FY2012(Fiscal year ended March 31, 2012)

Financial Results Presentation

May 16, 2012
Keihan Electric Railway Co., Ltd.
(Tokyo Stock Exchange 1st/Osaka Securities Exchange 1st
Securities Code: 9045

http://www.keihan.co.jp/)[Notes on forecasts]
Descriptions of business forecasts and future prospects are based on current information and certain
assumptions about factors that may affect future business. The actual results of operating
performance may differ from these forecasts.

Overview of FY2012
Financial Results

Consolidated Statements of Income(Millions of yen)
ChangeFY2011FY2012

Operating revenue

259,511

265,629

6,118

Operating income

16,26918,1601,891

Ordinary income

11,846

13,580(2.4%)(11.6%)

1,734(14.6%)

526

Main factors of changes

2011/11
Estimate

Transportation -2,746, Real estate +4,640, Retail +1,576,
Leisure and service +2,289, Others -12

260,600

Transportation -26, Real estate +1,365, Retail +315,
Leisure and service +44, Others +71

15,400Non-operating income -130
(Dividends income -24, Amortization of negative goodwill -116)
Non-operating expenses +27(Interest expenses -193, Miscellaneous expenses +168)

10,500Extraordinary income -479 (Gain on sales of fixed assets -265,
Compensation income for expropriation -157)
Extraordinary loss +88 (Impairment loss +1,222, Loss on revision ofretirement benefit plan -1,074)

Net income

6,478

7,005

ROA

2.7%

2.9%

0.2pt

ROA: Operating income to total assets

−

ROE

4.9%

5.1%

0.2pt

ROE: Net income to shareholders' equity−

EBITDA33,98536,2692,284

EBITDA: Operating income +depreciation

Depreciation

17,715

18,109393

Capitalexpenditures

29,781

32,487(8.1%)(6.7%)

6,500

33,60018,200(2.2%)

2,705

33,800(9.1%)[Changes in scope of consolidation and application of the equity method (from the previous fiscal year end)]
Consolidated subsidiaries: 36 companies (No change):
New: 3 companies
KB Enterprise Co., Ltd. (absorbed Keihan Bus Service Co., Ltd.), Kyoto Century Hotel Co., Ltd. (shares acquired by Keihan
Electric Railway Co., Ltd.),
Eastern Kogyo Co., Ltd.(shares acquired by Keihan Electric Railway Co., Ltd.)
Eliminated: 3 companies Keihan Bus Service Co., Ltd. (merged with KB Enterprise Co., Ltd.), Keihan Financial Management Co., Ltd. (merged with Keihan Electric Railway Co., Ltd. ),Keihan Travel Service Co., Ltd. (liquidated)
Equity method affiliates: 2 companies (No changes)2

Consolidated Balance Sheets(Millions of yen)

FY2011

ChangeFY2012Current assets

132,791

137,064

4,272

Fixed assets

473,437

505,438

32,000606,229642,50236,273

176,890

184,947

8,056

Total assets
Current liabilities

292,985

311,767

18,781

Total liabilities

469,876496,714

26,838

Net assets

136,352

145,788

9,435

Total liabilities and net assets

606,229642,50236,273Long-term liabilities

Interest-bearing debt at end of
fiscal period
Interest-bearing debt /EBITDA multiple (Times)

310,269

335,864

25,595

9.1

9.3

0.2

Main factors of changes
Land and buildings for saleNotes and accounts receivable
Cash and deposit+9,302+4,447-8,227

Property, plant and equipment(Newly-purchased buildings, etc.)+27,375

Short-term loans
Current portion of bonds+16,244-9,867

Bonds
Long-term loans
Deferred tax liabilities for land revaluation+20,309+3,464-5,109Retained earnings
Revaluation reserve for land
*Equity capital ratio+4,321+5,08822.3% (0.2pt)

Loans payable
Bonds
Long-term accounts payable
Short-term bonds payable+19,709+10,442-2,555-2,000*Interest-bearing debt: Loans payable + bonds + short-term bonds payable + accounts payable for Japan Railway Construction, Transport and Technology Agency(JRTT)

3

Consolidated Statements of Cash Flows(Millions of yen)

FY2011

Operating cash flows

Investing cash flows

ChangeFY2012

27,558-26,044

14,818-40,872

Main factors of changes-12,739-14,827

Financing cash flows-3,776

18,42022,196

Net increase (decrease) incash and cash equivalents-2,262-7,633-5,3701213

126,746

19,127-7,619

Increase in cash and cash
equivalents resulting frommerger with non-consolidated
subsidiaries
Cash and cash equivalents
at end of fiscal period

4

Changes in inventories
Income taxes paid
Changes in notes and accounts receivable-6,638-3,906-3,276

Purchase of investments in subsidiaries resulting
in change in scope of consolidation-9,475Purchase of fixed assets-6,327
Proceeds from long-term loans
Proceeds from issuance of bonds
Changes in short-term loans
Redemption of bonds

