city of nagoya

Financial Condition of City of Nagoya

Major redevelopment of the area surrounding Nagoya Station is making progress

Port of Nagoya Nagoya Castle Honmaru Palace Boasting the nation’s busiest port in both shipping tonnage and cargo value (photo by Nagoya port authority)

October 2020 Finance Bureau, City of Nagoya Contact Funds Division, Finance Department, Finance Bureau, City of Nagoya TEL：052-972-2309 Fax：052-972-4107 Redevelopment of the Sakae Area(Renovation of Hisaya-odori Street) E-mail：[email protected] Arimatsu District with a distinct flavor of Tokaido in Edo Period city of nagoya Table of Contents

I. FY2020 Bond Issuance Plan III. Nagoya’s Fiscal Conditions FY2020 City of Nagoya’s Bond Issuance Plan…….…...... …...... 2 Overview of General Account for FY2020…...…...... 23 FY2020 Plan for Public Bond Offerings………...... 3 General Account for FY2020: Key Priority Strategies………...... 24 Highlights of FY2020 Bond Issuance Plan……...... 4 General Account for FY2020: 25 Issuance Amount of Public Bond Offerings in FY2018/2019...... 5 Operations covered by municipal bonds...………………………..….. 26 Actual Issuance of Public Bonds...... 6 General Account……………………………………………….....…….. 27 Postwar History of The City’s Public Bond Offerings...... 7 Municipal Tax Revenue...... 28 Credit Rating...... 8 Residential Tax Cut (Individual)...... II. The City of Nagoya Residential Tax Cut (Corporate)...... 29 Profile of Nagoya………...... 9 Future Fiscal Management...... 30 Population Dynamics of Nagoya………...... 10 Outstanding Municipal Bonds...... 31 Realizing Nagoya, Future City of SDGs...... 11 Primary Balance of General Account...... 32 Nagoya’s Transportation Network...... 12 Ratio for Determining Financial Soundness/ Financial Shortfall Ratio ………………………………………...…...... 33 Redevelopment of the Area around Nagoya Station...... 13 Comparison of Fiscal Condition with Other Cities...... 34 Aiming to Realize Super Terminal Nagoya!...... 14 Nagoya’s Position Among Municipal Bond Issuers...... 35 Redevelopment of the Sakae Area...... 15 IV. Appendix...... 36 Port of Nagoya with Japan’s Largest Cargo Volume and concept of Center for Manufacturing and Cultural Exchanges…...... 16 Reminder ...... Back cover Restoration of Nagoya Castle Tower and Honmaru Palace...... 17 Arimatsu District with a distinct flavor of Tokaido in Edo Period...... 18 Nagoya City Hall Main Building Designated as a National Important Cultural Property ...... 19 Characteristics of Nagoya Economic Zone...... 20 Economic Snapshot of Nagoya...... 21 Economic Size of Nagoya...... 22

1 city of nagoya Ⅰ. FY2020 Bond Issuance Plan FY2020 City of Nagoya’s Bond Issuance Plan

(Million Yen) FY2020 FY2019 YOY Change Category A B A-B Fiscal Loan Fund, loans from Japan Finance Organization Government Fundsfor Municipalities, National 37,085 44,207 -7,122 Budget, etc. Private Funds 161,888 181,068 -19,180

Public Bond Offerings 135,000 137,000 -2,000

(Flex quota) (63,000) (55,000) (8,000)

Bonds underwritten by banks 26,888 44,068 -17,180

Total 198,973 225,275 -26,302

* This plan may change, as it is an estimate at the beginning of FY2020

2 city of nagoya Ⅰ. FY2020 Bond Issuance Plan FY2020 Plan for Public Bond Offerings

(Million yen)

Monthly Plan Issue Maturities Amount Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar.

5-year bonds 10,000 10,000

10-year bonds 50,000 10,000 15,000 10,000 15,000

20yr Ultra-long-term 10,000 10,000 bonds City resident 2,000 2,000 bonds 20yr fixed Upsize 20yr fixed redemption for 10yr redemption 30yr fixed Flexible quota 63,000 20,000 5,000 20,000redemption 18,000

Total 135,000 30,000 15,000 20,000 15,000 2,000 18,000 10,000 15,000

* The figures from April to October indicate actual results and figures in or after November indicate plans as of October 2020 * Monthly total figures do not include those of 5-year bonds

3 city of nagoya Ⅰ. FY2020 Bond Issuance Plan Highlights of FY2020 Bond Issuance Plan

1. Expected amount of city bonds The amount of city bonds to be issued in this fiscal year is expected to decrease by approx. 26.3 billion yen from the previous fiscal year, of which approx. 7.1 billion yen from public funds and approx. 19.2 billion yen from private funds. The amount of publicly offered bonds will remain the same as that of the previous fiscal year(135 billion yen) 2. Bond management focusing on market situations The city continues making efforts on bond management focusing on market situations (1) Implementation of negotiated style deals The city continues to emphasize the importance of communication with the market, utilizing negotiated style deals for 5-year, 10-year(planned in June and December) and ultra-long-term bonds. (2) Securing of flexible quota: 63 billion yen The flexible quota for this fiscal year is increased by 8 billion yen from the previous fiscal year to 63 billion yen in order to achieve flexible and agile bond issuances in response to the market environment. (3) Proactive investor relation management In addition to communication with investors at the time of bond issuance, the city promotes IR activities including individual and group meetings with investors, considering the coronavirus(COVID-19) spread 3. Continuous efforts in developing new initiatives The city, which launched a 30-yr bond with scheduled redemption in FY2018 and a 20-yr bond with fixed redemption in FY2019, continues to consider various financing including such new measures for the city, reflecting market needs 4 city of nagoya Ⅰ. FY2020 Bond Issuance Plan Issuance Amount of Public Bond Offerings in FY2018/2019 Issuance Amount for FY2019 (Million yen) Monthly Plan Category Amount Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Medium-term bonds 10,0005yr 10,000

10-year bonds 60,000 10,000 20,000 10,000 20,000

Ultra-long-term bonds 10,00020yr 10,000

City resident bonds 2,000 2,000 Upsize 20yr fixed 20yr fixed redemption 10,000 Upsize Flexible quota 55,000for 20yr 10,000redemption 15,000 10,000 for 5yr 30yr fixed redemption 10,000 Total 137,000 20,000 10,000 15,000 20,000 2,000 20,000 30,000 20,000

Issuance Amount for FY2018

Monthly Plan Category Amount Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Medium-term bonds 10,0005yr 10,000

10-year bonds 60,000 10,000 20,000 10,000 20,000 30yr fixed Ultra-long-term bonds 20,00020yr 10,000redemption 10,000

City resident bonds 2,000 2,000 Upsize Upsize Upsize 10,000 for 10yr Flexible quota 40,000for 20yr 10,000for 5yr 10,000 10,000 10yr fixed redemption Total 132,000 20,000 10,000 20,000 22,000 10,000 30,000 20,000

5 city of nagoya Ⅰ. FY2020 Bond Issuance Plan Actual Issuance of Public Bonds

Amount of Publicly Offered Bonds since FY2011  The bonds that the city (Billion Yen) 164 offers are all negotiated 160 10 140 10 137 140 139 140 style and mainly in 10yrs, 140 132 15 19 12 10 10 10 116 12 119 10 together with shorter or 120 15 15 20 10 13 26 13 30 longer tenor to fund in a 100 14 12 12 10 29 10 10 35 15 37 11 20 balanced manner. 10 10 80 10 10 10 20 15 20  Since FY2009, the city 60 has introduced the flex 84 40 72 75 75 73 75 70 quota to enable flexible 63 60 20 responses to changing 0 financial situations. 2011 2012 2013 2014 2015 2016 2017 2018 2019 (FY)  Trading volume of the 10yr 3yr 5yr 6yr 7yr 12yr 15yr 20yr 30yr 10yr fixed redemption 20yr fixed redemption 30yr fixed redemption bonds exceeds JPY1trn *The amount of issuance by fiscal year Outstanding Amount by Maturity as of the End of FY2019 (Billion Yen) 700

600 Total 1,416.5 Billion Yen 511.8 534.0 4.8 28.0 500 30.0 10.0 105.0 400 102.0 27.0 12.0 300 272.0 30.0 200 65.0 365.0 362.0 98.7 100 177.0 19.7 79.0 0 5yrs or less More than 5yrs More than 10yrs More than 20yrs and 10yrs or less and 20yrs or less 10yr 5yr 7yr 12yr 15yr 20yr 30yr 10yr fixed redemption 20yr fixed redemption 30yr fixed redemption 6 city of nagoya Ⅰ. FY2020 Bond Issuance Plan Postwar History of The City’s Public Bond Offerings

1966

Started to issue 2003 national government bonds Started to issue city resident bonds 2012 2005 Started to issue 3, 6 and Started to issue 15yr bonds 30yr bonds 2014 1909 1952 Started to issue 10yr fixed Issued foreign bonds Started to issue redemption bonds denominated in pound 2000 publicly offered 2018 sterling bonds Started to issue 5yr bonds Started to issue 30yr fixed 2004 redemption bonds Recent Issues of the city’s Public Bond Offerings Started to issue 20yr bonds Issue amount Maturity April, 2006 Year/Month Series Coupon (Billion yen) (years) Adopted negotiated 2010 2017 May 22nd 20yr 20 20 0.431% style for all issuance Outstanding volume 2013 Issue 500th10yr th Jun 508 10yr 10 10 0.060% reached 1 trillion yen Started to issue 2019 Aug 1st 20yr fixed redemption 15 20 0.170% 7 and 12yr bonds Started to issue 20yr fixed Sep 509th 10yr 20 10 0.050% redemption bonds Oct 17th city resident bonds 2 5 0.08% FY2019 2nd 20yr fixed redemption 10 20 0.156% Nov 2nd 30yr fixed redemption 10 30 0.358% 510th 10yr 10 10 0.105% Dec 27th 5yr 20 5 0.001%

th Mar 511 10yr 20 10 0.075%  Nagoya started public bond offerings in 1952. The city’s bonds 23rd 20yr 10 20 0.377% May have a longer postwar history than Japanese government bonds rd 3 20yr fixed redemption 20 20 0.206%  Before the war, in 1909, Nagoya issued foreign bonds th FY2020 Jun 512 10yr 15 10 0.150% denominated in pound sterling th Aug 4 20yr fixed redemption 20 20 0.228%  Nagoya has diversified maturities since 2000 Sep 513th 10yr 15 10 0.140%

7 city of nagoya Ⅰ. FY2020 Bond Issuance Plan Credit Rating

 Nagoya has obtained a rating from Moody’s Investors Service Inc.(currently Moody’s Japan K.K.) since Nov 7, 2007. Rating by Moody’s  Along with the downgrading of Japan government’s rating from Aa3 to A1 on December, 2014, the City of Nagoya’s and other municipalities’ rating were also changed A1 to A1. (Stable) = Same as Japanese Government Bond

Basis of rating BIS Risk Weight  Strong tax revenue base as a hub of the Tokai region Government bonds 0% with strong economic power City bonds 0% (Nagoya city bonds)  Strong liquidity Government- 0%  The central government’s robust involvement in local guaranteed bonds FILP agency bonds 10% fiscal management and solid intuition framework Bank debentures 20% including the fiscal coordination system

