The 11th Business TermBusiness Report
From April 1, 2016
to March 31, 2017

I. Business Report
II. Balance Sheet
III. Income Statement
IV. Statement of Changes in Net Assets
V. Notes to Non-Consolidated Financial Statements※ This document has been translated from the Japanese original,for reference purposes only.
If there is any discrepancy between this translated document and the Japanese original,
the original shall prevail.

Tokyo International Air Terminal Corporation

Business Report
From April 1, 2016
To March 31, 2017

1. Matters Concerning the Company’s Status(1) Progress and Results of Operations
During the fiscal year under review, Japanese economy in general continued to recover gradually
including the continuous recovery of consumer spending and improvement of corporate earnings
despite delays seen in some respects. Among overseas economies, though emerging and someother economies show weak trends, the U.S. and European economies have gradually expanded,
and China’s economy indicated steady expansion despite a modest slowdown in its consumer
spending growth. The global economy in general, including Japan, thus gradually recovered.
Under such circumstances, the number of outbound Japanese travelers exceeded the last year’s
number. The number of inbound foreign travelers, especially those from East Asia, continued toincrease significantly, exceeding 24 million by 2016.
In response, Haneda Airport’s international flights and routes have been expanded based on theoutcome of U.S.-Japan civil aviation talks—including shifting services for existing routes andflights from late-night and early-morning time to daytime from winter and adding new flights
bound to such cities as New York, Chicago and Minneapolis.
With the passenger demand increasing steadily for the new and other various destinations androutes, the actual number of inbound and outbound travelers in the fiscal year under review
increased 16% year on year. Furthermore, both the monthly and daily numbers of travelers in
March, the fiscal year-end, reached record high.
Against this backdrop, as safety and security forms the basis of an international passenger
terminal, the Company established a special structure for disaster prevention and enhanced
security especially during the Ise-Shima Summit period in May and high seasons such as Golden
Week, summer vacation, Silver Week in autumn and year-end and New Year holidays in responseto the increasing number of passengers. Moreover, as part of efforts to ensure safety of customers,
the Company further utilized new technologies including increasing security cameras and having
its patrol guards use wearable cameras.
Given that crisis management necessitates preparations and drills for various emergency
situations, the Company strived to enhance its readiness for contingency situations, including
improving its emergency management manual and conducting stress tests with external experts’
advice. Also, toward prompt on-site responses to the occurrence of fire, the Company held eightdrills assuming fires occurring near the workplaces of employees working in the building as partof the general disaster prevention drills conducted in entire international terminal area. In addition,
the Company leveraged meetings with its fire brigade’s local team to increase awareness of
employees working in the building about fire and disaster prevention.
In terms of aviation security, the Company introduced advanced body scanners in full scale inMarch in cooperation with Airline Operators’ Committee (AOC) to upgrade the security check at
airports as part of anti-terrorism initiatives promoted by Japanese government.
In terms of facilities, the Company continued to improve and enhance environment for customers’
use of mobile devices, including strengthening wi-fi environment in the terminal building andadding pole-type electric outlets installed next to lobby chairs, for improved convenience andcomfort of customers. Moreover, hot water dispensers, which many customers requested, areplaced at 6 places in the building. As to direction boards in the building, two large-sized monitors
have been installed next to the information counter on the third floor that show the floor layout ofcheck-in counters. Also, logos of the airlines are shown above the check-in counter islands open
for check-in. For arriving customers, the Company installed guidance monitors in the luggage
1

