The 14th term
Business Report
From April 1, 2019
To March 31, 2020

I. Business Report
II. Balance Sheet
III. Income Statement
IV. Statement of Changes to Shareholders’ Equity
V. Notes

Tokyo International Air Terminal Corporation

Business Report
From April 1, 2019
To March 31, 2020

1.

Matters Concerning the Company’s Status(1) Progress and Results of Operations
During this fiscal year, even though the Japanese economy and overseas economies in generalcontinued to recover gradually while weakening from the beginning of the fiscal year, due to the
new coronavirus world pandemic originating in mainland China from late January, economic
activities in the world including Japan, Asia, Europe and the U.S. have been stalled and restricted,
resulting in a very difficult situation toward the end of the fiscal year.
Regarding Japan's inbound and outbound demand in 2019 (January - December), the number ofoutbound Japanese travelers reached 20.88 million people, the highest amount ever recorded, andeven though the number of inbound international travelers showed a reduction against the
backdrop of the worsening Japan-Korea relations, there was a steady increase from China andSoutheast Asia, and an increase from Europe, the U.S., and Australia triggered by the Rugby
World Cup 2019 in Japan, exceeding the previous year as a whole and reaching 31.88 million
people in a year. However, from January, measures against infectious diseases including
restriction or prohibition on entering or leaving countries including Japan and countries/areas
overseas expanded globally, and the number of outbound Japanese travelers plummeted to 60%
year-on-year, and the number of inbound international travelers plummeted to 51% year-on-year
in the business term from January to March 2020.
Also regarding Haneda Airport's international flights, until late January, against the backdrop of
the large inbound demand, the number of passengers had continued to exceed the previous year
due to upsizing to a larger aircraft type in existing flights and routes, and an improvement ofpassenger load factors, etc., however they plummeted in all routes toward the end of the fiscal
year, and the actual number of inbound and outbound travelers in the fiscal year decreased to 93%
year-on-year, recording lower than the previous year.
Moreover, concerning Haneda Airport's international flights, new flights to 18 cities, mainly inEurope and the U.S. were planned due to an increase of about 50 aircraft landing slots in thesummer flight schedule 2020 from March 29, the end of the fiscal year, but most of them wereforced to suspend, cancel, or postpone their operations, as is also the case with cities currently
serviced, therefore, cities for new flights were limited to seven cities, Seattle, Detroit, Dallas,
Washington, D.C., Houston, Moscow, and Vladivostok. (Note: These new routes are also to belargely suspended or canceled from April)
Under these circumstances, in Haneda Airport, based on the Japanese government's policy for‐1‐strengthening the functions of the airports in the Tokyo metropolitan area, preparations werebeing conducted for flight path review and the enhancement of airport functions and facilities. In
order to respond to the growth of international passengers accompanying an increase in aircraft
landing slots, Tokyo International Air Terminal Corporation (hereinafter referred to as "theCompany") has safely completed the renovation and reconstruction work for the Terminal 3
Building (former International Passenger Terminal Building: renamed on March 14), increased
the floor space of the check-in counter floor on the departure floor and the baggage claim area on
the arrival floor in the main terminal building, added two boarding bridges at the north-sidesatellite terminal, and gradually commenced services from December. Additionally, in thedomestic area, Japan Airport Terminal Co., Ltd. has renovated and developed a facility forinternational flights on the south side of Terminal 2. The Company is going to rent the area
dedicated for international flights of the facility, and manage it with Terminal 3. With theassistance and cooperation of the many people involved, the Company could commence services
on March 29, 2020. (Note: The area dedicated for international flights in Terminal 2 has beenclosed since April 11)
Also during this fiscal year, regarding the management of terminals, the Company puts safety
and security first in all cases, and in consideration of disaster prevention and safety, it has taken
measures to prepare for terrorism and natural disasters. As a special response to the comings andgoings of important persons, the Company increased their guard and exercised caution in theterminal building in response to requests from the police and relevant authorities for special
events such as the U.S. president's visit to Japan in May, the Rugby World Cup 2019 in Japan
from September to November, and the enthronement ceremony in October. In addition, whenlarge-scale typhoons Faxai and Hagibis passed over the Tokyo metropolitan area, to say nothingof disaster prevention and maintenance of facilities, the Company strived to secure an
environment where passengers could feel safe in case something happened by successively
providing information about the current situation with public transport facilities to passengers
staying in the building due to flight cancellations. Furthermore, in order to continue to prepare forsuch emergencies, the Company established a system to promptly convey information on the web
in many languages, and prepared more stockpiles including emergency food.
Regarding crisis management, the Company has been striving to enhance its readiness forcontingency situations by conducting stress tests in the assumption of fires and earthquakes
occurring, while continuing to receive external expert advice. Also, to respond promptly in theworkplace after disasters have occurred, the Company held drills assuming the occurrence ofdisasters near the workplaces of employees working in the terminal as part of the general disasterprevention drills conducted throughout the entire international terminal area. In addition, theCompany dealt with increasing the readiness and awareness of fire and disaster prevention at the
airport for employees working in the building, through meetings within the terminal with the local
fire brigade team.
In terms of aviation security, the Company continues to confirm the awareness of crisis‐2‐management and fully disseminate security measures by conducting aviation security recurrent
training for all employees working in the building. Besides this, based on the designation of the
airport building as critical infrastructure by the Japanese government, while the enhancement ofcyber security is required in order to protect from unexpected cyber attacks and rapidly response
to such attacks, the Company established an internal and external cooperation system such as
participation in the Cybersecurity Council organized by the government after establishing theInformation Security Committee and CSIRT (Computer Security Incident Response Team), andenhanced daily management and monitoring by SOC (Security Operation Center), constructing amore robust system.
As measures against the new coronavirus infection, in order to prevent the infection fromspreading through the building, in addition to recommending that employees working in thebuilding and staff wear masks, for facilities, the Company has taken some measures withconsideration for environmental hygiene, such as enhancement of the air-conditioning ventilationand enhancement of cleaning such as sterilizing door knobs and handrails (including moving
walkways and escalators), buttons in elevators and baggage cart handles, as well as setting up
alcohol-based hand sanitizers at various areas in the building.
Regarding facilities and equipment related to passenger services, when terminals wereexpanded including the extension and reconstruction of Terminal 3 and provision of the area
dedicated for international flights in Terminal 2, the Company introduced various fast travelmeasures that provide smooth departure procedures without stress for passengers based on thegovernment's policy, to say nothing of the fact that the developed facilities and services are arealization of the concept of universal design (UD) which the Company has emphasized since thefoundation of the international terminal. In addition to newly introducing the latest self-service
check-in machines and self-service baggage drop machines in both Terminal 2 and Terminal 3, theCompany prepared displays to clearly show guidance information such as waiting times and items
which are not permitted to be checked in or carried on board at security checkpoints, andestablished gates dedicated for confirming boarding passes before inspection areas, making
passenger flow smooth. Furthermore, the Company introduced a new type of body scanner,
CT-type X-ray inspection equipment for carry-on baggage, and smart lanes in full scale. This
shortened passengers' waiting time, and enabled efficient and advanced inspections.
As international flights will be operated in the two terminals and an increase in passengers
including inbound international travelers transiting from international flights to domestic flights is
expected, the Company has introduced highly convenient guidance and leading/moving services
that are easy to understand according to user purpose by once again perceiving Haneda Airport
Terminal 1 to Terminal 3 integrally. After integrating websites for passengers which had
previously been operated separately for domestic and international flights, the site was revamped
as the "Haneda Airport" website which is easy to view and use even with a mobile terminal, andclearly shows information on domestic and international airlines, terminals in service, and transfer‐3‐information between terminals, along with all terminal information. Moreover, regarding transfers
between terminals along with transit, the Company will newly operate buses for transit ofinternational flights that connects two terminals in the limited area, have the regular free shuttle
bus operate on a 24-hour schedule, and furthermore, increase the frequency of operations of theramp bus which connects domestic flights and international flights with the shortest route in thelimited area, improving convenience.
Regarding the commercial area, the Company reopened the general duty-free store, TIAT
DUTY FREE CENTRAL in Terminal 3 at the end of March 2019 after renovation was completed,and expanded the product lineup. As a result, its sales increased steadily, such as Japanese brandproducts being popular with inbound international travelers. In addition, the Company opened ageneral duty-free store, a virtual boutique in which products including duty-free fashion items canbe purchased using a digital catalog, and an arrival duty-free shop in Terminal 2, providing alineup of attractive products and an opportunity to purchase duty-free items in the same way as
Terminal 3. Moreover, while more customers from China, Southeast Asia, and Japan arerequesting mobile billing methods, the Company has introduced the major billing systems of eachcountry in stages, and is striving to make an environment for smooth shopping with good value.
To maintain and improve its service quality, the Company has strived to identify and takeresponse measures for issues by regularly conducting comprehensive customer surveys evaluatinga wide range of aspects from the building facilities and services to customer services andanonymous investigations. The Company holds role-playing contests for its employees who
attend to customers at stores and service facilities in the building. It also continues to offer regulartraining in conversation with customers in English and Chinese, in order to improve customer
service skills especially for overseas travelers, and also offers regular training in conversation
with customers in Japanese to international employees.
In consideration of customer entertainment, also in the fiscal year, the Company has decorated
the terminal to produce a four seasons effect, including illuminations, and has carried out various
campaigns. For visitors including overseas customers, the Company and the Agency for Cultural
Affairs/the National Museum of Japanese History co-hosted and conveyed the allure of Japaneseculture/history. In addition, the Company and the head federation for the promotion of regional
revitalization co-hosted "Waku Waku Nippon," and promoted local tourist resources unique tospecific regions. The Company also strived to contribute to regional revitalization by stimulating
the demand for domestic tourism using Haneda as a hub.
Not only to encourage people from overseas to use Haneda Airport as the gateway to Japan's
local areas, but also to announce the expansion of the terminal to overseas markets, the Company
provided information booths at international tourism expos held in Hong Kong, Guangzhou, and
Ho Chi Minh this year as part of its efforts to stimulate inbound international customers' demand.