8 city of nagoya Ⅱ. The City of Nagoya Profile of Nagoya

Nagoya Overview Ordinance designated Area 326.50k㎡ (Oct 1, 2019) #15 city

Population 2,327,557 (Oct 1, 2019) #3

Households 1,117,913 (Oct 1, 2019) #3

Daytime 2,589,799 (Oct 1, 2015) #3 population Day/Night 112.8% (Oct 1, 2015) #2 population ratio Business 126,879 (Jun 1, 2016) #2 establishments Employed 1,417,153 (Jun 1, 2016) #3 individuals Gross City JPY13,586.0bn (FY2017) #3 Product

Do you know the mark ? The above-shown symbol, with the Japanese numeral 8 in a circle, was designated as City of Nagoya’s city emblem in 1907. This symbol is believed to have originally been a distinguishing mark used by Owari Branch of Tokugawa Family—“numeral eight in a circle” mark. A distinguishing mark generally refers to a mark that distinguishes a family or a group from others. The numeral eight in a circle mark was Owari Brach’s unofficial crest used on its servants’ lanterns, as rank- and-file members’ family crests, by logistics corps, etc. (The Branch’s official family crest was designed with leaves of asarum caulescens, a kind of wild ginger.) 9 city of nagoya Ⅱ. The City of Nagoya Population Dynamics of Nagoya

 Nagoya has a population of Population Shift for Nagoya Projected Population

2,327,557 as of October 2019, (Million people) which is the third largest among *Indexed to 100 using the population in 2015 the ordinance-designated cities. 110 0.02.4 This number was recorded as historical high, after 23 consecutive years’ growth since 105 1997.  According to the city’s estimate 2.30.0 100 (case 1), the birth rate and population outflow is expected to remain at the current level. 95  The city’s estimate (case 2) 2.20.0 shows that the targeted birth 90 rate for young generation will rise to 1.8% in 2030 and excessive population outflow will 85 halve from the current level of 0.02.1 around 3,000-4,000/year. 80  The city’s estimate (case 3) shows that the targeted birth rate will rise to 2.07% in 2040 2.0 75 and excessive population 0.0 2015 2020 2025 2030 2035 2040 2045 2050 2003 2005 2007 2009 2011 2013 2015 (Year) outflow will be resolved. (Year) Nagoya (case no.1) Nagoya (case no.2) Nagoya (case no.3) Whole Japan * As of October 1 of each year * Nagoya city’s population data is prepared based on the estimate described in “The City of Nagoya Comprehensive Strategy for Revitalizing Towns, People and Work (March 2020)”(actual figures by FY2018 ) * The national population data is based on National Institute of Population and Social Security Research, “Population Projections for Japan(estimates in 2017)” 10 city of nagoya Ⅱ. The City of Nagoya Realizing Nagoya, Future City of SDGs

Nagoya was selected as SDGs Future City  In July 2019, Nagoya was selected as SDGs Future City which proposes initiatives to achieve sustainable development goals  Ahead of the 26th Asian Games in 2026 and start of operations of Linear Chuo Shinkansen in 2027, Nagoya area seize a great opportunity to grow dramatically over the next 10 years. Nagoya, as “SDGs Future City”, builds a sustainable and tough city, in harmony with economy, society and environment, where “no one to be left behind” SDGs Future City Plan（overview） Integrated efforts connecting 3 dimensions：Future creation project based on Important regional issues and Nagoya’s efforts for solutions unparalleled Nagoya’s “Collaboration Power”～Promotion of SDGs Future Creation 【Economic Problem】 Club in Nagoya Open University of the Environment～ No. of participating firms in “Challenge project to Sustainable development of Nagoya economy in line with “Linear Era” 【Project Image】 UP！ low carbon and advanced smart mobility city” Sustainable development of ＜Projects toward resolution＞ Creation of hub of exchange to Nagoya economy in line with  Set-up and operation of innovation base “Linear Era” win int’l intercity competition  Nagoya Mirai Innovators and Women Startup Lab. PJT No. of start-ups UP！  Nagoya vitalization PJT through easy-to-work companies Economy Society 【Social Problem】 Creation of hub of exchange to win int’l intercity competition Future creation project based on ＜Projects toward resolution＞ unparalleled Nagoya’s “Collaboration Power”  Social implementation of advanced smart mobility ～Promotion of SDGs Future Creation Club ～  in Nagoya Open University of the Environment Introduction of new Smart Roadway Transit(SRT) ➊ Challenge project to low carbon and advanced smart mobility city  Urban development for opening of Linear Chuo Shinkansen ➋ Succession project by children of the next generation

% of local small firms working on Carbon footprint(automotive) 【Environmental Problem】 environmental activities UP！ DOWN！ Realization of low carbon and environmental harmony city ＜Projects toward resolution＞ No. of organizations supporting Nagoya  Promotion of hydrogen energy utilization UP！ Environment Total no. of passengers(per Open University of day) of city railway and city the Environment  Promotion of low-carbon life style and business style bus UP！ Realization of low carbon and  Mainstreaming biodiversity environmental harmony city 11 city of nagoya Ⅱ. The City of Nagoya Nagoya’s Transportation Network

【2019】 The port supports INT:441 flights/week; industry and lives of 37 cities citizens in the Central DOM:89 flights/day; The operation of the Linear Chuo Japan region where 19 cities Shinkansen Line (between Tokyo and World’s leading ※As of June 14, 2019 industry of 【2020】 Nagoya), which is to be started in 2027, automobiles, INT:0 flights/week will enable travelling between the two machineries and Chubu Centrair ※As of June 1, 2020 cities in approx.40 minutes. Port of Nagoya aerospace gather International Airport DOM:32 flights/day; 13 cities ※As of June 20, 2020

28min

12 city of nagoya Ⅱ. The City of Nagoya Redevelopment of the Area around Nagoya Station

N Overview 1 2 3 4 5 6 7

The area surrounding Nagoya Station, 15 which will be the terminal for the Linear Chuo Shinkansen upon its opening, along with the Sakae area, have been designated as an urgent urban renewal Aichi Industry & Labor Meieki 4-4 South district Nayabashi West Meieki 4-27 district Meieki 1-1 project Ushijima Minami district Meieki 4-7 district Center (Nagoya Cross Court district (Mode Gakuen Spiral North district 1 (Nagoya Lucent Tower) (Midland Square)) area to promote the creation of bases (Wing Aichi) Tower) (Aquatown Nayabashi) Towers) (JP Tower Nagoya) for reinforcing the city’s international 8 competitiveness. The area is expanding 7 3 4 steadily. 11 2 8 9 10 11 12 Against this backdrop, major private 10 sector-led redevelopment projects such as JR Gate Tower and JP Tower 5 16 6 Nagoya are underway, bringing a lively 14 atmosphere to the area. In addition, redevelopment plans by Nagoya Railway are scheduled for the future. 12 Sasashima live 24 Meieki 3 project Meieki-4-10 project Meieki 1-1 project South district (Chukyo TV New Company Sasashima live 24 (Grand Nagoya Building) (Symphony Toyota Building) (JR Gate Tower Nagoya steps up efforts to promote Premise) (Global Gate 名駅一丁目1番計画 investment from private sector to the 南地区(ＪＲゲートタワー) city, including induction of urban 9 13 functions through relaxation of floor area ratio and review of regulations 13 14 15 16 related to development, in order to create a city center suitable for the center of Nagoya metropolitan area

Keys

Completed Commercial district to be completed in Autumn 2021 15 Residential district to be completed at the end of image(draft) 0 500m FY2022 Sasashima live 24 Noritake Forest Graphics of the building (Proposal) Nayabashi East district Meitetsu Nagoya station district redevelopment 16 Under planning (Aichi University’s Nagoya campus) ((tentative) Noritake Forest Project) (terrasse-nayabashi) project 13 city of nagoya Ⅱ. The City of Nagoya Aiming to Realize Super Terminal Nagoya!

Nagoya City promotes discussions over future vision of the station in Urban development image line with launch of Linear Chuo Shinkansen, based on its concept Anytime 【Concept】 Ordinary and extraordinary mapped out in September 2014 and traffic management policy released City’s Identity Human Activity in March 2018. “Redevelopment plan for square in front of Nagoya Common concept Eastern side History/Culture Nagoya’s uniqueness Station (temporally)” was released in January 2019 in order to show Encounter •Manufacturing culture •Mixed old and new regions Gathering current basic concept •Samurai culture •Landscape of Sakura-Dori St Cultural Exchange New Concept In March 2020, redevelopment image of Nagoya Station was released Western side Recreation •Walkable town planning Linear frontier/Diversity Excitement based on change procedures for town planning of eastern station •Appeal through music •Gateway of linear Shinkansen Photogenic square •Space creation by •Internationality advanced technology •Youth Culture etc. Urban development basic policies High function as a super terminal and New landmark as world’s You can feel city’s identity at any time and various human tourism destination activities, such as excitement, experience and encounter, take place 【Eastern side】 Nagoya’s uniqueness ｢Samurai city Nagoya｣, realized by advanced technology, providing immersive scene

Samurai culture Photogenic Advanced technology

Warlords related to Nagoya ・ Nobunaga Oda ・ Hideyoshi Toyotomi ・ Ieyasu Tokugawa etc. 【Western side】 Linear frontier/Diversity

Arriving at Nagoya People gathering from all over the world!

Walkable Gathering Gateway of linear Shinkansen Recreation

※ From the windows of Shinkansen ※ Eastern/western area will be improved based on continuous opinions from experts and citizens, while establishing its concept etc. 14 city of nagoya Ⅱ. The City of Nagoya Redevelopment of the Sakae Area

Supported by launch of “Linear Chuo Shinkansen”, the city will be redeveloped Higashisakura 1-1 into more attractive city, making the most of the individuality of the Sakae Area, district ・Scheduled for North area/TV tower area in order to enhance the attractiveness of the heart of Nagoya. completion in 2021 Redevelopment of Hisaya-Odori street （North area/TV tower area)

Project structure/term Park-PFI・20 years Project area Hisaya-Odori St to Nishiki-Dori St(around 5.45ha) Main project Maintenance/management of specific park facility Maintenance/management of targeted park facility Open timing September 2020 Site of Education Center

North area Nishiki 3-25 district Utilization of city- Learning forest zone Urban resort forest zone owned property ・Scheduled to open in Versatile zone, where Providing fun of strolling, 2026 you can enjoy relaxation, together with seasonal art recreation and the four and illumination, setting up seasons, including unique restaurants such as Japan’s largest grass cafes and restaurants with square, setting up shops terraces stimulating your curiosity

TV tower area

Communication zone Symbol zone Sakae 4-1 district Vital zone of culture (renovation of Grass zone, where you dissemination capabilities, Chunichi BLD) ・Scheduled for can use routinely and which promote visits from completion in 2024 casually for activities, within and outside of Japan, MITSUKOSHI mae gatherings and relaxation, setting up shops where you HIROBAs setting up shops with the can enjoy meals, together theme of sports with a view of water basin community providing mist performance Redevelopment of Hisaya-Odori street （South area)  Redevelopment of Hisaya-Odori street (south area) is under consideration, based on “Plan for Hisaya-Odori street”, proposed by advisory panel in March 2020. South area Through this redevelopment, further liveliness in the area is expected  In advance of full-scale development, utilizing tentatively the site of former Sakae bus terminal, “MITSUKOSHI mae HIROBAs” opened in February 2020 and created bustle around the area :Hisaya-odori Park ★:Areas reported on private redevelopment 15 city of nagoya Ⅱ. The City of Nagoya Port of Nagoya with Japan’s Largest Cargo Volume and concept of Center for Manufacturing and Cultural Exchanges