14,893
9,967
9,749-9,696

Segment Information(Millions of yen)

FY2011

ChangeFY2012

Change (%)

2011/11 Estimate

Operating revenue

259,511

265,629

6,118

2.4

260,600

Transportation

94,60591,858-2,746-2.9

90,900Real estate

56,801

61,4424,640

8.2

59,500Retail

96,06097,637

1,576

1.6

96,900

Leisure and service

22,641

24,931

2,289

10.1

24,500

Others

1,339

1,327

-12

-0.9

1,300

Elimination-11,937-11,566370−-12,500

Operating income

16,26918,160

1,891

11.6

15,400Transportation

5,766

5,740

-26

-0.5

4,900

Real estate

8,820

10,186

1,365

15.5

8,800

Retail

1,604

1,919

315

19.7

1,400

Leisure and service

368

413

44

12.0

400

Others

-279

-207

71

−

-100

Elimination

-11

109

120

−

0

5

Results of Transportation(Millions of yen)

FY2011

Operating revenue

94,605FY201291,858ChangeChange (%)-2,746

2011/11
Estimate

Main factors of changes-2.9

Railway operation 78,894 (-1,056)
Bus
25,379 (+1,007)
Taxi− (-2,071)

90,900Railway operation
Bus
Taxi

4,900

5,461
91
−

(-269)(+30)(+64)

Operating income

5,766

5,740

-26

-0.5

Depreciation

11,846

12,019

172

1.5

−

Capitalexpenditures

13,7309,321-4,409-32.1−

・Taxi business sold on October 1, 2010
・Bus business: Effect of revenue increase resulting from merger with non-consolidated subsidiary 837 million yen<< Operating results for transportation (Keihan Electric Railway) >>Number of passengers(Thousands of people)
FY2011FY2012

ChangePassenger transportation revenue(Millions of yen)
Change (%)

FY2011FY2012

ChangeChange (%)

Non-commuter passes

144,395

144,826431

0.3

33,86633,757-109-0.3

Commuter passes

136,204

134,568-1,636-1.2

16,015

15,798-216-1.4

280,599

279,394-1,205-0.4

49,881

49,555

-326

-0.7

Total

6

Results of Real Estate(Millions of yen)

FY2011

ChangeFY2012

Change (%)

2011/11
Estimate

Main factors of changes

Operating revenue

56,801

61,4424,640

8.2

Real estate
Construction

48,532 (+3,403)
13,379 (+1,347)

59,500Operating income

8,820

10,186

1,365

15.5

Real estate
Construction

10,089 (+1,414)
262 (+150)

8,800

Depreciation

3,798

3,844

45

1.2

Capitalexpenditures

11,30921,382

10,07389.1−−

FY2012：New leasing properties, etc.

<<Results by business>>(Millions of yen)

Operating revenue
FY2011FY2012

ChangeOperating income
Change (%)

FY2011FY2012

ChangeChange (%)

Real estate sales

31,48733,404

1,917

6.1

1,617

2,910

1,293

80.0

Real estate leasing service

13,641

15,127

1,485

10.9

7,057

7,178

121

1.7

45,12848,532

3,403

7.5

8,674

10,089

1,414

16.3

Total

<<Main condominium buildings for sale>>
Name

Sales
amount(Millions of yen)

Number ofunits sold<<New leasing properties>>
Name

Location

Acquired date

LocationGrand First Senri Momoyamadai

5,126

207

Suita city, Osaka

Eastern Building

January 2012

Minato ward, Tokyo

Bijours Biwako

3,348

119

Otsu city, Shiga

Toranomon 5 Mori Building

August 2011

Minato ward, Tokyo

Fine Residence Mita

2,988

51

Minato ward, Tokyo

Mikami Building

June 2011

Setagaya ward, Tokyo

La Breise Keihan-Makino

2,919

118

Hirakata city, Osaka

Eishin Building

April 2011

Chiyoda ward, Tokyo

Fine Residence Nishiarai

1,356

41

Adachi ward, Tokyo

Keihan Midosuji Building

September 2010

Chuo ward, Osaka city

Eastern Building became part of the portfolio following the acquisition of shares in the building’s owner, Eastern Kogyo Co., Ltd.

7

Results of Retail(Millions of yen)

FY2011

Operating revenue

ChangeFY2012

96,06097,637

Change (%)

1,576

2011/11
Estimate

Main factors of changes

1.6

Department store
Store
Shopping mall management
Restaurant

54,32028,17911,4636,561(+2,362)(-1,094)(+452)(-247)

96,900Department store
Store
Shopping mall management
Restaurant

365
628
853
53

(-6)
(+137)(+127)
(+59)

1,400

Operating income

1,604

1,919

315

19.7

Depreciation

1,182

1,219

37

3.2

Capital expenditures

3,721

922

-2,798-75.2−−

FY2011: Keihan Department Suminodo Store, etc.