pick-up area that show videos of transit routes to domestic flights and local public transportation.
Thus, the Company provides easy-to-understand guidance for both departing and arriving
customers.
As to passenger services, the Company increased the frequency of free shuttle buses between
domestic and international terminals from every 6 minutes to every 4 minutes for improving theconvenience of transit customers transferring between terminals. Also, automatic coin exchange
machines have been installed in the departing and arriving areas that provide a service toexchange extra coins from traveling to electronic money points.
As to the multilingual website that has provided flight information and information about
facilities and services available in the international terminal in Japanese, English, Korean andsimplified Chinese characters, the information is now offered in traditional Chinese characters,
too. Furthermore, its smartphone-based browsability has been improved for mobile use includingin the building.
Furthermore, to maintain and improve its service quality, the Company strives 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. In addition, the Company holds role-playing contests for its employees
attending customers at stores and service facilities in the building. It also continues to offer
regular training in conversation with customers in English, Chinese and Korea and incross-cultural understanding for improving customer services for travelers from overseas.
As part of customer entertainment, the Company decorated the building to project Japan’s four
seasons including winter illumination and carried out various campaigns in the fiscal year underreview, too. Among them, the Company held the Haneda Edo Matsuri event, which has
established itself as an attraction offered by the Company, where people can get a feel of the Edo
period, during the Golden Week, summer vacation and New Year holidays respectively inelaborate ways for each season and contributed significantly to increasing the number of visitors
to the building. Additionally, the Company run booths at tourism exhibitions held in Guangzhou,
Bangkok and Kuala Lumpur for promoting the convenience of Haneda Airport and theattractiveness of its terminals, thus having started to take initiatives to encourage traveling toJapan and utilization of Haneda Airport.
In the commercial area, pick-up counters have been set up for duty-free items purchased at
downtown stores, offering a new option for purchasing duty free items not only to foreign
travelers but also to Japanese travelers visiting other countries. The applicable airport-type
downtown duty-free stores have been expanded to two stores located in Ginza area. Among therestaurants, in response to a wide variety of needs indicated by customers including those fromoverseas, the Company opened a restaurant where all items on its menu are Halal-certified and, atthe information counters and website for passengers, indicates those restaurants in the buildingthat offer Halal and/or vegetarian dishes.
With respect to universal design (UD) that the Company has emphasized since its foundation,
given that the fiscal year under review is the year for implementing the “spiral-up,” the UD
Committee comprised of academics, experts with their own disabilities, airport-related operators,
and the Company’s employees met, and on-site verification and evaluation were conducted fromthe perspectives of the use of wheelchairs and users with visual and hearing disabilities.
Furthermore, as part of information UD initiatives utilizing information and communications
technologies (ICT), demonstration experiment of guiding and multilingual functions offered in
the building have been carried out in the fiscal year under review, too, in cooperation with the
manufacturers. Based on these initiatives, guidance equipment has been introduced at security
checkpoints etc. in full scale based on project mapping. Also, the concierge uses tablet
terminal-based voice and hand-written translation and other communication tools for customer
services.
The Company’s employees working in the terminal building share our customer satisfaction (CS)philosophy and continuously implement CS activities for continuing to provide high quality
services and hospitality. In the fiscal year under review, too, Haneda Airport International Area
Passenger CS Liaison Committee planned and operated the CS award system, held CS seminars
2and campaigns, and issued CS bulletins, promoting relevant activities throughout the internationalterminal area. In addition, it is developing “understanding and empathy among the crew” beyond
organizational, occupational and operational frameworks by further promoting internalbranding activities through staff exchange meetings attended by employees working in thebuilding as well as those of government bodies relating to Haneda Airport’s international flights
and of airport-related companies.
These various efforts and activities have been recognized by external rating agencies. Our
International Terminal, together with our Domestic Terminal, ranked a 5 Star Airport in the
Global Airport Ranking by Skytrax, a U.K.-based service research firm, for three consecutive
years. Furthermore, our airport ranked second in the World’s Best Airport awards, acomprehensive evaluation of airports, in 2017 and, in awards by category, the first in the World’s
Cleanest Airport for two consecutive years and for the fourth time. Furthermore, the Company’senvironmentally-friendly initiatives taken toward developing an “eco-airport” since its foundation
based on various energy-saving technologies led to the recognition by Kanto Bureau of Economy,
Trade and Industry, Ministry of Economy, Technology and Industry with the “2016 Awarding of
Excellent Energy Conservation Factory & Building.” The company continues to seek safety andcomfort of customers at the terminal building and contribute to developing low-carbon society.
As a result of the Company’s implementation of measures described above to improve facilities
and services, steady operation of the terminal, and business execution with cost awarenesscombined with the increased customers, the Company reported operating revenue of 77,847
million yen (up 9.9% year on year) in the fiscal year under review, operating profit of 10,834
million yen (up 22.8% year on year), and ordinary profit of 7,119 million yen (up 53.4% year onyear). Net current profit reached 5,417 million yen (up 25.5% year on year) with net loss carriedforward eliminated by the fiscal year under review.

