Hankyu Hanshin Holdings
Annual Report 2008

Creating New Ways to
Inspire and Satisfy

Urban Transportation
Real EstateEntertainment and Communications
Travel and International Transportation
HotelsRetailing

Contents

2 Who We Are
4 Financial Highlights (consolidated)
5 To Our Stakeholders
6 Interview with the President
6
6
7
8
10
11

The Management Integration
Business Environment
Results
Medium-term Management Plan
For Sustainable Growth
Financial Strategy and Return toShareholders

12 Medium-term Management Plan
16 Outline of Group Restructuring
18 Review of Operations
18
20
22
26
28
29
30

Overview of Core Business
Urban Transportation
Real EstateEntertainment and Communications
Travel and International Transportation
HotelsRetailing

31 Measures to expand number of STACIA smart card
holders and encourage greater use of the card

Group Management Philosophy

Mission:What we are trying to achieve

Serenity and well-being, inspiration and dreams — by delivering these to our customers,
we will create satisfaction and make a positive contribution to society.

Values:What is important to us◎Customers Come First
Everything we do is for the customer. That’s where it all starts.
◎Integrity
Build trust by always acting with integrity.
◎Foresight & Creativity
With our progressive spirit and flexible thinking, we can create a new sense of value.
◎Respect for People
Each of our employees is an invaluable resource.

32 Corporate Governance and Compliance
34 Environmental Preservation Activities
35 Financial Section
65 Corporate Information
66
70
71
72
73

Supplementary Data
Group at a Glance
Directors and Corporate Auditors
Investor Information
The Hankyu Hanshin Toho Group

Forward-looking Statements
The reader is advised that this report contains forward-looking statements regarding
the future plans, strategies, and earnings performance of Hankyu Hanshin Holdings,
Inc., which are not statements of historical fact but constitute estimates or projections based on facts known to the Company’s management as of the time of writing.
Actual results may therefore differ substantially from such statements.
Figures are rounded unless otherwise specified in the notes.

Hankyu Hanshin Holdings1Who We Are
Hankyu Hanshin Holdings, Inc.

ProfileTwo companies that have contributed to the prosperity of Kansai for
100 years join hands
Hankyu Hanshin Holdings Group is a corporate group with some 20,000 employees, created by
the October 2006 management integration of two major private railway operators based in the
Kansai region, Hankyu Holdings, Inc. and Hanshin Electric Railway Co., Ltd.
Both companies have long histories. Hanshin Electric Railway goesback to 1905, and Hankyu Corporation (forerunner of Hankyu Holdings,Inc.) began life in 1910, as Mino-Arima Electric Railway Company. Since
that time, they have helped promote the developmentof Osaka, the economic heart of west Japan, throughtheir railway operations. Over a century, they havebrought entirely new services to the region undera dual-core business model of railway operationand community development, through residential
property subdivision and leisure facility management
and operation of department stores and commercial
Hankyu Railway
facilities at termini.

Hanshin Electric Railway

Business Domains and Operating Structures
Building six core businesses under the holding company structure
As a pure holding company, Hankyu Hanshin Holdings, Inc. operates four core companies, Hankyu Corporation, Hanshin
Electric Railway Co., Ltd., Hankyu Hanshin Express Holdings Corporation and Hankyu Hanshin Hotels Co., Ltd. It is active insix core business domains, Urban Transportation, Real Estate, Entertainment and Communications, Travel and International
Transportation, Hotels and Retailing. We see our mission as delivering serenity and well-being, inspiration and dreams to
our customers, to create satisfaction and make a positive contribution to society.

Hankyu Hanshin Holdings
Urban
Transportation

Real EstateEntertainment andCommunications

Hankyu Corporation
Hanshin Electric Railway

2

Annual Report 2008

Retailing

Travel andInternational
Transportation

HotelsHankyuHanshin
Express
Holdings

HankyuHanshinHotelsEarnings Structure
Urban Transportation and Real Estate are main drivers
Of our six core businesses, the main drivers are the Urban Transportation and Real Estate segments, accounting for about
half of all revenues from operations and 80% of operating income.
In the Urban Transportation segment, railways account for most earnings, while rental businesses generate mostearnings in the Real Estate business. Both businesses are centred on the office and commercial districts of Umeda (downtown Osaka), assuring stable cash flows as this is a major business area in a part of Kansai with a high population density.
Year ended March 2008 (consolidated basis)

Revenues from Operations: ¥752.3 billion
Operating Income:¥90.7 billion■ Urban Transportation

Revenues from Operations

194.9(¥ billion)

179.7

95.3

94.4

69.2

120.8 44.8

■ Real Estate■ Entertainment and Communications

1.3 0.9
Operating Income

33.2(¥ billion)

0

10

0

20

1000

30

39.5

2000

40

3000
50

4000

60

70

5000

80

8.5 3.2 2.7
6000
90■ Travel and International Transportation■ Hotels■ Retailing■ Other(%) 8000
7000

100

Note: Revenues from operations and operating income for each segment are before intersegment elimination.

Group Strengths
Two national brands that increase value along Group railway lines and deliver inspiration and dreams
The Group delivers inspiration and dreams through the Hanshin Tigers professional baseball team/Hanshin Koshien Stadium
and the Takarazuka Revue, both of which are popular and enthusiastically supported not only in Kansai but throughout
Japan, giving them uniquebrand recognition. These
two powerful attractions arestrengths that none of ourrivals have, and they contribute strongly to brand value.

©Hanshin Tigers©Takarazuka Revue Company

Hankyu Hanshin Holdings3

Financial Highlights (consolidated)
Statutory disclosure(Thousands of U.S. dollars)*1(Millions of yen)
2

2007*

2008

2008

¥ 743,377¥ 752,301$ 7,523,010

Operating income

87,00390,725907,250

Net income

36,619628

6,280

Capital investments

53,795

134,307

1,343,070

2,366,694

2,348,476

23,484,760

522,286

476,639

4,766,390

31.84

0.50

0.01

—

0.41

0.00

5.00

5.00

0.05

For the year:
Revenues from operations

At year-end:
Total assets
Total net assets
Amounts per share (in yen and dollars):
Net income - basic
Net income - diluted
Cash dividends applicable to the year

*1 The U.S. dollar amounts have been translated, for convenience only, at ¥100=$1, the prevailing exchange rate on the Tokyo Foreign Exchange Market as of 31st March 2008.
*2 The Hanshin Electric Railway is included in the scope of consolidation with effect from the second quarter.

For reference: on the assumption of merger with Hanshin at the beginning of the term; 12-month basis(Millions of yen)

2007*3

2008

YoY comparisons

For the year:
Revenues from operations¥ 813,613¥ 752,301–7.5 %

Operating income

94,80090,725–4.3 %Net income

40,507628–98.4 %

*3 The figures shown have been calculated on the assumption that Hankyu Holdings and Hanshin Electric Railway merged at the start of the term.
(The above figures have been calculated for convenience of comparison, and have not been audited by the Group’s accounting auditor KPMG AZSA & Co.)

Revenues from operations

Operating income(¥ million)(¥ million)

1,000,0001000000

100,000
100000800,000800000

799,396

813,613743,377

752,301

Net income(¥ million)

90,13094,80087,00390,72550000 50,000

64,842

31,73060,00060000

30000 30,000

400,000400000

40,00040000

20000 20,000

200,000200000

20,00020000

10000 10,000

600,000600000
486,15500

2006/3

2007/3

2008/300

40,50736,61940000 40,000

80,00080000

2006/3

2007/3

2008/30025,326628

2006/3

2007/3

2008/3

Statutory disclosure (for the term ended March 2006, Hankyu Holdings on a consolidated basis only; in the term ended March 2007, results of Hanshin Electric
Railway are included in the scope of consolidation from the second quarter.)On the assumption of the merger on 1st April 2006 (Simple sum of Hankyu Holdings and Hanshin Electric Railway on a consolidated basis for the term ended
March 2006; results for the term ended March 2007 assume the merger of Hankyu Holdings and Hanshin Electric Railway from the beginning of the term.)

4

Annual Report 2008

To Our Stakeholders

Kazuo Sumi

Shinya Sakai

President

First I would like to thank all our stakeholders fortheir support over the years.

Representative
Director

To realise the goals of the Hankyu Hanshin
Holdings Group 2007 Medium-Term Management

Net income in the reporting term wasPlan, ending fiscal 2013, we aim to increase com-

sharply below our initial forecasts for fiscal 2008,

petitiveness in all core businesses, bringing toended 31st March 2008 (consolidated basis).

bear Group collective strength through synergies

This was due chiefly to a more cautious revalua-among core businesses. We are steadily overhaul-tion of market values of land held for sale by ouring businesses targeted by the plan, and taking

subsidiary Hankyu Corporation under the “Saito”

aggressive measures to develop further integra-

International Culture Park Development project,tion synergies.

leading to major unrealised losses. The problem

Looking ahead, and taking into account

was increasing uncertainty over the pace andfinancial soundness and capital efficiency, we

profitability of future “Saito” businesses, follow-

will work to strengthen profitability and cash

ing a revaluation by Urban Renaissance Agency,

flow generation. We will continue to grow as awhich is in charge of rezoning works. However, we

corporate group trusted and supported by its

do not expect further appraisal losses at “Saito,”shareholders, investors and other stakeholders,and see the impact as limited to fiscal 2008. Wewith a good record in meeting their expectations.

believe this substantial book-value write-down

In the name of the Group, I would like towill help us minimise future business risk faced bythank our stakeholders for their continued sup-the Group, and build a healthy financial position.

port for our endeavours.

Hankyu Hanshin Holdings

5Interview with the President

Sustainable growth through greater profitability ofcore businesses and major projects
The Hankyu Hanshin Holdings Group seeks sustainable growth following the management integration
within the framework of its medium-term management plan. In this interview, President Kazuo Sumi
discusses the Group’s results for the reporting term and management’s vision for the future.

The Management Integration

Q1 Over 18 months have now passed since the management integration of the Hankyu
and Hanshin groups in October 2006. What kind of reactions have you had to the integration?

A First, I think it is a significant achievement to have made theHankyu-Hanshin name widely known among the public. We
have been able to move quickly into implementation stages
with new ventures such as issue of joint promotion tickets,collaborations in the condominium business and partnerships in single-family houses.
Turning to individual businesses, we have various
projects underway aimed at generating synergies from theintegration. An example is issue of STACIA card on a Groupwide
basis in October 2007. I think we have really brought home
to customers the benefits of convenience generated by the
Hankyu Hanshin integration.

In addition, in October 2007, following the management integration of the Hankyu Department Stores, Inc. withThe Hanshin Department Store, Ltd., a new holding company
was created for the department store group, H2O Retailing
Corporation, which was made an equity-method affiliate of
the Company. In addition to integrating and developing bothcompanies’ department stores, we have also strengthened
capital links with the department store holding company. I
believe the establishment of H2O Retailing Group enables us
to create further synergies in the development of our service
areas and operation of department stores.

Business Environment

Q2 How do you view the current business environment facing the Group’s railway,
real estate and other major businesses?

A

Changing demographics (the higher dependency ratio)
and a movement of population into the Tokyo area are a concern, but I believe we should follow a basic Group strategy
of creating still more appealing communities, and increasing value along our lines as well as residential populations,though scope here is limited.
The Urban Transportation business has benefited inrecent years from both a steadily rebounding population inareas along our lines, and an increase in regular passengers
as an improving job market boosts commuter numbers. For
three continuous years, Hanshin Electric Railway Co., Ltd. has
increased its total of passengers carried on a year-on-yearbase. Even after excluding the boost following the tragic
2005 derailment on JR West’s Fukuchiyama Line, Hankyu
Corporation still achieved slender year-on-year growth. With
the opening of operations in March 2009 of the Hanshin

6

Annual Report 2008

Namba Line, currently at the development stage (please
see P.21 for further details), the Group will have the sole rail
through-route serving the “Kita” (northern) district of Osaka(centred on Umeda) and the “Minami” (southern) district(centred on Namba). The new line will greatly enhance thevalue of the areas served by our network. I am really looking
forward to the opening of service on this line.
In the Real Estate segment, I believe office demand
will hold up. Some commentators have voiced concernsof oversupply, but, unlike Tokyo, the centre of Osaka City is
divided into the Kita and Minami districts. Offices are
clustering along two streets - Midosuji Street that connects
south and north Osaka, and the Yotsubashisuji Street, whichlinks Nakanoshima and Nishi-Umeda. Although the market
is smaller than Tokyo’s, there is sufficient demand clusteredaround these two streets. In particular, a lot of our rental

properties are located in the centre of the Kita district, andthey are unlikely to lose their competitiveness in coming
years. I believe they can become a stable source of earnings
for us.
The Travel and International Transportation segment

faces a difficult operating environment due to soaring oil
prices. In April 2008, we placed this business under an intermediary holding company, as part of measures to strengthen
our ability to respond quickly to a changing operating environment and manage operations more efficiently.

Results

Q3 What comments do you have on the Company’s results for the reporting term?
A First, I would like to apologise to all our shareholders forthe steep fall in net income we suffered due to booking ofan extraordinary loss including ¥69 billion on the downward
revaluation of land for subdivisions. We did at last stay in positive territory.
This was due chiefly to a more cautious revaluation ofmarket values of land held for sale by our subsidiary Hankyu
Corporation under the “Saito” International Culture Park
Development project, leading to major unrealised losses. The
problem was increasing uncertainty over the pace and profitability of future “Saito” businesses, following a revaluation by
Urban Renaissance Agency, which is in charge of rezoning
works (for more details concerning “Saito,” please see P.25).
However this revaluation loss did not have cash flow

implications, and over the medium to longer term, I believe
we have minimised management risk faced by the Group andplaced our finances on a healthier footing.
We treat the revaluation loss very seriously, and shareholders can rest assured we will take every measure to ensurethat further revaluation losses do not occur. This is the reason
for our very cautious approach in the “Saito” project.
Turning to business operators, we were able to surpass
our initial targets due to a robust performance by the Urban
Transportation, Real Estate, and other core businesses. We
were able to meet our targets for all major performance indicators, with the exception of the debt/equity ratio and returnon equity (both on a consolidated basis), which were affectedby the land revaluation loss.

Q4 What are your forecasts for the current term?
A We expect our six core businesses to continue to perform
well. However, due to the above-mentioned reorganisation of
the department store group, we expect a year-on-year decline
in revenues from operations, operating income and recurring
profit due to the removal from the scope of consolidation of
Hanshin Department Store Group (effective from the second
half of the reporting term), and an increase in depreciation

costs following increases in capital expenditure.
At the same time, due to the non-repetition of the huge
extraordinary loss posted for the reporting term, the postingof an revaluation loss at “Saito,” we expect to maintain net
income at the same level as in the previous term ended 31st
March 2007, of approximately ¥34.0 billion.

■ Major performance indicators (consolidated)(¥ billion)

FY2008 (initial estimate)*1

Revenues from operations
Operating income
Net income
EBITDA*2(excluding department store business)

Effects of integration
Interest-bearing debt/EBITDA
Interest-bearing debt
Debt/equity (D/E) ratio*3
ROE*4

750.0
80.0
35.0
135.0
(132.8)2.2
9.7x
1315.02.5x
6.0%

FY2008 (results)

752.3
90.7
0.6
145.2
(143.2)2.2
8.8x
1271.12.7x
0.1%

FY2009 (estimate)

709.0
84.0
34.0
142.0
4.6
9.4x
1335.02.6xmore than 6.0%

*1 Figures are initial estimates (announced 15th May 2007)*2 EBITDA = operating income + depreciation expenses + amortization of goodwill attendant on the management integration of Hankyu andHanshin*3 D/E ratio = Interest-bearing debt/equity*4 ROE = net income/equity (i.e. average net assets attributable to shareholders for the year)

Hankyu Hanshin Holdings7Medium-term Management Plan

Q5 What are the major points of the revised medium-term management plan unveiled in April 2008?
A One year after our announcement of the plan, we madetwo major revisions based on our strong current performanceand changes in our operating environment.
Firstly, we have shifted our emphasis to current earnings
growth. Specifically, in the six years up to the fiscal year ending March 2013, particularly in the first three years, we aim toraise the overall earnings baselines, and beat initial forecasts.
In tandem, we have raised our EBITDA forecasts (consolidated
basis) for the final fiscal year of the plan from an initial ¥150
billion to ¥160 billion.

■ Consolidated EBITDA (excluding department store business)■◆■(¥ billion)

165.0

Current estimates
Previous estimates (as of Nov. 2007)
Initial estimates

1,400.0

163.0

142.0

1,300.0

1,271.1

Increase resulting fromthe return of securitised
properties to BS

1,150.0

142.0
137.0

1,335.0

1,370.0

1,200.0

143.2

140.0
135.0

1,300.0

1,315.0

1,350.0

1,250.0

148.0

150.0

■ Current estimates■ Initial estimates

1,350.0

158.0

155.0

141.5

■ Interest-bearing debt(¥ billion)

160.0

145.0

The second change affects the accounting policy for
application of accounting standards to securitised assets.
Previously, we maintained a policy of resecuritising all
instruments at maturity using special purpose companies. In
anticipation of the introduction of more rigorous accounting
rules, we have adopted a policy of including such assets on
the balance sheet. In line with this, we expect our interestbearing debt to climb ¥30 billion above our initial forecast to¥1,130 billion at the end of March 2013.

1,130.0

1,100.0(137.0)1,100.0

1,050.0132.8
1,000.0

130.0
FY2007
Results

FY2008Results

FY2009Estimate

FY2010Estimate

FY2013
Estimate

FY2008Results

FY2009Estimate

FY2010Estimate

FY2013
Estimate■ Partial revision of numerical targets (consolidated)
Management indicators
Operating income

Earnings from core businesses¥100 billion

EBITDA

Cash flow generation capability¥160 billion or more(¥150 billion or more)

Effects of integration

Quantitative effects of management integration

EBITDA = ¥5 billion or more (per year from
FY2010)Interest-bearing debt/EBITDA

Financial soundness

Around 7 times

Interest-bearing debt

Repayment of all TOB funds¥1,130 billion or less(¥1,100 billion or less)Debt/equity (D/E) ratio

Financial soundness

Less than two-fold

ROE

Capital efficiency

6.0% or more

Red ink: current revisions

8

Targets for FY2013

Annual Report 2008

Figures in brackets: figures released in March 2007

Interview with the President

Q6 Are you confident that you will reach numerical targets for the fiscal year ending March 2013,
the last year of the plan?

A We regard the first period of the plan, from April 2007March 2010, as a period for investing in development for
further growth, and the second half from April 2010-March2013 as a time for realising the benefits of such large-scale
investments. We expect a major contribution from the Real
Estate business ahead of the last year of the plan, in particularfrom the large-scale rental-facility projects at Umeda andNishinomiya-Kitaguchi.
Of these projects, the most representative is the rebuilding of Umeda Hankyu Building. When completed, this development will house one of Japan’s largest department storesand will also have a high-rise office block. In particular, we
expect additional net gains from the office wing, scheduled
to open in 2010, which is a new departure. However, we only
expect full occupancy from April 2013 onward. Our targetplanning assumes that occupancy will increase steadily after
opening. Because it is not clear what changes the future hasin store for the office market, our targets for rental income
are also conservative. I think we stand a strong chance ofachieving them. I believe we can achieve the final year targets
if large-scale projects are implemented as planned, contributing to a major increase in Group profit.

■ Profit growth (EBITDA)

FY2008 comparison + ¥22 billion(excluding department store business)

300¥163 billion
FY2008 comparison + ¥7 billion(excluding department store business)

250
200

FY2008 comparison of EBITDA
Urban Transportation+ ¥2.1 billion

Real Estate+ ¥7.9 billion¥148 billion
Entertainment & Communications + ¥3.9 billion

150¥143 billion
100
50

Travel & International Transportation + ¥3.9 billion¥142 billion

Department
storesHotels+ ¥1.1 billion

Retailing+ ¥1.8 billion¥141 billion(excluding department
store business)

0

FY2008 Estimate

FY2009 Estimate

FY2010 Estimate

FY2013 Estimate* Comparison is on basis of forecasts at the time of announcement of the revision of the medium-term management plan, on 3rd April 2008.
FY2008 result: ¥145.2 billion (excluding department store business, ¥143.2 billion).

Hankyu Hanshin Holdings

9For Sustainable Growth

Q7 How is progress in other major projects?
A In November 2008, we will begin operations of Hankyu
Nishinomiya Gardens, a showpiece line-side development at
Nishinomiya-Kitaguchi Station along the Hankyu Kobe Line.
We expect some 20 million people a year to use this facility. It
will greatly boost passenger volume and increase value along
Group railway lines.
With the opening of the Hanshin Namba Line in March
2009, we will have a through-line linking the cities of Kobe,
Osaka and Nara. We have high hopes of this project, as it will
create the only private line serving both the Kita and Minami
districts of Osaka.

In spring 2008 we completed the first phase of renovation works on Hanshin Koshien Stadium. We have alreadyfinished in-field seating works and signed the first namingrights contracts with two major companies for new seating
installed in the renovation. This is one of several measures weare taking to increase stadium earnings. In October 2008, we
will start Phase II works on “Alps” and outfield seating (please
see P.27 for more details).
We also plan to complete the Umeda North Yard preliminary development area in the second half of fiscal 2012(please see P.23-25 for more details).

Q8 What plans do you have for the Tokyo area including the hotel and retailing businesses?
A The know-how we have built up over the years developing
our service areas stands us in good stead for developmentsin the Tokyo area. In April 2008, we opened the AKIBA TOLIM
commercial facility in Akihabara, Tokyo, our first full-fledged
venture of this kind in the capital area. Occupying an ideal sitenear the terminus of the Tsukuba Express, the building also

houses a new-format hotel, REMM Akihabara.
At 31st March 2008, our 15 Book 1st. stores in theTokyo area achieved annual sales of more than ¥10 billion. In
November 2008, we plan to launch operations of a large-scale
outlet in Shinjuku, to serve as our flagship Book 1st. store in
the Tokyo area.

Q9 What medium to long-term vision do you have for the Group? How do you see it developing?
A Our corporate philosophy is “delivering serenity and wellbeing, inspiration and dreams,” becoming a company that is
supported by its customers.
To achieve this goal, we are providing better transportation services, developing superior housing and working tocreate robust communities in our service areas, through thejoint Hankyu Hanshin brand. I believe we can build sustainable growth for the Group on the basis of comprehensive
lifestyle services — unique entertainment businesses such as
the Hanshin Tigers and Takarazuka Revue, as well as our commercial facilities, hotel and travel and other business — that
attract more customers to service areas of both networks.
To realise these visions, we must not rest on our laurels,
but continue our reforms and take measures to bolster thecompetitiveness of each of our businesses, to ensure that we
become the Group of choice for our customers.

10

Annual Report 2008

Interview with the President

Financial Strategy and Return to Shareholders

Q10 Finally, what financial strategy and policy for return to shareholders will the Company follow?
A The Group aims to ensure future growth through a rangethat generate a lower rate of return.
Turning to the dividend, our policy is to ensure a stable annual dividend of ¥5 per share in the foreseeable future,
while taking measures to strengthen operating and financial
fundamentals.
In future, by growing core businesses and improving ourfinancial position, in a balanced way, we will further increase
enterprise value, shoring up and improving our share price as
expected by our shareholders.

of large-scale projects. Over the first three years of the plan,interest-bearing debt is set to trend upwards, as capital
expenditure will outweigh depreciation. However, in the following three years, these investments will begin to bear fruit,
and we will be able to bolster our financial position by reducing interest-bearing debt from cash flow generated by eachof our core businesses, mainly the Urban Transportation andReal Estate businesses, and by selling off idle assets and assets■ Capital investment and depreciation costs(¥ billion)

FY2005-FY2007 (results)

FY2008-FY2010 (estimate)

FY2011-FY2013 (estimate)

165.0

330.0

223.0

Capital investment three-year total(Capital investment average per year)

55.0

110.0

74.0

Depreciation costs three-year total

138.5

170.0

184.0

■ Interest-bearing debt/EBITDA(¥ billion)
Interest-bearing debt

Interest-bearing debt/EBITDA

1,800.0

10.0x
9.7x

18000
1,700.01,600.0

8.7x

16000
1,500.015000
1,400.0

180.0

The large increase in EBITDA in the current
plan has enabled a substantial downward
revision in the ratio’s peak
9.2x

9.4x

17000

1800
170.0

Group-wide substantial growth
163.0(in the second 3-year period: + ¥15 billion)

8.8x

1600

Stronger earnings growth(in the first 3-year period: + ¥6.5 billion)

Aim to reduce to 7 times
by FY2013

148.0

142.0

146.5
141.5

143.2

1500
1400

1,335.0

1,300.0
1,209.4

1,271.1

130.0
6.9x

1300

Steady progress in
reducing borrowings used
1,130.0
in Hanshin integration; now
almost at a level prior to the TOB

120.0

Realisation of the benefits of large-scale investments

1100

Peak in the balance of interest-bearing debt
Major investment projects: Hanshin Namba Line, rebuilding of Umeda Hankyu
Building, Osaka Station North Yard development, Nishinomiya shopping centre
development, Hanshin Koshien Stadium Renewal+ (the possible return to the BS of securitised assets)

1,200.012000
1,100.0

Investments for development for further growth

11000
1,000.0

10000

150.0

140.0

1,370.0

14000
13000

1700
160.0

145.2

8.3x

(¥ billion)
EBITDA* Dotted line: initial estimate

1200
110.0

100.0
FY2007
Results

FY2008Results

FY2009Estimate

FY2010Estimate

FY2011
Estimate

FY2012Estimate

FY2013
Estimate

1000* Figures for fiscal 2007 are calculated on the assumption of merger on 1st April 2006.
* Purple line represents EBITDA excluding department store operations up to the first half of fiscal 2008.

