Hankyu Hanshin Holdings
Securities code: 9042

Integrated Report2019Profile

Group Management Philosophy

MissionWhat we try to achieve
By delivering Safety and Comfort and Dreams and Excitement,
we create satisfaction among our customers and contribute to society.

ValuesWhat is important to us
Customers First
Everything we do is for the customer. That s where it all starts.

Sincerity
Gain customers conﬁdenceby always being sincere.

Foresight & Creativity
With our pioneer spirit and ﬂexible thinking,we create a new value.

Respect for People
Everyone is absolutely
invaluable to the Group.

1

Hankyu Hanshin Holdings Integrated Report 2019

CO N T E N T S
1Proﬁle１ Strategy for Enhancement of Corporate Value

13

Growth Trajectory
At a Glance
Service Area
Group Characteristics

Message from the Chairman
Message from the President
Summary of Long-Term Management Vision for 2025
and Medium-Term Management Plan
Four Strategies for Our Medium-Term Management Plan
Value Creation Process of Hankyu Hanshin Holdings

2 Enhancing Our Corporate Value
Urban Transportation
Real EstateEntertainment
Information and Communication Technology
TravelInternational Transportation
Hotels3 The Foundations of Enhanced Corporate Value
Directors and Audit & Supervisory Board Members
A Conversation with External Audit &Supervisory Board Members
Sustainable Business Management
Enhancing Management Transparency and
Fulﬁlling Our Social Responsibility
Continuing to Be a Corporate Group Trusted by Society
SafetySocial Contribution
Diversity
Health Management
Building an Environmentally Friendly, Sustainable Society

Financial Section and Corporate Data
Consolidated Six-Year Summary
Consolidated Financial Review
Business Risks
Consolidated Balance Sheets
Consolidated Statements of Income / Consolidated
Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
List of Major Domestic Rental and Sales Properties
List of Overseas Sales Properties
List of Hankyu-Hanshin-Daiichi Hotels
Major Group Companies
Investor Information
Website Information

ProfileFinancial Highlights, Non-Financial Highlights

1
3
5
7
9
11

Group Management Philosophy

13
15
23
25
31

33
33
35
37
39
41
43
45

47
47
49
53
54
59
59
63
66
67
68

70
71
72
76
77
79
80
82
83
108
109
110
111
112
113

Deﬁnition of the areas served by the Hankyu and Hanshin lines: Below are lists of areas with Hankyu Corporation and Hanshin Electric
Railway stations (including tier 2 railway operators).
Osaka Prefecture: Osaka City (Fukushima, Konohana, Nishi, Naniwa, Nishi-Yodogawa, Higashi-Yodogawa, Yodogawa, Kita, andChuo, out of a total of 24 wards); and Toyonaka, Ikeda, Suita, Takatsuki, Ibaraki, Minoh, and Settsu cities and Shimamoto town
Hyogo Prefecture: Kobe City (Higashi-Nada, Nada, Hyogo, Nagata, and Chuo, out of a total of 9 wards); and Amagasaki, Nishinomiya,
Ashiya, Itami, Takarazuka and Kawanishi cities
Kyoto Prefecture: Kyoto City (Nakagyo, Shimogyo, Ukyo, and Nishikyo, out of a total of 11 wards); and Muko and Nagaokakyo cities
and Oyamazaki town

Forward-Looking Statements

The reader is advised that this integrated 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 basedon facts known to the Company s management as of the time of writing. Actual results may be inﬂuenced by various business risks anduncertainties, and diﬀer substantially from such statements.

About the Compilation of this Integrated Report and the Auditing Company Used

The ﬁnancial section of this integrated report includes a digest of information including consolidated ﬁnancial statements in the
Company s Securities Report for the 181st period, audited by KPMG AZSA LLC and presented in a somewhat modiﬁed format. We havepresented this information in such a way as to ensure that there is no discrepancy with the data presented in the annual securities
report. However, the integrated report itself has not been audited by KPMG AZSA LLC.

Deﬁnition

Fiscal 2019 refers to the ﬁscal year ended 31st March 2019. Other ﬁscal years are referred to in a corresponding manner in thisintegrated report. Figures are basically rounded oﬀ. Sums expressed in units of ¥100 million are rounded to the nearest ¥100 million.
Hankyu Hanshin Holdings Integrated Report 20192

Profile

Growth Trajectory
Total ﬂoor space: Approx. 278,000 m2(Incl. Gate Bldg. and annex)
Building details: 4 ﬂoors above ground(partial ﬁfth ﬂoor)

Growth Post Integration

Total ﬂoor space: Approx. 254,000 m2(Oﬃce space [incl. Sky Lobby, etc.]: 103,000 m2)
Building details: 41 ﬂoors above ground; 2 ﬂoor
below ground (Oﬃce space: 25 ﬂoors [17F‒41F])

Nov. 2008

May 2010

Opening of Hankyu Nishinomiya Gardens

Opening of Umeda Hankyu Building Oﬃce Tower

Hankyu Hanshin Holdings 2006

Nov. 2007

Sep. 2009

Opening of Umeda Hankyu Building(Hankyu Department Store Umeda
Main Store, Phase I Building)Opening of remm
Hibiya(First in a series ofremm-branded hotels)Mar. 2009

Beginning of operations of Hanshin Namba Line(between Nishikujo‒Osaka-Namba)

Operating kilometers: 10.1 km(Amagasaki‒Osaka-Namba)
Nishikujo to Osaka-Namba: 3.8 km

Growth Pre Integration

1910

Start of sales of Ikeda
Muromachi Residential
Land Plots

Hankyu 1907
Hanshin 1899
3

1910

1907

Establishment of the Minoh‒Arima
Electric Railway Company(currently Hankyu Corporation) by
Ichizo Kobayashi

1899

Establishment of Settsu
Electric Railway(currently Hanshin
Electric Railway Co., Ltd.)

Opening of
Takarazuka Line
(Umeda‒Takarazuka)
and Minoh Line
(Ishibashi‒Minoh)

1913

Formation of
Takarazuka Girls
Revue (currently
Takarazuka Revue
Company)

1920

Hankyu Hanshin Holdings Integrated Report 2019

Completion of the renovations ofHanshin Koshien Stadium

Total ﬂoor space: Approx. 38,500 m2(Seating area: 22,600 m2; Field:
13,000 m2; Other: 2,900 m2)
Capacity: 47,508

of Takarazuka
1924 Completion
Grand Theater

1921

of Umeda Hankyu Building (Beginning
1929 Openingof operations of Hankyu Department Store,

Kita-Osaka Electric
Railway (currently
Kyoto Line and Senri
Line) (Juso‒Toyotsu)

Opening of Kobe
Line (Umeda‒Kobe)
and Itami Line
(Tsukaguchi‒Itami)

Asia s ﬁrst railway terminal department store)

1926

Opening of
Takarazuka
Hotel

1924

1905

Beginning ofoperations
linking Kobe
(Sannomiya) andouter Osaka(Deiribashi)

Mar. 2010

Opening of Dempo Line(currently Hanshin Namba
Line)(Daimotsu‒Chidoribashi)

Opening of Dai-ichi Hotel(currently Dai-ichi HotelTokyo)

1939

Beginning of operations ofMain Line Osaka-ekimae
underground extension(Relocation of Umeda
Station)1941

Completion of Umeda Hanshin
Building Phase I construction(Renamed Dai Hanshin Building
in 1961, and the whole building
completed in March 1963)

1927 Launch of land and buildings sales business

1909

Completion of 30 rental houses infront of Nishinomiya Station (Launch ofland and buildings leasing business)

1938

1924

Opening of Koshien Stadium(Later renamed Hanshin Koshien
Stadium)

1935

Establishment of Osaka Baseball Club
(Osaka Tigers, currently Hanshin Tigers)

Urban Transportation
Real EstateEntertainment

Information and Communication Technology

Sep. 2012

TravelCompletion of Umeda Hankyu Building (Fullopening of Umeda Main Store of Hankyu
Department Store in November 2012)

International Transportation
HotelsTotal ﬂoor space:
Approx. 18,000 m2
Building details: 1 ﬂoor
above ground

ProfileApr. 2016

Mar. 2016

Commencement of S-POINT* service

Opening of a logistics center inIndonesia as a joint project of theReal Estate and the International
Transportation businesses*A loyalty points system operated intandem with H2O Retailing Group for
customers in the Kansai area

Total ﬂoor space: Approx. 254,000 m2(Department store: 151,000 m2 [incl.
concourse])
Building details: 41 ﬂoors above
ground; 2 ﬂoors below ground(Department store: 15 ﬂoors [B2F‒13F])

May 2017

Announcement of the Hankyu Hanshin
Holdings Group s Long-Term Management
Vision for 2025

Apr. 2018
Apr. 2013

Opening of Grand Front Osaka

Completion of Umeda 1-1 Project Phase I (Building
Name: Osaka Umeda Twin Towers South)(June 2018: Partial opening of Hanshin Department
Store [Hanshin Umeda Main Store])

2014

Takarazuka Revue marks 100th anniversary
since its ﬁrst performance in 1914

Total ﬂoor space: Approx. 260,000 m2(Phase I: 76,000 m2)
Building details: 38 ﬂoors above ground;
3 ﬂoors below ground (Phase I: 13 ﬂoors
above ground; 3 ﬂoors below ground)©Takarazuka Revue Company

1969

Opening of Hankyu
Sanbangai

of Hotel New
1964 Opening
Hankyu Osakaof airline agency business as Hankyu
1948 Launch
Corporation s agency department
Japan s ﬁrst agency agreement concluded
with Pan American Airways

Express International Co., Ltd.
1960 Hankyu(currently Hankyu Travel International

Co., Ltd.) was established independentlyof Hankyu Corporation

merger with Hankyu Travel
1962 Absorption-type
International Co., Ltd. (predominantly
involved in the domestic travel business)

Opening of new Hankyu Umeda Station as one of thelargest private railway terminals in Japan

1973 Changing of company name to Hankyu Corporation

1948

Launch of airline department of Hanshin
Electric Railway Co., Ltd. and conclusion of
agency agreement with Qantas Airways

1967 Opening of Hotel Hanshin

Oct. 2006
Establishment of Hankyu Hanshin Holdings, Inc.

1962

Completion of New
Hankyu Building

Hankyu Hanshin Holdings Integrated Report 20194

Profile

Nature of BusinessAt a Glance

Urban Transportation

Real EstateEntertainment

Railway operations
These operations form a network in the Kansai
area that centers on the railway lines of Hankyu
Corporation and Hanshin Electric Railway. Hankyu
Corporation's railway lines link Osaka (Umeda)
with Kobe, Takarazuka, and Kyoto. Meanwhile,
Hanshin Electric Railway is the only private (nonJR) railway operator with railway lines that directly
link Kobe with Osaka's major northern andsouthern terminals, which are Osaka-Umeda andNamba, respectively. The operating kilometers ofHankyu Corporation and Hanshin Electric Railway
are 143.6 km* and 48.9 km,* respectively.
*Including tier 2 railway operators

Leasing businessThis business owns numerous office buildings andfacilities, mainly in Osaka-Umeda and the lineside areas of the Hankyu and Hanshin lines. In
recent years, the business has been actively
pursuing development of real estate in the Tokyo
metropolitan area. (For a list of principal rental
properties, please see page 108.)

Sports businessThis business manages the Hanshin Tigers
professional baseball team, which has a history of
more than 80 years, as well as the team's homeground and high-school baseball mecca Hanshin
Koshien Stadium and related businesses. The
business also operates a music business(Billboard Live).

Real estate sales and other businessThis business markets condominiums, residential
land lots, and detached houses, mainly in the lineside areas of the Hankyu and Hanshin lines andthe Tokyo metropolitan area. In recent years thebusiness has entered the ASEAN region. The
business is engaged in property management,
building maintenance, and other building
operation and management services as well as
real estate fund management, including private
placement funds and J-REIT businesses. (Seepages 108‒109 for major [domestic andoverseas] sales properties.)

Stage businessThis business manages the performances of the
Takarazuka Revue—an organization which has
more than a century of history—sells related
products, and manages and operates related
businesses engaged in video and music
distribution. Further, the business operates
Umeda Arts Theater and promotes stage
productions.

Automobile business (bus, taxi)
This business operates bus and taxi services,which coordinate with railway services to increase
convenience in line-side areas.
Retailing businessThis business manages and operates shops
mainly inside railway stations on the Hankyu andHanshin lines.

©Takarazuka Revue Company

Core Companies*1

Advertising businessThis business provides advertising media that are
based on digital signage inside railway stations
and space inside trains.

Hankyu Corporation

Hankyu Corporation

Hanshin Electric Railway

Revenues from operations

Revenues from operations

¥

238.6

Fiscal 2019 Results*2（YoY +

1.1 %）

43.5（YoY +¥

billion（YoY + 4.5 %）

800.2

¥

billion

6.6 %）

49.3

billion

0.1 %）¥¥

billion（YoY + 20.3 %）1,144.5（YoY +

28.5%

74.5

billionOperating income

Segment assets

Percentage Percentage of Percentage ofOperating Revenues fromof Assets
Operations *3
Income *4（YoY +

Revenues from operations

Operating income

Segment assets

¥

237.3

¥

billionOperating income¥

Hanshin Electric Railway

Hankyu Hanshin Properties Corp.

13.4

billionSegment assets

billion

5.4 %）¥

106.3

billion

28.4%
36.5%

33.8%

*1 As for our Real Estate Business, Hankyu Corporation and Hanshin Electric Railway collaborate with Hankyu Hanshin Properties to promote urban development of real estate owned byHankyu Corporation and Hanshin Electric Railway for rent and development in cooperation with transportation networks, local governing bodies and others in Umeda and their line-side areas.
*2 Figures for the Entertainment Business and Information and Communication Technology Business have been compiled for year-on-year comparisons, and may be adjusted in the future.
*3 Figures for percentage of revenues from operations and operating income are calculated based on the simple aggregate amount (including intersegment transactions) of each segment.
*4 Europe, the Middle East, and Africa

5Hankyu Hanshin Holdings Integrated Report 2019

Information andCommunication Technology

International
Transportation

TravelHotelsProfileInformation and communication
technology businessThis business is in charge of theinformation services business, which
offers a range of IT-based services such assystem development; the broadcasting
and communications business, which
providesmulti-channel
broadcasts,
internet services, and fixed telephoneservices; and the safety/education
business, which operates ProgLab robotprogramming classes for children, andMimamorume, a child safety service
which monitors children’s journeys to andfrom school.

Travel businessThis business plans, markets, arranges,
and supports travel for Japanese people
in Japan and overseas and for inboundtourists.
The business provides various travel
services which include: media sales to sell
packaged tours through advertisements
in newspaper, internet and other media,
individual tours with itineraries that canbe created freely, group tours that we
propose for study or as educational tours
visiting enterprises or schools, countersales at shops, tours for the recently
increasing inbound international visitors
and arrangements for overseas businesstrips.

International transportation businessAs a global forwarder, this business
responds to diverse distribution needsfrom customers all over the world throughits five-region management systemcomprising Japan, the Americas, EMEA*4,
East Asia, and ASEAN. As of August 1,
2019, the business has 51 sites in Japanand 135 overseas. By bringing together air
freight,sea
freight,landfreight,
warehousing/logistics,
andcustoms
clearance services, the business provides
a comprehensive, one-stop logistics
solution that can respond to diverse
customer needs. As global businesses
become more advanced, the internationaltransportation business provides the ideal
solution.

Hotels businessThis business operates a wide range of
hotel formats, from“city hotels”throughto business hotels mainly comprising
guest rooms for overnight stays. The
business operates 47 hotels, consisting of
20 directly managed hotels and 27
franchise hotels, with 11,012 guest rooms
as of August 1, 2019.
In addition to the above hotels, thebusiness manages The Ritz-Carlton,
Osaka, based on an alliance with the RitzCarlton chain of international luxury
hotels. (See page 110 for more
information on the Hankyu Hanshin Hotels
Group.)

Hankyu Hanshin Express

Hankyu Hanshin Hotels

Hanshin Electric Railway
Hankyu Travel International

Revenues from operations

Revenues from operations

Revenues from operations

Revenues from operations

¥

¥

¥

¥

53.5

billion（YoY +

Operating income

¥

5.3

53.5

48.4%

¥

billion

4.4 %）

1.8（YoY -

billion¥（YoY +

6.4%（YoY +¥

billion14.2 %）

91.6

90.0

billion

7.5 %）

Operating income

Segment assets

8.9%
41.3%

billionOperating income

Segment assets

¥

35.5

2.4

（YoY -

7.1 %）

4.2%¥（YoY -¥

billion13.9 %）

48.9（YoY -

billion

3.5 %）

Operating income

Segment assets

billion

64.9

1.2（YoY -

billion45.2 %）

Segment assets

billion

6.7 %）

10.8%
11.3%
4.5%
2.3%

¥

84.1
（YoY +

billion

0.5 %）

7.8%

5.2%

4.4%
1.5%

2.0% 2.0%

3.9%

2.1%

1.0%

3.6%

1.6%

Hankyu Hanshin Holdings Integrated Report 20196

Profile

Service Area

Expanding
Expandingthe theserviceserviceareaarea
fromfrom
Kansai,Kansai,centering
centeringaroundaroundUmeda
Umeda
andandits line-side
its line-side
areas
areas
to theto theTokyoTokyo
metropolitan
metropolitan
areaarea
andandto Asiato Asia
Takarazuka Line
Takarazuka
28.5
Line km28.5 km
Kobe LineKobe Line46.9 km46.9 km
Hankyu Hankyu(Takarazuka
Line, MinohLine,Line)Minoh Line)
(Kobe
Line,
Line,
Itami
Imazu
Line,Line,
KoyoItamiLine)Line, Koyo(Takarazuka
Line)
Corporation
Corporation(Kobe Line, Imazu
Kobe Rapid
Kobe Rapid
2.8 km2.8 km
Linekm
65.4 km143.6143.6
km
kmKyoto LineKyoto 65.4
Railway
TransitLine
Railway Line
(Kyoto Line, Senri(KyotoLine,
Line,
Arashiyama
Senri Line,Line)
Arashiyama Transit
Line)

Nissei-chuo
Nissei-chuo

Myokenguchi
Myokenguchi

Hanshin Hanshin
Hanshin Line
Hanshin
43.9
Line km43.9 kmElectric Railway
Electric Railway(Hanshin Main
(HanshinLine, Hanshin
Main Line,
Namba
HanshinLine,
Namba
HanshinLine,
Mukogawa
Hanshin Mukogawa
Line)
Line)
Nose Electric
Railway

Transit Railway
TransitLine
Railway Line

*See page*See
10 pagefor the10annual
for thenumber
annual of
numberpassengers
of passengers
carried. carried.

Osaka
Osaka
Prefecture
Prefecture

Nose Electric
Railway

Kobe Rapid
5.0 km 5.0 km
48.9 km48.9 kmKobe Rapid

Hankyu Hankyu
Minoh Line
Minoh Line
Minoh

Kawanishi-noseguchi
Kawanishi-noseguchi

Hyogo
Hyogo
Prefecture
Prefecture

Kita-senri Kita-senri

Hankyu Hankyu
Senri
Line

Osaka Osaka
International
International
Takarazuka
Takarazuka
Grand Theater
Grand Theater
Airport Airport(Itami Airport)(Itami Airport)

Senri-ChuoSenri-Chuo
Senri
Ishibashi IshibashiLinehandai-mae
handai-mae

Takarazuka
Takarazuka

KoyoenItami

Hankyu Hankyu
Itami LineItami Line
KoyoenItami

Hankyu Hankyu
Takarazuka
Takarazuka
Line
Line

Tanigami Tanigami

ShukugawaShukugawa

Ky

Imazu

o

uk

o

uk

Ky

Kobe Rapid
Kobe
TransitRapid Transit
Railway Railway

Esaka

HankyuHankyu Kobe
LineKobe Line

in
sh
ku y
Ho ilwa
Ra

in
sh
ku y
Ho ilwa
Ra

Kob
e El
ectr
ectr
ic R
i
ailw c Railw
ay
ay

e El

Tsukaguchi
Tsukaguchi
Nishinomiya-kitaguchi
Nishinomiya-kitaguchi

Imazu
Imazu
Koshien Koshien
Imazu
Mukogawa
Mukogawa
Daimotsu Daimotsu
Juso
AmagasakiAmagasaki

Koshien Stadium
Koshien Stadium

Shin-KobeShin-Kobe
KobeKobesannomiyasannomiya

Hanshin Hanshin

Mukogawadanchi-Mae
Mukogawadanchi-Mae
Mukogawa
Mukogawa

Line

Kobe-Sannomiya
Kobe-Sannomiya
Shinkaichi ShinkaichiMotomachi
Motomachi

Line

Esaka

Awaji

Awaji

ShinShinOsaka Osaka
Juso

Tenjimbashisuji
Tenjimbashisujiroku-chomeroku-chome

Osaka-Umeda
Osaka-Umeda

Umeda
Umeda
Hanshin Namba
HanshinLine
Namba Line

Hanshin Hanshin
Main LineMain Line

Nishidai Nishidai

Kita-Osaka Kyuko

Hankyu Hankyu
Koyo LineKoyo Line

Kita-Osaka Kyuko

Hankyu Imazu
Line
HankyuImazu Line

Kob

Minoh

Osaka
Osaka
Bay Bay
Kobe Airport
Kobe Airport

Osaka-Namba
Osaka-Namba

KansaiKansai

Survey ofSurveyprospectiveof prospective
condominium
condominium
purchaserspurchasers
regardingregardingtheir preferred
their preferredKansai residential
Kansai residentialarea, conducted
area, conductedin FY2019
in FY2019
Ranking

StationRanking

StationRanking1

Nishinomiya-kitaguchi
1 Nishinomiya-kitaguchi
6

2

ShukugawaShukugawa
2

7

3

Umeda
Umeda
3

8

4

OkamotoOkamoto4

9

5

Takarazuka
Takarazuka 10
5

Source: A survey
Source:of prospective
A survey of prospective
condominium
condominium
purchasers regarding
purchasers
theirregardingpreferred
theirresidential
preferred residential
Esaka
area, byconducted
seven major
by sevenreal estatemajor real estate
6 Esaka area, conducted
developers (Sumitomodevelopers Realty(Sumitomo& Development
Realty & Development
Senri-Chuo
7 Senri-Chuo
Co., Ltd., DaikyoCo., Ltd.,
Incorporated,
Daikyo Incorporated,
Tokyu LandTokyu Land
Corporation,
Corporation,
Tokyo TatemonoTokyo Tatemono
Co., Ltd., Co., Ltd.,Ashiyagawa
8 Ashiyagawa
Nomura Real
NomuraEstate Real
Development
Estate Development
Co., Ltd., Co., Ltd.,
Mitsui Fudosan
MitsuiResidential
Fudosan ResidentialCo., Ltd., andCo., Ltd., andOsaka
9 Osaka Mitsubishi Mitsubishi
Jisho Residence
Jisho Co.,
ResidenceLtd.) andCo., Ltd.) andincluded in aincluded
press releasein a press
dated
releaseSeptember
dated September
Mikage10 Mikage27, 2018 27, 2018

StationRanking

StationKansai International
Kansai International
Airport Airport

The largest The
airportlargestin western
airport in westernJapan, thisJapan,
is thethisKansai
is the Kansai
area s gateway
area tos gateway
the world.
to the world.

Kansai KansaiInternational
International
AirportAirport

7

Hankyu Hanshin Holdings Integrated Report 2019

NEPAL
Kathmandu
N

Arashiyama
Kyoto-kawaramachi

KatsuraHankyuArashiyama LineThe Philippines

Thailand

VietnamProfileKyoto
Prefecture

Asia

HankyuKyoto Line

Malaysia
Singapore

Key areas in the real estate and leasing
businesses in the Tokyo metropolitan area

Indonesia

Shinjuku-ku
Chiyoda-ku
Shibuya-ku

Chuo-ku
Minato-ku

Overseas real estate sales business
Overseas real estate leasing businessJapan

Directly managed hotels
Franchised hotels

Umeda

Tokyo

Tokyo area
8 hotels
4 hotels

Kyoto/Osaka/Kobe areas
11 hotels
2 hotels

Hankyu Osaka-umeda Station
and Chayamachi Area
Hankyu Osaka-umeda Station
Osaka

Umekita Area

Metroa Sta.
Umed

JR Osaka Station

Osaka Metro
Nishi-Umeda Sta.

Nishi-Umeda Area

tro .
a Me
Osak Umeda Sta
iHigashHanshin Osaka-Umeda Station

JR Osaka Station South Area
(Diamond District)

JR Kitashinchi Sta.

Umeda
Hankyu Hanshin Holdings Integrated Report 20198

Profile

Group Characteristics
Business Developments Utilizing
Our Business Foundations

Group Business Foundations
Kansai Area
The Kansai area* is home to approximately 20 million
people, and is the second most highly populated region
outside of the Tokyo metropolitan area. Moreover, the
GRDP of the Kansai area accounts for 15.2% of Japan s
total.
The number of inbound visitors to the area continues toincrease, and of the 31 million that visited Japan in 2018,
almost 40% of those (12 more than million) visited theKansai area.

In addition to connecting the Osaka, Kobe, andKyoto areas̶Kansai s main economic hubs̶byrailway, we have also been advancing urban development in Umeda and other line-side areas.
In recent years, we have been providing various
services and products to meet diversifying customer
needs through our seven core businesses.

Urban Development Centered on
Our Urban Transportation Business

Second largest economy in Japan
Kansai area
population

21
15.2
31

Approx.

Kansai area GRDP
No. of inboundtourists

million (as of October 1, 2018)

Approx.

million (2018)12

Responding to Diversifying Needs

million (2018)

Hotels*Kansai area: Osaka, Hyogo, Kyoto, Shiga, Nara, and Wakayama prefectures(Source: Population Statistics, Ministry of Internal Aﬀairs and Communications;material from the Kansai Bureau of Economy, Trade and Industry; and material
from the Japan Tourism Agency)

Umeda Area

Internationaltransportation

TravelThe Umeda area is home to the Osaka-Umeda stations ofboth the Hankyu and Hanshin train lines, as well as stations
run by JR West and the Osaka Metro. It is one of Japan s
foremost shopping districts with huge numbers of people
passing through each day.

Average no. of passengers per day in FY2019
Hankyu Osaka-umeda Station

Urban
HanshinDevelopment Electric Railway% of Japan s total (FY2016)

Approx. 40% of the above

No. of inbound tourists
visiting Kansai
Approx.

HankyuCorporation

508,000
167,000

Hanshin Osaka-Umeda Station

Hankyu and Hanshin Line-side Areas
Although the overall population of Kansai is decreasing
as a result of Japan s low birthrate and aging society, thepopulation of line-side areas is increasing due in part tooutstanding infrastructure and the areas high popularity
as a convenient place to live. Since the low of 1996,
following the Great Hanshin Earthquake of 1995, line-side
populations have continued to grow.

RailwaysBuses& taxisResidences

Proposing new services
and products forlifestyles and business Oﬃce buildings

Information andcommunication

Entertainment

Commercial
facilities

Driving Growth through Seven Core Businesses
Urban Transportation
Real EstateEntertainment
Information andCommunication Technology
TravelInternational Transportation
Hotels（%）107.0
Hankyu and Hanshinline-side areas

106.0
105.0

Expanding Scope of Business

Population trends (1991=100)

Kansai

104.0
103.0

We are expanding our business from Kansai to theTokyo Metropolitan area, and further into Asia.

102.0
101.0
100.0
99.0

Kansai

98.0
97.0

91

19

9

95

19

00

20

05

20

Hankyu Hanshin Holdings Integrated Report 2019

10

20

15

20

18

20

Tokyo

Asia

Urban Transportation (FY2019)

Real Estate (FY2019)

Annual number of passengers carried

Leasable area (as of the end of FY2019)

Leasable area in Umeda (as of the end of FY2019)

1,870,000 m Approx. 770,000 m

Hanshin Electric Railway

Hankyu Corporation

Approx.

2

Number of condominium
units soldNote: Sum of tier 1 and tier 2 railway operators for both Hankyu and Hanshin.
Totals of less than one thousand have been rounded down.

1,114

2

International
business operated

inProfile655,936,000 245,366,000

5 countries

Entertainment (FY2019)
Sports businessTotal attendance
at Hanshin Tigers home games(during 2018 season)

Operating income

Approx.