Business performance by business segment is as follows:<Facilities Management and Operation Business Segment>
The International Passenger Terminal generated passenger service facility charge, or PSFC,
revenue which the Company receives from air travelers at departure and transit, of 18,201 million(up 16.5% year on year) reflecting increased passengers etc.
Facility usage fee revenue from air transport service operators’ use of facilities including
boarding bridges, luggage handling system and gates dedicated for business jet airplanes totaled
3,495 million yen (up 2.0% year on year).
Rent revenue generated from renting offices for airlines and shop spaces for tenants was 4,682
million yen (up 3.6% year on year).
Consequently, the operating revenue of the Facilities Management and Operation Business
Segment was 26,379 million yen (up 11.9% year on year)<Directly-Managed Business Segment>
In the Merchandise Sales Business, the sales of goods generated from general duty-free storesand branded boutiques were 45,433 million yen (up 7.6% year on year).
The sales from the Restaurant Business were 2,338 million yen (up 23.1% year on year).
Among other businesses, the revenues from parking lots business and other businesses such as
lounge business and advertising in the building were, respectively, 1,590 million (up 8.9% year
on year) and 2,105 million (up 27.1% year on year).
Consequently, the Directly-Managed Business Segment reported an operating revenue of 51,467
million yen (up 8.9% year on year.)3(2) Status of Capital Expenditure
During the fiscal year under review, the Company made capital expenditures of 3,796 million
yen in total, which included 536 million yen for the upgrade of BHS information system, 436
million yen for the installment of check-in countertop signs on the third floor, 258 million yen
for the relocation of insurance counters and installment of additional check-in counters on thethird floor, and 121 million yen for the construction of a new airline maintenance office in thefirst floor’s restricted area.

(3) Status of financing
The borrowing of funds for the work to extend the International Terminal etc. under the Limited
Loan Contract Alteration Contract signed with the loan syndication as of March 21, 2012 wascompleted by fiscal year 2014. In the fiscal year under review, the Company repaid 3,626
million yen and 3,567 million yen, respectively, on September 30, 2016, and March 31, 2017. As
a result, the outstanding balance of loan from the loan syndication stood at 94,450 million yen asof the end of the fiscal year under review.

(4) Issues to Be Addressed
Against the backdrop of strong passenger demand, recognizing the maintenance and improvementof safety and service quality under congestion situations during high seasons and peak hours as
issues to be addressed, the Company will further strengthen precautions and security in theterminal building, aviation security against terrorism, and disaster prevention measures including
against large-scale disasters in order to further ensure customers’ safety and security. It will also
flexibly extend facility and service hours and increase personnel based on demand forecasts andmake further efforts to strengthen the capacity of its facilities and functions for coping with thedemand as well as to improve guidance and information provision to diversify traffic. Also, inregard to information universal design leveraging ICT, the Company seeks to adopt andimplement such design for terminal guidance and transportation information services which iseasy to understand for everyone, including customers with disabilities and foreign passengers.
In the medium-term, based on Japanese government’s policy for strengthening the functions of the
airports in Tokyo metropolitan area, discussions have been commenced about the review of flightpaths and enhancement of airport functions and facilities with the aim to increase Haneda
Airport’s capacity by approx. 39 thousand arrivals/departures by 2020. To cope with an increasein passengers reflecting the increase in the number of flights, the Company will implement
necessary improvements including extending the existing international terminal building andadding boarding bridges. Furthermore, to contribute to the smooth hosting of Tokyo Olympic andParalympic Games in 2020, the Company will not only prepare without lapse for serving
customers--who are visiting Japan during the period as participating athletes, officials andspectators--as a member of the Immigration Liaison Meeting of Tokyo Organizing Committee of
the Olympic and Paralympic Games in cooperation with Japan Airport Terminal Co., Ltd.
operating domestic terminals, it will also build legacy in terms of facilities and services inaccordance with the Tokyo 2020 Accessibility Guideline including UD.
The Company will share information more closely than ever not only with the government, loan
syndication and other related parties but with related companies and our shareholders and ensure
detailed and sufficient consultation and coordination to robustly handle these tasks.
Fully recognizing Haneda Airport’s roles and significance as an international airport located inTokyo metropolitan area, the Company will continue to provide facilities and services ofoutstanding quality (safety, convenience and comfort), including relentlessly making efforts indaily operation and maintenance management and steadily responding to customers’ opinions,feedback surveys and matters pointed out by Skytrax.

4

(5) Changes in Assets and Income
Category

The 8th term
FY2013The 9th term
FY2014

The 10th term
FY2015

The 11th term
FY2016

Operating revenue

35,844 million yen

57,357 million yen

70,819 million yen

77,847 million yen

Net income(loss (△))

△2,217 million yen

2,924 million yen

4,316 million yen

5,417 million yen

Net income(loss (△))
per share△627,043 yen

824,014 yen

1,186,638 yen

1,491,682 yen

Net assets

400 million yen

2,833 million yen

6,348 million yen

15,843 million yen(6) 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 businesses operating in
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 terminalbuilding(7) Status of employees
Number of employees

Increase/decrease from the end of
the previous fiscal year

50 (16)

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

5(8) Main lenders(Millions of yen)
LenderAmountDevelopment Bank of Japan Inc.

21,896

Mizuho Bank, Ltd.

14,713

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

12,055

Sumitomo Mitsui Banking Corporation

6,017

The Bank of Yokohama, Ltd.