‐4‐With respect to the universal design (UD) that the Company has emphasized, the Company
continues to conduct evaluations and verifications carried out since its foundation while holding
the UD Committee, comprised of academics, experts with their own disabilities, airport-related
operators, and the Company's employees, every other year. Also in the fiscal year, the Company
improved the visibility of existing tactile paving as a project for which issues were found throughthe committee in the previous fiscal year, steadily promoting improvements from the viewpoint of
persons with their own disabilities and users.
As an effort to maintain and improve customer satisfaction, in the international terminalbuilding since its opening, in order to continue to provide high quality services and hospitality, theemployees working in the building have been continuously implementing customer satisfaction(CS) activities while sharing the CS philosophy. The Haneda Airport International Area Passenger
CS Liaison Committee widely promoted CS activities while involving relevant organizations andemployees by planning and operating the CS award system, holding CS campaigns, and issuing
CS bulletins. During this year, in order to promote understanding of customers with disabilities
and customers from overseas, the committee has been working to increase awareness andknowledge by holding CS seminars with themes such as "barrier-free" and "understanding ofdifferent cultures." In addition, the Company developed understanding and empathy among
employees beyond organizational and operational frameworks, by continuing internal branding
activities, "WE ARE TOKYO," through staff exchange meetings attended by employees working
in the building and staff related to Haneda Airport's international flights. At the same time, theCompany was working to convey a unified feeling and action of hospitality to the customers.
These various efforts and activities have been recognized by external rating agencies tofacilities and services of the international terminals of Haneda Airport. Our international anddomestic terminals have received the 5 Star Airport ranking in the Global Airport Ranking by
Skytrax, a U.K.-based service research firm, for six consecutive years. Furthermore, our airport is
ranked second in the “World’s Best Airport,” the comprehensive evaluation of airports in 2020,
and in awards by category, our airport has been ranked first in the “World's Cleanest Airport”
category for five consecutive years and seven times in total, and at the same time, our airport isalso ranked first in two consecutive years in the category newly established this year, "Best PRM(Persons with Reduced Mobility)/Accessible Facilities."

