated with the start of the Haneda Airport 1-Chome project. In
addition, it is expected that repair expenses and raw material expenses
for the area heating and cooling business will increase. Thus, we are
expecting a decrease by 15.6% from the previous term.
❸(Ordinary income) Although there is an income gain from the aircraft
fund, it is expected to decrease by 6.4% from the previous term due to adecrease in operating income.
❹(Profit attributable to owners of parent) Unlike the previous term
where the effective tax rate was low, we are expecting a normal tax rate
for the current term, and we expect a decrease by 17.1% from theprevious term.
<Dividend for fiscal year ending March 2024>
Although we are expecting a decrease in profit, there will be no effect on
cash flows, and with the aim of achieving stability and a consolidated
payout ratio of 40% or higher, we are expecting an annual dividend of¥14 per share.

(¥ Million)

7,501

19/3

7,835

20/3

❶

7,619

7,464

7,535

21/3

22/3

23/3

❷

6,949

24/3

(Forecast)❶(Fiscal year ended March 2023) As for the fiscal year ended March
2023, an increase by 0.9% from the previous term is expected due to anincrease in net sales and operating income before depreciation
resulting from the termination of the exemption of rent and heating
charge claims and recovery in water supply and drainage service.
❷(Fiscal year ending March 2024) As for the fiscal year ending March
2024, a decrease by 7.8% from the previous term is expected due to adecrease in operating income before depreciation resulting from anincrease in repair expenses and a decrease in depreciation expenses
owing to the sale of hotels in Kyoto, etc. Although we expect a decreasein profit for the fiscal year ending March 2024 in the consolidated
financial statement, we consider that EBITDA + recovery* as a cash flow
is showing a steady trend.
* EBITDA + recovery = Operating income + depreciation + recovery + leasing cost
Recovery refers to the principal repaid on the loan.
Fiscal year ended March 31, 2023 AFC REPORT

10

Outline of the Consolidated Financial Statements
for the Fiscal Year Ended March 31, 2023

Financial Highlights (Five Years)■ Outline of consolidated balance sheet

Net sales (¥ Million)
30,000(¥ Million)

1 Total assets

1 Total assets

102,468

100,4031

Current assets Current liabilities
11,051
24,583
Non-current
liabilities
36,110Current assets Current liabilities
9,865
28,881
Non-current 2
liabilities
33,168Non-current
assets
77,884Non-current
assets71,521

Net assets
55,306

As of March 31, 2022

Net assets
57,3683<Financial position as of March 31, 2023>❶(Assets) Despite the acquisition of Hiroshima Motomachi
NS Building, investment in an airport fund, and an increase inbusiness loans, assets decreased by ¥2 billion to ¥100.4 billion
due to the sale of the hotels in Kyoto and office buildings, andthe recording of depreciation expenses for Osaka Sogo
Building.
❷(Liabilities) Amounted to ¥43.0 billion, a decrease by ¥4.1
billion, mainly due to payments of long-term debt.
❸(Net assets) Increased by ¥2 billion to ¥57.3 billion due toincreases in retained earnings and in foreign currencytranslation adjustments due to the depreciation of the yen.
As a result, equity ratio increased by 3.1 points to 54.3%.

24,213(¥ Million)

Effect ofexchange ratechange on cash
and cashequivalents❷ Cash flows
from investing
activities

2,017❶ Cash flows
fromoperatingactivities

Cash and cash
equivalents
at beginning of
23/3

11 AIRPORT FACILITIES CO., LTD.

1,198

-4,460❸ Cash flows
from financing
activities

230
8,598

❹Cash andcash equivalents
at end of
23/3

million (compared to ¥8,467 million provided in the previousterm). Mainly attributable to an increase in inventory due topurchase of real estate for sale, an increase in operating loans
due to new loans made and an increase in income taxes paid
despite recording of income before income taxes andnoncash items such as depreciation.
❷Net cash provided by financing activities was ¥1,198 million(compared to ¥449 million used in the previous term). Mainly
attributable to proceeds from sale of non-current assets
including hotels and office buildings for lease despite
purchase of investment securities in relation to investment inan aviation fund and purchase of non-current assets.
❸ Net cash used in investing activities was ¥4,460 million(compared to ¥5,117 million used in the previous term). This ismainly due to the repayment of long-term debt anddividends paid.
❹As a result, cash and cash equivalents as of March 31, 2023
decreased ¥1,014 million to ¥8,598 million.

