Ana fy2011_e

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Fiscal year ended March 31, 2012 Consolidated financial results All Nippon Airways Co., Ltd. (9202)

ANA reports consolidated financial results for FY2011

1. Consolidated financial results for the period ended March 31, 2012 (1) Consolidated financial results Yen (Millions)

FY2011Apr.1 - Mar.31

Year onYear (%)


Year onYear (%)

Operating revenues 1,411,504 4.0 1,357,653 10.5

Operating income 97,022 43.1 67,808 -

Recurring profit 68,455 84.9 37,020 -

Net income 28,178 20.9 23,305 -

Comprehensive income 33,102 (13.7) 38,377 (226.4)

Net income per share 11.22 yen 9.29 yen

Net income / Shareholders' equity 5.3 % 4.7 %

Recurring profit / Total assets 3.5 % 2.0 %

Operating income / Operating revenue 6.9 % 5.0 %

Gain on equity method 526 684

(2) Consolidated financial positions Yen (Millions)

FY2011as of Mar.31

FY2010as of Mar.31

Total assets 2,002,570 1,928,021

Total net assets 554,859 526,354

Net worth / total assets 27.4 % 27.0 %

Net worth per share 218.24 yen 207.35 yen

Net worth 549,014 520,254

(3) Consolidated cash flows Yen (Millions)

FY2011Apr.1-Mar.31

FY2010Apr.1-Mar.31

Cash flows from operating activities 214,406 203,889

Cash flows from investing activities (166,323) (139,619)

Cash flows from financing activities 16,171 (10,596)

Cash and cash equivalents at the end of the period 265,834 201,606

2. Dividends Yen

Dividends per shareEnd of

1st quarterEnd of

2nd quarterEnd of

3rd quarterEnd of

fiscal yearFull

fiscal year

FY2010 - - - 2.00 2.00

FY2011 - - - 4.00 4.00

FY2012 (Forecast) - - - 4.00 4.00

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Total dividends(Million yen)

Payout ratio(Consolidated)

(%)

Ratio of dividends tonet assets

(Consolidated)(%)

FY2010 5,018 21.5 1.0

FY2011 10,062 35.7 1.9

FY2012 (Forecast) 25.2 Notes:

＊In FY2010 total amount of dividends does not include the dividends paid to the trust account of the Employee Stock Ownership Group and affiliates of 22 million yen. This is because the Company shares held by the trust account of the Employee Stock Ownership Group and affiliates are recognized as treasury shares.

＊In FY2011 total amount of dividends does not include the dividends paid to the trust account of the Employee Stock Ownership Group and affiliates of 26 million yen. This is because the Company shares held by the trust account of the Employee Stock Ownership Group and affiliates are recognized as treasury shares.

3. Forecast of consolidated operating results for the period ending March 31, 2013

4. Others

(1) Changes of important subsidiaries during the period (changes of specific subsidiaries in accordance with changes in the scope of consolidation):

Consolidated Equity method

Newly added - -

Excluded - - (2) Changes in accounting principles, procedures, and the method of presentation

(i) Changes caused by revision of accounting standards: No (ii) Changes other than (i): No (iii) Changes in accounting estimates: No (iv) Restatement: No

(3) Number of outstanding shares (Common stock)

Shares

FY2011 FY2010

Outstanding stock (including treasury stock)

as of Mar.31 2,524,959,257 as of Mar.31 2,524,959,257

Treasury stock as of Mar.31 9,266,449 as of Mar.31 15,903,528

Average number of shares during the period

2,511,841,390 2,507,572,204

Yen(Millions) Year on year(%) Operating revenue 1,500,000 6.3Operating income 110,000 13.4Ordinary income 70,000 2.3Net income 40,000 42.0Net income per share 15.90 yen

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(Reference) Summary of non-consolidated financial results (1) Non-consolidated financial results Yen (Millions)

(2) Non-consolidated financial positions Yen (Millions)

(3) Forecast of non-consolidated operating results for the period ending March 31, 2012

＊Statement Relating to the Execution Status for Audit Procedures

This financial summary falls outside the scope of audit procedures based on the stipulations of the Financial Instruments and Exchange Act. The audit procedures for financial statements based on the stipulations of said Act were not completed at the time this financial summary was disclosed.

＊Explanations and other special notes concerning the appropriate use of business performance forecasts The consolidated and non-consolidated business performance forecasts given in this document are based on assumptions, prospects, and future business plans, currently available on the date this document was published. Actual results may differ from these forecasts for a variety of reasons. For other matters relating to the forecasts, please refer to “1. Corporate Performance, (1) Analysis of Operating Results” on page 4 of the accompanying materials.


Year onYear (%)


Year onYear (%)

Operating revenues 1,233,839 3.5 1,191,571 11.1

Operating income 88,693 47.7 60,052 -

Ordinary income 60,617 91.7 31,621 -

Net income 26,795 16.4 23,012 -

Net income per share 10.66 yen 9.17 yen

FY2011as of Mar. 31

FY2010as of Mar. 31

Total assets 1,925,687 1,857,025


Net worth / total assets 26.8 % 26.2 %

Net worth per share 204.72 yen 193.93 yen

Net worth 515,207 486,774

Yen(Millions) Year on year(%) Operating revenue 1,340,000 8.6Ordinary income 62,000 2.3Net income 37,000 38.1Net income per share 14.70 yen

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1. Corporate Performance (1) Analysis of Operating Results

1) Overview of current fiscal year

In the year under review (April 1, 2011 to March 31, 2012), the economy in Japan continued

to face severe difficulties as a result of the Great East Japan Earthquake (hereafter, the

"Earthquake") that occurred in March 2011. Consumer spending remained steady, however,

and a number of trends such as a rally in capital investment have led to a gradual recovery

in the overall economy. The future remains uncertain, however, given the downturn in

overseas economies with the government debt crises in Europe, fluctuations in exchange

rates, and soaring oil prices.

Against this economic backdrop, ANA has made efforts to stimulate demand after the sharp

decline induced by the Earthquake, saving and recovering approximately ¥30 billion over

the fiscal year under its Emergency Income Recovery Plan in an effort to minimize the

impact on the balance of payments. In addition, some of the measures designed to reduce

costs by approximately ¥100 billion that were due to be introduced in the next fiscal year

were brought forward and introduced in the second half of this year.

As a result, consolidated financial results for the year showed an increase on the previous

year, as follows:

Operating revenues: ¥1,411.5 billion (up 4.0% year-on-year)

Operating income: ¥97 billion (up 43.1% year-on-year)

Recurring profit: ¥68.4 billion (up 84.9% year-on-year)

Net income: ¥28.1 billion (up 20.9% year-on-year)

Non-consolidated financial results also posted an increase, as follows:


Operating income: ¥88.6 billion (up 47.7% year-on-year)

Recurring profit: ¥60.6 billion (up 91.7% year-on-year)

Net income: ¥26.7 billion (up 16.4% year-on-year)

A breakdown of individual segments for the fiscal year under review follows.

Overview by segment

Air Transportation


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Operating income: ¥88.4 billion (up 46.3% year-on-year)

Domestic Passenger Services

Despite the decline in demand immediately following the Earthquake, by June business

travel demand had recovered to the levels on par with the same period in the previous year,

and as a result of measures taken to stimulate demand, the adverse impact of the

Earthquake on leisure demand had been nearly eliminated by the end of the fiscal year.

The route network was enhanced with the opening of the new Matsuyama - Okinawa route

in October, and the new Itami - Akita route in December. Extra flights were introduced on a

short-term basis to Sendai, Fukushima and Yamagata to aid with relief efforts in the region.

The number of regular flights was partially reduced,and smaller aircraft were introduced on

many routes in response to the significant fall in demand due to the impact of the

Earthquake. Meanwhile, various measures to match supply with demand were initiated,

including changing aircraft size to meet demand trends and introducing extra flights in times

of high demand.

Additionally, on November 1 ANA introduced the world’s first scheduled flight service for the

Boeing 787, flying between Haneda and Okayama/Hiroshima. This Boeing 787 service has

since been extended to flights between Haneda and Itami/Yamaguchi Ube/Matsuyama.

Other measures taken to stimulate demand included the introduction of new promotional

airfares, and efforts have been made to improve convenience and comfort, such as

refurbishment of some of the airport lounges.

As a result, results were only slightly down over the previous year, with domestic routes

carrying 39.02 million passengers (down 3.8% year-on-year), and generating revenues of

¥651.5 billion (down 0.2% year-on-year).

International Passenger Services

The demand for international passenger services fell significantly over the one-month period

following the Earthquake, but by June business demand had nearly recovered to

pre-Earthquake levels, and by the summer the number of passengers departing from Japan

on overseas leisure flights had recovered to levels similar to the previous year. Demand for

inbound tourism from overseas is continuing to show a moderate increase.

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Flights were temporarily suspended and aircraft were downsized in response to the impact

of the Earthquake, but larger aircraft were introduced on routes with strong demand to

ensure service matched demand. Several new international routes were also introduced:

Narita - Chengdu from June 19, Chubu - Hong Kong from October 30, and beginning

January 21, Haneda - Frankfurt route commenced using the Boeing 787 aircraft.

Sales activities were enhanced following the Earthquake, as ANA aimed to capture the

limited opportunities for connecting passengers’ demand between North America and Asia

via Narita, and incorporate demand in the Western Japan market. Post-June, when the

recovery in demand had become pronounced, ANA introduced various discount fares in an

effort to increase demand in the summer and year-end leisure sectors. The sector hardest

hit by the impact of the Earthquake was that of tourists visiting Japan from overseas, but

campaigns aimed at attracting site tours from various countries and boosting Japan’s image

resulted in a gradual revitalization in sales of tour products and promotions.

Additionally, the Trans-Pacific Joint Venture was introduced from April 1, 2011. This is a joint

venture between ANA, United Airlines and Continental Airlines (from March 2012 United

Airlines and Continental Airlines have unified their flight code to UA), and offers passengers

the ability to choose the flights they would like to use. Further, on June 1, 2011 ANA received

approval for antitrust immunity, which allows it to establish a joint venture with Lufthansa

German Airlines, and this starts up in FY2012.

As a result, numbers were up on the previous year, with international routes carrying a total

of 5.88 million passengers (up 13.8% year-on-year). Growth is sluggish as a result of the

Earthquake and fluctuations in the exchange rate, but revenues stood at ¥320 billion (up

14% year-on-year).