As mentioned above, the Company has been implementing steady operation and businessexecution with cost awareness, while continuing to expand the functions of terminal facilities andimprove services. As a result, the Company reported an operating revenue of 88,660 million yen(down 8.3% year-on-year) in the fiscal year, an operating profit of 9,217 million yen (down 31.9%
year-on-year), an ordinary profit of 6,345 million yen (down 38.2% year-on-year), and a net
current profit of 4,068 million yen (down 42.5% year-on-year).

‐5‐The business performance by each business segment is as follows:<Facilities Management and Operation Business Segment>
In the international passenger terminal, the rent revenue generated from renting offices forairlines and shop spaces for tenants was 4,966 million yen (up 3.0% year-on-year).
Passenger service facility charge (PSFC) revenue, which the Company receives from air
travelers at departure and during transit for connecting flights, was 19,368 million yen (down
7.9% year-on-year).
The facility usage fee revenue from air transport service operators' use of facilities, including
boarding bridges, the luggage handling system, and gates dedicated for business jet airplanes,
totaled 3,470 million yen (down 4.5% year-on-year).
Consequently, the operating revenue of the Facilities Management and Operation Businesses
Segment was 27,805 million yen (down 5.7% year-on-year).
<Directly-Managed Business Segment>
In the Merchandise Sales Business, the sales of goods generated from general duty-free storesand branded boutiques totaled 53,177 million yen (down 10.4% year-on-year).
The sales from the Restaurant Business totaled 2,915 million yen (down 2.1% year-on-year).
Among other businesses, the revenues from parking lot business and other businesses, such as
lounge business and advertising in the building, were, respectively, 1,718 million yen (down
1.5% year-on-year) and 3,042 million yen (down 2.0% year-on-year).
Consequently, the Directly-Managed Business Segment reported an operating revenue of
60,854 million yen (down 9.4% year-on-year).

(2) Status of Capital Expenditure
During the fiscal year, the Company made capital expenditures of 42,698 million yen in total,
which included 21,582 million yen for renovation and reconstruction works for the Terminal 3
building, 10,218 million yen for construction works, etc. for the international facilities in
Terminal 2, and new stores, 1,169 million yen for renovation works, etc. for existing stores.

(3) Status of financing
As the 3rd funds for work to extend and reconstruct the international passenger terminals, etc.
under the “Limited Loan Contract Alteration Contract” signed with a loan syndication as ofDecember 28, 2017, the borrowing of 4,000 million yen was conducted on January 29, 2020.
As a result, the outstanding balance of the loan from the syndication stood at 94,057 million
yen as of the end of the fiscal year.

(4) Issues to Be AddressedInternational flight passenger demand decreased significantly due to the new coronavirus
pandemic. Also for international flights planned to depart from and arrive at Haneda Airport, the‐6‐difficult situation has been continuing as the area dedicated for international flights in Terminal 2
has been closed since April 11, and most of the flights are suspended or canceled.
Even under these circumstances, the Company will continue to provide the necessary facilities
and services on the premise that the safety and security of customers using airplanes is ensured.
Additionally, while the quarantine system on returning to/entering Japan is enhanced, theCompany will cooperate and respond in accordance with the request by relevant
ministries/organizations such as providing facilities and space which will be especially needed,and passenger flow.
While the government's anti-infection measures against new coronavirus and emergency
economic measures are currently shown, regarding the management of the international passenger
terminal business, from the viewpoint of preventing infection from spreading to passengers andemployees working in the building, to lighten the management burden in situations hard tobalance in terms of the Company and operators in the terminals such as airlines and tenants, on
the premise that passengers' needs can be secured, the Company will temporarily/partially closeor reduce facilities, stores and services in terminals, and at the same time, it will support businessactivities with some measures such as exempting operators in the terminals from facility rental
fees/usage fees.
Moreover, toward the recovery period of international flight demand after a v-shaped recovery
and demand stimulation for tourism and transportation, etc. after the pandemic ends, the Company
will enter the phase where true value will be questioned regarding the terminal re-expansion
project including the management system for two international terminals, fast travel measures andtransit services, and while integrally perceiving Haneda Airport's domestic/international flights
and all passenger terminals, the Company will strive to become skilled in and coordinate/improvethe management of facilities and services. Furthermore, in the air transport/immigration processes,on the recognition that the Company will reach the phase requiring new standards which give fullconsideration to infection prevention, it will engage in the necessary measures as befits
international terminals. Regarding the One ID service using face recognition technology forwhich preparations for implementation are currently underway as an expansive measure of fast
travel,theCompany

regards

theserviceascreating

anenvironmentfor

non-face-to-face/contactless services with the expanded deployment of self-service baggage dropmachines, etc., and while developing and introducing these advanced technologies and facilities,
it will continue promoting the smart airport with safety and security.
In order to steadily handle these issues and continue to function as an international terminal asnormal, the Company will coordinate with Japan Airport Terminal Co., Ltd. as a PFI business
representative company, the government, loan syndication and our shareholders, and would like to
ask for the necessary support.
Fully recognizing Haneda Airport's roles and significance as an international airport located in
the Tokyo metropolitan area, the Company will strive to provide facilities and services withoutstanding safety, convenience and comfort as international terminals which contribute toachieving an advanced tourism country and the enhancement of the functions of the Tokyo‐7‐

metropolitan area, including relentlessly making efforts in our daily operation and maintenancemanagement, steadily responding to the opinions of customers and all stakeholders, and ensuring
repeated communication.