4,129

4,000

4,186

3,831

0

19/3

20/3

Ordinary income (¥ Million)
3,802
4,000
3, 338

21/3
3,617

22/3
2,962

2,000
0

0

23/3

2,503

19/3

20/3

21/3

2,121

2,000

2,104

20/3

21/3

22/3

11,1274, 284

0

23/3

1,564
821

8,106
1,995

19/3

20/3

21/3

22/3

23/3

Net assets (¥ Million)
55,74060,00056, 333

54,96455, 30657, 368

20,000

19/3

19/3

20/3

21/3

0.669

0.663

22/3
0. 584

23/3

20/3

21/3

22/3

23/3

104,483

100,429

102,468

100,403

20/3

21/3

22/3

23/3

51. 5

52.1

51.4

54. 5

19/3

20/3

21/3

22/3

23/3

4. 3

4. 2

4. 0

80,00040,000019/3

Equity ratio (%)
80
52.6
60
40
20
0
ROA (%)
6

0.498

-933

19/3

Total assets (¥ Million)
120,000
101, 384* Business investment in plant and equipment/Amount invested = Business investment in plant and equipment + Lease receivables
and investment assets + Investment securities (partial) + Real estate for sale + Operating loans

Debt to equity (Times)
0. 8
0. 519
0. 6
0. 4
0. 2
0

23/3

2,227

1,000

19/3

22/3

Profit (loss) attributable to owners of parent (¥ Million)
3,000

Business investment in plant and equipment/Amount invested (¥ Million)
20,00016,779

0

3,280

2,000

40,000❶ Net cash provided by operating activities was ¥2,017

9,612

23,777

10,0000■ Outline of consolidated cash flow statement

24,15525,51620,00010,000

As of March 31, 2023

Operating income (¥ Million)

24,855

4

3. 4

2.6

2

20/3

21/3

22/3

23/3

0

19/3

20/3

21/3

22/3

23/3

*ROA = business profit (operating income + non-operating income)/Total assets

EBITDA + recovery (¥ Million)
7,835
7, 5018,000

Annual dividend (¥: left axis) /Payout ratio (consolidated) (%: right axis)

7,619

7,464

7, 535

20

4,000

10

0

0

19/3

20/3

21/3

22/3

* EBITDA + recovery = Operating income + depreciation + recovery + leasing cost
Recovery refers to the principal repaid on the loan.

23/3

Annual dividend

14.00

14.00

14.00

85.1
14.00

33.1
19/3

31. 2
20/3

21/3

22/3

Payout ratio

14.00

100

44.7 50
23/3

0* Payout ratio: not announced for the fiscal year with bottom-line loss.

Fiscal year ended March 31, 2023 AFC REPORT

12

Outline of the Consolidated Financial Statements
for the Fiscal Year Ended March 31, 2023

Financial Highlights (Five Years)■ Outline of consolidated balance sheet

Net sales (¥ Million)
30,000(¥ Million)

1 Total assets

1 Total assets

102,468

100,4031

Current assets Current liabilities
11,051
24,583
Non-current
liabilities
36,110Current assets Current liabilities
9,865
28,881
Non-current 2
liabilities
33,168Non-current
assets
77,884Non-current
assets71,521

Net assets
55,306

As of March 31, 2022

Net assets
57,3683<Financial position as of March 31, 2023>❶(Assets) Despite the acquisition of Hiroshima Motomachi
NS Building, investment in an airport fund, and an increase inbusiness loans, assets decreased by ¥2 billion to ¥100.4 billion
due to the sale of the hotels in Kyoto and office buildings, andthe recording of depreciation expenses for Osaka Sogo
Building.
❷(Liabilities) Amounted to ¥43.0 billion, a decrease by ¥4.1
billion, mainly due to payments of long-term debt.
❸(Net assets) Increased by ¥2 billion to ¥57.3 billion due toincreases in retained earnings and in foreign currencytranslation adjustments due to the depreciation of the yen.
As a result, equity ratio increased by 3.1 points to 54.3%.