・Shopping mall management: Oct 1, 2010 Attraction of FOREVER 21 (Commercial building in Shibuya ward, Tokyo / Previous HMV Shibuya)

Name

Opening date

May 1, 2011

Kita ward, Osaka
City

Keihan Department Suminodo
Store

October 8, 2010

Daito city, Osaka

Hakodate Ichiba AEON Mall
Kyoto Hana Store

September 24, 2010
April 21, 2010

Store

Fushimi ward,
Kyoto city
Ukyo ward, Kyoto
city<< Main Stores Closed>>
Name

Closing date

Location

UNIQLO Tennouji Subway
Station Store

December 31, 2011

Abeno ward, Osaka
city

FREST Owada

October 22, 2010

Kadoma city, Osaka(Millions of yen)

(Millions of yen)

Location

SWEETS BOX LUCUA OsakaStoreSWEETS BOX Tambabashi
Store<< Sales of Store >><< Sales of Department Store >><< Major New Properties >>ChangeMoriguchi Store

24,510-283

Kuzuha Store

10,194258

Kyobashi Store

7,487

-181

Hirakata Store

6,637

249

Suminodo Store

4,873

2,321

Miscellaneous
revenue616-154,320

2,362

Total

8

Sales
amountSales
amountChangeStore

12,252-542

Convenience
store

5,873

13

876

-103

Station business

8,145

-490

Miscellaneous
revenue

1,030

28

Total

28,179-1,094

Division

Kiosk

Results of Leisure and Service(Millions of yen)

FY2011

ChangeFY2012

Change (%)

Main factors of changes
20,312 (+2,208)
4,771
(+29)

2011/11
Estimate

Operating revenue

22,641

24,931

2,289

10.1

Hotel
LeisureOperating income

368

413

44

12.0

Hotel
LeisureDepreciation

886

1,023

136

15.4

−

Capitalexpenditures

1,031

835

-196

-19.0

−

389
190

24,500(+168)(+51)<< Hotel occupancy rates >>FY2011FY2012

Number ofrooms

ChangeKyobashi

89.4%

93.1%

3.7pt

214

Temmabashi

75.2%

82.0%

6.8pt

317

Kyoto

91.5%

92.5%

1.0pt

286

Universal City

77.1%

78.0%

0.9pt

330

Universal Tower

69.8%

78.3%

8.5pt

641

Asakusa

85.7%

87.8%

2.1pt

178

Sapporo

79.5%

90.8%

11.3pt200

Biwako Hotel

73.2%

79.1%

5.9pt

171

Kyoto Tower

87.9%

90.0%

2.1pt

583

Kyoto Century Hotel

−

89.0%

−

220

Total

−

−

−

3,140

Hotel
Keihan9Remarks

July 25, 2011

Acquisition of shares400

Non-consolidated Statements of Income(Millions of yen)
FY2011FY201274,93678,8093,872

5.2

Railway operation

53,18852,821-367-0.7

Subsidiary business

21,74825,987

4,239

19.5

Real estate sales

5,627

8,974

3,347

59.5 (Grand First Senri Momoyamadai

Real estate leasing service

13,641

14,7851,143

8.4 New leasing properties and others

Leisure

2,479

2,228

-251

-10.1 Number of visitors in Hirakata Park

Operating income

12,537

12,847310

2.5

Railway operation

5,807

5,773

-33

-0.6

Subsidiary business

6,729

7,073

344

5.1

Real estate sales

-113

456

569

−

Real estate leasing service

7,057

7,019

-37

-0.5

Leisure

-213

-402

-188

−

Operating revenue

Ordinary income

Net income

8,897

4,107

9,237

4,469

Change

339

361

10

Change (%)

Main factors of changes

Number of passengers
Passenger transportation revenue

-0.4%
-0.7%

Condominium buildings for sale

+4,869+5,126)-15.0%

3.8

Non-operating income(Interest and dividends income +263)
Non-operating expenses(Provision of allowance for doubtful accounts +283)

+379

8.8

Extraordinary income+258(Gain on sales of investment securities +281)
Extraordinary loss
-1,029(Loss on revision of retirement benefit plan -1,074, Loss on valuation ofstocks of subsidiaries and affiliates -374, Impairment loss +595)+349

FY2013 Forecasts

Forecast of Consolidated Business Results (1)(Millions of yen)

FY2012
Results

FY2013
Forecast

Operating revenue

265,629

268,900

3,270

1.2

Transportation +441, Real estate +4,257, Retail -1,737,
Leisure and service +568

Operating income

18,16017,600-560-3.1Transportation -140, Real estate -386, Retail -519,
Leisure and service +86

Ordinary income

13,58012,200-1,380-10.2

Non-operating income -582
Non-operating expenses +238

Net income

7,005

7,400

394

5.6

Extraordinary income -1,151
Extraordinary loss -2,850

Capital expenditure

32,48724,800-7,687-23.7

Depreciation

18,10917,300-809

EBITDA

36,26934,900-1,369Interest-bearing debt

Interest-bearing debt /EBITDA multiple(Times)335,8649.3

343,300

9.8

Change (%)