5,542

Shinkin Central Bank

5,407

6

2. Status of the Company’s shares(1) Total Number of Shares Outstanding: 3,600 shares(2) Number of Shareholders: 13(3) Shareholders
Name of shareholder

Number of shares

Japan Airport Terminal Co., Ltd.

1,396

Japan Airlines Co., Ltd.

697

ANA Holdings Inc.

697

Narita International Airport Corporation

162

TEPCO Energy Partners Incorporated

126

Secom Co., Ltd.

108

Tokyo Gas Co., Ltd.

108

Keikyu Corporation

72

Tokyo Monorail Co., Ltd.

72

NTT Data Corporation

54

Development Bank of Japan Inc.

36

Mizuho Bank, Ltd.

36

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

36

Total

3,600

(4) Other Important Matters Regarding the SharesAmong the Company’s 3,600 outstanding shares, the 36 shares held by Development Bank ofJapan Inc., Mizuho Bank, Ltd., and The Bank of Tokyo-Mitsubishi UFJ, Ltd. each are preferredshares with preferred dividends.

7

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

Name

Supervising area; and important position held
concurrently

Representative Director
and President & CEO

Katsuji Doi

Director, Japan Airport Terminal Co. Ltd.
In charge of Finance Department

Managing Director

Junichiro Kitamura

Managing Director

Takahiro Uehara

Managing Director

Arata Yasujima

In charge of Passenger Service Department andDisaster Prevention and Security Department

Managing Director

Kensuke Oyama

In charge of Administration Department and Planning
Department

External Director

Tomoaki Kobayakawa

Representative Director and President, TEPCO Energy
Partners Incorporated; and Director, Tokyo ElectricPower Company Holdings, Incorporated

External Director

Masaki Saida

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

Corporate Auditor

Masakazu Owashi

External Corporate
AuditorFumiya Akai

External Corporate
Auditor

Tsutomu Terabayashi

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

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

Notes:
1. Masaki Saida and Tomoaki Kobayakawa are external directors stipulated in Article 2-15 of
the Companies Act.
2. All three corporate auditors are external corporate auditors stipulated in Article 2-16 of theCompanies Act.
3. Masakazu Owashi, Corporate Auditor, is a certified public accountant and has adequate
knowledge about finance and accounting.
4. Fumiya Akai, External Corporate Auditor, is an attorney-at-law specializing in corporate
laws and has adequate knowledge about finance and accounting.

(2) Amount of Compensation etc. for Directors and Corporate Auditors for the Fiscal Year under
Review
9 directors

113 million yen(of whom, 2 external directors:

4 million yen)

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 and corporate auditors who retired at the closure of the 10th General
Shareholders Meeting.

8

(3) Matters Concerning External Officers(i) Directors
Masaki Saida and Tomoaki Kobayakawa attend the board of directors meeting held every
month and offer appropriate remarks including necessary opinions and questions concerning
the Company’s overall management.
(ii) Corporate auditors
Masakazu Owashi, Fumiya Akai and Tsutomu Terabayashi 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:11 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 quoted
compensation amount, consents under Paragraph 1, Article 399 of the Companies Act, to theamount 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 the competence andindependence of the accounting auditor, shall submit a proposal for dismissing or refusing thereappointment 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’ and Employees’ Execution of Duties in Compliance with the Laws
and Regulations and the Articles of Incorporation and as well as the Appropriateness of Other
Operations(i) Structure to Ensure the Directors’ and Employees’ Execution of Duties in Compliance with theLaws and Regulations and the Articles of Incorporation
1) The director in charge of Administration Department is placed in charge of compliance, whoestablishes the compliance structure, strives to understand the issues. The Administration
Department ensures the maintenance and improvement of the compliance structure.
2）The Internal Audit Department monitors the operational status of the compliance structure andreports the result regularly to the representative director and president & CEO and the boardof corporate 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.
9

(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 internal audit of departments regularly, points out any
matters that need to be improved with respect to the management of 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, to assist the audit conducted by the board of auditors and thecorporate auditors.
2) Pursuant to the Regulations of the Board of Auditors, the employees appointed to assist in theduties of the corporate auditors in accordance with the provisions stipulated in the preceding
paragraph conduct administrative work related to the operation of the board of auditors 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 directors
1) The transfer and evaluation of the employees assigned to assist in the corporate auditors’
duties as stipulated in the above article require a consent of the board of auditors.
(vii) Structure of reporting to the corporate auditors, including the structure of reporting by directors
and employees to them
1) 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 asnecessary 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 make requests deemed necessary
to, the representative director regarding matters to be addressed by the Company, the status ofreadiness for audits by corporate auditors, and important audit-related issues.