24,213(¥ Million)

Effect ofexchange ratechange on cash
and cashequivalents❷ Cash flows
from investing
activities

2,017❶ Cash flows
fromoperatingactivities

Cash and cash
equivalents
at beginning of
23/3

11 AIRPORT FACILITIES CO., LTD.

1,198

-4,460❸ Cash flows
from financing
activities

230
8,598

❹Cash andcash equivalents
at end of
23/3

million (compared to ¥8,467 million provided in the previousterm). Mainly attributable to an increase in inventory due topurchase of real estate for sale, an increase in operating loans
due to new loans made and an increase in income taxes paid
despite recording of income before income taxes andnoncash items such as depreciation.
❷Net cash provided by financing activities was ¥1,198 million(compared to ¥449 million used in the previous term). Mainly
attributable to proceeds from sale of non-current assets
including hotels and office buildings for lease despite
purchase of investment securities in relation to investment inan aviation fund and purchase of non-current assets.
❸ Net cash used in investing activities was ¥4,460 million(compared to ¥5,117 million used in the previous term). This ismainly due to the repayment of long-term debt anddividends paid.
❹As a result, cash and cash equivalents as of March 31, 2023
decreased ¥1,014 million to ¥8,598 million.

4,129

4,000

4,186

3,831

0

19/3

20/3

Ordinary income (¥ Million)
3,802
4,000
3, 338

21/3
3,617

22/3
2,962

2,000
0

0

23/3

2,503

19/3

20/3

21/3

2,121

2,000

2,104

20/3

21/3

22/3

11,1274, 284

0

23/3

1,564
821

8,106
1,995

19/3

20/3

21/3

22/3

23/3

Net assets (¥ Million)
55,74060,00056, 333

54,96455, 30657, 368

20,000

19/3

19/3

20/3

21/3

0.669

0.663

22/3
0. 584

23/3

20/3

21/3

22/3

23/3

104,483

100,429

102,468

100,403

20/3

21/3

22/3

23/3

51. 5

52.1

51.4

54. 5

19/3

20/3

21/3

22/3

23/3

4. 3

4. 2

4. 0

80,00040,000019/3

Equity ratio (%)
80
52.6
60
40
20
0
ROA (%)
6

0.498

-933

19/3

Total assets (¥ Million)
120,000
101, 384* Business investment in plant and equipment/Amount invested = Business investment in plant and equipment + Lease receivables
and investment assets + Investment securities (partial) + Real estate for sale + Operating loans

Debt to equity (Times)
0. 8
0. 519
0. 6
0. 4
0. 2
0

23/3

2,227

1,000

19/3

22/3

Profit (loss) attributable to owners of parent (¥ Million)
3,000

Business investment in plant and equipment/Amount invested (¥ Million)
20,00016,779

0

3,280

2,000

40,000❶ Net cash provided by operating activities was ¥2,017

9,612

23,777

10,0000■ Outline of consolidated cash flow statement

24,15525,51620,00010,000

As of March 31, 2023

Operating income (¥ Million)

24,855

4

3. 4

2.6

2

20/3

21/3

22/3

23/3

0

19/3

20/3

21/3

22/3

23/3

*ROA = business profit (operating income + non-operating income)/Total assets

EBITDA + recovery (¥ Million)
7,835
7, 5018,000

Annual dividend (¥: left axis) /Payout ratio (consolidated) (%: right axis)

7,619

7,464

7, 535

20

4,000

10

0

0

19/3

20/3

21/3

22/3

* EBITDA + recovery = Operating income + depreciation + recovery + leasing cost
Recovery refers to the principal repaid on the loan.

23/3

Annual dividend

14.00

14.00

14.00

85.1
14.00

33.1
19/3

31. 2
20/3

21/3

22/3

Payout ratio

14.00

100

44.7 50
23/3

0* Payout ratio: not announced for the fiscal year with bottom-line loss.

Fiscal year ended March 31, 2023 AFC REPORT12

To Our Shareholders■ Notification of changes in shareholder benefits■ Facilities observation tour

To show our appreciation for our shareholders' understanding and support for the business of our companies, and to improve the attractiveness of investment, we introduced a shareholder special benefit plan (discount in the accommodation fee of hotels owned/rented byour company). However, after repeatedly conducting investigations from the perspective of enabling our shareholders to experience andbetter understand the Group’s business, we decided to change the shareholder benefit to a meal voucher for Blue Corner UC, a restaurant
operated by our group company from which you can watch aircrafts.
We hope you will visit Blue Corner UC to learn more about our business.

Benefit criteria

How to use

Meal vouchers will be issued to shareholders holding 100 shares (1 unit)
or more of our company shares, according to the number of shares held.

Please present the voucher at the time of payment. When the amount of
payment is less than the amount of the meal voucher and the change ismore than ¥1,000, a meal voucher worth ¥1,000 will be provided. Please
note that there will be no change for less than ¥1,000. Also, when theamount of payment is more than the amount of meal voucher, please
pay the difference.