Port of Nagoya Opened in 1907, Port of Nagoya has been a maritime gateway to support the manufacturing industry and people’s livelihood in the Chubu Region. Today the Port has developed into an international port equipped with comprehensive functions, connected with 170 countries and territories and dealing with Japan’s largest cargo volume etc.  Port of Nagoya is Japan’s largest port in the following categories(2019): Category Data 2nd largest 3rd largest  名古屋港の日本一 194.44ml. Tons Cargo volume Chiba Yokohama (18th consecutive year) 12,306.8bn yen Export value Yokohama Tokyo (21st consecutive year) 17,391.6bn yen Trade volume Tokyo Yokohama (2nd consecutive year) 7,221.9bn yen Trade surplus value Kobe Yokohama (22nd consecutive year) (Photo by Nagoya Port Authority) No. of automobiles 1,443,722 units  Mikawa Yokohama LEGOLAND® Japan Resort exported (41st consecutive year) LEGOLAND® Japan opened on April Center for manufacturing and cultural exchanges 1, 2017 at Kinjo-Futo, Nagoya for the first time in Japan. Operating 8 parks The city of Nagoya has formulated a plan to develop a center for in 7 countries, LEGOLAND is a manufacturing and cultural exchanges at Port of Nagoya’s Kinjo Pier where people will conduct various exchanges with focuses on popular theme park around the world “manufacturing” and “industrial technologies.” targeting families with children aged ©2020 The LEGO Group So far, it has developed such facilities as Manufacturing and Cultural 2-12 years. Exchange Plaza and opened theme parks based on proposals from the In April 2018, a hands-on aquarium private sector. Currently it is discussing various initiatives for further SEA LIFE Nagoya and LEGOLAND development and work towards improving First Exhibition Hall of Nagoya ® Japan Hotel opened to provide International Exhibition with its exhibition area of 20,000㎡, to enhance various experiences and memories. industrial competitiveness and city attractions. The park was expanded in July 2019  SCMAGLEV and Railway Park: JR-Central’s railway museum opened in March 2011 – introducing advances to open LEGO NINJAGO World in high speed railway technologies including JR-Central’s bullet trains, the Shinkansen.

©2020 The LEGO Group

(Photo by Central Japan Railway Company (JR-Central)) ©2019 The LEGO Group 16 city of nagoya Ⅱ. The City of Nagoya Restoration of Nagoya Castle Tower and Honmaru Palace

Nagoya Castle was constructed in 1612 on the orders of Ieyasu Tokugawa as residence of the Owari lineage of the Tokugawa family and was a masterpiece of Wooden reconstruction of the original castle tower castles that was designated as national treasure for the first time as a castle, which were burned down in 1945 due to the Second World War. The restoration of the Current castle tower, which has been Honmaru Palace has been completed already and open to the public. Nagoya city is restored to reinforced concrete construction currently proceeding with the restoration of wooden structures of the castle towers by contributions from citizens after the World War II, has problems in terms of aging of facilities and earthquake resistance. In order to solve such problems and to promote further understanding of the essential value of the castle, the wooden reconstruction is underway based on Main and smaller castle tower existing historical materials including (the original) Possession of Nagoya Castle “Kinjo Onkoroku”, “Showa survey map” and Office “glass plate photograph”

Image of wooden restored castle tower

Restoration of Honmaru Palace representing technological prowess and spirit of Japan’s manufacturing practices and Tree planting by Nagoya citizens Nagoya Castle’s Honmaru Palace was a masterpiece of Japanese early-modern castle palace and one of Japan’s representative buildings along with Ninomaru Palace of Kyoto’s Nijo-jo Castle, which was designated as National treasure. The Honmaru Palace was once designated as a national treasure along with the castle tower, but it was burned down in 1945 due to the Second World War. Nagoya city has restored the Honmaru Palace since 2009, as a historic and cultural symbol of Nagoya with an aim to hand down “the importance of skills and philosophy in manufacturing and the natural environment” to the succeeding generations. The restoration of the Honmaru Place was completed in 2018. The city has promoted the project “Tree Planting by Nagoya citizens” since 2008, making up for mass wood consumption for the restoration. In Kiso town and Nakatsugawa city, more than 10 thousand Japanese cypresses have been planted in these 10 years. The city continues to grow future forest Honmaru Palace Honmaru Palace Jorakuden supported by locals in Kiso area Entrance, drive way Ichinoma 17 city of nagoya Ⅱ. The City of Nagoya

Arimatsu District with a distinct flavor of Tokaido in Edo Period

Arimatsu in Midori ward district was founded by 8 people including Shokuro Takeda, who has moved from Aqui-cho, along Tokaido route in 1608. Fabric dyeing has been invented as souvenirs for travelers on the Tokaido route and the district has been developed with the fabric dyeing. Unique townscapes has remained for more than 400 years to convey the beauty of Japan with the culture of fabric dyeing Selected as Important historical district and heritage site of Japan Arimatsu district was designated as important historical district and heritage site of Japan in July 2016. It is the first district along the road in major city to be selected as the heritage site

※Important historical district and heritage site of Japan Townscapes particularly with high value are designated as cultural properties by the government. A total of 120 districts have been selected as of December 23, 2019 Cultural Cultural buildings

Hattori Family Residence TakedaTakeda Family Family Residence Residence (Tangible Cultural Properties (Tangible(Tangible Cultural Cultural Properties Properties designated by the prefecture) designateddesignated by bythe the city) city) Designated as Japan Heritage Dashi (float) and Arimatsu Shibori(tie-dyeing)

Arimatsu story was designated as Japan Heritage in May 2019 In addition to the historical district,  Makiage Shibori  Karamatsu Nui Sibori ※Japan Heritage Arimatsu has inherited cultural Stories telling Japanese culture and traditions throughout historical attractions or regional features are industry of fabric dyeing and 3 designated as Japan Heritage by the government. A total of 104 items was selected by FY2020 floats, cultural properties designated by the city.  Title of the story Arimatsu Shibori began 400 years ago when cotton ties with thread Arimatsu, home of Shibori that touches atmosphere of the Edo period, where indigo dyeing was dyed with indigo or other swings in the wind plants. There are 100 different  Overview of the story dyeing techniques. The Arimatsu Shibori Matsuri is held on the 1st in a calm atmosphere of an old merchant house, dyed noren fabric is swinging in the wind. In Saturday and Sunday in June every Arimatsu, home of shibori, scenery of Ukiyoe in Edo period is spreading year with crowd of people in Tokaido area. “What I want is Arimatsu Dyeing. I am even dying for the dyeing ” The three floats left in Arimatsu was produced in Edo to Meiji In “Tokaidochu Hizakurige” story, Yaji, the main character, composed the poem and purchased period. The Arimatsu Dashi Matsuri Shibori towel. How about world’s famous Arimatsu shibori as a souvenir? is held on 1st Sunday in October Arimatsu’s Edo culture with 400 years of history still attracts people every year 18 city of nagoya Ⅱ. The City of Nagoya Nagoya City Hall Main Building Designated as a National Important Cultural Property  Nagoya City Hall main building that was completed in 1933 was, on December 10, 2014, Exterior appearance designated as a Nationally Designated Important Property (structure) concurrently with the Aichi Prefectural Government Office main building. Such designation of active government buildings had been unprecedented as well as of any government structures built in the early Showa Era. Nagoya City Hall main building designated as a Nationally Important Cultural Heritage Nagoya City Hall main building was constructed as a project commemorating the ascendance of Showa Emperor to the throne and has been used as a central facility of the city government for over 80 years since 1933. Uniquely designed with specialty tiles on its exterior walls and traditional interior furnishing, the building is highly recognized as an iconic early Showa-style government structure that incorporate Japanese tastes into Western architectural styles. In December 2014, it was designated as a Nationally Important Cultural Heritage concurrently with the neighboring Aichi Prefectural Government Office main building.

Highlights  Ceremony Hall  Guest room  Central Hall Pillars and stair rails are made from high quality marble Kozakura from Yamaguchi Prefecture, excess marble used for the Diet Building. The Diet Building and the City Hall main building are believed to be the only government structures that use Kozakura marble.  City Assembly Chamber  Central Hallway The Central Hall is as high as approx. 20 meters with open ceiling. Over the ground floor are a beautiful combination of arch-shaped beams. A view from upper floors show stairs around the open ceiling space that look like an illusionist picture.  North Hallway The hallway on the north side of the building is as long as approx. 100  Other characteristics meters. Such a long hallway is so rare and well-known that it is used for The main building is uniquely designed both in interior furnishing and exterior movie and TV drama filming. appearance that is intended to be in harmony with the view of Nagoya Castle *Tour of Nagoya City Hall main building Nagoya City Hall main building is open to the public on weekdays when the city government office is open—except the office spaces, Ceremony Hall, Guest Room and City Assembly Chamber. Please note that, given it is an active office building visited by many citizens and business people, any actions that could disturb office duties and/or other visitors are prohibited. Other points of attention posted on the City’s website at the URL below should be observed. Otherwise it would be our pleasure if you could enjoy visiting the main building when you are in our neighborhood (Maps of highlights of the building are distributed at the entrance). City of Nagoya’s official website, “About Nagoya City Hall main building”: https://www.city.nagoya.jp/somu/page/0000062076.html 19 city of nagoya Ⅱ. The City of Nagoya Characteristics of Nagoya Economic Zone

Nagoya ranked as one of the three major metropolitan areas in Japan

Nagoya area Tokyo area Osaka area Category Nationwide % % % nationwide nationwide nationwide Population (1,000 people) 126,167 11,320 9.0％ 36,728 ％ 18,188 ％ (CY2019) 29.1 14.4 Area GDP (Billion Yen) 533,247.3 52,730.8 9.9％ 179,069.5 33.6％ 72,087.3 13.5％ (FY2016) Private establishments (Establishments) 5,340,783 485,562 9.1％ 1,338,895 25.1％ 767,370 14.4％ (CY2016)

Employees (1,000 people) 56,873 5,432 9.6％ 17,160 30.2％ 8,168 14.4％ (CY2016) Value of shipments of manufactured goods (Billion Yen) 331,809.4 65,819.7 19.8％ 53,310.9 16.1％ 42,149.2 12.7％ etc. (CY2019) Wholesaler of yearly sales (Billion Yen) 406,820.3 37,398.0 9.2％ 195,631.7 48.1％ 60,032.1 14.8％ (CY2016) Retailing of yearly industry (Billion Yen) 138,015.6 12,484.3 9.0％ 40,852.2 29.6％ 19,195.7 13.9％ (CY2016) Annual income service industry (Billion Yen) 257,967.4 19,893.7 7.7％ 99,039.7 38.4％ 33,264.3 12.9％ (CY2016)

The export value (Billion Yen) 76,931.7 16,864.6 21.9％ 25,848.0 33.6％ 15,776.1 20.5％ (CY2019)

The import value (Billion Yen) 78,599.5 8,882.3 11.3％ 37,136.9 47.2％ 14,374.9 18.3％ (CY2019)

 The Nagoya metro area is notable for its high concentration of manufacturing. The region’s shipment of manufactured goods is the highest among the three major metro areas. 20 city of nagoya Ⅱ. The City of Nagoya Economic Snapshot of Nagoya