2,800,000

Information and Communication
Technology (FY2019)

Ratio ofinterest-bearing
debt to EBITDA

EBITDA(Takarazuka Grand Theater: 1,210,000;
Tokyo Takarazuka Theater: 990,000)

2,899,000

Top-class Proﬁtability and
Financial Soundness Among Major
Private Railway Companies(FY2019)

Stage businessAnnual total attendance at Takarazuka Revue

114.9 billion ¥171.4 billion 5.1¥

Number of households
subscribing to cable TV

Approx.

Utilizing the strengths of our seven corebusinesses, we will enhance the competitiveness of our individual businesses, andaim for further growth by demonstrating
the comprehensive strength of our Group.

625,000(Baycom: 513,000; Himeji Cable TV: 112,000)

Travel (FY2019)
Total turnover¥

369.9 billion

Overseas travel turnover¥（

Total number ofhotels47

Total number ofguestrooms

11,012

Directly
managed
Other

*

20
27

Domestic travel turnover

229.8 billion ¥ 136.6 billion(3rd highest in the industry)

Hotels (as of August 1, 2019)(5th highest
in the industry)(6th highest in the industry)

Note: Totals of less than one hundred million have been rounded down.

）*291 rooms of the Ritz-Carlton, Osaka (Kita-ku, Osaka), are not included.

International Transportation(as of August 1, 2019)

Number ofoverseas bases

135

Number ofdomestic bases

51

ESG

Environment, Society, and GovernanceHankyu Hanshin Holdings Integrated Report 201910

Profile

Financial Highlights
Key Financial Indicators (Graphs)
Revenues from operations

Operating income and operating income margin(¥ billion)
1.000(¥ billion)
120

800
600

685.9

746.8

760.3

736.8

791.4

110.3
94.0

80

14.8

13.7

400

104.1

105.2

14.1

13.8

（%）
21

114.9

14

14.5

7

40

200
0

0

0
2015

2016

2017

2018

2019

(FY)

2015
Operating income

2016

2017

2018

(FY)

Operating income margin (right axis)

EBITDANet income attributable to owners of the parent and ROE(¥ billion)200(¥ billion)
80

150

150.1

166.5

160.8

159.3

70.0

171.4
60
40

100

（%）
16

71.3

66.4

2015

10.3

8.6

9.4

8.2

2016

2017

2018

2019

(FY)

Total assets and ROA

0
2015

2016

2017

2018

（%）
6

(¥ trillion)
1.5

4

1.0

1

2

0.5

0

0

0

2.28
3.7

2015
Total assets

2.28
4.6

2016

2.40

2.35
4.3

2017

4.5

4.4

2018

2019

(FY)

ROA (right axis)

0.96

0.92

6.4

1.4
2015

Interest-bearing debt

46.0

0
-52.5

-100

115.6

126.0

30.8

30.00

9.9

20.00
-78.8

-84.8

-88.4

2015

2016

2017

Net cash provided by operating activities

2018

2019

(FY)

Net cash used in investing activities

Free cash ﬂow

Hankyu Hanshin Holdings Integrated Report 2019

1.3

1.1

1.0

2017

2018

5.1
1.0
2019

30.00
14.0

35.00

25.0

35.00

40.00

40.00

5

0
(FY)

40
30

30.0

25.0

30.0

10.00
-116.2

-150

5.4

10

（%）
50

40.00

47.5

5.6

0.88

D/E ratio (right axis)

Returns to shareholders
124.8

0.87

Interest-bearing debt/EBITDA (right axis)

(Yen)
50.00

135.8

0.90

5.5

2016

Cash ﬂows-50

ROE (right axis)(Times)15(¥ billion)
150

79.4

(FY)

2.47

*ROA = Ordinary income/Average total assets at beginning and end of the period

131.9

2019

Interest-bearing debt, D/E ratio, and interest-bearing debt/EBITDA(¥ trillion)
3

50

8

7.6

4

Net income attributable to owners of the parent

100

12

0

0

2

65.5

54.2

20

50

11

2019

20
10

0

0
2015

Dividend per share

2016

2017

2018

2019

(FY)

Total return ratio (right axis)

Note: On the eﬀective date of August 1, 2016, stock shares were consolidated ona ﬁve-to-one basis. Annual dividends per share of or before 2015 are values
that factor in the consolidation of shares.

Non-Financial Highlights
Environmental Factors
CO2 emissions volumes and energy consumption on crude oil-conversion basis（t-CO2）800,000
600,000（kl）
800,000
657,860

647,705

641,524

625,471

Electricity consumption during summer months (July‒September)(Thousand kWh)
300,000
280,000

400,000

260,000

200,000

240,00000267,203400,000

317,117308,517

301,858

303,370296,607200,000
0
2014

2015

2016

2018

2017

(FY)

Urban transportation

Real estateEntertainment and communications

International transportation

Hotels

Other

2015

261,9732016

265,4282017

261,475

258,461

2018

2019

Profile610,906 600,000(FY)

TravelEnergy consumption on crude oil-conversion basis (right axis)
In ﬁscal 2018, CO2 emissions were down 2.3% year on year, to 610,906 t-CO2.
Furthermore, energy consumption on a crude oil conversion basis decreased gradually
as a result of eﬀorts by the Group companies to reduce energy consumption. Theseeﬀorts include the introduction of LED lighting in railway stations, theaters, buildings
and other facilities as well as the introduction of an increased number of new rollingstock with better energy eﬃciency than the existing models.

Social Factors

The Group has been endeavoring to lower electricity consumption over the peakusage months from July to September. As a result, total electricity consumption
from July to September 2018 was 258,461,000 kWh, down approx. 16% from theequivalent period in 2010, before the Great East Japan Earthquake.

Capital investment in railway operations

Social contribution activities: Hankyu Hanshin Dreams andCommunities of the Future Project(¥ billion)
25(Activities)
120

20

3.3
3.3

2.8

15

0

80

94

91

89

97

92

(Groups)
120

94
80

81
67

10
5

4.3

4.7

129

111

16.1

1.1
4.0

Hankyu Hanshin

2015

13.0
0.6

12.7

4.4
Hankyu Hanshin

2016

0.9

13.1

Safety-related capital investment

2017

14.1

5.8

3.7
Hankyu Hanshin

1.4

Hankyu Hanshin

2018

40

40

2.3
4.5

0

0

Hankyu Hanshin

2019

(FY)

Other capital investment

Note: The total length of lines operated is 143.6 km for Hankyu Corporation and 48.9 km
for Hanshin Electric Railway.

2015

2016

2017

2018

2019

(FY)

Number of social contribution activities conducted by the Group companies
Number of collaborating civic groups (right axis)

As a railway operator, the Group provides a form of public infrastructure. We
therefore make giving priority to the safety of our customers a fundamental policyof management, and conduct ongoing safety-related capital investments in ourrailway operations accordingly. In ﬁscal 2019, such investments totaled ¥14.1
billion at Hankyu Corporation and ¥4.5 billion at Hanshin Electric Railway. These
investments were primarily used to conduct station upgrades, including track
elevation, seismic reinforcement of elevated tracks, expansion of platforms, andmeasures for making stations barrier-free.

In accordance with a basic policy of creating towns and cities that people will truly
want to live in, the Group companies are engaged in roughly 90 social contribution
activities every year to realize the policy. As a partner to make better communities,
the Group companies also support civic groups in their railway line-side areas, interms of ﬁnancing and advertisement, and make joint eﬀorts with the civic groups.
A survey conducted in ﬁscal 2016 targeting line-side cities and towns found themore that customers recognize our projects, the more they have a positive imageof our Group and a desire to live in our line-side areas.

Governance Factors

Rate of attendance of external directors and external Audit &Supervisory Board members at meetings of the Board of
Directors and the Audit & Supervisory Board

Membership of the Board of Directors(People)
15

10

（%）
100
2
6

2
6

5
5

6

2015

2016

0

80
60
2

2

3

3

4

4

2017

2018

3

97.2

96.7

97.2
90.0

100.0

100.0

97.2

96.0

100.0

83.3

80.0

85.0

100.0

65.0

40

2

20

4

0

2019 (As of the

Directors with operational execution responsibilities
Internal directors without operational execution responsibilities
Independent external directors

96.7

conclusion of theGeneral Meeting of
Shareholders foreach year)

The General Meeting of Shareholders held in June 2019 approved the appointment of
one female external director, thereby increasing the proportion of external directors to
one third. Four directors of the Company concurrently serve as directors of Group
companies to ensure that business management reﬂects viewpoints from the Group s
operations. In addition, two of the Company s part-time directors have been appointed
from H2O Retailing Corporation and Toho Co., Ltd., with the aim of strengthening
coordination with other companies in the Hankyu Hanshin Toho Group.

2015

2016

2017

2018

2019

(FY)

External directors, Board of Directors meetings
External Audit & Supervisory Board members, Board of Directors meetings
External Audit & Supervisory Board members, Audit & Supervisory Board meetings
To support external directors and external Audit & Supervisory Board members, the Company has
established secretariats for the Board of Directors and the Audit & Supervisory Board. In
particular, the Company has appointed to the secretariat of the Audit & Supervisory Board
dedicated personnel who provide information to Board members and liaise with relevant in-house
departments and divisions. The Company provides external directors and external Audit &Supervisory Board members with information about the Company s businesses, ﬁnancial position,and organizations mainly at meetings of the Corporate Governance Committee. Also, thesecretariat of the Board of Directors sends Board members documents detailing agenda items for
submission to the Board of Directors, in principle, seven days prior to the dates of meetings.

Hankyu Hanshin Holdings Integrated Report 201912

Strategy for Enhancement of Corporate Value

Message from the Chairman

We are working for overall
Group growth by maximizing
our opportunities in the
Kansai area.
Kazuo Sumi
Chairman and Representative Director,
Group Chief Executive Officer

13

Hankyu Hanshin Holdings Integrated Report 2019

To Realize Our Long-Term Management Vision,
We Will Steadily Advance Our Medium-Term
Management Plan
The Hankyu Hanshin Holdings Group’s management environmentis expected to undergo significant change, driven by declining
population in line-side communities, due in part to Japan’s lowbirthrate. Additional change is expected in the lifestyle and living
environment as new technologies emerge. Our aim is to achieve

work on the Umekita Phase II Development Project, for which a
consortium that includes the Group was selected as builder, is
now underway in earnest, with harmony between green spaces
and innovation as the project credo and policy. Advance openingof the development is targeted for the summer 2024 timeframe.
These are just a few of the ways in which the Hankyu Hanshin
Holdings

Group

is

promotingmeasurestoenhancetheconvenience and attractiveness of its line-side areas in the rapidly

1

growing Kansai region, beginning with the Osaka Umeda area.

Strategy for Enhancement of Corporate Valuesustained growth, even amid these shifting conditions, and inconstruction as part of Phase II is currently under way. In addition,2017 we announced the Hankyu Hanshin Holdings Group LongTerm Management Vision for 2025.
Furthermore, in 2018, we announced our Medium-Term
Management Plan. This is a concrete action plan, extending overthe period from fiscal 2019 to 2022, to fulfill the Long-Term
Management Vision. We are now in the process of steadily
implementing measures based on the Plan, and going forward,
we will focus these diverse efforts toward step-by-step realizationof our Long-Term Management Vision.

While Satisfying Expectations from Stakeholders,the Entire Group Endeavors to Grow
The Group is working to enhance its medium- and long-term
corporate value, and will continue to promote its social
contribution activities and environmentally friendly businessactivities. We will also make a unified effort to strengthen our
corporate administration, with special emphasis on compliance,

The Rapidly Expanding Kansai Area
The Kansai area, which is the Group’s core business base, ishosting a succession of international events, from the G20 Osaka
Summit and the Rugby World Cup in 2019 to the World Masters

to fulfill our social responsibilities as an enterprise.
Going forward, in accordance with our Group Management
Philosophy,

we

will

reinforce

relationships

of

trust

with

stakeholders and local communities, and work as one to meettheir expectations as we drive overall Group growth.

Games in 2021 and Expo 2025, and thus we expect the numberof inbound tourists to gradually increase.
In parallel to this trend, a number of new railway lines areunder construction or being considered. Once they come into
service, mobility within the Kansai area will be even moreconvenient and enjoyable, and we expect this to further boost
the region’s potential.
The Group’s railway routes confer significant competitive
advantage, with close connections between JR Shin-Osaka
Station, the rail hub of the Kansai area, and Osaka International
Airport (Itami Airport) and Kobe Airport, the air gateways to theregion.
With this favorable positioning, the Group is preparing for theNovember 2019 opening of Hotel Hankyu RESPIRE OSAKA, amajor hotel with over 1,000 rooms in Umeda, the Group’sstrategic base. At the same time, the Umeda 1-1 Project, acomprehensive reconstruction of the Dai Hanshin and Shin
Hankyu Buildings, is on track for completion in the spring of 2022.
Phase I of the project was completed in 2018, and new

Hankyu Hanshin Holdings Integrated Report 201914

Strategy for Enhancement of Corporate Value

Message from the President

We will make steadyadvances with our MediumTerm Management Plan
to achieve our Long-Term
Management Vision.
Takehiro Sugiyama
President and Representative Director

15

Hankyu Hanshin Holdings Integrated Report 2019

However, net income attributable to owners of the parent

Fiscal 2019 Results(¥65.5 billion) decreased slightly over the previous fiscal year,

In fiscal 2019, the Hankyu Hanshin Holdings Group recordedtransfer relating to Hokushin Kyuko Line.

revenues from operations of ¥791.4 billion. Operating income
totaled ¥114.9 billion, while ordinary income reached ¥110.5
billion. All of these totals represent historic highs, achieved
despite the negative influence of successive natural disasters. In
our Real Estate business, we sold land for commercial facilities inthe eastern section of Saito International Culture Park (Ibaraki,
Osaka Prefecture), while our Urban Transportation, Entertainment

due to an extraordinary loss that we recorded on an asset
The balance of interest-bearing debt increased relative to theprevious term. While we carried out appropriate investments todrive growth, other factors, including increased cash flow,
resulted in a ratio of interest-bearing debt to EBITDA of 5.1, an
improvement over the previous fiscal year. As a result, we
continued to maintain our financial soundness.

1

FY2019 results

FY2018 results

Revenues from operations¥ 791.4 billion¥ 760.3 billion+ ¥ 31.2 billion+4.1%

Operating income¥ 114.9 billion¥ 105.2 billion+ ¥ 9.7 billion+9.2%

Ordinary income¥ 110.5 billion¥ 103.8 billion+ ¥ 6.8 billion

+6.5%

YoY

¥ 65.5 billion¥ 66.4 billion- ¥ 0.9 billion-1.3%

EBITDA*¥ 171.4 billion¥ 160.8 billion+ ¥ 10.6 billion+6.6%Interest-bearing debt

¥ 877.1 billion¥ 866.8 billion+ ¥ 10.3 billion+1.2%

5.1 times

5.4 times-0.3 pt

Net income attributable to owners of the parent

Interest-bearing debt/EBITDA ratio

Strategy for Enhancement of Corporate Valueand Communications businesses all posted strong performances.

*EBITDA: operating income + depreciation expenses + amortisation of goodwill

The Vision encompasses four strategies under the slogan,

Summary of Long-Term Management Vision“Enhancing line-side areas and expanding fields,”on the basis of

In 2017, to promote our growth as a corporate Group even as

businesses*2).

society evolves toward the future, we established the Hankyu
Hanshin Holdings Group Long-Term Management Vision for 2025.

two key business areas and models (stock businesses*1 and flow
We

will

endeavortoenhancesustainablecorporate value through these strategies.

*1 B usinesses that own or use stock such as property and other fixed assets (including the railway business, real estate leasing business, broadcast andcommunications business, and Hotels Business)*2 B
 usinesses that, instead of owning large-scale stock, use business know-how, human resources, brand assets, and other intangible assets (including the real estate
sales business and other businesses, sports business, stage business, information services business, Travel Business, and International Transportation Business)

SloganEnhancing line-side areas and expanding ﬁelds
Sustainably enhance corporate value

Strategy ❶Stock businesses(Umeda and line-side areas)

Make our railway the absolute

best among the Kansai networks.

Strategy ❹Strategy ❷Stock businesses(Tokyo metropolitan area and overseas markets)

Construct a stable revenue basein the Tokyo metropolitan area
and overseas markets.

Strategy ❸Flow businesses

Strengthen competitivenessby thoroughly pursuing brand

optimization and diﬀerentiation.

Group-wide initiatives and new business ﬁelds

Make greater use of the Group s collective strength and develop new business ﬁelds.

Hankyu Hanshin Holdings Integrated Report 201916

Strategy for Enhancement of Corporate Value

Specifically, we will promote the implementation of the four
strategies of the Vision to become a corporate group capable ofdynamics, and we will aim to achieve the figures outlined in thetable below in fiscal 2026.

maintaining minimum operating income at the current level of

By achieving such aims, we will maintain our top-level position¥100 billion, even in or around 2040, by which time ouramong the major private railway companies, with all metrics

environment will be affected significantly by changing population

indicating profitability and financial soundness.

Management Indicators

Profitability

Financial soundness

Vision of corporate formin fiscal 2026

Operating income¥120 billion

EBITDA¥200 billion

Interest-bearing debt/
EBITDA ratio

Medium-Term Management Plan for Fulfillment ofLong-Term Management Vision■ Basic Way of Thinking about the Medium-Term
Management Plan
In 2018, we established the Medium-Term Management Plan,covering the term from fiscal 2019 to fiscal 2022, as our firstconcrete action plan to fulfill our Long-Term Management Vision.
Prior to inauguration of the Plan, annual operating income wasapproximately ¥100 billion (excluding extraordinary income,

Between 5 and 6 times

such as income from the sale of sites for large-scale facilities).
Taking this level of operating income as a base, the Long-Term
Management Vision targets operating income of ¥120 billion in
fiscal 2026. As a first step, the goal for the Medium-Term
Management Plan is for the Group to achieve a stable level ofoperating income totaling ¥110 billion in fiscal 2022. To this end,
we are promoting measures in line with the four strategies of theLong-Term Management Vision.
Financially, we will focus on growth investments in line withthe four key strategies and distribute funds accordingly, while
placing particular emphasis on our ratio of interest-bearing debt
to EBITDA, to maintain a sound financial structure.

■Four strategies in Medium-Term Management Plan (Based on Long-Term Management Vision)

Strategy 1

Further strengthen stock businesses in Umeda and line-side areas

Enhancing the value of the Umeda area; Activating the main line-side areas; Improving the traﬃc networks(infrastructures) with new railway lines; Satisfying the demand from inbound tourists.

Strategy 2

Accumulate stock in the Tokyo metropolitan area and overseas markets

Accumulating stocks in the center of the Tokyo metropolitan area; Opening a new hotel in the Tokyo
metropolitan area; Studying acquisition of overseas stocks (real properties).

Strategy 3

Strengthen competitiveness of ﬂow businesses

Expanding the scale of the condominium businesses including those overseas; Growing the information
services business; Increasing income from the travel business; Increasing the volume of cargoes handled by
the international transportation business.

Strategy 417Make greater use of the Group s collective strength and venture
into new business ﬁelds

Hankyu Hanshin Holdings Integrated Report 2019

■Growth process toward fiscal 2026 (Image)Fiscal 2026
Final ﬁscal year of Long-Term
Management Vision

Fiscal 2022
Final ﬁscal year of MediumTerm Management Plan

We will aim to increase income by ¥10 billion in ﬁscal
2022 mainly with the ﬂow businesses (Strategy 3).

¥120 billion¥110 billion+¥10 billion
Expansion of ﬂow businesses

Substantial level of operating income
excluding temporary factors

Investments in stock businesses

From ﬁscal 2016 to ﬁscal 2018

From ﬁscal 2019 to ﬁscal 2022
(Term of this plan)1+¥10 billion

Strategy for Enhancement of Corporate Value

About ¥100 billion

From ﬁscal 2023 to ﬁscal 2026

During the term from ﬁscal 2023 to ﬁscal 2026, the second-half of the Long-Term
Management Vision, we plan to increase operating income by ¥10 billion with contribution
to earning income mainly made by the production of eﬀects of investments in stockbusinesses such as the Umeda 1-1 Project and additionally by a further increase in income
from the ﬂow businesses, ventures into new business ﬁelds, etc.

■ Advances in Fiscal 2019
During fiscal 2019, each of the four strategies moved ahead
steadily, particularly Strategy 3. In addition, we were able to growactual operating income to a suitable level of over ¥100 billion.
Moreover, as stated, we maintained our financial condition in ahealthy state, with a ratio of interest-bearing debt to EBITDA of
5.1. As such, we believe that the Group is making steady progress
toward the goals of the Plan.
In addition, we updated the Medium-Term Management Plan
(Current Plan) in view of the progress listed below and changes
in our business environment.

• Ongoing projects remain on track, enhancing the attractiveness of Umeda and line-side communities
Umeda 1-1 Project Phase I completed/Expansion and renovation of Ebista Nishinomiya/Hankyu Nishinomiya
Gardens Gate Building opens❶• New projects to drive future growth are greenlit
Participation in Umekita Phase II Development Project/Hotel Hankyu RESPIRE OSAKA opens• Inbound demand response measures (free Wi-Fi, introduction of tourist trains, etc.)❷• PILOT Hankyu Hanshin Green Building (Kyobashi 2-6 Redevelopment Project) completed• Acquisition of rental real estate in Indonesia (Jakarta)• Real estate sales: Rapid expansion of participation in ASEAN-based projects (participation in 26,000+
residences, mainly in Thailand and Vietnam)❸• Information services: Received large order in the area of transportation systems/Acquired Nihon Protec Co., Ltd.
• Travel: Structural reform promotion (expand use of broadcast television on top of newspaper and Internet for
acquiring new customers, strengthen day-return bus tour business with additional acquired buses, etc.)• International transportation: Strengthened logistics business (open warehouses in India, the US and elsewhere)/
Increased air cargo volume❹• 7-Eleven (May 2018, Kansai Area) and Kansai Super chain of supermarkets (November 2018) adopt S-POINT,
the Hankyu Hanshin Group’s loyalty points system for the Kansai Area
• Entry into agriculture business

Hankyu Hanshin Holdings Integrated Report 201918

Strategy for Enhancement of Corporate Value■ Key Elements of our Current Plan

Under the Current Plan, the communication and media

Revise the Structures of Our Core Entertainment andCommunications Businessbroadcasteducation),

which

Communications

andcommunications,

form

part

Business,

is driving growth of our flow businesses as outlined in Strategy
3. To further expand revenue and profitability growth in the

All three communication and media businesses (information
services,business as a whole, including the information services business,

of

are

our

safetyandEntertainment

and

and

demonstrating

increasing

competitiveness. As a result, operating income has growncommunication and media business, these businesses will bepositioned as an independent core businesses starting in fiscal
2020, and to make the content of these businesses easierto understand, we renamed the business Information andCommunication Technology.

significantly in the 12 years since fiscal 2008.

Entertainment and Communications

Entertainment

SportsSports

Stage

Stage

Communication and media

Position as independent corebusiness (change name)Name changed

Information andCommunication Technology

Information services businessBroadcast and communications
business
Safety and education businessCore Business Segments

Hankyu Hanshin Holdings
Urban Transportation

Real EstateEntertainment

Hankyu Corporation
Hankyu Hanshin
Properties

19

Information andCommunication
Technology

Hanshin Electric Railway

TravelInternational
Transportation

HotelsHankyu Travel
International

Hankyu Hanshin
Express

Hankyu Hanshin
Hotels

As of fiscal 2020, the Group has established the above

Transportation, Real Estate, Entertainment, Information andsix enterprises as core companies, and will drive growth

Communication Technology, Travel, International Transportation,

through its core businesses in seven business domains: Urban

and Hotels.

Hankyu Hanshin Holdings Integrated Report 2019

Changes in Operating Income During Our Current Plan

In future fiscal years, we will continue to grow our operating
income steadily, with a goal of reaching ¥120 billion by fiscal

The graph below tracks the Group’s operating income since2026. Prior to that, our goal is for the Group to post ¥110 billion

2014. Our base operating income, excluding time-limited,in stable operating profit by fiscal 2022.

extraordinary factors such as major land sales and the influenceof natural disasters, is growing steadily, and in fiscal 2019
exceeded ¥100 billion.

114.9(¥ billion)

110.3

110

105.2

1
Strategy for Enhancement of Corporate Value

104.1

110.0

107.0

100

90

94.0

0
2015

2016

Current Plan

2017

2018

2019

2021

2020

2022

(FY)

Current Plan (after deduction of extraordinary factors)

Fiscal 2019–Fiscal 2022 Capital Investments (including

Major changes from the Previous Plan include the transfer,lending)

from

Under this plan, we shall endeavor to further expand operating

actual growth investments aimed at realizing the Long-Termincome and EBITDA to fulfill the Long-Term Management Vision.
Consequently, we will prioritize growth investments in allotting
funds in accordance with Strategies 1 to 4 as outlined above.
Specifically, capital investment for fiscal 2019 to 2022
(including lending) under the Current Plan is projected to be¥630 billion, an increase of ¥20 billion over the ¥610 billion
figure in the Previous Plan.*

the

¥100

billionallocatedforlarge-scale

projects,

acquisitions, and other strategic investments, of ¥50 billion to
Management Vision. In addition, we have augmented the growthinvestment allocation by ¥10 billion. We also plan to augment
maintenance and renovation investment for existing infrastructureby ¥10 billion, in response to rising social expectations for safety
and peace of mind.
*The plan announced on May 23, 2018

¥630 billion¥610 billion
Allowance forstrategic investments

Allowance forstrategic investments¥100 billion

Investments for growth aiming
at fulﬁllment of Long-Term
Management Vision¥270 billion(Approx. ￥70 billion/year)

Investments for maintenanceand renewal of existing
infrastructures etc.

¥240 billion¥50 billion

Investments for growth aiming
at fulﬁllment of Long-Term
Management Vision¥330 billion

Comparison withprevious plan

¥10 billion

Comparison withprevious plan

¥10 billion(Approx. ￥80 billion/year)
Amount transferred fromstrategic investment allowance￥50 billion

Investments for maintenanceand renewal of existing
infrastructures etc.

¥250 billion(Approx. ￥60 billion/year)(Approx. ￥60 billion/year)

Previous plan
From ﬁscal 2019 to ﬁscal 2022
Total of 4 ﬁscal years

Current plan
From ﬁscal 2019 to ﬁscal 2022
Total of 4 ﬁscal years

Hankyu Hanshin Holdings Integrated Report 201920

Strategy for Enhancement of Corporate Value

Returns to Shareholders

Going forward, in view of the recent stable trend of the Group’sbusiness performance, and the steady implementation of the

The Group considers the total return ratio to be an indicator of

Medium-Term Management Plan, we are planning to raise thereturns to shareholders. As such, while continuously working todividend payout from ¥40 per share to ¥50 in fiscal 2020. The

reinforce our business foundations, our basic policy is to set theupper limit for treasury share holdings will be set at 5% of shares

total return ratio at 30%, and endeavor to pay dividends reliably

issued. If this limit is exceeded, we will cancel the appropriate

and acquire treasury shares.

amount of treasury stock.

In line with this policy, the full-year dividend payout for fiscal

Through these efforts, we will undertake to further enhance2019 has been set at ¥40 per share, and a maximum of ¥9.8

our returns to shareholders.

billion has been allocated for acquisition of treasury shares.

(Reference) Total return ratio calculation method(Total dividend of FY [n]) + (Acquisition of treasury stock in FY [n+1])
Total return×100
ratio of FY [n] =Net income attributable to owners of parent in FY [n](%)

Total return ratio of 30%, with ¥50 dividend
and acquisition of treasury stock (forecast)(¥ billion)
20

(¥)
80

15

60

70

10

35*

30*

30*

25*

5
0

9.1

8.7

6.3

7.6

7.6

8.8

2013

2014

2015

2016

Acquired treasury stock

Total annual dividend

10.0

9.8

8.8

(¥ billion)

120

Annual dividend100
per share(forecast)

20

9.9

10

114.9
104.1

50
40
30

9.9
110.3
2018

2017

50

40

40
35
Operating income

107.0 2020

2019
105.2

0
110.0
(FY)

*On the eﬀective date of August 1, 2016, stock shares were consolidated on a ﬁve-to-one basis. Annual dividends per share of or before 2016 are values that factor in the consolidation of shares.