Cargo Services

In domestic cargo services, cargo sheds in Sendai Airport were damaged by the Earthquake,

and there was a period of time when cargo could not be handled. The inoperability of

land-based cargo transport centering on the Hokkaido routes, however, led to a shift to

demand for air cargo transport, and ANA was able to capture the market to supply increased

number of parcel centering on its routes into and out of Hokkaido. Additionally, the

introduction of the Boeing 787 from November has meant that ANA has been able to meet

the increased supply needs and the transition was smooth.

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As a result, the volume of domestic cargo handled in the period was 467,000 tons (up 3%

year-on-year), and operating revenue was ¥33.2 billion (up 2.6% year-on-year), both of

which represent an increase over the previous year. The volume of domestic mail

transported was 31,000 tons (up 1.0% year-on-year) and operating revenue exceeded the

previous year at ¥3.5 billion yen (up 3.6% year-on-year).

In international cargo services, there were concerns that the Earthquake would lead to an

overall decline in the demand for air cargo services, but the advantages of air cargo led to

an increased demand for critical items such as medical supplies. With the yen reaching

highest levels on record, however, there was a major shift to overseas production from the

summer onwards, which led to a difficult market environment for air cargo exported from

Japan. ANA thus introduced measures to boost cargo volume capacity, including promoting

the transport of cargo between foreign countries via Japan, even where unit rates were low.

Bulk shipments of new mobile devices in the latter half of February led to an increase in air

cargo demand, and capacity was increased in order to meet this demand. Extra flights were

introduced to Bangkok to deal with increased demand for emergency supplies and goods to

rebuild Thailand after the floods that hit the country in November, and from December,

Narita - Okinawa flights were increased to 2 flights per day with the aim of enhancing

Okinawa’s role as a hub airport in the cargo network.

As a result, the volume of international cargo handled in the period was 570,000 tons (up

2.4% year-on-year), and operating revenue was 87.9 billion yen (up 2.2% year-on-year),

both of which represent an increase over the previous year. The volume of international mail

transported was 26,000 tons (up 18.1% year-on-year) and operating revenue exceeded the

previous year at 3.3 billion yen (up 5.0% year-on-year).

Other in Air Transportation Business

The reduction in charter flights has been offset by an increase in passenger check-in and

baggage handling services outsourced to ANA on behalf of other companies, with the result

that operating revenue from other air transportation services exceeded the previous year at

162.8 billion yen (up 1.8% year-on-year).

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Changes in fleet composition for the period under review

The following changes took place in the ANA Group’s fleet during the fiscal year ended March 2012.

Aircraft Purchased Leased-in Returned Leased-outSold /

Removed Change Reference

Boeing 747-400 — — 1 — 2 △3

Returned: May 2011, 1 aircraft

Sold : August 2011, 1 aircraft

November 2011, 1 aircraft

Boeing 787-8 6 — — — — +6

Purchased: September 2011, 1 aircraft

October 2011, 1 aircraft

January 2012, 3 aircrafts

March 2012 1 aircraft

Boeing 767-300 4 4 1 — 5 +2

Purchased: September 2011, 1 aircraft


January 2012, 1 aircraft

March 2012, 1 aircraft

Returned: July 2011, 1 aircraft

Sold and Leased-in:

April 2011, 1 aircraft

October 2011, 2 aircrafts

February 2012, 1 aircraft

Sold: March 2012, 1 aircraft

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Aircraft Purchased Leased-in Returned Leased-outSold /

Removed Change Reference

Airbus A320-200 7 — 9 — 1 △3

Leased-out and Purchased:

August 2011, 2 aircrafts

September 2011, 2 aircrafts


February 2012, 2 aircrafts

Returned: January 2012, 1 aircraft


Sold: September 2011, 1 aircraft

Boeing 737-800 2 — — — ― ＋2Purchased: April 2011, 1 aircraft

June 2011, 1 aircraft

Boeing 737-500 1 — 1 — 1 △1



Sold: February 2012, 1 aircraft

Bombardier DHC8-400 3 — — — — +3

Purchased: May 2011, 1 aircraft


March 2012, 1 aircraft

Bombardier DHC8-300 2 — 2 — 2 △2


November 2011, 1 aircraft

December 2011, 1 aircraft

Sold: August 2011, 1 aircraft


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Travel Services Operating revenue: 158.9 billion yen (down 0.3% year-on-year) Operating income: 3.9 billion yen (up 48.2% year-on-year) In domestic travel, the impact of the Earthquake led to a sharp downturn in demand for the ‘ANA Sky Holiday’ product for the Kanto and Tohoku regions in the first half of the period. However, increased demand for the dynamic package Tabisaku, where the traveler is free to choose a combination of flights and accommodations, meant that sales from October onwards exceeded those of the same period for the previous year, with the result that overall sales for the period reached the same levels as the previous period. The aftermath of the Earthquake led to a sharp decline in overseas travel in the first quarter of the period, but the impact of the strong yen led to a recovery to pre-Earthquake levels from July onwards to all countries apart from China. Sales for the summer Tabidoki product within ANA's flagship ‘ANA Hallo Tours’ program remained strong, with Asia being the most popular destination. The dynamic package ‘WEB Free Plan’ designed to stimulate last-minute purchases has proved to be extremely popular, and combined with efforts to promote sales for year-end Honolulu charter flights, sales for overseas travel have surpassed those of the previous period. Other Operating revenue: ¥138.4 billion (down 0.4% year-on-year) Operating income: ¥4.1 billion yen (up 14.3% year-on-year) ANA Trading Co., Ltd., which engages in trading and product sales, suffered a reduction in the retail service business as a result of the adverse impact of the Earthquake on sales at airport shops and on in-flight sales, and there was a decline in aircraft and machinery business. 2) Outlook for the Next Fiscal Year The outlook for the next fiscal year is still bleak in the aftermath of the Earthquake. Although there are signs of a gradual recovery, the financial turmoil in Europe and the risks associated with the long-term appreciation of the yen mean that we cannot expect high growth in the next fiscal year. Although neither Europe nor America can expect high growth rates, it is expected that China will be able to sustain its high growth rate, and the ANA Group will therefore move forward developing the three pillars of its FY2012-2013 ANA Group Corporate Strategy (released on February 17, 2012), namely ’Establishing a Multi-Brand Strategy’, ’Group Management Restructuring’, and ’Strengthening Cost Competitiveness through Structural Reforms’, and achieving its Group Management Strategy to ‘become Asia’s Number One airline group providing passenger and cargo transport services to the world’. The management plan for the next fiscal year is outlined below. In domestic passenger services, ANA will ensure optimal deployment of aircraft in each market to meet conditions in that market, and will further aim to maintain and further improve ANA’s competitiveness through effective deployment of the Boeing 787 aircraft and upgrading passenger services. This will continue to ensure the competitiveness of ANA's business revenue base. The route network will be further enhanced through the introduction of the new Haneda - Iwakuni route, a Narita - Niigata route and others. In full awareness of the competition with other companies, ANA will also increase its use of the Boeing 787 on its routes.

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In marketing, ANA will revise its promotional fares and offer a new range of domestic fares for overseas visitors to Japan, in order to reflect customer needs and the changing competitive environment. Additionally, customer satisfaction will be enhanced through improvements to services. In international passenger services, with a view to the expected growth in Asia, ANA will build a network that specializes in long haul flights and connections via Japan, as it works toward further improvements in profitability. In conjunction with the deployment of the Boeing 787, new routes will be introduced to connect Narita with Seattle, San Jose and Myanmar, and to strengthen the ANA route network in North America and Asia. (Route plans are subject to the approval of the relevant authorities.) In sales, ANA will move to a fare structure that meets the customers' needs, is flexible and is easy to understand. In addition to the joint venture with United Airlines, a joint venture is in place with Lufthansa German Airlines, with the aim of increasing revenue. In cargo operations, given predictions that the strong yen will mean a solid recovery in export cargo demand will take time, ANA will focus its energies on capturing the market for cargo exports leaving Asia and China bound for North America. In particular, ANA will work to further enhance the high-speed cargo transport and collection network in Asia, with the Okinawa cargo hub network at its center, as well as promoting a value-added/differentiation strategy, all with a view of maximizing revenue. This year’s Aircraft Plan includes the strategic introduction of 22 new aircraft. In addition to 14 Boeing 787s, 2 Boeing 777-200ERs, 4 Boeing 737-800s and 2 Bombardier DHC8-400s will be introduced. At the same time, 17 aircraft including Boeing 747-400s will be taken out of service as part of an ongoing process of fleet renewal. In LCC operations, AirAsia Japan will launch operations in August, and preparations are in full swing to enable routes to operate to Chitose, Fukuoka and Naha with Narita as the hub airport. International routes are planned to start in October, with the inaugural routes flying between Narita and Seoul and Busan. New demand in the domestic and international markets will be created and stimulated, and a revenue-generating model will be created in the early stages, which will in turn boost the profits of the entire group. In travel services, the intention is to further enhance internet-based sales. Taking advantage of the opening of Tokyo Sky Tree, emphasis in domestic travel products will be placed on expanding the range of products targeting Tokyo. For international travel, a line of products will be created utilizing the network of various airlines in the Star Alliance, as ANA works to enhance the Hallo Tour brand and strengthen sales. In other areas, there will be structural reforms to existing business units and expansion of external trade, with the overriding aim being to exploit the comprehensive strengths of the Group and deliver increased profitability to the ANA Group as a whole. Over the coming year, ANA intends to focus on international routes and capture new business chances. At the same time, it will promote cost structure reforms. Currently, the consolidated financial forecast for the year ending March 31, 2013 is as follows:

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Operating revenues: ¥1.5 trillion (up 6.3% year-on-year) Operating income: ¥110.0 billion (up 13.4.% year-on-year) Recurring profit: ¥70 billion (up 2.3% year-on-year) Net income: ¥40 billion (up 42% year-on-year) Further, at the time these calculations were made, the exchange rate was 80 yen to one US dollar, and the market price for aviation fuel on the Dubai market, which is an index for aviation fuel costs, was 115 US dollars in the first half of the period and 100 USD in the second half, while Singapore kerosene cost 130 USD in the first half of the period, and 120 USD in the second half par barrel. The goal of the move to a holding company structure will be to create a management structure that will be able to adapt to the needs of a changing market, and the target date for the establishment of the new management structure is April 2013. .