Hankyu Hanshin Holdings

11

Hankyu Hanshin Holdings Group 2007 Medium-Term Management Plan
On 26th March 2007, the Group announced the “Hankyu Hanshin Holdings Group 2007 Medium-Term Management
Plan,” which covers the six years from April 2007 to March 2013. The aim is to enhance the enterprise value of Group
companies as a whole. The fiscal year ending March 2013 is the target year, as current major projects (such as the rebuilding of Umeda Hankyu Building and the Hanshin Namba Line (Nishi-Osaka Line Extension Project)) are expected to bemostly completed by the end of that fiscal year.
One year after the initial announcement of the plan, on 3rd April 2008, we released the “Progress Report on the2007 Medium-Term Management Plan” (including revision of targets) based on performance estimates for the reporting
term ended March 2008 and the changes in our operating environment.
Looking ahead, and taking into account financial soundness and capital efficiency, we will work to strengthen
profitability and cash flow generation and continue to achieve our goals set for the fiscal year ending March 2013.

Main Points in Revision of Medium-Term Targets
Current sound performance

Stricter application of accounting standards for assets under
securitisation using special purpose companies (SPCs)

Review of the plan for expansion of earnings(especially for the first 3-year period)

Inclusion of securitised assets in on-the-balance-sheet assets,or arrangement of sale to third parties

EBITDA: Raise the targets

Interest-bearing debt: Target figures revised

Major Performance Indicators (Consolidated)(¥ billion)

EBITDA*3
Effects of integration
Interest-bearing debt/EBITDA
Interest-bearing debt
Debt/equity (D/E) ratio
ROE

FY2007 (results)*1
146.5 (141.5)—

FY2008 (results)*2
145.2 (143.2)
2.2

FY2009 (estimate)
142.0
4.6

FY2010 (estimate)
148.0
5.6

FY2013 (estimate)
163.0
6.2

8.3x

8.8x

9.4x

9.2x

6.9x

1,209.4
2.4x—

1,271.1
2.7x
0.1%

1,335.0
2.6xmore than 6.0%

1,370.0
2.5xmore than 6.0%

1,130.0
less than 2x
more than 6.0%

*1 Results for fiscal 2007 are calculated assuming that the management integration had occurred at the beginning of the fiscal year.
*2 Until the first half of fiscal 2008, the department store business falls within the scope of consolidation (including equity-method affiliates).
*3 Figures within brackets do not include the department store business.

About Major Performance Indicators
EBITDA: For the year ending March 2013, we aim to achieve a target of ¥160 billion or more (¥100 billion in operating income) by completing current major projects,
which will substantially increase EBITDA for the Group as a whole, taking into account the more than ¥5 billion a year merger benefit from the fiscal year ending
March 2010.

Interest-bearing debt: Due to concentration of investments in project developments in the first 3-year period of the plan and inclusion of securitised properties
in on-the-balance-sheet assets, there will be a one-time rise in interest-bearing debt. However, thanks to profit growth through completion of large-scale projects
and sale of low-yield and idle assets, we aim to decrease interest-bearing debt to ¥1,130 billion or less by the end of March 2013.
Interest-bearing debt/EBITDA: We aim to drastically improve this ratio to around 7 times at the end of March 2013 compared with 8.3 times at the end of March
2007. This will be done by increasing EBITDA while decreasing interest-bearing debt.

12

Annual Report 2008

Business Performance (Consolidated)(¥ billion)

FY2007 (results)*

FY2008 (results)*

FY2009 (estimate)

FY2010 (estimate)

FY2013 (estimate)

Revenues from operations

743.3

752.3

709.0

730.0

780.0

Operating income

87.0

90.7

84.0

84.0

100.0

Recurring profit

74.8

74.8

63.0

62.0

79.0

Net income

36.6

0.6

34.0

35.0

42.0

* Until the first half of fiscal 2008, the department store business fell within the scope of consolidation (including equity-method affiliates).

Benefits of Integration
Numerical targets for core businesses reflect synergy effects, in terms of expansion of sales and cost reduction, for whichquantitative estimates are available at the time of revision (made public on 3rd April 2008) of targets of the plan.
(EBITDA basis)

FY2008 (results)

FY2009 (estimate)

FY2010 (estimate)(¥ billion)
FY2013 (estimate)Total

2.2 (2.2)

4.6

5.6 (5.2)

6.2 (5.4)

Sales synergy

0.9 (0.9)

2.9

2.4 (2.7)

2.9 (2.6)35

0.1 (0.1)

0.1

28

0.1 (0.1)

21

Urban Transportation
Real Estate
OthersUrban Transportation
Real Estate
OthersCost-saving synergy

0.1 (0.1)
0.4 (0.7)
0.4 (0.2)
0.7 (0.7)
0.1 (0.1)
0.5 (0.5)14

1.7 (2.4)

0.6

0.7 (0.3)

0.7 (0.4)

0.6
0.4
0.6

1.8 (1.8)

1.8 (1.8)

0.5 (0.1)

0.5 (0.1)

0.8 (0.7)

1.0 (1.0)

70

2.2 (2.2)

2.3

1.4 (1.3)

1.6

3.1 (2.5)

3.3 (2.8)* Sums given are those which can be calculated at the current time.
* Figures may not total exactly due to rounding.
* Figures within brackets are initial targets (announced in March 2007).

Sales synergy

Cost-savings synergy

・Strengthen alliances within Urban Transportation, use companies
of both groups
・Collaborate in condominium unit sales business
・Link up on single-family house business・Strengthen collaboration in advertising
・Open retail outlets at facilities of both companies
・Use joint sales promotion of travel products using stores as well as
direct mailing and websites

・Effective use of human resources and know-how
・Strengthen purchasing at each business・Withdraw from duplicated facilities and rationalise duplicatedbusinesses
・Streamlining and system harmonisation at support departments[Main factors behind changes compared with initial forecasts]
・Improved efficiency of operational system thanks to reorganisation of
PMBM (property management & building maintenance) business[Main factors behind changes compared with initial forecasts]
・Collaboration in international transportation business (active use of
co-loading and joint use of overseas logistics facilities)

Hankyu Hanshin Holdings

13Core Businesses: Basic Strategies and Numerical Estimates
Please refer to the section Review of Operations (P18-30) for overview and policies for each core business.

[Notes regarding the numerical estimates for core businesses]
・”Core businesses” refer to units for administrative accounting purposes, these and differ from segments in financial statements.
・Results for fiscal 2007 are calculated assuming that the management integration had occurred at the beginning of the fiscal year.
・EBITDA for each core business does not take into account amortisation of goodwill generated by the merger.
・Figures within brackets are initial estimates (announced in March 2007).

Urban Transportation

P.20

While addressing the issues of declining population and intensifying competition in areas served by our stations, and responding tocalls for greater social responsibility and other structural change indemand and markets, we will build competitiveness for sustainablegrowth and increase value along Group railway lines.

(¥ billion)
100.0
1000

183.9

190.7
(180.1)

189.4

192.2
(181.7)193.0(181.7)

57.0

58.4(57.1)

59.5(59.3)

80.0800
60.0600

58.3(54.2)

56.0

31.9(28.1)

33.3

500 50.0

20.0200
0 0

Real Estate

P.22

FY2007
Results

FY2008Results

FY2009Estimate(1) By leveraging our expertise in community building, provide
safe and convenient basic infrastructure and provide services that support community lifestyles

80.0
60.0

188.6

800

20.0

(3) Raise our profile in the Umeda area, through renovations ofour properties

0

55.1(50.0)

56.2

600

225.4
(215.7)

185.0

41.5
(36.3)

14

Annual Report 2008

2500

200.0

150.0
43.7 1500(43.3)
100.0

38.3(35.0)

39.1

50.0

200

500

0 FY2007

FY2008Results

FY2009Estimate

FY2010Estimate

FY2013
Estimate
119.7(118.4)99.4(95.3)

102.0

105.8
(101.4)

200
20.0

11.2

100
10.0

19.2
(18.1)

17.5(16.3)

15.7(14.1)

15.9

15.4
10.7
(9.0)

0

0

(¥ billion)
120.0
1200
100.0
1000

92.5

8.9

9.9
(8.8)

80.0
800
12.3
(12.0)

60.0
600
40.0
400
20.0
200

(2) Upgrading and expansion of media use(3) Leverage our leisure facilities(¥ billion)
250.0

2000

61.7
(60.4)

54.4(51.8)

53.8

0

1000

(¥ billion)
300
30.0

P.26

201.5
(210.3)

FY2013 0
Estimate

400

Results(1) Increasing the appeal of live events

179.7(184.1)42.0
40.0(2) Enhance enterprise value and optimise cash flow by striking
an appropriate balance between investments and returns

We are further strengthening our revenue base by maximising theappeal of our proprietary Hanshin Tigers, Hanshin Koshien Stadium
and Takarazuka Revue brands. We are also focusing on increasing theexcitement of live events, and the various media they use.

FY2010Estimate(¥ billion)
100.0

1000

Leveraging our strengths in brand recognition and trust in the KyotoOsaka-Kobe area, and in value creation in areas served by our railways,
we have adopted the following priority strategies.

Entertainment & Communications

1500150.0

33.1(32.8)

29.4(27.4)

29.0(2) Rigorously commit to low-cost operation(3) Provide safe, high-quality transportation services(¥ billion)

2000200.0

1000100.0
40.0400(1) Provide services of real value to our customers■■■■■■ EBITDA (left scale)□□□□□□ Operating income (left scale)
Revenues from operations (right scale)■00

FY2007
Results

FY2008Results

FY2009Estimate

FY2010Estimate

FY2013
Estimate00

Hankyu Hanshin Holdings Group 2007 Medium-Term Management Plan

Travel & International Transportation

P.28<Travel>By providing high-valued added products that fulfil dreams and inspire, we will consolidate our customer base and generate stable earnings.

(1) Increase customer satisfaction(2) Strengthen marketing capability (for tailor-made tours and corporate business)(3) Position the company for stable profit growth (centralised
purchasing, etc.)(¥ billion)
15.0 150<International Transportation>(¥ billion)

78.6

Create sophisticated logistics systems to generate stable businessgrowth, based on global networks centred on China and elsewhere in

79.5(78.5)
72.4

10.0 100Asia.

(1) Bolster the revenue base (provide higher-quality services,etc.)(2) Enhance productivity (build alliances with other companies,
achieve low-cost operations)(3) Build up Group collective strength (expand network of local
units, etc.)

6.9
(6.6)
5.5
5.0

50

4.3

P.29

Consolidating its management base, this business is pursuing a goalof developing into a well-established hotel chain operator.

(1) Create infrastructure for hotel chain operation

0 FY2007

0(3) Strengthen marketing capabilities of each hotel management company

8.0 804.0 40P.30

Achieve sustainable growth by increasing value along Group railway
lines by developing stations and line-side areas, and by expanding
business projects outside our service areas.

(1) Revitalise our stores and raise employee standards

4.8

5.3
(5.3)

6.6
(6.0)

FY2008Results

040040.020020.0

FY2009Estimate

FY2010Estimate

FY2013
Estimate

80

69.4

69.2
(68.8)

69.8

70.2(71.5)

71.2(72.9)

4.8
(4.4)

5.4
(5.2)

5.9(5.4)

5.1

4.1

1.6

1.6
(1.3)

1.8

FY2007
Results

FY2008Results

FY2009Estimate

3.0
(2.4)

2.1
(2.0)

FY2010Estimate(3) Find ways to generate synergies from the management
integration (purchasing and product delivery, etc.)

2.0

40
20

0

0

40.0
400
20.0
200

FY2013
Estimate00(¥ billion)

67.9

66.3
(67.7)

68.4

72.7(75.7)

60

4.0

80.0
800
60.0
600

81.7
(83.8)

2.3
(2.6)

2.8

3.1

60060.0

4.1
(3.4)

3.5
(3.1)

1.8

1.3
(1.3)

1.9

2.0
(1.4)

FY2007
Results

FY2008Results

FY2009Estimate

FY2010Estimate

1000100.0
80080.0

6.0(2) Strengthen our capability as an organisation to support sustainable growth (establish logistics infrastructure, etc.)

0 0(¥ billion)(¥ billion)
10.0
100
8.0

60060.0

100.0
1000

2.0 200Retailing

6.2

8.2
(7.2)

(¥ billion)
10.0 100

6.0 60(2) Establish an efficient business management system (solid
start of our hotel chain REMM)

4.3(5.6) 3.1

100.0
1000

80080.0(4.4)

Results

Hotels74.8(81.7)

80.7(85.5)

2.7(2.0)

40040.020020.0

FY2013
Estimate

0 0*Figures do not include the department store business.

Hankyu Hanshin Holdings15

Outline of Group Restructuring
Based on the Hankyu Hanshin Holdings Group 2007 Medium-Term Management Plan, we are steadily overhaulingoperations to realise the benefits of the integration as soon as possible.

Management Integration Initiatives
Undertook management integration with the Hankyu

Oct. 2007

Hanshin Department Store

Department Stores and switched to a holding company system(with the launch of H2O Retailing Group) ❶Oct. 2007

Hankyu Facilities
Hanshin Engineering

Following the merger of these two companies, the new entity
absorbed Hanshin Electric Railway’s operations for leasing facility management and administrative operations for buildings
located along the railway lines. (After the merger, the new entity
was renamed Hankyu Hanshin Building Management.)

Oct. 2007

Itec Hanshin
Hankyu Business Associate(Computer-related services)within the Group. (Following the integration process, the new

Apr. 2008

Apr. 2008

Hankyu Express International
Hanshin Electric Railway(Travel Section)
Hanshin Air Cargo
Hankyu Hotel Management
Hotel Hanshin
Hotel Hanshin Restaurant Systems

Carried out a corporate spin-off to create a centralised IT service
entity was named Itec Hankyu Hanshin.)Hankyu Express International and other travel and transportation operations were reorganised to create an intermediaryholding company under the name of Hankyu Hanshin Express
Holdings Corporation ❷Merged three companies to realise further benefits through the
integration of hotel operations, and strengthen our managementbase. (The new entity has been named Hankyu Hanshin Hotels.) ❸Selection and Focus
Split into two new entities: Hankyu Cargo Service (domestic logistics services) and Hankyu Logitec (international logistics services)Mar. 2008

Hankyu Cargo Service⇒ On 1st April 2008, all of the investments in Hankyu Cargo
Service were sold to Plus Logistics⇒ On 1st April 2008, Hankyu Logitec was made a subsidiary ofHankyu Express International
The hotel’s business rights and assets were transferred to a new

Apr. 2008

Hotel New Hankyu Kobe Sanda

hotel operator established by ORIX Real Estate Corporation;
Hankyu Hanshin Hotels will continue hotel management
operations

16

Annual Report 2008

❶ Strengthening partnerships with the Department Stores Group under H2O Retailing
The Company’s equity stake in H2O Retailing increased to 21.75%, leading to its inclusion in the scope of consolidation as anequity method affiliate, and partnerships have been strengthened with the Department Stores Group.

Hankyu Hanshin Holdings
100%

100%
Hankyu Hanshin Express
Holdings

Hankyu Hanshin Hotels

100%
Hankyu Corporation(%: equity stake)

21.75%100%

H2O Retailing

Hanshin Electric Railway(pure holding company)

Hanshin
Department Store

HanshinHankyuDepartment Store Department Stores

Creating a Hankyu Hanshin department store brand through the merger of the two department store operators on 1st October 2008

❷ Travel and International Transportation segment: Shift to an intermediary holding company structure
The travel business is managed by two new entities, Hankyu Travel International and Hanshin Travel Service. Internationaltransportation services are handled by Hankyu Express International and Hanshin Air Cargo. These four entities have beenbrought under the umbrella of the intermediary holding company.
⇒Increase competitiveness in Travel and International Transportation by speeding up decision-making and introducing
proprietary systems more closely tailored to each specific business.

Hankyu Hanshin Express Holdings
Travel business

100%

International transportation business

100%

Hankyu Travel International(%: equity stake)

Hanshin Travel Service

100%
Hankyu Express International

85%
Hanshin Air Cargo

15%

Business alliance
SENKO

Sumitomo Corporation❸ Merger of Hankyu Hotel Management and Hotel Hanshin
To deepen management integration, Hankyu Hotel Management, the Hotel Hanshin and Hotel Hanshin Restaurant Systems
were merged on 1st April 2008 to create a single managing company, Hankyu Hanshin Hotels.
Hankyu Hotel Management

Hankyu Hanshin Hotels

Corporate name change

MergerHotel Hanshin
Hotel Hanshin Restaurant Systems

Hankyu Hanshin Holdings

17

Review of Operations

Overview of Core Businesses

Entertainment andCommunications

Urban Transportation

Real Estate

The Urban Transportation business,
centred on Hankyu Corporation andHanshin Electric Railway Co., Ltd.,
operates railway, bus and taxi services
forming an extensive transportation
network throughout the Kansai area. Its
mission is to provide safe, comfortable
and highly convenient transportation
services in our service area, the KyotoOsaka-Kobe region. We are encouraging the use of IC cards as an importantbusiness development tool. Throughthe Nishi-Osaka Line Extension Project,
now underway, we are also creatinga wide area railway network linking
Kobe, Osaka (Minami) and Nara.

Consisting of real estate leasing, trading
and management businesses, the Real
Estate business derives its core earnings from rental properties (retail andoffices) and its condominium business.
Centred on the Hankyu-Sanbangai and
Herbis OSAKA developments in the
Umeda area of Osaka, this business is
engaged in major attractive projects(such as the rebuilding of Umeda
Hankyu Building, and the developmentof Nishinomiya-Kitaguchi area) aimed
at reinvigorating areas served by ourlines, drawing on our track record increating value along our lines throughdevelopment projects.

This segment consists of the sportsbusiness, centred on baseball interests(the nationally popular Hanshin Tigers
professional baseball team and theHanshin Koshien Stadium); the stage
revue business (Takarazuka Revue); theadvertising agency business, whichuses advertising spaces on railways andother public transport; and the publishing business, which deals mainlywith magazines. The Entertainment
and Communications business aims torealise dreams and bring excitement to
its customers all over Japan through awide range of live entertainment.

Total length of lines operated:
Hankyu Corporation 146.5km
Hanshin Electric Railway 45.1km(including tier 2 railway operator)

Revenues from operations(¥ billion)
200.0
150.0

(189.6)(¥ billion)(190.9)

200.0

194.9

181.9

150.0

154.0

100.0

50.0

50.0

2006/3

2007/3

2008/3Operating income

30.0

0

30.6

2006/3(31.9)

33.2

33.2

2007/3

2008/3

36.3

10.0

0

2008/3

40.1
2006/3

2007/3

10.0

4.0

0

2007/3

2008/3(11.2)

12.0

(8.5)

8.5

6.0

21.6

2006/3

95.3

75.7(¥ billion)

39.5

2.0

2007/3(88.8)

8.0

10.0

2006/3(90.2)

80.0

40.0(38.5)

30.0
20.0

Share of total revenues
from operations
Annual Report 2008

179.7

20.0

40.0

(34.4)

20.0

0

18

(34.8)

176.3

100.0

111.8

(¥ billion)(¥ billion)
40.0(188.8)

60.0

100.0

0

(¥ billion)(167.3)

2008/3

4.1

5.2

0

2006/3

2007/3

25.6%

20.4%

11.5%

P.20-21>>>

P.22-25>>>

P.26-27>>>

2008/3

Hotels

Retailing

In April 2008, we shifted to a corporate
structure with four core businesses
operating under a intermediary holding company, Hankyu Hanshin Express
Holdings Corporation. The four businesses
are Hankyu Travel International Co., Ltd.
and Hanshin Travel Service Co., Ltd.,
which operate travel businesses, andHankyu Express International Co., Ltd. andHanshin Air Cargo Co., Ltd., which handle
international transportation. Hankyu Travel
International Co., Ltd. offers the Trapics
brand of products tailored to customers’
vacation styles. Hanshin Travel Service Co.,
Ltd. offers the high-quality Friend Tour lineof package tours, with a focus on European
destinations and customised tours forbusiness travellers. The internationaltransportation business offers high-quality
logistics services through Hankyu Express
International Co., Ltd. and Hanshin Air
Cargo Co., Ltd.

Hankyu-Hanshin-Daiichi Hotel group
operates 45 hotels, consisting of 16
directly managed by Hankyu Hanshin
Hotels Co., Ltd., and 29 belonging
to chains operated by franchise. It is
one of Japan’s most important hotel
chains, with approximately 8,300 guest
rooms, as of 30th April 2008. It offers
a wide range of hotel formats, fromgeneral-purpose “city hotels” to hotels
for businessmen (with very limited
function facilities), and is particularly
strong as a hotel operator with many
directly-managed hotels in the Tokyoand Kansai areas. In addition to chain
operations, it also manages the newand already very popular The RitzCarlton, Osaka, an international luxury
brand with which it has formed analliance.

This segment comprises the department store business (The Hanshin
Department Store’s Umeda store in
Osaka as well as the chain operated by
The Hanshin Department Store, Ltd.);
retailing, which spans a wide range ofoutlets in areas served by our lines, suchas bookshops, convenience stores andcosmetics and accessory stores; andthe food and drink business operatedby Creative Hankyu Co., Ltd. Our Book
1st. chain has also opened stores in theTokyo area. In the Department StoreBusiness, The Hanshin Department
Store group in October 2007 mergedwith Hankyu Department Store, and is
no longer treated within the scope of
consolidation.

(¥ billion)(¥ billion)(¥ billion)

100.0(93.8)

80.0
60.0(93.9)

88.3

80.0

94.4

67.3

(70.3)

60.0
40.0

200.0

(69.4)

69.2

65.4
53.9

(188.7)150.0(185.8)

155.9
120.8

100.0

40.0
20.0
0

2006/3

2007/3

2008/3(¥ billion)

00

2006/3

2007/3

2008/3

1.2

4.2
3.2

2.5

0.3

2006/3

1.3

2007/3

2008/3

1.3

02007/3

(6.0)

6.0

0.9

4.7

4.0

2.0

0.4
2006/3

2007/3

2008/30

2008/3

(5.8)

(0.6)

0.6

1.0

2006/3

2.7

2.4
2006/3

2007/3

9.2%

15.8%

P.28>>>

P.29>>>

P.30>>>

2008/3

Share of total revenues
from operations

12.5%

Operating income

(2.7)

3.0

62.0

(¥ billion)

(1.4)

1.5

(4.4)

4.0

0

50.0

(¥ billion)

5.0

2.0

20.0

Revenues from operations

Travel and International
Transportation

Numerical values are by segment.
Revenues from operations represent amounts prior to consolidation adjustments; that is, revenues from outside customers plus intersegment transfers and transactions･ For the term ended 31st March 2006, consolidated results for Hankyu Holdings are shown and consolidated results for Hankyu Hanshin Holdings (with consolidation of the Hanshin Group dated from the second quarter) are given for the term ended 31st March 2007
･ Figures in brackets for the term ended 31st March 2006 are simple additions of the results of Hankyu Holdings and Hanshin Electric Railway, while figures in brackets for the term ended 31st March 2007 assume consolidation of Hanshin Electric Railway at the beginning of
the term (12-month period)
Breakdowns of revenues from operations for each segment show proportions of such revenues from outside customers in the term ended 31st March 2008. Others represent 5.0% of the total

Hankyu Hanshin Holdings

19Urban Transportation
Core companies: Hankyu Corporation, Hanshin Electric Railway

Overview of the year ended 31st March 2008

Policies in the year ending March 2009

Expanding railway revenues by attracting
customers through joint promotions

Increase value along Group railway lines

Joint promotions by Group companies

・Attract customers to facilities along our lines

In the railway business, we took measures to attract customers to facilities along our lines through cross-use of the
PiTaPa-enabled HANA PLUS Card (Hankyu) and CoCoNet Card
(Hanshin)* on lines of both operators, as well as issue of oneday-pass tickets valid on all Hankyu and Hanshin railway lines
and joint promotions by Group companies.

・More convenient bus routes through a joint Hankyu andHanshin initiative* In October 2007, the STACIA card was launched as a new card for use throughout the Group (please see P.31).