80■ Management Indicators in Fiscal 2022

bearing debt to EBITDA of 5.9.

In line with the above indicators of our Current Plan, we will aim

20182019 of2020
2016 2017 debt
ratio of interest-bearing
to EBITDA
5.7 due to 2022
the sale(FY)ofat stably recording operating income of ¥110 billion and EBITDAof ¥180 billion in fiscal 2022 while achieving a ratio of interest-

Operating income
120(Forecasts)

Actual operating income excluding temporary factors

Operating income(times)

114.9
104.1

100

(Forecasts)

sites for large-scale facilities in the previous fiscal year.

Interest-bearing debt/EBITDA ratio(¥ billion)

110.3

In fiscal
0 2020 we foresee operating income of ¥107 billion and a

107.0

105.2

110.0

10
8
6

5.7

5.5

5.6

5.4

5.1

2016

2017

2018

2019

5.9

4

80

2
0

0
2016

Operating income

2017

2018

2019

(Forecasts)(times)10 Hanshin Holdings Integrated Report 2019
Hankyu
8

2022

(FY)
(Forecasts)

Actual operating income excluding temporary factors

Interest-bearing debt/EBITDA ratio

21

2020

2020

(Forecasts)

2022 (FY)(Forecasts)

Going forward, we will continue to carry out active ESG-related

Focus on ESG Efforts for Sustainable Growthefforts that meet the highest standards.

ESG activities are paramount for the Group to achieve sustainable*Corporate Governance Committee: Held to achieve such objectives
as transparent appointment and dismissal of directors, coordination
among external directors, etc.

growth. The Hankyu Hanshin Holdings Group is thus engaged invarious Environmental (E), Social (S), and Governance (G)initiatives.
With respect to corporate governance, in addition to theexisting

Corporate

GovernanceCommittee*,werecently

established a Compensation Committee to make concretedecisionsregarding

directorcompensationaccordingtoof our compensation system, in part to create incentives toenhance shareholder value. To ensure the diversity of our Boardof Directors and further strengthen its oversight functions, we

1

To firmly satisfy expectations from stakeholders, the Group will
make steady advances with its Medium-Term Management Plan

Strategy for Enhancement of Corporate Value

objective, transparent procedures. We also carried out a review

Achieving Our Long-Term Management Vision

to achieve its Long-Term Management Vision.
It will also aim actively and resolutely at enhancing sustainablecorporate value through the concerted efforts of the Group.

carried out a review of its composition, appointing a female
external director and raising the proportion of independent
external directors to one-third of board membership.

Hankyu Hanshin Holdings Integrated Report 201922

Strategy for Enhancement of Corporate Value

Summary of Long-Term Management Vision for 2025
and Medium-Term Management Plan
Result (Fiscal
実績 (2010年度)
2011)
Operating
営業利益
income¥Operating
営業利益
income億円
647
64.7
billion

EBITDAEBITDA

¥

¥

127.1
billion
億円
1,271

¥

億円
940
94.0
billion

¥

¥

億円
1,052
105.2
billion

EBITDAEBITDA

150.1
billion
億円
1,501

有利子負債
Interest-bearing
debt

1,251.7
billion億円
12,517

Result (Fiscal
実績 (2017年度)
2018)
Operating
営業利益
incomeEBITDAEBITDA

有利子負債Interest-bearing
debt¥

Result (Fiscal
実績 (2014年度)
2015)

¥

160.8
billion
億円
1,608

有利子負債
Interest-bearing
debt

955.8
billion
億円
9,558

¥

866.8
billion億円
8,668

有利子負債/EBITDA倍率
Interest-bearing
debt/EBITDA ratio

有利子負債/EBITDA倍率
Interest-bearing
debt/EBITDA ratio

有利子負債/EBITDA倍率
Interest-bearing
debt/EBITDA ratio

9.8 times
9.8 倍

6.4 times
6.4 倍

5.4 times
5.4 倍

From ﬁscal
2008 to ﬁscal 2011
2007〜2010年度
Capital investment
設備投資（成長投資）(Investment
for growth)

From ﬁscal
2012 to ﬁscal 2015
2011〜2014年度
Capital investment
設備投資（成長投資）(Investment
for growth)

From ﬁscal
2016 to ﬁscal 20182015〜2017年度
Capital investment
設備投資（成長投資）(Investment
for growth)

2,400
¥ 240
billion 億円

3,900
¥ 390
billion億円

3,200
¥ 320
billion 億円(¥130billion) 億円）（1,300(¥60
billion億円
) ）
（600

(¥170
billion億円) ）（1,7001１

戦略
Strategy

From ﬁscal 2016
2015〜2017年度
to ﬁscal 2018

From ﬁscal 2012
2011〜2014年度
to ﬁscal 2015

Productionof a lot of
数々の総合効果のcomprehensive
発現や成長のためのeﬀects and promotionof large-scale
大規模プロジェクトを
projects for growth

推進Fiscal 20182017年度Long-Term
Management Vision
長期ビジョン2025
for 2025「深める沿線
Enhancingline-sideareas拡げるフィールド」
and expanding
ﬁelds• Further
improvement in・財務体質の更なる改善
ﬁnancial position• First ・長期ビジョンの実現に
step toward
fulﬁllment ofLong-Term
向けた第一歩Management Vision• Productionof eﬀects of・大規模プロジェクトのlarge-scale projects
効果発現• Steady improvementinﬁnancial
position
・財務体質の着実な改善

From ﬁscal 2007 to
2006〜2010年度
ﬁscal 201122

Strategy
戦略

開発プロジェクト
Development
projects

4４

Strategy
戦略• Reconstructionof Umeda Hankyu Building
・梅田阪急ビルの建替

Grand opening of Hankyu Department Store (Hankyu Umeda Main Store) (until November 2012)

阪急百貨店（阪急うめだ本店）のグランドオープン（〜2012年11月）
・うめきた先行開発区域（グランフロント大阪）の開発（2010年3月〜2013年3月）• Development of Umekita Phase I Development Area (Grand Front Osaka)(From March 2010 to March 2013)

Development
project
開発プロジェクト
• Reconstructionof Umeda Hankyu
Building (From May 2005)
・梅田阪急ビルの建替（2005年5月〜）• Development of Hankyu Nishinomiya Gardens

・阪急西宮ガーデンズの開発（2004年9月〜2008年11月）(From September 2004 to November 2008)
・阪神なんば線の建設（新線開業）（2003年10月〜2009年3月） ・阪神甲子園球場のリニューアル（2007年10月〜2010年3月）• Construction of Hanshin Namba Line (Opening of new extension)(From October 2003 to March 2009)23

Hankyu Hanshin Holdings Integrated Report 2019

• Renewal of Hanshin Koshien Stadium (From October 2007 to March 2010)

Fiscal 2026
Visioncorporate form
2025年度ofありたい姿

Aim to increase income by
フロー型事業を中心に100億円の¥10 billion mainly with ﬂow
利益伸長を目指す
businesses (Strategy 3).

Operating income

営業利益¥ 120 億円
billion
1,200＋100億円+¥10 billion

EBITDAEBITDA

2,000¥ 200億円
billion1
Strategy for Enhancement of Corporate Value+¥10 billion＋100億円Interest-bearing
debt/EBITDA ratio
有利子負債／EBITDA倍率

Fiscal 2022
2021年度Fiscal 20192018年度Medium-Term
中期経営計画Management Plan

BetweenMedium-term
中間目標年度target year

長期ビジョンを実現するためのConcrete action plan for
fulﬁllment of Long-Term
具体的な実行計画
Management Vision

2018年度計画
Result (Fiscal 2019)
営業利益
Operating income＊
億円 billion*
1,100¥ 114.9

EBITDAEBITDA

３ 3

and

times

Increase income by ¥10 billion
ストック型事業に対する投資のmainly with the production of
効果発現を中心に
eﬀects of investments
100億円の利益伸長を想定する
in stock businesses.

（2018〜2021年度）(From ﬁscal 2019 to ﬁscal 2022)

Strategy
戦略

55 倍台
6

¥ 171.4億円 billion
1,680
有利子負債
Interest-bearing debt

¥ 877.1億円 billion
9,000

2021年度計画
Plan (Fiscal 2020)
営業利益
Operating income

Operating income

億円
1,100
¥ 107.0
billion
EBITDAEBITDA¥ 167.0
billion億円
1,800

110.0 billion¥

180.0 billion

有利子負債Interest-bearing debt

Interest-bearing debt

¥ 950.0
billion億円
10,700¥1,060.0 billion

Interest-bearing debt/EBITDA ratio

倍 times
5.95.7* Operating income
for ﬁscal 2019＊2018年度の営業利益は、
大規模な（2018〜2021年度）
includes temporary (extraordi-設備投資
施設用地の売却益等が一時的に生
nary)factors such as the sale of
ずるため、
1,100億円と予想
sites for large scale facilities.

¥

EBITDA

有利子負債/EBITDA倍率
Interest-bearing debt/EBITDA ratio 有利子負債/EBITDA倍率
Interest-bearing debt/EBITDA ratio

times
倍
5.45.1

Plan (Fiscal 2022)

6,100 億円

戦略投資枠

1,000 億円

長期ビジョンの実現に向けた成長投資2,700 億円

既存インフラの維持更新投資ほか

2,400 億円

5.9 times
Capital investment(From ﬁscal 2019 to ﬁscal 2022)¥

630 billion

Allowance forstrategic investments
Investment for growthfor fulﬁlment of Long-Term
Management Vision¥

50 billion¥

330 billion

Investments for maintenanceand renewal of existing¥
infrastructure etc.

250 billion

Hankyu Hanshin Holdings Integrated Report 201924

Strategy for Enhancement of Corporate Value

Four Strategies for Our Medium-Term Management Plan

Strategy

Umeda and line-side areas & stock businesses

1

Further strengthen stock businesses in Umeda and line-side areas

Make our railway the absolute best among the Kansai networks.
We aim to increase the resident and non-resident population of line-side areas. To this end, we will channel into these areas
the dynamism of the Tokyo-Nagoya-Osaka axis and the power of Asia and other regions of the world, attract new industries andcutting-edge technologies ahead of other companies, and support efforts to develop thriving local communities.

Concrete Effort ❶Enhancement of Value of Umeda Area

We will systematically reconstruct and develop buildings in the
Umeda area from the long-term viewpoint and enhance the valueof the area.

■ Enlarged map of Umeda area

Head Oﬃce Building ofHankyu Corporation
Applause Tower
North Bldg.

Kitano Hankyu
Bldg.

GRAND FRONT OSAKASouth Bldg.

a Sta.

●Hotel Hankyu RESPIRE OSAKA

Nishi Hankyu
NU chayamachi PLUS
Bldg.
Kita
HankyuNU chayamachi
Bldg. Hankyu OsakaHotel New
umeda Sta.
●chayamachi arco
Hankyu Osaka

JR Osaka Station

Umed● Umekita Phase II

Hotel Hankyu
International

Hankyu Sanban Gai
Shopping Center
Hankyu Terminal Bldg.

Umeda Center
Bldg.

25

-Umed
a Sta.
HigashiOsa● Umeda 1-1 Project
JR
Kit
ash
Osaka Umeda
inc
hi S
ta.
Twin Towers South(Hanshin Umeda Main Store)

Metro

ka M
etro

The Ritz-Carlton Osaka

Osaka

eda
S

HERBIS ENT

Nish
i-Um

HERBIS OSAKA

ta.

Osaka

Metro

HankyuGrand HEP FIVE
Bldg.
HigashiUmeda
HEP NAVIO
Hankyu Bldg.
Hankyu Bldg.
Hanshin Osaka-Umeda Sta.
(Hankyu Umeda Main Store)●UMEDA FOOD HALL

Osaka Nikko Bldg.

Umeda OS Bldg.

Revamping existing commercial facilities

improve the appeals of its commercial facilities, we are

In order to bring vitality to the Umeda area and maintain andcontinuously working to revamp existing facilities in the area.

UMEDA FOOD HALL, opened March 2018chayamachi arco, opened March 2018

Hankyu Hanshin Holdings Integrated Report 2019

Umeda 1-1 Project (Building Name: Osaka Umeda Twin Towers South)
We have carried out the comprehensive reconstruction of the Dai

11F–38F), as well as the conference zone, which will comprise one

Hanshin Building and the Shin Hankyu Building since October 2014.

large and one small hall. Moving forward, we will continue

The first phase building was completed in April 2018, and thereconstruction work and improvement of nearby public facilities in an

Hanshin Department Store (Hanshin Umeda Main Store) was partiallyintegrated manner, seeking to create comfortable, high-quality areas

opened in June.

that will enhance international competitiveness. Specifically, we will

In June 2019, we began the second phase of the new construction
work, with the full opening of the department store zone scheduled

upgrade city functions, enhance disaster preparedness, create new
public spaces, and form attractive townscapes.

for autumn of 2021. In spring 2022, we expect to open up WestJapan’
s largest rental floor space in the office zone (approx. 3,500 m2;

1Strategy for Enhancement of Corporate Value■ Project summary

Artist’s impression of completed building

Location

1-1 Umeda, Kita-ku, Osaka

Site area

Approx. 12,200 m2*

Total floor
space

Approx. 260,000 m2

Size

38 floors above ground and3 below groundPurpose

Department store, offices, halls,
etc.

Construction
completion

Around spring 2022

*Including overlapping areas■Outline of Osaka Umeda Twin Towers South■ Office zone
Equipped with the latest facilities, the expansive
11th to 38th floors will offer the largest rental officespace per floor in West Japan*1 (approx. 3,500 m2)
and 2.9-meter high ceilings.
The three key concepts of the office zone are“Center of the convenient Umeda area,”“A building
with outstanding services,”and“A space for wellbeing.*2”In addition to providing comfortable officeenvironments for each tenant, on the 12th floor wewill create a dedicated space for workers known as
WELLCO.
WELLCO is a space that promotes thorough rest,
productive work, and fruitful learning. Through theprovision of comfortable rest areas and spaces
for interaction between workers, WELLCO willcontribute to a healthy body and mind, increased
motivation, and in turn highly creative work.
*1 Among office buildings completed since 2000.
*2 In the World Health Organization’s definition of health, outlinedin their 1946 constitution, well-being is described as a state ofphysical, mental, and social health in which the individual’s humanrights are guaranteed, and in which the individual can realize his or
her own capabilities.

■ Conference zone
Using the large space constructed above theroad, we will build the Umeda South Hall in theconference zone on the 11th floor.
The space will act as a hub for business-related
information, a space to cultivate active, internationallyminded personnel, and a space for diverse personnel
to interact. We hope this will invigorate business in
the Umeda area, and contribute to its international
competitiveness. Moreover, the space will also
contribute to the building's disaster preparedness
functions as a location for people to stay intemporarily when unable to return home.

Café

Lounge and work space

Wellness zone

■ D epartment store zone (partial
opening June 1, 2018; complete
opening scheduled for autumn 2021)

Oﬃce zone

Rooftop space
Conference zone
Department store zone
Road

Undergroundpassage

Parking lot, etc.

Note: Building uses at time of completion

At the time of the total opening of the store
around the autumn of 2021, the area will
become almost the same as that before thereconstruction (total floor area of approx.
100,000 m 2), and 11 floors (B2F–9F) are
expected to be occupied by the department
store.
The department store will boast a wideranging selection of products and an
improved sales floor environment. Throughthese enhancements and an array ofdifferent events, the store will propose new
ways of living for its customers, creating acommercial facility ideally suited to a topclass location with a substantial presence
and competitiveness.

■ Rooftop space
The lower rooftop plaza will be revamped tocreate a spot for bustling interaction, while
the amount of greenery will be increased
to improve the urban environment. In thisway, we will create a comfortable, charming
environment for office workers and visitors.
The space can also be used as a temporary
evacuation area during disasters.

Hankyu Hanshin Holdings Integrated Report 201926

Strategy for Enhancement of Corporate Value

Osaka Station North District (Umekita) Phase II Development
Plan

Improvement in Traffic Networks(Infrastructures) with New Railway
Lines

Concrete Effort ❷A joint venture of nine developers (including Hankyu Corporation;
led by Mitsubishi Estate Co., Ltd.) formed a consortium with six
design and operating companies (including Hankyu Hanshin
Properties) to submit an application to develop the Osaka Station
North District (Umekita) Phase II Development area. As a result,the consortium was selected by the Urban Renaissance Agency
to lead development of the area.
In line with the project’s concept of fusing greenery andinnovation, and utilizing our track record in the Grand Front
Osaka development project, we will work to ensure the Umekita
area is a leading example of urban development in Kansai andacross Asia. (Initial opening scheduled for summer 2024;

Hankyu Corporation is studying three new line projects*1 in orderto reinforce the connection between the line-side areas including
Umeda and the gateways of Kansai consisting of KansaiInternational Airport and Osaka International Airport (Itami
Airport) as air gateways and Shin-Osaka Station which is being
planned to serve as a station of the Linear Chuo Shinkansen Line.
By improving these new lines, we will reinforce the railway
networks and aim at creating the line-side areas capable of being
continuously selected by many customers in the future.
To Takarazuka

Osaka International
Airport(Itami Airport)

HankyuTakarazuka Line

complete opening in summer 2027)

New lines planned by Hankyu Corporation

Sanyo Shinkansen

Kobe-sannomiya

Kita Umeda*(Umekita)

Hankyu Kobe Line

Hans

hin M

Port Liner

Shin-Osaka
TokaidoLinear Chuo Shinkansen Shinkansen
Hokuriku Shinkansen
Hankyu Kyoto Line

Juso

Kyoto-kawaramachi

ain L

ine

Osaka-Umeda
NaniwasujiLine (planned)*2

Kobe Airport

Hanshin Namba Line

Osaka-Namba

JR
Namba

JR Osaka Loop Line

TennojiShin-Imamiya

Whole view of Osaka Station North District (Umekita) Phase II
Development Area (artist’s impression)

Hotel Hankyu RESPIRE OSAKAIn November 2019, we will open Hotel Hankyu RESPIRE OSAKA in
the Yodobashi Umeda Tower, which is operated by Yodobashi
Holdings, Inc. Built to accommodate mainly inbound tourists, thehotel will comprise more than 1,000 Japanese-influenced rooms,

Kansai International
AirportShin-Osaka
Connection Line
Osaka Airport Line
*New Stations(provisional name)*1 Naniwasuji Connection Line: The line to connect Juso Station with Kita Umeda Station to be
newly constructed in the Osaka Station North District (Umekita)
Phase II Development Area.
Shin-Osaka Connection Line: The line to connect Juso Station with Shin-Osaka Station.
O s a k a A i r p o r t L i n e : The line to diverge from the Takarazuka Line and be connected
to Osaka International Airport.
*2 License acquired on July 10, 2019; Scheduled for opening in spring 2031

predominantly made up of twin rooms, triple rooms, and otherrooms for large numbers of people.

JR Hanwa Line

Nankai Main Line

NaniwasujiConnection LineConcrete Effort ❸Satisfaction of Demand from
Inbound Tourists

We are improving systems to accommodate inbound tourists
and implementing various policies and measures to increase
revenues from inbound tourism.
Kyo-train Garaku sightseeing train
Replacing the existing Kyo-train sightseeing train that runs on the
Kyoto Line, Hankyu Corporation began operation of the second
edition, Kyo-train Garaku, in March 2019.

Artist’s impression

Hotel lobby

27

Guestroom

Hankyu Hanshin Holdings Integrated Report 2019

Kyo-train Garaku sightseeing train

Strategy

2

Tokyo metropolitan area and international markets & stock businesses
Accumulate stock in the Tokyo metropolitan area andinternational markets

Construct a stable revenue base in the Tokyo metropolitan area and international markets.
(Diversify the portfolio, which is currently concentrated in Umeda and line-side areas.)

Our property portfolio is currently concentrated in Umeda and line-side areas. We will diversify our property profile by acquiring
additional assets including rental property in the Tokyo metropolitan area’s large market and in international markets that are
set to grow.

Accumulation of Stocks in Centerof Tokyo Metropolitan Area

Strategy for Enhancement of Corporate Value

Concrete Effort ❶1
Acquisition of International Stocks(Real Estate)

Concrete Effort ❷PILOT Hankyu Hanshin Green Building

We have invested in an Indonesian entity that owns and operates(Kyobashi 2-6 Redevelopment Area)

the Plaza Indonesia Complex and the fX Sudirman, marking our

Redevelopment of the Kyobashi 2-6

full-scale entry into the running and management of overseas

area, which includes the former Han-

multipurpose complexes. The Plaza Indonesia Complex is locatedshin Green Building, was completed

along the main thoroughfare of Jakarta’s Central Business District,as scheduled, and the multipurpose

and comprises a commercial facility, offices, and a hotel, while the

PILOT Hankyu Hanshin Green Build-fX Sudirman is a commercial complex home to the JKT48 theater,ing, with hotel and office space, wasa movie theater, and more.

completed in February 2019. In April,
the remm Tokyo Kyobashi hotel
opened on the upper floors (7F–14F)of the building.

CO•MO•RE YOTSUYA(Yotsuya Station District Redevelopment Project)

Plaza Indonesia
Complex

Aiming for completion in early
2020, we are participating in
the Type 1 Urban Redevelopment Project for the District in
Front of Yotsuya Station. The
project is led by the Urban
Renaissance Agency (UR Urban Agency), and we are participating with other business
operators as “specific busi-

Artist’s impression

ness participants.”

fX Sudirman

Hankyu Hanshin Ginza 3-chome
Project

Jakarta suburbs
Note: Numbers (1)‒(3) are projects that Hankyu Hanshin
Properties is involved in.

We will develop a commercial facility
serving as the flagship in Ginza, one ofInternational
AirportPlanned EastWest MRT Linein the spring of 2020.

Government
oﬃce area

Sarinah Sta.

Tangerang

the most popular commercial areas inJapan, with the aim of its completion

Jakarta Central Business District

Kota Tgr. Sel.

Bekasi(1) Detached houses(The ZORA)(3) Distribution
warehouse

CBD

Plaza Indonesia
ComplexfX Sudirman

Depok

Senayan Sta.
Bogor(2) Condominiums(Opus Park)

Local oﬃce
To Lebak Bulus Sta.

CBD

Japanese
embassy
Bundaran HI Sta.
Dukuh Atas Sta.
Setiabudi Sta.

Benhil Sta.

Istora Sta.
North-SouthMRT Line

Sudirman/Thamrin Road
Jakarta s main thoroughfare, linedwith government oﬃces, oﬃce
buildings, and commercial facilities

Artist’s impression

Hankyu Hanshin Holdings Integrated Report 201928

Strategy for Enhancement of Corporate Value

Strategy

Flow businesses

3

Strengthen competitiveness of flow businesses

Strengthen competitiveness by thoroughly pursuing brand optimization and differentiation.
Thoroughly optimize the Hankyu Hanshin brand value and differentiate the products and services from the competition
so as to strengthen competitive edge and achieve further business expansion.

As of June 30, 2019

Expansion of Scale ofCondominium Businesses including
those Overseas

Concrete Effort ❶Domestic real estate sales businesses
The condominium business among the real estate sales businesssteadily promotes its business in the Kinki area and aims at
expanding its business in the Tokyo metropolitan area to the

No. of projects

Total no. of units

Vietnam5

Approx. 10,800

Thailand13

Approx. 10,300

Philippines

3

Approx. 3,100

Indonesia

2

Approx. 1,800

Malaysia

1

Approx. 850

same level of the number ofunits (the level of approx. 800

Niche Pride TaopoonInterchange
Artist’s impression ofcompleted condominium forsale in Bangkok, Thailand

units per year) as that in the
Kinki area.
Concrete Effort ❷Artist’s impression ofcompleted Geo Fukushima
Noda The Marks

Growth of Information Services
Business

Our ability to handle multiple vendors*1 is a major advantage, as
is our ability to offer one-stop service.*2 By maximizing these andInternational real estate sales business
By making good use of our experiences in Japan, we participate in
the house sales business in Vietnam, Thailand, the Philippines,
Indonesia and Malaysia. As of June 30, 2019, we have had a handin over 26,000 units in these areas.
We will aim at expanding the scale of the international real estate
sales business by further accelerating our efforts in the ASEAN
countries, etc.

other advantages, we will accelerate our progression, and market
share growth in promising growth areas including building
management, transportation-related systems, the Internet, andmedical services. In addition, we will leverage our successes todate in the Kansai region to expand into the Kanto and Chubu
areas. We will apply such advanced technologies as AI and IoT topromote new businesses.
*1 The capacity to package products from a wide range of vendors and build highly
efficient systems*2 A unified service from system configuration to operation, monitoring, and maintenanceTotal units
sales overseas

More than 26,000

Successful project: Bus Management System at Busta Shinjuku(Introduced in April 2016)(including those of business
partners)

TaiwanMyanmar

The Philippines

Laos

Thailand

Vietnam
Detached houses for sale andCambodia condominiums for sale in
Ho Chi Minh City, Vietnam

Condominiums for salein Bangkok, Thailand

Brunei

Detached houses
for sale insuburbs ofManila, Philippines

Malaysia
Condominiums for sale in suburbsof Kuala Lumpur, Malaysia
Indonesia

29

Hankyu Hanshin Holdings Integrated Report 2019

Successful project: On-board Security Cameras
As criminal offences on board trains increase, and in order to

Detached houses for sale andcondominiums for sale insuburbs of Jakarta, Indonesia

strengthen security ahead of the 2020 Tokyo Olympics andParalympics, there is increased demand from domestic railway
companies for on-board security cameras.

Concrete Effort ❸Increase in Income from Travel
Business

While continuing to provide travel packages to Europe, one of
our strengths, we will work to enhance the competitiveness of
our other travel packages by enhancing our specialized products,
such as cruises and hiking tours, as well as our high-quality/luxury
products and our products for individuals. In addition, we will
promote structural reforms to establish a second pillar of ourbusiness.

Increase in Volume of Cargoes
Handled by International
Transportation Business

Concrete Effort ❹Originally an air forwarding business, air freight is a particularstrength of our International Transportation Business, and we willcontinue to increase the volume of cargo we handle. Moreover,as a comprehensive distribution company, we will strive tofurther expand our sea freight and logistics services, and seek tocreate a well-balanced business portfolio.
Although we already have bases in major countries andregions overseas, we will actively seek to expand into growth
regions, and make investments in logistics facilities, new products,1

and other elements that can drive the growth of the business.

Strategy for Enhancement of Corporate ValueOur 18-seater luxury bus: Crystal Cruiser Smile

Strategy

4Group-wide initiatives and new business fields
Make greater use of the Group’s collective strength anddevelop into new business fields

In addition to pursuing Group-wide initiatives, we will introduce cutting-edge technologies into existing businesses, venture into
new business fields, and thereby provide culturally enriched and innovative lifestyle options.

Concrete Effort ❶Expanding and Improving Our
S-POINT Service

Concrete Effort ❷Ventures into New Business Fields

We started the S-POINT service available in the Kansai area inEntering the Agriculture Businesscooperation with H2O Retailing Group in

Further growth is expected in the agriculture industry, and in the

April

have

long term, we expect the agriculture business to complement

endeavored to acquire new S-POINT

and add value to our existing businesses. We therefore decided

members and increased the number of

to take a step into agriculture, beginning with the production andfacilities

sales of highly popular cherry tomatoes with high sugar content.

2016.

Since

(S-POINT

then,

we

memberstores)where the S-POINT service is available
one by one inside and outside theGroup.
The S-POINT service has expanded
and is now available in approximately
5,000 stores. Since May 2018, the service has been madeavailable in around 2,800 7-Eleven stores in six prefectures*1 inthe Kansai area, while shops in Hankyu and Hanshin line stations
and the Kansai Super*2 chain of supermarkets began offering theservice in June and November respectively. We will continue
working to provide a system in which it is easy to collect and use
these loyalty points.