10(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, which are attended by the directors and corporate auditors,
each director reports the status of business execution. The board of directors meetings also discussand resolve important matters.
At the meetings, the external directors participate in the resolutions from an independent
perspective and supervise and monitor the management, with the corporate auditors also
monitoring the management in a similar manner.
Corporate auditors attend not only the board of directors meetings but other important internal
meetings such as the Managing Directors’ Meetings. Furthermore, they directly interview
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 in place,
the Company seeks to strengthen and improve its management monitoring function.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Note: The amounts stated in this Business Report are rounded down to the nearest unit indicated.

11

Balance Sheet(As of March 31, 2017)(Thousands of yen)

Assets
Account title
Current assets

Liabilities
AmountAccount title

45,991,852

AmountCurrent liabilities

15,010,177

36,388,760

Accounts payable-trade－

Accounts receivable - trade－

Current portion of long-term loans pay able－

Merchandise－

Cash and deposits

Accounts receivable - otherPrepaid expenses－(Preferred loan)

852,932－

Accounts payable - other－Accrued expenses－－

Deferred tax assets (current)

212,226

Income taxes payable

Other current assets

10,353

Accrued interest expenses
Other current liabilities

1,270,766

Noncurrent assets

114,190,648

Tangible assets

109,847,864

Shareholder subordinated bonds－

Buildings

95,744,231

Long-term loans payable－

Structures

1,286,359(Preferred loan)( 18,000,000)

M achinery and equipment

5,822,076(Shareholder subordinated loans)( 18,000,000)

VehiclesNoncurrent liabilities

6,860

6,895

129,328,665

Long-term lease deposit received

485,596

Tools, furniture and fixtures

6,251,926

Provision for directors' retirement benefits－

Construction in progress

736,374

Interest rate swap liabilities－

Total liabilities
Intangible assets
SoftwareInvestments and other assets
Long-term prepaid expenses

1,121,299

144,338,842
Net assets－

Shareholders' equity

20,804,448

Capital stock

9,000,000

Capital surplus

9,000,000

3,221,484

Capital reserve

9,000,000

15,709Retained earnings

2,804,448

Deferred tax assets (noncurrent)

2,205,774

Other retained earnings

2,804,448

Separately managed penalty in trust

1,000,000

Retained earnings brought forward

2,804,448

Valuation and translation adjustments

Deferred gains or losses on hedges

Total assets

160,182,500

12△ 4,960,790－

Total net assets

15,843,658

Total liabilities and net assets

160,182,500

Income Statement
From April 1, 2016
To March 31, 2017
(Thousands of yen)Account title

AmountOperating revenue
Rents

4,682,411

Facility rental income

21,697,365

Sales of goods

45,433,340

Restaurant sales

2,338,587

Other revenue

3,695,845

77,847,550

Cost of sales
Cost of goods sold

31,601,355

Operating gross profit

46,246,195
35,411,684

Selling, general and administrative expenses

Operating income

10,834,510

Non-operating income
Interest income

503

Miscellaneous income

374,068

374,571

Non-operating expenses
Interest expenses

4,088,289

Miscellaneous loss

1,404

4,089,694

Ordinary income

7,119,388

Income before income taxes

7,119,388

Income taxes-current

1,113,409

Income taxes-deferred

588,930

Net income

5,417,048

13

Statement of Changes in Net Assets
From April 1, 2016
to March 31, 2017

(Thousands of yen)
Shareholders' equity
Retained earnings

Capital surplus

Other retained earnings
Capital stock

Total shareholders' equity
Legal capital surplus

Total capital surplus

9,000,000

9,000,000

9,000,000△2,612,599△2,612,599

15,387,400

Net income

－

－

－

5,417,048

5,417,048

5,417,048

Net changes of items otherthan shareholders’ equity

－

－

－

－

－

－

Total changes during the period

－

－

－

5,417,048

5,417,048

5,417,048

9,000,000

9,000,000

9,000,000

2,804,448

2,804,448

20,804,448

Balance as of April 1, 2016

Total retained earnings

Retained earnings
brought forward

Changes during the period

Balance as of March 31, 2017

Valuation and translation adjustments

Deferred gains or losses Total valuation andon hedges
translation adjustments

Total net assets△9,039,319△9,039,319

6,348,080－－

5,417,048

Net changes of items otherthan shareholders’ equity

4,078,529

4,078,529

4,078,529

Total changes during the period

4,078,529

4,078,529

9,495,577

Balance as of March 31, 2017

△4,960,790△4,960,790

15,843,658

Balance as of April 1, 2016

Changes during the period

Net income

14Notes to Non-Consolidated Financial Statements

I. Notes on Matters Related to Important Accounting Policies
1. Criteria and methods for evaluating assets(1) Derivatives:(2) Inventory assets:

Market value method
Based on cost method using retail method (balance sheet values are calculated using
method of reducing book value when the contribution of inventories toprofitability declines)

2. Method of depreciation of noncurrent assets(1) Property, plant and equipment:(2) Intangible assets:

Straight line method

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. Criteria for recording reserves(1) Provision for directors’ retirement benefits
The Company records required allowance as of the end of the term in accordancewith internal rules on payment of directors’ retirement benefits to prepare for thepayment of retirement benefits to directors.
4. Treatment of consumption tax, etc.
The accounting treatment of consumption tax and local consumption tax is based on 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 -- 2,706,000
yen; cumulative at the end of the fiscal year under review -- 3,382,719,000 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 ofinterest rate and the Company’s policy is not to carry out any speculativetransactions.

(4) Method to evaluate the hedge effectivenessThe assessment on the effectiveness is omitted, as the important conditions forhedge procedures and hedge target are the same and it is assumed in advance tofully offset the risk of interest rate fluctuations from the start of the hedge andcontinuously thereafter.

15

<Additional information>[Application of Implementation Guidance on Recoverability of Deferred Tax Assets]“Implementation Guidance on Recoverability of Deferred Tax Assets” (Corporate Accounting Standard Guideline
No. 26, March 28, 2016) is applied from this fiscal year.

II. Notes on Balance Sheet(Thousands of yen)

1. The amounts are rounded down to the nearest thousand.
2. Pledged assets
Assets pledged as collateral
Ordinary deposits

36,225,949

Accounts receivable - trade59,300

Buildings

95,744,231

Structures

1,286,359

Machinery and equipment

5,822,076

Separately managed penalty in trust
1,000,000
Liabilities corresponding to the above
Current portion of long-term debt

5,292,525

Long-term loans payable

89,157,974

3. Total depreciation of property, plant and equipment

51,938,794

4. Monetary claims and obligations to subsidiaries and affiliates
Accounts receivable – trade

Monetary claims

73,860Accounts receivable – other

14,756

Monetary obligations Accounts payable – trade

2,916,163

Accrued expenses

2,055,247

Shareholder subordinated bonds

6,660,000

Long-term loans payable
Long-term lease deposited

6,660,000
261,639

III. Notes on Income Statement(Thousands of yen)

1. The amounts are rounded down to the nearest thousand.
2. Transactions with subsidiaries and affiliates
Operating transactions
Non-operating transactions

49,185,707
299,699

IV. Notes on Statement of Changes in Net Assets
1. The amounts are rounded down to the nearest thousand.
2. Type and total number of the Company’s shares outstanding as of the last day of the fiscal year underreview
Common stock

3,492 shares

Preferred stock

108 shares

16

V. Notes on Tax Effect Accounting
Breakdown of main causes for deferred tax assets(Deferred tax assets)(Thousands of yen)Accrued enterprise tax, etc.

92,398Provision

13,226fordirectors'

retirement benefits
Deferred losses on hedges

2,099,827

Other

225,775

Deferred tax assets subtotal

2,431,227

Valuation reserve△13,226

Deferred tax assets total

2,418,001

VI. Notes on Financial Instruments
1. Matters regarding the status of financial instruments
The Company manages funds only in short-term deposits and procures funds through loans from financial
institutions such as banks as well as from the shareholders and corporate bonds issued to the shareholders.
The funds procured through loans and corporate bonds are mainly used as funds for capital investment
and stabilizing the interest expenses by carrying out interest rate swap trading against the interest rate
fluctuation risk of part of loans.
Derivative trading is limited to interest rate swap trading to avoid interest rate fluctuation risk of loans.
2. Matters regarding market value of the financial instruments
The values on the balance sheet, market value and the difference between them as of March 31, 2017 (theCompany’s account settlement date for the relevant fiscal year) are as follows.
(Thousands of yen)
Category

Value on the balanceMarket value (*)

Difference

sheet (*)
(1) Cash and deposits(2) Shareholder
subordinated bonds(3)Long-term

loans

payable4) Derivative trading－

36,388,760

36,388,760(14,580,000)(21,805,249)

7,225,249(112,450,499)(121,370,560)

8,920,060(7,060,618)(7,060,618)－(*) Items that are recorded as liability are shown in parenthesis ().

Note: Matters regarding the calculation method of market value of financial instruments and derivative
trading(1) Cash and deposits
They are settled in a short period of time and their market values are roughly equivalent to thebook values. Therefore, the concerned book values are used.