Change

7,435

0.5

12

Main factors of changes[Breakdown of capital expenditures]Transportation-4.5 (+3,078)
Real estate-3.8 11,582)
2.2−

Retail(+77)
Leisure and service(+564)
Corporate, etc.
(+175)

12,400
9,800

(-

1,000
1,400
200

<<Main capital expenditures for FY2013>>(Transportation)
Investment on our railway(Real estate)
Investment on our real estate

7,671
9,699

Forecast of Consolidated Business Results (2)<< By segment >>(Millions of yen)

FY2012
Results

FY2013
Forecast

ChangeChange (%)

Main factors of changes

Operating revenue

265,629

268,900

3,270

1.2

Transportation

91,85892,300441

0.5 Bus +153, Railway operation -343
Real estate management
Real estate sales
Real estate leasing service
Construction+2,106+1,205+1,051-261

Real estate

61,44265,7004,257

6.9

Retail

97,637

95,900-1,737-1.8 Shopping mall management

-661
-572
-399

Leisure and service

24,93125,500568

2.3 Hotel+574

Others

1,327

1,500

172

13.0

Elimination-11,566-12,000-433−

Operating income

18,16017,600

-560

-3.1

5,740

5,600

-140

-2.4 Bus -72, Railway operation +49

-386

-3.8

Real estate sales
Construction
Real estate leasing service
Real estate management

-707
-276
+349
+15

-27.1

Shopping mall management
Department store
Store

-217
-159
-100

Store

Transportation
Real estate

10,1869,800

Department store

1,919

1,400

-519

Leisure and service

413

500

86

Others

-207

0

207

−

Elimination

109

300

190

−

Retail1321.0 Hotel+246

Forecast of Non-Consolidated Business Results(Millions of yen)

FY2012
Results

Operating revenue

FY2013
Forecast

ChangeChange (%)

78,80983,0004,190

5.3

Railway operation

52,821

52,200-621-1.2

Subsidiary business

25,98730,800

4,812

18.5

12,847

12,94092

0.7

Railway operation

5,773

5,590

-183

-3.2

Subsidiary business

7,073

7,350

276

3.9

Ordinary income

9,237

8,990

-247

Net income

4,469

5,750

1,280

Operating income

Main factors of changes

Number of passengers
Passenger transportation revenue

-1.2%
-1.1%

-2.7

Non-operating income
Non-operating expenses

-120
+219

28.7

Extraordinary income
Extraordinary loss

-1,115-2,383<< Forecast of operating results for transportation (Keihan Electric Railway) >>Number of passengers(Thousands of people)

Passenger transportation revenue(Millions of yen)

FY2012
Results

FY2013
Forecast

Non-commuter passes

144,826

144,040

-786

-0.5

33,75733,554-203-0.6Commuter passes

134,568

131,869-2,699-2.0

15,79815,480-318-2.0279,394

275,909-3,485-1.2

49,55549,034

-521

-1.1

Total

ChangeChange (%)

14

FY2012
Results

FY2013
Forecast

ChangeChange (%)

TOPICS

Keihan Group’s Medium-term Management Plan
(FY2013-2015)

The Previous Medium-term Management Plan (FY2010-2012)

Summary of ATTACK 2011
(Billions of yen)

Numeric targets(consolidated basis)

FY2012
Targets

FY2012
Results

Vs. Targets

Operating income

20.7

18.1

-2.6

EBITDA

42.0

36.2

-5.8

ROA

3.2%

2.9%

-0.3 pt

Net income

8.0

7.0

-1.0

ROE
(Net income to shareholders’ equity)

5.8%

5.1%

-0.7 pt

Interest-bearing debt
/EBITDA multiple (Times)

8.5

9.26

0.76 pt(Operating income to total assets)[Issues to be addressed in Medium-term Management Plan (FY2013–2015)]○Build an operating structure strong enough to counter a shrinking market due to population decline, intensifying competition, andsudden deterioration in the operating environment.
○Work to halt the decline in the number of passengers and implement measures to stimulate growth.
○Improve the consolidated interest-bearing debt/EBITDA multiple by driving a recovery in earnings power.

16

1. Basic Policy in Medium-term Management Plan
Over the next three years, we will implement measures to counter the shrinking market
due to population decline and any sudden deterioration in the operating environment,
and to support the future development of the Keihan Group.