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(2) Analysis of the Financial Position 1 ) Financial Position

Assets: Current assets increased by ¥76.5 billion from the end of FY2010, and fixed assets decreased by ¥1.6 billion from the end of the previous year, resulting in assets of ¥2,002.5 billion (¥74.5 billion year-on-year increase). Liabilities: Liabilities increased due to procurement of financing by taking out new loans, resulting in a ¥46.0 billion increase in liabilities from the end of the previous year, to ¥1,447.7 billion. Note that interest-bearing debt increased by ¥24.8 billion year-on-year. Net assets: Retained earnings were increased due to a net income for the fiscal year, net assets were ¥554.8 billion (¥28.5 billion year-on-year increase).

2 ) Cash Flows

Operating activities: We had a net income of ¥63.4 billion for the period before tax adjustments. Adjustment of depreciation, and other non-cash items, changes in sales-related debts and credits, and changes in taxes, cash flows from operating activities were ¥214.4 billion. Investing activities: Net cash used in investing activities totaled ¥166.3 billion. As for our investing activities, our main expenditures were from the acquisition of aircraft, parts, and the like, as well as prepayment of aircraft scheduled for delivery. As a result, free cash flows totaled ¥48.0 billion. Financing activities: While our payments include payment of loans and leases, repayment of corporate bonds, and dividend payments, we secured financing through long-term loans. As a result, net cash flows from financing activities came to ¥16.1 billion.

As a result of the above, cash and cash equivalents for the fiscal year increased by ¥64.2 billion compared with the end of the previous year, and the balance was ¥265.8 billion.

The trends of our group's cash-flow indicators are as follows:

＊ Net worth ratio: Net worth / Total assets

Net worth ratio based on market prices: Total market value of shares / Total assets Debt repayment period: Interest bearing debt / Cash flow from operating activities Interest coverage ratio: Cash flow from operating activities / Interest payments

Notes: 1. Each indicator is calculated based on consolidated financial figures.

2. The total market value of shares is calculated based on the closing stock price at fiscal year-end, and the total number of shares issued as of the end of the fiscal year (less treasury stock).

3. The cash flow from operating activities in the consolidated statements of cash flows is used as the cash flow from operating activities. Interest-bearing debt is all the debts recorded on the consolidated balance sheet for which interests are being paid.

Category FY 2007 FY 2008 FY 2009 FY 2010 FY 2011Net worth ratio (%) 25.4 18.3 25.5 27.0 27.4Net worth ratio based on market prices (%) 47.9 42.4 36.0 32.3 31.4

Debt repayment period (years) 4.6 - 11.3 4.6 4.5Interest coverage ratio 10.7 - 4.6 10.7 10.8

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(3) Dividend Policy and Dividends for the Current and Next Fiscal Periods With a comprehensive review of performance and the financial situation over the current period, and bearing in mind the business environment going forward, a dividend of 4 yen per share is proposed for the current period. ANA views the return of profits to shareholders as an important function of management, and has always worked to provide robust shareholder returns while maintaining a balance between returns and strengthening its financial condition to support future business expansion. Regarding dividends going forward, while comprehensive consideration will be given to future trends in such areas as business conditions and performance results, ANA’s priority is to achieve the goals set out in the FY2012-2013 ANA Group Corporate Strategy, and therefore plans a dividend of 4 yen per share for the period to come.

(4) Operating Risks The following risks could significantly affect the judgment of investors in the ANA Group. These forward-looking statements are being made at the determination of the ANA Group as of the end of the fiscal year under review. 1) Risks accompanying delay in economic recovery The sluggish domestic economy may cause reduced demand for air travel due to deterioration in personal consumption and corporate profits. In addition, a weak international economy could cause a decline in air passenger demand and stagnation in the distribution of goods which may affect the Group’s performance. 2) Risks associated with the impact of the accident at the Nuclear Power Plant Although the accident at the Fukushima's No. 1 Nuclear Power Plant has been brought under control to some degree, the reactor is not currently in a state of cold shutdown, and the possibility therefore remains of a similar accident occurring again in the future. Should such an accident occur, it is expected that the no-fly zone would be extended, which would then mean that the current routes would no longer be viable, leading to the possibility of an impact on Tohoku and Hokkaido routes. In addition, in the event of power supply restrictions or major power outages, maintaining operation of essential Company systems, such as booking and flight management systems will be impossible, which in turn may affect service provision and the maintenance of operations. 3) Risks related to corporate strategies

① Risks related to fleet strategy In air transportation operations, ANA is pursuing a fleet strategy centered on the deployment of medium and small-sized aircraft, rationalization of models, and the introduction of highly economical aircraft. In line with this strategy, orders have been placed with three companies: The Boeing Company, Bombardier Inc. and Mitsubishi Aircraft Corporation. Any delays in

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delivery due to financial or other factors at any of these three companies could create obstacles to the Company’s medium-to-long term operations. Further, this fleet strategy could prove ineffective due to the factors given below, significantly diminishing expected benefits.

(i) Dependence on the Boeing Company As of the end of March 2011, the Company had ordered 69 aircraft from Boeing, out of the 87 aircraft purchases mandated by our fleet strategy. If Boeing were unable to fulfill its agreements to ANA due to financial or other factors, ANA would be unable to acquire aircraft according to this fleet strategy. Such circumstances could significantly affect ANA’s performance.

Delivery of the Boeing 787 was delayed several times, but since the delivery of the first 787 on September 26, 2011, ANA has taken delivery of 6 additional aircraft through March 31, 2012. Should there be substantial delays to the scheduled delivery of other 787 aircraft going forward, it could adversely affect ANA’s medium-to-long term operations. (ii) Delay of aircraft development plan In accordance with its fleet strategy, ANA has decided to introduce the Mitsubishi Regional Jet (MRJ) currently being developed by Mitsubishi Aircraft Corporation but the date of delivery has been delayed by approximately 2 years. Further delays to the delivery schedule going forward could adversely affect ANA’s medium-to-long term operations.

② Risks associated with arrival / departure slots ANA views the new runway at Haneda and introduction of simultaneous take-offs and landings at Narita Airport, and the resulting capacity expansion at metropolitan Tokyo airports as a major business opportunity, and has been making various investments and improvements to its operating structure. There has been no official announcement yet, however, regarding allocation of the second phase of slot increases amounting to 407,000 slots (annual number of slots). There are plans to increase the number of slots at Narita Airport by 270,000 in the summer of 2013, and eventually by a total of 300,000, but no final decision has yet been taken. In light of this situation, if the size or timing of the capacity expansion at the two metropolitan airports (Haneda and Narita) differs from assumptions made by the Company, the achievability of the Group’s Corporate Plan could be adversely affected.

③ Risks associated with cargo business strategies Our cargo business, including express operations, is highly dependent on cargo shipped to and from China and other Asian regions; changes to economic conditions in these regions could therefore lead to a decrease in the volume of cargo and a reduction in the unit price. ④ Risks associated with the LCC business ANA has already invested in the LCC business and has already begun LCC business operations, but the possibility remains that the projected demand for LCC airlines will not be generated, or that escalating competitiveness both within Japan and abroad in the LCC arena could lead to a downturn in business conditions or a withdrawal from LCC operations. The possibility exists, meanwhile, that too many passengers could transfer their business away from the Group to the LCC business, and the forecasted returns would therefore not be realized.

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4) Risks associated with fluctuations in the price of crude oil Since jet fuel is derived from crude oil, the price of jet fuel will fluctuate in conjunction with the price of crude oil. This may affect the Group’s performance as follows: ① Risks associated with an increase in the price of crude oil If the price of crude oil increases, basically this will lead to an increase in the price of jet fuel, leading to a significant burden on the ANA Group. To reduce the risk of fluctuations in the price of jet fuel and to stabilize associated expenses, ANA purchases crude oil and jet oil derivatives in planned, ongoing hedging transactions for specific periods of time. ANA’s hedging transactions are limited to a certain percentage of its aggregate domestic and overseas purchase of fuel, with plans for hedging amounts set quarterly. Individual transactions are maintained within limits that are set in such a way as to ensure that ANA’s transactions will not affect the spot market, and margins are adjusted monthly to avoid any physical delivery obligations.

Approximately 40% of the amounts for 2012 have already been hedged. Should the price of crude oil increase further in the future, however, hedging transaction prices will generally increase in alignment with the market. Given the limitations of the Group’s current efforts to offset high crude oil prices through cost reductions and higher fares and surcharges, resurgent crude oil prices could affect ANA’s performance in the mid-to-long term. ② Risks associated with a sharp drop in the price of crude oil ANA offsets the risk of fluctuations in the price of crude oil through hedging transactions. Consequently, if the price of crude oil were to drop sharply during the fiscal year, the effect of the fall in the market price might not be reflected immediately, depending on the status of the hedging position, and may not contribute to immediate profit. 5) Risks associated with infectious diseases such as H1N1 influenza An outbreak of a serious, contagious disease, such as H1N1 influenza, could lead to a drastic reduction in demand, not only for international flights, but also for the Group’s entire operations. Fear would reduce the public interest in travel, and such outbreaks could lead to a sudden decrease in the number of domestic and international passengers, and could affect ANA’s profitability. Further, ANA’s ability to carry on its business operations could be adversely affected if the number of employees and contractors affected by the spread of a highly infectious new strain of influenza exceeded forecasts. 6) Risks associated with fluctuations in foreign exchange rates Since the purchase of jet fuel, which accounts for a significant portion of ANA’s expenses, is conducted in foreign currencies, the depreciation of the yen will always have a significant effect on ANA’s profits. Further, with increased earnings from international operations, appreciation of the yen has come to have a greater impact on earnings. Accordingly, to the greatest extent possible, foreign currency taken in as revenue is used to pay expenses denominated in the same foreign currency, thereby minimizing the risk of fluctuations in foreign exchange rates. In addition, ANA uses forward exchange agreements and currency options for its jet fuel purchases to limit the risk of fluctuations in foreign exchange rates, and to stabilize and control payment amounts. 7) Risks associated with the international situation ANA’s route network currently covers North America, Europe, China and other parts of Asia. Should any political instability, conflict or large-scale terrorist attack occur in any of these regions,