・Expansion of the service menu under the STACIA Card

Expand the network
・Hanshin Namba Line (Nishi-Osaka Line Extension Project)・Discussion and promotion of new station plans (downtown
stations for Settsu and Nagaokakyo)

Share and enhance technology and know-how

Safety measures

・Shared use of facilities

Measures to improve safety of transportation include
introduction of a centralised earthquake alert system along
Hankyu and Hanshin lines.

・Joint project ordering, and harmonisation of specifications
for station equipment

Infrastructure upgrades along our lines

More convenient bus services

・Grade separation

Measures to improve bus service convenience include releaseof a common Hankyu and Hanshin bus card, and bus shelterswith advertising wall panels.

・Promote safety improvement policies (install operational
status monitoring systems)

Depreciation costs dampen strong operating-line
performance・Installation of underground disaster prevention facilities

・Barrier removal at stations earmarked for upgrades

Revenues from operations increased year-on-year at bothHankyu and Hanshin on the back of a good performance byrailway transportation, which benefited from increased customer numbers due to condominium developments along
our lines and the general recovery in consumption. However,operating income was slightly down due primarily to anincreased depreciation burden following the amendment oftax legislation in Japan.

■ Results for the year ended 31st March 2008
Revenues from operations:¥194.9 billion (up ¥13.0 billion year-on-year)
Operating income:¥ 33.2 billion (down by less than ¥0.1 billion year-on-year)

Hankyu Railway(Note 1) Results for the previous term, the basis for comparison, are inclusive ofHanshin Group results from the second quarter. (Segment results only include
the nine-month performance by Hanshin Group).
(Note 2) Assuming full management integration from the beginning of the previous term, on a consolidated basis, revenues from operations would have risen¥4.0 billion year-on-year and operating income would have fallen ¥1.3 billion.
Hanshin Electric Railway

20

Annual Report 2008

Major Ongoing Projects
Hanshin Namba Line (Nishi-Osaka Line Extension Project)
Creation of a new railway network linking Kobe, Osaka and NaraIn the Nishi-Osaka Line Extension Project, we are a forming a wide-area railway network linking Kobe,
Osaka and Nara by strengthening links between the Kobe-Osaka corridor and downtown Osaka, andsharing lines with Kintetsu railway.
Creation of a wide-area network will greatly increase convenience, creating connections at the
new stations Kujo, Dome-mae and Sakuragawa. It will also feature the first private through-routeserving the two major railway terminals in Osaka, Umeda and Namba.
The project uses the top-and-bottom (ownership/operation) separation method, in which NishiOsaka Railway Co., Ltd., a third-sector company, will construct and own railway facilities (lines andstations) using subsidies from the central local governments. Hanshin Electric Railway, one of the
major investors in Nishi-Osaka Railway, will operate the line under a leasing contract.
Project overview■ Project cost: Approx. ¥127.5 billion (including the extension and existing Hanshin lines.)

Hanshin Electric Railway will face a total financial burden of approx. ¥23.0 billion.
■ Opening scheduled for: 20th March 2009
■ Predicted demand: Approx. 84,000 people per day

Hanshin Namba Line logo

■ Hanshin-Namba Line

Sanno
miya
KOBE

Hanshin Main Line

Amagasaki

OSAKA

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Existing
Nishi-Osaka Line

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Hankyu Hanshin Holdings

21Real EstateCore companies: Hankyu Corporation, Hanshin Electric Railway

Overview of the year ended 31st March 2008

Policies in the year ending March 2009

Subdivision and rental businesses
perform well

By leveraging our expertise in community building,provide safe and convenient basic infrastructure andservices that support community lifestyles

Condominiums, residential land both perform well
The Geo Tower Nishinomiya-Kitaguchi (Nishinomiya, Hyogo
Prefecture) and Geo Grande Ashiya-Midorigaoka (Ashiya,
Hyogo Prefecture) developments led strong condominium
subdivision sales, and Kobe Hanayamate Hapia Hills (Kita-ku,
Kobe) underpinned robust residential land sales.

Opening of Kotocross Hankyu Kawaramachi and
Mikage Classe commercial rental facilities
In rental businesses, Kotocross Hankyu Kawaramachi, a commercial rental facility abutting Hankyu Kawaramachi Station
opened in October 2007, and Mikage Classe, a commercial
facility at Hanshin Mikage Station, opened in March 2008, performed well. This combined with high occupancy rates andreduced management and operation costs at Group officeand commercial facilities to offset the impact of sales of properties in the previous term.
Property management and building maintenance businesses strengthened their marketing and improved the quality of services through integration of Hankyu Hanshin Building
Management Co., Ltd., in a measure to consolidate management resources.

・In the Nishinomiya-Kitaguchi Development Project, weplan to open Hankyu Nishinomiya Gardens in November
2008
・Provide a stable supply of around 1,200 condominium units
per year from the year ending March 2010
・Strengthen sales of Minoh Onohara Residence andTakarazuka Yamatedai Residence, the first Hankyu-Hanshin
joint ventures in the single-family house subdivisionbusiness

Enhance enterprise value and optimise cash flow by
striking an appropriate balance between investments
and returns
Raise our profile in the Umeda area,
through renovations of established properties
・Raise our profile in the Umeda area through renovations at Umeda Hankyu Building Reconstruction Project,
Chayamachi Redevelopment Project (Eastern District), andOsaka Station North Area (Northern Railway Yard of Osaka
Station) Development Project■ Results for the year ended 31st March 2008
Revenues from operations:¥179.7 billion (up ¥3.4 billion year-on-year)
Operating income:¥ 39.5 billion (up ¥3.2 billion year-on-year)(Note 1) Results for the previous term, the basis for comparison, are inclusive ofHanshin Group results from the second quarter. (Segment results only include
the nine-month performance by Hanshin Group).
(Note 2) Assuming full management integration from the beginning of theprevious term, on a consolidated basis, revenues from operations would havefallen ¥9.1 billion year-on-year and operating income would have risen ¥1.0
billion.

Geo Tower Nishinomiya Kitaguchi(Nishinomiya, Hyogo)

22

Annual Report 2008

Geo Grande Ashiya-Midorigaoka(Ashiya, Hyogo)

HERBIS ENT (Kita-ku, Osaka)Major Ongoing Projects
Currently, the Hankyu Hanshin Holdings group has several major projects
underway along Group lines. Below are details of progress in these driversof future growth in the real estate business.
■ Major projects

FY2007

FY2008FY2009Chayamachi Project(Eastern District)

FY2012FY2013

Design and construction work carried out
Western District
Oct. 2005: Commercial facility
opens (NU chayamachi)

Nishinomiya-Kitaguchi(Stadium Area)
Saito Project(Western District)

FY2011

Completion of office wing
Construction of office wing
Total floor space: 102,000m2 Rentable area: 70,000m2
Grand opening
Phase II construction of department store
Total floor space: 150,000m2

Umeda Hankyu Building
reconstruction
Phase I construction of department store
Osaka Station North Area(preliminary development)

FY2010Detail
P.23
P.24

Completion of construction:
Second half of FY2013 (target)

Negotiations with local authorities, design, construction work

Construction work

Nov. 2008: Shopping centre opens

FY2011 (target) Commercial facilities to open

P.24
P.25

Rentable area: 100,000m2

Residential units: (5 years ending March 2013) approx. 770 condominiums, approx. 90 subdivision plots Land for facilities: (5 years ending March 2013) approx. 14 hectares

P.25

Rebuilding of Umeda Hankyu Building
Building a new pillar of real estate operations
We aim to construct a multiple-use commercial building on a scale that will make it a landmark in the premium locations of Umeda area, with barrier-free connections with surrounding facilities and enhanced pedestrian traffic flows.
The application of the Urban Renaissance Special Measures Law, enabling a relaxation in floor-area ratios by
800%, means that we can build to a floor-area ratio of 1,800%. At Umeda we plan one of Japan’s largest department stores, occupying 2 floors below ground and 13 floors above ground in a high-rise building that will dwarf
rivals in the neighbourhood in terms of earthquake-resistance and profitability. Offices will occupy floors 17-41.
We aim to transform new Umeda Hankyu Building into a pillar of the real estate business, further strengthening the commercial clout of the area and greatly increasing its rentable area with this building.
Currently, we are committed to opening Phase I of the department store in
the autumn of 2009, to be followed by the office buildings by the first half of fiscal
2011, with completion of Phase II of the department store (Grand Opening) in
spring 2012.
Project overview
Scale
HeightTotal area
Floor-area ratio

Former building
2 floors below ground,12 floors above ground45m
112,600m2
1,000%

Total investment: ¥57.5 billion
Grand opening: Spring 2012

Planned building
2 floors below ground, 41 floors above ground, rooftop level187m
252,000m2
1,800%■

Hankyu Department Umeda Main Store

Rentable area: Approx.140,000m2
Sales floor area: Approx. 84,000m2
Two basement floors and 13 floors above ground■

Artist’s impression ofcompleted new Umeda Hankyu Building

Office use

Rentable area:
Approx. 70,000m2
Office floors:
25 (17th - 41st)
Total area per floor: Approx. 3,700m2
Lease area per floor: Approx. 2,800m2

Hankyu Hanshin Holdings23

Major Ongoing Projects
Osaka Station North Area (Umeda North Yard) Development
Completion of Osaka’s best business address in fiscal 2013
We have begun the redevelopment of the 7-hectare Umeda North Yard preliminary development area, a pillar of therevitalization of the Kansai economy. Umeda North Yard is the premium area around JR Osaka Northern District and oneof the best remaining city-centre business locations in Japan. Hankyu Corporation was selected to join the consortium
developing Blocks A, B and C. In February 2008, the project was officially approved as a special regeneration zone.
Completion is scheduled for the second half of fiscal 2013, under the slogan “Create a community with a bright
future founded on innovation and knowledge.” Centred on the “Knowledge Capital” zone (facilities for research into
robots and IT), development has begun of a multipurpose complex with one of Kansai’s largest office towers, superior
commercial facilities, hotels and residential units. Drawing on its track record and expertise in this kind of development,
the Group will join hands with bid-competition organisers, Osaka City and members in the developer consortium, andhelp further revitalise Umeda by helping creating an attractive community.

FloorsSite area
Building area
Total area subject to calculation of floor-area ratios
Major use

A Block

B Block

C Block

37 floors above ground,
3 floors below
Approx. 10,570m2
Approx. 8,400m2

37 floors above ground,
33 floors above ground,
3 floors below
3 floors below
Approx. 22,679m2
Approx. 15,700m2

50 floors above ground,
1 floor below
Approx. 4,665m2
Approx. 2,500m2

Approx. 169,100m2

Approx. 260,800m2

Approx. 53,700m2

OfficesCommercial facilities

South tower: Offices
North tower: Offices, hotels & residences
Lower-level: Commercial facilities, research facilities
Approx. 228,800m2
Approx. 80,700m2
Approx. 82,300m2
Approx. 52,300m2
Approx. 39,500m2

OfficesCommercial facilities
Total floor Knowledge Capitalarea
Condominiums
Hotels & residences

Condominiums

Artist’s impression of completed Umeda North Yard

Hankyu Chayamachi Bldg.
(Hotel Hankyu International)

C Block

Chayamachi Redevelopment (Eastern District)

B Block

Hotel newHankyu Annex

A Block

NU chayamachi

Construction of new multipurpose complex in Eastern District

HankyuUmeda
StationThe Osaka Station
North Area
(Umeda North Yard)

Following the NU chayamachi commercial facility opened in thewestern district of the Umeda Chayamachi area in October 2005,
we launched a compound development project consisting of Preliminary
development area
(about 7 hectares)
retail, residential, school and administrative blocks. The main works
are scheduled to start by the second half of fiscal 2009. Throughits retail facility and condominium operations, the Company aims
to create comfortable, bustling communities.
■

Outline of project■2

Hotel newHankyu Osaka

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Outline of project (group only)

Site area:
5,130mCommercial and residential block development
Operation of commercial facilities
Total floor area: 34,930m2
Building size: 1 floor below ground, 31 floors above (1st to 3rd floors)
Project type: Compound development consisting of Subdivision of condominium units
retail, residential, school and administrative blocks (4th to 31st floors)

Eastern
Chayamachi district

HERBIS ENT

Hanshin Department
Store
Shin Hankyu Bldg.

HERBIS OSAKAThe Ritz-Carlton, Osaka

Hotel Hanshin

Buildings associated with our group in Umeda area

24

Annual Report 2008

Nishinomiya-Kitaguchi Development Project (Hankyu Nishinomiya Gardens)
One of western Japan’s largest retail complexes, opening November 2008
In November 2008, one of Japan’s largest retail complexes, Hankyu Nishinomiya Gardens, will open on the former siteof the Hankyu Nishinomiya Baseball Stadium, which abuts Hankyu Nishinomiya-Kitaguchi Station in the middle of theresidential area between Osaka and Kobe. This facility will house a Hankyu department store as a core facility. It will bea mixed retail and entertainment space jointly developed by the Hankyu Hanshin Toho group companies, including acinema complex created by Toho Cinemas Ltd. and OS Co., Ltd. In combination with the Hyogo Performing Arts Centre
and the Kitaguchi-Minami Hankyu building just south of the station, the complex will draw not only local residents but
people from a wide area, becoming a nexus in the Osaka-Kobe corridor.
■

Outline of facilities

Facility name: Hankyu Nishinomiya Gardens
Site area: Approx. 70,000m2
Rentable area: Approx. 107,000m2
Number of retail outlets: 268
Parking: Approx. 3,000 cars■

Core facilities

Department store (Hankyu Department Stores, Inc)Store area: 25,000m2
Cinema complex (Toho Cinemas Ltd., OS Co., Ltd)
Size: 12 screens, approx. 2,200 seats
General merchandise store (Izumiya Co., Ltd.)Store area: 11,500m2■

Schedule

October 2007: Construction starts
November 2008: Opening planned“Saito” Development Project
Progress in subdivisions in the western sector
Located approximately 20km north of Osaka City centre in a hilly area comprising the northern part of Ibaraki Cityand eastern part of Minoh City, the 743-hectare International Culture Park “Saito” is a 21st-century public-private sector
new-town development. With harmony between human communities and nature as the theme, we intend the threezones of Saito - western (313 hectares), central (63 hectares), and eastern (367 hectares) - to be a cluster of international
academic, cultural and research and development institutions, mainly in the life sciences. Development of a new residential neighbourhood based on the concept of “building a new garden city” is proceeding smoothly. Up to the year
ended 31st March 2008, we sold out all cluster condominium, single-family houses and land subdivisions and lots. In
March 2007, the Saito-Nishi Station on the Osaka Monorail Saito Line opened, meaning that Senri Chuo Station can bereached in 17 minutes and Umeda Station in 36 minutes (not including time needed to change trains). In March 2008,
the total population stood at some 6,000 residents, an increase of around 1,500 year-on-year.
■

Outline of “Saito”

Total development area: 743ha (western zone: 313ha)
Use: Single-family houses, condominiums, land for facilities, etc.
Resident population: Approx. 6,000 people (as of 31st March 2008)
Working population: Approx. 1,100 people (as of 31st March 2008)■

Outlook for subdivision business (five-year term ending March 2013)

Condominiums: Approx. 770 units
Subdivisions: Approx. 90 lots
Land for facilities: Approx. 14ha

Hankyu Hanshin Holdings

25Entertainment & Communications
Core companies : Hankyu Corporation, Hanshin Electric Railway

Overview of the year ended 31st March 2008

Policies in the year ending March 2009

Hanshin Tigers, Takarazuka Revue andUmeda Arts Theatre perform well

Hanshin Tigers/Hanshin Koshien Stadium andTakarazuka Revue: Strengthen proprietary brands

In our sports businesses, Central League team Hanshin Tigers
reached the playoffs for the Japan Series title in the national
baseball competition. Attendance at home games was also
higher than in 2005, when they won the Central League
pennant.
In the revue and theatre business, a strong performer
was “Adieu Marseille,” in which the leading male-role actress,
Sumire Haruno, gave a farewell performance. Takarazuka
Grand Theatre and Tokyo Takarazuka Theatre both enjoyedhigh seat occupancy. Successful productions at Umeda
Arts Theatre included “Elisabeth” by Vereinigte Bühnen Wien
(United Stages Vienna) and the Umeda Concert by the NHK
Symphony Orchestra.
Other customer draws included the opening of “Billboard
Live” club and restaurant chain (Tokyo, Osaka and Fukuoka),launch of cable TV high-speed internet connection services
and events staged on top of Mt. Rokko in partnership withTakarazuka Revue.

・Create superior content by nurturing and buying the best
players and training new talent・Create a superior spectator environment by renovating
Hanshin Koshien Stadium・Maintain seat occupancy and improve earnings capabilities
at Takarazuka Revue by a fundamental review of ticketingand number of shows・Bring in new customer segments by popularising theBillboard brand

Make more of live events using different media
・Develop multi-use of live-event content through various
media formats
・Develop and implement media-mixing policies (bolster
relationships among units of our publishing, broadcasting,and advertising operations)・Expand channels handled and strengthen informationdelivery (internet and mobile media)■ Results for the year ended 31st March 2008
Revenues from operations:¥95.3 billion (up ¥19.6 billion year-on-year)
Operating income:¥ 8.5 billion (up ¥ 3.3 billion year-on-year)(Note 1) Results for the previous term, the basis for comparison, are inclusive ofHanshin Group results from the second quarter. (Segment results only include
the nine-month performance by Hanshin Group).
(Note 2) Assuming full management integration from the beginning of the previous term, on a consolidated basis, revenues from operations would have risen¥6.5 billion year-on-year and operating income would have grown ¥0.1 billion.

©Hanshin Tigers

26

Annual Report 2008

©Takarazuka Revue Company“Billboard Live” club and restaurantMajor Ongoing Projects
Hanshin Koshien Stadium Renovation
Full reopening scheduled for March 2009
From its opening in 1924 right down to the present, Hanshin Koshien Stadium has been loved bymany fans as the spiritual home of Japanese baseball. Now, we have launched an approximately ¥20
billion renovation project to completely overhaul facilities for greater safety and comfort.
In the first phase of work, completed in March 2008, we renovated the infield seating, expanded
retailing and restaurant facilities and added new advertising space. We are also introducing sales ofnaming rights at some infield seating, a new departure for the stadium, and have signed contracts
with two companies to this effect.
Ahead of the reopening in March 2009, we are creating an even more comfortable, safe spectator environment to draw new customers and boost earnings.

■ Renovation schedule

Phase I construction
October 2007 to March 2008

Works on the infield seating area

Phase II construction
October 2008 to March 2009

Works on the “Alps” and outfield seating,reinstallation of“silver umbrella” roof coverPhase III construction
October 2009 to March 2010

Works on the Stadium exterior

Renovation of Hanshin Koshien Stadium (artist’s impression)

Ahead of the 95th anniversary of the Takarazuka Revue in 2009
□ Increasing the annual number of productions from eight to ten
At the moment, a total of eight productions a year are put on by the Takarazuka Revue at its main venues Takarazuka
Grand Theatre and Tokyo Takarazuka Theatre. With the formation of the new Sora (Cosmos) troupe, the Revue now has
five member troupes (the existing ones being Hana (Flower), Tsuki (Moon), Yuki (Snow) and Hoshi (Star)), meaning thatsome troupes do only one performance a year. With a 10-show annual schedule, we can offer our customers a broader
range of performances, increase the number of performance opportunities for each troupe and help them develop theirstage skills, and foster the stars of the future.

□ New seating categories and ticket-pricing
At both theatres, we are changing seating categories and raising prices for certain seats. Specifically, the best seats (SSand S class) have been repriced, A- and B-class seats and on-the-door B seats are unchanged, and discounts have been
introduced for advance purchases by members of the Takarazuka Revue official fan club, for some performances. In thisway we are creating new opportunities to watch the troupe in action at affordable prices.

Hankyu Hanshin Holdings27

Travel and International Transportation
Core companies: Hankyu Express International*, Hanshin Electric Railway* On 1st April 2008, this company changed its registered name to Hankyu Hanshin Express Holdings

Overview of the year ended 31st March 2008

Policies in the year ending March 2009

Despite a buoyant travel business,
operating income declines
due to high oil prices

Reorganisation of Travel andInternational Transportation Businesses

Travel operations perform well on strong demand for
tourism in Japan
In overseas travel operations, customer numbers on mainstay
European destinations remained high due to a focus on profitability and effective advertising campaigns, despite lower
growth in overseas tourism from Japan due to fuel surcharges
following the surge in oil prices. In travel operations in Japan,
bus-tour operations were also popular, due to aggressive
marketing backed by early advertising campaigns.

International transportation:
Air cargo (imports) continue to struggle
From last year, there were signs of recovery in previously
stagnant air cargo movements (exports), but import cargos
continued to face difficult conditions, mainly due to theimpact of rising transportation costs. At the same time, marine
cargos (imports and exports) continued to benefit from theshift away from air transportation.

Profit declines despite overall rising revenues
As a result of the foregoing, revenues increased year-on-year,
but operating income declined, due to the very tough operating environment faced by the international transportation
business and a decline in rental revenues following the rebuilding of the Hankyu Express International office in Tokyo.

■ Results for the year ended 31st March 2008
Revenues from operations:¥94.4 billion (up ¥6.2 billion year-on-year)
Operating income:¥ 3.2 billion (down ¥1.0 billion year-on-year)(Note 1) Results for the previous term, the basis for comparison, are inclusive ofHanshin Group results from the second quarter. (Segment results only include
the nine-month performance by Hanshin Group).
(Note 2) Assuming full management integration from the beginning of the previous term, on a consolidated basis, revenues from operations would have risen¥0.6 billion year-on-year and operating income would have fallen ¥1.2 billion.

28

Annual Report 2008

・In April 2008, we shifted to a four-company structure, with
Hankyu Travel International Co., Ltd./Hanshin Travel Service
Co., Ltd. (travel), and Hankyu Express International Co.,
Ltd./Hanshin Air Cargo Co., Ltd. (international transportation) operating under the intermediary holding company
Hankyu Hanshin Express Holdings Corporation (please see
P.16-17)
・This overhaul was designed to improve competitiveness andspeed up decision-making in the Travel and International
Transportation businesses

Travel business・Broaden range of value-added products (expanded hiking
holiday options and development of cruise products) toincrease customer appeal
・Leverage benefits of scale through cross-marketing of
package tours and centralised booking by Hankyu Travel
International Co., Ltd. and Hanshin Travel Service Co., Ltd.

International Transportation
・Build up customer base through provision of advanced
logistics systems in line with development of bases ingrowth markets in Asia and Eastern Europe, and expansionof transportation networks in major overseas locations
・Leverage benefits of integration through further expansionof co-loading in air cargo and marine transportation operations, joint use and operation of new warehousing facilities
at Narita Airport, and through promotion of collaborations
abroadHotels
Core company: Hankyu Hotel Management** On 1st April 2008, this company changed its registered name to Hankyu Hanshin Hotels following the merger with Hotel Hanshin, etc.

Overview of the year ended 31st March 2008

Policies in the year ending March 2009

Strengthen competitiveness andearnings capability at established hotels
and build up chain operations

Build up the REMM brandWe are strengthening the competitiveness of establishedhotels through guestroom refurbishment and facility renovation, as well as aggressive marketing activities. We bolstered
our profit base by improving restaurant performance, expanding revenues by taking on consignment operation of restaurants at Takarazuka Grand Theatre, and cutting overall costs
through Group economies of scale in areas such as centralised
purchasing.
Measures to develop our chains included the openingof REMM Hibiya (255 rooms, Chiyoda-ku, Tokyo) in November
2007, and the addition of Tokyo Dai-ichi Inn Hachinohe andTokyo Dai-ichi Inn Hachinohe Annex (both in Hachinohe,
Aomori Prefecture) to the Group hotel business.

■ Results for the year ended 31st March 2008
Revenues from operations:¥69.2 billion (up ¥3.8 billion year-on-year)
Operating income:¥ 1.3 billion (up less than ¥0.1 billion year-on-year)(Note 1) Results for the previous term, the basis for comparison, are inclusive ofHanshin Group results from the second quarter. (Segment results only include
the nine-month performance by Hanshin Group, from July 2006 to March
2007).
(Note 2) Assuming full management integration from the beginning of theprevious term, on a consolidated basis, revenues from operations would havedeclined ¥0.2 billion year-on-year and operating income would have fallen lessthan ¥0.1 billion.