Basic Policy
Building the foundations for a strong Keihan
for the next 100 years17

2. Issues to be Addressed(1)

Ensure safety and increase risk management capabilities

1. Improve safety on the railways
2. Increase the Group’s crisis response capabilities for an event such as a major natural
disaster(2)

Expand the business by reviving railways via development along
the Keihan Railway lines and utilizing related expertise

1. Revitalize areas along the Keihan Railway lines
2. Develop a future vision for the transportation business, including stronger links with othermodes of transport
3. Establish new businesses using expertise built up over many years(3)

Strengthen the operating structure

1. Create a structure that maximizes profits
2. Deliver extensive efficiency gains

18Positioning of Medium-term Management Plan
(FY2013- 2015)
Re-Born21(FY2003 – FY2006)
The Keihan Group
Rebirth Plan
Go for profitable growth

Jump21(FY2007 – FY2009)ATTACK 2011
(FY2010 – FY2012)

Medium-termManagement Plan
(FY2013 – 2015)

Reinforcement of
profitability for growth
Improve management quality
and set our businesson the road to growth
as early as possible“Build up a Robust
Management Base”
capable of conquering
the difficulties and“Realize the Growth towards
Our Vision”
as early as possible.

Build the foundations
for a strong Keihan
for the next 100 years

FY2021
Management Vision"Our Challenge to Keihan
as First Choice"Jump21
Re-Born21

ATTACK2011

Medium-term Management Plan
(FY2013 - 2015)

Deterioration in
the operating
environment.

FY2021

Build the foundations for a stronger Keihan to open the way to further growth19

3. Corporate Strategy(1)Strengthen the operating structure through extensive efficiency gains

1. Operating divisions
Create an efficient operating system through a radical review of the business structure

Overhaul business approaches
Restructure and integrate businesses in the Group
Exit unprofitable businesses or businesses with limited potential
2. Administrative divisions
Achieve extensive efficiency gains through cost control
Create a lean head office at Keihan Electric Railway by reducing the sizeof administrative divisions
Reduce costs in administrative divisions at Group companies
203. Corporate Strategy(2)

Revitalize areas along the Keihan Railway lines

1. Push ahead with site development
Push ahead with the creation of highly livable areas by developing strategic sites such as the
KUZUHA MALL second-stage development plan in order to ensure areas along our lines
continue to be chosen by the public well into the future

2. Implement our Kyoto strategy
Establish a position as the leading company in Kyoto so that customers always associate
Keihan with Kyoto

3. Promote new businesses to develop areas along rail lines
Promote lifecycle support businesses to create areas along rail lines with better environments
for families with young children and senior citizens

21

3-(2) Revitalize Areas along the Keihan Railway Lines−Push ahead with site development−
KUZUHA MALL second-stage development plan
Based on the development concept “Towards Kuzuha we can be proud of ,” we will develop
KUZUHA MALL into one of the best regional shopping centers in Japan in terms of size and quality
by increasing the number of high-quality fashion, interior and general goods stores, and by offering
greater entertainment and home living content, which is currently lacking.
<Renovation project overview>○Schedule
2012 Summer “KUZUHA MALL” start floor expansion work
(West Wing to close end-June, Kids Wing and Kuzuha Court to close end-August)2014 Spring “KUZUHA MALL” open after floor expansion work

○ Facility overview
Sales area
approx. 72,000m2 (before expansion approx. 50,000m2)
Car parking approx. 3,000cars (before expansion approx. 2,000 cars)

Current West Wing
to be dismantled
Existing Main Hall

Current Kuzuha Court
to be dismantled

Current Kids Wing
to be dismantled

Additional Main Hallfloor space (new building)

New South Wing
(new building)

Keihan Railway
Kuzuha Station
West multi-story
parking lot

Image of mall after renovation

22

Mall expansion plan3-(2) Revitalize Areas along the Keihan Railway Lines− Implement our Kyoto strategy −Enhance the presence of our transport network◆ Non-stop RAKU RAKU Keihan express service during the Spring tourist season
・Operate the non-stop Keihan express (Yodoyabashi – Demachiyanagi) service using 8000 series
rolling stock between Kyobashi and Shichijo
・Schedule: Every Saturday, Sunday and public holiday until June 3 (Sunday)◆ Secure more contracts from Kyoto City Transportation Bureau

・Leverage our expertise in operational efficiency to secure more station operation contracts from
Kyoto City Transportation Bureau
・Contracts secured for five stations through to FY2012; 12 new contracts to be started in FY2013

Rolling stock logo for the
non-stop RAKU RAKU
Keihan express service◆ Enhance services using independently operated Kyoto Regular Tour Bus services

Step up tourist marketing initiatives through cooperation across the Group,
mainly in the hotel and transportation businesses◆ Enhance the appeal of Group hotels near JR Kyoto Station
Renovate Hotel Keihan Kyoto, Kyoto Tower Hotel and Kyoto Century Hotel◆ Strengthen cooperation across the Group
Step up tourist marketing initiatives through cooperation between the Grouptransportation network (Eizan Electric Railway, Keifuku Electric Railroad, Keihan Bus,
Kyoto Bus, etc.) and Group hotels, and through synergies with JR West and the local
community.