(5) Changes in Assets and Income
Category

Operating revenue

Net income

Current net profit per
share:Net assets

The 11th term
FY2016The 12th term
FY2017The 13th term
FY2018The 14th term
FY201977,847 million

89,539 million

96,685 million

88,660 million

yen

yen

yen

5,417 million

5,440 million

7,077 million

yen

yen

yen

1,491,682 yen

1,497,353 yen

1,383,905 yen

772,489 yen

15,843 million

22,021 million

38,015 million

42,892 million

yen

yen

yen

yen

4,068 million yen

yen(6) Important matters concerning the parent company(i). Matters concerning the parent company
The Company’s parent company, Japan Airport Terminal Co., Ltd., owns 2,706 shares(51%) of Company stock. The Company and Japan Airport Terminal Co., Ltd. are in aconsignment and entrustment relationship regarding the purchase transactions of items
related to commodity sales, including duty-free items and the management of stores, etc.
(ii). Transactions with the parent company
Regarding transactions which require notes in the Notes to Non-Consolidated Financial
Statements for the fiscal year among transactions between the Company and Japan Airport
Terminal Co., Ltd., there are financing, borrowing of funds, and procurement of goods
from Japan Airport Terminal Co., Ltd., and business consignment and payment of interest
to Japan Airport Terminal Co., Ltd.
(a) Matters noted not to harm the interests of the Company when carrying out thetransactions
The Company is a special-purpose company that operates the PFI business, therefore
regarding transactions with its parent company such as financing, borrowing, andpayment of interest, the Company properly determines the terms and conditions oftransactions according to the contracts with the government, financial institutions, andshareholders.
Additionally, regarding goods to be sold at stores in the terminal, the Company
procures goods from Japan Airport Terminal Co., Ltd. Prices and other terms and‐8‐conditions for transactions are determined after negotiations with a reference to market
prices.
Furthermore, prices, other terms and conditions for the business consignment are
determined after consultations between both companies, while taking into consideration
details of business with a reference to general terms and conditions, etc.
(b) The board of directors meeting's decision and the reason as to whether the transactions
will harm the Company's income
For the transactions, the Company’s board of directors meeting makes a final decisionindependent of its parent company based on internal regulations, and it has decided thatthe transactions will not harm the Company's income.
(c) The opinions in the case where the decision of the board of directors meeting is different
from opinions of external directors
There are no applicable matters.
(7) Main Businesses(i). Management and operation of the international passenger terminal building(ii). Leasing of offices and shop spaces for air transport service operators and business operators on
the premises of the airport(iii). Provision of various services including guiding the users of the international passenger terminalbuilding, operation of lounges and rental meeting rooms and operation of parking lots(iv). Sales of merchandise to the users of the international passenger terminal building(v). Operation of restaurants and coffee shops for the users of the international passenger terminal(8) Status of employees

Increase/decrease from the end of

Number of employees

the previous fiscal year

70 (13)

Increased by 7 (Increased by 2)(Note) The numbers indicate employed workforce. The numbers in parentheses are those of
non-regular employees and not included in the numbers before them.

‐9‐(9) Main lenders

Lenders

AmountDevelopment Bank of Japan Inc.

22,218 million yen

Mizuho Bank, Ltd.

15,906 million yen

MUFG Bank, Ltd.

12,801 million yen

Japan Airport Terminal Co., Ltd.

6,660 million yen

Sumitomo Mitsui Banking Corporation

6,360 million yen

The Bank of Yokohama, Ltd.

5,377 million yen

Shinkin Central Bank

5,058 million yen

‐10‐

2.

Status of the Company's shares(1) Total Number of Shares Outstanding:

5,306 shares(2) Number of shareholders

13(3) Shareholders

Number of shares

Shareholder nameownedJapan Airport Terminal Co., Ltd.

2,706 shares

Japan Airlines Co., Ltd.

895 shares

ANA Holdings Inc.

895 shares

Narita International Airport Corporation

162 shares

TEPCO Energy Partners Incorporated

126 shares

Secom Co., Ltd.

108 shares

Tokyo Gas Co., Ltd.

108 shares

Keikyu Corporation

72 shares

Tokyo Monorail Co., Ltd.

72 shares

NTT Data Corporation

54 shares

Development Bank of Japan Inc.

36 shares

Mizuho Bank, Ltd.

36 shares

MUFG Bank, Ltd.

36 shares
Total

5,306 shares(4) Other Important Matters Regarding the SharesAmong the Company's 5,306 outstanding shares, the 36 shares held by Development Bank ofJapan Inc., Mizuho Bank, Ltd., and MUFG Bank, Ltd. each are preferred shares with preferred
dividends.

‐11‐

3.

Status of Company Executives(1) Directors and corporate auditors
Corporate position

Name

Representative Director and President & CEO

Katsuji Doi

Supervising area; and important position held concurrently

Special Adviser, Japan Airport Terminal Co., Ltd.

Managing Director

Hiroto Kuniwake

Managing Director

Akira Asai

In charge of Passenger Service Department and Disaster Prevention and Security Department

Managing Director

Hiroki Kato

In charge of Administration Department and Planning Department

Managing Director

Shinsaku Yamaki

In charge of Finance Department

External Director

Toshihiro Kawasaki

Fellow, in charge of Promotion of Electrification, Tokyo Electric Power Company Holdings, Inc.

External Director

Akihiko Shiina

Representative Director and Senior Executive Vice President, Narita International Airport Corporation

Corporate Auditor

Masakazu Owashi

In charge of Facilities Department, Sales Department, and International Operation Office

External Corporate Auditor

Hiroshi Tobita

Tobita & Partners LPC

External Corporate Auditor

Hiroyuki Gotoh

Managing Executive Officer, Tokio Marine & Nichido Fire Insurance Co., Ltd.

Note 1: Toshihiro Kawasaki and Akihiko Shiina are external directors stipulated in Article 2-15 of
the Companies Act.