Dai-ichi Hotel Tokyo(Minato-ku, Tokyo)

・Following the opening of REMM Hibiya, in April 2008 we
received our first guests at REMM Akihabara (260 rooms,
Chiyoda-ku, Tokyo)
・Get both hotels operating smoothly, to strengthen the
REMM brandIntegrated management under Hankyu Hanshin Hotels
・Through the April, 2008 merger of Hankyu HotelManagement Co., Ltd., the Hotel Hanshin, Ltd. and Hotel
Hanshin Restaurant Systems Co., Ltd., we created a new,more efficient single managing company, Hankyu Hanshin
Hotels Co., Ltd., to operate the Hankyu-Hanshin-Daiichi
Hotel group chain (please see P.16-17)

Building stronger chain operations
・Bolster and build up chain brands
・Strengthen the service functions as a chain manager, withregard to franchisees and hotels for which operation has
been outsourced to us

Overhaul business structure
by reconfiguring portfolio
・Deal with outdated hotels and develop new locations

Hotel Hankyu International(Kita-ku, Osaka)

REMM Hibiya(Chiyoda-ku, Tokyo)

Hankyu Hanshin Holdings

29

RetailingCore companies: Hankyu Corporation, Hanshin Electric Railway

Overview of the year ended 31st March 2008

Policies in the year ending March 2009

Revenues and income slide due toremoval of The Hanshin Department Store
group from the scope of consolidation

Develop areas away from our lines by leveraging
our experience in store-opening on home turf

In the goods-merchandising businesses, we opened newstores in the Book 1st. and Color Field cosmetics and accessories chains, expanding our flower shop chain from its baseterritory in the Hankyu railway catchment area to the Hanshin
railway network, and opening Hanshin Tigers merchandise
stores in the Hankyu catchment area too. We strengthened
competitiveness by leveraging the know-how of both Hankyu
and Hanshin companies.
In restaurant and food-service businesses, we expandedbusiness scale by aggressively opening outlets in our Cook
Deli Gozen and other chains both within and beyond our railway catchment areas. However, revenues and income bothfell year-on-year, as The Hanshin Department Store, Ltd. andits four subsidiaries were removed from the scope of consolidation at the beginning of the third quarter.

■ Results for the year ended 31st March 2008
Revenues from operations:¥120.8 billion (down ¥35.2 billion year-on-year)
Operating income:¥ 2.7 billion (down ¥ 1.9 billion year-on-year)(Note 1) Results for the previous term, the basis for comparison, are inclusive ofHanshin Group results from the second quarter. (Segment results only include
the nine-month performance by Hanshin Group).
(Note 2) Assuming full management integration from the beginning of theprevious term, on a consolidated basis, revenues from operations would havedeclined ¥65.1 billion year-on-year and operating income would have fallen¥3.0 billion.

Color Field

30

Annual Report 2008

・Open outlets of the large-scale Book 1st. bookstores atcommercial facilities inside and outside the Group
Major store opening projects for the current term ending March 2009
Apr. 2008: Akihabara, Tokyo (approx. 858m2)
Apr. 2008: EBISTA Nishinomiya (approx. 462m2)
Nov. 2008: Shinjuku, Tokyo (tentative name, approx. 3,600m2)
Nov. 2008: Hankyu Nishinomiya Gardens (tentative name, approx. 1,584m2)

・Strengthen merchandising and open new outlets of
the Color Field cosmetics and accessories chain and the
DOUBLEDAY furniture and daily accessories chain

Streamline operation of station shopping centres
・Maximise profit by optimising station store distribution(within station precincts and in underpasses)
・Expansion of services using smart cards
・Create designated logistics system for station stores (within
station precincts and in underpasses)

Create business promotion system
・For greater business management flexibility and improved
competitiveness, retail businesses under the direct control
of Hankyu Corporation will be taken over by Hankyu Retails
Corporation, by means of corporate divestiture, and generalretail management and shared functions will be centralised
under Hankyu Corporation.
・Integrate the asnas chain, operated in communities servedby the Hankyu lines, and An 3 chain, operated in communities served by Hanshin lines, to create a more closely
integrated convenience store business.

Book 1st.

Cook Deli Gozen

Measures to expand number of
STACIA smart card holders andencourage greater use of the card■

STACIA Card, a new Hankyu Hanshin Holding
Group card, was issued in October 2007. We
are working to expand the number of holdersof this multi-functional contactless IC card, as asales promotion tool to cross-sectionally connect different businesses the Group companies
operate.

Features of STACIA card
Multi-functional□ Transportation (PiTaPa)□ Shopping on credit□ Cash advances□ Anshin Goopas (service by which children under 15 years old passing station
exits using the card can alert their guardian’s mobile phone)□ Discounts at Group facilities

Point programs
By shopping on credit using the STACIA card, points can be accumulated. Up to ten times the usual level of points is
granted for purchases on Hankyu Hanshin Holdings Group trains and in Group commercial facilities, hotels and otherfacilities. Accrued points may be exchanged for a “STACIA coupon” that can be used at some Hankyu Hanshin Toho Groupfacilities, encouraging customer visits.

■ Smart card strategy- Aim to be the most popular card among customers who live in Hankyu-Hanshin service areas- Expand number of STACIA smart card holders, encourage greater use of smart cards to boost the Group’s sales andstrengthen its customer base■ Main steps to realise goals of smart card strategy
1. Promote switch by holders of Group’s railway magnetic commuter passes to the use of STACIA smart cards
2. Encourage customers of shopping centres operated by the Group to join the STACIA card plan
3. Strengthen collaborative relationship with H2O Retailing Group
4. Promote further collaboration with companies outside the Group
5. Enhance Groupwide CRM (Customer Relationship Management) through use of STACIA Card member database■ Targets for the term ending March 2011 (FY2011)
Card-holders: 700,000*PiTaPa
PiTaPa, a service operated by Surutto Kansai (Through Kansai transportation
network), offers a post-paid card settlement service for transportation fares aswell as a credit card function for small-amount payments. Centred on the KyotoOsaka-Kobe area, most private railway and public transportation companies in
the Kansai region accept the cards.

PiTaPa-Surutto Kansai’s IC card system

Hankyu Hanshin Holdings

31Corporate Governance and Compliance
We understand that strengthening corporate governance is important for us to remain a corporategroup that is trusted by all our stakeholders, particularly our customers. We seek to bolster corporate
governance by improving management transparency and soundness as well as through rigorous compliance with laws and regulations, and timely and appropriate disclosure of corporate information.

Corporate Governance System(1) Reinforcing the Management Supervisory
Functions and the establishment of a GroupManagement Committee
The Board of Directors consists of 15 members, three of whomare external appointments. In addition to these three external
directors, an additional six directors serving on a non-regularbasis perform supervisory and oversight functions as theirmain duties.
We decided at a regular General Shareholders’ Meeting
held in June 2006 to limit the term of Directors to one year.
The purpose of this move was to clarify responsibility at the
Director level. A one-year term was deemed more appropriate
as it will give the Board more chance to rethink the conditions
for introduction of our anti-takeover defence plan preventing
large-scale purchases of our stock.
We have also established a Group Management
Committee comprising not only Directors but also senior
executives of core businesses operated by Group companies.
The Committee will discuss important matters pertaining toCompany and Group management strategy and businessplanning. When Group companies act in matters that havematerial implications for Group management, for instancewhen operating companies are planning to make an investment that exceeds a specified amount, they are required toseek prior approval from the Company.

32

Moreover, fund procurement has come under one
roof — that of Hankyu Hanshin Holdings — and based on
the overall strategy of the holding company (the maximum
amount for fund procurement) said funds will be allocatedto each business unit by the holding company. In addition tominimising procurement costs, this approach strengthens thegovernance of the corporate group.

(3) Auditing
The Company has five statutory auditors, including threeexternal auditors, who audit the performance of directors andthe businesses and financial position of the Company andGroup companies.
Specialist staff members are appointed to assist theauditors in the performance of their duties. As a rule, the auditors meet once a month to discuss and debate issues and takeexecutive decisions.
In addition, the Group Audit Division carries out internal
audits, with audit plans and reports perused by auditors. The
auditors also receive a general report on internal audits at theCompany and Group companies (including whistle-blowing
reports). Moreover, the auditors receive regular reports fromthe accounting auditors, and also act as observers at on-site
audits of the Company and Group companies by accounting
auditors.

(2) Group Management Policy(4) Ensuring Transparency in Accounting Audits

Under a pure holding company system centred on Hankyu
Hanshin Holdings, Inc., four core operating companies work
towards the best interests of the corporate group as a whole.
Each business unit is given autonomy extending to thescope of management planning related to its businesses.
It is the responsibility of the corporate group as a whole
to deliver a return to all of its shareholders and investors.
We are striving to maintain a good balance of management
information disclosure across our business projects, while
increasing our management transparency.

In accordance with the Corporation Law and the Financial
Instruments and Exchange Law, we have entered into an agreement with KPMG AZSA & Co. to carry out accounting auditing.
There are no special interests that compromise the relationship between the accounting auditors (including employees
belonging to the auditing firm) and the Company.
Measures are also in place to ensure that no employees ofthe said auditing company are engaged in accounting auditsof the Company beyond the ordinary period of duration.

Annual Report 2008

Promotion of Compliance-Focused Management
The growth of the Group has been supported over the years
by the trust it has won through development of areas along
its railway lines. In future, to deepen such trust and support,
we will need to meet the expectations of all our stakeholders(customers, partners, shareholders, regional communities,
employees, etc.). We believe this can only be achieved througha management focus on compliance.
The Company has established a compliance office andis taking measures to enhance and strengthen complianceawareness at all Group companies through training and Group
newsletters. Our compliance programme currently comprises
the following three measures.

(1) Publication of Compliance ManualThis manual voices the Company’s determination to not tolerate violation of laws or social norms or betrayal of customer
trust, by any Group employee from executives down. It also
aims to raise awareness by pointing out cases where compliance errors can easily be made.

(2) Corporate Ethics Consultation Desk (internal
whistle-blower procedures)
We have set up a dedicated whistleblower hotline enabling
all employees to discuss or quickly bring to management’s
notice suspected or known legal violations and unethicalconduct. Business partners are also welcome to use thisconsultation and notification facility, and when necessary wewill use lawyers and other outside specialists to improve its
effectiveness.

(3) Risk Management Committee
In case of actual or suspected major legal violations, the risk
management committee is convened with the President as
Chair, and decisions are taken after discussion of preventive or
corrective actions, and measures to preempt a recurrence.

Compensation for Directors and Auditors
The following table shows the compensation for theCompany’s directors and statutory auditors for the term
ended 31st March 2008.

(¥ million)

Internal

External

Total

Directors

112

28

140

Auditors

10

8

19

122

37

159

Total

(rounded down to the nearest ¥1 million)

Our Corporate Governance System
Shareholders’ General Meeting

Group
Management
Committee

Board of Directors

Board of Auditors

15 Directors(including three external directors)

Five auditors(three of whom are external auditors)

CPAs
PresidentGroup Auditing
Department
Group companies

Hankyu Hanshin Holdings

33

Environmental Preservation Activities
Environmental preservation is a part of corporate social responsibility

Environmental Activities Programmes
In October 2006, Hankyu Hanshin Holdings, Inc. established an Environmental Committee (Committee Chairman:
President of Hankyu Hanshin Holdings, Inc.) to set up a system
to promote environmental preservation activities across thecorporate group. The Environmental Committee is charged
with oversight of the environmental activities of the core
operating companies as well as core companies supporting
their business units.

Certification by External Agencies
ISO14001 environmental management certification has
been obtained at Shojaku Plant of Hankyu Corporation,
Amagasaki rail yard of Hanshin Electric Railway Co., Ltd., thebuilding administration division of Hankyu Hanshin Building
Management Co., Ltd., Hankyu Express International Co., Ltd.
(specifically the Narita Cargo Centre, the Atsugi Cargo Centre
and the Western Japan Logistics Centre), Amanohashidate

Hotel Co., Ltd. the Hotel New Hankyu Osaka, the Hotel New
Hankyu Annex and other business locations.
We have also obtained Green Management Certificationfrom the Ministry of Land, Infrastructure and Transport-affiliatedFoundation for Promoting Personal Mobility and EcologicalTransportation, for Hankyu Bus Co., Ltd.

Green Purchasing
Companies across Japan are now stepping up green purchasing measures, as a means of ensuring more efficient use ofresources. The corporate group has compiled a set of basic
principles for green purchasing, covering all Group activities.
As a result we have achieved a green purchasing rate of 69%
at companies that have introduced green purchasing, with
78% of former Hankyu Holdings group departments using

green purchasing to source office supplies over the Internet.
We are extending the programme to the Hanshin Group in
fiscal 2008.
Looking ahead, we will continue to preferentially buy
products and services with minimal environmental impact
from environment-friendly businesses, and broaden the scopeof application of these principles to other units.

Reference: CO2 emission volumes in fiscal 2007 (by business segment)
Retailing: 2.6%

Our Basic Stance on CSR(Corporate Social Responsibility)

Others: 6.6%
Urban
Transportation: 51.5%

Entertainment andCommunications: 3.1%
Travel andInternational
Transportation: 4.2%
Hotels: 11.1%

Total of

595,000 tons

In addition to our pursuit of profitability across the range ofour businesses, we are also aware of the need to balance thiswith the fulfillment of our social and environmental responsibilities, which include cultural contributions, environmental
preservation, and the importance of respecting the rights of
the individual. To strengthen CSR, it is necessary to find theright balance between social and cultural contributions, environmental preservation and respect for employee rights.

Real Estate: 20.9%*As the corporate group consists of numerous business units and locations,
we were unable to obtain data for some units and locations in time for printing.

34

Annual Report 2008

Financial Section
Contents
36 Six-Year Summary
37 Consolidated Financial Review
41 Business Risks
42 Consolidated Balance Sheets
44 Consolidated Statements of Income
45 Consolidated Statements of Changes in Net Assets
46 Consolidated Statements of Cash Flows
47 Notes to the Consolidated Financial Statements
64 Independent Auditors’ Report

Hankyu Hanshin Holdings35

Six-Year Summary Six years in the period ended 31st March 2008

Thousands of
U.S. dollars (Note)

Millions of yen
2003

For the year:
Revenues from operations ..........
Operating income ........................
Income (loss) before income
taxes and minority interests ........
Net income (loss) ........................
Capital investments .....................
Depreciation and amortisation ....
At year-end:
Total assets .................................
Total net assets ...........................
Total net assets / total assets ......
Per share data (in yen and dollars):
Net income (loss) — basic ...........
Net income — diluted ..................
Shareholders’ equity ...................
Common stock price range(in yen and dollars):
High ............................................
Low .............................................

2004

2005

2006

2007

2008

2008

¥ 477,719 ¥ 471,483 ¥ 476,623 ¥ 486,155 ¥ 743,377 ¥ 752,301
48,06847,99958,76864,842$ 7,523,010

87,00390,725907,250
260,980(145,063)

855

36,042

43,21765,30626,098(89,318)

3,102

26,07925,326

36,619628

6,280

22,771

24,36327,48952,09153,795

134,307

1,343,070

32,10930,10629,97429,612

43,88951,578515,780¥1,754,211 ¥1,715,806 ¥1,670,911 ¥1,609,117 ¥2,366,694 ¥2,348,476$23,484,760

229,845

247,840

277,393360,222522,286

476,63913.10%

14.44%

16.60%

22.39%

21.70%

19.87%¥ (97.92)¥¥

4,766,390

3.32¥ 28.11¥ 25.36¥ 31.84

0.50

$0.01

—

3.28

27.70

25.22

—

0.41

0.00

251.05270.72299.48343.45405.35369.25

3.69

¥418

¥386

¥460

¥886

¥817

¥719

$7.19

300

296

362

365

502

400

4.00

Notes: 1. The U.S. dollar amounts have been translated from Japanese yen, for convenience only, at the rate of ¥100=US$1.00
2. Effective from the year ended 31st March 2007, the Company and its domestic consolidated subsidiaries have adopted the new
accounting standard, the Accounting Standard for Presentation of Net Assets in the Balance Sheet (Statement No. 5 issued by the
Accounting Standards Board of Japan on 9th December 2005) and the Implementation Guidance for the Accounting Standard for
Presentation of Net Assets in the Balance Sheet (the Financial Accounting Standard Implementation Guidance No. 8 issued by the
Accounting Standards Board of Japan on 9th December 2005), (collectively, the “New Accounting Standards”).
By adoption of the new accounting standard for presentation of equity, minority interests and net unrealised gains on hedging
derivatives were included in total net assets for the year ended 31st March 2007 and will be thereafter.

36

Annual Report 2008

Consolidated Financial Review

Revenues from Operations
During the term under review (ended 31st March 2008)
The Hanshin Department Store, Ltd. and H2O Retailing
Corporation (formerly Hankyu Department Stores, Inc.)
implemented a management integration on 1st October
2007, after which The Hanshin Department Store, Ltd.
and its four subsidiaries were excluded from the scope of
consolidation. In spite of this, all six core business segments performed well, and Hanshin Electric Railway Co.,
Ltd. and its consolidated subsidiaries, who were included in
the consolidation as of the second quarter of the previous
year, recorded a net increase in the first quarter. As a result,revenues from operations increased 1.2% to ¥752.3 billion(US$7,523.0 million).
In the Urban Transportation Segment, revenues fromTier 1 railway operations were strong for both Hankyu
Corporation and Hanshin Electric Railway Co., Ltd., andprogress was made on the Hanshin Nishi-Osaka Line
Extension Project, which is scheduled to open in the springof 2009. For the PiTaPa IC card settlement service, we took
steps to increase the value-added on the cards, including measures such as promotional campaigns for the useof IC cards incorporating PiTaPa functions. As a result ofefforts such as these, revenues from operations in the Urban
Transportation Segment increased 7.2% from the previous
year to ¥194.9 billion (US$1,949.0 million).
In the Real Estate Segment, in our condominium

Revenues from Operations(Billions of Yen)

743.4

471.5

476.6

operations, we provided a stable supply of units — principally of the Geo condominium series — in areas close to ourrailway lines, and we were an active supplier of units in theTokyo metropolitan area. In leasing operations, we opened
new commercial facilities, and maintaining high occupancy
ratios in both rental buildings and commercial facilities while
cutting our operating and management costs, increased
profitability. In addition, we endeavoured to enhance thebrand value of the areas close to our railway lines, including by the rebuilding of the Umeda Hankyu Building and
the Nishinomiya-Kitaguchi development project (Hankyu
Nishinomiya Gardens) in the Umeda and surrounding areas.
With these effects, revenues from operations in the Real
Estate Segment grew 1.9% year on year to ¥179.7 billion(US$1,796.9 million).
In the Entertainment and Communications Segment,in the stage revue business, both the Takarazuka Grand
Theater and the Tokyo Takarazuka Theater achieved highseat occupancy ratios, owing to factors such as the farewell
performances of a retiring top Takarazuka Revue star. In
sports operations, the Hanshin Tigers professional baseballteam stayed in the race for the pennant until the final stagesof the season, resulting in stadium attendance that exceeded
the figure recorded in 2005, when the team won the championship. As a result, revenues from operations in theEntertainment and Communications Segment rose 25.9%
from the previous year to ¥95.3 billion (US$953.3 million).

Costs of Revenues from Operations(Billions of Yen)

752.3

486.2

2004 2005 2006 2007 2008

656.4

423.5

417.9

661.6

421.3

2004 2005 2006 2007 2008

Hankyu Hanshin Holdings37

In the Travel and International Transportation Segment,
the number of passengers for European destinations
remained high in our overseas travel operations. In domestic
travel operations, the number of passengers was also high,principally for bus tours. In the international transportation
operations, there were signs of a recovery in air shipments
for export cargoes, but the situation for import air shipments
remained very difficult. In contrast, factors such as the shift
away from air transportation gave rise to robust demand
for marine transportation for both imports and exports. To
further enhance the competitiveness of both our air andmarine cargo operations, on 1st April 2008, we carried out
a restructuring in which Hankyu Hanshin Express Holdings
Corporation (formerly Hankyu Express International Co., Ltd.)
became an intermediary holding company. As a result of
these developments, revenues from operations in the Traveland International Transportation Segment increased 7.0%
from the previous year to ¥94.4 billion (US$944.4 million).
In the Hotels Segment, we took steps to give existing
hotels a sharper competitive edge and expand the hotel
chain, by opening accommodation-oriented REMM Hotels
that target not only our existing customer base but also
women and other new prospective customers. As a resultof these efforts, revenues from operations in the Hotels
Segment were up by 5.8% to ¥69.2 billion (US$692.4
million).

Operating Income andRatio of Operating Income
to Revenues from Operations

In the Retailing Segment, competitiveness was boosted
by the opening of new outlets, including in the Book 1st.
bookshop chain and the Color Field chain of cosmetics, clothing and accessories stores. In addition, we took
advantage of the business integration by such means as
opening flower shops, which previously were mainly along
Hankyu railway lines, on Hanshin lines, and opening Hanshin
Tigers goods shops along Hankyu lines. However, primarily
because The Hanshin Department Store and its four subsidiaries were excluded from the scope of consolidation fromthe third quarter, revenues from operations in the Retailing
Segment fell by 22.5% from the previous year to ¥120.8 billion (US$1,207.5 million).
The Other Segment was affected by factors such as
the addition of the first quarter results of Hanshin KensetsuCo., Ltd. and other Hanshin Group companies. As a result,revenues rose 1.7% from the previous year to ¥44.8 billion(US$448.2 million).
As a result of the developments described above, the ratiosof consolidated operating revenues accounted for by each segment were as follows: 25.6% by Urban Transportation, 20.4%
by Real Estate, 11.5% by Entertainment and Communications,
12.5% by Travel and International Transportation, 9.2% by the
Hotels Segment, 15.8% by Retailing, and 5.0% by the Other
Segment.

Income before Income Taxes
and Minority Interests(Billions of Yen)

(Billions of Yen / %)

87.0

58.8

10.2

12.3

65.3

64.8

43.2

13.3

48.0

90.7

36.0

12.1

26.1

11.7

0.9

2004 2005 2006 2007 2008
Operating income
Ratio of operating income
to revenues from operations

38

Annual Report 2008

2004 2005 2006 2007 2008

Consolidated Financial Review

Operating Income
During the term under review, operating income increased
4.3% year on year to ¥90.7 billion (US$907.3 million). A
breakdown for each segment is provided below.
In the Urban Transportation Segment, there was anincrease in operating revenue, but owing primarily to achange in the tax system, depreciation charges rose, withthe result that operating income slipped 0.1% to ¥33.2 billion (US$331.6 million).
In the Real Estate Segment, factors such as robust condominium sales increased operating income by 8.9%, to¥39.5 billion (US$395.2 million).
In the Entertainment and Communications Segment,
operating income rose 63.2% to ¥8.5 billion (US$85.5 million). This was attributable principally to strong stage revue
business and the fact that the Hanshin Tigers continued tocompete until the final stages of the season.
In the Travel and International Transportation Segment,
travel operations performed well, but the operating environment for the international transportation business washarsh, and the renovation of Hankyu Express International’sTokyo building caused rental income to decline. As a resultof these and other factors, operating income was down by
24.5% to ¥3.2 billion (US$32.1 million).
In the Hotels Segment, vigorous marketing activity contributed to a 1.0% increase in operating income to ¥1.4 billion (US$13.5 million).

In the Retailing Segment, owing primarily to the fact that
The Hanshin Department Store, Ltd. and its four subsidiaries
were excluded from the scope of consolidation, operating
income decreased by 41.7% to ¥2.7 billion (US$27.2
million).
The Other Business Segment returned to profitability,
posting operating income of ¥0.9 billion (US$9.0 million).
Other Income and Expenses
Other expenses exceeded other income by ¥64.6 billion(US$646.3 million). This was attributable principally to anincrease in interest payments on interest-bearing debt from
capital investments and to the posting of a valuation loss
by Hankyu Corporation on its holding of land for sale in theInternational Culture Park “Saito.”
The net result was that income before income taxes andminority interests totalled ¥26.1 billion (US$261.0 million)
and that net income was down by 98.3% to ¥0.6 billion(US$6.3 million).
Financial Position
1. Equity
Equity defined as net assets after deduction of minority
interests totalled ¥466.6 billion (US$4,665.7 million) at theend of the term under review, representing a year-on-year
decline of ¥47.0 billion. Principal factors for the decline
included the very modest level of accumulated profit andTotal Assets and Equity

Net Income per Share —Basic and ROE(Billions of Yen)
2,366.7 2,348.5(Yen / %)

9.93
7.94

8.38

1,715.8 1,670.9

1,609.1
1,853.2 1,881.9

28.11

25.36

31.84

1,468.0 1,393.5 1,248.9

1.30
3.32

0.13
0.50

247.8

277.4

360.2

513.5

466.6

2004 2005 2006 2007 2008

2004 2005 2006 2007 2008

Net Income per Share — Basic
ROE

Total assets
EquityNote: EBITDA refers to the total sum ofoperating income and depreciation &amortisation expenses.
Hankyu Hanshin Holdings

39

Cash Flows
Cash and cash equivalents declined by ¥9.0 billion from theend of the previous term to ¥31.2 billion (US$311.7 million)at the end of the term under review.
Net cash provided by operating activities totalled ¥74.9
billion (US$749.0 million). Net cash used in investing
activities was ¥100.1 billion (US$1,000.6 million), and net
cash provided by financing activities totalled ¥36.7 billion(US$367.2 million). The principal factor behind these results
was the implementation of large-scale development projects
with the use of cash derived from operating activities andborrowing.

the impact of factors such as the valuation loss on holdings of land for sale, a fall in retained earnings resulting fromchanges in the scope of consolidation, and a substantial
decline in net unrealised holding gain on securities owing
primarily to the sluggishness of share prices.
The Hankyu Hanshin Group uses ROE (return on equity)
on a consolidated basis as an indicator of capital efficiency.
Its goal is to achieve a level of ROE of at least 6.0% by
fiscal 2013.
2. Fund Procurement
At the end of the term, interest-bearing debt on a consolidated
basis totalled ¥1,271.1 billion (US$12,711 million), an increaseof ¥61.7 billion from the end of the previous term. A major reason for this was that the aggregate capital investment of operating subsidiaries substantially exceeded depreciation charges.
The Hankyu Hanshin Group uses the ratio of interestbearing debt to EBITDA (earnings before interest, taxes,
depreciation and amortization) on a consolidated basis as
an indicator of financial soundness. The Hankyu HanshinGroup’s goal is to lower this ratio to the 7.0 level by fiscal
2013; the ratio was 8.8 in the term under review.