23

Kyoto Century Hotel3-(2) Revitalize Areas along the Keihan Railway Lines− Promote new businesses to develop areas along our lines −Senior citizen lifestyle support business◆ Develop new facilities with nursing care services
Keihan Life Support, which offers nursing care services for senior citizens, is developing new facilities

Home relocation support business◆ Home relocation support businessSupport for senior citizens to lead a comfortable life after retirement andencouragement for families raising small children to reside in our domain area

Family support business◆ Create areas along the Keihan Railway lines with better environments for families raising young
children
To prevent families moving out and encourage more families to move into neighborhoods along the Keihan
Railway lines, we will create areas with better environments for families raising young children by starting new
businesses aligned to their needs.

We will continue to develop businesses relevant to the lifestyles of people that live along
our lines, such as support for senior citizens and families raising young children.
24

Strategy to Revitalize Areas along the Keihan Railway Lines[Revive the railways]
Rebuild businesses focused on stations to further strengthen our railways bycreating more vibrant areas along our lines
Develop businesses
along our lines

Expand areas
along our lines

Createmorevibrant
areas along
our lines

Reviverailways

Passenger
growthKeihan Group now

25

Population
growthStrategy to Revitalize Areas along the Keihan RailwayLines
CreateCreate livable
livable areas
areas along
along our
our lines
lines where
where people
people want
want toto live
live
Population
Population increase
increase along
along our
our lines
lines[Projected generational cycle along our lines]

Strengthen competivenessOutside railline areas

Employment

Parents

FamilyPush ahead withsite development

Home relocation
support business,
etc.

School studentsChildren

Return to
areas along
our lines

New people
moving in

Senior citizens

New corporate group resistant tothe society with declining population

Marriagesenior citizens
lifestyle support
business

Develop areas
along our lines

Familysupportbusiness, etc.

Families withyoung children

Strengthen the operating structure26

Handing over tothe next generation
within areas along
our lines

4- (1) Business Strategy − Transportation−
As part of efforts to ensure safety and peace of mind,
we will develop services tailored to the needs of our customers
while boosting the efficiency of our transport operating system.
1. Ensure safety and peace of mind
Work to ensure safety and peace of mind by steadily implementing measures to improvetransport safety management

2. Improve the efficiency of the transport operating system
Reduce costs at operating and administrative divisions to create a lean head office based on
efficient organizations and personnel systems

3. Develop services tailored to the needs of customers
Offer services designed to match the needs of our customers(Billions of yen)

FY2012
Results

FY2013
Forecast

FY2014Plan

FY2015
Plan

Operating revenue

91.8

92.3

92.2

92.3

Operating income

5.7

5.6

6.8

7.0

27

4- (1) Business Strategy − Transportation−
Ensure safety and peace of mind
◆ New 13000 series rolling stock introduced (five carriages)
1. Safety improvements
・ Increase in structural strength of carriage bodies
・ More handles for passengers to grab in the event of accidents and emergency
braking, larger and more rounded partitions at the end of seat rows
2. Environmentally friendly
・ A roughly 35% reduction in power consumption compared with the previous
rolling stock model (2600 series)◆ Roll out new ATS technology
・ We started introducing the new equipment from FY2012, with a target
completion date of FY2017 for all Keihan lines
Implement initiatives to further improve safety

13000 series rolling stock(Operation started in April 2012)

Improve the efficiency of the transport operating system◆ Expansion of driver-only train services
Considering increase in number of driver-only train services◆ Introduce additional station support systems
Install remote station monitoring systems to reduce staff numbers while maintaining station service levels28

4- (1) Business Strategy − Transportation−
Develop services tailored to the needs of customers◆ Nationwide compatibility for transport IC cards
・ As a member of the KANSAI THRU PASS group, Keihan plans to join anationwide transport IC card compatibility project (spring 2013)
・ The aim is to improve convenience for customers nationwide and enhance our own
network
Transport IC card PiTaPa◆ Kyoto Regular Tour Bus services

・ Following the start of our independently operated services, we will work to revitalize the businessby continuing to attract users from overseas and using IT tools to boost sales
・ Onboard foreign language guide system introduced in October 2011English, Chinese and Korean initially offered, followed by Taiwanese from January 2012. Taiwanese
language support was introduced in conjunction with stepped up efforts to attract more visitors from Taiwan◆ “Direct Express Choku Q Kyoto” bus services introduced on the Kyoto-KatanoNamba route・ In response to strong demand for “Direct Express Choku Q Kyoto” busservices (high-speed link to JR Kyoto Station), we launched services on
the Kyoto-Katano-Namba route on April 1, 2012.
・ The route follows the Second Keihan Highway and Hanshin
Expressway, enabling a high speed, convenient service without citytransfers
29“Direct Express
Choku Q Kyoto”

4- (2) Business Strategy − Real Estate−
In the real estate leasing service business, we will seek to boost
the value of assets and strategically replace portfolio assets;in the real estate sales business, we will continue to focus onshort-term turnover business.
1. Boost asset value and replace portfolio assets in real estate leasing business・ Flexibly reshuffle portfolio assets
・ Promote investment in real estate funds