2.

Director Toshihiro Kawasaki retired from Director of Tokyo Electric Power Company
Holdings, Incorporated on June 26, 2019.

3.

All three corporate auditors are external corporate auditors stipulated in Article 2-16 of theCompanies Act.

4.

Masakazu Owashi, Corporate Auditor, is a certified public accountant and has
adequate knowledge about finance and accounting.

5.

Hiroshi Tobita, External Corporate Auditor, is an attorney-at-law specializing in
corporate law and has adequate knowledge about finance and accounting.

(2) Amount of Compensation, etc. for Directors and Corporate Auditors for the Fiscal Yearunder Review
10 directors

110 million yen(of whom, 3 external
directors : 6 million yen)corporate

4 corporate auditors

19 million yen(of whom, 4 external corporate auditors:
19 million yen)

Note: The above-mentioned compensations, etc. include the retirement benefits paid to directors andcorporate auditors who retired at the closure of the 13th General Shareholders Meeting.

‐12‐

(3) Matters Concerning External Officers(i). Directors
Toshihiro Kawasaki and Akihiko Shiina attend the board of directors meeting held every
month and offer appropriate remarks including the necessary opinions and questions
concerning the Company's overall management.
(ii). Corporate Auditors
Masakazu Owashi, Hiroshi Tobita and Hiroshi Gotoh offer appropriate counseling andsuggestions from the standpoint of ensuring legal compliance and fairness at the monthly
board of directors meeting and the board of auditors meeting held as necessary.

4.

Accounting Auditor(1) Name of the Accounting Auditor
Ernst & Young ShinNihon LLC(2) The Amount of Compensation, etc. for the Accounting Auditor for the Fiscal Year under
Review
Audit and attestation services compensation stipulated in Article 2, Paragraph 1 of the Certified
Public Accountants Act: 16 million yen(3) Reasons for the Board of Auditors Consent to the Compensation, etc. of the Accounting
Auditor
The Company's board of auditors, after considering the accounting auditor's audit plan details,
the status of the accounting auditing work executed and the grounds for the calculation of thequoted compensation amount, consents under Paragraph 1, Article 399 of the Companies Act,to the amount of compensation, etc. for the accounting auditor.

(4) Policy on Dismissal or Refusal of Reappointment of the Accounting Auditor
The Company's board of auditors may, in accordance with provisions stipulated in items of
Paragraph 1, Article 340 of the Companies Act, dismiss the accounting auditor, and if
appropriate auditing is deemed difficult due to the occurrence of situations that hinder thecompetence and independence of the accounting auditor, shall submit a proposal for dismissing
or refusing the reappointment of the accounting auditor to the General Meeting of Shareholders
based on a resolution of the board of auditors.

5.

Company Structure and Policy(1) Structure to Ensure the Directors' Execution of Duties in Compliance with the Laws andRegulations and the Articles of Incorporation as well as the Appropriateness of Other‐13‐

Operations(i). Structure to ensure the directors' and employees' execution of duties in compliance with thelaws and regulations and the Articles of Incorporation
The director in charge of the Administration Department is placed in charge of compliance,1)and is to establish the compliance structure and strive to understand the issues. The
Administration Department ensures the maintenance and improvement of the compliancestructure.
The Internal Audit Department monitors the operational status of the compliance structure and2)reports the result regularly to the representative director and president & CEO and the board ofcorporate auditors.
(ii). Structure related to storage and management of information concerning the execution of duties
by directors
Information related to the execution of duties by directors is recorded, stored and managed inaccordance with the Regulations of the Board of Directors and Document Management
Regulations, and the stored and managed information is accessible to the directors and auditorsat all times.
(iii). Regulations and other structures concerning the management of risk of losses
1)

A risk management structure will be established, with supervising departments determined
respectively for individual risks related to compliance, disaster, business, information
security, etc.

2)

The Audit Department conducts regular internal audits of departments, points out any
matters that need to be improved with respect to the management of the risk of losses, andreports the results to the representative director and president & CEO and corporate auditors(iv). Structure for ensuring efficient execution of duties by directors
1)

With the Regulations of the Board of Directors established, the board of directors meeting isheld, in principle, once a month and when needed to ensure communication between the
directors and mutually monitor the execution of duties in accordance with laws andordinances.

2)

The important matters that must be resolved at the board of directors meeting are stipulated
in the Regulations of the Board of Directors. Such matters will be resolved at the board of
directors meeting after being deliberated at the Managing Directors' Meeting, which
comprises the president & CEO and the standing directors.

3)

A supervising director is assigned to each of the organizational units. Organizational
Regulations and Regulations for Official Authority have been established that specify theduties and authorities of organizational units and employees.

(v). Matters relating to employees who assist corporate auditors in their duties in the case of such
request made by the corporate auditor
1)

The representative director and president & CEO assigns employees, who are independent ofbusiness execution departments, are to assist with the audit conducted by the board ofauditors and the corporate auditors.
‐14‐

Pursuant to the Regulations of the Board of Auditors, the employees appointed to assist in2)

the duties of the corporate auditors in accordance with the provisions stipulated in thepreceding paragraph conduct administrative work related to the operation of the board ofauditors, such as convocation-related work and the preparation of minutes of meetings.
(vi). Matters concerning the independence of the employees assigned to assist in the duties of thecorporate auditors from the directors
The transfer and evaluation of the employees assigned to assist in the corporate auditors'

1)

duties, as stipulated in the above article, requires the consent of the board of auditors.
(vii). Structure of reporting to the corporate auditors, including the structure of reporting by directors
and employees to them1)

In addition to statutory matters, the Company is establishing a structure where directors andemployees report any matters that might have a significant impact on the Company to theboard of auditors in a timely manner.

2)

Pursuant to the Regulations of the Board of Auditors, the board of auditors may seek reports
as necessary from accounting auditors, directors, and employees in the internal audit
departments etc., and others.