 Nominal gross production in Gross Product for Nagoya (FY2017) Corporate Municipal Tax by Sector (FY2019) Nagoya is largely comprised of commercial sectors wholesale,

retail and services. Others Manufacturing industries Financial and 1.0bn yen insurance 1.7% including automotive sector Others sectors Financial and Wholesale 2,140.8bn yen 7.3bn yen comprises 9.5%. insurance and 15.8% Wholesale and 12.7% sectors retail sectors  retail sectors Manufacturing industries 509.3bn yen 3,020.1bn yen 11.1bn yen Construction comprise 20.8% of the 3.7% 22.2% 19.4% Construction sector 5.4bn yen corporate inhabitant taxes sector Corporate 566.8bn yen 9.4% (assessed in the relevant year, Gross Product Municipal 4.2% Tax by corporate tax), indicating a Manufacturing 13,586.0bn yen (by corporate tax) Service sector sector Service sector 9.2bn yen higher percentage than that of (100%) Manufacturing 57.3bn yen 1,284.2bn yen 2,343.1bn yen (100%) 16.1% the city’s gross production. 9.5% 17.2% sector 11.9bn yen Real estate Transportation 20.8% and sector Transportation and communication 1,548.9bn yen Real estate sectors 11.4% communication sector 7.3bn yen sectors 4.1bn yen 12.7% 2,172.8bn yen 7.2% 16.0%

21 city of nagoya Ⅱ. The City of Nagoya Economic Size of Nagoya

 Population Population of Major Cities (Oct 2019)  As of Oct 2019, the population (10, 000 people) 400 of Nagoya was around 350 2,330,000, up 0.3% year on Same as Paris 300 year. (2,330, 000) 250  The population has increased 200 for 23 years in a row from 150 2,151,000 in October 1996, a 100 total increase of approximately 176,000. 50 0  Daytime population is slightly Kobe Sakai Kyoto Chiba

below 2.59 million (National Osaka Sendai Niigata Nagoya Saitama Sapporo Fukuoka Shizuoka Kawasaki Okayama

Census for FY2015). The ratio Hiroshima Yokohama Kumamoto Kitakyushu Hamamatsu of daytime to nighttime Sagamihara population is 112.8%, Gross Product of Major Cities (FY2017) suggesting a significant (Trillion yen) population inflow from 25 surrounding areas. JPY13,586.0bn (USD120.8bn) 20 Similar level to Morocco and Hungary  Gross product 15  The gross product of Nagoya in FY2017 was the third largest 10 among ordinance-designated cities after Osaka and 5 Yokohama. The gross product of Nagoya accounts for 0 approximately 2.5% of Japan’s Kobe Sakai Kyoto Chiba Osaka Sendai Niigata Nagoya Saitama Sapporo GDP. Fukuoka Kawasaki Okayama Hiroshima Yokohama Kumamoto * Cities not mentioned in the above graphs have not provided data for FY2017 Hamamatsu 22 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Overview of General Account for FY2020

Budget Revenue Budget Expenditure

Special grant to local By Usage By Type government etc. 3.7bn yen, 0.3% Balance Human rights Repayment brought Municipal and citizen of forward Others bond services municipal 88.8bn yen 31.8bn yen 81.9bn yen 56.6bn yen bonds 7.1% 2.5% National and 6.5% prefectural 4.5% 128.8bn yen Labor cost 10.3% Property cost 272.7bn yen treasury 106.5bn yen Citizen’s 21.7% disbursement 8.5% 290.2bn yen External economy Citizens’ 23.2% revenue source 89.2bn yen welfare and Loans Municipal tax 7.1% 73.6bn yen Local tax 468.8bn yen Revenue Health 37.4% 597.9bn yen Expenditure 527.7bn yen 5.9% Expenditure grants Improvement 1,254.4bn yen 47.7% 1,254.4bn yen 42.1% 1,254.4bn yen 6.3bn yen of urban Subsidies etc. Internal 0.5% (100%) areas (100%) 100.7bn yen (100%) revenue source 133.0bn yen 8.0% Social 785.6bn yen Local gift tax 10.6% assistance 62.6% and Education Investment expenditure prefectural tax and Safety and cost 337.0bn yen grant culture for environment 115.1bn yenPublic bond 26.9% 86.7bn yen Miscellaneous citizen of 9.2% cost 6.9% revenue 200.9bn yen the city 128.2bn yen 112.7bn yen 16.0% 118.2bn yen 10.2% Monetary User fees 9.0% 9.4% transferred and charges 31.6bn yen 43.4bn yen 2.5% 3.4%  The general account budget increased 4.5 billion yen or 100.4% from the previous year to 1,254.4 billion yen.  Municipal tax in FY2020 increased by JPY3.4bn from the previous year on top of increase in residential tax(individual) and fixed asset tax, though residential tax(corporate) decreased due to that by corporate tax, partly incorporated into national tax. Residential tax(individual) increased because of growth of individual income, and fixed asset tax increased because new or enlarged houses are newly subject to fixed asset tax.  The ratio of the City’s independent revenue sources to its total revenue is 62.6%, which is the second highest among Japan’s ordinance-designated cities.  In terms of expenditure, mandatory expenses – personnel, social assistance and government debt expenses – were 58.8%. 23 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions

General Account for FY2020: Key Priority Strategies

１. Provide comprehensive support to children and parents to ２. Realize quality welfare and establish a vigorous and develop human resource of the future energetic city Nagoya comprehensive support for Subsidies for medical expenses of pregnancy preservation for cancer patients children’s career education Promote children’s career education by arranging Newly subsidize medical expenses of pregnancy preservation for cancer patients consultants in high schools and special high schools Preparation for expanding transport available for senior citizens discount card Measures for children waiting for daycare places Prepare for expanding transport and setting up usage limits available for senior Make ongoing efforts to develop private daycare and other facilities, with the aim citizens discount card of achieving zero children waiting for daycare places by April 2021 Damage compensation systems for accidents by dementia patients Nagoya school innovation Start damage compensation systems in 2020 Design of emergency and disaster medical Provide individually optimized classes and achieve education utilizing ICT, to further center(provisional name) promote studies depending on individual interests, abilities and learning progress Enhance Nagoya City University Hospital in response to increasing ambulance transport and Diaper disposal in nursery schools medical actions in a disaster Subsidize the cost for disposal of used diapers in public and private nursery schools ４. Create liveliness and new value based on strong economy and New exercises and culture activities in elementary schools strengthen urban function in harmony with the environment

Conduct new exercises and culture activities utilizing local human resources etc. Enhancement of city functions

Home visits for supporting childcaree Enhance city functions of the areas surrounding Nagoya station and Sakae, with an eye to the opening of Linear Chuo Newly arrange home visitors for supporting childcare, to find and help homes Shinkansen Line necessary for early support Enhancing and conveying Nagoya’s attractiveness ３.Protect lives and industries from disaster and provide safe Facilitate domestic/international exchange including tourism and secure life by enhancing and conveying Nagoya’s attractiveness Disaster prevention Promotion of industrial development

Steadily promote disaster prevention measures Strengthen industrial competitiveness and revitalize regional listed in disaster response plan economies by fostering and supporting next-generation Urgent traffic safety measures industries. Promotion of sports events Take urgent traffic safety measures, in light of increasing traffic accidents caused directly by preschoolers and the Make preparation to hold and promote the 20th Asian Games to be held in Nagoya, Aichi in elderly 2026 and strengthen citizen’s health promotion and regional revitalization 24 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions General Account for FY2020: Operations covered by municipal bonds

①Citizens' welfare and health ②Safety and environment of the city Reconstruction of child welfare facilities Management of rivers and and renewal of medical equipment at incineration plants Nagoya City University Hospital Extraordinary fiscal measures bond 12.0bn yen 1. Citizens' 14.7% welfare and 6. Human rights health and citizen 3.8bn yen services 4.7% 0.8bn yen 0.9% 2. Safety and 5. Citizen's environment of ③Education and culture for citizens ④Improvement of urban areas Amount economy the city Construction of Paloma Mizuho Arena and Construction of municipal housing 3.3bn yen covered by 23.6bn yen equipment upgrade of elementary and junior and management of road bridges 4.0% municipal 28.8% high schools Bonds 81.9bn yen (100%) 4. Improvement of urban areas 26.6bn yen 3. Education and 32.5% culture for citizens 11.8bn yen 14.4% ⑤Citizen's economy ⑥Human rights and citizen services Relocation and reconstruction of First Exhibition Equipment upgrade of ward offices, etc. Hall at Nagoya International Exhibition Hall

25 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions General Account

Budget revenue

(Billion Yen) Under social assistance 1,400 expenditure, the budget scale of 1,209.7 1,249.9 1,254.4 1,200 family public assistance has been 1,072.3 1,085.6 1,171.2 1,034.5 1,049.9 1,028.8 1,025.9 1,057.4 decreasing while the support for 1,000 549 565 575 welfare and child-rearing families 800 434 469 465 459 472 502 511 583 related projects have increased Historical trend of 600 92 90 82 123 94 92 79 85 71 68 78 social assistance expenditure (Billion Yen) 400 350 569 595 598 337.0 200 477 487 472 488 500 500 507 511 298.8 300 67.3 0 270.8 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 51.5 252.5 27.0 Municipal tax Municipal bond Others (FY) 250 44.0 25.8 41.7 34.1 25.1 Budget expenditure 200 22.1 34.9 36.6 58.2 (Billion Yen) 48.7 46.1 150 31.1 1,400 1,249.9 1,254.4 24.1 1,209.7 46.1 54.9 68.5 1,200 1,171.2 100 29.6 1,034.5 1,049.9 1,028.8 1,057.4 1,072.3 1,085.6 1,025.9 418 401 1,000 391 391 392 394 396 393 50 86.3 87.9 85.6 800 412 391 383 115 81.9 90 118 114 96 128 129 128 600 89 91 73 76 89 86 129 0 140 139 137 134 132 140 139 337 2011 2014 2017 2020 400 299 308 323 (FY) 215 253 254 259 271 289 299 Livelihood Welfare 200 179 176 172 169 166 168 166 263 264 267 273 Public childcare cendter Childcare allowance 0 Medical support Others 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (FY) Labor cost Social assistance expenditure Public bond cost Investment expenditure Others 26 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Municipal Tax Revenue

(Billion Yen) 700

(612.3) (595.9) (607.1) 600.9 597.9 600 583.3 11 9 13 (515.1) (517.3) (522.4) (528.2) 83 83 521.8 510.7 516.3 82 516.5 516.3 (492.2) (491.9) (495.6) (499.3) 503.5 505.6 488.2 12 12 500 495.2 493.8 476.2 486.1 487.3 12 12 16 6 8 11 80 73 73 80 80 72 73 79 79 75 77 76 78 218 400 212 222

194 186 189 183 200 204 207 195 193 198 300 199 201 195 70 72 61

84 92 85 200 91 58 70 68 64 64 59 58 68 61

230 232 100 218 170 168 163 149 165 144 150 150 153 156 159 163 165

0 1997 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (FY)

Residential tax (individual) Residential tax (Corporate) Property tax Other taxes Decrease in revenue due to tax cuts

※All figures are of settled accounts except those for FY2020 (initial budget) ※Figures in ( ) includes tax reduction ※Residential tax(individual) after FY2018 reflects impact from tax resource transfer due to review of prefectural support of teacher salaries ※Numbers may not add up precisely to the totals due to rounding 27 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Residential Tax Cut (Individual)

Purpose of the Tax Cut and Tax Rate After the Tax Cut Changes in the impact of tax cut (Billion Yen) FY2010 FY2010 Results