Capital Investments

Equity Ratio(%)

Interest-Bearing Debt andRatio to EBITDA(Billions of Yen)

(Billions of Yen / Times)
1,209.4

22.4

134.3

21.7

1,271.1

1,064.4
988.1
889.6

19.9

12.95

16.6

10.64

14.4
52.1
24.4

2004 2005 2006 2007 2008

53.8

8.99

8.26

8.75

27.5

2004 2005 2006 2007 2008

2004 2005 2006 2007 2008
Interest-bearing debt(including financial business)
Interest-bearing debt to EBITDA(excluding financial business)

Note: EBITDA refers to the total sum ofoperating income and depreciation &amortisation expenses.

40

Annual Report 2008

Business Risks

The various categories of risk to which the business performance, stock price, financial position andother aspects of operations of the Hankyu Hanshin Holdings Group are subject are detailed below.
Legal risk

Interest-bearing debt

In accordance with the stipulations of Article 3 of the Railway
Business Law, the Group must obtain permission, separately,
from the Ministry of Land, Infrastructure, Transport andTourism to engage in each category of railway operations
on each route that it intends to operate. Moreover, under
Article 16 of the Law, a railway operator must obtain the
Ministry’s permission, separately, for the passenger fares
it intends to set, and on each occasion when it wishes
to change the fares. Consequently, there is a certain riskthat the Group’s railway operations may be constrainedin some way by the Ministry’s administration of theseregulations.

The balance of interest-bearing debt held by the Group asof the end of March 2008, on a consolidated basis, was¥1,271,100 million.
As a result of the acquisition of shares in Hanshin Electric
Railway Co., Ltd. through a successful public tender offer inthe form of a takeover bid on 27th June 2006, Hanshin Railway
has become a consolidated subsidiary of Hankyu Hanshin
Holdings. This acquisition has resulted in an increase in thebalance of interest-bearing debt of the Group. On the other
hand, management integration between Hanshin Electric andthe Hankyu Corporation Group has led to an increase in cash
flow, and the Group is not expected to have any significant
difficulty in repaying its debts. Additionally, the Group is
responding to this increase in the balance of interest-bearing
debt as a result of the management integration with Hanshin
Electric by diversifying its fund procurement methods, using
all possible means to minimise the negative impact of interest
rate movements. Be that as it may, in the unlikely event thatinterest rates rise suddenly and in excess of our projections, this
could exert an adverse effect on the business performance andfinancial position of the Group.

Progress in large-scale development projects
The Group is working to utilise its working assets more
effectively to facilitate the development of areas served by
the Hankyu and Hanshin railway lines. To raise its asset
effectiveness, the Group is pursuing the following initiatives:
reconstruction of the Umeda Hankyu Building; developmentof the Chayamachi area of the Umeda district; developmentof Nishinomiya-Kitaguchi Station; development of the former
Takarazuka Familyland site; further development of theInternational Culture Park “Saito” (a new town). These projects
are all believed to be key to the Group’s future growth, and
the Group’s management will be working to complete thesedevelopment projects as soon as possible. However, in theevent of rapid and major changes in the business environment,such as in land prices or changes in direction in the urban
development plans, the business performance and financial
position of the Group could be adversely affected.
Based on a project reappraisal by Urban RenaissanceAgency, our subsidiary Hankyu Corporation adopted aconservative estimate of the market value of its holdings of landfor sale at the “Saito” international culture park development
project in March 2008, in light of deepening uncertainties about
the pace and profitability of future development at Saito.

Transfer of equity-method affiliate
In order to ensure greater convenience for users of the
Hokushin Kyuko Railway Co., Ltd., an affiliate accounted forunder the equity method (currently a consolidated subsidiary),
the company has agreed to a plan transferring that railway’s
facilities to Kobe Rapid Transit Railway Co., Ltd.
To facilitate the plan, in 2002 we provided Kobe Rapid
Transit Railway Co., Ltd. with financing for part of the funds
necessary to purchase the facilities.
In September 2007, our equity method affiliate, Kobe
Electric Railway Co., Ltd., temporarily suspended support
for the rehabilitation of Hokushin Kyuko Railway Co., Ltd. To
maintain the rehabilitation project, additional financing was
extended to Hokushin Kyuko Railway by Hankyu Corporation.
We will continue to provide assistance to ensure that
Hokushin Kyuko Railway can conduct smooth and efficient
operations as a second-tier railway operator. However, thebusiness performance and financial position of the Group could
be affected by changes in this plan.

Hankyu Hanshin Holdings

41

Consolidated Balance Sheets As of 31st March 2007 and 2008

Thousands of
U.S. dollars (Note 1)

Millions of yen

Assets

2007

2008

2008

Current assets (Note 5):
Cash and cash equivalents (Note 18) .........................................................

¥

41,806¥33,073$

330,730

Trade receivables .......................................................................................

95,945

102,651

1,026,510

Short-term loans ........................................................................................

43,44446,929469,290

Allowance for doubtful receivables ............................................................

(7,270)(7,666)(76,660)

Inventories (Note 4) ...................................................................................

194,957

146,089

1,460,890

Deferred tax assets (Note 16) ....................................................................

18,77816,182

161,820

Prepaid expenses and other current assets...............................................

37,82140,280402,800

Total current assets.............................................................................

425,481

377,538

3,775,380

Nonconsolidated subsidiaries and affiliates............................................

114,507

158,141

1,581,410

Other securities ......................................................................................

163,376108,622

1,086,220

Long-term loans .........................................................................................

42,83425,336

253,360

Investments and other assets (Note 5):
Investments in:Deferred tax assets (Note 16) ....................................................................

6,939

5,207

52,070

Other investments .....................................................................................

65,61460,152

601,520

Allowance for doubtful receivables ............................................................

(5,852)(6,153)(61,530)

Total investments and long-term loans ...............................................

387,418

351,305

3,513,050

Land (Note 2 (j))..........................................................................................

777,338

812,870

8,128,700

Buildings and structures ............................................................................

1,093,585

1,110,483

11,104,830

Rolling stock and buses .............................................................................

199,387

212,460

2,124,600

Machinery and equipment .........................................................................

126,093

126,862

1,268,620

Construction in progress ............................................................................

88,180132,915

1,329,150

Property and equipment (Note 5):2,284,583

2,395,590

23,955,900

Less accumulated depreciation .................................................................

(807,664)(842,011)(8,420,110)

Property and equipment — net ..........................................................

1,476,919

1,553,579

15,535,790

Intangible assets (Note 5) ............................................................................

76,876

66,054

660,540¥2,366,694¥2,348,476$23,484,760

See the accompanying notes to the consolidated financial statements.

42

Annual Report 2008

Millions of yen

Thousands of
U.S. dollars (Note 1)

Liabilities and Net Assets
Current liabilities:
Short-term borrowings (Note 5) .................................................................
Current portion of long-term debt (Note 5) ................................................
Trade payables ...........................................................................................
Accrued expenses .....................................................................................
Income taxes payable ................................................................................
Advances received .....................................................................................
Employees’ savings deposits.....................................................................
Provision for restructuring costs ................................................................
Other current liabilities (Note 16) ...............................................................
Total current liabilities .........................................................................

2007

2008

2008

¥ 137,689
179,868
124,314
26,425
4,959
52,84812,529201
49,999588,832¥ 202,241
139,102126,137
22,956
6,891
56,506
12,595201
29,887596,516$ 2,022,410
1,391,020
1,261,370
229,560
68,910565,060
125,950
2,010
298,870
5,965,160

Long-term liabilities:
Long-term debt due after one year (Note 5) ..............................................
Deferred tax liabilities related to land revaluation ......................................
Employees’ severance and retirement benefits (Note 6) ..........................
Retirement benefits for directors and corporate auditors ..........................
Reserve for investment losses ..................................................................
Negative goodwill ......................................................................................
Deposits from tenants (Note 7) .................................................................
Other noncurrent liabilities (Notes 8 and 16) .............................................
Total long-term liabilities .....................................................................

891,825
6,825
64,405554
29,7852,769
97,007
162,406
1,255,576

929,757
7,007
59,153705
17,935681
103,487
156,596
1,275,321

9,297,570
70,070591,530
7,050
179,350
6,810
1,034,870
1,565,960
12,753,210

99,475150,062
228,570

99,475150,134
211,758

994,750
1,501,340
2,117,580(2,301)
475,806(3,267)458,100(32,670)
4,581,000

34,583
204
2,604
333
37,724
8,756
522,286¥2,366,694

6,621
(557)
2,193
212
8,469
10,070476,639¥2,348,476

66,210(5,570)21,9302,120
84,690100,700
4,766,390$23,484,760

Contingent liabilities (Note 9)
Net assets (Note 10):
Shareholders’ equity:
Common stock
Authorised — 3,200,000 thousand shares
Issued — 1,271,407 thousand shares .....................................................
Capital surplus............................................................................................
Retained earnings ......................................................................................
Less treasury stock, at cost:
4,536,540 shares in 2007 and 7,857,884 shares in 2008 ........................
Total shareholders’ equity...................................................................
Accumulated gains from revaluation and translation adjustments
Net unrealised holding gains on securities ................................................
Net unrealised gains on hedging derivatives .............................................
Surplus from land revaluation (Note 2(j)) ...................................................
Foreign currency translation adjustments ..................................................
Total accumulated gains from revaluation and translation ..................
Minority interests.........................................................................................
Total net assets ..................................................................................

Hankyu Hanshin Holdings

43Consolidated Statements of Income Years ended 31st March 2006, 2007 and 2008

Thousands of
U.S. dollars (Note 1)

Millions of yen
2006

2007

2008

Revenues from operations....................................................................

¥486,155 ¥743,377 ¥752,301$7,523,010

Costs of revenues from operations ......................................................
Operating income .............................................................................

421,31364,842

656,374
87,003

661,576
90,725

6,615,760
907,250

Income before income taxes and minority interests .......................

1,018(15,071)
2,265
169
4,003
(2,414)(1,105)(4,893)
—
1,114
—
—
(187)
(6,988)(1,998)——
6,222—(3,760)(21,625)
43,217

2,733(19,726)
1,517
780
3,675
7,275
(763)
(2,766)(3,930)2,680(3,399)(2,321)—(869)(4,346)
3,091(1,992)0—(3,336)(21,697)
65,306

2,278(23,498)
1,048
1,975
3,748
6,381
(1,012)
—
—
1,463
(717)
(69,133)—(8,796)———
16,908
9,956(5,228)(64,627)
26,09822,780(234,980)
10,48019,75037,48063,810(10,120)——
14,630(7,170)(691,330)—(87,960)———
169,080
99,560(52,280)(646,270)
260,980

Income taxes (Note 16):
Current .................................................................................................
Deferred ...............................................................................................
Income before minority interests ....................................................

2,746
14,83925,632

9,314
17,874
38,118

9,631
15,196
1,271

96,310151,960
12,710

Other income (expenses):
Interest and dividend income...............................................................
Interest expense ..................................................................................
Amortisation of negative goodwill .......................................................
Gain on sale of securities .....................................................................
Equity in income of affiliates ................................................................
Gain (loss) on disposal of property and equipment — net (Note 2(i)).....
Special allowance for doubtful receivables ..........................................
Special reserve for investment losses .................................................
Loss on financial support to subsidiaries and affiliates ........................
Gain on contributions for construction works — net (Note 2(i))...........
Loss on real estate for sale ..................................................................
Write-down of real estate for sale .......................................................
Restructuring costs ..............................................................................
Loss on impairment of fixed assets (Note 11) .....................................
Contribution to construction of Osaka Monorail Saito Line .................
Gain on transfer of professional baseball player to U.S major leagues ...
Provision for accruing interest on past consumer loans ......................
Dividend from investment in silent partnership ...................................
Gain on change in equity by management integration.........................
Other — net (Note 11) .........................................................................

Minority interests in income of consolidated subsidiaries .................
Net income ......................................................................................

(306)(1,499)¥ 25,326 ¥ 36,619 ¥

(643)
628

Yen

Net income per share — basic..............................................................
Net income per share — diluted (Note 2(u)) .........................................
Dividends per share of common stock ................................................
See the accompanying notes to the consolidated financial statements.

44

2008

Annual Report 2008¥25.3625.22
5.00¥31.84—
5.00$(6,430)6,280

U.S. dollars (Note 1)

¥0.50
0.41
5.00

$0.01
0.00
0.05

Consolidated Statements of Changes in Net Assets Years ended 31st March 2006, 2007 and 2008

Thousands of
U.S. dollars (Note 1)

Millions of yen
2006

Common stock:
Balance at beginning of year ................................................................
Stock issued of new share (Note 10) ...................................................
Conversion of convertible bonds (Note 10)..........................................
Balance at end of year .........................................................................
Capital surplus:
Balance at beginning of year ................................................................
Stock issued of new share (Note 10) ...................................................
Conversion of convertible bonds (Note 10)..........................................
Effect of sale of treasury stock ............................................................
Balance at end of year .........................................................................
Retained earnings:
Balance at beginning of year ................................................................
Net income .........................................................................................
Effect of changes in consolidated subsidiaries and investments
accounted for by the equity method — net .......................................
Transfer from land revaluation .............................................................
Appropriations:
Cash dividends .................................................................................
Directors’ and corporate auditors’ bonuses .....................................
Balance at end of year .........................................................................
Less treasury stock, at cost:
Balance at beginning of year ................................................................
Net changes .........................................................................................
Balance at end of year .........................................................................
Net unrealised holding gains on securities:
Balance at beginning of year ................................................................
Net changes during the year ................................................................
Balance at end of year .........................................................................
Net unrealised gains on hedging derivatives:
Balance at beginning of year ................................................................
Net changes during the year ................................................................
Balance at end of year .........................................................................
Surplus from land revaluation:
Balance at beginning of year ................................................................
Transfer to retained earnings ...............................................................
Other — net .........................................................................................
Balance at end of year .........................................................................
Foreign currency translation adjustments:
Balance at beginning of year ................................................................
Adjustments from translation of foreign currency financial statements ....
Balance at end of year .........................................................................
Minority interests:
Balance at beginning of year ................................................................
Net increase ........................................................................................
Balance at end of year .........................................................................

2007

2008

2008

¥ 75,969 ¥ 97,545 ¥ 99,475
19,895
1,930
—
1,681
—
—
¥ 97,545 ¥ 99,475 ¥ 99,475$ 994,750——$ 994,750¥

3,367 ¥ 24,985 ¥150,062
19,812 125,097
—
1,679
—
—
127
(20)
72
¥ 24,985 ¥150,062 ¥150,134$1,500,620——
720$1,501,340¥ 76,775 ¥196,412 ¥228,570
25,326
36,619628$2,285,700
6,280

871
96,261(11,063)(24)(110,630)(240)(2,781)(5,248)(6,353)(40)——¥196,412 ¥228,570 ¥211,758(63,530)—$2,117,580

¥

$

¥

700 ¥
(369)
331 ¥

788
(1)

331 ¥
1,970
2,301 ¥

2,301
966
3,267

23,0109,660
32,670$¥ 21,423 ¥ 38,817 ¥ 34,583
17,394(4,234) (27,962)¥ 38,817 ¥ 34,583 ¥ 6,621$ 345,830(279,620)$ 66,210

¥

— ¥
—
— ¥

— ¥
204
204 ¥

204
(761)
(557)

$

¥100,815 ¥(96,261)(1,950)¥ 2,604 ¥2,604 ¥——
2,604 ¥

2,604
—
(411)
2,193

$

190 ¥
143
333 ¥

333
(121)
212

$

¥

¥
¥
¥
¥

(256) ¥
446
190 ¥
1,987 ¥
341
2,328 ¥

2,328 ¥ 8,756
6,428
1,314
8,756 ¥ 10,070

$

$

$

2,040
(7,610)(5,570)26,040—(4,110)21,9303,330(1,210)2,120$

87,56013,140$ 100,700

Number of shares of common stock issued
2006

At beginning of year ................................................................................ 927,867,655
Issue of new shares ................................................................................ 121,670,471
Stock issued on share exchange ............................................................
—At end of year .......................................................................................... 1,049,538,126

2007

2008

1,049,538,126
214,209,324
7,659,478
1,271,406,928

1,271,406,928——
1,271,406,928

See the accompanying notes to the consolidated financial statements.

Hankyu Hanshin Holdings

45

Consolidated Statements of Cash Flows Years ended 31st March 2006, 2007 and 2008

Thousands of
U.S. dollars (Note 1)

Millions of yen
2006

2007

2008

2008

Cash flows from operating activities:
Income before income taxes and minority interests ............................... ¥ 43,217 ¥ 65,306 ¥ 26,098 $ 260,980
Depreciation and amortisation .................................................................
29,612
43,88951,578515,780
Loss on impairment of fixed assets .........................................................
6,988
869
8,797
87,970
Amortisation of goodwill and negative goodwill......................................
(2,265)719
1,849
18,490Equity in income of affiliates ....................................................................
(4,003)(3,675)(3,748)(37,480)
Decrease in employees’ severance and retirement benefits ..................
(2,071)(2,201)(1,817)(18,170)
Increase in allowance for doubtful receivables ........................................
3,071(3,992)
729
7,290
Increase in reserve for investment losses ...............................................
4,558
4,228
(1,116)(11,160)
Interest and dividend income...................................................................
(1,018)(2,733)(2,278)(22,780)
Interest expense ......................................................................................
15,071
19,72623,498234,980
Gain on sale of property and equipment ..................................................
(333)(12,592)(10,489)(104,890)
Loss on sale of property and equipment .................................................
1,108
866
391
3,910
Loss on disposal of property and equipment ...........................................
1,639
2,189
1,720
17,200Loss on deduction of property and equipment ........................................
240
2,262
1,997
19,970Gain on sale of securities .........................................................................
(169)(2,948)(1,975)(19,750)
Loss on sale of marketable and investment securities ............................
—
1,882
—
—
Gain on change in equity by management integration (Note 12) ..............
——(9,956)(99,560)
Gain on contributions for construction work ............................................
(1,016)(2,312)(806)(8,060)
Dividend from investment in silent partnership .......................................
(6,222)—(16,908)(169,080)(Increase) decrease in trade receivables ..................................................
4,642(25,612)(1,731)(17,310)(Increase) decrease in inventories ...........................................................
(12,732)850(15,013)(150,130)
Write-down of real estate for sale ...........................................................
—
2,321
69,133
691,330(Increase) decrease in trade payables ......................................................
8,546
17,566(4,612)(46,120)
Other ........................................................................................................
1,395(3,831)(5,392)(53,920)
Subtotal ................................................................................................
90,258102,777
109,949
1,099,490
Interest and dividends received ...............................................................
8,053
3,698
3,141
31,410Interest paid .............................................................................................
(13,885)(20,161)(23,135)(231,350)
Income tax paid........................................................................................
(4,196)(7,332)(15,053)(150,530)
Net cash provided by operating activities.............................................
80,23078,98274,902
749,020
Cash flows from investing activities:
Purchases of property and equipment .....................................................
(47,692)(53,356) (133,994) (1,339,940)
Proceeds from sales of property and equipment.....................................
5,296
46,24827,848278,480
Purchases of investment securities .........................................................
(9,067)(7,595)(5,674)(56,740)
Proceeds from sales of investment securities.........................................
9,739
22,554
4,232
42,320Purchases of investments in consolidated subsidiaries
affecting scope of consolidation ............................................................
— (210,380)(528)(5,280)
Proceeds from sales of investments in consolidated subsidiaries
affecting scope of consolidation ............................................................
—
563
—
—
Net increase in short-term loans receivable.............................................
(8,123)(5,351)(7,202)(72,020)
Long-term loans advanced .......................................................................
(1,038)(874)(10,948)(109,480)
Proceeds from collection of long-term loans ...........................................
873
6,322
1,008
10,080Receipt of contributions for construction.................................................
2,228
5,542
3,101
31,010Receipt of dividend from investment in silent partnership ......................
——
19,562
195,620
Other ........................................................................................................
4,584(3,252)
2,537
25,370Net cash used in investing activities ....................................................
(43,200) (199,579) (100,058) (1,000,580)
Cash flows from financing activities:
Net increase (decrease) in short-term borrowings...................................
(5,604)35,36245,706457,060
Proceeds from long-term borrowings ...................................................... 139,487
241,463
140,920
1,409,200
Repayment of long-term debt .................................................................. (223,802)(82,991) (117,043) (1,170,430)
Proceeds from new shares issued ..........................................................
39,433———
Proceeds from new bonds issued ...........................................................
——
39,794397,940
Redemption of bonds ..............................................................................
(15,160)(49,900)(66,000)(660,000)
Net increase (decrease) in commercial paper ..........................................
7,000(7,000)——
Dividends paid..........................................................................................
(2,781)(5,248)(6,353)(63,530)
Dividends paid to minority shareholders of consolidated subsidiaries.....
(69)
(74)
(235)
(2,350)
Other ........................................................................................................
(464)
678
(71)
(710)
Net cash provided by (used in) financing activities...............................
(61,960) 132,290
36,718367,180
Effect of exchange rate changes on cash and cash equivalents ...........
446
99
(159)
(1,590)
Increase (decrease) in cash and cash equivalents ..................................
(24,484)
11,792
11,403
114,030
Cash and cash equivalents at beginning of year ....................................
52,37028,37540,167
401,670
Increase in cash and cash equivalents from newly consolidated
subsidiaries .............................................................................................
489
—
842
8,420
Decrease in cash and cash equivalents due to exclusion ofsubsidiaries from consolidation .............................................................
——(21,245)(212,450)
Cash and cash equivalents at end of year (Note 18) ............................... ¥ 28,375 ¥ 40,167 ¥ 31,167 $ 311,670
See the accompanying notes to the consolidated financial statements.

46

Annual Report 2008

Notes to the Consolidated Financial Statements

1. Basis of presenting consolidated financial statements
The accompanying consolidated financial statements ofHankyu Hanshin Holdings, Inc. (the “Company”) have been
prepared in accordance with the provisions set forth in the
Financial Instruments and Exchange Law and its related
accounting regulations and in conformity with accounting
principles generally accepted in Japan, which are different incertain respects as to application and disclosure requirementsfrom International Financial Reporting Standards.
The accounts of overseas subsidiaries are based on theiraccounting records maintained in conformity with generally
accepted accounting principles prevailing in the respective
countries of domicile. The accompanying consolidated financial statements have been restructured and translated into
English, with some expanded descriptions and the inclusion of the 2006 consolidated statements of changes in net

assets, from the consolidated financial statements of theCompany prepared in accordance with Japanese GAAP and
filed with the appropriate Local Finance Bureau of the Ministryof Finance as required by the Financial Instruments andExchange Law. Some supplementary information included in
the statutory Japanese language consolidated financial statements, but not required for fair presentation, is not presented
in the accompanying consolidated financial statements.
The translation of the Japanese yen amounts into U.S.
dollars are included solely for the convenience of readers outside Japan, using the prevailing exchange rate at 31st March
2008, which was ¥100 to $1.00. The translations should
not be construed as representations that the Japanese yenamounts have been, could have been, or could in the future
be converted into U.S. dollars at this or any other rate ofexchange.