17

(2) Shareholder subordinated bonds
The market value of shareholder subordinated bonds is calculated by discounting the sum of
the principal and interest using the rate assumed in case of new issue.
(3) Long-term loans payable
The market value of long-term loans payable is calculated by discounting the sum of theprincipal and interest using the rate assumed in case of taking out new loans.
(4) Derivative trading(i) The trading for which hedge accounting is not applied: Not applicable.
(ii) The trading for which hedge accounting is applied: The amount equivalent to the principal
stipulated by the contract amount or contract as of the settlement day for each hedge
accounting method is as follows.
(Thousands of yen)
Method ofhedge
accounting
Fundamental
processing
methodCalculation
Type of derivative

Main items

Contract

trading

hedgedamount, etc.

Market value

method of thesaid market
valueInterest rate swap
Long-term
trading:loans payable
Fixed interest
payment, variableinterest receipt

82,775,000△7,060,618

The price, etc.
indicated by thecounterparty
financial
institution

VII. Notes on Real Estate for Rent, etc.
1. Matters regarding the condition of the real estate for rent, etc.
The Company owns a passenger terminal building that includes office spaces and commercial facilities
for rent as well as a multilevel, pay-by-the-hour parking lot in Haneda Kuko, Ota-ku, Tokyo.
2. Matters regarding the market value of the real estate for rent, etc.
(Thousands of yen)

Property that includes theValue on the balance sheet

Market value

102,852,667

199,000,000

portion that is used as realestate for rent, etc.

Note 1. The value includes offices, etc. used by the Company.
2. The market value of important properties as of the end of the fiscal year under review is theamount based on the actuary reports by real estate appraisers.

18

VIII. Notes on Related Party Transaction
1.

Main corporate shareholders etc.
(Thousands of yen)Type

Name ofthecompanyetc.

Ratio ofvotingrights andotherownership

Relationshipwith theparty

Transactions

Transaction
value

Account title

Balance attheterm-end

Financing－

Shareholder
subordinatedbonds;

6,660,000(Note 1);Other relatedcompanyJapan
AirportTerminalCo., Ltd

38.78%;
directly
held

Procurementof goods andconsignmentof operation of
stores etc.: anddouble-hattingof directors

Borrowing offunds (Note 2);
Businessconsignment(Note 3);
Procurementof goods (Note－15,679,408
31,666,932

Long-term loans
payable;Accruedexpenses;
Accounts
payable—trade4)

FinancingMainshareholder

Japan
AirlinesCo., Ltd.

19.36%;

Borrowing offunds (Note 2);－－－

Shareholder
subordinatedbonds;
Long-term loans

FinancingMainshareholder

ANA
Holdings
Inc.

－(Note 1);19.36%;
directly held

Borrowing offunds (Note 2);－

2,055,247
2,916,163(Note 1);
directly held

6,660,000－

Shareholder
subordinatedbonds;
Long-term loans

3,330,000

3,330,000
3,330,000

3,330,000

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 of claims
is after that of repayment of preferred loans from the lenders based on the Limited Loan Contract
Alteration Contract signed with the lenders.
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 three companies 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 asof the establishment of the Company). As for the repayment of the principal, it has been agreed thatthe order of the settlement of claims is after that of repayment of preferred loans from the lenders
based on the Limited Loan Contract Alteration Contract signed with the lenders.
Note 3: The business consignment terms and conditions are determined as in the cases of any other similartransactions conducted generally.
Note 4: The terms and conditions for procurement of goods are determined as in the cases of any othersimilar transactions conducted generally.

19

Note 5: Among the amounts indicated in the table above, transaction amounts do not include consumption
tax.
Note 6: The ratios of voting rights and other ownership are rounded down to the nearest two decimal places.
2. Directors, main individual shareholders, etc.
(Thousands of yen)Type

Name ofthe person,companyetc.

Business or
profession

Ratio ofvotingrights andotherownership

RelationshipTransactions
with theparty

Transaction
value

Account
title

Balance attheterm-end

Director at ourcompany;

Director

Tomoaki
Kobayakawa

Representative
Director andPresident,
TEPCO
EnergyPartner,
Incorporated－

Borrowingof funds－

Borrowingof funds

Borrowingof funds(Note 1)－Long-term
loans

1,260,000

Borrowingof funds(Note 2)－Long-term
loans

1,620,000

Director at ourcompany;

Director

Masaki Saida

Representative
Director andSeniorExecutive
President,
NaritaInternational
Airport
Corporation

Terms and conditions of transactions and policy on determining them
Note 1: This transaction was conducted for a third party by Tomoaki Kobayakawa, director at our company, inthe capacity of the representative of TEPCO Energy Partner Incorporated. The borrowing rate was determinedrationally based on market interest rates and transaction terms and conditions.
Note 2: This transaction was conducted for a third party by Masaki Saida, director at our company, in thecapacity of the representative of Narita International Airport Corporation. The borrowing rate was determinedrationally based on market interest rates and transaction terms and conditions.
Note 3: Among the amounts indicated in the table above, transaction amounts do not include consumptiontax.
IX. Notes on data per share
1.