 Purpose of the To support the lives of the citizens and revitalize the local economy as well as Tax Cut its future potential with respect to current economic conditions Category Per capita basis Per income/corporate tax  Tax Rate After the Tax Cut Tax cut 21.8 1.4 20.4 ① Residential Tax (individual) Residential tax (Per capita) Before tax cut 3,000yen→2,700yen 15.4 0.3 15.1 (By income)Before tax cut 6% →5.4% (individual) Residential tax ②Residential Tax (corporate) 6.4 1.1 5.3 (Per capita) Before tax cut 50,000 yen ～ 3 million yen (corporate) →45,000 yen ～ 2.7 million yen *Total settlement amounts for FY 2010 and FY 2011 (Amount of the impact) (By corporate tax) Before tax cut 14.7%, 12.3% →13.23%, 11.07% From FY2012 to FY2020 FY2012 – FY2019 Results

 Purpose of the To support the lives of the citizens and revitalize the local economy as well as its future potential with respect to current economic conditions, while contributing to Category Tax Cut Per capita basis Per income/corporate tax future regional economic development  Tax Rate After the Tax Cut Tax cut 90.3 5.9 84.4 ① Residential Tax (individual) Residential tax (Per capita) Before tax cut 3,000yen→2,800yen (individual) 65.8 1.8 64.0 (By income)Before tax cut 6% →5.7% From 2018 onwards Residential tax Before tax cut 8%→7.7% (corporate) 24.5 4.1 20.4

The tax rate is calculated by adding 5.7% of the tax rate after the previous tax *Total settlement amounts for FY 2012 – FY 2019 cut and 2% from the transfer of tax revenue sources following the review of the system of paying salaries of teachers for compulsory education, which were previously paid by the prefecture FY2020 Budget

② Residential Tax (corporate) Category (Per capita) Before tax cut 50,000 yen ～ 3 million yen Per capita basis Per income/corporate tax →47,500 yen ～ 2.85 million yen (By corporate tax) Before tax cut 14.7%, 12.3%, Tax cut 9.3 0.3 9.0 →13.965%, 11.685% From Oct. 1 , 2014 Residential tax Before tax cut 12.1%, 9.7% (individual) 9.3 0.3 9.0 →11.495%, 9.215% Residential tax --- ※ Since FY2019, corporate figures have been restructured into special tax (corporate) system to promote corporate donations (see next page)) *Initial budget for FY2020 28 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Residential Tax Cut (Corporate)

As summarized below, the City of Nagoya has restructured the 5% tax cut for residential tax cut (corporate) from the fiscal year ending on or after FY2019 April 1. This change aims to reflect changes in the socioeconomic conditions surrounding corporations after the implementation of the tax cut and to promote donations by corporations An overview of restructuring of 5% residential tax cut (corporate)

Financial resources for a special tax system to promote corporate donations Positive impact of rearrangement of 5% of residential tax cut (corporate) As a two-year temporary measure to promote donations by corporations, Nagoya City has 3.8 billion yen established a special tax exemption system for residential tax cut (corporate) based on the amount of donations made by corporations (based on FY2020 Initial Budget) Resources for Priority Policies (comprehensive support for children and parents)

An overview of a special tax system to promote corporate donations

 Corporations eligible for tax A corporation that has disbursed a total of 5,000 yen or more as a donation cut or exemption  Eligible donations Contributions to the City of Nagoya, Community Chest of Aichi Prefecture, Japanese Red Cross Aichi Chapter, or organizations designated by the City of Nagoya by ordinances  Reduction and exemption The amount equivalent to 69% of the donation amount amount (However, the upper limit is set to 2.5% of residential tax cut (corporate).

 Applicable period Fiscal year ending April 1, 2019 through March 31, 2021

Ex: Corporations whose fiscal year-end is March, 31 Fiscal year ending March 31, 2019 → tax cut Fiscal year ending March 31, 2020 Special tax system to Fiscal year ending March 31, 2021 promote corporate donations 29 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Future Fiscal Management

Policy  While giving consideration to fair burdens among generations, systematic fiscal management will be conducted so that no excessive burden is handed down to the future generations.

Setting of rules  Municipal bonds’ roles include securing fairness of burdens among generations for construction of facilities etc. that provide benefits over time, leveling of fiscal expenditure, temporary fiscal supplement for shortage in tax revenue. On the other hand, given repayment for municipal bonds is a public bond cost and places a financial burden, certain rules were formulated regarding outstanding municipal bond amount.  Furthermore, a targeted amount to be accumulated for the financial adjustment fund was set, from the perspective of securing fiscal elasticity between fiscal years. (Formulated in Sep. 2010)

Details of the rules

Details of the rules FY2019 Results FY2020 Budget Current outstanding amount of general account municipal bonds shall not exceed the 1,581.7bn yen 1,566.0bn yen peak amount in the past (1,900.9bn yen/end of FY2004) - Refer to page 31 A surplus of each fiscal year’s primary balance shall be maintained - Refer to page A surplus of 58.0bn yen A surplus of 46.3bn yen 32

Future burden ration shall not exceed 250% FY2019 results 104.8% - Refer to page 33 104.8%

Real public bond cost ratio shall not exceed FY2019 results 8.2% 18% -Refer to page 33 8.2%

10.0bn yen Balance of the financial adjustment fund shall 12.5bn yen 13.3bn yen after aim to achieve 10 billion yen supplementary budget in September 30 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Outstanding Municipal Bonds

General Account  Outstanding general (Billion Yen) account municipal bonds 2,000 1,900.9 1,875.71,839.6 1,847.8 1,849.7 decreased in FY2005 for 1,814.8 1,801.8 1,814.4 1,823.81,774.2 144 138 132 153 149 1,746.31,695.7 127 126 133 142 149 144 1,649.6 1,621.31,607.4 the first time since 153 176 137 129 1,581.71,566.0 197 217 248 292 330 118 116 110 102 1,500 354 360 97 FY1959 369 373 379 393 400 391 382  From FY2009 to FY2011, 1,000 the outstanding bonds 1,630 1,584 1,531 1,491 1,452 1,425 1,403 increased for three 1,371 1,321 1,270 1,240 1,193 1,153 1,112 1,098 1,089 1,087 consecutive years 500 (general account) due to an increase in issuance 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020(FY) of special municipal Special municipal bond: Bond to supplement a decrease in tax revenue, Extraordinary bond to supplement tax revenue, Bond to supplement a decrease in revenue (special bond), Bond to promote reforms of the third sector etc. Extraordinary fiscal measures bond bonds including Ordinary bond extraordinary financial Total Accounts

measures bonds. The (Billion Yen) 3,463.6 3,412.13,369.2 3,323.1 3,283.6 3,282.1 3,263.9 3,244.33,174.8 balance decreased 3,079.2 3,003.6 2,897.7 3,000 2,792.8 consecutively from 2,714.7 2,662.0 2,621.5 2,563.8 FY2012 (general 1,901 1,876 1,840 1,815 1,802 1,814 1,848 1,850 1,824 1,774 account) 1,746 1,696 2,000 1,650 1,621 1,607 1,582 1,566  In the total account, too, 97 93 107 113 115 116 112 105 99 87 the outstanding amount 73 63 53 1,000 46 44 43 41 has continued to 1,466 1,444 1,423 1,396 1,365 1,334 1,324 1,289 1,252 1,218 1,185 1,139 1,091 1,047 decrease since FY2011 1,011 988 957 and recorded below 3 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020(FY) trillion yen for the first time in 17 years, since Corporate account Special account General account * Settlement amounts until FY2019 and estimated amount in FY2020 1998. * Expenditure for the city university has been settled in general account since FY2006 based on its transformation into an independent administrative institution. For a comparison purpose, the balance includes the expenditure for the city university in and before FY2005 in general account expenditure. * The indicated values are rounded off to the indicated numbers and may not match the annual totals. 31 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Primary Balance of General Account

 The primary balance indicates (Billion Yen) the relationship between 100 benefits and burdens among 85 generations and is calculated 76 80 71 by the formula (Revenue- Bond 66 66 61 63 revenue) - (Expenditure-Debt 59 60 56 Expenditure). 50 63 49 49  The primary balance is 38 40 46 adequate with balanced benefits and burdens among 21 generations when expenditure 20 24 (excluding debt expenditure) 6 is covered by revenue 0 4 Revenue Expenditure (excluding bond revenue) △5 Bond Debt  △20 81.9 128.2 A negative primary balance Revenue Expenditure means the current generation (46.3) Surplus of receives more administrative △40 Excluding the primary Excluding services than their burdens and Bond 1,172.5 balance Revenue Debt 1,126.2 places a burden on future Expenditure △60 generations. Nagoya has Total 1,254.4 Total 1,254.4 maintained a positive primary balance since FY 2003 △80

(FY)

*Settlement amounts until FY2019 and estimated amount in FY2020

32 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions

Ratio for Determining Financial Soundness/Financial Shortfall Ratio

 While the restoration evaluation Ratio for Determining Financial Soundness Ratio for Determining Financial Nagoya City’s Ratio Soundness ratio in FY2019 Early Fiscal clears all criteria, the city will Category Overview rehabilitation Reconstructi standard on standard conduct systematic fiscal FY2017 FY2018 FY2019 management so that no excessive burden is handed down to the future generations Actual Ratio of actual deficit of general - - - 11.25% 20% while giving consideration to deficit ratio account to standard fiscal scale fairness in burdens among generations.

Consolidated Ratio of actual deficit of all actual - - - 16.25% 30% accounts to standard fiscal scale deficit ratio

Ratio of redemption money for principal and interest and Actual debt expenditure equivalent to such 10.5％ 9.4％ 8.2％ 25％ 35％ expenditure ratio money paid from general account to standard fiscal scale

Ratio of actual debt to be borne by general account (e.g. Future burden Outstanding municipal bonds, 125.0％ 118.2％ 104.8％ 400％ ratio planned expenditure based on debt burden) to standard fiscal scale

33 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Comparison of Fiscal Condition with Other Cities

Comparison of FY2019 internal revenue ratios and municipal tax collection rates of various cities  The city of Nagoya’s internal revenue (Internal revenue source ratio: %) (Municipal tax collection rate: %) ratio is 64.8% in FY2019, the second 99.40 80.0 99.16 highest among ordinance-designated 98.94 98.93 98.94 75.0 99.24 98.73 98.58 99 cities 98.24 98.53 98.33 98.39 98.43 70.0 97.94 97.81  Municipal tax collection rate is 65.8 98.56 97.53 65.0 64.8 98.22 98 99.40%, the highest among the 60.5 60.3 97.74 60.0 58.7 58.5 58.3 58.0 97.71 ordinance-designated cities 97 55.0 53.9 53.4 53.1  The ratio of independent revenue sources is.... 51.7 The ratio of revenue sources that a municipality is 50.0 49.1 48.6 48.2 46.4 45.6 96 able to raise independently (such as city tax, fees 45.0 43.6 43.1 and charges) to the total revenue. Generally 40.2 speaking, the higher the ratio of independent 40.0 95 revenue sources, the more stable the fiscal structure is and the more solid the fiscal base is. 35.0 30.0 94  Collection rate is …