Artist’s impression*1 Osaka Prefecture, Kyoto Prefecture, Hyogo Prefecture, Shiga Prefecture, Nara Prefectureand Wakayama Prefecture*2 In November 2018, the service was made available at 27 stores in Hyogo Prefecture,and in April 2019, 36 stores in Osaka Prefecture and one store in Nara Prefecture

Hankyu Hanshin Holdings Integrated Report 201930

Strategy for Enhancement of Corporate Value

Value Creation Process of Hankyu Hanshin Holdings

Social issues facing
the world

Social issues
facing our Group

Change in external
environment
surrounding Groupand opportunities

ChangesHigh potential in line-side
areas of Group in Kansai● Arrival ofsociety suﬀering
full-scale
depopulation(Especially in
Kansai area)● Increase inaging
population

Expansion of demand frominbound tourists
Concentration of population into
center of Tokyo metropolitan area
Growth in Asia
(Especially in ASEAN)
Further advancement oftechnical innovations such as
AI and IoT● Decay of

Infrastructure● Enhancement ofdiversity● Harmony withenvironment

31

Hankyu Hanshin Holdings Integrated Report 2019

Entertainment

Opportunities
Possibility to change Umeda
from Umeda in Kansai to
Umeda in Asia by making
good use of the growth in
ASEAN.

quality of life

● Promotion ofReal Estate

Information andCommunication
Technology● Tight labormarketUrban
Transportation

Possibility to make good useof our business know-how
and advantages accumulated
in the line-side areas for many
years in new markets.

Possibility to endeavor to
reduce costs, resolve thelabor shortage and shift fromthe existing business modelby making good use of anddiverting new technologies toeach business and thereby
achieve growth.

TravelInternational
Transportation
HotelsESG

Hankyu Hanshin Holdings Group Long-Term Management Vision for 2025
Slogan: Enhancing line-side areas and expanding ﬁelds

Values provided
to stakeholders

Customers

Vision of corporate form

Sustainably enhance
corporate value

Medium-Term
Management Plan

Umeda andline-side areas+
Stock businesses
Strategy 2Strategy 3

Flow businesses

Strategy 4

Employees
Upbringing of various
types of human resources
and increase in motivation

Construct a stablerevenue base in
the Tokyo metropolitan
area and overseas markets.

Strategy 3
Strengthen competitivenessby thoroughly pursuing
brand optimizationand diﬀerentiation.

Strategy 4Make greater use of
the Group s collective
strength and develop
new business ﬁelds.

Suppliers
Fair and reasonabletransactions

Local
communities
Enhancementof value ofline-side areas

Globalenvironment

Enhance economic
valueGroup-wide
initiatives
andnew business ﬁelds

Strategy 2

Return of proﬁts withsustainable growth
Enhancement ofvalue of share

Enhance social value

Tokyo metropolitan area
and overseas markets+
Stock businesses

Make our railway
the absolute best among
the Kansai networks.

Strategy for Enhancement of Corporate Value

Strategy 1

Strategy 1

1

Shareholders
and investors

Enhance daily life
(customer) value(From ﬁscal 2019 to ﬁscal 2022)

Provision of advanced
goods and services
based on needsof customers

Protection ofenvironmental
resources

SDGs the Group is
working to achieve(Environment, society and corporate governance)

Improvement of social issues

Hankyu Hanshin Holdings Integrated Report 201932

Fiscal 2019
Breakdown of revenues from operations

Enhancing Our Corporate Value

Urban Transportation

Hiroshi Sasaki

Senior Managing Director,
Hankyu Corporation

Managing Director,
Hanshin Electric
Railway Co., Ltd.

❶ Provide quality urban transportation services and otherrelated services

Develop personnel/Strengthen Group collaboration/Enhanceservices and convenience/Enhance appeal of railway stations❷ Increase convenience and reliability of infrastructure andexpand railway network

Develop railway stations and lines/Expand and strengthen railway
network❸ Ensure reliable transportation

Enhance security/Develop rolling stock❹ Expand feeder services and extend catchment areas ofrailway lines and stations

Advance line-side measures in the bus and taxi businesses/
Enhance bicycle parking areas at railway stations and bicycle
rental services/Collaborate with line-side area municipal
authorities, chambers of commerce and industry, and companies¥ 791.4 billion

Travel(YoY +4.1%)

Information andCommunication
Technology

Real EstateEntertainment

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount (includingintersegment transactions) of each segment.

Revenues from operations

Operating income margin (right axis)(¥ billion)
250

（ %）

239.5

200

17.2

237.1
17.8

236.0
17.6

238.6
18.2

242.8
18.0

25
20

150

15

100

10

50

5

0

Basic Policies

Urban Transportation

28.5%

International
Transportation

We remain focused on enhancing the value of
our railways by providing safe and comfortabletransportation services.
Yoshifumi Nomura

Other

Hotels

2016

2017

2018

2019

2020
(Est.)0(FY)

to ¥43,455 million.
The negative impact of natural disasters on revenues fromoperations amounted to ¥1,200 million, and on operating incomeof ¥1,100 million.

Railway Business･ D espite the impact of natural disasters, there was steadydemand for our Hankyu and Hanshin Line railway businesses,
and due to such additional factors as a decline in electric power
costs, revenue and income rose.
･ T o further enhance safety levels for its customers, Hankyu
Corporation equipped automated platform gates in some partsof Juso Station. Hanshin Electric Railway began reconstruction
work on the Yodogawa Bridge, situated on the Hanshin Namba
Line, to ensure safety in the event of flooding and storm surges.
･ To motivate more passengers to use its railway services, Hankyu
Corporation began operating Kyo-train GARAKU, the second
version of its rapid limited express for tourism. To celebrate ten

Business Environment

years of operation of the Hanshin Namba Line, Hanshin Electric■ I ncreasing line-side populations and tourism-based
demand present new business opportunities

wide range of commemorative initiatives and events.

･ While the population of the entire Kansai area remains on a
downward trend, Umeda and other line-side areas of our Group
continue to enjoy high popularity, with the local populations
trending upward.
･ Moreover, the number of international visitors to the Kansai
region of Japan is increasing annually, so we anticipate anincrease in business opportunities in the medium term.

Railway began operating specially decorated trains, and held a

Automotive Business･ Despite an increase in the number of consolidated subsidiaries,
which led to increased revenue, the influence of natural
disasters and other factors, including increased fuel costs,
resulted in a drop in income.
･ As a measure to enhance convenience for inbound tourists,
Hankyu Bus upgraded its multi-language information services at

Fiscal 2019 Review of Operations

Osaka Umeda and other bus terminals. Hanshin Bus and Osaka
Airport Transport introduced complementary wireless LAN■ Healthy demand for our railway businesses resulted inhigher revenue and income

service in their airport limousine buses.

Despite the impact of natural disasters, an increase in the number

Retailing Businessof consolidated subsidiaries, steady growth in Hankyu andHanshin line services and other factors saw revenues from33

· As part of our efforts to activate station areas, we opened

operations in our Urban Transportation Business increase by

the Phase I Area of TauT Hankyu Rakusaiguchi. This area, near

¥2,594 million (1.1%) compared to the preceding fiscal year, toHankyu Rakusaiguchi Station, is a grade-separated facility in the¥238,562 million. Operating income rose ¥1,869 million (4.5%),

space created by elevating the tracks of the Hankyu Kyoto line.

Hankyu Hanshin Holdings Integrated Report 2019

■ Hankyu Corporation and Hanshin Electric Railway: Performance results

Fare revenues (Millions of yen)

Other tickets

HankyuCommuter pass
Total

HanshinCommuter pass
Total

FY2018Change33,45633,198+258

21,638+392

63,05996,51622,03012,024
34,054

63,137
96,335
11,79733,436%

Passenger volumes (Thousands)

FY2019FY2018Change335,005+2,772−78−0.1%

318,158

319,939

+180

+0.2%

655,936

654,945

+226
+618

+0.8%
+1.8%
+1.9%
+1.9%

337,778
121,012124,353

−0.6%

+991

+0.2%

119,567+1,444

241,641+3,724122,073245,366%−1,781+2,279

+0.8%

2

+1.2%

Enhancing Our Corporate Value

Other tickets

FY2019

+1.9%
+1.5%

1. Revenues of less than one million yen have been rounded down; personnel totals of less than one thousand people have been rounded down.
2. Fare revenues and passenger volumes from other tickets for Hankyu include revenues and personnel applicable to PiTaPa zone-specified discount fares.
3. Sum of tier 1 and tier 2 railway operators for both Hankyu and Hanshin

Overview of Our Medium-Term Management Plan

Hanshin Line and Taoyuan Metro.
W e will also offer free Wi-Fi service, create information
kiosks certified by the Japan National Tourism Organization■ Responding to society’s demands for increased safety
and security(JNTO), and expand multi-language information services in･ Our Urban Transportation Business is promoting initiatives

we will create a more welcoming environment for foreign

intended to enhance the value of our line-side areas with thegoal of ensuring safe and stable transportation and public

stations, trains, and vehicles. Through these and other measures,
visitors.

confidence while making our railway the absolute best among
the Kansai network.
･ As an example of our safety and security efforts, in response torising demand, as a Group we have already installed automatedplatform gates at four of our stations. Moving forward, we arescheduled to complete installation of automated platform gatesat Kobe-Sannomiya Station on both the Hankyu and Hanshin

Fiscal 2020 Outlook■ E xpanded revenue and income projected despite
higher depreciation expenses, thanks in part to higher
investment in new rolling stock･ Having recovered from the effects of the natural disasters oflines by spring of 2021. In addition, Hanshin Electric Railway isfiscal 2019, and in line with growing line-side populations

conducting improvement work at Osaka-Umeda Station andand increasing tourism-based demand, revenue from railway
operations is expected to increaseplans to complete this renovation project by 2022.
･ To better service inbound demand, we introduced new trains･ R egarding costs, depreciation expenses are expected tofor tourists and offered Hankyu Tourist Pass and Hanshin Tourist

increase in the wake of new investment in rolling stock andPass tickets for inbound visitors. In addition, to encourage

renewed investment in station equipment.

tourism from and to Taiwan, the Hanshin Electric Railway･ As a result, revenues from operations in our Urban Transportation

concluded a cooperative agreement with Taipei’s TaoyuanBusiness in fiscal 2020 is expected to increase by ¥4.2 billion,

Metro. Initiatives under the agreement include operatingto ¥242.8 billion, while operating income is expected to reachdecorated trains and sale of special tickets spanning the¥43.8 billion, an increase of ¥0.3 billion year-on-year.

■ Hankyu Corporation and Hanshin Electric Railway: Performance forecasts (Fiscal 2020)

Fare revenues (Millions of yen)

HankyuHanshin

FY2020FY2019Change34,69534,054+641

98,38496,516+1,867

%

+1.9%

+1.9%

Passenger volumes (Thousands)

FY2020668,181249,913

FY2019Change245,366+4,546655,936+12,244

%

+1.9%

+1.9%

1. Revenues of less than one million yen have beenrounded down; personnel totals of less than one
thousand people have been rounded down.
2. Fare revenues and passenger volumes fromother tickets for Hankyu include revenues andpersonnel applicable to PiTaPa zone-specified
discount fares.
3. Sum of tier 1 and tier 2 railway operators forboth Hankyu and Hanshin

Hankyu Hanshin Holdings Integrated Report 201934

Fiscal 2019
Breakdown of revenues from operations

Enhancing Our Corporate Value

Other

HotelsReal Estate

International
Transportation

Tsuneo Wakabayashi

Yusuke Kusu

President and Representative
Director,
Hankyu Hanshin
Properties Corporation

Executive Vice President
and Representative Director,
Hankyu Hanshin
Properties Corporation¥ 791.4 billion

Travel

Our goal is to support attractive
urban development while offering
the choice of an affluent lifestyle.

(YoY +4.1%)

Information andCommunication
Technology❶ Enhance appeal of and revitalize Umeda area and otherareas served by our lines• Consideration and promote systematic building reconstruction in
the Umeda area
• Develop major line-side bases from a long-term perspective❷ Strengthen business in the Tokyo Metropolitan area

• Steadily acquire rental assets in the Tokyo Metropolitan area
• Diversify methods for acquiring properties and land

❸ Formulate and establish policies for the distribution
facility real estate• Promote joint distribution facility development in the easternarea of Saito (Sanroku Line area)• Consider and establish business development policies andspecific approaches

Real estate sales business and others❹ Maintain real estate sales business income andstrengthen businesses in the Tokyo Metropolitan areaand elsewhere• Participate in medium- and long-term projects (urban
redevelopment, building reconstruction, etc.)• Expand business portfolio to include development and sales ofrental properties for income• Expand business area (extend to Nagoya area and major
regional cities)❺ Strengthen and expand non-asset business• Expand scope of real estate funds and REIT business• Diversify methods and routes for acquiring properties and asset
types❻ Accelerate and expand the scale of international
businesses• Expand the scale of residential business in ASEAN nations• Acquire non-residential assets

28.4%

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount (includingintersegment transactions) of each segment.

Revenues from operations

Operating income margin (right axis)(¥ billion)
250
200

220.9
22.6

215.7

222.6

19.5

237.3

18.4

20.8

246.2

16.9

（ %）
25
20
15

100

10

50

5

0

Real estate leasing business

Real EstateEntertainment

150

Basic Policies

Urban Transportation

2016

2017

2018

2019

2020
(Est.)0(FY)･ In addition, due to the growing number of foreign visitors toJapan, we anticipate that our real estate leasing business willcontinue to show steady growth, not only through offices but
commercial facilities, too.

■ Intensifying competition for land acquisition

Real Estate Sales Business and Others･ In our real estate sales business, although the population of
Kansai as a whole is trending downward, Umeda and otherline-side areas continue to enjoy high popularity, and thus we
expect growth to continue. We also expect demand to growin the Tokyo Metropolitan area, where population density
continues to rise, as well as in ASEAN and other emerging
markets.
･ Moreover, as competition to acquire land for condominiums
intensifies, we will continue to closely monitor our operating
environment.

Fiscal 2019 Review of Operations■ Revenue and income increased thanks to strengthened
competitiveness of our office buildings and other realestateWhile condominium sales declined, other factors led to expanded
operating revenue and income, including sales of land for largescale facilities in the eastern area of Saito (Ibaraki, Osaka
Prefecture), steady growth in office rentals in a healthy real estatemarket environment, and receipt of tenant construction deposits
for Phase I of the Umeda 1-1 Project. Revenues from operations
increased ¥14,689 million (6.6%) over the previous fiscal year, toBusiness Environment■ Favorable demand for office space

Real Estate Leasing Business･ In line with increased demand for office space, predominantly in

35¥237,276 million, while operating income rose ¥8,295 million(20.3%), to ¥49,250 million.

Real Estate Leasing Business･ R evenue and income grew, benefitting from an increase in
the competitive strength of our commercial facilities andthe Umeda area, vacancy rates are falling and rental prices are

office building, as well as efforts to maintain and enhance ourrising.

occupancy rates. Hankyu Nishinomiya Gardens Gate Building,Hankyu Hanshin Holdings Integrated Report 2019

with direct access from Hankyu Nishinomiya-kitaguchi Station

stringent standards to our land acquisition, and steadily(Nishinomiya, Hyogo Prefecture), was one of the facilities that

promote the growth of our business through such strategies

opened during the term, and a section of the area under theas participation in medium- and long-term projects (including

elevated tracks on the north side of Hankyu Osaka-umeda

urban redevelopment projects and building reconstructions),

Station (Kita-ku, Osaka) was renovated and reopened as

development and sale of rental condominiums for income,chayamachi arco.

and expansion of our business portfolio. We will also aim to

selected to handle the Umekita Development Plan (Osaka

enjoy extremely strong brand recognition, but in the Tokyo

Station North Side) Phase II. We are moving forward with thisMetropolitan area and international markets.

large-scale project, with the goal of first openings aroundsummer 2024.

2

expand our business, not only in the Kansai area where weEnhancing Our Corporate Value･ In addition, the consortium that includes the Group was･A dditionally, in order to enhance the value of the Umeda area
and our line-side areas, the core business foundation of ourGroup, we will make steady progress with the Umeda 1-1 Project

Real Estate Sales Business and Others･T he term saw numerous sales of condominiums, residential
land lots, and detached residences in the Kansai and Tokyoand other development projects, strengthen the competitivenessof our commercial facilities and office buildings, and maintainand increase their occupancy rates. In this way, we will seek toachieve medium- to long-term growth in our leasing business.

Metropolitan areas as we endeavored to expand the scope ofthe business.
･ In our international real estate business, we worked to expand
our business scope, including sales of condominiums anddetached residences in such ASEAN nations as Vietnam andThailand.
･ In addition to these efforts, we sold land for facilities in theeastern area of Saito (Ibaraki, Osaka Prefecture).

Fiscal 2020 Outlook■ Lower revenue is projected compared to the previous
fiscal year, which was boosted by sale of land forlarge-scale facilities･ In our real estate leasing business, we will endeavor to revise
office rental rates upward while maintaining occupancy rates. In
addition, we will undertake to enhance the attractiveness of our

Overview of Our Medium-Term Management Plan
■ Condominium business expansion through stringent
site selection, an augmented business portfolio, andother measurescommercial facilities through shop replacement and renovationin our commercial facilities. Through these and other strategies,
we will work to expand operating revenue. At the same time,
due to rising costs associated with the Umeda 1-1 Project, andother factors, we are projecting lower income for the term.
･ In real estate sales business and others, we expect an increase･ For the three years until fiscal 2022, the final year of our medium-in gross margins on condominium sales, but without the income

term management plan, we intend to increase operating income

boost from the sale of land in the eastern area of Saito duringwith a focus on flow businesses, while in our Real Estate Businessthe previous fiscal year and the effects of other factors, we

we aim to expand the scale of condominium unit sales.

anticipate a decline in operating income.

･W e will keep such factors as the consumption tax increase･ As a result, we expect revenues from operations in our Real

implemented in October 2019, persistently high construction

Estate Business to increase in fiscal 2020 by ¥8.9 billion, tocosts, and shortages of personnel fully in mind as we pursue our¥246.2 billion, while operating income will decrease by ¥7.7

business activities. In addition, we will respond to the increasingly

billion, to ¥41.6 billion, year-on-year.

tough competitive environment for land acquisition by applying

Hankyu Hanshin Holdings Integrated Report 201936

Fiscal 2019
Breakdown of revenues from operations

Enhancing Our Corporate Value

Other

HotelsEntertainment

International
Transportation¥ 791.4 billion

TravelInformation andCommunication
Technology

We will continue to fulfill dreams and offer
excitement through our content.

Urban Transportation(YoY +4.1%)

Real EstateEntertainment

8.9%

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount (includingintersegment transactions) of each segment.

Revenues from operations

Operating income margin (right axis)（ %）(¥ billion)

Tomotsugu Ogawa

Koji Momokita

Managing Director,
Hankyu Corporation

Managing Director,
Hanshin Electric
Railway Co., Ltd.

150
120
90

25

112.5
13.6

115.2

121.1
14.7

13.6

18.0
74.5

20

18.1

15

73.1

60

10

30

5

0

2016

2017

2018

2019

2020
(Est.)

0(FY)

Note: In line with the launch of the Information and Communication Technology
business, ﬁgures post-FY2018 do not include these business segments.

Basic Policies❶ Maximize value of the Hanshin Tigers and KoshienbrandsForge a team that contends for the championship on a regularbasis/Increase the appeal of Koshien Stadium and expand thestadium business❷ Maximize value of the Takarazuka brand

Maintain the high capacity utilization and financial performance of
the Takarazuka Revue/Develop content business actively/Increaseinternational business❸ Advance growth of other entertainment businesses andthe leisure business
Expand the music business and Mt. Rokko businesses

Fiscal 2019 Review of Operations■ Sports business income declined
Operating income from our sports business rose during the term,
thanks partly to an increase in revenue from our billboard-related
business.*1 The Hanshin Tigers competed strongly throughout theseason, exciting their fans and drawing broad support, but they
did not progress to the Climax Series, which led to a drop in
operating income.
In our stage business, all of our musical presentations received
strongly positive audience evaluations. The Takarazuka Grand
Theater enjoyed the highest admissions figure since its opening
in 1993. Revenue from Revue-related goods, live viewing andother businesses was strong, and the Takarazuka Revue gave its
third performance in Taiwan, the first in three years. As a result,Business Environment■ Broad-based fan support is a competitive asset

Sports Business

operating revenue rose, but due to increased production costs
and other factors, operating income was flat compared to theprevious fiscal year.
*1 Billboard-related business: Billboard-licensed music business that includes
Billboard Live Tokyo (Roppongi) and Billboard Live Osaka (Umeda)･T he Hanshin Tigers baseball team and Koshien Stadium enjoy
broad recognition not only in the Kansai region but acrossJapan. The support we enjoy from Tigers and Koshien fans is aunique competitive asset that others can’t match.

Total attendance at Hanshin Tigers home games(Thousands of people)
3,500
3,000
2,500

Stage Business･ The Takarazuka Revue boasts over a century of history, and

37

2,911

2015

2016

3,035

2,899

1,500
1,000

women, it continues to appeal to many fans and make major

500

Hankyu Hanshin Holdings Integrated Report 2019

2,878

2,000

as a globally unique theatrical company composed entirely ofcontributions toward enhancing our corporate value.

2,690

0

2014

2017

2018

(CY)

Overview of Our Medium-Term Management Plan

Fiscal 2020 Outlook■ Actively promoting measures to increase fan base■ O perating revenue and income is projected to beslightly lower compared to the previous fiscal year･ In our sports business, we are committed to making the Hanshin
facilities and services offered at Koshien Stadium.
･ In the stage business, we will continue to combine production
and marketing to provide a steady stream of high-quality
performances at the Takarazuka Revue, which boasts more thana century of history.
･ While striving to maximize the brand value of both businesses,
we will actively promote strategies to cultivate new fans as weseek to maintain and improve profit levels.

2･ In our sports business, we anticipate that the Hanshin Tigers
will attract roughly the same number of fans as in fiscal 2018,

Enhancing Our Corporate Value

Tigers a team that remains competitive while enhancing thea favorable year for the team, and we assume that profits willremain stable.
･ In the stage business, we are likely to experience a decline fromthe rather strong performances posted in previous years witha concomitant decrease in sales of related products. Thus, we
expect that profits will decrease from the level we achieved infiscal 2019.
･ As a result, revenues from operations in our Entertainment
Business in fiscal 2020 is expected to decrease by ¥1.4 billion,to ¥73.1 billion, year-on-year, while operating profit is forecast
to decline by ¥0.2 billion, to ¥13.2 billion.

©Takarazuka Revue Company
Hankyu Hanshin Holdings Integrated Report 201938

Fiscal 2019
Breakdown of revenues from operations

Enhancing Our Corporate Value

Information andCommunication Technology

Contributing to the development of society throughinformation and communications technology.

Other

HotelsInternational
Transportation
TravelInformation andCommunication
Technology

Urban Transportation¥ 791.4 billion(YoY +4.1%)

Real Estate

6.4% Entertainment

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount (includingintersegment transactions) of each segment.

Revenues from operations

Operating income margin (right axis)

Takashi Mizobuchi(¥ billion)（ %）Managing Director
Hanshin Electric Railway
Co., Ltd.

80

25

60
40

53.5
9.9

58.7

15

9.0

20
0

10
5

2019

2020
(Est.)0(FY)

Basic Policies

Fiscal 2019 Review of Operations❶ Grow income continuously in the information services
business by increasing income in target growth markets,
developing businesses outside the Group with a focus
on the Kanto and Chubu areas, and catering to new IT
markets■O perating revenue and income expanded due toan increase in projects for our information services
business, and an increase in the number of consolidated
subsidiaries❷ Achieve stable income in the broadcast andcommunications business by expanding and improving
regionally based products and services, acquiring
customers mainly through communications services,and retaining customers through the introduction anddevelopment of lifestyle services❸ Expand our safety and education business further
in response to programming education becoming acompulsory school subject, and increasing needs forpeace of mind and safety

Business Environment■ Technological innovation sparks market expansion･ The market for system solutions and Internet-based sales, etc.,

In our information services business, we saw more orders forrailway car security camera systems and other equipment. Cable
TV companies also saw steady subscriber growth, and along withsuch other factors as an increase in the number of consolidated
subsidiaries, operating revenue and income both increased.

Overview of Our Medium-Term Management Plan
■ We will maximally leverage our accumulated strengths
and uniqueness, and focus on promising growth areas･ In our information services business, we fully leverage our wellhoned multi-vendor solutions*1 and one-stop services*2. By
maximizing these and other advantages, we will accelerate ouris expanding against a background of huge advances in informa-progression and market share growth in promising growthtion and communications (ICT) technology, and our information

areas including building management, transportation, theservices business is benefitting from steady growth in systems

Internet, and medical services. In addition, we will leverage ourdevelopment commissions, e-commerce site construction andsuccesses to date in the Kansai region to expand into the Kanto

maintenance, and related areas, despite increasingly heated

and Chubu areas. We will apply such advanced technologies ascompetition. Going forward, we anticipate continued steadyAI and IoT*3 to promote new businesses.

market growth.

･ In our broadcast and communications business, we will aim for･ As the number of Internet users rises, our broadcast and com-stable growth and increased income, for example by promoting

munications business will expand its CATV services, centering

new responses to innovation, acquiring customers mainly

on Internet services. In addition, we see further opportunities as

through communications services, and retaining customers

telecommunications technology progresses and the number ofthrough the introduction and development of lifestyle services.

data centers increases.

In addition, we will undertake to grow the overall scale of our･ We anticipate that the market for our safety and educationelectronic communications construction business, and expand

business will continue to expand, in part due to increasing de-our stock businesses, including optical fiber leasing and regional

mand from guardians who want to confirm child safety throughbroadband wireless access (BWA*4) businesses, growing themmonitoring services. Another factor driving this expansion isprogramming education, which will become a compulsory subject in elementary schools starting in fiscal 2021.

39

20

Hankyu Hanshin Holdings Integrated Report 2019

into mainstay income sources.
･ In our safety and education business, we will reinforce sales
activities for our Mimamorume service in the Tokyo Metropolitan

area. In addition, we will expand the scope of the business bylarge-scale orders for transportation-related systems andextendingTokyobusiness expansion centering on promising growth categories.

In addition, we will undertake to increase the number ofwith business scale, with higher prices and personnel expenses.

theservicebeyondtheKansaiandMetropolitan areas.
ProgLabfranchises

At the same time, we anticipate that expenses will grow alongandexpandthecurriculum

beyondprogramming.

･ In our broadcast and communications business, we will offer

2

new, high-quality services, including 4K and 8K broadcasting

Enhancing Our Corporate Value

services via Fiber to the Home (FTTH *5) and higher-speed
Internet services. We anticipate that these efforts will expand*1 The capacity to package products from a wide range of vendors andbuild highly efficient systems*2 A unified service from system configuration to operation, monitoring,and maintenance*3 Networked sensors and devices embedded in a variety of everyday
objects and people, with the ability to use the resulting data to create
new value*4 2.5 GHz-band (2,575 to 2,595 MHz) wireless service aimed at eliminating
the digital divide and contributing to enhanced public welfare

Fiscal 2020 Outlook■ Higher operating revenue is expected, thanks to large
orders for our information services businessour user base and further anchor our existing clients, resulting in
steady income expansion.
･ In our safety and education business, we anticipate steady
growth through the expansion of existing services such as
Mimamorume.
･ A s a result, we are projecting an increase in fiscal 2020
revenues from operation in our Information and Communications
Business of ¥5.2 billion, to ¥58.7 billion, and operating incomeof ¥5.3 billion, equal to the previous fiscal year.

*5 Extension of fiber optic data transmission cables to residences, enablinghigh-speed data communications services.

･ In our information services business, we are projecting
increased revenues from operations due to such factors as

Bay communications (Cable TV store)

Mimamorume (School route email notification service)

Hankyu Hanshin Holdings Integrated Report 201940

Fiscal 2019
Breakdown of revenues from operations

Enhancing Our Corporate Value

Other

HotelsTravelInternational
Transportation

Creating travel itineraries that reflect
customers' desires.

Information andCommunication
Technology

TravelUrban Transportation¥ 791.4 billion

4.2%(YoY +4.1%)

Real EstateEntertainment

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount (includingintersegment transactions) of each segment.

Revenues from operations

Seiji Matsuda

Operating income margin (right axis)（ %）(¥ billion)

President andRepresentative Director,
Hankyu Travel International
Co., Ltd.

40
30

30.5

29.9

36.9

35.5

34.0
6.0

6

5.0

5.1

20

4

10
0

8

2016

2

2.1

2.2

2017

2018

2019

2020
(Est.)0(FY)･ Meanwhile, an increasing number of unmarried individuals,

Basic Policies

heightened demand from inbound tourists, and other societal
changes are transforming travel requirements. We are therefore❶ Strengthen competitiveness of travel packages

making efforts to restructure our business without being boundStrengthen areas outside Europe/Strengthen specialized products/
Expand customer base among new demographics/Revise cost
structure for advertising expenses, etc.

by convention. Specifically, we are expanding our range oftravel packages for individuals and enhancing our capability toaccommodate inbound tourists.