(viii).

Structure to ensure the effectiveness of audits conducted by the corporate auditors

1） The Company has a structure in place where the corporate auditors attend the board of
directors meeting and, when necessary, offer opinions. They also attend important meetings
including the Managing Directors' Meeting to directly grasp important matters deliberated
and/or reported.
2） The board of corporate auditors exchanges opinions with, and makes requests deemednecessary to, the representative director regarding matters to be addressed by the Company,
the status of readiness for audits by corporate auditors, and important audit-related issues.

(2) Overview of the Operational Status of the Structure for Ensuring the Appropriateness of
Operations
The Company's board of directors is comprised of seven directors (of whom two are external
directors) and meets once a month in accordance with the Regulations of the Board of Directors. At
the board of directors meetings, attended by the directors and corporate auditors, each director
reports the status of business execution. The board of directors meetings also discusses and resolves
important matters.
At the meetings, the external directors participate in the resolutions from an independent
perspective and supervise and monitor management, with the corporate auditors also monitoring
management in a similar manner.
Full-time corporate auditors attend not only the board of directors meetings but also otherimportant internal meetings such as the Managing Directors' Meetings. Furthermore, they directlyinterview directors regarding the status of business execution and monitor on a daily operational
basis any issues concerning the status of business execution and compliance. With these structures inplace, the Company seeks to strengthen and improve its management monitoring function.
‐15‐

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Note: The amounts stated in this Business Report are rounded down to the nearest unit indicated.

‐16‐

Balance Sheet(As of March 31, 2020)(Millions of yen)

Assets
Account title
Current assets

Liabilities
Account title

Amount62,969AmountCurrent liabilities

36,645

Cash and deposits

46,132

Accounts payable - trade

1,121

Accounts receivable - trade

1,547

Current portion of long-term loans payable

7,701

Merchandise

5,046

Accounts receivable - other

9,199

Prepaid expenses
Supplies
Other current assets

Noncurrent assets
Tangible fixed assets(Senior loan)( 7,701)

Accounts payable - other

20,420730

Accrued expenses

1,464

197

Income taxes payable

542

115

Accrued interest expenses

5

Lease obligations (current)

0140,740

Special suspense account for reduction entry

136,170

Other current liabilities

4,890
499

Buildings

111,306

Structures

1,449

Shareholder subordinated bonds

14,580Machinery and equipment

13,535Long-term loans payable

104,355

VehiclesTools, furniture and fixtures
Lease assets
Construction in progress
Intangible fixed assets
SoftwareNoncurrent liabilities

8
6,773

124,171(Preferred loan)( 86,355)(Shareholder subordinated loans)( 18,000)

Long-term lease deposit received

471

3,092

Provision for directors' retirement benefits

55

1,542

Interest rate swap liabilities

1,542

Lease obligations (noncurrent)

3

4,364

Asset retirement obligations (noncurrent)
Total liabilities
Investments and other assets
Deferred tax assets
Separately managed penalty in trust
Other investments

341
160,817

Net assets

3,026
2,022

Shareholder's equity

45,9201,000

Capital stock

13,265

Capital surplus

13,265

4

Capital reserve

13,265Retained earnings

19,390

Other retained earnings
Retained earnings brought forward

Total assets

2

19,39019,390

Valuation and translation adjustments△ 3,028

Deferred gains or losses on hedges△ 3,028

203,709- 17 -

Total equity

42,892

Total liabilities and net assets

203,709

Income Statement
From April 1, 2019
To March 31, 2020
(Millions of yen)Account title

AmountOperating revenue
Rents

4,966

Facility rental income

22,839

Sales of goods

53,177

Restaurant sales

2,915

Other revenue

4,761

88,660

Cost of sales
Cost of goods sold37,173Operating gross profit

51,486

Selling, general, and administrative expenses

42,269Operating income

9,217

Non-operating income
Interest income0

Miscellaneous income

473

474

Non-operating expenses
Interest expenses

3,306

Miscellaneous loss

40

3,346

Ordinary income

6,345

Extraordinary income
Gain on sales of fixed assets

109

Government subsidy

99

208

Extraordinary loss
Loss on retirement of fixed assets

727

Loss on reduction of fixed assets

44

771

Income before income taxes

5,782

Income taxes - current

1,480

Income taxes – for prior periods

441△

Income taxes - deferred
Net income

207
4,068

- 18 -

Statement of Changes to Shareholders’ Equity
From April 1, 2019 to March 31, 2020

(Millions of yen)
Shareholder's equity
Capital surplus

Retained earnings
Other retained earnings

Capitalization
Legal capital surplus Total capital surplus

Balance as of April 1, 2019

Retained earnings
brought forward

Total shareholders'equityTotal retained
earnings

13,265

13,265

13,265

15,322

15,322

41,852

Net income

－

－

－

4,068

4,068

4,068

Net changes of items other thanshareholders' equity

－

－

－

－

－

－

－

－

－

4,068

4,068

4,068

13,265

13,265

13,265

19,39019,39045,920Changes during the period

Total changes during the period

Balance as of March 31, 2020

Valuation and translation adjustments

Deferred gains orlosses on hedges

Total valuation andtranslation
adjustments△ 3,836△ 3,836

38,015

Net income

－

－

4,068

Net changes of items other thanshareholders' equity

808

808

808

808

808

4,876

3,028

42,892

Balance as of April 1, 2019

Total equity

Changes during the period

Total changes during the period

Balance as of March 31, 2020

△ 3,028△－ 19 －

Notes to Non-Consolidated Financial Statements

I. Notes on Matters Related to Important Accounting Policies

I.

1.

2.

Criteria and methods for evaluating assets(1)

Derivatives:

Market value method(2)

Inventory assets:

Based on cost method using the retail method (balance sheet values arecalculated using the method of reducing book value when the contributionof inventories to profitability declines)

Method of depreciation of noncurrent assets(1)

Property, plant, and equipment (not including leased assets): Straight line method(2)Intangible assets (not including leased assets): Straight line method
As for the software used in-house, the Company adopts the straight-line method based on
an expected usage period of five years for internal use.