An indicator of actual tax collection indicating the Kobe Sakai Kyoto Chiba Osaka Sendai Niigata

ratio of actual tax revenue to municipal tax Nagoya Saitama Sapporo Fukuoka Shizuoka Kawasaki Okayama

receivable. Hiroshima Yokohama Kumamoto Kitakyushu Hamamatsu Internal revenue source ratio Sagamihara Municipal tax collection rate Comparison of FY2020 financial capability indices (3-year average) among various cities  1.1 The city’s financial capability index(3- 1.028 year average) is the second highest 0.989 0.980 1.0 0.967 among the ordinance-designated 0.937 0.932 0.911 0.895 cities 0.9 0.888 0.884 0.868  Financial capability index is.,,, 0.826 0.813 0.810 0.8 0.789 0.788 The value obtained by dividing the standard 0.738 revenue by the standard expenditure that is used 0.712 0.707 to calculate the ordinary tax revenue allocated to 0.7 0.696 a municipality. A value exceeding 1 in a single year would indicate the municipality’s financial 0.6 capacity to conduct standard fiscal management without depending on any ordinary tax allocated to the municipality. The indicated value represents 0.5 the average of three years. Kobe Sakai Kyoto Chiba Osaka Sendai Niigata Nagoya Saitama Sapporo Fukuoka Shizuoka Kawasaki Okayama Hiroshima Yokohama Kumamoto Kitakyushu Sagamihara Hamamatsu 34 city of nagoya Ⅲ. Nagoya’s Fiscal Conditions Nagoya’s Position Among Municipal Bond Issuers

 There are 58 issuing organizations Comparison of Municipal Tax Revenue of Issuing Organizations in FY 2018 of public subscription municipal (Billion Yen) bonds (nationwide) in Japan. Of 1,8005,600 5,463 those, 38 are prefectures and 20 1,6005,400 are ordinance-designated cities in 1,400 1,278 1,265 FY2020 1,200 1,188

 1,000 904 Among those, Nagoya ranks 12th 824 819 737 715 in municipal tax revenue and 16th 800 676 631 583 545 in population. Among ordinance 600 422 373 353 333 326 400 324 321 301 designated cities, Nagoya ranks 292 291 290 284 282 280 276 276 265 third after Yokohama and Osaka 200 City. Only 9 prefectures exceed 0

Nagoya in terms of municipal tax Tokyo Miepref. Kobecity Gifupref. Hokkaido Kyoto city Aichipref. Osakacity Kyoto pref. Chiba pref. Osakapref. Hyogopref. Miyagipref. Nagoya city Ibarakipref. Niigata pref. Saitama city Tochigipref. Sapporo city Gunma pref. Fukuoka city Naganopref. Saitama pref. Kawasakicity

revenue, and only 13 prefectures Fukuoka pref. Shizuokapref. Yokohamacity Hiroshima pref. Kanagawa pref. exceed Nagoya in terms of Fukushima pref. population. Comparison of Census Population of Issuing Organizations in FY 2019 (October 1)  In terms of municipal tax revenue, (Million people) 16 9 organizations in the top 30 are 13.94 ordinance-designated cities while 14 6 organizations are ordinance 12

designated cities in terms of 10 9.20 8.82 census population. Nagoya’s 8 7.55 7.34 6.28 5.46 financial capability and population 6 5.27 5.11 compare favorably with those of 3.75 3.64 4 2.87 2.81 2.74 2.58 2.33 2.30 2.22 2.05 1.99 1.97 1.94 1.94 1.89 prefectural governments 2 1.84 1.78 1.75 1.60 1.59 1.53 0 Tokyo Miepref. Gifupref. Hokkaido Aichipref. Oskapref. Osakacity Kyoto pref. Chiba pref. Hyogopref. Miyagipref. Nagoya city Ibarakipref. Niigata pref. Tochigipref. Sapporo city Gunma pref. Fukuoka city Naganopref. Saitama pref. Kawasakicity Fukuoka pref. Shizuokapref. Yokohamacity Okayamapref. Hiroshima pref. Kanagawa pref. Kumamotopref. Fukushima pref. Kagoshimapref. 35 city of nagoya

【Appendix】

This fusuma painting is on display at Nagoya Castle Honmaru Palace 36 city of nagoya 【Appendix】 Table of Contents

IV. Appendix Management Status of Extra-governmental Organizations Municipal Bond Issuance of General Account and Dependence for FY 2019 (Three Main Organizations)...... 45 on Public Bonds ...... 38 Relations with Nagoya City Land Development Corporation.. 46 Public Bonds Redemption Fund (Bullet Bonds)...... 39 Relations with Nagoya City Housing Supply Corporation...... 47 Settlement of General Account for FY 2019...... 40 Relations with Nagoya Expressway Public Corporation...... 48 Settlement of Special Account for FY 2019 ...... 41 Financial Statements for FY 2018 (General Account, etc.)..... 49 Settlement of Public Enterprise Account for FY 2019………… 42 Financial Statements for FY 2018 (All Accounts)...... 52 Management Status of Public Enterprises in FY 2019……….. 43 FY2018 Consolidated Financial Statements...... 53 Management Status of Extra-governmental Organizations……44 Fiscal-related Data...... 55

37 37 city of nagoya IV. Appendix Municipal Bond Issuance of General Account and Dependence on Public Bonds

 In FY2010, municipal bond issuance (Billion Yen) (%) increased by issuing special bonds including extraordinary fiscal policy 11.9% 1,800 12.0% bond, revenue compensation bond and 180 12.0 third-sector reform promotion bond to cope with sluggish economy. After that, issuance and dependence on public 1,500150 10.0%10.0 9.1% debt declined as construction projects completed and extraordinary fiscal 124.0 8.2% policy bond issuance decreased. 1,200 7.7% 8.0% 120 14.0 7.3% 8.0  After FY2016, dependence on public 6.6% 6.5% 6.5% debt remained at the same level, due to 93.0 6.1% 5.9% 5.7% decrease of extraordinary fiscal policy 90090 83.6 81.9 6.0%6.0 46.1 81.7 79.5 80.6 bond and increase of construction 4.1 75.9 1 1 12.0 projects bond for construction of refuse 40.4 65.6 68.9 12.4 21.7 28.0 60.3 1 incineration plants etc. 60060 38.0 28.0 4.0%4.0 19.2 28.6 22.0

68.1 69.8 30030 63.9 2.0%2.0 53.7 57.8 52.6 47.9 46.3 41.5 38.3 40.3

00 0.0%0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (FY) General Bonds of extraordinary Special 通常債 臨時財政対策債 特例的な市債 Dependence公債依存度 Rate Bonds financial measures Bonds

* Special Bonds： Bonds for cutting tax (including special exception), temporary tax revenue and third sector business * Settlement amounts until FY2019 and estimated amount in FY2020

38 city of nagoya IV. Appendix Public Bonds Redemption Fund (Bullet Bonds)

(Billion Yen)  In order to secure future redemption of 2,500 bullet bonds, part of the debt is funded in 250 229.2 a planned manner. 210.1 214.4 201.5 201.3 194.4  The volume of funds exceeded the 187.7 2,000200 184.2 187.0 186.3 182.2 drawdown between FY2010 and FY2011, but the balance started to shrink in FY2012 due to decrease in issuance 1,500150  The balance has been on an upward trend since FY2017 reflecting diversification of tenors and longer term for maturity. The 1,000100 city issued 20-yr bonds and 30-yr bonds in FY2003 and FY2005 54.5 53.4 52.8 52.1 50.8 49.6 48.0 46.8 47.0 46.9 47.0 500 50

00

-31.3 -31.6 -36.1 -34.6 -32.2 -50500 -42.6 -53.0 -50.1 -51.0 -52.1 -66.4

1,000-100 2010H22 2011 H23 2012 H24 2013 H25 2014 H26 2015 H27 2016 H28 2017 H29 2018 H30 2019 R1 2020 R2 (FY)

Drawdown取崩 Added積立 fund 残高Balance

*General account figures *Settlement amounts until FY2019 and estimated amount in FY2020

39 city of nagoya Ⅳ. 資料編 Settlement of General Account for FY 2019

(Million yen)  General account includes expenses Annual required for operations which are basis of FY2019 FY2018 the administrative operations of local increase government and excludes extraordinary account Revenue settlement A 1,235,271 1,204,833 30,438  The account is funded by citizen tax and used for citizen-related services such as Expenditure settlement B 1,223,296 1,196,614 26,682 welfare and education as well as management of basic infrastructure such as roads and parks Current account balance C=A-B 11,974 8,218 3,756

Financial resources carried forward D 4,063 3,302 760

Real balance E=C-D 7,912 4,916 2,996

※Numbers may not add up precisely to the totals due to rounding

40 city of nagoya IV. Appendix Settlement of Special Account for FY 2019

(Million yen)  Nagoya City has 12 special Account Revenue Expenditure Difference Description of operation accounts and 6 public Management of national health enterprise accounts, in National health insurance 205,421 205,421 - insurance operation addition to the general account. Medical care for people aged 75 and 54,599 53,368 1,231 Provision of medical care for people over aged 75 and over  A special account is Management of nursing care insurance Nursing care insurance 197,323 193,407 3,915 established in accordance operation with city ordinance when it is Loans to single mothers and widows 1,227 975 252 Lending to single mothers and widows necessary to separate Management of Main market, Hokubu accounting of revenue and Market and slaughterhouse 7,578 7,578 - market, Nambu market and expenditure from the general slaughterhouses account, such as a special Implementation of Nagoya Castle Nagoya Castle Tower 2,239 2,239 - operation funded by special Tower operation revenue. Loans to land readjustment 175 175 - Lending to private land readjustment associations associations Implementation of urban area Urban area redevelopment 331 331 - redevelopment operation Implementation of graveyard and park Graveyard and park development 1,324 1,324 - development operation Management of 21 funds including Fund 122,065 122,065 - education fund Implementation of pre-acquisition of Pre-acquisition of land 11,738 11,737 1 land for public facilities Consolidated management of Public bond 479,766 479,738 28 borrowing and redemption of public bonds Total 1,083,785 1,078,359 5,426

* Each amount is rounded off, so the total numbers may not agree with the sum of items shown. 41 city of nagoya IV. Appendix Settlement of Public Enterprise Account for FY 2019

(Million yen)  The public enterprise account is a special account to which Account Revenue Expenditure Difference Description of operation the Local Public Enterprise Act is applied. Management of city hospitals and Hospital 34,269 37,028 -2,759 improvement of related facilities

Management of water service Water service 46,593 43,873 2,721 operation and improvement of related facilities

Management of industrial water Industrial water 974 892 82 operation and improvement of related facilities

Management of sewerage Sewerage 72,088 69,914 2,174 operation and improvement of related facilities Management of city bus operation Bus 25,858 24,405 1,453 and improvement of related facilities Management of subway operation Subway 92,890 77,837 15,054 and improvement of related facilities

Total 272,672 253,948 18,724

* Each amount is rounded off, so the total numbers may not agree with the sum of items shown.