17

ANA’s performance could be adversely affected, as there would be an accompanying decline in demand for travel to the affected region. 8) Risks associated with statutory regulations As an airline operator, ANA undertakes operations based on the stipulations of statutory regulations for airline operations. Further, passenger and cargo operations on international routes must conform to the stipulations of international agreements including treaties, bilateral agreements and the decisions of IATA (the International Air Transport Association). Further, the pricing of fares and charges is constrained by the Japanese Antimonopoly Act and similar laws and regulations in other countries. 9) Risks associated with litigation ANA may become involved in litigation with respect to its business activities, which could affect ANA’s ability to perform. Further, ANA could be sued in the future with respect to the events listed below, and similar investigations could be initiated in other countries or regions. ① Antitrust Law Investigations in the USA From February 2006, ANA has extended its full cooperation with the investigation being conducted by the United States Department of Justice into price adjustments relating to international air cargo and passenger transport services. Following a comprehensive review of the various aspects of the situation, ANA reached a plea bargain agreement in October 2010, and signed an agreement in November of that year. In October of that same year, a settlement with the class action group regarding cargo transport connected to this case was agreed upon. No claim amount has been specified with regards to the class action related to air passenger transport, and it is therefore difficult to provide details or give a detailed analysis 10) Risks associated with public sector fees Public sector fees in relation to the air transportation business include aviation fuel taxes and landing fees, and fees for the use of navigational aid facilities. The Japanese government has introduced time-limited measures to mitigate aviation fuel taxes and landing fees, but the ANA Group could be adversely affected if these measures are reduced or abolished in the future. 11) Risks associated with environmental regulations As part of efforts to protect the global environment, numerous domestic and international regulations have been introduced or strengthened in recent years. These have addressed such issues as aircraft emission of greenhouse gases (CO2 etc.), the usage and treatment of environmental pollutants, and energy use at major business operations. Compliance with such statutory regulations imposes a considerable cost burden on ANA; further expenses may be incurred should the current regulations become stricter, if new regulations such as the European Union Emission Trading Scheme are introduced, or if various governments introduce environmental taxes. 12) Risks associated with conditions surrounding the airline industry The environment around the airline industry is currently undergoing sweeping changes. In the global airline industry, factors including progress with open skies policies, the rise of low-cost carriers, and stronger alliances between existing airlines are causing tectonic shifts in the competitive environment. Within Japan, ANA’s profitability could be adversely affected if there are changes to aviation policy, major changes in the current competitive or business climate, or changes in the management trends of our competitors, especially within Japan Airlines Co., Ltd,

18

which has been receiving assistance from public funds as it restructures in the process towards re-listing. 13) Competitive risks It cannot be denied that there is a possibility ANA may incur increased expenses for its air transportation operations as a result of such factors as increases in jet fuel prices, the cost of raising funds or the need to implement actions to meet environmental regulations. If such increased expenses are incurred, ANA will have to secure income by reducing indirect fixed costs, by enhancing efficiency through the integration of aircraft, and by raising fares and fees. However, because ANA competes with other airlines in Japan and overseas, as well as with other forms of transport such as the bullet train on certain routes, passing on costs could diminish its competitiveness and lead to a loss of customers to our competitors. As price competition greatly restricts the passing on of costs to customers, any increase in expenses could have an adverse impact on the Group’s profitability. 14) Risks associated with ineffective strategic alliances ANA enjoys various benefits from its strategic alliances, mainly through its membership in the Star Alliance. These include heightened brand recognition domestically and abroad, as well as an increased mix of passengers and a diversification of the market. Additional benefits include the sale of code-share tickets by Alliance partners and the use of ANA flights by customers in partner mileage programs. From April 1, 2011, joint venture flights were introduced on Pacific routes in collaboration with United Airlines and Continental Airlines (from March 2012 United Airlines and Continental Airlines have unified their flight code to UA), having received approval under ATI (Antitrust Immunity). On June 1,, 2011, the Ministry of Land, Infrastructure and Transport gave approval under ATI (Antitrust Immunity) for Lufthansa German Airlines, and joint ventures in the Japan-Europe network have been gradually introduced commencing in the latter half of 2011. The positive impact of the alliances would be reduced, however, should a strategic partner withdraw from the Star Alliance, if there were a dissolution of a partnership between two of the companies, a downturn in performance or a restructuring, or if some external factor led to stricter regulations governing the partnerships. This in turn could affect the profitability of the Group.

15) Risks associated with flight operations ① Aircraft accidents, etc. Any aircraft accidents on ANA or code-share flights could cause a drop in customer confidence and demand, creating a medium to long-term downturn that could adversely affect ANA’s performance. On September 6, 2011, Flight 140 (operated by Air Nippon Co., Ltd.) experienced flight instability, while the tail of the aircraft of Flight 731 (operated by Air Nippon Co., Ltd.) came into contact with the runway on February 5, 2012. Both of these incidents are currently under investigation by the Transportation Safety Board of the Ministry of Land, Infrastructure and Transport to determine the causes. Results of the investigations are due be announced. A major accident suffered by a competitor could similarly lead to a reduction in demand that could affect ANA’s performance. An accident would give rise to significant expenses including compensation for damages and the repair or replacement of aircraft. Such direct expenses would be largely met through aviation insurance. ② Directives to improve airworthiness, etc. In the event that an issue arises that significantly compromises the safety of an aircraft, the Minister for Land, Infrastructure and Transport is required by law to issue a directive to improve

19

airworthiness. In some cases, all aircraft of the same model are grounded until the aircraft’s safety has been confirmed. Even when the law does not require a directive to be issued, in some cases when safety cannot be confirmed, operation of the same model is voluntarily suspended in accordance with in-house regulations. Any such situation would have an adverse impact of the Group’s profitability. 16) Risks associated with leaked customer information ANA holds a huge amount of customer information, including personal data on approximately 23 million AMC members (as of March 31, 2012). The proper management of such personal information is now dictated by a strengthened Personal Information Protection Law. The Group has stated its privacy policy, apprised customers of the policy, and established full measures to ensure information security, including in its IT systems. In addition, work procedures and information systems are continuously monitored and revised when needed to eliminate any potential security gaps. Despite these precautions, a major leak of personal information caused by unauthorized access or some other unforeseen factor could still occur and carry significant cost, in terms of both compensation and loss of public confidence, which could significantly affect ANA’s performance. 17) Risks associated with disasters ANA’s data center is located near Haneda Airport, while operational control of its domestic and international flights is conducted at Haneda Airport. 60% or more of the Group’s passengers on domestic routes use Haneda Airport. A major disaster such as an earthquake in the Tokyo area or a fire at the above-mentioned facilities could lead to a long-term shutdown of the Group’s information systems and/or operational control functions that could significantly affect its performance. Further, disasters such as earthquakes, tsunami, typhoons, heavy snow or volcanic eruptions in areas other than Tokyo—in Japan as well as abroad—could force the closure of the affected airports and lead to the suspension of flights, which could also affect ANA’s performance. 18) Risks associated with cost structure Fixed costs such as aircraft and personnel costs account for a high share of ANA’s expenses, constraining it from adjusting the scale of operations to meet a given financial situation. Consequently, any decrease in the number of passengers or in cargo volume could have a significant impact on the Group’s profits. 19) Risks related to IT systems Air transportation operations are highly dependent on information systems for critical functions in customer services and operations such as reservations and sales, boarding procedures, and operational control and management. Any system failure, including in telecommunications networks, would make it difficult to maintain customer service and operations, and would result in a loss of public confidence, which could affect ANA’s performance. The Group’s information systems are also used by ANA’s partner airlines, so the impact would not be confined to the Group. Furthermore, in the event of a large scale electricity outage, or a drive to conserve electricity, there are concerns that there would not be sufficient power to supply ANA’s essential information systems, such as booking and operations management systems, which may affect maintenance of system operations. 20) Risks associated with finance

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① Increase in the cost of procuring funds The Group acquires aircraft through bank loans, capital increases and bond issuances. Any future disruption in financial markets, reorganization of government financial agencies, or downgrading of ANA’s credit rating may make it difficult or even impossible to raise funds on terms advantageous to the Group, increasing the cost of such fund-raising. Such circumstances could significantly affect ANA’s performance. ② Risks related to asset impairment If the profitability of various operations deteriorates, or an asset is sold off, ANA may be required to recognize asset impairment losses in the future.

2. Management Policy

(1) Fundamental Management Policy The ANA Group Safety Principles state that “Safety is our promise to the public and the foundation of our business.” Indeed, safety is our duty as a provider of public transportation and is always at the forefront of our operations. While giving top priority to the safe operation of Group airlines, we aim to gain and maintain the confidence of customers and shareholders by raising the quality of our air transportation services and by improving the profitability of the ANA Group as a whole.

(2) Medium and Long Term Management Strategies Against a backdrop of inherent concerns regarding the impact of the Earthquake and the downturn of the global economy with mounting government debt crises in Europe, and despite an uncertain future with soaring oil prices and fluctuations in the exchange rate, the Group is still striving to achieve its management vision of “Becoming Asia’s Number One airline group”. As such, it has entered the LCC business, introduced the world’s first commercial Boeing 787 flights, and is making preparations for its merger with Air Nippon Co., Ltd (April 1, 2012). The airline industry has reached a major turning point, with the expansion of airport capacity in the Tokyo metropolitan area, further developments in liberalizing airline business, and a spate of new LCCs being established. Under these circumstances, ANA will need to engage in full-fledged competition with the major carriers in Asia, Europe and America and the LCCs, as well as the existing Japanese carriers, Besides, competition with other modes of transport is likely to intensify, with extensions to the bullet train, for example, already in the pipeline. In this era of aggressive competition, ANA intends to make the most of the opportunities presented by the progress that has been made since 2010 in converting Haneda to an international airport and in the successive expansion of capacity at Narita airport. It will further capitalize on the introduction of the Boeing 787 and the joint ventures it has established to enhance its network of international routes. At the same time, ANA intends to consolidate its management base, always aiming for the ’Establishing a Multi-Brand Strategy’, ’ Group Management Restructure’ and ’Strengthening Cost Competitiveness through Structural Reforms’, and under our banner of ’Reborn– With Strength’, the Group will continually strive to maintain its position as the airline group of choice for the consumer, and achieving its Group Management Strategy of ’Becoming Asia’s Number One airline group’. 1) ANA Group Business Strategy ～ Growth with a focus on international routes

While responding to significant changes in the competitive environment as we move forward, the ANA Group will strive to be a network carrier that maintains an expanding network combining

21

strength with efficiency. ① International operations

(i) Strengthen the business model of being a network carrier that attaches importance to long-haul flights and ease of connecting flights. (ii) Achieve an overall increase of 22% (compared to FY2011) by FY2013 in international route volume (seat km). This will be achieved by: Expanding and enhancing the international long-haul network through such measures as deploying the Boeing 787 on routes between Narita and Seattle and Narita and San Jose; and expanding the Asian route network with the deployment of medium-sized aircraft.