❷ Establish a second pillar

Strengthen initiatives for non-Japanese tourists/Expand group andbusiness travel services and create stable source of revenues

Fiscal 2019 Review of Operations
Business Environment■ We must respond to new travel needs arising fromthe changing times･R ecent geopolitical instability, frequent natural disasters,■ Operating income rose, due in part to the popularityof new European travel packages as well as steadyincreases in Asian travel demand
While domestic tourism was affected by natural disasters during
the term, we worked to achieve recovery with the planning anddeterioration in the purchasing environment for airline tickets

sale of products utilizing Recovery Discounts. In addition, travel

and the like accompanying the increase in foreign visitors to

demand was healthy, particularly to Europe and Asia. Thanks toJapan, and other factors have had a significant effect on thethese and other factors, revenues from operations increased bybusiness environment.

¥1,506 million (4.4%) year-on-year, to ¥35,528 million. However,･ In addition, with the emergence of online travel agents, weoperating income decreased by ¥291 million (14.2%) to ¥1,764

anticipate increased changes in travel industry markets as well

million, due partly to an increase in advertising, promotion andas more intense competition.

other expenses.

■ Travel billings ranked
Total travel billings (Fiscal 2019)
Rank

1

2

3
4
5

6

7
8
9

10

Company name
JTB
HIS
KNT-CT Holdings
Nippon Travel Agency
Hankyu Travel International
JALPAKANA Sales
Tobu Top Tours
Evolable Asia
JR TOKAI TOURS

Overseas travel billings (Fiscal 2019)

Domestic travel billings (Fiscal 2019)¥ billion

Rank

5,934

1

¥ billion

Rank

16,932

1

4,954

3

5,524
4,498

3,699
1,907
1,807
1,353
1,174
970

2
4

5
6

7
8
9

10

Company name
JTB
HIS
Hankyu Travel International
KNT-CT Holdings
Nippon Travel Agency
JALPAK
Evolable Asia
Nissin Travel Service
M.O.Tourist
NOE

4,438

2,298
1,632
1,269
525
524
490
386
332

2

3
4
5
6

7

8
9

10

Company name
JTB
KNT-CT Holdings
Nippon Travel Agency
ANA Sales
JALPAK
Hankyu Travel International
Tobu Top Tours
JR TOKAI TOURS
Meitetsu World Travel
Evolable Asia

Source: Japan Tourism Agency Bulletin,“Business Volume for Major Travel Agents (April 2018 to March 2019)”
Note: 1. Billings are rounded down to the nearest ¥100 million.
2. The total of Hankyu Travel International Co., Ltd., Hankyu Hanshin Business Travel Co., Ltd., and Hanshin Travel International Co., Ltd.

41

Hankyu Hanshin Holdings Integrated Report 2019¥ billion

10,073
3,083
2,781
1,573
1,381

1,366
952
935
740
646

Overview of Our Medium-Term Management Plan

strengthen our use of information and communications
technology (ICT); and bolster our presence in the Tokyo
Metropolitan area.

■ S trengthening the competitiveness of our travel
packages and establishing a second pillar･ Through our efforts to reinforce the competitiveness of our･ The basic policy of our travel business is to become an enterprise

other measures, we aim to transform our business by capturing

customers’desires. Under the policy, we established the three2

a stable and consistent level of profitability even in the face ofEnhancing Our Corporate Value

needed by society by creating travel itineraries that reflectgroup travel packages, establish a second pillar, and implement

such external factors as terrorism and natural disasters.

years from fiscal 2018 to 2020 as a period of structural reform,
during which we will boost the competitiveness of our travel
packages and establish a second business pillar.

(1) Boosting the competitiveness of our travel packages･ We will bolster non-European travel while maintaining our

Fiscal 2020 Outlook■ H igher revenue anticipated due to stronger travel
demand to non-European destinations

strengths in Europe-bound travel. Specifically, to cope with the･ In fiscal 2020, we anticipate that due to recovery from theshortage of airline seats and the steep rise in prices for travel tonatural disasters of the previous year, further strengthening of

Taiwan, we will secure the needed seats through bulk buying.

demand for European travel, and increases in demand for travel

At the same time, we are reinforcing our encouragement forto other destinations, revenues from operations will increase.

efforts to create new travel packages in Vietnam and Cambodia.

Nevertheless, investments in structural reform are projected to

In addition, in our domestic bus tour business we will introduce

maintain operating income at roughly the same level as during

original exclusive luxury buses and strengthen our offerings ofthe previous fiscal year.

day-trip bus tours in the Tokyo Metropolitan area by increasing
the number of dedicated buses.
･ We will work to strengthen our specialized travel packages,･ As a result of these efforts, in our Travel Business we expect¥36.9 billion in revenues from operations in fiscal 2020, which
represents an increase of ¥1.4 billion compared with thesuch as cruises and hiking tours. Moreover, in addition to using

preceding fiscal year, while operating income is expected to be

television shopping channels and commercials to expand our¥1.9 billion, an increase of ¥0.1 billion.

customer base, we will seek to enhance travel packages forindividuals through the launch of TABICOORDE, a new booking
website intended for personalized travel planning.

(2) Establishing a second pillar･ As it expands, we will strengthen our efforts to exploit inbounddemand.
･ Expanding the scale of our group and business travel, andestablishing it as a stable source of income, is an important
challenge. Consequently, we will buttress our presence in
the Tokyo Metropolitan area and augment our sales force.
In addition, to capture more business travel demand, we will
invest in personnel, including cultivating international personnel;

Hankyu Hanshin Holdings Integrated Report 201942

Enhancing Our Corporate Value

Fiscal 2019
Breakdown of revenues from operations

International Transportation

International
Transportation

As a comprehensive distribution enterprise, we areaiming to become an Innovative Logistics Provider
capable of offering creative value-added services
to customers on a global basis.

Other

Hotels10.8%

Urban Transportation¥ 791.4 billion

TravelInformation andCommunication
Technology(YoY +4.1%)

Real EstateEntertainment

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount (includingintersegment transactions) of each segment.

Revenues from operations

Operating income margin (right axis)（ %）(¥ billion)

Seisaku Okafuji

Kazuhiro Tanimura

Chairman & Chief
Executive Officer,
Hankyu Hanshin
Express Co., Ltd.

President & Chief
Operating Officer,
Hankyu Hanshin
Express Co., Ltd.

100
80

76.1

Strengthen air freight, sea freight, and logistics services businesses
globally/Increase investment in growing markets❷ Develop and implement optimal measures for profit
growthStrengthen sales capabilities globally/Maximize group synergy❸ Ensure robust global governance

10
8

71.7

6

40

0

❶ Reform to establish a balanced business portfolio

88.7

60

3.3

20

Basic Policies

83.7

90.0

2.3
2016

2.7

2.2
2017

2018

2019

4

2.0

2020
(Est.)

2
0(FY)

Overview of Our Medium-Term Management Plan
■ Moving forward with reform to establish a balanced
business portfolio･ We will continue efforts to ensure sustainable growth in our air
freight business, while further expanding our sea freight businessand logistics services business.
･M oreover, we will continue to enlarge our global network andexpand our handling of incoming and outgoing internationalcargo by developing our business mainly in Asia, and seek a wellbalanced business portfolio with varying freight modes in multiple

Business Environment■ Global logistics is a long-term growth market･ Global population is projected to trend upward, while manufacturing and consumption locations will continue to disperse anddiversify. The role of global forwarders providing mainly procurement rather than pure shipping services is expected to ex-regions.
･W e will offer customers more convenient logistics services at
our Narita Global Logistics Center, which opened in 2019, by
utilizing the cross docking terminal. In addition, we will work tostrengthen our warehouse logistics business.
･T hrough the planning period, we will actively promote these
efforts along with plans to secure increased profitability in fiscal
2022.

pand, and the importance of Japanese forwarders in providing
high-quality, high value-added integrated logistics services will
increase.
･ In particular, while logistics services demand is anticipated tolevel off in Japan, North America, and Europe, Asian demand ispoised to grow.

Fiscal 2019 Review of Operations■ Our air freight business enjoyed steady demand, while
our sea freight and logistics service businesses also
grew
Demand for our air freight services grew steadily in Japan. Thanks
to this and other factors, the revenues from operations increased¥6,283 million (7.5%) to ¥89,990 million. However, operating
income fell by ¥384 million (13.9%) compared to the previous
fiscal year, to ¥2,392 million, due to the loss of special demandin East Asia and EMEA region from the previous fiscal year.

43

Hankyu Hanshin Holdings Integrated Report 2019

Narita Global Logistics Center (photo provided by Seino Transportation Co., Ltd.)Fiscal 2020 Outlook■ Working to increase revenues for our sea freight andlogistics businesses

2･ During fiscal 2020, we will pursue efforts in line with the Basic

Enhancing Our Corporate Value

Policy and work to increase the volume of business for our sea
freight and logistics businesses. However, we anticipate that inview of the projected influence of global economic trends, anduncertainty regarding short-term freight volume, revenue andincome is likely to fall below that recorded during the previous
fiscal year.
･ As a result, we anticipate revenues from operations for fiscal
2020 in our International Transportation Business will be ¥88.7
billion, down ¥1.3 billion year-on-year, while operating income
will decrease ¥0.6 billion year-on-year to ¥1.8 billion.

■Expanding our global network and enhancing our logistics business● Expanding our business in America

Alongside our opening of a new base in Miami, the gateway toSouth America, we opened and expanded warehouses in New
Jersey, Dallas, and other areas, underpinning our logistics business.

Rotterdam
Brussels

Amsterdam

LondonParis
Dusseldorf
PragueFrankfurt

Moscow

Beijing
Guangzhou

Milan

Hong Kong
IncheonBucheonHai Phong

Delhi

Ahmadabad

KampalaEntebbeNairobiMombasa

Bawal

Seoul

Busan

Hanoi
Bangkok

ShanghaiTaipei
Kaohsiung

Dubai
Chiang Mai
Mumbai
DanangManilaPune
YangonChennaiBangalore
Coimbatore
Butterworth
JakartaPenangJohannesburg
DurbanSingapore

Kuala Lumpur

Taichung
Cebu
Laem Chabang
Binh Duong
Ho Chi Minh
Phnom Penh

Pasir Gudang

SeattleSan Francisco
Los Angeles

DetroitToronto
New York
BostonCincinnati

Chicago
McAllenMonterrey
Bajio

Miami

Atlanta
DallasNumber of locations:51 in Japan, 135 outside Japan(as of August 1, 2019)● Local subsidiary● Branch/Oﬃce● Representative oﬃce

Mexico City

Sao Paulo

Port Klang
Johor Bahru

Cape Town● Strengthening business development in Africa● Opening new bases and strengthening our logistics business in Asia

In April 2018, we acquired Intraspeed South Africa (Pty) Ltd.,In addition to new warehouses in Indonesia (2016) and Singapore

a freight forwarder, as a subsidiary; we also acquired Intraspeedʼs two companies in Kenya and Uganda as subsidiaries.
We remain committed to ongoing development in Africa.

(2017), we have opened new warehouses in India in Chennai,
Ahmadabad, and Delhi to further enhance our logistics structure.
We are also opening bases in Coimbatore in India and Da Nang in
Vietnam as we work to strengthen our global network.

Hankyu Hanshin Holdings Integrated Report 201944

Fiscal 2019
Breakdown of revenues from operations

Enhancing Our Corporate Value

HotelsHotels

Other

7.8%

International
Transportation

Japan’
s leading hotel chain operator.

Urban Transportation¥ 791.4 billion

TravelInformation andCommunication
Technologys(YoY +4.1%)

Real EstateEntertainment

Note: Figures for percentage of revenues from operations and operating
income are calculated based on the simple aggregate amount (includingintersegment transactions) of each segment.

Yoshihiro Nakagawa

Kazuhide Fujimoto

Chairman and
Representative Director,
Hankyu Hanshin Hotels
Co., Ltd.

President andRepresentative Director,
Hankyu Hanshin Hotels
Co., Ltd.

Revenues from operations

Operating income margin (right axis)（ %）(¥ billion)
80

10

68.0
60

65.6

67.2

64.9

68.5

8
6

40

4.8
20
0

2016

4.3

2017

4

3.3

2018

1.9

2019

2.5

2020
(Est.)

2
0(FY)

influence of natural disasters caused a decline in occupancy andBasic Policies

average daily rates. In addition, our management contract for❶ Improve profitability of existing hotels

and income.

Maintain and enhance product value through appropriate
investment❷ Expand network by opening new hotels

Implement plan to open new hotels, which mainly comprise guest
rooms for overnight stays❸ Establish our market leadership in the Umeda area

Clarify our long-term management policy for our most importantfoothold, the Umeda area

Rokkosan Hotel expired in December 2017, lowering revenue
As a result, revenues from operations decreased by ¥2,324
million (3.5%) year-on-year to ¥64,923 million, while operating
income declined by ¥1,001 million (45.2%), to ¥1,214 million.
Natural disasters contributed to a ¥1,000 million loss inrevenues from operations and a ¥700 million loss in operating
income.

Business Environment

Overview of Our Medium-Term Management Plan

■ As hotels continue to open, competition to acquire
guests heats up■ Opening new hotels in carefully selected locations
offering the greatest convenience･ In the domestic hotel market competition for guests has been･ In our Hotels Business this year, we opened two hotels thatfierce due to the opening of numerous new hotels and the use

mainly comprise guest rooms for overnight stays: in April, remmof online travel agents. Because of the natural disasters ofTokyo Kyobashi, and in May, Hotel Hanshin Annex Osaka.

FY2019 (and the ensuing closure of Kansai Airport), the growth･ In November of this year, we are scheduled to open one of theof inbound tourism has slowed, and we believe this will impact

largest hotels (about 1,000 rooms) in the Umeda area, Hotelour hotel business.

Hankyu RESPIRE OSAKA, in Yodobashi Umeda Tower, and in･ At the same time, numerous international events are scheduled
in major cities including Osaka over the medium to long term.

December, we are set to open remm plus Ginza, the first of our
new brand of remm hotels.

This points to an increase in inbound tourism, and we therefore･ In the spring of 2021, we are scheduled to open a hotel

anticipate an increase in demand for hotel accommodations.

in Sannomiya, Kobe, that will offer mainly guest rooms forovernight stays.
･ Going forward, we intend to expand revenues mainly in the

Fiscal 2019 Review of Operations■ L ower operating revenue and income due to the
influence of natural disasters
In the Tokyo Metropolitan area, hotel occupancy rates andaverage daily rates were high, thanks to guest room renovation at
the Dai-ichi Hotel Tokyo and the March 2017 opening of remm
Roppongi. At the same time, in the Kinki area, factors such as the45

Hankyu Hanshin Holdings Integrated Report 2019accommodation sector by capturing the steady growth indemand from visitors to Japan. We will accomplish this by
opening new hotels focused on accommodations in carefully
selected locations offering the greatest convenience.
･ In addition, we are targeting revenue growth in fiscal 2022
through stringent revenue management and facility renewal
while improving the profitability of existing hotels.

Non-Japanese guests as a percentage of overnight-stay guests

Fiscal 2020 Outlook■ Higher revenue and income anticipated due to suchfactors as new hotel openings･R evenue from operations in our hotel business is projected to
expect that recovery from the natural disasters of fiscal 2019, as
well as other factors, will drive revenue and income.
･ At the same time, we expect expenses to increase due toopening costs for the new hotels, as well as higher depreciation
charges.

50
40

31.4

30
20
10

･ A s a result of these efforts, we forecast revenues fromoperations in fiscal 2020 to reach ¥68.5 billion, representing a

Kansai area0

year-on-year increase of ¥3.6 billion, while operating income is

38.6

38.1

36.9

37.0

45.6

42.3

2

39.9

40.6

Enhancing Our Corporate Value

grow, as four new hotels open their doors to guests. We alsoTokyo metropolitan area

（%）

22.7
25.0

14.9

17.3

12.3

2013 2014 2015 2016 2017 2018 2019

(FY)

expected to increase by ¥0.5 billion, to ¥1.7 billion.
Visitors to Japan
Nationwide

Kansai area

Percentage visiting Kansai area (right axis)(Millions of people)
3,000

2,869

2,500
2,000
1,500
Guestroom at remm plus Ginza

Tokyo metropolitan area ADR

Kansai area ADR

Tokyo metropolitan area occupancy rate

0

Kansai area occupancy rate

（ %）

(Yen)
20,000

93.9

94.3

95.4

16,000

90.5

90.8

88.7

12,00014,61916,66514,140

8,000

90.9
90.9

15,44916,09813,54913,406

4,000
0

500

100
80

1,974

789

1,024

39.8

1,208

1,241

479
2014

（ %）
60
50

42.1

40.0

1,341

1,000

Average daily rates (ADR) and occupancy rates of Hankyu Hanshin
Hotels in the Tokyo metropolitan area and Kansai area

17,221

35.7

2,404
42.6

3,119

40
30
20
10

2015

2016

2017

2018

0

(CY)

Source:“Trend in Visitor Arrivals to Japan and Japanese Overseas
Travelers,” Japan National Tourism Organization (JNTO),“Consumption Trend Survey for Foreigners Visiting Japan,”Japan Tourism Agency

60
40
20

2016

2017

2018

2019

0

(FY)

Hankyu Hanshin Holdings Integrated Report 201946

The Foundations of Enhanced Corporate Value

Directors and Audit & Supervisory Board Members
As of June 13, 2019

Directors

Kazuo Sumi

Takehiro Sugiyama

Masao Shin

Chairman and Representative Director,

President and Representative Director

Executive Vice President and Representative Director

1982 Joined Hankyu Corporation

1981 Joined Hanshin Electric Railway

1973 Joined Hankyu Corporation2005 Director, Hankyu Corporation

2006 Director, Hanshin Electric Railway

2000 Director, Hankyu Corporation

2006 Director, Hankyu Holdings

2006 Director, Hankyu Hanshin Holdings

2002 Managing Director, Hankyu Corporation

2006 Director, Hankyu Hanshin Holdings

2008 Managing Director, Hanshin Electric Railway

2003 President, Hankyu Corporation2007 Managing Director, Hankyu Corporation2014 Senior Managing Director, Hanshin Electric Railway

2005 President, Hankyu Holdings

2016 Executive Vice President, Hankyu Corporation

2016 Director, Hankyu Corporation (Current position)

2006 President, Hankyu Hanshin Holdings

2016 Executive Vice President, Hankyu Hanshin Holdings

2017 President, Hanshin Electric Railway (Current position)2014 Chairman, Hankyu Corporation (Current position)2016 Director, Hanshin Electric Railway (Current position)2017 Executive Vice President, Hankyu Hanshin Holdings

2017 Chairman, Hankyu Hanshin Holdings (Current position)2016 Director, Hankyu Travel International (Current position)

Group Chief Executive Oﬃcer

2016 Director, Hankyu Hanshin Express (Current position)2017 President, Hankyu Corporation (Current position)(Current position)2018 Director, Hankyu Hanshin Properties Corporation(Current position)2017 President, Hankyu Hanshin Holdings (Current position)2018 Director, Hankyu Hanshin Properties Corporation (Current position)
2019 Director, Hankyu Hanshin Hotels Co., Ltd. (Current position)

Takaoki Fujiwara

Noriyuki Inoue

Shosuke Mori

Representative Director

Director (External*1)

Director (External*1)

1975 Joined Hanshin Electric Railway

1957 Joined Daikin Industries

1963 Joined Kansai Electric Power2005 Director, Hanshin Electric Railway

1994 President, Daikin Industries

2005 President, Kansai Electric Power2007 Managing Director, Hanshin Electric Railway

2002 Chairman and CEO, Daikin Industries

2010 Director, Hankyu Hanshin Holdings (Current position)2011 President, Hanshin Electric Railway

2003 Director, Hankyu Corporation2010 Chairman, Kansai Electric Power2011 Director, Hankyu Hanshin Holdings

2005 Director, Hankyu Holdings

2016 Senior Advisor, Kansai Electric Power (Current position)2017 Chairman, Hanshin Electric Railway (Current position)

2006 Director, Hankyu Hanshin Holdings (Current position)2017 Director, Hankyu Hanshin Holdings (Current position)2014 Chairman of Daikin Industries and Chief Global Group Oﬃcer(Current position)

Noriko Endo

Yoshishige Shimatani

Naoya Araki

Director (External*1)

Director (Part-time)

Director (Part-time)

1994 Joined Diamond1975 Joined Toho

1981 Joined Hankyu Department Store

2013 Visiting Researcher, Policy Alternatives Research Institute,2011 President, Toho (Current position)2012 President, Hankyu Hanshin Department Storesthe University of Tokyo
2015 Project Professor, Graduate School of Media andGovernance, Keio University (Current position)
2019 Director, Hankyu Hanshin Holdings (Current position)

47

Hankyu Hanshin Holdings Integrated Report 20192015 Director, Hankyu Hanshin Holdings (Current position)(Current position)2012 Representative Director, H2O Retailing (Current position)2017 Director, Hankyu Hanshin Holdings (Current position)

Audit & Supervisory Board Members

Masayoshi Ishibashi

Koichi Kobayashi

Haruo Sakaguchi

Standing Audit & Supervisory Board Member

Standing Audit & Supervisory Board Member

Audit & Supervisory Board Member (External*2)

1979 Joined Hanshin Electric Railway

1982 Joined Hankyu Corporation

1958 Lawyer (Current position)2013 Standing Audit & Supervisory Board Member, Hanshin Electric2005 Director, Hankyu Holdings

1989 Vice Chairman, Japan Federation of Bar Associations

2006 Director, Hankyu Hanshin Holdings

2006 Audit & Supervisory Board Member, Hankyu Holdings

2013 Director, Hankyu Corporation

2006 Audit & Supervisory Board Member, Hankyu Corporation

Railway (Current position)2013 Standing Audit & Supervisory Board Member, Hankyu Hanshin
Holdings (Current position)2015 Managing Director, Hankyu Corporation
2016 Standing Audit & Supervisory Board Member, Hankyu
Corporation (Current position)2016 Standing Audit & Supervisory Board Member, Hankyu Hanshin
Holdings (Current position)

Michiari Komiyama

Audit & Supervisory Board Member (External*2)

Audit & Supervisory Board Member (External*2)

1986 Professor of Faculty of Commerce, Doshisha University

1971 Prosecutor

1989 Professor of Faculty of Business Administration, Kobe University

1999 Prosecutor, Supreme Public Prosecutor s Oﬃce

1999 Professor of Faculty of Business Administration, Graduate

1999 Chief Prosecutor, Saga District Public Prosecutor s Oﬃce

School of Kobe University

2003 Notary, Osaka Legal Aﬀairs Bureau

2010 Audit & Supervisory Board Member, Hankyu Hanshin Holdings

2013 Lawyer (Current position)2010 Audit & Supervisory Board Member, Hanshin Electric Railway(Current position)2016 Director, Distribution Science Research Center (Current position)(Current position)3

2002 Chief Prosecutor, Kobe District Public Prosecutor s Oﬃce

2008 President of the University of Marketing and Distribution Sciences(Current position)(Current position)2013 Audit & Supervisory Board Member, Hankyu Hanshin Hotels

The Foundations of Enhanced Corporate Value

Junzo Ishii(Current position)
2006 Audit & Supervisory Board Member, Hankyu Hanshin Holdings

2017 Audit & Supervisory Board Member, Hankyu Hanshin Holdings(Current position)2017 Audit & Supervisory Board Member, Hankyu Corporation(Current position)*1 Mr. Noriyuki Inoue, Mr. Shosuke Mori, and Ms. Noriko Endo satisfy the qualiﬁcations of external directors as provided in Article 2, Paragraph 15 of the
Corporate Law.
The Company has submitted notiﬁcations to the stock exchanges on which its shares are listed, naming Mr. Inoue, Mr. Mori, and Ms. Endo as external(independent) directors.
*2 Mr. Haruo Sakaguchi, Mr. Junzo Ishii, and Mr. Michiari Komiyama satisfy the qualiﬁcations of external Audit & Supervisory Board members as provided in
Article 2, Paragraph 16 of the Corporate Law.
The Company has submitted notiﬁcations to the stock exchanges on which its shares are listed, naming Mr. Sakaguchi, Mr. Ishii, and Mr. Komiyama as
external (independent) Audit & Supervisory Board members.

Hankyu Hanshin Holdings Integrated Report 201948

The Foundations of Enhanced Corporate Value

A Conversation with the External Audit & Supervisory Board Members
As a corporate group providing social
infrastructure, the Group should be ready tomeet the social challenges of tomorrow
By bringing their respective specialist expertise to the auditing of the Group’smanagement, external Audit & Supervisory Board members contribute to enhancing
medium- and long-term corporate value. We asked three external Audit & Supervisory
Board members to come together to exchange opinions regarding their role, thecurrent situation and challenges facing the Group’s governance and management
structures, and the future of the Group.

The external Audit & Supervisory Board
member’s mission is to indicate society’spoint of view frankly to management
What do you regard as most importantin your activities as external Audit &Supervisory Board members?

judgments and business execution.
Since my specialty is business administration, I look forward toleveraging my academic experience to provide advice from adifferent perspective from that of executives or legal specialists.
Komiyama

I have been an auditor for the company for just two

years so far. I am making an effort to leverage my knowledge asa legal professional to monitor the company’s legal and regulatorycompliance from a comparatively fresh standpoint.
My task is to monitor the direction of management andindicate frankly anything that seems out of the ordinary. The

The most important aspect of the external Audit &Group comprises around 180 companies, and I have made an

Supervisory Board member’s role is to confirm that the Groupeffort to inquire actively when anything was not clear, and tocompliance structure is fully functioning, and to view its

grasp the situation.

Sakaguchi

management from society’s point of view, to ensure thatmanagement does not lose touch with social norms.
In a large organization, it may become difficult for people toreport their opinions frankly to those who are more senior,including top management. If an improper management decision
is made, indicating that fact frankly to top management is theexternal Audit & Supervisory Board member’s mission. Keeping
this mission front and center is critical.
Ishii

I feel that in recent years, the auditor’s importance isfurther increasing. From my standpoint as an auditor, I hope tohelp the company achieve more appropriate management

49

Hankyu Hanshin Holdings Integrated Report 2019

It ismanagementItis essential
essentialtotoview
view
managethroughsociety’seyes,
toensurement through society s eyes,
that
it doesthat
not it
lose
touch
to
ensuredoes
notwithlosesocial norms.
touchwith social norms.
HaruoSakaguchi
Sakaguchi External Auditor
Haruo
External Audit & Supervisory Board Member

It isis importantessential not
not totosimply
simplypursueimmediateprofit,
proﬁt,
but
pursue immediatebut
to build
build aastablestablemanagement
managementfoundation
throughsustained
sustained
foundation throughlong-term
growth.
long-term growth.
Junzo Ishii
Junzo
Ishii External Auditor

External Audit & Supervisory Board Member

3
The Foundations of Enhanced Corporate Value

continue
I hopehope toto seeseethetheGroupGroup
continue
to preserveand protect
to preserveand protect
naturalnaturalareas
railway
areas along
its alongrailwayitslines,
lines,
while undertaking
to itswhile undertaking
to enhanceenhance
its line-side value.
line-side value.
Michiari Komiyama
Michiari
Komiyama External Auditor
External Audit & Supervisory Board Member

Hankyu Hanshin Holdings Integrated Report 201950

The Foundations of Enhanced Corporate Value

A Conversation with the External Audit & Supervisory Board Members

A structure focusing on the medium
and long term is a distinctive Groupcharacteristic

The importance of weighing businesses
not only in terms of their commercial
viability, but their social benefits

How do you evaluate our governanceand management structures?

Sakaguchi

I believe the Group’s governance structure is

Komiyama

As an auditor, I hope to deepen my understanding

functioning appropriately. While the scope of business isof the Group’s situation, heighten my awareness of issues

extremely broad, I don’t see any concerns under current

affecting it, and pose questions and make indications toconditions.

management in a forthright way.