(3)

Lease assets: The straight-line method, using the term of the lease as the useful life and a residual
value of zero, is used.

3.

Criteria for recording reserves
Provision for directors' retirement benefits: The Company records the required allowance as of the end of
the term in accordance with internal rules on the payment of directors' retirement benefits to prepare forthe payment of retirement benefits to directors

4.

Treatment of consumption tax, etc.
The accounting treatment of consumption tax and local consumption tax is based on the tax exclusion
method.

5.

Inclusion of interest payable, etc. in noncurrent assets acquisition cost
The interest payable and loan-related ancillary cost incurred during the construction of the passenger
terminal building have been added to the acquisition cost (for the fiscal year under review -- 217 million
yen; cumulative at the end of the fiscal year under review -- 4,517 million yen) and recorded as part ofnoncurrent assets.

6.

Hedge accounting method:(1) Hedge accounting method: Deferred hedge treatment(2) Hedge procedure and hedge target
Hedge procedure: Derivative trading (interest swap trading)Items hedged: Borrowings based on variable interest rate(3) Hedge policy: It is carried out with the aim of avoiding risks rising from future fluctuation of theinterest rate and the Company's policy not to carry out any speculative transactions.
(4) Method to evaluate the hedge effectivenessThe assessment on the effectiveness is conducted by comparing the cumulative amount of market
movements of hedge procedures and the cumulative amount of market movements of hedge target.

- 20 -

7.

Additional information
Accounting estimates regarding the impact of the spread of the new coronavirus infection
Regarding the determination, etc. of the recoverability of deferred tax assets, scenarios are plannedand evaluated in light of accessible information based on external sources of information when thefinancial statements are prepared. As certain assumptions, assuming that the recovery of the number oftravelers which affects operating revenue, etc. due to the new coronavirus infection will take a period
of about four years, accounting estimates are reflected in the accounting treatment.
Notes on Balance SheetII.

(Millions of yen)1

The amounts are rounded down to the nearest million.

2

Pledged assets
Assets pledged as collateral

Ordinary deposits

45,997 million yen

Accounts receivable - trade

Liabilities corresponding to theabove

Buildings

105,051 million yen

Structures

1,449 million yen

Machinery and equipment

1,843 million yen

Separately managed penalty in trust

1,000 million yen

Current portion of long-term loans
payable7,701 million yen

Long-term loans payable

86,355 million yen

The amount of reduction entry that is directly reduced from the acquisition price3

Buildings
4

5

68 million yen

Total depreciation of property, plantand equipment

44 million yen
79,976 million yen

Monetary claims and obligations to subsidiaries and affiliates
Monetary claims
Monetary obligations

Accounts receivable - trade

733 million yen

Accounts receivable - other10 million yen

Accounts payable - trade

1,121 million yen

Accounts payable - other

3,808 million yen

Accrued expenses
Shareholder subordinated bonds

13,320 million yen

Long-term loans payable

13,320 million yen

Long-term lease deposit received
III. Notes on Income Statement
1.

Reported amounts are rounded down to the nearest million yen.

2.

Transactions with subsidiaries and affiliates
Operating transactions
Non-operating transactions

647 million yen

62,865 million yen
601 million yen- 21 -

259 million yen

IV. Notes on Tax Effect Accounting
Breakdown of main causes for deferred tax assets and deferred tax liabilities(Deferred tax assets)(Millions of yen)Accrued enterprise tax, etc.

121 million yen

Provision for directors' retirement benefits

16 million yen

Deferred losses on hedges

1,336 million yen

Asset retirement obligations

104 million yen

Other586 million yen

Deferred tax assets subtotal

2,166 million yen

Valuation reserve△ 39 million yen

Deferred tax assets total

2,126 million yen(Deferred tax liabilities)
Asset retirement obligations

104 million yen

Deferred tax liabilities total

104 million yen

Subtraction: Net amount of deferred tax assets
V.
1.

2,022 million yen

Notes on Related Party Transaction
Main corporate shareholders etc.
Type

Name of thecompany etc.

(Millions of yen)

Ratio of Relationshipvotingwith therights and
party
other
ownershipTransactions

Transaction
amount(Millions of yen)

Shareholder
subordinated
bonds

6,660

Long-term loans
payable

6,660

42,996

Accruedexpenses646

601

Accounts
payable – trade

1,121

Accrued interest
expenses－－(Note 1)

ParentcompanyJapan Airport
Terminal Co.,Ltd.

51.00％(direct)

Borrowing of
funds

－

(Note 2)Businessconsignment

19,869(Note 3)

Procurementof goods(Note 4)

Payment ofinterest

Financing－

Shareholder
subordinated
bonds

3,330

Long-term loans
payable300

3,330(Note 1)Main
shareholderJapan Airlines
Co., Ltd.

16.87%(direct)

Borrowingof funds

Balance at theend of theperiod(Millions of yen)

Financing

Procureme
nt ofgoods,
consignme
nt of
operationof stores,
etc. andborrowingof funds

Account Title

Borrowing offunds(Note 2)

Payment ofinterest－

Accrued interest
expenses- 22 -－

Financing

－

3,330

Borrowing of
funds

－

Shareholder
subordinatedbonds(Note 2)Long-term loans
payable300

3,330

Accrued interest
expenses－Long-term loans
payable1,620

73 Accrued interest－(Note 1)Main
shareholder

ANA HoldingsInc.