42 city of nagoya IV. Appendix Management Status of Public Enterprises in FY 2019

(Million yen)

Category Hospital Water service Industrial water Sewerage Bus Subway

Total assets 64,461 403,002 18,524 1,066,896 21,955 680,953 Assets Fixed assets 57,166 352,465 15,940 1,020,994 12,408 661,280 Current assets 7,295 50,537 2,584 45,902 9,547 19,674 Total liabilities 55,818 143,453 10,871 605,121 19,818 578,995 Noncurrent liabilities 46,197 101,112 6,336 420,470 12,792 401,584 Liabilities Current liabilities 7,573 21,233 273 43,624 6,528 69,914 Deferred income 2,047 21,108 4,263 141,027 498 107,498

Balancesheet Total equity 8,644 259,549 7,653 461,775 2,137 101,958 Equity Capital 19,873 254,190 7,273 447,592 33,490 296,004 Surplus -11,230 5,359 379 14,183 -31,353 -194,046 Total liabilities and equity 64,461 403,002 18,524 1,066,896 21,955 680,953

Revenue 34,269 46,593 974 72,088 25,858 92,890

Expenses 37,028 43,873 892 69,914 24,405 77,837

Net income -2,759 2,721 82 2,174 1,453 15,054

Reversal of reserve for construction - 828 92 3,576 - - and improvement

Retained earnings carried over from -10,493 3,027 279 5,145 -33,158 -214,094 previous year

Profit Profit and lossstatement Unappropriated retained earnings -13,252 3,549 274 5,749 -31,705 -199,040

* Each amount is rounded off, so the total numbers may not agree with the sum of items shown.

43 city of nagoya IV. Appendix

Management Status of Extra-governmental Organizations

(Million yen) Financial Situation Loss Municipal Loan by compensation Category Capital Total Ordinary Net investment Total debts Net assets Nagoya and loan assets profit/loss *1 profit/loss *2 guarantee Nagoya City Land Development Corporation 20 20 8,100 6,519 1,581 -7 - 6,500 Nagoya Meat Market Co., Ltd. 480 236 2,978 3,920 -942 143 108 2,767 (Public utility foundation) Nagoya City Smaller Business Mutual 120 120 28,598 28,443 155 -1 -1 International Design Center NAGOYA,. IdcN 12,147 4,005 7,169 685 6,484 -11 8 (Public utility foundation) Nagoya Meat Corporation 105 90 307 131 176 -16 -18 (Public utility foundation) Nagoya Industries Promotion 215 120 2,401 1,266 1,135 -15 -10 897 (Public utility foundation) Nagoya International Center 345 321 1,525 220 1,305 -12 -12 (Public utility foundation) Nagoya Citizens Recreation Village 10 10 160 139 21 4 4 (Public utility foundation) Nagoya Philharmonic Orchestra 10 10 642 284 358 -41 -41 (Public utility foundation) Nagoya City Cultural Promotion Agency 60 30 2,023 636 1,387 65 66 (Public utility foundation) Nagoya Convention & Visitors Bureau 1,055 500 1,491 90 1,401 -30 -30 (Social welfare corporation) Nagoya City Rehabilitation Agency 30 30 1,912 1,453 459 62 63 (Public utility foundation) Nagoya Urban Development Public Corporation 1,010 1,010 17,346 5,448 11,899 633 604 1,510 1,018 Nagoya City Housing Supply Corporation 50 50 23,511 20,089 3,422 273 264 14,435 266 Nagoya Expressway Public Corporation 318,248 159,124 1,688,010 1,369,972 318,038 - - 38,769 277,977 Wakamiya Park 1,063 602 2,988 2,123 865 -20 -19 Nagoya Guideway-Bus Co., Ltd. 3,000 1,900 1,266 1,963 -697 -17 -18 1,787 Sakae Park Promotion Co., Ltd. 1,500 788 2,586 598 1,988 79 54 Nagoya Rinkai Express Railway Co., Ltd. 100 77 7,196 1,435 5,761 519 390 (Public utility foundation) Nagoya Construction Services Foundation 30 30 473 30 443 3 -1 MEISEI SOIL RECYCLING SYSTEM Co., Ltd. 200 82 1,443 64 1,378 71 45 (Public utility foundation) Nagoya-city Education and Sports Association 120 60 3,004 1,864 1,140 -84 -84 Nagoya Water and Sewage General Service Co., Ltd. 630 600 2,129 757 1,372 196 105 Nagoya Transportation Development Organization 100 100 15,315 11,324 3,991 319 209

*Capital and municipal investment figures are as of July 1, 2020. Other figures are as of FY2019. *Each amount is rounded off, so the total numbers may not agree with the sum of items shown. *1: Numbers for public utility foundations, companies and three local public corporations, and social welfare corporations are, respectively, changes in current ordinary revenue/expenditure, ordinary profit (loss), and current revenue/expenditure. *2: Numbers for public utility foundations, companies and three local public corporations, and social welfare corporations are, respectively, changes in current general net assets, current profit (loss), and current activities revenue/expenditure difference. 44 city of nagoya IV. Appendix Management Status of Extra-governmental Organizations for FY 2019 (Three Main Organizations) (Million yen)

Nagoya City Land Nagoya City Housing Nagoya Expressway Category Development Corporation Supply Corporation Public Corporation Investment 20 50 318,038

Statement of Of those, investment by Nagoya 20 50 159,019 investment (Investment ratio) 100％ 100％ 50％

Number of investors 1 1 2

Total assets 8,100 23,511 1,688,009

Fixed assets 20 18,838 1,677,113 Assets Current assets 8,080 4,673 9,893

Deferred account - - 1,003

Total liabilities 6,519 20,089 1,369,971 Balance sheet Noncurrent liabilities 4,815 10,452 572,970 Liabilities Current liabilities 1,704 9,636 81,346

Reserves under - - 715,656 special laws Net worth 1,581 3,422 318,038 Total liabilities and net worth 8,100 23,511 1,688,009 Revenue 2,420 12,314 77,767 Profit and loss 2,420 12,051 77,767 statement Expenditure Net income (after tax) - 264 -

* Each amount is rounded off, so the total numbers may not agree with the sum of items shown. 45 city of nagoya IV. Appendix

Relations with Nagoya City Land Development Corporation

Purpose  Nagoya City Land Development Corporation conducts its activities including acquisition, management and disposal of lands for public use based on Act on Advancement of Expansion of Public Lands. Basically it stopped acquiring lands from FY2014. Nagoya City provides the corporation with financial supports including debt guarantee for loans from private-sector, loans and interest subsidy. Nagoya City will make a repurchase plan of corporation’s land and try to dissolve the possession of corporation’s land by FY 2023.

Nagoya City Land

City of Nagoya Repurchase: Development Redemption: 2.37 bn yen Corporation 2.9 bn yen Financial Redemption: Borrowing: institutions －bn yen 0.5 bn yen

Interest payment: Outstanding loan 20 mil yen 6.5 bn yen Interest subsidy Value of lands held Outstanding loans administrative cost payment: － bn yen 30 mil yen 7.58 bn yen Repurchase: - yen Ministry of Land, Infrastructure, Maximum debt Transport and Tourism guarantee New acquisition: amount for loans - yen 6.5 bn yen Land owners

 Value of land held and outstanding loan amount are actual numbers as of the end of FY2019. Other numbers are planned numbers for FY2020 budget of Nagoya City Land Development Corporation. 46 city of nagoya IV. Appendix

Relations with Nagoya City Housing Supply Corporation

Purpose  Nagoya City Housing Supply Corporation conducts its activities including supply of housing for rent and management of municipal housing on behalf of Nagoya City based on Local Housing Corporation Act and Act on Public Housing. Nagoya City provides the Corporation with financial supports including loans and compensation for losses.

Nagoya City Housing Financial City of Nagoya Supply Corporation institutions

Loans: 2.50 bn yen

Properties for rent Redemption: Redemption: 16.18 bn yen 240 mil yen 3.06 bn yen Outstanding loans Outstanding loans Interest payment: 14.44 bn yen 10 mil yen 630 mil yen Municipal housing Municipal housing management fee: managed 11.93 bn yen 62,265 units

Maximum amount of compensation for losses from loans 2.77 bn yen

 Asset balance, outstanding loan amount and the number of municipal housing units managed are actual numbers as of the end of FY2019. Other numbers are planned numbers for FY2020 budget of Nagoya City Housing Supply Corporation. 47 city of nagoya IV. Appendix

Relations with Nagoya Expressway Public Corporation

Purpose  Nagoya Expressway Public Corporation conducts activities including new construction, reconstruction, maintenance, repair and other management and related operations based on Local Road Public Corporation Act. Nagoya City provides the Corporation with financial supports including guarantee for loans, investment and loans.

Nagoya Expressway City of Nagoya Financial institutions Public Corporation Redemption: Public corporation bond etc.: 6.8 bn yen 52.2 bn yen Outstanding loans Redemption: 20.9 bn yen Interest payment: 37.94 bn yen 570 mil yen Outstanding loans Interest payment: Outstanding public 38.8bn yen 5.55 bn yen corporation bond Investment: Road assets 446.0 bn yen 110 mil yen 1,676.6 bn yen Loan: 250 mil yen Ministry of Land, Investment balance Loan: Infrastructure, 159.0bn yen 350 mil yen Transport and Tourism Nagoya’s maximum Redemption: amount of compensation 15.74 bn yen Outstanding loans for losses from loans 88.1 bn yen 316.5 bn yen

Guaranteed 50/50 by Fee revenue: prefecture and city 64.81 bn yen Expressway users

 Asset balance and loan balance are actual values as of the end of FY2019. Other values are planned value for FY2020 budget of Nagoya Expressway Public Corporation.  Fully opened on November 23, 2013 (81.2km). The loan is scheduled to be repaid by October 2044. 48 city of nagoya IV. Appendix

Financial Statements for FY 2018(General Account, etc.)(1)

In response to a request from the central government in January 2015, Nagoya City’s financial statements in and after FY2016 are prepared under a unified standard based on double-entry bookkeeping, accrual accounting and creation of fixed asset register. Balance Sheet (General Account, etc.) (As of March 31, 2019) (Billion Yen) ［Assets］［Liabilities］ Fixed assets 3,589.8 Noncurrent liabilities 1,666.2 Tangible fixed assets 2,964.5 Municipal bonds 1,452.5 Business assets 1,212.9 Long-term accrued liabilities 18.3 Infrastructures 1,736.4 Reserve for retirement benefits 186.5 Goods 15.1 Reserve for compensation for loss 7.3 Intangible assets 6.5 Others 1.7 Software 2.2 Current liabilities 202.9 Other 4.3 Current portion of municipal bonds 172.8 Investments and other assets 618.8 Accrued liabilities 1.2 Investments and capital investments 633.8 Accrued expenses - Reserve for investment loss -321.9 Advance received - Long-term delinquent receivables 6.2 Deferred revenue - Long-term loans 96.1 Reserve for bonuses, etc. 19.0 Funds 194.5 Deposits received 9.6 Others 10.6 Others 0.3 Reserve for uncollectible account -0.6 Total liabilities 1,869.1 Current assets 114.3 ［Net worth］ Cash and deposits 18.0 Fixed asset formation 3,683.7 Accounts receivable 2.8 Surplus (shortfall) -1,848.7 Short-term loans 32.0 Funds 61.9 Financial adjustment fund 16.7 Sinking fund 45.2 Inventories - Others 0 Reserve for uncollectible account -0.4 Total net worth 1,835.0 Total assets 3,704.1 Total liabilities and net worth 3,704.1 * Each amount is rounded off, so the total numbers may not agree with the sum of items shown.  The financial statements indicate the status of assets, liabilities and net worth as of the balance sheet date. 49 city of nagoya IV. Appendix

Financial Statements for FY 2018(General Account, etc.)(2)