Komiyama

As a corporate group providing social infrastructure,

Sakaguchi

The Group is endeavoring to contribute to society

I believe the Group’s social mission is being shared firmly acrossin a variety of ways, including its Hankyu Hanshin Dreams andthe organization as a whole. As an auditor, I would say that theCommunities of the Future Project. The Group’s focus is on

current situation is positive, but I intend to fulfill my responsibilities

businesses with deep roots in local communities, such as urban

without relaxing my vigilance.

transportation, and I hope management will continue toIshii

As an enterprise engaged in providing a broad range ofemphasize businesses that are not only commercially viable, butsocialinfrastructure,includingrailways,one

distinctive

characteristic of the Group is its focus on the medium and long

also socially beneficial. This will further enhance the Group’s
corporate value.

term. A symbolic example of this is the lack of hasty management

Ishii

decisions, which one often sees when companies merge to

Meeting of Shareholders, another indication of the Group’sachieve synergy, after the 2006 management integration ofstrong ties to society.

Hankyu Holdings and Hanshin Electric Railway.

Many individual shareholders attended this year’s General

The Group’s business activities are many and varied, as are its

Another notable aspect of the Group is the way its management

brands. These include the Hanshin Tigers and the Takarazuka

prioritizes not only profitability and growth, but also contributions

Revue in the Group’s Entertainment business, its condominium

to local communities, particularly those along its railway lines.

business, which includes the Geo series of apartment buildings,

Corporate management usually targets financial metrics such as

its remm series of hotels in its Hotels business, and more, and its

return on equity (ROE) or return on assets (ROA), but simply

brands have accumulated many fans. I think that actively

reaching those goals is insufficient. In recent years we have seen

leveraging the value of these brands will not only offer new value

more attention paid to environment, society, and governanceto customers, it will heighten Group employee pride in the brands(ESG)

and enhance their enthusiasm for their work.

management,

andefforts

toachieve

Sustainable

Development Goals (SDGs). There is increasing demand for
management that is not only commercially viable, but sociallybeneficial. This is something that the Hankyu Hanshin HoldingsGroup has been focused on from the beginning.
Moreover, I am struck by the high level of awareness ofcorporate ethics within the Group, and I hope this corporate
culture will be maintained resolutely into the future.

51

What challenges do you see for theGroup and for yourselves as external
Audit & Supervisory Board members?

Hankyu Hanshin Holdings Integrated Report 2019

valuesynergywith soHoldings
many other business
The throughHankyuHanshinGroupareas.

major
from itscontinue
2006 management
integration.
The Umeda
toseeeffect
the Group
to preserveand protect
theseshould achieve synergy between its wide
co m p o u n d co m m ercial facilit y n ex t to H an kyu
range of socially important businesses
Nishinomiya - kitaguchi Station in Nishinomiya, Hyogo
and demonstrateitsitsstrengths
Prefecture.
Since it opened
doors in 2008, the facility

1-1 Project,
which
is in
progress, is toa typical
exampleof thisnaturalareas,
while
undertaking
enhance
its line-side

has become popular with an extremely large number oftosociety.
One
cancertainly
say mountains.
that the Groupis seeanGroup’
s railway
lines,
suchas the Rokko
I hope to

Ta ke f o r e x a m p l e H a n k y u N i s h i n o m i y a G a rd e n s , a

What do you regard as the Hankyu
Hanshin Holdings Group’s strengths,
Promoting neighborhood creation while coordinatingand how do you see its future?

customers.

effect. I think the Group’s visibility has been further enhanced

value.

thanks to the management integration of Hankyu Holdings andIshii

The Hankyu Hanshin Holdings Group is developing

Hanshin Electric Railway.

a broad range of businesses that are deeply connected

In addition, there are wonderful, natural areas along theen tGroupe r p r i scontinuee p e o pto
l epreservel o o k t oandt oprotectm e e t theset h e cnaturalh a l l e areas,nges
thewhile undertaking
to willenhancevalue.To meet thoseJapanese
society
faceitsinline-side
the future.

with regional government and residents is something the

expectations,
it willbe essential
to simply
pursueIshii
The Hankyu
HanshinHoldings notGroup
is developingaHankyu Hanshin Holdings Group is uniquely qualiﬁed tobroad range
are deeply
connected
to society.
imme
diate ofp businesses
roﬁt, but thatto builda stable
management

undertake, and I think there is much more that the GroupOne can certainly
say that
the Group
is an enterprisefoundation
throughsustained
long-term
growth.people look

Sakaguchi

I think the Group’s strength is the way its Urban

Transportation and Real Estate businesses create value throughiscapableof soachieving.
synergywithmany other business areas. Take for example

to Theto meetthe challenges
society
face in the
future.
Groupdoes notJapaneseconsideronlywillﬁnancial
metrics
To meet those expectations, it will be essential not to simply

Komiyama
The Hankyu
HanshinHoldings
Group realized
HankyuNishinomiya
Gardens,a compoundcommercial
facilitysuch as ROE and ROA. In recent years, alternative metrics

next
to Hankyu
Nishinomiya-kitaguchi
Stationintegration.
in Nishinomiya,amajor
eﬀect fromits 2006 management
The

including ESG and SDGs have attracted attention, andHyogo Prefecture.
Since
it openedin 2008,
facility
Umeda
1-1 Project, which
is itsin doors
progress, is athet ypicalhas become
popularan theextremely
numberhasofexampleof thiseﬀect.with
I think
Group larges visibility
customers.

b e e n f u r t h e r e n h a n ce d t h a n k s to t h e m a n a ge m e n t

Promoting neighborhood creation while coordinating withintegration of Hankyu H oldings and Hanshin Elec tric

regional government and residents is something the Hankyu

Railway.
Hanshin Holdings Group is uniquely qualified to undertake, and I
In addition,
there
arethatwonderful,natural
areas
the
think
there is much
more
the Groupis capableof along
achieving.

Groups railway
such
as the Holdings
Rokko mountains.
I hopeKomiyama
Thelines,
HankyuHanshinGroup realizedapursue immediate profit, but to build a stable managementfoundation through sustained long-term growth.

the Group has emphasized these metrics from early on.

The Group does not consider only financial metrics such as

Asthoughbalancingviability
and social
ROEsuch,and ROA.
In recentyears,commercial
alternative metrics
includingESG

beneﬁts
is certainly
not simple,
I hopesee theGroup
and SDGs
have attracted
attention,
andto theGroup
hasemphasized
metrics
from early
on.andAsworksuch,actively
thoughmaintainits these
uniquecapabilities
ﬁrmly,

balancingcommercial
viability
and social
is certainlytoa d d ress
su ch s ocial challen gesbenefits
a s n eighb o rh o notodsimple, I hope to see the Group maintain its unique capabilities
creation.

firmly, and work actively to address such social challenges asneighborhood creation.

3
The Foundations of Enhanced Corporate Value

Hankyu Hanshin Holdings Integrated Report 201952

The Foundations of Enhanced Corporate Value

Sustainable Business Management
Together with our stakeholders, we create communities
that people will truly want to live in.
Our Sustainable Business Management Philosophy
At the Hankyu Hanshin Holdings Group, our basic philosophy is to provide safety andcomfort, dreams and excitement. In this way, we work with our stakeholders to create
communities that people will truly want to live in.

Harnessing Our Long-Standing Strengths for Better ESG
For more than 100 years since the early 20th century, we have used our core business of
Urban Transportation as a launchpad for a broad range of new endeavors in ﬁelds asdiverse as real estate and entertainment. Through these, we have always sought to create
prosperous communities that make people happy by oﬀering innovative lifestyle options
and solutions to real communit y needs. Indeed, our early determination to turncommunity needs into customer satisfaction anticipated the ESG (environment, society,and corporate governance) demands that companies face today.
Moving forward, we will leverage our many business activities to create sustainablecommunities with ever-smaller impact on the environment, and will continue to support
our communities in a combined eﬀor t to promote good citizenship. We are al so
determined to pursue diversity, and to encourage healthy lifestyles among our workforce
and their families. In other words, we consider good corporate governance the bedrock ofour business and key to our eﬀorts to achieve sustainable, high levels of corporate value.

Sustainable Development Goals
Sustainable Development Goals are an important challenge facing global society today,
and our sustainable business management demands we work hard to help achieve them.
SDGs are a set of 17 goals and 169 targets to achieve by the year 2030 relating to
problems such as poverty, the environment, education, welfare, and community building;they were adopted at the UN summit in 2015, and apply to the whole world.
At the Hankyu Hanshin Holdings Group, we believe a concerted eﬀort to help achieve
the SDGs is another way in which we can make our customers happy. To that end, we
have identiﬁed seven of the SDGs 17 goals where our wide variety of business activities
can make a diﬀerence.
11. Sustainable cities and communities
4. Quality education
7. Aﬀordable and clean energy
9. Industry, innovation, and infrastructure
12. Responsible consumption andproduction
13. Climate action
17. Partnerships for the goals

53

Hankyu Hanshin Holdings Integrated Report 2019

Enhancing Management Transparency andFulfilling Our Social Responsibility■ Corporate Governance System

Corporate Governance

4-1

Principle

4-10

Hankyu Hanshin Holdings, Inc. (the Company), is a pure holding
X-X

company, and the conduct of operations is basically the

Figures in boxes correspond to the principles of Japan’s Corporate
Governance Code.

responsibility of Group member companies. Hankyu Hanshin
Holdings' principal role is supervision and oversight of the entire■ Basic Approach to Corporate GovernancePrinciple

2-1

2-2

Group—meaning that these functions are separate from the

3-1

conduct of Group businesses.

Based on the Group mission and values set out in its GroupThrough this system, the Company realizes supervision andManagement Philosophy, the Company aims to remain aoversight and enhances the overall governance of the Group by:company that customers and other stakeholders trust. To this■ Making decisions regarding the Company and the Group's

end, the Company is strengthening and increasing corporate

management policies and strategies,

governance by heightening the transparency and soundness of■ Deciding on the approval of the medium-term or annual

business management, complying with relevant laws andmanagement plans of all core businesses,

regulations, and ensuring appropriate, timely disclosure.

■ Requiring timely submission of progress reports by operating

Reflecting this basic approach, the Company has establishedcompanies, andthe policies below with a view to adhering to the principles ofcorporate

governance,sustaining

growth,and■ Having Group companies obtain approval before taking

enhancingactions that affect the Group's management significantly (forcorporate value over the medium to long term.

example, investments above a certain threshold).

■ We shall respect shareholders' rights and ensure equality.

With regard to the above matters, the Board of Directors, which■ We shall take into consideration the interests of shareholders

includes external directors, makes approval decisions andand other stakeholders and cooperate with them appropriately.

receives reports. Moreover, to undertake preliminary reviews the■ We shall disclose corporate information appropriately andCompany has established a Group Management Committee,

ensure transparency.

which includes representatives of the Group's core businesses.

■ We shall ensure that the Board of Directors performs its roles

Further, to ensure transparency in the appointment andand duties appropriately and ensure advanced oversight anddismissal of the Company's directors and to facilitate coordination

decision making.

among external directors, the Group has established the■ We shall have constructive dialogue with shareholders with a3

Corporate Governance Committee, which comprises standing

view to sustaining our growth and enhancing corporate value
over the medium to long term.

external

Audit

independent&ofSupervisory
the

Board

Company,

andmembers
the

who

are

president

andThe Foundations of Enhanced Corporate Value

Audit & Supervisory Board members, and external directors andrepresentative director. Moreover, to ensure that concrete

Corporate Governance System
General Meeting of Shareholders
Appointment / Dismissal

Appointment / Dismissal

Board of Directors
Part-time: 5

Full-time: 4

Consultation(nomination,compensation)

Audit

Call / Report on
execution situation

Corporate Governance Committee
Compensation Committee

Selection / Dismissal /Supervision

Chairman & President

ReportReportCall

Group Management Committee
Participate

Audit & Supervisory Board
Standing Audit & Supervisory
Board Members: 2(including 3
External Directors)

Accounting audit

Group Auditing Division

Participate(as observer)

ReportExternal Audit & Supervisory
Board Members: 3

Cooperation

Appointment / Dismissal

Cooperation

Accounting Auditors(CPAs)

Staﬀ of Audit &Supervisory Board
Members

Audit

Group Companies
Directors (representative of each core business)

Hankyu Hanshin Holdings Integrated Report 201954

The Foundations of Enhanced Corporate Valuedecisions regarding the amount of director compensation, which

At the same time, the Audit & Supervisory Board members

are the responsibility of the Board of Directors, are made based

receive regular status reports from the accounting auditors

on objective and transparent procedures, the Company has(CPAs) and take part in on-site audits by the accounting auditors

established a Compensation Committee comprising the chairman

including those of Group companies.

(or the president, in the chairman's absence or unavailability) andexternal directors and external Audit & Supervisory Board(3) Corporate Governance Committee

members who are independent of the Company.

To ensure transparency in the appointment and dismissal of

In addition, as part of efforts to strengthen its overall

directors and coordination between external directors, acapabilities, the Company is strengthening the governance ofCorporate Governance Committee has been established, madefunding.

theup of four representative directors, three external directors, twoCompany and distributing funds to operating companies withinstanding Audit & Supervisory Board members, and three external

the limits set out in business plans that the Company has

Audit & Supervisory Board members.

Measuresincludecentralizing

fundingunder

In addition to selecting director candidates and providing

approved.

advice relating to the dismissal of directors, the Committee
serves as a context to provide information in such areas as the■ Management Organization

Group's business, finances, and organization to external directors.

(1) Board of Directors and Directors
Principle

4-1

4-2

4-6

4-11

The Board of Directors enhances governance of the entire Groupand oversight of respective companies by deciding on matterspursuant to statutory laws and regulations and the articles ofincorporation based on regulations and standards that the Boardof Directors has established, by deciding on the approval ofmanagement policies and strategies of the Company and theGroup as well as the medium-term and annual management
plans of core businesses, and by requiring timely reporting fromoperatingcompanies

about

Group

companies'

significant

investments.
To ensure the diversity of the Board of Directors and strengthen
its supervisory functions, it was agreed at the General Meeting of
Shareholders held in June 2019 to increase the number ofexternal directors from two to three, including one female
director, ensuring one-third of directors on the nine-member
board are directors independent of the Company.

4-4

The Company has adopted the Audit & Supervisory Board system
to ensure adequate management oversight. We have five Audit &Supervisory

Board

members,whomonitorthebusiness

operations and financial position of the Company and its
subsidiaries, and audit the performance of duties by the directors.
Three of the five Audit & Supervisory Board members are
external, to provide an independent viewpoint and ensure a highdegree of professionalism in Group auditing. In this way, we areworking to further ensure sound decision making in the conductof operations. We provide full backup to Audit & Supervisory
Board members, for example by involving them in the GroupManagement Committee and other meetings within the Group.
The Audit & Supervisory Board meets once a month, in principle,
to discuss and pass resolutions on important matters.
In addition, as part of the auditing of the Group's business
operations, the Audit & Supervisory Board members peruse whenappropriate auditing plans and results of audits of the Group
Auditing Division, composed of internal audit staff. The Audit &Supervisory Board members also receive from the Group Auditing
Division regular reports (and ad hoc reports when required) oninternal audits at the Company and its subsidiaries, including on
the state of operation of the whistle-blowing system.

55

Hankyu Hanshin Holdings Integrated Report 2019

To ensure that concrete decisions regarding the amount of
director compensation, which are the responsibility of the Boardof Directors, are made based on objective and transparent
procedures, the Company has established a Compensation
Committee comprising the chairman (or the president, in thechairman's absence or unavailability), three external directors
and three external Audit & Supervisory Board members, toprovide advice relating to the Company's compensation system
and its content.

(5) Roles and functions of External Directors and External
Audit & Supervisory Board Members
Principle

4-7

4-9

The Company appoints independent external directors and Audit& Supervisory Board members with the aim of further enhancing
the governance of the Group through their contributions to(2) Audit & Supervisory Board and Audit & Supervisory
Board Members
Principle(4) Compensation Committee

meetings of the Board of Directors and the Audit & Supervisory
Board, as well as other activities.
The external directors appointed to the Board are selectedfrom among persons with extensive experience in corporate
management or with extensive experience acquired throughresearch into public governance, with the aim of strengthening
the management oversight function of the Board of Directors
with respect to the Group as a whole. Similarly, the external
Audit & Supervisory Board members whom we appoint are
selected from among persons possessing high-level specialist
expertise in the fields of compliance and business administration.
Further, to ensure that it assesses the independence of
external directors and external Audit & Supervisory Board
members objectively, in light of the Tokyo Stock Exchange's
independence requirements, the Company has established theIndependence Criteria.

■P olicies and Procedures for the Appointment of
Directors and Audit & Supervisory Board Members

Reasons for election of external Audit & Supervisory
Board members

Principle 3-1
Policy for the appointment and dismissal of Directors

Principle

The Company appoints personnel who are well acquainted withthe businesses of the Hankyu Hanshin Holdings Group as directors
as well as appointing personnel from H2O Retailing Corporation
and Toho Co., Ltd., as directors to strengthen collaborative
relationships with the Hankyu Hanshin Toho Group.
Moreover, directors shall be dismissed if the execution of theirduties involves impropriety, serious legal violations, violations of
the company's articles of incorporation, or other improper
conduct.

Policy for the appointment of Audit & Supervisory Board
Members
To ensure Audit & Supervisory Board members conduct audits
effectively and efficiently, the Company has established the Audit& Supervisory Board and appoints internal standing Audit &Supervisory Board members and external Audit & Supervisory
Board members. The Company appoints internal Audit &Supervisory Board members who have appropriate expertise infinance, accounting, or law and abundant experience in businessfields. Also, the Company appoints external Audit & Supervisory
Board members who are independent of the Company and haveabundant experience and expertise.

consultation

Name

Haruo
Sakaguchi(Independent Audit& Supervisory Board
Member)Reasons for appointment
Currently a lawyer. Appointed to advise on more
compliance-based management and for his ability toprovide independent input.

Former Professor of Faculty of Business Administration
within the Graduate School of Kobe University andformer President of the University of Marketing and(Independent
Distribution Sciences. Appointed for his ability to
Audit &
Supervisory Board express useful opinions based on his high-level
Member)specialist expertise in business administration and for
his ability to provide independent input.

Junzo Ishii

A member of the legal profession who has servedin important positions, including chief prosecutorof the Kobe District Public Prosecutor's Office, and(Independent
who is currently active as a lawyer. Appointed
Audit &
because, given his experience, he is expected toSupervisory Board
provide valuable opinions, particularly about ensuring
Member)compliance in business management.

Michiari
Komiyama■ Compensation of Directors
Principle 3-1(1) Policy
The Company's compensation system for directors further
motivates them to enhance the Company's enterprise value andbusiness performance, as well as to enhance shareholder value.

Appointment procedure
Following

3-1

with

the

Corporate

GovernanceCommittee, the Board of Directors decides on the appointmentof candidates for the positions of Audit & Supervisory Board
member and director based on the abovementioned appointment
policies. Resolutions regarding candidates for the position of
Audit & Supervisory Board member will be made by the Audit &Compensation

comprises

twoelements:

basic

monetary

compensation paid according to position and stock-based,
performance-linked compensation paid in trust to individuals in
the posts of chairman and president.
Note: The payment of retirement benefits to directors was discontinued in
April 2004 to heighten transparency of the compensation system.

3(2) Procedure

Reasons for election of external director

Based on the foregoing policies, to ensure that concrete decisions

Principle

3-1

Name

Noriyuki Inoue(Independent
Director)

Shosuke Mori
(Independent
Director)

Noriko Endo
(Independent
Director)

The Foundations of Enhanced Corporate Value

Supervisory Board in advance.

regarding the amount of director compensation, which are theresponsibility of the Board of Directors, are made based on

Reasons for appointment

objective and transparent procedures, the Company has

Representative director for many years at Daikin
Industries, Ltd. Also served as vice-chairman of(or the president, in the chairman's absence or unavailability),

established a Compensation Committee comprising the chairman

Kansai Economic Federation. Appointed for his
wealth of management experience, perspectivefrom top business circles, and ability to provide
independent input.

three external directors and three external Audit & Supervisory

Representative director for many years at Kansai
Electric Power Co., Inc., a company whose
operations, like those of the Hankyu Hanshin
Holdings Group, are closely bound up with the
public good. Also served as chairman of Kansai
Economic Federation for many years. Appointed forhis wealth of management experience, perspectivefrom top business circles, opinions from theviewpoint of CSR, and ability to provide independent
input.

consultation with the Compensation Committee concerning the

To obtain input based on her extensive expertise
acquired through research into public governance,
she was appointed as an external and independent
director.

vice president and representative director, and the representative

Board members, to provide advice relating to the Company's
compensation system and its content.
The Board of Directors makes compensation decisions after
compensation system and content of compensation.

■ Other Deliberative Bodies(1) Group Management Committee
The members of the Group Management Committee include
fulltime directors, specifically the chairman and representative
director, the president and representative director, the executive
director; executive officers; and representatives of each of theGroup's core businesses. The committee convenes to deliberateand decide on the approval of resolutions of the Board of
Directors; the management strategies and business plans ofGroup companies; systems and rules for maintenance of the

Hankyu Hanshin Holdings Integrated Report 2019

56

The Foundations of Enhanced Corporate Value

holding company system; and significant Group management
matters, such as investments above a certain threshold andreorganization.

comprising the Company's chairman and representative director,
president and representative director, executive vice president
and representative director, representative director, the executive
charge

of

the

Group

Planning

Division,andrepresentatives of each core business. In relation to respective
core businesses, the councils deliberate significant mattersconcerning

strengthen

corporate

governanceandheightenfuturebusinessdevelopment

as

well

as

the

preparation and progress management (performance evaluation)of business plans.

approval from the General Meeting of Shareholders held on June
13, 2017, to abolish a provision of the articles of incorporation
concerning the election of senior advisors.

■ Ensuring Effectiveness of the Board of Directors
and the Audit & Supervisory Board
Principle 4-11
(1) Attendance at meetings of the Board of Directors andthe Audit & Supervisory Board
External Directors(3) The Group Presidents' Meeting—Initiatives to foster
solidarity within the Group

Name

Attendance at meetingsof the Board of Directors

Noriyuki Inoue

Attended 8 of 10 meetings

The Hankyu Hanshin Holdings Group comprises over 180 Group

Shosuke Mori

Attended 8 of 10 meetingscompanies. The Group Presidents' Meeting, held twice a year,
brings together presidents of those Group subsidiaries andaffiliates. It is designed to foster a deeper sense of solidarity
within the Group and ensure that the Group philosophy andmanagement policies permeate the entire organization. The
Group Presidents' Meeting aims to encourage a joint sense ofcommitment to the Medium-Term Management Plan. Awards are
given to companies that boost earnings or individuals and groups
that

the

elected senior advisors at present, the Company received

Each core business has a Core Business Strategy Council,inTotransparency of business management and given that it has not(2) Core Business Strategy Councils

officer(3) Abolition of senior advisors system

successfullylaunchinitiatives

or

make

significant

contributions at their units.

External Audit & Supervisory Board Members
Name

Attendance at meetingsof the Board of Directors

Attendance at meetingsof the Audit & Supervisory Board

Haruo Sakaguchi

Attended all 10
meetings

Attended all 10
meetings

Junzo Ishii

Attended all 10
meetings

Attended all 10
meetings

Michiari Komiyama

Attended all 10
meetings

Attended all 10
meetings(2) Evaluation of the Board of Directors' effectiveness

Number of meetings of deliberative bodies held

A summary of the process, items, and results of an evaluation of

Corporate Governance Committee

2 meetings

Core Business Strategy Councils

2 meetings

the effectiveness of the Board of Directors conducted in fiscal

Compensation Committee

1 meeting

The Group Presidents’Meeting

2 meetings

2019 is as shown below.

Group Management Committee

14 meetings

A survey was carried out to assess the management by the Boardof Directors in fiscal 2019, including the sufficiency of its■ Efforts to Strengthen Governance(1) Position regarding shares held for strategic reasons
Principle

1. Evaluation process

1-4

explanations and the appropriateness of its handling of its
proceedings.
2. Evaluation items

The Company acquires shares held for strategic reasons with a

The results of investigative interviews indicated that conduct ofview to building relationships of trust with various stakeholders

meetings of the Board of Directors was adequate, explanations

and enhancing corporate value over the medium to long term byof the status of business management were appropriate, and themaintaining business relationships or strengthening collaborations

Board of Directors was effective and generally administeredwith partner companies and maintaining relationships withappropriately in fiscal 2019.

regional communities.
Individual

strategic

At the same time, suggestions were offered relating to suchshareholdings

arereviewedformatters as disclosure by key subsidiaries of details of actual

appropriateness each year by the Board of Directors, taking intotransactions made based on the Company's management plan,account economic rationales such as dividend income. Where aand on-site observation tours by external directors to afford themgiven holding is deemed no longer appropriate, it is soldan opportunity to understand the Company's businesses.

progressively, with comprehensive consideration of factors suchas the Company's financial circumstances and the influence ofstock sales on market conditions.

Internal Control System(2) Abolition of anti-takeover measures
After considering recent trends related to such measures andchanges in the business environment, the Company has decided
to abolish anti-takeover measures that have already been set to
expire at the conclusion of the General Meeting of Shareholders
held in 2018.

Principle

4-3

Recognizing the importance of ensuring that the business
operations of the Company are conducted in an appropriatemanner, we have established an internal control system for theentire Group, and revise it when deemed necessary. As things
stand, our internal control system is characterized as follows:

57

Hankyu Hanshin Holdings Integrated Report 2019■ We ensure compliance-focused management by compilingwhere compliance errors can easily occur.

and distributing a Compliance Manual, and have established a

The Company provides intensive compliance training on a

dedicated whistle-blowing system. (For further information on

Group-wide basis for new employees and newly appointed

the Company's compliance activities, please refer to the

executives. In addition, all Group companies arrange their own

following section.)training programs tailored to job grade and function, with the aim■ We have established the Group Auditing Division, composedof internal audit staff under the direct control of the president,
for independent monitoring of Group-wide business activities.
It carries out internal audits into the Hankyu Hanshin HoldingsGroup and all its operating companies.
■ To create a structure for ensuring appropriate operations, theGroup vests Audit & Supervisory Board members of eachGroup company with authority not only in accounting but also
in operational audits, and at the same time provides guidance
to smaller Group companies on Board of Directors' resolutions
for the creation of an internal control system.
■ Audit & Supervisory Board members and the Group Auditing
Division receive regular reports from the Risk Management
Office with regard to creation and operation of internalof further increasing compliance awareness.

■ Corporate Ethics Consultation Desk
(Internal Whistle-Blower Procedures)
Principle

2-5

We have set up a dedicated whistle-blower hotline enabling all
employees to discuss or quickly bring to management's attention
suspected or known legal violations and unethical conduct.
Business partners are also welcome to use this consultation andnotification facility, and when necessary we will use lawyers andother outside specialists to improve its effectiveness.

Corporate Ethics Consultation Desk

controls at the Company and its subsidiaries (including

Audit &
Supervisory
Board
Memberimplementation status for risk management and promotion ofcompliance-based management measures). Through suchmeasures, they deepen their links with, and strengthen therole of, internal control divisions.

Audit &
Supervisory
Board
MemberReports

Reports■ With regard to systems for “Management Assessment andAudit Concerning Internal Control Over Financial Reporting,”asection of the Financial Instruments and Exchange Act, theConsultation
Desk

Reports

President

Directs

Consultation
Desk

Reports

President

Company responds appropriately by carrying out management
evaluations on a consolidated basis, in line with in-house rules.

Approves /Directs

Reporting of investigation progress and ﬁndings

Corruption Prevention and Compliance

Consultation
Desk

As a system to ensure compliance-focused management, theGroup has set up a dedicated compliance office, and is working
employees by means of the measures detailed below.