2. Continue to focus on short-term turnover business
Develop the condominium and detached housing businesses

3. Reinforce commission-based business
Strengthen the asset management and property management businesses and pursue
greater scale(Billions of yen)

FY2012
Results

FY2013
Forecast

FY2014Plan

FY2015
Plan

Operating revenue

61.4

65.7

65.5

64.4

Operating income

10.1

9.8

9.1

9.5

30

4- (2) Business Strategy − Real Estate−
Boost asset value and strategically replace portfolio assets in real estateleasing business◆Expand earnings through the consolidation of Eastern Kogyo
Eastern Kogyo Co., Ltd., which manages Eastern Building, became our subsidiaryon January 27, 2012
The subsidiary will contribute to the Group’s portfolio strategy for leasing real estate〔Eastern Building Outline〕
Location: 2-15-2 Nishi-Shinbashi, Minato ward, Tokyo
(6 minutes on foot from Tokyo Metro Toranomon Station )Total floor space: 26,835.29 m2
Eastern Building
Completion : April 1964
Building structure: 10 stories high steel-reinforced concrete structure with
[Kumiyama Shopping Town Outline]
3 stories flat-roofed building◆Kumiyama Shopping Town renovation
・The land and buildings are now leased to Aeon Retail Co., Ltd. andthe facility is operated as AEON Mall Kumiyama
・The facility was reopened on April 5 following the renovation that
increased store floor space by 50%

Before renovation

After renovation

Shops

41,479㎡

60,130㎡

Multistory
parking lot

15,263㎡

24,050㎡

Total

56,742㎡

84,180㎡

Location：156-1 Mori Minami Ouchi,
Kumiyama-cho, Kuse-gun, Kyoto◆Strategically replace portfolio assets and invest in real estate funds
・Appropriate management of portfolio asset risk
・Promote investment in real estate funds as a means of diversifying real estate asset holdings31

4- (2) Business Strategy − Real Estate−Continue to focus on short-term turnover business◆New property sales
Dojima The Residence Mark Tower
A high-rise condominium located in the heart of Osaka in the Dojima area,
midway between Nakanoshima and the Ume-Kita area currently being
redeveloped
Location: 2 Doujima, Kita ward, Osaka city, Osaka
Building scale : 39 stories high, 269 units
Completion : October 2013 (planned)

Dojima The Residence Mark Tower(Completion planned in October 2013)◆Acquire and strengthen expertise in the condominium renovation business・We are renovating existing housing stock to supply customers with residential property at a lower pricethan new-build properties in the same area

Reinforce commission-based business◆ Expand the condominium management and property management businesses
・Keihan Group company Keihan Kind Co., Ltd.* acquired a property management business (owner-occupied
condominiums and other properties) in November 2011 to extend its operating base from the Kansai area into
the Tokyo metropolitan area.
Property management contracts transferred in deal・All property management operations for office
Owner-occupied condominiums management: 49 buildings, 2,513 units
buildings, leasing condominiums and other Group
Leasing condominiums management: 10 buildings, 239 units
properties are to be handled by Keihan Kind
Locations of properties: Tokyo, Saitama, Chiba, etc.
*Consolidated subsidiary from FY201332

4- (3) Business Strategy − Retail−We will steadily implement the KUZUHA MALL
second-stage development plan,
boost competitiveness by extensively overhauling the business structure,and expand the property management business.
1. Implement the KUZUHA MALL second-stage development plan

Steadily implement the plan, drawing on the combined strengths of the Keihan Group’s
retailing business

2. Extensively overhaul the business structure
・Boost sales and profitability by rebuilding merchandising at the Keihan department storesin Moriguchi and Suminodo
・Reinforce the operating structure in the supermarket business to support business growth
going forward

3. Expand the property management business
Use our expertise to increase the number of properties under management(Billions of yen)

FY2012
Results

FY2013
Forecast

FY2014Plan

FY2015
Plan

Operating revenue

97.6

95.9

96.9

102.2

Operating income

1.9

1.4

1.7

2.8

33

4- (3) Business Strategy − Retail−
Implement the KUZUHA MALL second-stage development plan
Initiatives timed to coincide with the KUZUHA MALL second-stage development plan progress◆ Keihan Ryutsu Systems Co., Ltd.
・Using the renovation as an opportunity to boost shopping
center value, Keihan Ryutsu Systems will attract tenants withretail formats that have been lacking so far
・Keihan Ryutsu Systems will aim to boost number of storesfrom around 170 to roughly 230, making the mall one of thebest in Japan in terms of size and quality◆ Keihan Department store
Renovate store in Kuzuha Mall and improve merchandising◆ Keihan The StoreKUZUHA MALL second-stage development plan

Renovate the existing Kuzuha Store and station store as part of the development plan

Steadily implement the plan, drawing on the combined strengths of the Keihan Group’s retailing business