② Domestic Operations

Improve competitiveness. This will be achieved by: Qualitative enhancement by ensuring flexibility so that supply and demand can be met; and by the full-scale deployment of Boeing 787 aircraft. ③ Cargo Operations Expansion of international services. This will be achieved by: Maximum utilization of the Okinawa hub by enhancing the efficiency of aircraft operations. ④ Alliance Strategy Strengthening the global network in the Asian, North American and European markets through joint ventures. ⑤ LCC Strategy (AirAsia Japan) Service planned to launch in August 2012, with a successive increase in the number of routes and number of flights

2) Strengthening the management base -- ’Reborn – With Strength’ The existing ANA brand and the LCC brand will be leveraged to form a ’Multi-Brand Strategy’. This double-pronged approach will stimulate demand in a market that is not currently covered by the ANA brand. It will also increase the ANA Group’s share of the market, leading to an enhancement of corporate value. Additionally, ANA aims to position itself as ’Always the airline of choice– winning in the era of mega-competition’. The Group will therefore begin working out the details of the move to a ’holding company structure’ that can deliver a flexible structure able to meet the needs of a ’multi-brand strategy’. In parallel, the Group will strive to deliver approximately ¥100 billion in savings by 2014 through structural reforms that have been up and running since 2011. This will enhance its competitiveness and make the Group more resilient against risk.

① Establishing a ’Multi-Brand Strategy’ (i) Work to expand the international network, while establishing ANA's brand as a full

service carrier/network carrier distinct from the LCC. (ii) The new LCC business model will deliver a thoroughly low-cost operating system,

and maximize revenues by tapping in to a new market and creating new demand. ② Group Management Restructure

(i) Separating management and executive powers, the holding company will plan corporate strategy and allocate corporate resources from an overall, optimal perspective.

(ii) The delegation of authority and responsibility to each unit within the Group will enable optimal delivery of operations in a speedy, cost-effective manner as there will be an accurate understanding of customer needs.

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(iii) Allowing each operating company to concentrate on the execution of its own business operations will optimize the multi-brand strategy and maximize profitability.

③ Strengthening Cost Competitiveness through Structural Reforms (i) Innovation in business process and flattening of the organizational structure will lead to optimization of facilities, IT and indirect staff.

(ii) A global comparison of standards highlighting the productivity of direct staff will pave the way for the transformation to a competitive operational structure

3) A foundation to support the implementation of the Corporate Strategy: A solid corporate platform. In accordance with the ’ANA GROUP SAFETY PLINCIPLES’ and the ’Course of ANA Group Safety Action’, safety is the foundation of our business, and we strive to achieve the world’s highest level of safety. As embodied in the concept ’values that cannot be copied, creating diverse people who are ready to face life’s challenges’, ANA devotes its efforts to encouraging an attitude where diverse people will continue to rise to the challenge. By gaining a precise understanding of what people expect and require of the ANA Group, as a global company, we respect international standards and are committed to CSR. ① Safety Each and every Group employee should reliably carry out each and every task and action, one by one. That is how we can develop people who enhance safety and reinforce a system that promotes safety. ② Human Resources ANA will continue to develop and enhance human resource development, as a foundation on which it can build an international network that is supported by people who are fully capable of representing the Group on the global stage in all their actions. ③ CSR ANA will implement initiatives aimed at making the ANA Group the leading environmental airline.

4) Products and Service: Achieving an ANA Brand that is No. 1 in Asia

The LCC marks a clear departure for ANA in terms of products and service. ANA will push forward with promoting the brand strategy People x Products and Service, with the aim of increasing the value of customer contacts and establishing our position as No. 1 in Asia for quality & customer satisfaction. ① The world’s highest level of customer satisfaction

(i) To provide a ’people service’ by always looking at things from the customer’s perspective, by being one step ahead of the expectations of our customers, and to provide top quality products, including the popular Inspiration of Japan, and the highest level of service to our customers worldwide.

(ii) To earn and maintain a 5 star ranking, the highest possible ranking in the SKYTRAX Airline Ranking

② The world’s best punctuality record

(i) In order to meet the discerning needs of the customer, as a network carrier ANA insists that all its employees be acutely aware of the value of time, and maintains an impeccable punctuality record.

(ii) We aim to claim the top spot in the Flight Stats On-time Performance Service Award run by Conductive Technology throughout the period this campaign is running.

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3. Consolidated Financial Statements

(1) Consolidated Balance Sheets Yen (Millions)

AssetsFY2011

as of Mar.31FY2010

as of Mar.31

Current assets 548,719 472,187

Cash and deposits 41,867 36,956

Trade accounts receivable 124,028 95,756

Marketable securities 237,104 173,874

Inventories (Merchandise) 4,924 5,445

Inventories (Supplies) 44,935 50,014

Deferred income taxes - current 30,269 38,618

Other 66,752 72,766

Allowance for doubtful accounts (1,160) (1,242)

Fixed assets 1,453,675 1,455,318

Tangible fixed assets 1,219,875 1,189,200

　Buildings and structures 112,028 117,775

　Flight equipment 751,108 714,572

　Machinary, equipment and vehicles 21,255 25,457

　Tools and fixtures 9,817 11,486

　Land 56,545 57,279

　Leased assets 27,305 35,904

　Construction in progress and

　　advance payment on aircraft purchase contracts241,817 226,727

Intangible fixed assets 71,846 74,403

Investments and others 161,954 191,715

　 Investment in securities 58,586 51,079

　 Long-term loans receivables 4,488 5,075

　 Deferred income taxes – non-current 68,887 93,116

　 Other 31,068 43,329

　 Allowance for doubtful accounts (1,075) (884)

Deferred assets 176 516

Total assets 2,002,570 1,928,021

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LiabilitiesFY2011

as of Mar.31FY2010

as of Mar.31

Current liabilities 461,045 447,591

Trade accounts payable 180,804 160,755

Short-term debt - 166

Current portion of long-term debt 115,962 115,036

Current portion of bonds payable - 20,000

Lease obligation 11,443 11,193

Accrued income tax 3,912 4,787

Accrued bonuses to employees 30,841 27,683

Provision for potential loss on antitrust proceedings 116 116

Asset retirement obligations 1,146 1,614

Other 116,821 106,241

Long-term liabilities 986,666 954,076

Bonds payable 95,000 95,000

Long-term debt payable 716,663 665,161

Lease obligation 24,589 32,263

Deferred income taxes - non-current 1,787 1,951

Accrued bonuses to employees 2,382 2,132

Accrued employees’ retirement benefits 126,075 123,400

Retirement benefit for directors and corporate auditors 591 569

Asset retirement obligations 1,027 977

Consolidation adjustment account - 392

Other 18,552 32,231

Total liabilities 1,447,711 1,401,667

Net assets

Shareholders’ equity 540,637 516,803

Common stock 231,381 231,381

Capital surplus 195,723 196,330

Retained earnings 117,622 94,892

Treasury stock (4,089) (5,800)

Other accumulated comprehensive income 8,377 3,451

Valuation difference on available-for-sale securities (140) (810)

Deferred gains or losses on hedges 9,334 5,010

Foreign currency translation adjustment (817) (749)

Minority interests 5,845 6,100


Total liabilities and net assets 2,002,570 1,928,021

25

(2) Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income Yen (Millions)



Operating revenues and expenses

Operating revenues 1,411,504 1,357,653

Operating expenses 1,086,670 1,071,003

Sales, general and administrative expenses 227,812 218,842

Operating income 97,022 67,808

Non-operating income and expenses

Non-operating income 10,695 9,096

Interest income 857 994

Dividnds income 1,595 1,603

Foreign exchange gain - 1,437

Gain on sale of assets 3,347 414

Equity in income of affiliates 526 684

Other 4,370 3,964

Non-operating expenses 39,262 39,884

Interest expenses 19,578 19,314

Foreign exchange loss 192 -

Loss on sale of assets 1,541 2,197

Loss on disposal of assets 5,868 6,872

Provision for accrued employee's retirement benefits 6,396 6,425

Other 5,687 5,076

Ordinary income 68,455 37,020

Extraordinary gains 1,581 16,882

Gain on sales of noncurrent assets 819 -

Subsidy 440 2

Reversal of provision for loss on antitrust proceedings - 16,729

Gain on transfer of benefit obligation relating to employees' pension fund

- 38

Income from compensation - 76

Other 322 37

Extraordinary losses 6,605 18,844

Loss on sale of noncurrent assets 1,209 -

Loss on retirement of non-current assets - 3,047

Impairement loss 1,746 315

Loss on sale of investment securities 282 -

Valuation loss on investment securities 10 3,536

Special retirement benefits 2,442 192

Settlement package - 6,835

Loss on adjustment for changes of accounting standard for asset retirement obligations

- 2,130

Expense reletad to antitrust proceedings - 693

Other 916 2,096

Net income before taxes 63,431 35,058

Income taxes current 4,967 4,657

Income taxes deferred 30,283 7,377

Minority interests (loss) 3 (281)

Net income (loss) 28,178 23,305

26

Consolidated Statements of Comprehensive Income Yen (Millions)



Income before minority interests 28,181 23,024

Valuation difference on available-for-sale securities 658 (2,350)

Deferred gains or losses on hedges 4,324 18,222

Foreign currency translation adjustment (69) (492)

Share of other comprehensive income of associates accounted for using equity method

8 (27)

Other comprehensive income 4,921 15,353

Comprehensive income 33,102 38,377

Comprehensive income attributable to owners of the parent 33,104 38,662

Comprehensive income attributable to minority interests (2) (285)

27

(3) Consolidated Statements of Changes in Net Assets Yen (Millions)



Shareholders' equity

　Common stock

Balance at the end of previous period 231,381 231,381

Balance at the end of the period 231,381 231,381

　Capital surplus


Changes of items during the period

Disposal of treasury stock (607) (305)

Total changes during the period (607) (305)


　Retained earnings



Dividends from surplus (5,018) -

Net income 28,178 23,305

Change of scope of equity method (430) 7,077

Total changes during the period 22,730 30,382


　Less treasury common stock

Balance at the end of previous period (5,800) (7,016)


Purchase of treasury stock (25) (56)

Disposal of treasury stock 1,721 1,373

Change of scope of equity method 15 (101)


Balance at the end of the period (4,089) (5,800)

　Total shareholders' equity



Dividends from surplus (5,018) -

Net income 28,178 23,305






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Other accumulated comprehensive income

　Valuation difference on available-for-sale securities

Balance at the end of previous period (810) 1,516


Change of scope of equity method - 52

Net changes of items other than shareholders' equity during the period 670 (2,378)

Total changes during the period 670 (2,326)

Balance at the end of the period (140) (810)