2. Significant accounting policies(a) Consolidation
The consolidated financial statements include the accountsof the Company and significant subsidiaries (together, the“Group” or “Companies”) that meet the control requirements
for consolidation. The consolidated financial statements comprise the accounts of 65, 96 and 94 subsidiaries for each of
the three years in the period ended 31st March 2008.
The Company has adopted the equity method of accounting for investments in which the Company owns 20-50% orexerts influence over financial and operational policies 11,11
and 7 significant affiliates, respectively for the three years in
the period ended 31st March 2008.
All significant intercompany transactions and accounts
have been eliminated.
In the elimination of investments in subsidiaries, theassets and liabilities of the subsidiaries, including the portion
attributable to minority shareholders, are evaluated using thefair value at the time the Company acquired control of therespective subsidiary.
The difference between the cost of investments in subsidiaries and affiliates and the equity in their net assets at thedate of acquisition is amortised over five years. The difference derived from the management integration with Hanshin
Electric Railway Co., Ltd. and H2O Retailing Corporation is,amortised in equal amounts over twenty years.
Some subsidiaries and affiliates are consolidated with
year-ends that differ from that of the Company. However,necessary adjustments have been made if the effect of thedifference is material.

trading purposes (“trading securities”), (2) debt securities
intended to be held to maturity (“held-to-maturity debt securities”), (3) equity securities issued by subsidiaries and affiliatedcompanies, and (4) all other securities that are not classified inany of the above categories (“available-for-sale securities”).
Trading securities are stated at fair market value. Gains
and losses realised on disposal and unrealised gains andlosses from market value fluctuations are recognised as gains
or losses in the period of the change. Held-to-maturity debt
securities are stated at amortised cost, net of the amountconsidered not collectible. Equity securities issued by subsidiaries and affiliated companies which are not consolidated or
accounted for using the equity method are stated atmoving average cost. Available-for-sale securities are statedas explained below.
If the market value of held-to-maturity debt securities,
equity securities issued by unconsolidated subsidiaries oraffiliated companies, or available-for-sale securities, declines
significantly, such securities are stated at fair market value,
and the difference between fair market value and the carrying amount is recognised as loss in the period of thedecline. If the fair market value of equity securities issued byunconsolidated subsidiaries or affiliated companies not on
the equity method is not readily available, such securities are
written down to net asset value with a corresponding charge
in the statement of income in the event net asset value
declines significantly. In these cases, the fair market value or
the net asset value will be the carrying amount of the securities at the beginning of the next year.
The Companies have recorded their share of income heldby limited-liability investment partnerships and of similar
investments using the equity method.

(b) Securities
The Companies classify securities as (1) securities held for

Hankyu Hanshin Holdings

47

(c) Allowance for doubtful receivables
The Companies provide for doubtful accounts principallyat an amount computed based on past experience plus
estimated uncollectible amounts based on the analysis ofcertain individual accounts.
(d) Inventories
Inventories are stated at cost, which is determined by theidentified cost method for real estate for sale and principallyby the moving average method for other inventories.
(e) Derivatives and hedge accounting
The Companies state derivative financial instruments at fairvalue and recognise changes in the fair value as gains orlosses unless the derivative financial instruments are used
for hedging purposes.
If derivative financial instruments are used as hedges andmeet certain hedging criteria, the Companies defer recognition of gains or losses resulting from the changes in the fairvalue of the derivative financial instruments until the related
losses or gains on the hedged items are recognised.
However, in cases where forward foreign exchange contracts are used as hedges and meet certain hedging criteria,
forward foreign exchange contracts and hedged items areaccounted for in the following manner:
1. If a forward foreign exchange contract is executed tohedge an existing foreign currency receivable or payable,(a) the difference, if any, between the Japanese yenamount of the hedged foreign currency receivable orpayable translated using the spot rate at the inception date of the contract and the book value of thereceivable or payable is recognised in the statement ofincome in the period which includes the inception date,and(b) the discount or premium on the contract (the difference
between the Japanese yen amount of the contract
translated using the contracted forward rate and thattranslated using the spot rate at the inception date of
the contract) is recognised over the term of thecontract.
2. If a forward foreign exchange contract is executed to hedge
a future transaction denominated in a foreign currency, gainor loss on the future transaction due to market fluctuation will
be deferred as assets or liabilities using the market value estimated by the financial institution at the balance-sheet date,and no gain or loss on the forward foreign exchange contract
are recognised.
Also, if interest rate swap contracts are used as hedges
and meet certain hedging criteria, the net amount to be paid or
received under the interest rate swap contract is added to or
deducted from the interest on the assets or liabilities for which
the swap contract was executed.

48

Annual Report 2008(f) Reserve for investment losses
The reserve for investment losses is provided for possible
losses in excess of investments and loans to affiliates based onan evaluation of the net assets of the investee and other factors.
(g) Provision for restructuring costs
Provision for restructuring costs is stated as of 31st March
2007 and 2008 at the estimated loss from the reconstructionof Nishinomiya Stadium.
(h) Property and equipment
Property and equipment are stated at cost. Depreciation ofbuildings acquired after 31st March 1998 is provided on thestraight-line method, and depreciation of other property, isprovided principally on the declining balance method. For certain railway facilities, depreciation is calculated by the replacement cost method, based on the estimated useful lives as
set forth by Japanese tax regulations.
Maintenance and repairs, including minor renovations andimprovements, are usually charged to costs of revenues as
incurred, and major improvements are capitalised.
In addition, certain capital gains from sales of property aredeferred to offset the cost of acquired property as permitted
by the Corporation Tax Law of Japan.
The Company changed the depreciation method forproperty and equipment due to the revision of JapaneseCorporation Tax Law and its regulation.
1. The depreciation method for property and equipment
acquired after 31st March 2007 changed to a method
based on the Japanese Corporation Tax Law after therevision. By the change, operating income and income
before income taxes and minority interests were ¥573
million ($5,730 thousand) less for the year ended 31st
March 2008 than they would have been with the previous
method.
2. Property and equipment acquired before 1st April 2007
were allowed, after depreciating to 95% of their acquisition cost, to be equally depreciated to memorandum value
over five years. By the change, operating income andincome before income taxes and minority interests were¥2,397 million ($23,970 thousand) less for the year ended
31st March 2008 than they would have been with the previous method.
(i) Contributions for construction works
Prior to the year ended 31st March 2007, contributions forthe construction of railway facilities, for example building
grade separations and widening railroad crossings, granted by
the national and municipal governments and other corporations, are accounted for in the following manner:
1. If assets acquired with contributions are regarded as
improving the economic value of the Company, forNotes to the Consolidated Financial Statements

example grade separations, the assets are stated at theacquisition cost in property and equipment.
2. If assets acquired with contributions are not regarded as
improving the economic value, the assets are stated inproperty and equipment after deducting the contributions
from the acquisition cost.
Effective from the year ended 31st March 2007, a consolidated subsidiary of the Company, Hankyu Corporation,changed the method of accounting for contributions forconstruction works under which all assets acquired using
the contributions are now stated in property and equipment
at acquisition cost after deducting the amounts corresponding to the contributions. This change was made to unify
accounting policy across the Group following the management integration with Hanshin Electric Railway Co. Ltd., andto recognise the purpose of contributions for construction
works, which is that a local authority grants property acquisition funds to serve the public interests and urban planning,etc, but a railroad enterprise constructs railroad facilities andacquires property. This change in the accounting policy hascaused income before Income taxes and minority interests
to decrease by ¥754 million for the year ended 31st
March 2007.
Accumulated amounts of the deductions were ¥153,260
million, ¥323,546 million and ¥324,260 million ($3,242,600
thousand) at 31st March 2006, 2007 and 2008, respectively.
(j) Land revaluation
Pursuant to the Law Concerning Land Revaluation, two consolidated subsidiaries and an affiliate accounted for by theequity method revaluated land used for business activities on
31st March 2002.
With respect to valuation differences in two consolidated
subsidiaries, amounts equivalent to taxes related to the valuation differences were included in “Deferred tax liabilities,”amounts belonging to minority shareholders were includedin “Minority interests,” and amounts from which these arededucted were recorded as “Surplus from land revaluation”
in shareholders’ equity. For an affiliate accounted for by theequity method, the Company’s share after deduction of taxes
is included in “Surplus from land revaluation” in net assets.
The method of land revaluation
The revaluation of the land was determined basedon real estate tax values in accordance with Article 2,
Paragraph 3 of the Enforcement Ordinance Concerning
Land Revaluation on 31st March 2002.
The excess of book values after revaluation over fair values at
31st March 2007 and 2008 were ¥6,371 million and ¥5,892
million ($58,920 thousand), respectively.
(k) Impairment accounting
In the year ended 31st March 2006, the Company adopted

the new accounting standard for impairment of fixed assets(“Opinion Concerning Establishment of Accounting Standard
for Impairment of Fixed Assets” issued by the BusinessAccounting Deliberation Council on 9th August 2002) andthe implementation guidance for the accounting standard for
impairment of fixed assets (the Financial Accounting Standard
Implementation Guidance No.6 issued by the AccountingStandards Board of Japan on 31st October 2003). The accumulated impairment losses were deducted from the cost ofeach fixed asset.
(l) Accounting Standard for Statement of Changes in Net
Assets and reclassifications and restatement
Effective from the year ended 31st March 2007, theCompany and its domestic consolidated subsidiaries haveadopted the new accounting standard, “Accounting Standard
for Statement of Changes in Net Assets”(Statement No.6
issued by the Accounting Standards Board of Japan on
27th December 2005) and “Implementation Guidance for
the Accounting Standard for Statement of Changes in Net
Assets” (the Financial Accounting Standard Implementation
Guidance No.9 issued by the Accounting Standards Board ofJapan on 27th December 2005), (collectively, the “Additional
New Accounting Standards”).
Previously, consolidated statements of shareholders’equity were prepared for purposes of inclusion in the consolidated financial statements although not mandatory in Japan.
Consolidated statements of changes in net assets for theyear ended March 2006 have been prepared in accordancewith the New Accounting Standards to conform with thepresentation for the year ended March 2007. These restatements had no impact on the Company’s business results forthe said periods.
(m) Software cost
Software is depreciated using the straight-line method overthe estimated useful life of five years.
(n) Employees’ severance and retirement benefits
The Companies provide two types of post-employment benefit plans, unfunded lump-sum payment plans and funded
non-contributory pension plans, under which all eligible
employees are entitled to benefits based on the level ofwages and salaries at the time of retirement or termination,
length of service and certain other factors.
The liabilities and expenses for severance and retirement
benefits are determined based on the amounts actuarially calculated using certain assumptions. The Companies provide
for employees’ severance and retirement benefits based on
the estimated amounts of projected benefit obligation andthe fair value of plan assets.
Prior service costs are recognised in expenses in equal

Hankyu Hanshin Holdings49amounts over 3 to 15 years, and actuarial gains and losses
are recognised in expenses using the straight-line method
over 4 to 15 years.
(o) Translation of foreign currencies
Monetary receivables and payables denominated in foreign
currencies are translated into Japanese yen at the year-end
rates.
Financial statements of consolidated overseas subsidiaries are translated into Japanese yen at year-end rates, exceptthat shareholders’ equity accounts are translated at historicalrates and income statement items resulting from transactions
with the Company at the rates used by the Company. The
Companies report foreign currency translation adjustments inaccumulated gains from revaluation, translation adjustments
and minority interests in net assets.
(p) Finance leases
Finance leases which do not transfer ownership areaccounted for in the same manner as operating leases inaccordance with Japanese GAAP. Some overseas consolidated subsidiaries capitalise finance leases.
(q) Bond and new share issue costs
Bond and new share issue costs are principally charged toincome as incurred.
(r) Income taxes
The asset and liability approach is used to recognise deferred
tax assets and liabilities for tax loss carryforwards and the
expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used forincome tax purposes.
(s) Cash flow statement
In preparing the consolidated statements of cash flows, cashon hand, readily available deposits and short-term highly liquid
investments with maturities not exceeding three months
at the time of purchase are considered to be cash and cash
equivalents.
(t) Net income per share
Basic net income per share is based on the weighted average
numbers of shares of common stock outstanding during eachyear, retroactively adjusted for stock splits.
Diluted net income per share is calculated assuming
conversion of all dilutive convertible bonds at the beginning of
the year.
Diluted net income per share for the year ended 31st
March 2007 was not presented because there were no dilutive shares.

50

Annual Report 2008(u) Dividends per share
In accordance with the new Japanese Corporate Law becoming effective on 1st May 2006, replacing the JapaneseCommercial Code, declarations of dividends and appropriations of unappropriated retained earnings are approved at thegeneral meeting of shareholders held after the end of the
fiscal year. Therefore, cash dividends per share shown in the
consolidated statements of income reflect the final dividends
approved after the end of the relevant fiscal year.
(v) Business Combination and Business Separation
Effective from the year ended 31st March 2007, the Company
has adopted the new accounting standards, “AccountingStandard for Business Combinations” (Accounting Standard
issued by the Business Accounting Council on 31st October2003), “Accounting Standard for Business Separation”(Statement No.7 issued by the Accounting Standards Boardof Japan on 27th December 2005) and “Implementation
Guidance for the Accounting Standard for Business
Combinations and Business Separation” (the financial
implementation Guidance No.10 issued by the AccountingStandards Board of Japan on 27th December 2005).
(w) Reclassification
Due to an amendment to “Regulations for the Preparation ofConsolidated Financial Statements,” issued on 2nd October
2007, certain prior year amounts have been reclassified tocertain to the presentation for the year ended 31st March
2008. Negotiable certificate of deposit, which were previously included in “other investments” under the consolidatedbalance sheets have been retroactively reclassified to “othersecurities.”

Notes to the Consolidated Financial Statements

3. Securities
The following table summarises book values and fair values of held-to-maturity debt securities as of 31st March 2007 and 2008:
Millions of yen

Thousands of U.S. dollars

2007
2008
2008
Book value Fair value Difference Book value Fair value Difference Book value Fair value Difference

Securities with available fairvalue exceeding book value....
Other securities ........................
Total ..........................................

¥1,400500¥1,900¥1,412493¥1,905

¥12
(7)
¥ 5

¥—
—
¥—

¥—
—
¥—

¥—
—
¥—

$—
—
$—

$—
—
$—

$—
—
$—

The following tables summarise acquisition costs and book values (fair values) of available-for-sale securities with available fairmarket values as of 31st March 2007 and 2008:
Securities with book values exceeding acquisition costs:
Millions of yen
Acquisition
cost

2007
Book
Acquisition
value Difference
cost

Thousands of U.S. dollars
2008
Book
value

Difference

2008
Book
value

Difference$363,980
460
490$364,930$237,590
1020$237,620

Acquisition
cost

Equity securities ................... ¥38,823 ¥89,801 ¥50,978 ¥12,639 ¥36,398 ¥23,759 $126,390
1,847
1,867
20
45
46
1
450
Bonds ...................................
1,190
1,312
122
47
49
2
470
Other ....................................
Total ...................................... ¥41,860 ¥92,980 ¥51,120 ¥12,731 ¥36,493 ¥23,762 $127,310
Securities with book values not exceeding acquisition costs:
Millions of yen
Acquisition
cost

2007
Book
value

Equity securities ................... ¥26,436 ¥23,506
Bonds ...................................
744
740
Other ....................................
947
846
Total ...................................... ¥28,127 ¥25,092

Thousands of U.S. dollars
2008
Book
value

Difference¥(2,930)(4)(101)¥(3,035)¥48,844 ¥35,178 ¥(13,666) $488,440 $351,780 $(136,660)
28
(0)
280
280
(0)
28
2
2
(0)
20
20
(0)
¥48,874 ¥35,208 ¥(13,666) $488,740 $352,080 $(136,660)

Difference

Acquisition
cost

2008
Book
value

Acquisition
cost

Difference

The following table summarises book values of securities with no available fair values as of 31st March 2007 and 2008:
Thousands of
U.S. dollars
2008

Millions of yen
2007
2008

Held-to-maturity debt securities:
Discount bank debentures .........................................................................
Available-for-sale securities:
Non-listed equity securities........................................................................
Investments in limited liability investment partnerships andsimilar investments ..................................................................................
Negotiable certificate of deposit ................................................................
Sales of available-for-sale securities during the years ended
31st March 2006, 2007 and 2008 amounted to ¥2,589 million, ¥21,101 million and ¥1,988 million ($19,880 thousand),
respectively. Within other income (expenses) in the statements of income for the years ended 31st March 2006, 2007
and 2008 were gains on sales of available-for-sale securities

¥

20

¥

5

$

50

¥ 4,378¥ 4,118$ 41,180¥16,720¥22,521¥13,928¥18,885$139,280$188,850

amounting to ¥41 million, ¥2,659 million and ¥1,237 million($12,370 thousand), respectively, which were included in thegain on sale of securities, and losses on sales ofavailable-for-sale securities amounting to nil, ¥841 million and¥1 million ($10 thousand), respectively, which were included
in other-net.
Hankyu Hanshin Holdings

51

Available-for-sale securities with maturities and held-to-maturity debt securities at 31st March 2007 and 2008 were to mature as
follows:
Millions of yen
2007
Due after one
Due within year throughone yearfive years

Bonds
Government bonds .............
Debentures .........................
Other ..................................
Total ......................................

¥153
—
20
¥173

¥2,604297—¥2,9012008

Due after five
years throughten years

Due after
ten years¥1,128—49¥1,177

¥327
—
—
¥327

Due after one
Due within year throughone yearfive years

¥10
—
5
¥15

¥38
—
—
¥38

Due after five
years throughten years

Due after
ten years

¥26
—
—
¥26

¥—
—
—
¥—

Thousands of U.S. dollars
2008
Due after one Due after fiveDue within year through years throughone yearfive years
ten years

Bonds
Government bonds .............
Debentures .........................
Other ..................................
Total ......................................

$100
—
50
$150

$380
—
—
$380

$260
—
—
$260

Due after
ten years

$—
—
—
$—

4. Inventories
Inventories at 31st March 2007 and 2008 consisted of the following:
Millions of yen
2007
2008

Real estate for sale ........................................................................................
Finished products and merchandise ..............................................................
Materials, work in progress and supplies ......................................................
Total ...............................................................................................................

52

Annual Report 2008

¥173,710
10,171
11,076¥194,957¥127,618
7,314
11,157¥146,089

Thousands of
U.S. dollars
2008$1,276,180
73,140111,570$1,460,890

Notes to the Consolidated Financial Statements

5. Short-term borrowings and long-term debt
Short-term borrowings are represented generally by notes maturing within one year. The weighted average interest rate forshort-term bank loans was 1.4167% at 31st March 2008.
Long-term debt at 31st March 2007 and 2008 consisted of the following:
Millions of yen
2007
2008

Secured:Banks, 0%–8.5%, maturing through 2028................................................. ¥ 115,923
Unsecured:
Banks, insurance companies and others,
0%–6.8%, maturing through 2022 ..........................................................
784,669
1.27% bonds, due June 2007 ....................................................................
20,000
0.96% bonds, due November 2007 ...........................................................
10,0002.8% bonds, due February 2008................................................................
15,0002.23% bonds, due July 2008 .....................................................................
20,0002.23% bonds, due August 2009 ................................................................
20,0002.46% bonds, due September 2010 ..........................................................
10,000
1.85% bonds, due July 2012 .....................................................................
—
1.39% bonds, due November 2011 ...........................................................
—
1.66% bonds, due November 2013 ...........................................................
—
Floating rate bonds, due September 2010*1 ..............................................
15,000Floating rate bonds, due June 2011*2 ........................................................
10,0003.1% bonds, due June 2007 ......................................................................
20,0003.525% bonds, due June 2012 ..................................................................
15,0002.22% bonds, due June 2014 ....................................................................
10,0000.4%–3.4% bonds issued by consolidated subsidiaries,
due August 2005 to November 2008.......................................................
6,200
1,071,792
Less current portion ...................................................................................
179,867
Less inter transactions ...............................................................................
100¥ 891,825

Thousands of
U.S. dollars
2008¥ 116,642$ 1,166,420

807,017———
20,00020,00010,00020,00010,00010,00015,00010,000—15,00010,0008,070,170———
200,000
200,000
100,000
200,000
100,000
100,000
150,000
100,000—
150,000
100,000

5,200
1,068,859
139,102—¥ 929,757

52,00010,688,590
1,391,020—$ 9,297,570*1 The floating rate is currently the 20-year swap rate minus the 2-year swap rate plus 0.95% from 1st October 2001. (If theresult of this calculation is below 0, the rate would be 0%)*2 The floating rate is the 20-year swap rate minus the 2-year swap rate plus 0.15% from 29th June 2004. (If the result of thiscalculation is below 0, the rate would be 0%)

The following table shows the book value of collateral pledged against long-term debt, including the portions due within one year,
in the amount of ¥115,923 million and ¥116,642 million ($1,166,420 thousand) as of 31st March 2007 and 2008, respectively.
Millions of yen
2007

Current assets ...............................................................................................
Investments and other assets .......................................................................
Property and equipment ................................................................................
Intangible assets............................................................................................

¥

153
28,431
540,65096¥569,330

Thousands of
U.S. dollars

2008

¥

29
20,257555,665
1,433¥577,384

2008

$

290
202,570
5,556,650
14,330$5,773,840

Hankyu Hanshin Holdings53

As is customary in Japan, security may have to be given
if requested by a lending bank and such banks have theright to offset cash deposited against any debt or obligationthat becomes due and, in the case of default and certain
other specified events, against all debts payable to the bank.
Certain long-term debt agreements provide, among otherthings, that the Companies are to submit to the relevant
lender, upon its request, for approval their proposed appropriation of earnings (including dividends) before such appropriation can be submitted to shareholders. The Companies havenever received such requests.

The annual maturities of long-term debt as at 31st March 2008 were as follows:Year ending 31st March

2010...........................................................................................................................
2011...........................................................................................................................
2012...........................................................................................................................
2013...........................................................................................................................
2014 and thereafter ...................................................................................................

Millions of yen

Thousands of
U.S. dollars¥ 73,208
124,947
138,676
160,011432,915¥929,757$ 732,080
1,249,470
1,386,760
1,600,110
4,329,150$9,297,570

6. Employees’ severance and retirement benefits
Employees’ severance and retirement benefits included in the liability section of the consolidated balance sheets as of 31st
March 2007 and 2008 consisted of the following:
Millions of yen
2007
2008

Projected benefit obligation ...........................................................................
Prepaid pension cost .....................................................................................
Unrecognised prior service costs ..................................................................
Less fair value of pension assets ..................................................................
Less unrecognised actuarial differences .......................................................
Employees’ severance and retirement benefits ............................................

¥150,690
2,027
969(93,185)
3,904¥ 64,405¥136,967
1,967
417(75,395)(4,803)¥ 59,153

Thousands of
U.S. dollars
2008$1,369,670
19,6704,170(753,950)(48,030)$ 591,530

Included in the consolidated statements of income for the years ended 31st March 2006, 2007 and 2008, were severance andretirement benefit expenses that comprised the following:

Service costs — benefits earned during the year........................
Interest cost on projected benefit obligation ...............................
Expected return on plan assets ...................................................
Amortisation of prior service costs ..............................................
Amortisation of actuarial differences ...........................................
Severance and retirement benefit expenses...............................

54

2006

Millions of yen
2007

2008

Thousands of
U.S. dollars
2008¥4,331
2,285(1,071)(669)
1,224¥6,100¥6,205
2,988(1,622)(663)
530¥7,438¥6,912
3,033(1,685)(628)
463¥8,095$69,120
30,330(16,850)(6,280)4,630$80,950

The discount rate and the rate of expected return on plan
assets used by the Companies are principally both 2.5%.
The estimated amount of all retirement benefits to be paid

at future retirement dates is allocated equally to each service
year using the estimated number of total service years.

7. Deposits from tenants
The Company and certain consolidated subsidiaries havereceived guarantee and lease deposits from tenants forleased property according to the lease agreements. These

guarantee deposits are refundable to the tenants, generally
by 10 equal annual installments commencing in the 11th
year, and lease deposits are refundable when the contracts
are cancelled.

Annual Report 2008

Notes to the Consolidated Financial Statements

8. Other noncurrent liabilities
Other noncurrent liabilities at 31st March 2007 and 2008 consisted of the following:Thousands of
U.S. dollars
2008

Millions of yen
2007
2008

Contributions received from national and municipal governments andother corporations for long-term railway construction work in progress .....
Deferred tax liabilities ....................................................................................
Other .............................................................................................................

¥ 6,681
138,460
17,265¥162,406¥ 7,733
140,5568,307¥156,596$ 77,330
1,405,560
83,070$1,565,960

9. Contingent liabilities
At 31st March 2007 and 2008, the Companies were contingently liable for guarantees of loans in the amounts of¥33,700 million and ¥13,711 million ($137,110 thousand),
respectively.