■ Compliance Manual and Training Programs

The issuance of the Compliance Manual and Compliance Card
makes clear to the approximately 22,000 Group company
directors and employees that violations of law or social norms, or
actions that betray customer trust, are prohibited, and that
healthy relations with partners and government must be
maintained. It also aims to raise awareness by pointing out cases
Compliance Manual Content
Compliance in the service of customers･ Customer safety first･ Sincere dealings withcustomers･ Strict rule compliance･ Appropriate handling of
personal data･ Appropriate disclosure･ Prudent, socially responsible
behavior･ Appropriate use of social
media
Compliance in the service of vendors･ Sincere dealings･ Appropriate handling ofintellectual property･ Prohibition of involvementwith anti-social forces･ Prohibition of bribes andexcessive entertainment

Compliance in the service of shareholders･ Prohibition of improperaccounting procedures･ Prohibition of insidertransactions
Compliance as a social entity･ Efforts to solve environmental
problems･ Efforts to contribute to society･ Respect for human rights
Compliance in the workplace･ Creation of appropriate work
environments･ Distinction between public
and private･ Respect for decision-making
procedures

The Foundations of Enhanced Corporate Value

to raise awareness of compliance issues among executives and3■ Establishment of Risk Management Committees

In the case of identification of a major compliance issue during
the course of an Ethics Consultation, a risk management
committee is convened as soon as possible to discuss and decide
on appropriate responses.
In addition, we are setting up compliance promotion offices atmajor Group companies such as Hankyu Corporation, Hanshin
Electric Railway, Hankyu Hanshin Properties, Hankyu Travel
International, Hankyu Hanshin Express, and Hankyu Hanshin
Hotels. At other companies we are appointing “complianceleaders,”to ensure our response is on a Group-wide basis.
Overview of Group ComplianceHankyu Hanshin HoldingsCore companies● Information to Group companies

Compliance promotion oﬃce

● Guidance and training for Group
companies

Internal whistle-blowing, responsible
for planning and organizing seminars● Risk management

and other awareness-raising activities● Risk Management Committee
secretariat● Corporate Ethics Consultation Desk
(internal whistle-blower procedures)● Internal auditing

Other Group companies
Complianceleaders
Liaise with compliance departmentsof higher-level companies

Hankyu Hanshin Holdings Integrated Report 201958

The Foundations of Enhanced Corporate Value

Continuing to Be a Corporate Group
Trusted by Society

SafetySafety Policy and Safety Objective

b. Promote anti-terrorism and other measures for the Expo 2025

The shared mission of Hankyu Corporation and Hanshin Electricc. Strengthen information networks, such as for inbound tourists

Railway is to ensure the absolute safety of railway transportation.
Toward this end, we strictly observe all safety policies, focus onachieving our safety objectives, and strive daily to improve safetymeasures and ensure safety during emergencies by devising

Osaka, Kansai
in emergency situations
d. Analyze risks relating to accidents for which we may bear
responsibility, and share resulting information

solutions employing aspects of both“hardware”and“software.”Hankyu Corporation

Positions and Roles◎ President

Safety Objective■ Elimination of Accidents for Which We Bear
Responsibility

The

President

determines

theimplementation,

management

organization, and rules of the railway business. In addition, when
formulating the Medium-Term Management Plan, which includes
facilities and transportation, personnel, investment, and budget, thePresident verifies and ascertains the situation from the perspectives ofsafety and feasibility and instructs on improvements.

Safety Policy and Safety Priority Measures
Provide safe, high-quality transportation
services that fully justify public trust—Hankyu Corporation: Safety and comfort■ 1. S trive to prevent accidents for which we bear
responsibility
a. Enforce stringent policies and comply with work procedures

b. Promote measures to prevent accidents on the platform forwhich we bear responsibilityc. Promote measures to prevent accidents at grade crossings forwhich we bear responsibilityd. Promote measures to maintain facilities and improve thestandard of safety operations
e. Promote measures to accelerate accident prevention■ 2. S trive to prevent recurrence of accidents forwhich we bear responsibility
a. Prevent the recurrence of previous accidents and incidentsb. Formulate and implement solid countermeasures by convening
the Investigative Committee for Measures to Prevent Accidents■ 3. A ddress risks to business continuity

a. Reduce risks from natural disasters and implement preventive
measures59

Hankyu Hanshin Holdings Integrated Report 2019

◎ Chief Safety Manager
In order to prioritize securing the safety of railway facilities and rollingstock and the handling of operations, and to control and managetransportation operations in each division, the Chief Safety Manager
works to disseminate safety management regulations and to ensurecompliance with related laws and regulations; to increase awareness ofsafety as the Group's most important priority; to confirm theimplementation of transportation operations, management conditions,and the progress made in implementing the safety improvement
measures stipulated in the Medium-Term Management Plan; and to
implement improvement measures.
◎ Chief Train Operations Manager
The Chief Train Operations Manager manages operations-related duties,
including utilizing the employees involved in operations, railway facilities,
and rolling stock; setting and revising the operations plan; managing
train crews, the operations of rolling stock, and train operations; andproviding training for train crews and maintaining their capabilities.
◎ Chief Crew Training Manager
Based on the instructions and orders of the Chief Train Operations
Manager, the Chief Crew Training Manager maintains and manages thecapabilities of train crews and periodically confirms and submits reportson the progress being made in improving their capabilities.
◎ Other Managers and Responsible Persons
In each division, other managers and responsible persons maintain andmanage the facilities they are responsible for in order to ensure there
are no obstacles to realizing safe transportation.

Safety Management Promotion Committees

Safety Policy

Safety Management Promotion Committees discuss, investigate,■ Maximum priority on safety

and report on a variety of proposals for transportation safety.

The President, directors, and employees shall do everything

These committees include the Group Safety Management

possible

Promotion Committee, on which the President serves as

understanding that putting the highest priority on ensuring safety

chairperson; the Business Division Safety Management Promotionis the mission of railway businesses.

Committee, on which the Chief Safety Manager serves aschairperson; and the divisional safety management promotion

toensuresafetyofoperations,

based

on

the

■ Compliance with laws and regulations

The Company shall comply with all laws and regulations related

committees.

to safety and apply them rigorously and sincerely in its operations.

■ Safety Management System■ Maintenance of safety management systems

The Company shall implement continuous verification procedures

President
Directors
Head of Urban
Transportation Business(Chief Safety Manager: Director)

Deputy Head of
Urban Transportation Business

Manager, Urban
Transportation Planning(Head of Investment
and Financing Team)Manager,
Transport Division(Chief Train
Operations Manager)

Manager,
Technical Division(Chief Civil Engineering
Facilities Manager)

Manager,
Takarazuka LineOperations

Manager,
Kyoto LineOperations

Deputy Operations
Manager (CrewTraining Manager)

Deputy Operations
Manager (CrewTraining Manager)

Deputy Operations
Manager (CrewTraining Manager)appropriately.

Positions and RolesManager,
Technical Division(Chief Electrical
Facilities Manager)

Manager,
Kobe LineOperations

to ensure that safety management systems are operating

Manager,
Technical Division(Chief Rolling
Stock Manager)◎ President
The President has the ultimate responsibility for ensuringtransport safety.
◎ Chief Safety Manager (Head of Urban Transportation Business)
The Chief Safety Manager is responsible for overseeing all
activities related to ensuring transport safety.
◎ Chief Train Operations Manager (Transportation Division
Manager)■ Safety Management Promotion Committees

Under the direction of the Chief Safety Manager, the Chief Train
Operations Manager is responsible for operations including train

Group Safety Management
Promotion Committee

operations, maintaining the capabilities of train crews, and otherrelated operations.

Business Division Safety
Management Promotion
Committee

The Foundations of Enhanced Corporate Value

Investigative Committee to
Improve the Safety andSecurity of Operations

3■ Safety Management System
Investigative Committee for
Measures to Prevent Accidents
President

Transport Division
Safety Management
Promotion
Committee

Technical Division (civilengineering facilities)
Safety Management
Promotion Committee

Technical Division(electrical facilities)
Safety Management
Promotion Committee

Technical Division(rolling stock)
Safety Management
Promotion Committee

Directors

Urban Transportation
Business

Railway Safety Council

Hanshin Electric Railway

Chief Safety Manager(Head of Urban
Transportation Business)
Deputy Head of Urban
Transportation Business

Safety Objective■ Elimination of Accidents for Which We Bear
Responsibility

Chief Train Operations Manager(Manager, Transportation
Division)Manager,
Electrical Division

In 2019, we again achieved our annual goal for workplace safety:
zero accidents for which we bear responsibility. It has been 33
years and 11 months since we last had such an accident, and we
received an award from director of the Ministry of Land,

Manager,
Rolling Stock
DivisionManager,Engineering
Division

Chief Crew Training Managers(Head, East Rolling Stock Yard)(Head, West Rolling Stock Yard)

Infrastructure, Transport and Tourism's Kinki District Transport
Bureau. We look forward to extending our accident-free recordin fiscal 2020.

Hankyu Hanshin Holdings Integrated Report 201960

The Foundations of Enhanced Corporate Value◎ Chief Crew Training Managers (the Heads of the East Rollingthe emergency suspension of operations of trains on line

Stock Yard and the West Rolling Stock Yard)

segments in earthquake zones.

Under the direction of the Chief Train Operations Manager, theChief Crew Training Managers are responsible for ensuring allcrew are properly qualified.

■ 3. Responding to actions of third parties, such asacts of terrorism

If there is a warning that the actions of third parties, such as acts

◎ Electrical Division Manager
Under the direction of the Chief Safety Manager, the Electrical
Division Manager has overall control of items relating to electricalfacilities.

of terrorism, could cause serious incidents with extremely
significant effects on society, or if such a warning calls forcontinued vigilance, or if suspicious items or persons are
discovered or damage is incurred, we take measures appropriate◎ Rolling Stock Division Manager
Under the direction of the Chief Safety Manager, the Rolling Stock
Division Manager has overall control of items relating to rollingstock.

to the threat level.
Further, we are advancing the installation of security cameras
on station platforms and in station concourses to prevent crime.

◎ Engineering Division Manager
Under the direction of the Chief Safety Manager, the Engineering
Division Manager has overall control of items relating to tracks,
civil engineering, and construction facilities.

3. Maintenance Work: Indispensable for
Safe, Comfortable Operations■ 1. Inspecting electrical equipment

Safety Enhancement Initiatives

We have many different types of electrical equipment, including

To ensure the safety of customers, we are proactively taking

railway crossing safety equipment, power equipment, railway

signal safety equipment, secure communications equipment,

personnel-related measures to enhance education and training
as well as infrastructure-related measures to improve equipment
and facilities.

track equipment, and substation equipment, which we inspect
regularly based on prescribed inspection schedules.

■ 2. Inspecting railway tracks

We regularly inspect railway tracks, rails, ties, and othercomponents to ensure the safe operation of trains.

1. Training and Education■ 3. Inspecting structures

At government-designated in-house training centers, Hankyu
Corporation and Hanshin Electric Railway foster train drivers andtrain conductors. During the training period, trainees receive
education on academic subjects and practical skills in accordancewith a national curriculum. Also, experienced drivers and train
conductors act as instructors and provide rigorous one-on-one,
onsite training.
Even after personnel have passed certification exams, we
maintain and heighten the skills, awareness, and qualifications of

We inspect elevated tracks, bridges, tunnels, and other railway
civil engineering structures regularly.

■ 4. Inspecting rolling stock

We conduct inspections at our plants and train depots tomaintain the safety of rolling stock. Regular inspections include
train

inspections,statusandfunction

inspections,maincomponent inspections, and overall inspections. In addition, we
conduct unscheduled inspections as required.

drivers, conductors, and operations personnel by holding safety
workshops and seminars and by conducting training based on a
range of scenarios.

Examples of Initiatives Undertaken in
Fiscal 2019

2. Initiatives for Natural Disasters■ 1. Responding to rain storms

During rain storms, we direct trains to reduce speed or suspend

Hankyu Corporation

operations based on information obtained from the rain gauges,
wind gauges, and water meters installed alongside our railway
lines

and

meteorologicalinformation

from

the

Japan

Meteorological Agency.

■ 2. Responding to earthquakes

If earthquake early warning systems forecast an earthquake witha seismic intensity of four or above, or if seismographs that wehave installed alongside our railway lines detect an earthquake ofthe same seismic intensity, we immediately begin procedures for

61

Hankyu Hanshin Holdings Integrated Report 2019

Improving the Safety of Infrastructure
In fiscal 2019, as part of its ongoing quest to prevent accidents,
Hankyu Corporation got its first automatic platform gates on
platforms 3, 4, and 5 of Juso Station.
Similarly, we are engaged in various measures to prevent
accidents caused by old and damaged facilities. These include
the seismic reinforcement of stations and elevated tracks, andthe repair and maintenance of tunnels and overbridges.

Hanshin Electric Railway’scurrent bridge over the
Yodo River
Automatic platform gates

Earthquake-proofing work on elevated tracks

Improving the Safety of Personnel
On November 20 (Tue), 2018, we held a training session at the
Katsura Yard on the Hankyu Kyoto Line to bring everyone up to
speed on how to react in emergency situations. This session

Artist’s impression of how
the raised bridge will lookassumed a washout of tracks due to heavy rain, and covered

Meanwhile, we have been changing the direction of some

activation of emergency stop devices, cooperating with theseats on platforms since 2016 so that people sit side-on to theoperation center, and evacuating passengers.

tracks as this helps prevent people from falling onto the tracks.

Also covered were techniques for restoring equipment
damaged due to heavy rain.

Platform seats are arrangedside-on to the tracks

Improving the Safety of Personnel

Training on how
to safely evacuatepassengers

We continued our employee training and education and focusedon technology succession and improving safety awareness. For

3

instance, fiscal 2019 saw a continuation of our training for all
Transportation

Business

Division

employees,

The Foundations of Enhanced Corporate Value

Urban

which

encourages them to look out for, and call out to, customers at
stations and other company facilities who may need assistance,such as blind passengers.

Staff learn how tomake repairs

Hanshin Electric Railway

Improving the Safety of Infrastructure
The rebuilding and raising of the Yodo River bridge on the Hanshin
Namba Line began in 2018 as a permanent fix for a long-standing
issue. Specifically, the tracks are currently lower than the nearby
levee, meaning the tide gates have to be closed every high tide.
Inaddition,

work

began

in

December2018

onraising

approximately 2.4 kilometers of tracks either end of the bridge,
which will eliminate five level crossings.

Employee training

Hankyu Hanshin Holdings Integrated Report 201962

The Foundations of Enhanced Corporate Value

Social Contribution

Social Contribution Policy

greenery and a railway that extends toward
the future, reflecting the dreams of children
and communities rich in natural blessings.

Hankyu Hanshin Dreams and Communitiesof the Future Project
For more than 100 years, our Group has enjoyed the support ofthe communities that have emerged around the Hankyu Hanshinline-side areas, thus engendering a relationship of mutual trust.
Today, through policies under our Group Management Philosophy
that are intended to provide“safety and comfort”as well as“dreams and excitement,”we seek to satisfy our customers andcontributetosociety.

The

HankyuHanshinDreamsandCommunities of the Future Project reflects this commitment.

Environment-Friendly Development
As a Group with strong local roots, we are committed tosustainablecommunity

building

withenvironment-friendly

developments that provide local residents with security, peace ofmind, and cultural enrichment.
Themes of specific initiatives
1. Creating a safe, comfortable, and environmentally aware local
community

Basic Policy

2. Contributing to the preservation of biodiversity and the

We intend to promote the creation of towns and cities along our

3. Promoting sustainable lifestyles

natural environmentline-side areas that people will truly want to live in.

4. Preserving, utilizing, and developing
local history and cultural resources
5. Prevention of global warming
6. Contributing to the emergence of a

Priority Areas

society committed to recycling and■ Our links to the future: Environment-Friendly
Development and Human Capital Development
To realize“towns and cities that people will truly want to live in,”
we are promoting actions in two priority areas:“environmentfriendly

community

development,” which

enhancesthesustainability of communities; and“human capital development,”
which shoulders the task of building communities for future
generations.

waste reduction

Human Capital Development
We are creating opportunities for the healthy development of
ambitious children, upon whose shoulders the task of building
the communities of the future rests.
Themes of specific initiatives
1. Enabling children to experience and learn about nature and■ Hankyu Hanshin Dreams and Communities of the Future Project❶ Collaboration with Group companies
Certification and promotion system for the social
contribution initiatives of each Group company❷ Collaboration with civil society
Dreams and Communitiesof the Future Fund etc.

❸ Collaboration with Group employees
Social Contribution Point System

ecology
2. Fostering mental enrichment in children through cultural andartistic activities
3. Supporting the healthy development of children throughsports
4. Enabling children to gain a deeper understanding of society
and their communities
5. Cultivating in children a sense of compassion andacknowledgement of diversity
6. Instilling in children the wisdom ofConcept Behind Our Symbols
To demonstrate our commitment to the development of local
communities, our symbols depict a young girl with a heart or

63

Hankyu Hanshin Holdings Integrated Report 2019

their parents and grandparents
7. Supporting children with disabilities,
children orphaned by traffic
accidents or disasters, children insingle-parent families, and children
confined to social welfare facilities

Celebrating 10 years of the Hankyu Hanshin
Dreams and Communities of the Future Project

Dreams and Communities of
the Future SDGs Trains

As part of the Hankyu Hanshin Holdings Group's commitment to creating communities that people will truly wantto live in, we have operated the Hankyu Hanshin Dreams and Communities of the Future Project since 2009. The

project, which focuses chiefly on fostering better environments and people, is one of our efforts aimed at helping
meet the SDGs.

To commemorate a decade of project initiatives, we launched the Dreams and Communities of the Future SDGs

Trains. By operating these special trains, we hope to educate people about SDGs in cooperation with thegovernment and the municipalities our trains serve, as well as businesses and civic groups that are serious about
SDGs. The trains' first run was on May 27, 2019, and they will operate until the end of May 2020. We hope thatthe Dreams and Communities of the Future SDGs Trains will lead more people to think about how to achieve
better communities and a better society.

We look forward to leveraging the Hankyu Hanshin Dreams and Communities of the Future Project as a vehicle

for addressing local challenges, fostering new generations of long-term supporters of the Hankyu Hanshin HoldingsGroup, and improving brand value.

3
The Foundations of Enhanced Corporate Value

SDGs Trains on the Hankyu Railway (left) and the Hanshin Railway (right)

The front and rear cars of the SDGs Trains are wrapped in original illustrations and badged to commemorate the10th year of the project. Inside, all advertising space is occupied with posters displaying SDGs and their
explanations, as well as the Hankyu Hanshin Holdings Group's SDG-related initiatives along with those of thegovernment, municipalities, and cooperating businesses.

■ Train door-side stickers■ Interior posters

Hankyu Hanshin Holdings Integrated Report 201964

The Foundations of Enhanced Corporate Value

Group Social Contribution Initiatives in Fiscal 2019
● Collaboration with Group companies
Certification and promotion system for the social
contribution initiatives of each Group company
We promote the initiatives of our Group companies throughpublic relations, sponsorships, and additional contributions. In
fiscal 2019, 94 initiatives were certified (89 in fiscal 2015, 91 in
fiscal 2016, 94 in fiscal 2017, and 92 in fiscal 2018). Of these, theHankyu Hanshin Dreams and Communities Challenge Troop, acareer development program for elementary school students
was particularly successful, attracting a best-ever 2,640 kids.
By the beginning of fiscal 2020, 100 projects had already beencertified.

through donations raised by our employees and additional
contributions from the company. In fiscal 2019, 18 of the 102
institutions submitting applications received a total of ¥11.79
million.(Cumulative total: 129 institutions, ¥70.29 million)
Similarly, we ran a campaign (promoted through training
sessions) encouraging employees to make donations directlydeducted from their salaries. By the end of December 2018,
there were 1,452 participants (up 100 from the previous year) in
the scheme across 69 companies.
● Collaboration with Group employees
Social Contribution Point System
We encourage current and past employees to engage incommunity activities voluntarily by assigning points. In fiscal
2019, some 2,478 people (up 225 from the previous year) across
71 companies received points.

● Collaboration with civil society
Dreams and Communities of the Future Fund etc.

We also donated ¥1.17 million to 39 groups where our
employees engage in volunteer activities.

We subsidize citizen's groups in the Hankyu Hanshin service area

Major Social Contribution Activities● Hankyu Hanshin Dreams and Communities Challenge Troop
Our businesses, facilities, and workforce are the ideal framework
for elementary school students to experience a variety of real
work during their summer vacation. We have hosted more than
15,000 children across 322 programs so far.
We were proud to receive the Kids
Design Award* in 2018 for the Hankyu
HanshinDreamsandCommunities

Challenge Troop initiative.

Hankyu Hanshin Dreams and Communities Challenge Troop*A system, operated by the Kids Design Association, to reward initiatives
and designs that address social challenges related to children and childraising.

●H ankyu Hanshin Dreams and Communities Exciting Work
ProgramHankyu Corporation management staff conduct classes at local
elementary schools about Hankyu founder Ichizo Kobayashi's
community building initiatives and the wide-ranging work that
goes into supporting communities. To date, we have brought

Hankyu Hanshin Dreams and Communities Exciting Work Program

these opportunities to think about future occupations to around
11,000 children at 134 schools.
●R eusing towels and sheets to increase donations toenvironmental action groups
When guests staying multiple nights at our hotels use the same
sheets and towels instead of having them replaced every day, it
reduces the volume of laundry wastewater.
We encourage this practice by donating some of the money
saved on laundry to environmental action groups.
Using the same sheets and towels on multi-night hotel stays
helps fund good causes.

65

Hankyu Hanshin Holdings Integrated Report 2019

Diversity“Respect for others”is one of our stated corporate values, andin keeping with this, our workplaces and in-house frameworks
are geared toward enabling our workforce to make maximum
use of their skills.

Career Opportunities for Female Employees
We have targets and plans to expand career opportunities for
women in accordance with the Act on Promotion of Women's
Participation and Advancement in the Workplace.

Flexible Working Systems
We are introducing working systems and programs that allow for
flexibility as suits the various characteristics of each groupcompany.

■ Our initiatives● Flextime■ Our initiatives
We have a range of initiatives aimed at meeting two goals*:
Increase female employment by recruiting females for a minimumof 30% of general career-track positions, and steadily increase
the percentage of female workers in managerial positions.
(Aiming for more than 5% by fiscal 2023.)*Set jointly by Hankyu Hanshin Holdings, Hankyu Corporation, and Hanshin
Electric Railway.

Employees can choose their clock-on and clock-off times
between 7:00 and 22:00, thus allowing for more convenientarrangement of work and personal needs.
● Annual paid leave in half-day increments
Allowing employees to take paid leave in half-day increments (upto ten times a year) encourages them to take leave owing tothem and supports more flexible working systems.
●“No overtime”days twice a week
This initiative improves work efficiency and encourages better
work-life balance.

● Proactive hiring of women (e.g., more prominent highlightingof woman’s careers forfemale jobseekers)● Increasing the percentage
of females in management
positions (e.g.,“back onboard”support for those
returning from childcare
leave)

3■ Workforce Composition

We have a range of options for employees to choose in order toHankyuHanshin Hankyu
HankyuHankyu Hankyu
HankyuHanshinElectric Hanshin
TravelHanshin Hanshin
Corporation
Holdings
Railway Properties International Express Hotels

maintain their working careers while raising children or providing

Employees*1

nursing care for family members.

31, 2019)(as of Mar.

Total

Male

103

2,863

1,215

494

746

539

1,225

Female

65

210

85

143

770

229

774

2,276

Female %age

38.7%

6.8%

6.5%

22.4%

50.8%

29.8%

38.7%

24.1%
1,061

7,185

■ Our initiatives

Management
employees*1

Male

56

88

77

160

202

205

273

● Expanded support programs

Female

9

2

4

7

17

5

21

65

31, 2019)

Female %age

13.8%

2.2%

4.9%

4.2%

7.8%

2.4%

7.1%

5.8%

Male

23
（0） 89（2） 31（1） 17（10） 31（4）

Female16（0） 19（6）

Female %age

41.0%

Avg. term Maleof service
Female

20.0

22.7

20.7

9.4

13.4

16.9

10.6

9.3

3.8

2.9

(as of Mar.

Our support systems for pregnant employees and those raisingchildren exceeds those required by law, and we provide options
for those who provide nursing care for family members. These
include using an optional“pool”of unused annual paid leavedays and subsidies for those using babysitters.
● Expanded support for those on childcare leave
Employees on childcare leave receive regular information about
what's going on in their workplace and company, and we hold“back on board”seminars full of information on balancing

New
recruits*2(in FY2019)(as of Mar.
31, 2019)

男女差

17.6%

The Foundations of Enhanced Corporate Value

Childcare and Nursing Care Support

6（1） 107（40）304（58）

6（3） 14（9） 38（1） 23（12） 128（33）244
（64）
16.2%

45.2%

55.1%

79.3%

54.5%

44.5%

14.8

19.6

18.9

16.2

20.2

11.9

11.4

7.6

7.5

10.2

8.2

11.3

8.7

10.1

*1 Excludes those on secondment elsewhere; includes those seconded to us.
*2 Parentheses denote portion of total number hired mid-career.

childcare and work to ensure a smooth and stress-free return.
● Handbooks for leave-takers and their managers
These provide managers and staff not only with information on
systems and policies, but also with hints for workplacecommunication and effective management, thus helping
maintain a stress-free workplace environment.

Hankyu Hanshin Holdings Integrated Report 2019

66

The Foundations of Enhanced Corporate Value

As part of this, we have established Assist Hankyu Hanshin, aHiring People with Disabilities

special subsidiary company aimed at promoting employment ofpeople with disabilities.

In addition to hiring people with disabilities at Hankyu Hanshin
Holdings Group companies, we have also established a special
subsidiarycompany

(that

meets

the

criteria

forspecialdispensation under relevant laws) to expand employment

Assist Hankyu Hanshin has approximately 140 people withdisabilities working in a variety of departments, including cleaning,assistant work (e.g., printing, special correspondence, café
operations), and healthcare

opportunities.

(e.g., office massage). Here,■ Our initiatives

skillseach employee can develop

We will endeavor to maintain a rewarding work environment for

and

enjoy

rewardingwork.

people of all abilities, and to proactively create employment
opportunities for people with disabilities.

Health Management

Formulation of the Hankyu Hanshin HoldingsGroup’s Declaration on Employee HealthManagement

under the Japanese government's Certified Health & Productivity
Management Outstanding Organizations Recognition Program.
Hankyu Corporation, Hanshin Electric Railway, and Itec Hankyu
Hanshin received awards in the large enterprise category, andHankyu Hanshin Insurance Service in the SME category.

As part of our core values, which include respect for others, we
believe that healthy employees and employees' families are thefoundation for a brighter future. To that end, we pursue“healthmanagement.”
In February 2019, four group companies were recognized

The Hankyu Hanshin Holdings Group's Declaration on Employee Health Management
The Hankyu Hanshin Holdings Group believes that the mental and physical wellbeing of employees and their families remains
the source of happiness and the cornerstone of the Group’s prosperous future. In addition, in order to provide our customers
with safety and comfort as well as dreams and excitement, it is paramount that we enable everyone to fully demonstrate
their diverse personalities and abilities in good health.
To achieve this goal, we must maintain high awareness of our own wellbeing and work to promote good health among
our colleagues in the workplace and their families.
The Hankyu Hanshin Holdings Group declares its active support of the wellbeing of each individual. Under the Hankyu
Hanshin Wellness Challenge, we will strive to create a workplace environment in which all can live and work in good healthand with motivation.

Takehiro Sugiyama
President and Representative Director
Officer in charge of Health Management
Hankyu Hanshin Holdings, Inc.
April 2018

■ Priorities of the Hankyu Hanshin Wellness Challenge❶ Physical Health• Improving individual awareness ofgood health• Improving exercise level, eating
habits, and other lifestyle issues•E ncouraging employees and theirfamily members to undergo
thorough periodic medical
checkups67• Prevention of lifestyle-related diseases
and provision of specific health guidance• Provision of thorough medical
examinations for those in need andcontinuation of treatment• Prevention of infectious diseases• Early cancer detection• Promotion of smoking cessation

Hankyu Hanshin Holdings Integrated Report 2019

❷ Mental Health❸ Workplace Health• Provision of stress checks• Provision of mental healtheducation• Prevention of mental healthdisorders• Improving the system of mental
health leave and work
resumption• Promoting work-life balance by
optimizing work hours• Creating a workplace with asense of vitality and fellowship• Implementing measure against
second-hand smoke inhalation

Building an Environmentally Friendly,
Sustainable Society

Environmental Preservation Activities
Our Basic Approach to ESG
As part of our efforts to address issues related to ESG(Environment, Society, Governance), our Group has formulated a

HankyuCorporation
Series 1000 train

Basic Environmental Philosophy and Basic Environmental Policies
in addition to proactively implementing our own environmental
preservation initiatives. In the interests of preventing global
warming,

wehave

promotedenergy-efficiency

programs

throughout our Group and have focused on reducing CO2
emissions. In addition to promoting resource conservation, wearedeveloping

initiatives

that

meet

the

needs

of

local

communities regarding environmental preservation.
Through a wide range of environmental preservation efforts,
we continue to promote initiatives aimed at achieving thefollowing sustainable development goals (SDGs) adopted at the

Hanshin Electric
Railway Series
5700 train

United Nations Summit:“7. Affordable and Clean Energy”;“11.
Sustainable Cities and Communities”;“13. Climate Action”; and“15. Life on Land.”■ Settsu-shi station, a carbon-neutral railway
stationIn 2010, Hankyu Corporation opened Japan’s first railway station

Basic Environmental Philosophy
Mindful that global environmental preservation is a task facing all
sustainable society through environmental activities aimed athanding down a sounder global and human environment to thenext generation.

the Kyoto Line incorporates a variety of environmental measures
such as photovoltaic panels and LED lighting. As a result, CO2

3

emissions have been reduced to about half the level emitted bya conventional railway station; the remaining CO2 is offset by

The Foundations of Enhanced Corporate Value

mankind, the Hankyu Hanshin Holdings Group works for adesigned to achieve zero CO2 emissions. Settsu-shi Station onforest conservation credits, so the practical effect is zero
emissions.