16.87%(direct)

Borrowingof funds

Payment ofinterest

Akihiko Shiina
Director

Director

NaritaInternational
Airport
Corporation
Representative
Director
SeniorExecutive Vice
President

Borrowing offunds-

Borrowingof funds－(Note 2)
(Note 5)

Payment ofinterest

expenses

Terms and conditions of transactions and policy on determining them

Note 1: Financing terms and conditions are in accordance with the Shareholder Subordinated Bond
Agreement signed between the Company and its six shareholders including the above threecompanies on March 30, 2012, following the approval by the Board of Directors Meeting on
February 23, 2012 (prepared based on the loan terms of the Shareholders Agreement agreed
among the shareholders as of the establishment of the Company).
As for the repayment of the principal, it has been agreed that the order of the settlement ofclaims is after that of repayment of preferred loans from the loan syndication based on the“Limited Loan Contract Alteration Contract” signed with the loan syndication.

Note 2: Loan terms and conditions are in accordance with the “Shareholder Subordinated Loan
Agreement” signed between the Company and its nine shareholders including the above threecompanies on March 27, 2008, following the approval by the Board of Directors Meeting on
March 18, 2008 (prepared based on the loan terms of the Shareholders Agreement agreed among
the shareholders as of the establishment of the Company).
As for the repayment of the principal, it has been agreed that the order of the settlement ofclaims is after that of repayment of preferred loans from the loan syndication based on the
Limited Loan Contract Alteration Contract signed with the loan syndication.

Note 3: Prices, other terms and conditions for business consignment are determined after consultations
between both companies while taking into consideration details of business with a reference togeneral terms and conditions, etc.

Note 4: The prices, terms and conditions for procurement of goods are determined after negotiations witha reference to market prices.

Note 5: This transaction was conducted for a third party by Akihiko Shiina, a director at our company, in
his capacity as a representative of Narita International Airport Corporation.

Note 6: Among the amounts indicated in the table above, transaction amounts do not include consumption
tax.

Note 7: The ratios of voting rights and other ownership are rounded down to the nearest two decimal
places.

- 23 -

VI. Notes on data per share
1.

Net asset per share:

2.

Current net profit per
share:

8,072,268.32 yen
772,489.56 yen

VII. Matters concerning important subsequent events
Borrowing of a large amount of funds

The Company decided to borrow funds as follows in the board of directors meeting held on August 24,
2017, and borrowed funds on April 28, 2020.

(1)

Purpose of the funds

Financial arrangements for construction costs, etc. (The 4th, final)(2)

Lenders(Lead arranger)

Mizuho Bank, Ltd.

(Lead arranger)

Development Bank of Japan Inc.

(Lead arranger)

MUFG Bank, Ltd. and others, 20 financial
institutions in total(3)

Amount ofborrowedmoney

25,452 million yen(4)

Borrowing rate

TIBOR (6 months) + spread(5)

Borrowing execution
date

April 28, 2020

(6)

Final deadline

September 30, 2037

(7)

Pledged assets

Buildings, structures, machinery and equipment, and rent credits- 24 -

The 14th term
Annexed detailed statements toBusiness Report
From April 1, 2019
To March 31, 2020

Tokyo International Air Terminal Corporation

1.

Details of our company executives who hold a position as an executive director in another company

Refer to "3. Status of Company Executives" in the Business Report and "Ⅷ. Notes on Related Party Transaction" in Notes to NonConsolidated Financial Statements.

― 1 ―The 14th term
Annexed detailed statements tofinancial statements
From April 1, 2019
To March 31, 2020

Tokyo International Air Terminal Corporation

1.

Details of tangible and intangible non-current assets(Millions of yen)

Ca
teg
ory

Property, plant and equipment:
Intangible
assetsType of assets

Book value
at thebeginning of
the period

Increase in
the term
underreview

Decline in
the term
underreview

Depreciationin the term
underreviewBook value atthe end of theperiodTotal
depreciation

Acquisition
cost at theend of theperiodBuildings

89,32829,053

70

7,004

111,306

54,054

165,361

Structures

1,054

600

8

197

1,449

1,250

2,699

Machinery andequipment

5,648

8.560

-

672

13,535

4,109

17,645

2

7

-

1

8

188

197

Tools, furnitureand fixtures

5,411

3,408

33

2,012

6,773

20,371

27,145

Leased assets

-

4

-

0

3

0

4

(Subtotal)(101,444)(41,635)(112)(9,889)(133,077)(79,976)(213,054)

Construction inprogress

15,56019,47531,943

-

3,092

-

3,092

Total

117,004

61,111

32,056

9,889

136,170

79,976

216,147

Software

797

1,062

-

317

1,542

-

1,542

VehiclesNote: The main factors contributing to the increase in the term include 21,582 million for renovation and reconstruction
work for the Terminal 3 building, 10,218 million yen for construction works, etc. for the international facilities in
Terminal 2 and new stores, 1,169 million yen for renovation works for existing stores.

2.

Details of the reserves(Millions of yen)

Category

Provision for directors'
retirement benefits

Balance atthe beginningof the period

Increaseduring theterm underreview

57

16

Decline during the term underreview
Used for the
relevant
Other
purpose19-

Balance at theend of theperiod55

Note: The reason for recording reserves and the calculation method for the amounts are described in item 3 under
section I "Notes on Matters Related to Important Accounting Policies" of "Notes to Non-Consolidated
Financial Statements."

－ 1 －

3.

Details of selling, general and administrative expenses(Millions of yen)Account Title

AmountRemarks

Directors' compensations

111

Employees' salaries

606

Provision for directors' retirement benefits

16

Legal welfare expenses

16

Welfare expenses

3

Transportation expenses

47

Supplies expenses

30

Furniture and fixtures

266

Utilities expenses

641

Communication expenses

97

Insurance expenses

443

Repair expenses

93

Rent expenses

5,318

Conference expenses

7Entertainment expenses

17

Taxes and public charges

1,373

Donations

5

Advertising expenses

597

Cleaning expenses

23

Fees payable78

Temporary staffing expenses

23

Educational and training expenses

25

Business consignment expenses

22,104

Miscellaneous expenses

110

Depreciation

10,206

Total

42,269― 2 ―