10. Net assets
Japanese Corporate Law (“the Law”) became effective on
1st May 2006, replacing in the Japanese Commercial Code(“the Code”). The Law is generally applicable to events andtransactions occurring after 30th April 2006 and for fiscal
years ending after that date.
Under the regulations of the Corporate Law, the entire
amount paid for new shares is required to be designated ascommon stock. However, a company may, by a resolution of
the board of directors, designate an amount not exceeding
one-half of the price of the new shares as statutory reserve(additional paid-in capital), which is included in capital surplus.
In the event that dividend distribution of retained earnings is made, the smaller of an amount equal to 10% of thedividend or the excess, if any, of 25% of common stock over
the total statutory reserves (the total of statutory reserves
included in statutory reserve and legal earnings) must be set
aside as statutory reserve. Legal earnings reserve is included

in retained earnings in the accompanying consolidated balance sheets.
By resolution of the general meeting of shareholders,
statutory reserves may be appropriated to eliminate accumulated deficits or increase common stock. Statutory reserves,
however, are not allowed to be to use as a source of dividend
payments.
The maximum amount that the Company may appropriate
for dividend payments is calculated based on the nonconsolidated financial statements of the Company in accordancewith Japanese laws and regulations.
At the general meeting of shareholders held on 25th June
2008, the shareholders approved cash dividends amounting to ¥6,340 million ($63,400 thousand). These appropriations have not been accrued in the consolidated financial
statements as of 31st March 2008. Such appropriations arerecognised in the period in which they are approved by theshareholders.

11. Impairment loss on fixed assets

Breakdown by region

Details of impairment loss are as follows:
In the loss for 2008, a ¥450 million loss from the transfer of fixed
assets and certain businesses in the Hotels segment is includedin Other (net).

2007
RegionOsaka

Breakdown by use
2007
RegionOsaka

Hyogo, etc.

Use
Leasing assets
Idle assets, etc.
Totalling 20
Leasing assets
Idle assets, etc.
Totalling 20

Type of assets
Land, etc.

Millionsof yenHyogo, etc.

Osaka
Hyogo
Tokyo, etc.

Millionsof yen
¥152
96
144
22
182
13
20
240

¥414
2008

Land, etc.

Region

455

Osaka
2008

RegionType of assets
Land
Buildings and structures
Construction in progress
Other
Land
Buildings and structures
Construction in progress
Other

Use
Type of assets
Goodwill, etc.
in retailing business Good will and Land
Totalling 2
Hotel, etc.
Land, etc.
Totalling 4
Retailing stores
Buildings, etc.
Totalling 3

Millionsof yenThousands of
U.S. dollars¥8,395$83,950

810

8,100

41

410

Hyogo

Tokyo, etc.

Type of assets
Goodwill
Land
Land
Buildings and structures
Machinery and equipment
Buildings and structures
Construction in progress
Other
Intangible assets

Millionsof yen¥8,254
141
450
172
188
36
0
3
2

Thousands of
U.S. dollars$82,540
1,410
4,500
1,720
1,880
360
0
30
20

Hankyu Hanshin Holdings55

12. Management integration and share exchange
2007
Hankyu Holdings, Inc., the predecessor of the Company
and Hanshin Electric Railway Co. Ltd. (“Hanshin”) agreed tointegrate management under a mutual holding company forthe purpose of increasing enterprise and shareholders’ value
through the strengthening of management structure andenhancing know-how in various businesses. On 29th May
2006, the two parties entered into a share exchange agreement on the condition of the successful take-over bid by
the Company. Upon the successful bid, the share exchange
agreement went effect and the share exchange was made on
1st October 2006.
(a) Purchase of shares
The Company purchased 63.71% of the shares of “Hanshin”
at the cost of ¥249,841 million; related expenses aggregated¥2,131 million. For the purchase of the shares, the amountof ¥54,238 million was recorded under goodwill, and the
profits and losses of “Hanshin” for the period from 1st July
2006 to 31st March 2007 were included in the Consolidated
Statements of Income of the Company for the year ended
31st March 2007. The goodwill is being amortized over 20
years on a straight-line basis.
The assets and liabilities received by the business combination on 27th June 2006 set forth in the table below.
Regarding profits and losses, estimates were made on theassumption that the date of the business combination was
1st April 2006.
Millions of yen

Current assets ....................................................
Fixed assets........................................................
Total assets ........................................................

¥120,786
652,613773,399

Current liabilities .................................................
Noncurrent liabilities ...........................................
Total liabilities .....................................................
Minority interest .................................................

130,165
325,994456,159¥ 6,874
Millions of yen

Sales ...................................................................
Operating income ...............................................
Income before income taxes ..............................
Net income .........................................................
Net income per share (yen) ................................

¥813,613
94,80170,43240,507¥ 32.47(b) Exchange of shares
Under the share exchange agreement, the Company issued
214,209 thousand new shares at the exchange rate of 1.4of the Company’s ordinary shares of common stock foreach share of “Hanshin.” As a result of the issuance of newshares, investments in subsidiaries and statutory reserve
included in capital surplus increased ¥123,209 million, respectively. Simultaneously, the Company recognised goodwill in
the amount of ¥8,093 million, which is being amortised over
20 years on a straight-line basis.
56

Annual Report 2008

2008
For the purpose of obtaining a competitive advantage in theretailing business in Umeda market, the central area in Kansai
district, improving customer satisfaction and maximising
shareholder value, Hankyu Department Stores Inc., one of
the major companies of the Hankyu Hanshin Toho Group,
agreed to integrate the management of Hanshin Department
Store, Ltd., one of the consolidated subsidiaries of theCompany through the share exchange on 1st October 2007.
By the integration, Hankyu Department Stores Inc. changed
the name of the company as H2O Retailing Corporation and is
now an affiliate applying equity method.
(a) Outline of the accounting method was as follows:
The difference between the increase in the equity of theCompany relating to Hankyu Department Stores Inc. and thedecrease in the equity of the Company relating to Hanshin
Department Store, Ltd. was treated separately as gain onchange in equity by management integration and consolidation goodwill. In the consolidated statement of income forthe year ended 31st March 2008, gain on change in equity by
management integration aggregating ¥9,388 million ($93,880
thousand) was presented in other income and impairment
loss of unamortised consolidation goodwill excluding theretailing business of Hanshin Department Store, Ltd. and its
subsidiaries by aggregating ¥8,254 million ($82,540 thousand)was presented in other expenses containing loss on impairment of fixed assets of ¥8,796 million ($87,960 thousand).
(b)
Revenue from operations and operating income included in
the consolidated statement of income for the year ended
31st March 2008 of Hanshin Department Store, Ltd. and its
subsidiaries were ¥56,843 million ($568,430 thousand) and¥1,184 million ($11,840 thousand), respectively.

Notes to the Consolidated Financial Statements

13. Derivative financial instruments and hedging
transactions
The Group includes companies whose line of business
requires a high degree of reliance on external debt such asbank borrowings and corporate bonds. For these companies,
managing the risk of changing interest rates is necessary forstable operations. This goal is being achieved by using
derivative transactions — under a certain set of conditions —as a means of cost efficient interest risk hedging. Derivativetransactions employed comprise interest rate swaps andinterest swaptions, which change floating and fixed interest
rates, covering outstanding bonds, borrowings, and deposits.
The Group also includes companies operating in the travel,forwarding and other businesses whose financial statements
are denominated in foreign currencies. For these companies,
protection from the risks of currency fluctuations affecting
the value of foreign currency denominated assets and liabilities is necessary for stable operations. The use of foreignexchange forward contracts as well as currency options —within certain conditions — provides an effective and cost
efficient way of protecting against such risks.
Additionally, the Group engages in currency swap transactions to protect the principal of foreign currency denominateddeposits against the risk of fluctuations in exchange rates.
Group companies engaging in derivative transactions are

acting according to established transaction standards, which
stipulate separate spheres of authority and limit transaction
amounts. The execution and management of derivative transactions is carried out by each group company’s accounting
department, subject to the approval of an authorised individual. The Group has established internal control systems,
ensuring that contracts are concluded and settled in compliance with the relevant regulations.
The following summarises hedging derivative financial
instruments used by the Group and items hedged:
Hedging instruments:
Foreign exchange contracts
Currency swap contracts
Currency option contracts

Hedged items:
Foreign currency trade receivables
and trade payables and future
foreign currency transactions

Interest rate swap contracts
Interest swaption contracts

Interest on bonds and loans payable

The Group evaluates hedge effectiveness semiannuallyby comparing the cumulative changes in cash flows or thechanges in fair value of hedged items and the corresponding
changes in the hedging derivative instruments, except for incases of obvious hedge effectiveness.

The following table summarises market value information as of 31st March 2007 and 2008 of derivative transactions forwhich hedge accounting had not been applied:
Millions of yen
2007
2008

Forward exchange contracts:
Contract principal amount due within one year .......................................
Market value ............................................................................................
Unrealised gains ......................................................................................

¥—
—
¥—

¥146
135
¥ (11)

Thousands of
U.S. dollars
2008$1,4601,350$ (110)Hankyu Hanshin Holdings

5714. Lease transactions
Information for non-capitalised finance leases at 31st March 2006, 2007 and 2008 was as follows:
Thousands of
U.S. dollars

Millions of yen
The Group as lessees

2006

2007

2008

2008

Original lease obligations for machinery and equipment and other(including finance charges) ..............................................................

¥19,830¥20,790¥17,889$178,890

Minimum lease payments due within one year ................................
Minimum lease payments due after one year ...................................
Total ...............................................................................................

¥ 3,294
5,905¥ 9,199¥ 3,186
5,594¥ 8,780¥ 2,496
4,690¥ 7,186$ 24,960
46,900$ 71,860

Lease payments under such leases for the years ended 31st March 2006, 2007 and 2008 were ¥3,137 million, ¥3,848 millionand ¥3,279 million ($32,790 thousand), respectively.
Thousands of
U.S. dollars

Millions of yen
The Group as lessors

2006

2007

2008

2008

Original lease obligations (machinery and equipment and other) ......

¥ 4

¥—

¥—

$—

Minimum lease payments due within one year ................................
Minimum lease payments due after one year ...................................
Total ...............................................................................................

¥ 0
—
¥ 0

¥—
—
¥—

¥—
—
¥—

$—
—
$—

Leasing receipts for the years ended 31st March 2006, 2007 and 2008 amounted to ¥1 million, ¥0 million and nil, respectively.
Depreciation for the years ended 31st March 2006, 2007 and 2008 amounted to ¥1 million, ¥0 million and nil, respectively.
Information for operating leases at 31st March 2006, 2007 and 2008 was as follows:
Thousands of
U.S. dollars

Millions of yen
The Group as lessees

Minimum lease payments due within one year ................................
Minimum lease payments due after one year ...................................
Total ...............................................................................................

2006

2007

2008

2008

¥12,698
53,144¥65,842¥11,40242,284¥53,686¥ 8,599
28,679¥37,278$ 85,990
286,790$372,780
Thousands of
U.S. dollars

Millions of yen

58

The Group as lessors

2006

2007

2008

2008

Minimum lease payments due within one year ................................
Minimum lease payments due after one year ...................................
Total ...............................................................................................

¥ 82
1,305
¥1,387¥ 82
1,224¥1,306¥ 82
1,142¥1,224$ 820
11,420$12,240

Annual Report 2008

Notes to the Consolidated Financial Statements

15. Segment information
The Group’s businesses are divided into the Urban
Transportation Segment, the Real Estate Segment, theEntertainment and Communications Segment, the Travel andInternational Transportation Segment, the Hotels Segment,
the Retailing Segment and the Other Segment.
The seven businesses segments for the three years
ended 31st March 2008 comprised the following:
The Urban Transportation Segment included railways,
buses and taxis, and the manufacture of rolling stock .
The Real Estate Segment included the rental of realestate, purchase and sale of real estate and property management services.
The Travel and International Transportation Segment

included travel and international air cargo services.
The Hotels Segment included hotel ownership and management businesses.
The Entertainment and Communications Segment consisted of sports-related business, the Takarazuka Revue
Theater, advertising, information services and publishingbusinesses.
The Retailing Segment included department stores, retailsales and food and drink sales.
The Other Segment included construction, consumer
finance, computer-related services and outsourcing services
for personnel and accounting services.
Geographic segment information is not disclosed as overseas operations were immaterial.

By business category:Millions of yen
Urban
Transportation

2006
Net sales:
Customers ............................
Intersegment ........................
Costs and expenses.................
Operating income ....................

¥151,963
2,046
154,009
123,411¥ 30,598

Real Entertainment & Travel & International
Estate Communications Transportation
HotelsRetailing

Other¥ 99,008
12,794
111,80290,197¥ 21,605¥61,034926
61,96059,519¥ 2,441¥16,868 ¥—
4,876 (24,596)
21,744 (24,596)
21,253 (27,261)¥ 491 ¥ 2,665

Retailing

Other¥36,511
3,578
40,08935,955¥ 4,134¥67,056229
67,28564,818¥ 2,467¥53,715147
53,86253,421¥ 441

Eliminations Consolidated¥486,155—
486,155
421,313¥ 64,842

Millions of yen
Urban
Transportation

2007
Net sales:
Customers ............................
Intersegment ........................
Costs and expenses.................
Operating income (loss) ..........

¥179,429
2,426
181,855
148,661¥ 33,194

Real Entertainment & Travel & International
Estate Communications Transportation
Hotels¥151,839
24,498176,337
140,061¥ 36,276¥69,873
5,860
75,73370,495¥ 5,238¥88,016
241
88,25784,008¥ 4,249¥65,336 ¥153,505
94
2,397
65,430 155,902
64,093 151,237¥ 1,337 ¥ 4,665

Eliminations Consolidated¥35,379 ¥—
8,700 (44,216)
44,079 (44,216)
44,096 (46,277)¥ (17) ¥ 2,061¥743,377—
743,377
656,374¥ 87,003

Hankyu Hanshin Holdings

59Millions of yen
Urban
Transportation

2008
Net sales:
Customers ............................
Intersegment ........................
Costs and expenses.................
Operating income ...................

¥192,462
2,441
194,903
161,748¥ 33,155

Real Entertainment & Travel & International
Estate Communications
Transportation Hotels¥153,332
26,358
179,690
140,173¥ 39,517¥86,906
8,422
95,32886,780¥ 8,548¥94,136
301
94,437
91,230¥ 3,207

Retailing¥68,943 ¥118,790
296
1,962
69,239 120,752
67,889 118,034¥ 1,350 ¥ 2,718

Other

Eliminations Consolidated¥37,732
7,087
44,81943,919¥ 900¥— ¥752,301(46,867)—(46,867) 752,301(48,197) 661,576¥ 1,330 ¥ 90,725

Other

Eliminations Consolidated

Thousands of U.S. dollars
Urban
Transportation

2008
Net sales:
Customers ................................
Intersegment ...........................
Costs and expenses ...................
Operating income .......................

Real Entertainment & Travel & International
Estate Communications
Transportation Hotels$1,924,620 $1,533,320
24,410263,580
1,949,030 1,796,900
1,617,480 1,401,730$ 331,550 $ 395,170$869,060
84,220953,280
867,800$ 85,480$941,360
3,010
944,370
912,300$ 32,070$689,430
2,960
692,390
678,890$ 13,500

Retailing$1,187,900 $377,320 $— $7,523,010
19,62070,870 (468,670)—
1,207,520 448,190 (468,670) 7,523,010
1,180,340 439,190 (481,970) 6,615,760$ 27,180 $ 9,000 $ 13,300 $ 907,250

Millions of yen
Urban
Transportation

2006
Assets ......................................
Depreciation and amortisation ....
Impairment loss of fixed assets ...
Capital expenditures ................

¥584,178
17,446
1,407
14,071

Real Entertainment & Travel & International
Estate Communications
Transportation Hotels

Retailing¥606,048
6,388
1,939
13,573¥17,037 ¥168,976 ¥12,950 ¥1,609,117
907
741
(138)
29,612
—
1,898
—
6,988
1,023
314
(278)
50,438¥62,274
1,387
—
654

¥86,295
936
—
1,237

¥71,359
1,945
1,744
19,844

Other

Corporate andEliminations Consolidated

Millions of yen
Urban
Transportation

2007
Assets ......................................
Depreciation and amortisation ....
Impairment loss of fixed assets...
Capital expenditures ................

Real Entertainment & Travel & International
Estate Communications Transportation
Hotels¥738,804 ¥1,008,765 ¥130,111 ¥116,942
22,07011,876
3,803
1,568
10
456
—
—
28,539
9,900
5,000
1,779

¥81,355
2,362
25
5,381

Retailing

Other

Corporate andEliminations Consolidated¥91,613 ¥180,308 ¥18,796 ¥2,366,694
1,941
646
(377)
43,889
92
94
192
869
2,401
307
(1,454)51,853

Millions of yen
Urban
Transportation

2008
Assets ......................................
Depreciation and amortisation ....
Impairment loss of fixed assets ...
Capital expenditures ................

Real Entertainment & Travel & International
Estate Communications
Transportation Hotels¥760,392 ¥1,015,780 ¥133,716
13,2904,869
26,802
2
141359
22,58082,984
9,699¥128,750
1,773
—
1,852

¥82,8103,129—
14,844Retailing

Other

Corporate andEliminations Consolidated¥22,501 ¥232,469 ¥(27,942) ¥2,348,476
1,593
660
(538)
51,578
8,294
—
—
8,796
1,687
758
(910)
133,494

Thousands of U.S. dollars
Urban
Transportation

Real Entertainment & Travel & International
Estate Communications
Transportation Hotels

2008
Assets ...................................... $7,603,920 $10,157,800 $1,337,160
Depreciation and amortisation ....
268,020
132,900
48,690
Impairment loss of fixed assets ...
20
1,410
3,590
Capital expenditures ................
225,800
829,840
96,99060

Annual Report 2008

$1,287,500
17,730—18,520$828,100
31,290—148,440

Retailing

Other

Corporate andEliminations Consolidated$225,010 $2,324,690 $(279,420) $23,484,760
15,9306,600(5,380)515,780
82,940——87,96016,8707,580(9,100) 1,334,940

Notes to the Consolidated Financial Statements

16. Income taxes
The Companies are subject to a number of income taxes, which, in the aggregate, indicate an aggregate statutory income ratein Japan of approximately 40.7%, 40.7% and 40.6% for the years ended 31st March 2006, 2007 and 2008, respectively.
The following table summarises the significant differences between the aggregate statutory income tax rate and theCompanies’ effective income tax rate for financial statement purposes for the year ended 31st March 2008.
The difference between the rates for the years ended 31st March 2006 and 2007 was immaterial.
2008

Statutory tax rate ....................................................................................................................................................

40.6%

Valuation Allowance ............................................................................................................................................
Elimination of dividends from consolidated subsidiaries ....................................................................................
Loss on impairment of fixed assets ....................................................................................................................
Nondeductible expenses ....................................................................................................................................
Reimbursement of capital surplus from consolidated subsidiaries.....................................................................
Nondeductible income ........................................................................................................................................
Gain on change in equity by management integration........................................................................................
Equity in income of affiliates ...............................................................................................................................
Other ...................................................................................................................................................................
Effective income tax rate........................................................................................................................................

151.8
27.8
12.8
8.1
(74.0)(52.2)(15.5)
(5.8)
1.5
95.1%

Significant components of the Companies’ deferred income tax assets as of 31st March 2007 and 2008 were as follows:
Millions of yen
2007
2008

Deferred tax assets:
Revaluation of assets on consolidation ...........................................................
Loss on revaluation of real estate for sale ......................................................
Tax loss carryforwards ...................................................................................
Retirement benefits ........................................................................................
Losses on revaluation of investment securities..............................................
Special reserve for investment losses ............................................................
Unrealised profit from assets..........................................................................
Loss on valuation of properties of business reorganisation ............................
Loss on impairment of fixed assets ................................................................
Allowance for doubtful receivables .................................................................
Accrued expenses ..........................................................................................
Enterprise taxes ..............................................................................................
Retirement benefits for directors and corporate auditors ...............................
Other ...............................................................................................................
Subtotal of deferred tax assets .......................................................................
Valuation allowance ........................................................................................
Less amounts offset against deferred tax liabilities........................................
Net deferred tax assets ..................................................................................
Deferred tax liabilities:
Gain on reversal of difference from land revaluation ......................................
Revaluation of assets on consolidation ...........................................................
Net unrealised holding gains on securities .....................................................
Gain on valuation of properties of business reorganisation ............................
Other ...............................................................................................................
Subtotal of deferred tax liabilities....................................................................
Less amounts offset against deferred tax assets ...........................................
Total deferred tax liabilities .............................................................................
Net income tax assets ....................................................................................

Thousands of
U.S. dollars
2008¥ 53,497 ¥ 50,204
18,08647,973
13,91033,96824,081
22,872
4,026
8,034
11,978
7,548
7,319
6,920
5,235
5,103
3,116
3,736
7,490
3,006
2,475
2,133
858
1,594
227
290
14,21813,726
166,516
207,107(24,189)(57,152)(116,610) (128,566)
25,717
21,389$502,040
479,730
339,680
228,720
80,34075,48069,20051,03037,36030,06021,33015,9402,900
137,260
2,071,070(571,520)(1,285,660)
213,890(102,295) (131,956)(104,451) (104,648)(42,952)(26,672)(3,255)(3,156)(2,117)(2,695)(255,070) (269,127)
116,610
128,566(138,460) (140,561)¥(112,743) ¥(119,172)(1,319,560)(1,046,480)(266,720)(31,560)(26,950)(2,691,270)
1,285,660(1,405,610)$(1,191,720)

Hankyu Hanshin Holdings

61Net deferred tax assets as of 31st March 2007 and 2008 were included in the consolidated balance sheets as follows:
Millions of yen
2007
2008

Current assets ...............................................................................................
Current liabilities ............................................................................................
Long-term assets...........................................................................................
Long-term liabilities .......................................................................................
Net deferred tax assets .................................................................................

¥ 18,778—
6,939(138,460)¥(112,743)¥ 16,182(5)
5,207(140,556)¥(119,172)

Thousands of
U.S. dollars
2008$

161,820(50)
52,070(1,405,560)$(1,191,720)

17. Loan commitments
A consolidated subsidiary had extended loan commitments at 31st March 2007 and 2008 as follows:
Millions of yen
2007
2008

Total loan commitments ..................................................................................
Loans extended ...............................................................................................
Remaining commitments ................................................................................

¥81,953
41,866¥40,087¥76,067
45,581¥30,486

Thousands of
U.S. dollars
2008$760,670
455,810$304,860

The above loan commitments may not be exercised in full, as the consolidated subsidiary extends loans within limits set in lightof the proposed use of funds and the borrower’s financial position.

18. Consolidated statements of cash flow
The year-end balances of cash and cash equivalents presented on the consolidated statements of cash flow and on the consolidated balance sheets at 31st March 2007 and 2008 were reconciled as follows:
Millions of yen
2007
2008

Cash and cash equivalents in the consolidated balance sheets ......................
Deposits with maturities over 3 months .........................................................
Cash and cash equivalents in cash flow statements .......................................

¥41,806(1,639)¥40,167¥33,073(1,906)¥31,167

Thousands of
U.S. dollars
2008$330,730(19,060)$311,670

19. Subsequent events
Appropriation of retained earnings
An appropriation of retained earnings for the year ended 31st March 2008 was duly approved at the general meeting of shareholders held on 25th June 2008 as follows:

Cash dividends(¥5.00 per share)................................................................................................................

62

Annual Report 2008

Millions of yen

Thousands of
U.S. dollars¥6,340$63,400

Notes to the Consolidated Financial Statements

20. Special purpose entities
Some consolidated subsidiaries invest in the following two kinds of special purpose entities. These investments have no voting
rights and dispatch no directors or employees. Loss of the investment is limited to the amount invested.
Purpose of establishment(A) Diversity and stability of financing
2008
Thousands of U.S. dollars

Millions of yen

Investment in silent partnerships ………………………………………………
Total assets of special purpose entity …………………………………………
Total liabilities of special purpose entity ………………………………………
Real estate purchased ……………………………………………………………
Receivable amount of dividends ………………………………………………
Distributed income ………………………………………………………………
Distributed loss ……………………………………………………………………
Lease payments …………………………………………………………………
Management fees ………………………………………………………………

¥ 4,042
89,31578,83239,005
5,587
20,923—8,774
283$ 40,420
893,150
788,320
390,050
55,870209,230—
87,7402,830(1) Investments in silent partnerships are recorded as investment in other securities.
(2) Included in receivable amount of dividends are suspense payments totaling ¥5,526 million ($55,260 thousand).
(3) Distributed income included distributed liquidation in the amount of ¥16,908 million ($169,080 thousand) and is presented
in other income of consolidated statements of income. Residual amounts of the distributed income is presented in costs ofrevenues from operations after offsetting lease payments.
(4) Management fees are presented in revenue from operations in the consolidated statements of income.

Purpose of establishment(B) Development and value up of assets
2008
Millions of yen

Investment in silent partnerships ………………………………………………
Total assets of special purpose entity …………………………………………
Total liabilities of special purpose entity ………………………………………
Real estate purchased ……………………………………………………………
Receivable amount of dividends ………………………………………………
Distributed income ………………………………………………………………
Distributed loss ……………………………………………………………………
Lease payments …………………………………………………………………
Management fees ………………………………………………………………

Thousands of U.S. dollars¥ 9,180
82,56556,902
—
528
3,846
1,016
—
484

$ 91,800
825,650
569,020—
5,280
38,46010,160—4,840(1) Investments in silent partnerships vare recorded as investment in other securities.
(2) Management fees are presented in revenue from operations in the consolidated statements of income.