Reference date

Period of issuance

Valid period

March 31

Late June

From July 1 to the following June 30

September 30

Late November

From December 1 to the following
November 30

Number of shares held
Details
100 shares or more and less than 500 shares Two meal vouchers worth ¥2,500 each(annually)
Two meal vouchers worth ¥5,000 each
500 shares or more(annually)

We are currently working on the discussion and preparation to resume the observation tour of the Tokyo International Airport facilities,
a popular event among our shareholders, by around later in FY2023. Once it is decided that the tour will be held, the details will be
provided via AFC REPORT, etc.
Also, we are planning to give priority to the shareholders who are chosen by ballot to participate in the facilities observation tour
that had been planned in April 2020.

■ Shareholder questionnaire
We are implementing a shareholder questionnaire once every two years in order to collect opinions from our shareholders and toreflect them in the IR activities for the future. A postcard for answering the questionnaire is enclosed with this AFC REPORT. We
welcome your frank and straightforward opinions. Thank you for your kind cooperation.
Some of the results of the questionnaire will appear on the next AFC REPORT.

Discount coupon already issued
Discount coupons for accommodation fees that have already been
issued can continue to be used at the designated hotels (Tokyu Stay
Kamata, Hotel JAL City Haneda Tokyo West Wing) until they expire.

■ Blue Corner UC, a restaurant from which you can watch airplanes■ Report on the General Meeting of Shareholders
As for the results of the 54th General Meeting of Shareholders held on June 29, 2023, please check the websiteof our company (https://www.afc.jp/english/ir/stock/meeting.html).
We would like to ask for further understanding and support from our shareholders and investors.

Blue Corner UC is a restaurant located in the new aircraft maintenance area of Tokyo International Airport, lined with aviation and airport
related facilities such as hangars and maintenance plants, and has been loved by people working in the area. The restaurant is glass-walled toprovide a fabulous view of runways where aircrafts go by or airport terminals. It is also loved by aviation enthusiasts as a perfect spot in the
airport for enjoying the view of aircrafts. The place can be used for various occasions, such as for lunch, as a cafe, or enjoying alcohol at night.
The new-look restaurant was refurbished on the 25th year of opening, and is waiting for your visit.
Name of the restaurantBlue Corner UC

Address

Utility Center Building 2F,
3-5-10, Haneda Airport, Ota-ku, Tokyo

Opening Hours

Weekdays 11:00 to 21:00 (L.O.19:45)(Closed on weekends and holidays)▶Please access the notification on the resolutions from here.
https://www.afc.jp/english/ir/stock/meeting.html■ Newsletter service
We are offering an email newsletter service to provide the latest information of our company.
Please register from the QR code on the right.

▶For the latest information on the Blue Corner UC, please visit the official Instagram.

13 AIRPORT FACILITIES CO., LTD.

Fiscal year ended March 31, 2023 AFC REPORT14

To Our Shareholders■ Notification of changes in shareholder benefits■ Facilities observation tour

To show our appreciation for our shareholders' understanding and support for the business of our companies, and to improve the attractiveness of investment, we introduced a shareholder special benefit plan (discount in the accommodation fee of hotels owned/rented byour company). However, after repeatedly conducting investigations from the perspective of enabling our shareholders to experience andbetter understand the Group’s business, we decided to change the shareholder benefit to a meal voucher for Blue Corner UC, a restaurant
operated by our group company from which you can watch aircrafts.
We hope you will visit Blue Corner UC to learn more about our business.

Benefit criteria

How to use

Meal vouchers will be issued to shareholders holding 100 shares (1 unit)
or more of our company shares, according to the number of shares held.

Please present the voucher at the time of payment. When the amount of
payment is less than the amount of the meal voucher and the change ismore than ¥1,000, a meal voucher worth ¥1,000 will be provided. Please
note that there will be no change for less than ¥1,000. Also, when theamount of payment is more than the amount of meal voucher, please
pay the difference.

Reference date

Period of issuance

Valid period

March 31

Late June

From July 1 to the following June 30

September 30

Late November

From December 1 to the following
November 30

Number of shares held
Details
100 shares or more and less than 500 shares Two meal vouchers worth ¥2,500 each(annually)
Two meal vouchers worth ¥5,000 each
500 shares or more(annually)

We are currently working on the discussion and preparation to resume the observation tour of the Tokyo International Airport facilities,
a popular event among our shareholders, by around later in FY2023. Once it is decided that the tour will be held, the details will be
provided via AFC REPORT, etc.
Also, we are planning to give priority to the shareholders who are chosen by ballot to participate in the facilities observation tour
that had been planned in April 2020.