Statement of Administrative Costs (General Account, etc.) (From April 1, 2018 to March 31, 2019) Net worth matrix (General Account, etc.) (From April 1, 2018 to March 31, 2019) Amount Composition Cost per citizen Item (Billion Yen) (Billion Yen) ratio (%) (1000 yen) Ordinary expenses 987.8 100.0 431.3 Item Total Fixed asset Surplus Operating expenses 497.5 50.4 217.3 formation (shortfall) Personnel expenses 257.6 26.1 112.5 FY2017 Ending balance of net worth 1,783.1 3,668.9 -1,885.8 Staff salary 208.6 21.1 91.1 Net administrative costs -891.4 -891.4 Provision for reserve for bonuses 19.0 2.0 8.3 Revenue 936.3 936.3 Provision for reserve for retirement benefits 12.0 1.2 5.3 Tax, etc. 685.9 685.9 Others 17.9 1.8 7.8 Subsidy from central/ prefectural governments 250.5 250.5 Property expenses, etc. 217.4 22.0 94.9 FY2018 Difference 45 45 Property expenses 114.7 11.6 50.1 Change in fixed assets, etc. (internal) 7.9 -7.9 Maintenance and repair expenses 45.5 4.6 19.9 Increase in tangible fixed assets, etc. 60.2 -60.2 Depreciation expenses 57.1 5.8 24.9 Decrease in tangible fixed assets, etc. -58.8 58.8 Others - 0.0 - Increase in loans and funds 143.3 -143.3 Other operating expenses 22.6 2.3 9.9 Decrease in loans and funds -136.8 136.8 Interest expenses 18.0 1.8 7.9 Valuation difference on assets -0 -0 Provision for reserve for uncollectible account 0.6 0.1 0.3 Cost-free transfer of jurisdiction, etc. 6.9 6.9 Others 3.9 0.4 1.7 Others --- Transfer payment 490.3 49.6 214.0 FY2017 change in net worth 51.9 14.8 37.1 Subsidies 113.0 11.4 49.4 FY2017 Ending balance of net worth 1,835.0 3,683.7 -1848.7 Social security benefits 290.4 29.4 126.8 Payment to other account 85.0 8.6 37.1 * Each amount is rounded off, so the total numbers may not agree with the sum of items shown. Others 1.8 0.2 0.8 Ordinary revenue 85.9 * Cost per citizen is based on the Usage fee and service charge 45.6 population as of the end of FY2018 Others 40.3 (2,289,598). Net ordinary administrative costs 901.9 * Each amount is rounded off, so the Temporary loss 2.7 total numbers may not agree with the Disaster recovery operation cost 0 sum of items shown. Loss from disposal/sale of property 1.4 Provision of reserve for loss on investment 1.3 Provision of reserve for compensation for loss -  The statement of administrative costs shows expenses, etc. incurred in ordinary administrative Others - services during a fiscal period. Temporary income 13.2  Gain from sale of assets 1.1 Net worth matrix indicates detail of changes in net worth during a fiscal period. Others 12.0 Net administrative costs 891.4 50 city of nagoya IV. Appendix

Financial Statements for FY 2018(General Account, etc.)(3)

Statement of Cash Flow (General Account, etc.) (From April 1, 2018 to March 31, 2019) (Billion Yen) ［Cash flow from operating activities］ ［Cash flow from investing activities］ Expenditure for operating activities 933.9 Expenditure for investing activities 202.8 Operating expenses 443.6 Payment for developing public facilities, etc. 59.6 Personnel expenses 261.8 Provisions for fund 59.4 Property costs 160.2 Investments and capital investments 4.6 Interest expenses 18.0 Loans 23.9 Other expenditure 3.6 Other expenditure 55.4 Transfer payment 490.3 Revenue from investing activities 162.3 Subsidy 113.0 Subsidy from government and prefecture 25.2 Social security benefits 290.4 Reversal of fund 40.4 Payment to other accounts 85.0 Loans recovered 39.8 Other expenditure 1.8 Revenue from sale of property 1.5 Revenue from operating activities 995.8 Other revenue 55.4 Tax revenue 685.2 Cash flow from investing activities -40.6 Subsidy from government and prefecture 225.3 ［Cash flow from financing activities］ Usage fees and service charges 45.6 Expenditure for financing activities 162.3 Other revenue 39.7 Redemption of municipal bonds 160.8 Temporary expenditure 0 Other expenditure 1.5 Disaster recovery operation cost 0 Revenue from financing activities 143.1 Other expenditure - Issuance of municipal bonds 143.1 Temporary revenue - Other revenue - Cash flow from operating activities 61.9 Cash flow from financing activities -19.2 FY2018 Cash flow 2.0 Cash, at the end of FY2017 6.4 Cash, at the end of FY2018 8.5  The statement of cash flow shows cash flow during a fiscal year in three Cash other than annual revenue and expenditure, at the end 6.5 categories of “operating,” “investing” and “financing” activities. of FY2017 Changes in cash other than annual revenue and 3.1 expenditure in FY2018 Cash other than annual revenue and expenditure, at the end 9.6 * Each amount is rounded off, so the total numbers may not agree with the sum of items shown. of FY2018 Cash deposit, at the end of FY2018 18.0 51 city of nagoya IV. Appendix Financial Statements for FY 2018 (All Accounts)

Balance Sheet (All Accounts) (As of March 31, 2019) (Billion Yen) ［Assets］［Liabilities］ Fixed assets 5,615.1 Noncurrent liabilities 2,923.6 Tangible fixed assets 5,028.6 Municipal bonds, etc. 2,370.3 Business assets 1,917.7 Long-term accrued liabilities 18.3 Infrastructures 2,903.3 Reserve for retirement benefits 234.4 Goods 207.7 Reserve for compensation for loss 9.8 Intangible assets 79.5 Others 290.8 Software 4.0 Current liabilities 338.4 Others 75.5 Current portion of municipal bonds, etc. 246.7 Investments and other assets 507.0 Accrued liabilities 38.9 Investments and capital investments 290.1 Accrued expenses - Reserve for investment loss -38.8 Advance received 7.3 Long-term delinquent receivables 9.8 Deferred revenue - Long-term loans 36.0 Reserve for bonuses, etc. 25.6 Funds 200.2 Deposits received 16.2 Others 10.8 Others 3.8 Reserve for uncollectible account -1.1 Total liabilities 3,262.0 Current assets 192.4 ［Net worth］ Cash and deposits 69.0 Fixed asset formation 5,708.1 Accounts receivable 24.5 Surplus (shortfall) -3,160.3 Short-term loans 31.0 Funds 61.9 Financial adjustment fund 16.7 Sinking fund 45.3 Inventories 2.0 Others 4.8 Reserve for uncollectible account -0.9 Deferred assets 2.3 Total net worth 2,547.8 Total assets 5,809.8 Total liabilities and net worth 5,809.8

* Each amount is rounded off, so the total numbers may not agree with the sum of items shown.

52 city of nagoya IV. Appendix FY2018 Consolidated Financial Statements

 The financial statements are also prepared on a “consolidated” basis, adding affiliated organizations’ accounts to the city’s accounts.  The scope of the consolidation is as follows:

Consolidation

All accounts Special district authorities (3)

Cross-regional federation (1)

General account Public university corporation (1)

＋ Local public corporations (3) ＋ Special account The 3rd Sector etc. (26) Corporations, etc. for which the city ＋ government is regarded as playing leading roles in management, in terms of directors dispatched / financial Public enterprise account assistance provided by the city, including corporations of which over 50% of capital is paid by the city as well as the city’s affiliated organizations.

53 IV. Appendix

Balance Sheet (Consolidated) (As of March 31, 2019)

(Billion Yen) ［Assets］［Liabilities］ Fixed assets 6,457.3 Noncurrent liabilities 3,334.2 Tangible fixed assets 6,040.5 Municipal bonds, etc. 2,695.1 Business assets 2,018.1 Long-term accrued liabilities 20.1 Infrastructures 3,812.1 Reserve for retirement benefits 241.7 Goods 210.3 Reserve for compensation for loss 9.8 Intangible assets 82.2 Others 367.5 Software 4.8 Current liabilities 440.6 Others 77.4 Current portion of municipal bonds, etc. 303.9 Investments and other assets 334.5 Accrued liabilities 56.2 Investments and capital investments 37.4 Accrued expenses 0.8 Reserve for investment loss - Advance received 8.3 Long-term delinquent receivables 10.6 Deferred revenue 0.1 Long-term loans 28.0 Reserve for bonuses, etc. 26.8 Funds 246.4 Deposits received 24.3 Others 13.3 Others 20.3 Reserve for uncollectible account -1.2 Total liabilities 3,774.8 Current assets 307.5 ［Net worth］ Cash and deposits 126.6 Fixed asset formation 6,548.8 Accounts receivable 37.6 Surplus (shortfall) -3,556.6 Short-term loans 27.7 Funds 63.8 Financial adjustment fund 18.6 Sinking fund 45.3 Inventories 45.0 Others 8.3 Reserve for uncollectible account -1.5 Deferred assets 2.3 Total net worth 2,992.2 Total assets 6,767.0 Total liabilities and net worth 6,767.0

* Each amount is rounded off, so the total numbers may not agree with the sum of items shown.

54 city of nagoya IV. Appendix Fiscal-related Data

Category 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Population 2,263,894 2,266,517 2,266,851 2,271,380 2,276,590 2,295,638 2,304,794 2,314,125 2,320,361 2,327,557 Nominal municipal gross 12,169.4 12,503.6 12,450.5 12,692.4 12,805.4 13,217.8 13,274.8 13,586.0 - - production (¥B) Municipal tax revenue (¥B) 476.2 486.1 487.3 488.2 503.5 505.6 510.7 516.3 583.3 600.9

Internal revenue ratio (%) 65.1 66.5 67.1 67.2 65.9 65.9 65.4 60.4 64.6 64.8

Financial capability index 1.041 1.013 0.985 0.983 0.984 0.985 0.987 0.985 0.985 0.985

Real public bond ratio (%) 12.1 12.0 12.1 12.6 13.0 12.7 11.8 10.5 9.4 8.2

Future burden ratio (%) 216.3 202.5 188.4 164.9 153.9 147.4 138.8 125.0 118.2 104.8 Outstanding municipal bond 1,847.8 1,849.7 1,823.8 1,774.2 1,746.3 1,695.7 1,649.6 1,621.3 1,607.4 1,581.7 balance (general account) (¥B) Outstanding municipal bond 3,283.6 3,244.3 3,174.8 3,079.2 3,003.6 2,897.7 2,792.8 2,714.7 2,662.0 2,612.5 balance (all accounts) (¥B) Municipal bond issue amount (general account/new issue) 124.0 93.0 83.6 75.9 81.7 60.3 65.6 68.9 79.5 80.6 (¥B) Municipal bond issue amount 230.7 161.3 135.7 129.9 139.0 107.0 107.7 111.0 124.5 135.7 (all accounts/new issue) (¥B) Municipal bond issue amount (total amount including 287.9 227.4 235.0 240.8 263.3 206.6 208.4 181.7 201.1 216.4 refinancing bonds) (¥B) Ordinary revenue/expenditure 99.4 99.8 99.8 100.2 99.3 97.5 99.8 99.2 98.0 99.6 ratio (%)

 Population values are as of October 1 of each year.  For municipal tax revenue and outstanding municipal bond balance, please refer respectively to p.27 and p.31 of the main document. 55 Reminder

This material explaining the fiscal condition of the City of Nagoya is intended for investors considering purchasing Nagoya City municipal bonds. It is not related to the sale or offer of any particular bond.

The contents of this material are as of October 2020, based on the settlement of accounts for FY 2019, and are subject to change in the event of future developments in the local fiscal system and/or economic conditions.