Hankyu Hanshin Holdings

63

64

Annual Report 2008

Corporate Information
Contents
66 Supplementary Data
70 Group at a Glance
71 Directors and Corporate Auditors
72 Investor Information
73 The Hankyu Hanshin Toho Group

Hankyu Hanshin Holdings

65Supplementary Data
Hankyu and Hanshin Service Areas■

Operating Lines and Major Projects
Hankyu Kobe Line46.9kmHankyu Takarazuka Line

28.5kmHankyu Kyoto Line

65.4kmHanshin Electric Railway

40.1kmHanshin Namba Line

(Nishi-Osaka Line Extension Project)

3.8km (under construction)*1

Kobe Rapid Transit Railway Line

5.7km*1,2

Kobe Rapid Transit Railway Line

5.0km*1,2

Nosé Electric Railway Line14.8kmKita-Osaka Kyuko Railway Line

5.9km

Hokushin Kyuko Railway Line

7.5km*1

Nissei-chuo

Kyoto

Kyoto

Osaka

Itami

Shin-osaka

NishinomiyaImazu kitaguchi
Amagasaki

Nishinomiya

Hanshin Koshien
Stadium renovation

New station in
Settsu City

Esaka

ShukugawaShin-kobe

New station in
Nagaokakyo City

Kita-senri
Senri-chuo

KoyoenTanigami

Saito development

Osaka International
AirportMino-oKawanishinoseguchi

Nishinomiya-Kitaguchi development(Hankyu Nishinomiya Gardens)

Shinkansen

Myokenguchi

Takarazuka Yamatedai
development
Takarazuka

Sannomiya
Kosoku Kobe
Motomachi

Kawaramachi

Hyogo Pref.

*1 Tier 2 Railway Operations*2 Some 3.5km of the Kobe Rapid Transit Railway line is shared byseveral operators (Kosoku Kobe to Nishidai)

Kobe

Arashiyama

Juso

Mukogawa
Mukogawadanchi-mae

Osaka Monorail

Awaji
Tenjimbashisuji-rokuchome
Umeda

Umeda Hankyu Bldg. reconstruction
Chayamachi redevelopment■ Osaka Station North Area development■

Nishikujo■

Nishidai

Kintetsu-namba

Hanshin Namba Line
(Nishi-Osaka Line Extension Project)

Nara Pref.
Subway■Street survey into preferred residential
areas (Kansai region)
Rank

Place

(Location)

1

Ashiya(Ashiya, Hyogo)

2

Shukugawa(Nishinomiya, Hyogo)

3

Kobe

(Kobe, Hyogo)

4

Nishinomiya(Nishinomiya, Hyogo)

5Okamoto(Kobe, Hyogo)

6

Umeda

(Osaka, Osaka)

Average passengers per day/per km(Kobe, Hyogo)

Hanshin

9

Senri-chuo(Toyonaka, Osaka)

10

Takarazuka(Takarazuka, Hyogo)

11

Sumiyoshi(Osaka, Osaka)

12

Ibaraki(Ibaraki, Osaka)

13

Sannomiya(Kobe, Hyogo)

13

Toyonaka(Toyonaka, Osaka)(Nishinomiya, Hyogo)

Annual Report 2008

162
135

Seibu

(Kyoto, Kyoto)(Osaka, Osaka)

198

KeikyuMikageKurakuen

201

Hankyu

Kyoto

Osaka

237

Keio
Sotetsu

8

16

269
245

Odakyu7

15(1,000 persons/day)

Tokyu

Keihanrepresents areas along Hankyu and Hanshin Lines
Source: Survey of 7th August 2007 by Sumitomo Real Estate and7 other major real estate firms

66

■

129
106
95

Keisei

74

Tobu

67

Nankai

56

Kintetsu
Meitetsu
Nishitetsu

39

Kansai area
Tokyo area
Other areas

39
0
50
100
150
200
250
300
0Note: The above
50graph includes
100railways150
200tier 2 as 250
operations underof the end 300
of March 2007.
Source: Website of Ministry of Land, Infrastructure and Transport and Tourism:
The Real Situation of the Major Private-Sector Railway Companies (The Association of Japanese Private Railways)

■

Population(Thousand)150
150000Hankyu/Hanshin
service areas
Osaka (service areas)
Hyogo (service areas)
Kyoto (service areas)
Osaka (non-service)
Hyogo (non-service)
Kyoto (non-service)
Shiga
Nara
Wakayama

Population changes (1991=0)120000100
90000
6000050
30000
00-30000-50-60000-100-90000

1991

1992

1993

1994

1995

1996

Area (km2)

1998

2006 (thousand)

1,486
560
528
398
25,848
1,334
7,865
4,215
4,017
3,691
4,726
27,334

Hankyu/Hanshin service areas
Osaka (service areas)
Hyogo (service areas)
Kyoto (service areas)
Non-Hankyu/Hanshin service areas
Osaka (non-service)
Hyogo (non-service)
Kyoto (non-service)
Shiga
Nara
Wakayama
Total

■

1997

5,076
2,373
2,044
657
15,587
6,290
3,531
1,908
1,365
1,430
1,061
20,663

1999

2000

2001

2003

2004

2005

2006 (Year)

Hankyu/Hanshin Service Areas:
Following areas with stations of Hankyu (Tier 1), Hanshin Electric Railway(Tier 1), Kita-Osaka Kyuko Railway, Nosé Electric Railway
Osaka:
Osaka City (Higashi-Yodogawa, Yodogawa, Nishi-Yodogawa, Kita, Konohana,
Fukushima Wards out of 24 wards), Toyonaka, Takatsuki, Suita, Ibaraki,
Mino-o, Ikeda, and Settsu cities, Shimamoto, Toyono, and Nose towns
Hyogo:
Kobe City (Higashi-Nada, Nada, Chuo Wards out of 9 wards), Amagasaki,
Nishinomiya, Takarazuka, Itami, Kawanishi, and Ashiya cities, Inagawa Town
Kyoto:
Kyoto City (Ukyo, Nishikyo, Nakagyo, Shimogyo Wards out of 11 wards),
Nagaokakyo and Muko cities, Oyamazaki Town
Source: The Basic Resident Register, end of March each year

Profile of Kansai area private railways
Combined routes

2002*Excludes stations jointly operated with other companies.

Average number ofpassengers per day(thousands)

Total number of stations*(1) Number of stations
serving less than 5,000
passengers per day*(1) as a percentage
of all stations*

Kintetsu

582.3km

1,676

327

207

63%

Hankyu146.5km

1,695

84

2

2%

Nankai154.8km

635

99

49

49%

Keihan88.1km

798

84

27

32%

Hanshin

45.1km

493

41

6

15%

Note: The above graph includes railways operations under tier 2 as of the end of March 2007.
Source: Website of Ministry of Land, Infrastructure, Transport and Tourism:
The Real Situation of the Major Private-Sector Railway Companies (The Association of Japanese Private Railways)

Hankyu Hanshin Holdings

67Overview of Umeda District■

Passengers■(1,000 persons/day)

Main commercial facilities
Hankyu Hanshin related facilities

2000
2,000

1,738
1,439

1500
1,500
1000
1,000
586
383

343

00

Umeda Namba Tennoji Tokyo Shinjuku Shibuya Ikebukuro(Osaka St.)
Umeda: Osaka Municipal Transportation Bureau (including Nishi-Umeda and(Osaka) Higashi-Umeda), JR West, Hankyu, Hanshin
Namba: Kintetsu, Nankai, Osaka Municipal Transportation Bureau
Tennoji: JR West, Kintetsu (Abenobashi), Hankai Tramway, Osaka Municipal
Transportation Bureau
Tokyo: JR East, Tokyo Metro
Shinjuku: JR East, Keio, Odakyu, Bureau of Transportation Tokyo Metropolitan Government,
Tokyo Metro, Seibu
Shibuya: Tokyu, JR East, Tokyo Metro, Keio
Ikebukuro: JR East, Tobu, Seibu, Tokyo Metro(1,000m2)

2,732
2,364

2500
2,500
2000
2,000
1500
1,500

approx.54,000m2

Hankyu-Sanbangai

approx.40,000m2

HEP FIVE*

approx.23,000m2

HEP NAVIO*

approx.21,000m2

Herbis ENT

approx.21,000m2

NU chayamachi

approx.12,000m2

Herbis OSAKA

approx. 9,000m2

Diamor Osaka*

approx. 8,000m2

Facilities other than Hankyu Hanshin’s

Leased office floor area in vicinity of station
3000
3,000

Hanshin Department Store* Includes lease areas other than Hankyu Hanshin’s

Source: Urban Transportation Report 2006 Edition (Institution for Transport Policy Studies)■(Before rebuilding) approx. 67,000m2(Currently) approx. 50,000m2

1,311

1,219

500
500

Hankyu Department Stores*

Yodobashi Camera

approx. 45,000m2

Daimaru Umeda store

approx. 40,000m2

Hilton Plaza East

approx. 24,000m2

Hilton Plaza Westapprox. 18,000m2

Whity Umeda

approx. 13,000m2

E-MA

approx. 8,000m2
Source: Data from Hankyu Hanshin, Individual company web sites,
Materials from Japan Council of Shopping Centers

1,290

1000
1,000

1,027

946

Shibuya

Ikebukuro

500
500
00

Umeda
(Osaka St.)Tokyo

Shinjuku

Source: Real Estate White Paper 2007 (Ikoma Data Service System)■

Land prices in major commercial areas of Osaka(1,000 yen/m2)*government-announced prices

12000

12,000

10000

10,00010,800Umeda (7-10 Kakuda-cho, Kita-ku)
Shinsaibashi (1-4-5 Nishi-Shinsaibashi, Chuo-ku)
Namba (3-6-11 Namba, Chuo-ku)

8,340

8000

8,000

6000

6,000

4000

6,750

7,050

6,000
4,990

4,990

4,990

5,050

4,200

4,090

4,030

4,050

3,790

3,640

3,560

3,560

2002

2003

2004

2005

4,000

2000

8,790

4,800

5,460

4,100

2,000

68

Annual Report 2008

2006

2007

2008

(Year)

■

Osaka business districts: six major districts
Trends in average vacancy rates and changes in average rents
(%)

Umeda
Minami-Morimachi
Yodoyabasgu/Honmachi
Senba
Shinsaibashi/Namba
Shin-Osaka

Changes in average rents

17,00012

16,00010

15,0008

14,0006

13,0004

12,0002

11,0000Osaka business(Yen/3.3m2)

Trends in average vacancy rates

14

Dec. 2003

Dec. 2004

Dec. 2005

Dec. 2006

Dec. 2007

Jun. 2008

10.39
8.71
7.03
10.76
12.40
11.81
12.41

9.23
8.88
6.52
9.65
9.52
8.98
10.20

7.45
5.30
7.92
7.91
9.66
6.65
9.48

5.49
3.74
6.95
5.78
7.06
6.21
6.50

4.71
3.00
5.48
4.10
7.12
6.24
7.15

5.58
3.71
6.06
4.71
8.19
8.68
8.52

10,000Dec. 2003

Dec. 2004

Dec. 2005

Dec. 2006

Dec. 2007

Jun. 2008

13,185
15,441
11,386
12,993
12,172
15,20911,985

12,78815,233
10,941
12,49011,837
14,961
11,392

12,584
15,07010,653
12,318
11,651
14,68011,071

12,611
15,296
10,392
12,292
11,712
14,756
11,054

12,88215,856
10,536
12,425
11,982
15,224
11,192

12,85015,84010,715
12,408
11,82815,185
11,284

Source: Miki Shoji “Osaka Office Building Market Research Report” (monthly)■

Main facilities for lease (As of March 2008)
Building name

General description■

Completed

Developments in Umeda district (red = Company-related Projects)❶ Umeda Hankyu Building reconstruction❷ Chayamachi Eastern District Urban Redevelopment Association

Dai Hanshin Building(Hanshin Department Store)

5 stories below, 11 above groundJun. 1963

Umeda Hankyu Building(Hankyu Department’s
Umeda flagship store)

2 stories below, 8 above ground(12 above in part)Nov. 1920(Before rebuilding)

Umeda Hanshin Daiichi Bldg.
(HERBIS OSAKA)

5 stories below, 40 above groundMar. 1997⑤ West Umeda Project−Sankei Building Corporation

Umeda Hanshin Daini Bldg.
(HERBIS ENT)

4 stories below, 28 above groundNov. 2004⑥ Mainichi Newspapers Building Phase 2−The Mainichi Newspapers

Preliminary development areas (Blocks A, B, and C)

Hankyu Chayamachi Building(Chayamachi Applause)

3 stories below, 34 above ground

Hankyu-Sanbangai

2 stories below, 4 above ground(4 below in part)Nov. 1969

Hankyu Grand Building *1

3 stories below, 32 above

Aug. 1977

Hankyu Terminal Building

4 stories below, 17 above

Mar. 1972

Navio Hankyu *2(HEP NAVIO)

2 stories below, 10 above ground

Hankyu Five Building *2(HEP FIVE)

3 stories below, 10 above groundUmeda Center Building *2

2 stories below, 32 above❸ Osaka Northern District (North Yard) development

Nov. 1992

Oct. 1980

Nov. 1998④ Osaka Station reforms / New Northern Building development / Acty Osaka enlargement−West Japan Railway Company, Osaka Terminal Building Co., Ltd.
Hankyu Chayamachi Bldg.
(Hotel Hankyu International)⑦ Osaka Tokyu Hotel site development−Urban Corporation⑧ Osaka Fukoku-Seimei Building
reconstruction−Fukoku Mutual Life
Insurance Company⑦●
Hotel newHankyu Annex

C Block

B Block

Hotel newHankyu Osaka

A Blocksaknin ationsh StHamedaU⑨●
HERBIS ENT

n

k
Fu

Hankyu Terminal Bldg.
HEP FIVE

ion
tat
aS

④ JR O●

Mar. 1987
io
tat
aS
im
h
us

Hankyu Sanbangai Shopping Arcade

HEP NAVIO⑨ Osaka-ekimae area joint
development−Japan Post Service
Co. Ltd., West Japan
Railway Company*1 We lease land and buildings from a special purpose company, etc.
*2 Owned jointly with another company

NU chayamachi

HankyuUmeda
Station⑥●

Hankyu Grand Bldg.

⑧●
N

Hanshin Department
Store
Shin Hankyu Bldg.

HERBIS OSAKA⑤●
The Ritz-Carlton, Osaka

Hotel Hanshin

Hankyu Hanshin Holdings69Group at a Glance(As of 31st March 2008)

Urban Transportation

Travel and International Transportation

Business subsegments forfinancial reporting purposes

Business subsegments forfinancial reporting purposes

Name of the consolidated subsidiary

Hanshin Electric Railway Co., Ltd.
Railway Operations

Travel Agency

Hanshin Electric Railway Co., Ltd.
Hankyu Travel Support Co., Ltd.

Nosé Electric Railway Co., Ltd.

Hankyu Express International Co., Ltd.

Kita-Osaka Kyuko Railway Co., Ltd.
Hokushin Kyuko Railway Co., Ltd.

Name of the consolidated subsidiary

Hankyu Express International Co., Ltd.

Hankyu Corporation

Freight Transport

Hanshin Air Cargo Co., Ltd.
Sanyo Jidosha Unso Co., Ltd.

Hanshin Electric Railway Co., Ltd.
Hankyu Bus Co., Ltd.
Bus Operations

Hankyu Kanko Bus Co., Ltd.
Hanshin Bus Co., Ltd.
Osaka Airport Transport Co., Ltd.
Hankyu Denen Bus Co., Ltd.

Taxi Operations

Hankyu Taxi Inc.
Hanshin Taxi Co., Ltd.

HotelsBusiness subsegments forfinancial reporting purposes

Hankyu Hotel Management Co., Ltd

Railway Technology Co., Ltd.

Dai-ichi Hotel Kyushu Co., Ltd.

Globaltech Co., Ltd.
Other

Hankyu Electric Communication Systems Co., Ltd.

Arima View Hotel Co., Ltd.
Hotel Management

Hotel New Hankyu Kochi Co., Ltd.

Nippon Rent-A-Car Hankyu Inc.

Hotel Hanshin, Ltd.

Alna Sharyo Co., Ltd.

Hanshin Hotel Systems Co., Ltd.

Retailing
Name of the consolidated subsidiaryBusiness subsegments forfinancial reporting purposes

Hankyu Corporation
Rental ofReal Estate

Hankyu Realty Co., Ltd.

Hankyu Retails Co., Ltd.
Sales of Goods

Osaka Diamond Chikagai Co., Ltd.
Hankyu Corporation

Name of the consolidated subsidiary

Hankyu Corporation

Hanshin Electric Railway Co., Ltd.

Iina Dining Co., Ltd.
Doubleday Hankyu Co., Ltd.

Hanshin Real Estate Co., Ltd.
Purchase and Sale ofReal Estate

Amanohashidate Hotel Co., Ltd.

Hankyu M-TECH Corporation

Real EstateBusiness subsegments forfinancial reporting purposes

Name of the consolidated subsidiary

Hankyu Railway Service Co., Ltd.

Hanshin Station Net Co., Ltd.
Restaurants, etc.

Creative Hankyu Co., Ltd.

Hanshin Electric Railway Co., Ltd.
Hankyu Realty Co., Ltd.
Hankyu Hanshin Building Management Co., Ltd.

Property Management

Hankyu Community Service Co., Ltd.
High Security System Co., Ltd.

REIT Operations

Hankyu REIT Asset Management, Inc.

Other
Business subsegments forfinancial reporting purposes

Construction

Entertainment and Communications
Business subsegments forfinancial reporting purposes

Name of the consolidated subsidiary

Hanshin Electric Railway Co., Ltd.
SportsHanshin Tigers Baseball Club, Ltd.
Wellness Hanshin Inc.
Hankyu Corporation

Revue

Takarazuka Creative Arts Co., Ltd.
Takarazuka Stage Co., Ltd.

Theatre Operations
Advertising Agency

70

Umeda Arts Theater Co., Ltd.
Hankyu Advertising Agency Inc.
Hanshin Contents Link Corporation

Information Service

Itec Hankyu Hanshin Co., Ltd.

Publishing

Hankyu Communications Co., Ltd.

Annual Report 2008

Name of the consolidated subsidiary

Hanshin Construction Co., Ltd.
Chuo-Densetsu Co., Ltd.

Consumer Finance

Station Finance Inc.

Group FinanceHanshin Financial Support Co., Ltd.

Outsourcing Services
for Personnel andAccounting Services

Hankyu Business Asssociate Co., Ltd.

Directors and Corporate Auditors(As of 25th June 2008)

Directors
Kazuo Sumi

Tadashi Sano

President and Representative Director

Director

President, Hankyu Corporation

President, Bay Communications Inc.

Shinya Sakai

Nobuo Minami

Representative Director

Director

President, Hanshin Electric Railway Co., Ltd.

President, Hanshin Tigers Baseball Club, Ltd.

Isao Matsuoka

Koichi Kobayashi

Director

Director

Chairman, Toho Co., Ltd.

Chairman, Takarazuka Revue Company

Noriyuki Inoue

Mitsuo Nozaki

Director (External)

Director

Chairman and CEO, Daikin Industries, Ltd.

General Manager of Personnel and General Affairs Dept.

Shunichi Sugioka

Takehiro Sugiyama

Director (External)

Director

Chairman and CEO, H2O Retailing Corporation
Chairman, Hankyu Department Stores, Inc.

Head of Corporate Planning Dept.

Masao Shin

Hiroshi Ishikawa

Director
Head of Personnel and General Affairs Dept.

Director (External)
Advisor, The Kansai Electric Power Co., Inc.

Toru Nakashima

Hiroshi Ojima

Director
Head of Corporate Planning Dept.

Director
President, Hankyu Hanshin Express Holdings Corporation

Tomokazu Yamazawa
Director
President, Hankyu Hanshin Hotels Co., Ltd.

Corporate Auditors
Yasuro Yamauchi

Haruo Sakaguchi

Standing Corporate Auditor

Corporate Auditor (External)

Standing Corporate Auditor, Hankyu Corporation

Lawyer and Corporate Auditor, Hankyu Corporation (External)

Hidekazu Sugisawa

Hideki Yoshihara

Standing Corporate Auditor

Corporate Auditor (External)

Standing Corporate Auditor, Hankyu Corporation

Professor of Graduate School of Business Administration,
Nanzan University, and Corporate Auditor of Hanshin Electric
Railway Co., Ltd. (External)

Takaharu Dohi
Corporate Auditor (External)
Lawyer and Corporate Auditor, Hankyu Corporation (External)

Presidents of Core Companies
Hankyu Corporation

Kazuo Sumi

Hanshin Electric Railway Co., Ltd.

Shinya Sakai

Hankyu Hanshin Express Holdings Corporation

Hiroshi Ojima

Hankyu Hanshin Hotels Co., Ltd.

Tomokazu Yamazawa

Hankyu Hanshin Holdings

71

Investor Information(As of 31st March 2008)

Hankyu Hanshin Holdings, Inc.
Head Office:Authorised Shares:

3,200,000,000

1-16-1, Shibata, Kita-ku, Osaka 530-0012, Japan
Phone: +81-6-6373-5001 (Corporate Planning Dept., IR Office)Fax:+81-6-6373-5042

Issued Shares:

1,271,406,928

Number of Shareholders: 138,420
Tokyo Office (Personnel and General Affairs Dept.):
Toho Twin Tower Bldg.,
1-5-2, Yurakucho, Chiyoda-ku, Tokyo 100-0006, Japan
Phone: +81-3-3503-1568
Fax:+81-3-3508-0249

Stock Exchange Listing:Tokyo, Osaka

Transfer Agent:

Mitsubishi UFJ Trustand Banking Corporation

Principal Shareholders:Japan Trustee Services Bank, Ltd. (Trust account)
Nippon Life Insurance Company

Paid-in Capital:¥99,475 million

Fiscal Year-End:

31st March

Number of Employees:

19,892 (consolidated basis)

The Master Trust Bank of Japan, Ltd. (Trust account)
Sumitomo Mitsui Banking Corporation
H2O Retailing Corporation
Privee Investment Holdings Co., Ltd.
Japan Trustee Services Bank, Ltd. (Trust account No.4)
The Sumitomo Trust & Banking Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corporation (Trust account)

Stock Price Range / Turnover Trend (Tokyo Stock Exchange)
Stock Price (¥)

Nikkei Average (¥)

900

21,000

Nikkei Average(right scale)

600

300

14,0007,000

Stock Price (left scale)0
150,0000

100,000
50,00004

56Turnover(thousand shares)

72

Annual Report 2008

7

8

2005

9 10 11 12 1

2

3

4

5

6

7

2006

8

9 10 11 12 1

2

3

4

5

6

7

2007

8

9 10 11 12 1

2

3

4

2008

5

6

7

The Hankyu Hanshin Toho GroupThe Hankyu Hanshin Holdings GroupThe Group’s operations revolve around the railway business, and its business sphere is expanding in parallel with the ongoing development of the area served by Hankyu and Hanshin’s train
services. Activities currently encompass the full spectrum of urban transportation including not
only railways, but also buses and taxis, as well as real estate development. In the fields of travel,international transportation, hotels, and sports/theatres, too, the Hankyu Hanshin Holdings Groupis one of the best-known corporate players in Japan. Recent years have seen further expansion into
new business fields such as publishing and the operation of retail outlets such as bookstores.
The revenues from operations of Hankyu Hanshin Holdings on a consolidated basis for theterm ended March 2008 was ¥752.3 billion.

The H2O Retailing GroupOn 1st October 2007, a retail group came into being under the control of H2O Retailing Corporation,
the holding company set up after the management integration between Hankyu Department
Stores, Inc. and The Hanshin Department Store, Ltd. Under H2O Retailing Corporation, with Hankyu
and Hanshin department stores as core stores, the group operates retail-related businesses suchas department stores, a supermarket business, home-delivery service, shopping centres and otherbusinesses.
The revenues from operations of H2O Retailing on a consolidated basis for the term ended
March 2008 was ¥471.6 billion.

The Toho Group
Toho Co., Ltd. was established in 1932 to manage the Tokyo Takarazuka Theater, which gave its first
performance in 1934. Today, the company produces motion pictures and operates an extensive
chain of cinemas throughout Japan, and also produces stage performances. In both fields, Toho is
one of Japan’s leading companies, and it also engages in the business of real estate rentals, taking
advantage of its real estate holdings in prime downtown locations, particularly the sites of former
cinemas.
The revenues from operations of Toho on a consolidated basis for the term ended February
2008 was ¥205.0 billion.

Hankyu Hanshin Holdings

73

Hankyu Hanshin Holdings, Inc.
1-16-1, Shibata, Kita-ku, Osaka 530-0012, Japan
Phone: +81-6-6373-5001 Fax: +81-6-6373-5042
http://www.hankyu-hanshin.co.jp/english/

Hankyu Hanshin Toho Group