Net asset per share:

4,170,443.98 yen

2.

Current net profit per share:

1,491,682.82 yen

X. Matters concerning important subsequent events
There are no applicable matters.

20

The 11th Business Term
Supplementary Statements
From April 1, 2016
To March 31, 2017

Ⅰ．Supplementary Statement of the Business Report

Ⅱ．Supplementary Statement of the Financial Statements※ This document has been translated from the Japanese original,for reference purposes only.
If there is any discrepancy between this translated document and the Japanese original,
the original shall prevail.

Tokyo International Air Terminal Corporation

Supplementary Statements for the11th Business Term(from April 1, 2016 to March 31, 2017)

I. Supplementary Statement of the Business Report
1. Important positions, such as business executive director, held at another company

Description of theCategory

Name

Concurrent positions held at

positionconcurrently held

TEPCO Energy Partner Incorporated;

External

TomoakiDirector

Kobayakawa

Representative Director
and President;

Tokyo Electric Power Company
Holdings, Incorporated

Director
Representative Director

External
Director

Narita International Airport
Masaki Saidaand Senior Executive

Corporation
Vice President

External
Corporate

Tsutomu

Tokio Marine & Nichido Fire

Managing Executive

Terabayashi

Insurance Co., Ltd.

Officer

Auditor1

RelationshipII Supplementary Statement of the Financial Statements
1. Details of tangible and intangible non-current assets(Thousands of yen)
Category

Type ofBook value

Increase in

Decline in

Depreciation inBook value at

Total

Acquisition cost

assetsat the beginning of

the term under

the term under

the term underthe end of thedepreciation

at the end of thethe period

review

review

review

periodperiodBuildings

101,760,007

644,539－

6,660,315

95,744,231

33,877,675

129,621,906

Structures

1,323,916

119,980－

157,536

1,286,359

713,726

2,000,086

6,057,240

249,493－484,656

5,822,076

2,408,267

8,230,344

11,051

－

－

4,155

6,895

183,001

189,896

7,707,872

933,284－

2,389,231

6,251,926

14,756,124

21,008,050(116,860,088)(1,947,297)－)(9,695,895)(109,111,490)(51,938,794)(161,050,284)－

736,374－－

736,374－

736,374

116,860,088

2,683,672－

9,695,895

109,847,864

51,938,794

161,787,592

Software

61,647

1,112,415－

52,763

1,121,299

337,738

1,459,037

Software

61,647

1,112,415－

52,763

1,121,299

337,738

1,459,037

Machinery andequipment

Tangible assets

VehiclesTools, furnitureand fixtures(Subtotal)
Construction(in progress

Total
Intangible Intangible
assetsassets

Note 1: Main factors contributing to the increase in the term under review included 536,642 thousand yen for the
upgrade of BHS information system, 436,300 thousand yen for the installment of check-in countertop signs
on the third floor, 258,987 thousand yen for the relocation of insurance counters on the third floor andinstallment of additional check-in counters, and 121,688 thousand yen for the construction of a new airline
maintenance office in the first floor’s restricted area.

22. Details of the allowance(Thousands of yen)

Category

Balance atthe beginningof the period

Increaseduring theterm underreview

49,825

16,526

Provision for directors'
retirement benefits

Decline during the term underreview
Used for the
relevant
Other
purpose21,876

Balance at theend of the－period44,475

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

3. Details of selling, general and administrative expenses(Thousands of yen)Account title

AmountRemarks

Directors' compensations

111,000

Employees' salaries

427,180

Provision for directors' retirement benefits

16,526

Legal welfare expenses

13,588

Welfare expenses

3,646Transportation expenses

67,439Supplies expenses

48,273

Furniture and fixtures

37,627

Utilities expenses

434,651

Communication expenses

95,217

Insurance expenses

348,678

Repair expenses

210,018

Rent expenses

2,806,512

Conference expenses

8,912

Entertainment expenses

18,134

Taxes and public charges

1,299,311

Donation expenses

23,276Advertising expenses

588,532

Cleaning expenses

19,363Business consignment expenses

18,303,834

Miscellaneous expenses

781,300

Depreciation

9,748,659

Total

35,411,684

3