　Deferred gaines or losses on hedges

Balance at the end of previous period 5,010 (13,212)


Net changes of items other than shareholders' equity during the period 4,324 18,222



　Foreign currency translation adjustment and others

Balance at the end of previous period (749) (262)


Net changes of items other than shareholders' equity during the period (68) (487)


Balance at the end of the period (817) (749)

　Total valuation, translation adjustments and others



Change of scope of equity method - 52




Minority interest on consolidated subsiduaries



Net changes of items other than shareholders' equity during the period (255) (437)



Total net assets



Dividends from retained earnings (5,018) -

Net income (loss) 28,178 23,305







29

Note: Type and number of outstanding shares (Thousands shares)

FY2010As of Mar.31

IncreaseFY2011

DecreaseFY2011

FY2011As of Mar.31

Issued Stock

Common Stock 2,524,959 - - 2,524,959

Total 2,524,959 - - 2,524,959

Treasury Stock

Common Stock 15,903 103 6,740 9,266

Total 15,903 103 6,740 9,266

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(4) Consolidated Statements of Cash Flows Yen (Millions)



I. Cash flows from operating activities

Income (loss) before income taxes and minority interests 63,431 35,058

Depreciation and amortization 119,268 118,440

Impairment loss 1,746 315

Loss on adjustment for changes of accounting standard for asset retirement obligations

- 2,130

Settlement package - 6,835

Loss (gain) on disposal and sale of fixed assets 4,789 11,749

Loss (gain) on valuation and sale of securities 134 3,536

Increase (decrease) in allowance for doubtful accounts 210 153

Increase (decrease) in accrued employees’ retirement benefit 2,212 4,517

Interest and dividend income (2,452) (2,597)

Interest expense 19,578 19,314

Exchange loss (gain) (333) 359

Special reteirement benefit 2,442 192

Decrease (increase) in notes and accounts receivable-trade (28,756) 1,088

Decrease (increase) in other receivable (6,197) 14,835

Increase (decrease) in notes and accounts payable-trade 20,049 9,738

Other, net 42,209 6,297

Subtotal 238,330 231,959

Interest and dividends received 3,220 2,235

Interest paid (19,866) (19,137)

Payments for special retirement payments (1,979) (791)

Settlement package paid - (6,985)

Income taxes (paid) refund (5,299) (3,392)

Net cash provided by (used in) operating activities 214,406 203,889

II. Cash flows from investing activities

Payment for purchase of short-term investment securities (231,730) (106,460)

Proceeds from sale of short-term investment securities 227,770 142,860

Payment for purchase of tangible fixed assets (181,196) (188,113)

Proceeds from sale of tangible fixed assets 40,577 38,190

Payment for purchase of intangible fixed assets (15,685) (23,585)

Payment for acquisition of investments in securities (7,059) (20)

Proceeds from sale of investments in securities 602 502

Payment for loan receivable (108) (3,126)

Proceeds from collection of loan receivable 956 765

Other, net (450) (632)

Net cash provided by (used in) investing activities (166,323) (139,619)

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III. Cash flows from financing activities Increase (decrease) in short-term loans, net (166) (28,930)

Proceeds from long-term debt 180,481 161,504

Repayment of long-term debt (128,053) (109,736)

Proceeds from issuance of bonds - 19,909

Redemption of bonds (20,000) (40,000)

Repayment of finance lease obligation (11,950) (14,269)

Decrease (increase) in treasury stock 1,084 1,012

Cash dividends paid (5,018) -

Other, net (207) (86)

Net cash provided by (used in) financing activities 16,171 (10,596)

IV. Effect of exchange rate changes on cash and cash equivalents (26) (257)

V. Net increase (decrease) in cash and cash equivalents 64,228 53,417

VI. Cash and cash equivalents at the beginning of the period 201,606 148,189

VII. Cash and cash equivalents at the end of the period 265,834 201,606

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Notes to Consolidated Financial Statements All Nippon Airways Co., Ltd. and its consolidated subsidiaries

FY2011

1. Basis of presenting consolidated financial statements All Nippon Airways Co., Ltd. (the Company) and its domestic subsidiaries maintain their books of account

in accordance with the provisions set forth in the Japanese Company Law and in conformity with accounting principles and practices generally accepted in Japan, which may differ in some material respects from accounting principles and practices generally accepted in countries and jurisdictions other than Japan. The Company’s foreign subsidiaries maintain their books of account in conformity with accounting principles and practices of the countries of their domicile.

2. Summary of significant accounting policies (a) Principles of consolidation and accounting for investments in non-consolidated subsidiaries and affiliates

The consolidated financial statements include the accounts of the Company and all of its significant subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

Investments in certain subsidiaries and significant affiliates are accounted for by the equity method of accounting. The difference between the cost and the underlying net equity in the net assets at dates of acquisition of consolidated subsidiaries and companies accounted for by the equity method of accounting is amortized using the straight-line method over a period of 5 years.

Investments in non-consolidated subsidiaries and affiliates not accounted for by the equity method of accounting are stated at cost. The equity in undistributed earnings of these companies is not significant.

Certain subsidiaries have fiscal years not ending on March 31 and the necessary adjustments for significant transactions, if any, are made on consolidation.

(b) Marketable securities and investment securities

Held-to-maturity securities are carried at amortized cost. Marketable securities classified as other securities are carried at fair value with changes in unrealized holding gain or loss, net of the applicable income taxes, included directly in net assets.

Non-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined by the moving average method.

(c) Derivatives

Derivatives, such as forward foreign exchange contracts, interest rate swaps and commodity options and swaps, are used to limit exposure to fluctuations in foreign exchange rates, interest rates, and commodity prices. These are not used for trading purposes.

Derivative financial instruments are carried at fair value with changes in unrealized gain or loss charged or credited to operations, except for those which meet the criteria for deferral hedge accounting under which an unrealized gain or loss is deferred as an asset or a liability. Receivables and payables hedged by qualified forward exchange contracts are translated at the corresponding foreign exchange contract rates.

(d) Inventories

Inventories are stated at cost principally based on the moving average method. Net book value of inventories in the consolidated balance sheet is written-down when their net realizable

values decline. (e) Tangible Fixed assets and depreciation (excluding leased assets)

Property and equipment are stated at cost less accumulated depreciation. Depreciation of tangible fixed assets is computed based on estimated useful lives by the following methods: Aircraft ........................................................... Straight-line method mainly Buildings ......................................................... Straight-line method mainly Other ground property and equipment ............ Declining balance method

The Company and certain subsidiaries employ principally the following useful lives, based upon the Company’s estimated durability of aircraft: 17-20 years mainly

(f) Intangible fixed assets and amortization (excluding leased assets) Intangible fixed assets included in other assets are amortized by the straight-line method. Cost of software

purchased for internal use is amortized by the straight-line method over 5 years, the estimated useful life of purchased software.

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(g) Leased assets and depreciation Leased assets arising from transactions under finance lease contract which do not transfer ownership to

lessee are depreciated to residual value of zero by the straight-line method using the term of contract as useful life.

(h) Stock issuance costs and bond issuance costs New stock issuance costs are principally capitalized and amortized over a period of 3 years. Bond issuance costs are principally capitalized and amortized over the period of redemption.

(i) Foreign currency translation

Foreign currency receivables and payables are translated into yen at the rates of exchange in effect at the balance sheet date, and translation adjustments are included in the profit and loss account.

(j) Allowance for doubtful receivables

A general provision is made for doubtful receivables based on past experience. Provisions are made against specific receivables as and when required.

(k) Accrued bonuses to employees

Provisions are made for bonus payment for employees of the company. The accrued amounts of estimated bonus payments at balance sheet date are stated as accrued bonuses to employees.

(l) Retirement benefits

Accrued retirement benefits for employees at the balance sheet date are provided mainly at an amount calculated based on the retirement benefit obligation and the fair market value of the pension plan assets as of the balance sheet date, as adjusted for unrecognized net retirement benefit obligation at transition, unrecognized actuarial gain or loss and unrecognized prior service cost. The retirement benefit obligation is attributed to each period by the straight-line method over the estimated service years of the eligible employees. The net retirement benefit obligation at transition is being amortized principally over a period of 15 years by the straight-line method. Actuarial gains and losses are amortized from the year following the year in which the gain or loss is recognized primarily by the straight-line method over periods which are shorter than the average remaining service years of employees. Prior service cost is being amortized as incurred by the straight-line method over periods which are shorter than the average remaining service years of the employees.

(m) Retirement benefit for directors and Corporate Auditors

Accrued retirement benefits for directors and corporate auditors at the balance sheet date are provided mainly at an amount calculated based on the retirement benefit for directors and corporate auditors obligation.

(n) Provision for antitrust law

Regarding receipt of Examiner’s Report from Korean Fair Trade Commission with respect to alleged anti-competitive behavior in Air Freight Transport Services, the Company has made an estimated provision in case of possible loss arising from the proceedings.

(o) Revenue recognition

Passenger revenues, cargo and other operating revenues are recorded when services are rendered. (p) Consumption taxes

Consumption taxes are excluded from the amounts of the income statements. (q) Consolidated tax return system

The Company and certain subsidiaries applied a consolidated tax return system. (r) Regarding the accounting of Trust Type Employee Stock Ownership Incentive Plan, since FY2008

The Company introduced a “Trust Type Employee Stock Ownership Incentive Plan”. The purposes of this plan are to: increase incentives for the Company’s employees to accumulate their own property as a part of the Company's benefit plan and to endeavor to enhance the Company's corporate value; as well as to ensure stable provision of the Company's shares to the Employee Stock Ownership Group (the “ESOP Group”).

Under this plan, the “Employee Stock Ownership Trust (the “ESOP Trust”)”, which was established for the purpose of transferring the Company’s shares to the ESOP Group, acquires the Company's shares in advance in a quantity sufficient for the ESOP Group to obtain for the next five years, and subsequently sells

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those shares to the ESOP Group. Taking the conservative view and focusing on the economic substance, the accounting treatment for the

acquisition and sale of the Company’s shares is based on the assumption that the Company and the ESOP Trust form substantially a single entity given that the Company guarantees the ESOP Trust's liability. Therefore, the Company’s shares owned by the ESOP Trust as well as the assets and liabilities and income and expenses of the ESOP Trust are included in the consolidated balance sheets, consolidated statements of operations, consolidated statements of changes in net assets and consolidated statements of cash flows of the Company. The number of the Company’s shares owned by the ESOP Trust as of March 31, 2012 was 5,708,000.