Expand the property management business◆ Increase the number of properties under management
Rapidly increase the number of properties under management by leveraging the expertise
we have accumulated in the management of Keihan Group properties, renovate properties alreadyunder management, and target major new contracts to establish a stable commission-based business.
34

4- (4) Business Strategy − Leisure and Service−
We will boost competitiveness by extensively overhaulingthe business structure, target tourism-related demand,and build the hotel brand.
1. Strengthen sales and marketing in the hotel business・ Enhance cooperation between the 13 hotels in the Keihan Group・ Improve the accuracy of revenue management
・ Develop human resources(Billions of yen)

FY2012
Results

FY2013
Forecast

FY2014Plan

FY2015
Plan

Operating revenue

24.9

25.5

26.2

26.5

Operating income

0.4

0.5

0.7

1.0

35

4- (4) Business Strategy − Leisure and Service−
Strengthen sales and marketing in the hotel business and leverage synergies◆ Enhance cooperation between the 13 hotels in the Keihan Group
1. Set up a shared online booking system for all Keihan Group hotels

・ The online system will enable customers to directly book rooms at any
Keihan Group hotel to suit their travel area and purpose
・ Site also available in English, Chinese and Korean as part of efforts to stepup support for inbound customers from overseas

2. Introduce online membership system for Keihan Group hotels

・ For users of the online booking system, offer preferential deals for members
and discounts on bookings made with loyalty points⇒ Use data gained from the two above systems to create customer-focusedmarketing and targeted revenue management

3. Set up an integrated procurement center for Keihan Group hotels
・ Integrate procurement of food ingredients, fixtures and fittings,
consumables and other items to help support optimum pricing and boost
customer satisfaction

Shared online booking system for all
Keihan Group hotels
Booking page (planned design / partial)

Boost convenience for customers and strengthen competitiveness from a price and service
perspective, attract more customers, including inbound visitors from overseas, and build the hotel
brand
36

5. Numeric targets (Consolidated basis)(Billions of yen)

Numeric targets

FY2012
Results

FY2015
Targets

FY2012 Results
vs. Targets

Operating income

18.1

20.2

2.1

EBITDA

36.2

37.9

1.7

Interest-bearing debt
/EBITDA multiple (Times)

9.26

8.98

-0.28 pt

Goals based on
numeric targets

FY2012
Results

FY2015
Targets

FY2012 Results
vs. Targets

Net income

7.0

8.6

1.6

ROE

5.1%

5.6%

0.5 pt2.9%

3.1%

0.2 pt(Net income to shareholders’ equity)

ROA(Operating income to total assets)37

6. Keihan Group Earnings Targets and Financial Indicators
Keihan Group (Consolidated basis)(Billions of yen)

FY2012
Results

FY2013
Forecast

FY2014Plan

FY2015
Plan

Operating revenue

265.6

268.9

270.8

273.7

Operating income

18.1

17.6

18.3

20.2

Ordinary income

13.5

12.2

12.2

14.2

Net income

7.0

7.4

7.4

8.6

Earnings per share (Yen)

12.5

13.2

13.2

15.3

EBITDA

36.2

34.9

35.5

37.9

Interest-bearing debt at end of fiscal
period

335.8

343.3

353.8

340.1

Interest-bearing debt / EBITDA
multiple (Times)

9.26

9.84

9.96

8.98

Equity capital ratio

22.3%

23.1%

23.3%

24.5%

Capital expenditure

32.4

24.8

33.7

23.3

38

6. Keihan Group Earnings Targets and Segment Information
Keihan Group (Consolidated basis, by segment)(Billions of yen)

Operating revenue
FY2012
Results

FY2013
Forecast

Operating income

FY2014Plan

FY2015Plan

FY2012
Results

FY2013
Forecast

FY2014Plan

FY2015
Plan

Transportation

91.8

92.3

92.2

92.3

5.7

5.6

6.8

7.0

Real estate

61.4

65.7

65.5

64.4

10.1

9.8

9.1

9.5

Retail

97.6

95.9

96.9

102.2

1.9

1.4

1.7

2.8

Leasure and service

24.9

25.5

26.2

26.5

0.4

0.5

0.7

1.0

Others

1.3

1.5

1.6

1.8

-0.2

0.0

0.0

0.0

Elimination

-11.5

-12.0

-11.6

-13.5

0.1

0.3

0.0

-0.1

Total

265.6

268.9

270.8

273.7

18.1

17.6

18.3

20.2

(Billion of yen)

[Operating revenue by segment]

350.0(Billions of yen)

[Operating income (loss) by segment]

25.0

300.0

20.0

250.0
200.0

15.0

150.0

10.0

Others
Leasure and service
Retail

100.0

5.0

50.0
0.0

Real estateTransportation

0.0
FY2012
Result

FY2013
Forecast

FY2014Plan

FY2015Plan

FY2012
Result39

FY2013
Forecast

FY2014Plan

FY2015Plan