■ Shareholder questionnaire
We are implementing a shareholder questionnaire once every two years in order to collect opinions from our shareholders and toreflect them in the IR activities for the future. A postcard for answering the questionnaire is enclosed with this AFC REPORT. We
welcome your frank and straightforward opinions. Thank you for your kind cooperation.
Some of the results of the questionnaire will appear on the next AFC REPORT.

Discount coupon already issued
Discount coupons for accommodation fees that have already been
issued can continue to be used at the designated hotels (Tokyu Stay
Kamata, Hotel JAL City Haneda Tokyo West Wing) until they expire.

■ Blue Corner UC, a restaurant from which you can watch airplanes■ Report on the General Meeting of Shareholders
As for the results of the 54th General Meeting of Shareholders held on June 29, 2023, please check the websiteof our company (https://www.afc.jp/english/ir/stock/meeting.html).
We would like to ask for further understanding and support from our shareholders and investors.

Blue Corner UC is a restaurant located in the new aircraft maintenance area of Tokyo International Airport, lined with aviation and airport
related facilities such as hangars and maintenance plants, and has been loved by people working in the area. The restaurant is glass-walled toprovide a fabulous view of runways where aircrafts go by or airport terminals. It is also loved by aviation enthusiasts as a perfect spot in the
airport for enjoying the view of aircrafts. The place can be used for various occasions, such as for lunch, as a cafe, or enjoying alcohol at night.
The new-look restaurant was refurbished on the 25th year of opening, and is waiting for your visit.
Name of the restaurantBlue Corner UC

Address

Utility Center Building 2F,
3-5-10, Haneda Airport, Ota-ku, Tokyo

Opening Hours

Weekdays 11:00 to 21:00 (L.O.19:45)(Closed on weekends and holidays)▶Please access the notification on the resolutions from here.
https://www.afc.jp/english/ir/stock/meeting.html■ Newsletter service
We are offering an email newsletter service to provide the latest information of our company.
Please register from the QR code on the right.

▶For the latest information on the Blue Corner UC, please visit the official Instagram.

13 AIRPORT FACILITIES CO., LTD.

Fiscal year ended March 31, 2023 AFC REPORT14

■ Corporate profile (as of March 31, 2023)■ Stock information (as of March 31, 2023)

Corporate Name: Airport Facilities Co., Ltd. (AFC)Stock Listings:

Established:

February 1970

Capital:¥6,826.10 million

Employees:

119 (Consolidated) 113 (Non-consolidated)■ Directors and corporate auditors

Tokyo Stock Exchange (TSE)
Prime Market(Ticker Code: 8864)

Total Number of Shares Authorized: 124,800,000
Total Number of Shares Issued: 52,979,350
Number of Shareholders:

10,474

Share Unit Number:

100 sharesFiscal year ended March 31, 2023

(As of July 3, 2023)

Directors

The Company (Treasury Stock)

Shigeo Tamura

Executive Vice President

Hideo Miyake

0.76%

Executive Vice President

Tadao Nishio

ForeignInvestors

Managing Executive Officer

Keisuke Kuma

Executive Officer

Osamu Sasaoka
Takehiko Sugiyama

External Director

Kayo Aoyama

External Director

Toshikatsu Ogura
Corporate Auditors

Full-time Statutory Auditor

Masaaki Komiya

Full-time Statutory Auditor

Takahiro Hama

Statutory Auditor

Sawako Ueno

Statutory Auditor

Hirotomo Suzuki

April 1, 2022 March 31, 2023

Composition of Shareholders

President and Executive Officer

External DirectorA
FC
REPOR T

Securities Companies

5.55%
Individuals

14.40%

14.46%
Financial
Institutions
Other JapaneseCorporations

43.12%

21.71%

Major Shareholders
Shareholder

Number of Shares Owned(thousands)

Ratio of Shareholding(%)

Japan Airlines Co., Ltd.

10,521

21.04

ANA HOLDINGS INC.

10,521

21.04

Development Bank of Japan Inc.

6,920

13.83

The Master Trust Bank ofJapan, Ltd. (Trust Account)

2,654

5.30

NOTHERN TRUST CO., (AVFC) RE IEDP AIF
CLIENTS NON TREATY ACCOUNT

1,600

3.19

AIRPORT FACILITIES CO., LTD.
(Ticker Code: 8864)