Additional information

The Company and its domestic consolidated subsidiaries have adopted “Accounting Standard for Accounting Changes and Error Corrections” (Accounting Standards Board of Japan Accounting Standard No.24, December 4, 2009) and “Implementation Guidance on Accounting Standard for Accounting Changes and Error Corrections” (Accounting Standards Board of Japan Implementation Guidance No. 24, December 4, 2009).

3. Retirement benefit plans

The Company and its domestic consolidated subsidiaries have defined benefit plans, i.e., pension fund plans, tax qualified pension plans and lump-sum payment plans, covering substantially all employees who are entitled to lump-sum or annuity payments, the amount of which is determined by reference to their basic rates of pay, length of service, and the conditions under which termination occurs. In addition, the Company and certain domestic consolidated subsidiaries have also defined contribution pension plans.

The government sponsored portion of the benefits under the pension fund plans has been included in the amounts shown in the above table.

The components of retirement benefit expenses are as follows:

Yen(Millions)

FY2011 FY2010

Retirement benefit obligation (265,140) (269,579)

Plan assets at fair value 96,072 95,924

Unfunded retirement benefit obligation (169,068) (173,655)

Unfunded net transitional retirement benefit obligation 19,114 25,700

Unrecognized actuarial loss 36,812 41,327

Unrecognized prior service cost (12,933) (16,760)

Gross amount recognized (126,075) (123,388)

Prepaid pension cost - 12

Accrual enployees' retirement benefits (126,075) (123,400)

Yen(Millions)

FY2011 FY20010

Service cost 10,937 10,766

Interest cost 6,452 6,527

Expected return on plan assets (3,347) (3,466)

Amortization of net retirement benefit obligation at trasition 6,396 6,425

Amortization of accrual loss 6,717 6,284

Amortization of prior service cost (3,824) (3,831)

Net periodic pension and severance cost 23,331 22,705

Other 1,129 980

Total 24,460 23,685

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Note :

The Company and certain consolidated subsidiaries paid extra retirement benefit as extraordinary losses.

4. Income taxes The tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and

liabilities is as follows:

Yen(Millions)FY2010

Deferred tax assets:Tax loss carried forward 58,411

Accrued emplyees' retirement benefits 49,433Deferred losses on hedges 13,850Unrealized gain on inventories and property and equipment 13,720Accrued bonuses to emplyees 11,619Loss on valuation of securities 2,534Asset retirement obligations 1,026Accrued income tax 1,022Other 8,201

Total gross deferred tax assets 159,816Less valuation allowance (5,589)Total net deferred tax assets 154,227

Deferred tax liabilities:Deferred gains on hedges (17,207)Reserve for special taxation measures law (4,987)Unrealized gains on securities (1,139)Other (1,111)

Total gross deferred tax liabilities (24,444)Net deferred tax assets 129,783

Yen(Millions)FY2011 FY2010

Special retirement benefit 2,442 192

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Deferred tax assets are described on the consolidated balance sheets as follows:

Reconciliation of the difference between the statutory tax rate and the effective income tax rate for the year ended March 31, 2012 is as follows:

Note :

Amendment to the Japanese tax regulations were enacted into law on December 2, 2011. Consequently, the

statutory income tax rate utilized for deferred tax assets and liabilities expected to be settled or realized in the

period from April 1, 2012 to March 31, 2015 is 37.42% and for periods subsequent to March 31, 2015 the rate

is 35.03%. Due to the adjustment of this amendment, deferred income tax asset decreased by 8,596 million,

income tax deferred increased by 9,157million, valuation difference on available-for-sale securities increased

by 153 million, and deferred gains or losses on hedges increased by 408 million.

FY2011

Statutory tax rate 40.16 %

Reconciliation:

Entertainment expenses not qualifying for deduction 1.00 %

Inhabitants tax per capita levy 0.26 %

Decrease in deferred tax assets due to tax rate change 14.44 %

Change in valuation allowance and related adjustments 1.02 %

Other (1.31)%

Actual effective tax rate 55.57 %

Yen (millions)FY2011 FY2010

Current assets －Deferred tax assets 30,269 38,618Fixed assets －Deferred tax assets 68,887 93,116Fixed liabilities-deffered tax liabilities (1,787) (1,951)

Yen(Millions)FY2011

Deferred tax assets:Accrued employees' retirement benefits 44,682Tax loss carried forward 34,897Unrealized gain on inventories and property and equipment 12,451Accrued bonuses to emplyees 12,080Deferred losses on hedges 2,590Loss on valuation of securities 2,188Impairment loss 1,205Other 7,888

Total gross deferred tax assets 117,981Less valuation allowance (6,612)Total net deferred tax assets 111,369

Deferred tax liabilities:Deferred gains on hedges (8,180)Reserve for special taxation measures law (3,678)Unrealized gains on securities (1,193)Others (949)

Total gross deferred tax liabilities (14,000)Net deferred tax assets 97,369

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5. Leases Lessee

(a) Finance leases Finance lease transactions other than those that are expected to transfer ownership of the assets to the

lessee are accounted for as assets.

Tangible fixed lease assets include mainly aircraft, airport service vehicles, host computers, and their peripheral equipment.

Intangible fixed lease assets include software. The depreciation method for leased assets is defined as ‘2. Summary of significant accounting policies (g)

Leased assets and depreciation ’.

(b) Operating leases The rental payments required under operating leases that have initial or remaining non-cancelable lease

terms in excess of one year are as follows:

Lessor

(c) Operating leases The rental payments required under operating leases that have initial or remaining non-cancelable lease

terms in excess of one year are as follows:

6. Segment information The reportable segments of the Company and its consolidated subsidiaries are components for which

discrete financial information is available and whose operating results are regularly reviewed by the Executive Committee to make decisions about resource allocation and to assess performance.

Air transportation has a business in Domestic and International passenger operations, cargo and mail operations and other transportation services. Travel services encompass sales of tickets, planning and sales of branded travel packages using “Air transportation”. The accounting policies of the segments are substantially the same as those described in the summary of significant accounting policies in Note 2. Segment performance is evaluated based on operating income. Intra-group sales are recorded at the same prices used in transactions with third parties.

<FY2010 Apr.1 – Mar.31> Yen (Millions)

Reportable Segment

Air

Transportation

Travel

Services Subtotal

Other Total Adjustment Consolidated

Operating

revenues 1,121,272 146,945 1,268,217 89,436 1,357,653 - 1,357,653

Intra-group sales

and transfers 97,020 12,436 109,456 49,527 158,983 (158,983) -

Total 1,218,292 159,381 1,377,673 138,963 1,516,636 (158,983) 1,357,653

Segment result 60,504 2,637 63,141 4,813 67,954 (146) 67,808

Segment assets 1,848,754 36,602 1,885,356 119,350 2,004,706 (76,685) 1,928,021

Yen (Millions)

FY2011 FY2010

Current portion of operating lease obligations 883 1,153

Long-term operating lease obligations 1,907 2,188

2,790 3,341

Yen (Millions)

FY2011 FY2010

Current portion of operating lease obligations 30,297 31,362

Long-term operating lease obligations 144,896 145,595

175,193 176,957

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Other

Depreciation and

amortization

116,287 223 116,510 1,930 118,440 - 118,440

Increased in

tangible or

intangible fixed

asset

210,592 68 210,660 4,734 215,394 (3,696) 211,698

<FY2011 Apr.1 – Mar.31> Yen (Millions)

Reportable Segment

Air

Transportation

Travel

Services Subtotal

Other Total Adjustment Consolidated

Operating

revenues 1,173,596 150,180 1,323,776 87,728 1,411,504 - 1,411,504

Intra-group sales

and transfers 88,985 8,772 97,757 50,724 148,481 (148,481) -

Total 1,262,581 158,952 1,421,533 138,452 1,559,985 (148,481) 1,411,504

Segment result 88,499 3,907 92,406 4,124 96,530 492 97,022

Segment assets 1,911,248 45,922 1,957,170 129,200 2,086,370 (83,800) 2,002,570

Other

Depreciation and

amortization

117,234 161 117,395 1,873 119,268 - 119,268

Increased in

tangible or

intangible fixed

asset

194,521 33 194,554 5,169 199,723 (2,842) 196,881

Overseas sales

<FY2011 Apr.1 – Mar.31>

Japan Overseas Total

1,251,572 159,932 1,411,504 Notes: 1. “Overseas” consists substantially of America, Europe, China and Asia. 2. “Overseas sales” indicates sales of the Company and its consolidated subsidiaries in countries or regions

other than Japan.

7. Impairment loss The assets of the Company and its domestic consolidated subsidiaries are grouped by individual property

in the case of rental real estate, assets expected to be sold, and idle assets, and by management accounting categories in the case of business assets. Due to slumping performance in business assets, and falling prices of estate assets, assets expected to be sold and idle assets, the net book value of assets whose profitability and market price dropped notably were written down to the recoverable amounts and impairment loss under extraordinary losses.

〈FY2011 as of Mar.31〉

Application Category Location Impairment loss

Business assets Land Saitama 189

Assets expected to be sold Aircraft 1,551

Idle assets Software 6

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8. Per share information

Notes:

Since no residual securities exist, per share net income after residual securities adjustments is omitted.

The basis for calculating net income per share is as follows:

The basis for calculating net assets per share is as follows:

9. Subsequent event

The Company and its consolidated subsidiary Air Nippon Co., Ltd. (“ANK”) merged on April 1, 2012 in a

decision made at the meetings of their Boards of Directors held on November 25, 2011.

(a) Merger date

April 1, 2012

(b) Method of merger

This was an acquisition and merger, with the Company surviving and ANK to be dissolved.

(c) Allocation of shares related to the merger

Because ANK was a wholly-owned subsidiary of the Company, there were no issue of new shares,

increase in capital, or payment of funds resulting from the merger.

(d) Handling of new share warrants and corporate bonds with preemptive rights resulting from the merger,

ANK, the extinct company, issued no new share warrants or corporate bonds with preemptive rights.

Yen

FY2011<Apr.1 - Mar.31>

FY2010<Apr.1 - Mar.31>

Net assets per share 218.24 207.35

Net income per share 11.22 9.29

FY2011<Apr.1 - Mar.31>

FY2010<Apr.1 - Mar.31>

Net income (million yen) 28,178 23,305

Amount not allocable to common shareholders (million yen) - -

Net income available for common stock (million yen) 28,178 23,305

Weighted average number of shares of common stockoutstanding during each period (thousand shares)

2,511,841 2,507,572

Yen

FY2011<as of Mar.31>

FY2010<as of Mar.31>

Net assets (million yen) 554,859 526,354

Amounts deducted from total net assets (million yen) 5,845 6,100

(Minority Interest) (5,845) (6,100)

Total net assets related to common stock (million yen) 549,014 520,254

Number of common stocks used to determine equityper share（thousand shares）

2,515,692 2,509,055

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4. Non-Consolidated Financial Statements

(1) Non-Consolidated Balance sheets Yen (Millions)

AssetsFY2011

as of Mar.31FY2010

as of Mar.31Current assets 501,376 431,455 Cash and deposits 30,946 27,233 Trade accounts receivable 104,609 80,034 Marketable securities 237,090 173,850 Inventories 46,015 51,447 Payment in advance 5,958 7,631 Prepaid expenses 6,999 8,210 Short-term loans receivable 571 2,187 Other accout receivable 9,721 6,309

Income taxes receivable 507 761

Deferred income taxes - current 21,927 30,440 Other 37,168 43,402 Allowance for doubtful accounts (138) (53)Fixed assets 1,424,135 1,425,054 Tangible fixed assets 1,204,315 1,172,272 Buildings 99,374 104,298 Structures 1,899 1,906 Flight equipment 750,535 714,024 Machinary and equipment 18,019 21,454 Transportation equipment other than aircraft 1,902 1,782 Tools and fixtures 8,493 9,931 Land 56,333 57,174 Leased assets 26,006 35,059 Construction in progress and

　　advance payment on aircraft purchase contracts241,750 226,639

Intangible fixed assets 63,734 68,438

Facilities deposits 6 7 Software 63,078 67,725 Other 648 705 Investments and others 156,086 184,343 Investment in securities 29,704 28,661 Investment in subsidiaries and affiliates 43,520 35,913 Long-term loans receivable 7,588 8,750 Housing loans to emplyees 421 780 Long-term prepaid expenses 1,909 2,367 Deferred income taxes – non-current 51,679 75,131 Other 21,963 33,443 Allowance for doubtful accounts (700) (705)Deferred assets 175 514 Stock issurance expenses 76 383 Bond issurance expenses 98 131Total assets 1,925,687 1,857,025

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LiabilitiesFY2011

as of Mar.31FY2010

as of Mar.31Current liabilities 464,346 455,503 Trade accounts payable 162,623 148,933 Short-term debt 57,705 50,613 Current portion of long-term debt 115,385 114,376 Current portion of bonds payable - 20,000 Lease obligation 10,915 10,699 Non operating account payable 4,277 6,184 Accrued expenses 14,804 14,038 Accrued income tax 860 1,059 Deposit 1,508 1,317 Advance ticket sales 71,191 50,832 Accrued bonuses to employees 14,949 15,077 Provision for potential loss on antitrust proceedings 116 116 Asset retirement obligations 1,133 1,598 Other 8,874 20,654Long-term liabilities 946,132 914,747 Bonds payable 95,000 95,000 Long-term debt payable 715,409 663,330 Lease obligation 23,146 31,228 Accrued bonuses to employees 1,399 1,447 Accrued employees’ retirement benefits 96,110 95,226 Retirement benefit for directors and corporate auditors 209 218 Asset retirement obligations 980 934 Other 13,876 27,361Total liabilities 1,410,479 1,370,250Net assetsShareholders’ equity 505,858 482,280 Common stock 231,381 231,381 Capital surplus 195,243 195,944 Retained earnings 82,383 60,607 Treasury stock (3,149) (5,653)Valuation, translation adjustments and others 9,349 4,494 Valuation difference on available-for-sale securities 121 (515) Deferred gains or losses on hedges 9,227 5,010Total Net assets 515,207 486,774Total liabilities and net assets 1,925,687 1,857,025

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(2) Non-Consolidated Statements of Income Yen (Millions)



Operating revenues and expenses Operating revenues 1,233,839 1,191,571 Operating expenses 983,931 970,337 Sales, general and administrative expenses 161,214 161,181 Operating income 88,693 60,052Non-operating income and expenses Non-operating income 10,430 10,141 Interest income 928 1,041 Other 9,501 9,099 Non-operating expenses 38,506 38,571 Interest expenses 19,721 19,421 Other 18,785 19,150Ordinary income 60,617 31,621Extraordinary gain 513 16,743 Gain on sale of shares of affiliates 53 - Gain on sale of investment securities 19 - Subsidy 440 2 Reversal of allowance for doubtful account - 3 Reversal of provision for loss on antitrust proceedings - 16,729 Other 8Extraordinary losses 5,189 17,128 Loss on sale of property and equipment 1,173 - Loss on retirement of property and equipment - 2,794 Impairment loss 1,551 - Valuation loss on investment securities 9 3,526 Settlement package - 6,835 Loss on adjustment for changes of accounting standard for asset retirement obligations

- 2,101

Special retirement benefit 2,072 141 Expenses related to antitrust proceedings - 693 Other 382 1,036Net income before taxes 55,940 31,236 Income taxes (788) (1,777) Income taxes deferred 29,933 10,001Net income 26,795 23,012

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(3) Non-Consolidated Statements of Changes in Net Assets Yen (Millions)



Shareholders' equity

　Common stock



　Capital surplus


Changes

Disposal of treasury stock (700) (304)

Total changes (700) (304)


　Retained earnings


Changes


Net income 26,795 23,012

Total changes 21,775 23,012


　Less treasury common stock, at cost

Balance at the end of previous period (5,653) (6,970)

Changes




Balance at the end of the period (3,149) (5,653)

　Total shareholders' Equity


Changes


Net income 26,795 23,012





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Valuation, translation adjustments and others

　Valuation difference on available-for-sale securities

Balance at the end of previous period (515) 1,627

Changes

Net changes of items other than shareholders' equity 636 (2,143)

Total changes 636 (2,143)

Balance at the end of the period 121 (515)

　Deferred gains or losses on hedges


Changes

Net changes of items other than shareholders' equity 4,217 18,222



　Total valuation,translation adjustments and others






Total net assets


Changes


Net income 26,795 23,012






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5. Breakdown of Operating Revenues and Overview of Airline Operating Results (Consolidated) (1) Breakdown of Operating Revenues Yen (Millions)

Notes:

1. Segment breakdown is based on classifications employed for internal management. 2. Segment operating revenue includes inter-segment transactions.

FY2011

Apr.1- Mar.31

FY2010

Apr.1- Mar.31Difference

Domestic routes

Passenger 651,556 652,611 △ 1,055

Cargo 33,248 32,413 835

Mail 3,532 3,408 124

Subtotal 688,336 688,432 △ 96

International routes

Passenger 320,066 280,637 39,429

Cargo 87,978 86,057 1,921

Mail 3,338 3,180 158

Subtotal 411,382 369,874 41,508

Revenues from air transportation services 1,099,718 1,058,306 41,412

Other operating revenues 162,863 159,986 2,877

Subtotal 1,262,581 1,218,292 44,289

Travel Services

Package tours(Domestic) 126,296 127,627 △ 1,331

Package tours(International) 23,509 21,558 1,951

Other revenues 9,147 10,196 △ 1,049

Subtotal 158,952 159,381 △ 429

Other Businesses

Trading and retailing 90,231 93,799 △ 3,568

Information and telecommunications 26,042 24,950 1,092

Realestate and building maintenance 19,032 17,226 1,806

Other revenues 3,147 2,988 159

Subtotal 138,452 138,963 △ 511

Total operating rebenues 1,559,985 1,516,636 43,349

Intercompany eliminations (148,481) (158,983) 10,502

Operating revenue(Consolidated) 1,411,504 1,357,653 53,851

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(2) Overview of Airline Operating Results

Notes: 1. Number of domestic passengers includes code share flights (IBEX airlines co., ltd. , Hokkaido International

Airlines co., ltd., Skynet Asia Airways Co., ltd and Star Flyer Inc. and Oriental Air Bridge Co., Ltd) 2. Each result does not include the results of charter flights. 3. Domestic available cargo capacity includes code share flights with Hokkaido International Airlines Co., Ltd.,

Skynet Asia Airways Co., Ltd. and Oriental Air Bridge Co., Ltd. 4. Domestic routes’ data include results of night cargo flights. 5. International available cargo capacity includes code share flights and land transportation. 6. Available cargo capacity is the total cargo capacity available for each sector multiplied by distance traveled. 7. Cargo and mail load factor = Cargo and Mail traffic volume / available cargo capacity.

FY2011

Apr.1- Mar.31

FY2010

Apr.1- Mar.31

Year on Year

(%)Domestic routes

Number of passengers 39,020,283 40,574,438 △ 3.8

Available seat km (thousand km) 56,756,415 56,796,327 △ 0.1

Revenue passenger km (thousand km) 34,589,837 35,983,767 △ 3.9

Passenger load factor (%) 60.9 63.4 △ 2.4

Available cargo capacity (thousand ton-km) 1,805,776 1,861,365 △ 3.0

Cargo (tons) 467,348 453,606 3.0

Cargo traffic volume (thousand ton-km) 464,633 450,481 3.1

Mail (tons) 31,274 30,966 1.0

Mail traffic volume (thousand ton-km) 32,028 31,886 0.4

Cargo and mail load factor (%) 27.5 25.9 1.6

International routes

Number of passengers 5,883,224 5,168,612 13.8

Available seat km (thousand km) 34,406,341 29,768,766 15.6

Revenue passenger km (thousand km) 25,351,766 22,430,244 13.0


Available cargo capacity (thousand ton-km) 3,637,178 3,059,811 18.9

Cargo (tons) 570,684 557,445 2.4

Cargo traffic volume (thousand ton-km) 2,239,222 2,069,828 8.2

Mail (tons) 26,397 22,349 18.1

Mail traffic volume (thousand ton-km) 114,139 107,553 6.1

Cargo and mail load factor (%) 64.7 71.2 △ 6.5

Total

Number of passengers 44,903,507 45,743,050 △ 1.8

Available Seat-Km (thousand km) 91,162,756 86,565,094 5.3

Revenue Passenger-Km (thousand km) 59,941,603 58,414,012 2.6


Available cargo capacity (thousand ton-km) 5,442,955 4,921,177 10.6

Cargo (tons) 1,038,032 1,011,052 2.7

Cargo traffic volume (thousand ton kg) 2,703,855 2,520,309 7.3

Mail (tons) 57,672 53,315 8.2

Mail traffic volume (thousand ton kg) 146,167 139,439 4.8

Cargo and mail load factor (%) 52.4 54.0 △ 1.7

Ana fy2011_e

Business

Transcript of Ana fy2011_e