Preventing Global Warming and Promoting
Energy Efficiency■ Adoption of additional energy-efficient rollingstock

Hankyu Settsu-shi
StationAs part of our efforts to prevent global warming, we are planning■ Introduction of energy-efficient equipment

to increase our use of energy-efficient rolling stock at Hankyu

In recognition of their excellent environmental performance,

Corporation, Hanshin Electric Railway, Kita-Osaka Kyuko Railway,

Umeda 1-1 Project, Hankyu Nishinomiya Gardens, and HEP Five

Nose Electric Railway, and Hokushin Kyuko Railway.

have all been awarded the DBJ Green Building Certification fromEnergy-efficient rolling stock has enabled Hankyu Corporation
to cut energy use by 6.7 percent in fiscal 2019 compared withfiscal 2015, and Hanshin Electric Railway by 2.5%.

the Development Bank of Japan Inc.
The DBJ Green Building Certification system rates real estatebased on its consideration for the environment and society, thus
helping to connect business owners, financial institutions, andinvestors. Buildings are rated not only on their environmental
credentials, but on their ability to meet the broad social needs ofa variety of stakeholders, and the award therefore reflects the
exceptional state of our buildings.

Hankyu Hanshin Holdings Integrated Report 2019

68

The Foundations of Enhanced Corporate Value

Five Stars: Top-Class Eco-Friendly andSocio-Friendly Buildings

Candle Night for One
Million People■ Installation of photovoltaic panels
Umeda 1-1 ProjectAward recipients: Hanshin Electric Railway and Hankyu Corporation

Solar power generation facilities have been installed in each of
our Group facilities including Hankyu Settsu-shi Station, Hanshin
Oishi Station, and the Silver Umbrella of Hanshin Koshien Stadium.

Hanshin Koshien
Stadium

Hankyu Nishinomiya Gardens
Award recipients: Hankyu Corporation and Hankyu Hanshin REIT

Four stars: Superior Eco-Friendly andSocio-Friendly Buildings

Efforts to Preserve the Natural Environment■ Preserving community forests
We are involved in a range of greening activities, including
rooftop and wall green environments on group facilities. In
another example, Nose Electric Railway employees volunteer tohelp local civic groups thin local bush land to promote a healthy
forest environment.

HEP FiveAward recipients: Hankyu Hanshin Properties and Hankyu Hanshin REIT

■ Raising environmental awarenessIn order to heighten awareness of the issue of global warming,
Hankyu Corporation and Hanshin Electric Railway have taken theinitiative to encourage customers visiting the Umeda Yukata

Maintaining our
precious forest

Festival to participate in uchimizu — the practice of sprinkling thestreets with water to cool down the neighborhood. This event
creates an opportunity for all to consider many aspects ofsustainable living. In addition, Candle Night for One Million
People, an event in which some Osaka neighborhoods extinguishtheir lights, is held regularly to bring the use of candles to theforefront.
Hankyu Nishinomiya
Gardens

Uchimizu event in
Umeda

69

Hankyu Hanshin Holdings Integrated Report 2019

Financial Section and Corporate Data
Page

Consolidated Six-Year Summary

71

Consolidated Financial Review

72

Business Risks

76

Consolidated Balance Sheets

77

Consolidated Statements of Income / Consolidated
Statements of Comprehensive Income

79

Consolidated Statements of Changes in Net Assets

80

Consolidated Statements of Cash Flows82

Notes to the Consolidated Financial Statements

83

List of Major Domestic Rental and Sales Properties

108

List of Overseas Sales Properties

109

List of Hankyu-Hanshin-Daiichi Hotels

110

Major Group Companies

111

Investor Information

112

Website Information

113

Financial Section and Corporate Data

Hankyu Hanshin Holdings Integrated Report 201970

Financial Section and Corporate Data

Consolidated Six-Year Summary
2014

2015

20166

2017

20188

2019

2019

Result of Operations (Millions of yen and thousands of U.S. dollars) :1

Revenues from operations¥ 679,157¥ 685,906¥ 746,792¥ 736,763¥ 760,252¥ 791,427$ 7,129,973

Operating income

91,82894,026110,293

104,058

105,211

114,937

1,035,468

EBITDA2

149,200

150,100

166,500

159,300

160,800

171,400

1,544,144

Ordinary income

81,191

85,590104,479

100,607

103,774

110,543995,883

Income before income taxes

83,542

77,62096,087

100,805

101,41088,562

797,856

Net income attributable to owners of the parent

46,352

54,201

69,971

71,302

66,36165,476589,874

Comprehensive income

55,941

71,034

63,842

79,28873,991

66,565

599,685

Capital expenditure

80,722

68,11566,63986,21286,404

114,368

1,030,342

Depreciation and amortisation

54,474

53,14353,70152,80053,27654,172

488,036

Cash Flows (Millions of yen and thousands of U.S. dollars):
Cash flows from operating activities¥ 146,991¥ 131,881¥ 124,838¥ 115,633¥ 135,821¥ 126,035$ 1,135,450

Cash flows from investing activities(45,517)(52,529)(78,843)(84,845)(88,351)(116,160)(1,046,486)

Cash flows from financing activities(105,079)(81,746)(47,278)(30,595)(43,242)(11,171)(100,640)

Increase (decrease) in cash andcash equivalents(1,840)(1,125)(1,978)

(480)

4,588

(1,848)(16,649)

Cash and cash equivalents at end of year

24,49723,49722,363

22,53027,501

27,589248,550¥2,349,831 ¥2,404,926

Financial Position (Millions of yen and thousands of U.S. dollars):
Total assets¥2,286,928¥2,279,638¥2,282,180¥2,466,223$22,218,225

617,598

679,482

724,237

804,659

866,512915,3818,246,676

1,032,307

955,828

916,570

899,523

866,758

877,055

7,901,396

Total net assets
Interest-bearing debt
Per Share Data (Yen and U.S. dollars):
Basic

42.98

¥ 277.88¥ 285.11¥ 267.91

36.75

42.95

277.67284.86267.81266.86

2.40

Net assets

477.69525.562,815.96

3,150.67

3,391.35

3,615.52

32.572

Dividend

6.00

6.00

35.00

35.00

40.00

40.00

0.36

Operating income margin (%)

13.5

13.7

14.8

14.1

13.8

14.5

—

ROA (%)3

3.6

3.7

4.6

4.3

4.4

4.5

—

ROE (%)4

8.0

8.6

10.3

9.4

8.2

7.6

—

Interest-bearing debt/EBITDA (Times)

6.9

6.4

5.5

5.6

5.4

5.1

—

Equity ratio (%)

26.3

29.1

31.0

33.5

34.8

35.9

—

Debt/equity (D/E) ratio (Times)5

1.7

1.4

1.3

1.1

1.0

1.0

—

1,271,406

1,271,406

254,281254,281254,281254,281—

20,913

21,037

21,607

21,86022,152

22,654—

Net income attributable toowners of the parent

¥

36.76

Diluted¥¥266.86$

2.40

Ratios:Others:Number of outstanding shares (Thousands)
Number of employees

1.	The U.S. dollar amounts have been translated, for convenience only, at ¥111 = US$1, the prevailing exchange rate on the Tokyo Foreign Exchange Market as of March 31,
2019.

2.	EBITDA = operating income + depreciation expenses + amortisation of goodwill
EBITDA figures are rounded to the nearest ¥100 million.

3.	ROA = ordinary income / total assets (average of period-start and period-end totals)

4.	ROE = net income attributable to owners of the parent / equity (average of period-start and period-end totals)
5.	D/E ratio = interest-bearing debt / equity

6.	Regarding transactions related to such items as the export of mixed cargo of the International Transportation Business, the Company has changed the recognition ofrevenues from operations from net presentation to gross presentation as of fiscal 2017. As a result of this change, the amount of revenues from operations for fiscal 2016is the amount after retrospective application (gross presentation).

Further, the Company consolidated shares at the ratio of 5 shares to 1 share with an effective date of August 1, 2016. Net income per share, diluted net income

attributable to owners of the parent per share, net assets per share, dividend per share, and number of outstanding shares have been calculated based on the assumptionthat the said reverse stock split was executed on April 1, 2015.

7.	Hankyu Corporation and Hanshin Electric Railway Co., Ltd. (since fiscal 2018) and Hankyu Hanshin Properties Corp. (since fiscal 2019), our subsidiary companies, haveoperated the Board Incentive Plan Trust, and the shares of the Company held by such trust are recorded as treasury shares in the consolidated financial statements.

Therefore, when net assets per share and net income per share vesting in the shareholders of the Parent Company and net income per share vesting in them after dilution
are calculated, the number of such shares is included in the treasury shares to be deducted.

8.	The partially amended“Tax Effect Accounting”standards (ASBJ Guidance No. 28, February 16, 2018) have been applied since the start of fiscal 2019, and the consolidated
financial indicators of fiscal 2018 are those after retrospective application of the relevant accounting standards.

71

Hankyu Hanshin Holdings Integrated Report 2019

Consolidated Financial Review
fiscal year, despite a decrease in income from investments

Analysis of Operating Results for Fiscal 2019accounted for with the equity method, due to a decrease in(Year ended March 31, 2019)

payment of interest as a result of a reduction of consolidated
interest-bearing debts and other factors as well as theabovementioned increase in income.

Despite the effects of natural disasters and other factors, therevenues from operations were ¥791,427 million, an increase

As a result of the above, revenues from operations, operatingof ¥31,174 million (4.1%) over the previous consolidated fiscal

income, and ordinary income all increased, with each achieving

year due to the sale of building land in the Real Estate Business,

record highs.
Extraordinary income/loss saw a ¥19,616 million decrease

and sound growth in the Urban Transportation Business and thedue to the extraordinary loss recorded from an agreement2 toEntertainment and Communications Business.
Natural disasters1 were the cause of a ¥2,200 million yen

transfer railway assets related to the Hokushin Kyuko Electric
Railway.

decrease in revenues from operations, and a ¥2,000 million

Net income vesting in the shareholders of the Parent

decrease in operating income.
As a result, operating income was ¥114,937 million, an

Company was ¥65,476 million, a decrease of ¥885 million (1.3%),

increase of ¥9,726 million (9.2%) over the previous consolidated

despite a decrease in tax expenses, which were brought about by

fiscal year.

deferred tax assets for impairment losses related to the Hokushin
Kyuko Electric Railway.

Ordinary income also increased to ¥110,543 million, an
increase of ¥6,768 million (6.5%) over the previous consolidated

Analysis of operating income(¥ million)

105,211

FY2018

1. Effects from the 2018 Osaka earthquake, torrential

Increase in revenues from operations＋31,174

rains of July 2018, Typhoon Jebi, Typhoon Trami, andIncrease in operating expenses and costs of sales*−24,720

2. I n order to reduce train fares, the Kobe City

Increase in personnel expenses
Decrease in expenses

the 2018 Hokkaido Eastern Iburi earthquake.
Government approached our subsidiary Hankyu−418

Corporation and proposed the commencement of＋3,422

discussions regarding the unification of operation＋254of the Hokushin Kyuko Electric Railway (Shin-Kobe

Increase in depreciation and amortisation−68

Transportation Bureau. Hankyu Corporation came to

Decrease in amortisation of goodwill＋83

Decrease in taxes

Station–Tanigami Station) under the Kobe City
the conclusion that such efforts would contribute to
the stimulation of the Kobe Sannomiya area, a key

114,937

FY2019business location for our Group, and entered into

YoY diﬀerence ＋9,726

the discussion. As a result, it was decided that the* Included in cost of revenues from operations, retirement beneﬁt expenses increased −688.

Group would aim to transfer railway assets related to
the Hokushin Kyuko Electric Railway to the Kobe City
Transportation Bureau in the first half of fiscal 2021.
A basic agreement was concluded on March 29, 2019.

Segment Information
The following table shows business performance for each core business segment. For more on these results, see the respective pages
referenced at the bottom of the columns in the table below.
Financial Section and Corporate Data

(Millions of yen)
Urban
Transportation

Revenues fromoperations

Real EstateEntertainment andCommunications

TravelInternational
Transportation

Effects of natural disasters: −1,200

HotelsOther

Adjustment

Consolidated−1,000−2,200FY2019238,562

237,276

126,531

35,52889,99064,92343,417(44,803)

FY2018

235,967

222,586

121,078

34,022

83,707

67,24842,811(47,169)

760,252+2,594+14,689+5,453+1,506+6,283(2,324)+605+2,366+31,174

YoY difference
Operating income−1,100−700

791,427−2,000FY201943,45549,25018,759

1,764

2,392

1,214

2,333

(4,231)

114,937

FY201841,586

40,95417,750

2,055

2,777

2,216

1,929

(4,058)105,211

YoY difference+1,869+8,295+1,008

(291)

(384)

(1,001)

+404

(173)

+9,726

Reference page

P. 33

P. 35

P. 37

P. 41

P. 43

P. 45

—

—

—

Hankyu Hanshin Holdings Integrated Report 201972

Financial Section and Corporate Data

Review of Financial Position

Total liabilities were ¥1,550,842 million, an increase of¥12,429 million over the end of the previous consolidated fiscal
year, because of an increase in long-term deferred contribution
for construction and interest-bearing debts etc., despite a

1. Assets, Liabilities and Net Assets

decrease in the amount in accounts payable etc.

Total assets at the end of the consolidated fiscal year under

Total net assets were ¥915,381 million, an increase ofreview were ¥2,466,223 million, an increase of ¥61,297 million¥48,868 million over the end of the previous consolidated fiscal

over the end of the previous consolidated fiscal year, because ofyear, because of an increase in retained earnings etc.

an increase in property and equipment and investment securities

As a result, the equity ratio was 35.9%, and the ROE was

etc.

7.6%.

AssetsLiabilities and net assets(¥ billion)(¥ billion)
Total assets¥2,466.2 billion

Total assets¥2,404.9 billion
329.7
35.2

Noncurrent assets+48.8
Main cause:
Increase inproperty andequipment andinvestment
securities

1,749.5

Total liabilities
and net assets¥2,404.9 billion

343.7
35.7

866.5

1,783.8
1,131.5

290.4

Current assets+12.5
Main cause:
Sale of land
and increasein buildings

FY2018Current assets
Intangible assets

73

Property and equipment
Investments and other assets

Hankyu Hanshin Holdings Integrated Report 2019

303.0
FY2019406.9

Total liabilities
and net assets¥2,466.2 billion
Net assets+48.9
Main cause:
Increase inretained earnings
Long-term liabilities+15.1
Main cause:
Increase inlong-term deferred
contribution
for construction
Current liabilities‒2.6
Main cause:
Decrease in
the amount inaccounts payable

FY2018Current liabilities

Long-term liabilities

915.4

1,146.6

404.3
FY2019Net assets

2. Cash Flows(2) Cash Flows from Investing Activities

Total cash and cash equivalents at the end of the consolidated

Net cash used in investing activities was ¥116,160 million,

fiscal year were ¥27,589 million, an increase of ¥87 million overan increase of 31.5% year-on-year, because of purchases ofthe end of the previous consolidated fiscal year.

noncurrent assets of ¥137,809 million, receipt of contributions forconstruction of ¥18,252 million, etc.

(1) Cash Flows from Operating Activities
Net cash provided in operating activities was ¥126,035 million,(3) Cash Flows from Financing Activities

an decrease of 7.2% year-on-year, because of income before

Net cash used in financing activities was ¥11,171 million, aincome taxes of ¥88,562 million, depreciation and amortization

decrease of 74.2% year-on-year, because of a net decrease inof ¥54,172 million, paid corporation and other taxes of ¥30,542

borrowings of ¥8,879 million, the issue of bonds of ¥19,866

million, etc.

million, purchases of treasury stock of ¥10,199 million, dividends
paid of ¥9,896 million, etc.

Cash ﬂows(¥ billion)

Cash ﬂows frominvesting activities‒116.2

Cash ﬂows fromoperating activities＋126.0Cash ﬂows fromﬁnancing activities‒11.2+54.2 −30.5+13.8 −137.8

+88.6

01

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er

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Financial Section and Corporate Data

D

e

or

ta
xe
s

tis
a

ta
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co

in
e
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n

+16.3

27.5

Ye
ar

+19.9 −10.2−8.9

M+18.3 −12.9

3. Fund Procurement

The outstanding balance of interest-bearing debt at the end of
the consolidated fiscal year was ¥877,055 million, an increaseof ¥10,297 million over the end of the previous consolidated
fiscal year, as expenditure of funds for investments in facilities

The ratio of interest-bearing debt/EBITDA, which is thebenchmark the Company uses for assessing the soundness of its
financial position, stood at 5.1 times at the end of the fiscal year
compared with 5.4 times at the end of the previous fiscal year.

and equipment such as the Umeda 1-1 Project and payment ofincome tax etc., exceeded receipt of funds from EBITDA (operating
income + depreciation expenses + amortisation of goodwill) etc.

Hankyu Hanshin Holdings Integrated Report 201974

Financial Section and Corporate Data

Consolidated Capital Expenditure andDepreciation and Amortisation
The amount of capital expenditures (including those forintangible assets) in the consolidated fiscal year under review
was ¥114,368 million, recording an increase of ¥27,964 million(32.4%) over the previous consolidated fiscal year.

The following is a breakdown for each business segment.

(Millions of yen)(%)

FY2019YoY

Urban Transportation

33,791−3.5

Real Estate

62,44856.4

Entertainment and Communications

7,923

4.8

831

54.5

TravelInternational Transportation

678

−7.4

1,961

−14.7

Other

1,452

118.3

Total

109,087

25.8

HotelsAdjustment

5,280

—

Consolidated

114,368

32.4

Urban Transportation

International Transportation

on safety and service improvement, building of new rolling

Express invested in IT systems for in-house operations.

The railway business carried out capital investment with a focus

In the International Transportation Business, Hankyu Hanshin

stock, and improved existing rolling stock.

Real Estate

The Real Estate Business carried out capital investment for the

HotelsIn the Hotels Business, Hankyu Hanshin Hotels refurbished theguest rooms of its hotels.

Umeda 1-1 Project and acquired Lalaport Koshien (land).

Entertainment and Communications

The Entertainment and Communications Business renewed thetransmission lines of main lines.

TravelIn the Travel Business, Hankyu Travel International introduced
luxury buses and invested in IT systems for online reservations.

75

Hankyu Hanshin Holdings Integrated Report 2019

Depreciation and amortisation in the consolidated fiscal
year under review was ¥54,172 million, recording an increase of¥896 million (1.7%) over the previous consolidated fiscal year.

Business Risks
The various categories of risk to which the business performance, stock price, financial position, and other aspects of operationsof the Hankyu Hanshin Holdings Group are subject are detailed below. Nevertheless, these dangers do not encompass all risks
attendant on Group activities and there are risks other than those stated below which are difficult to foresee.
Information about future events that appears in this annual report was determined by the Group to be current as of March 31, 2019.

Legal Risk

Natural Disasters

Business Law, the Group must obtain separate permissions from the

Urban Transportation, Real Estate, Entertainment and Communications,

Ministry of Land, Infrastructure, Transport and Tourism (MLIT) for

Travel, International Transportation, and Hotels segments, the Group

each category of railway operations on each route that it intends to

has a correspondingly large assortment of facilities necessary for theoperate. Moreover, under Article 16 of the Law, a railway operator

conduct of business, such as railway installations and buildings andmust obtain the Ministry’s approval for the passenger fares it intends

retail outlets for rent. In the event of earthquakes or other major

to set and on each occasion when it wishes to change the fares.

disasters, large-scale accidents, or acts of terrorism, the business

Consequently, there is a certain risk that the Group’s railway opera-

performance and financial position of the Group could be adversely

tions may be constrained in some way by the MLIT’s administration

affected by damage to these facilities, its customers, and/or limitationsof these regulations.

placed on its business operations.

In accordance with the stipulations of Article 3 of the Railway

Operating as it does across an extremely wide range of businesses in its

Interest-Bearing Debt

The balance of interest-bearing debt held by the Group as of theend of March 2019, on a consolidated basis, was ¥877,055 million.
As a result of the acquisition of shares in Hanshin Electric
Railway through a successful public tender offer (takeover bid) on
June 27, 2006, Hanshin Electric Railway has become a consolidated
subsidiary of Hankyu Holdings. This acquisition has resulted in an
increase in the balance of interest-bearing debt of the Group. On theother hand, management integration between the Hankyu HoldingsGroup and Hanshin Electric Railway Group has increased cash flows,
so the Group is not expected to have any significant difficulty inrepaying its debts.
The Group will take measures to diversify its fund procurement
methods to deal with an increase in interest-bearing debt resulting
from the integration, and will use all possible means to minimise thenegative impact of interest rate movements. But in the unlikely eventthat interest rates rise suddenly and in excess of our projections,this could exert an adverse effect on the business performance andfinancial position of the Group.

Decline in the Market Value of Assets Held by Membersof the Hankyu Hanshin Holdings GroupIn the case of a substantial decline in the market value of inventory
assets, property and equipment and intangible assets, investment
Financial Section and Corporate Data

securities, and other assets, the recording of impairment losses orvaluation losses would likely have a negative impact on the earnings
performance and financial position of the Hankyu Hanshin HoldingsGroup.

Declining Birth Rate

In the Group’s mainstay Kyoto-Osaka-Kobe area, demographic
changes accompanying the declining birth rate are expected tolower demand for railway, bus, and taxi services and other types ofpassenger transportation and to lower demand in other businessareas. In addition, securing personnel is likely to become difficult as
an imbalance between supply and demand develops in the labour
market. Such contingencies could affect the business performanceand financial position of the Group.

Hankyu Hanshin Holdings Integrated Report 201976

Financial Section and Corporate Data

Consolidated Balance Sheets
As of March 31, 2018 and 2019

Millions of yen

2018

Thousands of U.S. dollars

2019

2019

AssetsCurrent assets:
Cash and deposits¥28,836¥

28,856$

259,964

Trade receivables

92,61993,154

839,225

Land and buildings for sale

116,177

119,918

1,080,342

Finished products and merchandise

2,609

2,568

23,135Work in progress

3,364

3,864

34,811

Materials and supplies

4,644

4,762

42,901

Other

42,43550,095451,306

(239)

(254)

(2,288)290,448

302,9632,729,396

Buildings and structures–net (Note 6.3)

565,783

572,410

5,156,847

Machinery, equipment and vehicles–net (Note 6.3)

64,081

65,672591,640

Land (Notes 6.3 and 6.5)

940,894

955,0128,603,712

Construction in progress

160,931

171,336

1,543,568

Allowance for doubtful receivables
Total current assets

Noncurrent assets:
Property and equipment:

17,84019,358174,396

1,749,531

1,783,789

16,070,171

Goodwill

18,457

16,214

146,072

Other (Notes 6.2 and 6.3)

16,756

19,520175,856

Total intangible assets

35,21435,734

321,928

285,953

291,7712,628,568

Deferred tax assets

5,038

6,965

62,748Net defined benefit asset

10,061

14,595

131,486

Other (Note 6.3)

28,89430,610275,766

Other–net (Note 6.3)
Total property and equipment (Notes 6.1 and 6.2)
Intangible assets:

Investments and other assets:
Investment securities (Notes 6.3 and 6.4)

Allowance for doubtful receivables

(217)

(208)

(1,874)

Total investments and other assets

329,731

343,735

3,096,712

2,114,477

2,163,259

19,488,820

2,404,926

2,466,223

22,218,225

Total noncurrent assets
Total assets

77

Hankyu Hanshin Holdings Integrated Report 2019

Millions of yen

2018

Thousands of U.S. dollars

2019

2019

Liabilities:
Current liabilities:
Trade payables¥

46,891¥

48,054$

432,919

Accrued expenses

21,032

21,380

192,613

Short-term borrowings (Note 6.3)

142,091

137,036

1,234,559—

20,000180,180

Lease obligations

1,493

1,567

14,117

Income taxes payable

11,811

4,576

41,225

Provision for bonuses

4,405

4,345

39,144

Other (Note 6.3)

179,183

167,324

1,507,423

Total current liabilities

406,909404,286

3,642,216

Long-term debt (Note 6.3)

625,340

621,375

5,597,973

Bonds

92,00092,000828,829

Lease obligations

5,832

5,076

45,730Current portion of bonds

Long-term liabilities:

179,375

183,167

1,650,153

Deferred tax liabilities related to land revaluation (Note 6.5)

5,152

5,152

46,414

Net defined benefit liability

61,65462,209560,441

Deferred tax liabilities

Long-term deferred contribution for construction

52,586

63,375570,946

Other

109,561

114,198

1,028,811

1,131,503

1,146,555

10,329,324

1,538,413

1,550,842

13,971,550

Common stock

99,474

99,474896,162

Capital surplus

146,053

146,591

1,320,640

Retained earnings

583,482

641,731

5,781,360

Less treasury stock, at cost

(24,247)(34,400)(309,910)

Total shareholders’equity

804,764

853,397

7,688,261

Total long-term liabilities
Total liabilities
Net assets:
Shareholders’equity:

Accumulated other comprehensive income:27,14624,144

217,514

Deferred gains or losses on hedges

(494)

(325)

(2,928)

Revaluation reserve for land (Note 6.5)

5,575

5,523

49,757

Foreign currency translation adjustments

607

(163)

(1,468)Valuation difference on available-for-sale securities

Total accumulated other comprehensive income

125

2,287

20,60432,961

31,465

283,468

Non-controlling interests (Note 6.5)

28,78630,517274,928

Total net assets

866,512915,3818,246,676

2,404,926

2,466,223

22,218,225

Total liabilities and net assets

Hankyu Hanshin Holdings Integrated Report 2019

Financial Section and Corporate Data

Cumulative adjustments related to retirement benefit plans

78

Financial Section and Corporate Data

Consolidated Statements of Income
Years ended March 31, 2018 and 2019

Millions of yen

2018

Revenues from operations¥

Thousands of U.S. dollars

2019760,252¥

2019791,427$ 7,129,973

650,127

5,857,000

676,489

6,094,495

Costs of revenues from operations:Operating expenses and cost of sales of transportation

625,407

Selling, general and administrative expenses (Note 7.1)

29,633

Total costs of revenues from operations (Note 7.2)

655,041

Operating income

26,361

237,486

114,937

105,211

1,035,468

Non-operating income:Interest income

119

Dividend income

1,212

Equity in income of affiliates

9,232

Miscellaneous income

2,227

Total non-operating income

12,791

123

1,108

1,372

12,3602,918

26,2884,962

44,703

9,377

84,477

Non-operating expenses:
Interest expenses

10,059Loss on retirement of noncurrent assets

1,825

Miscellaneous expenses

2,342

Total non-operating expenses

14,228

9,615

86,622

1,756

15,8202,399

21,613

103,774

13,771

110,543

124,063

Gain on contributions for construction

32,483
1,276

3,657

32,946

Income on sales of noncurrent assets
Other

1,408

Total extraordinary income

35,168

Ordinary income

995,883

Extraordinary income:

2,758

24,847

806

7,261

7,221

65,054Extraordinary loss:
Loss on reduction of noncurrent assets
Impairment loss (Note 7.3)

4,042

33,702
819

Other

3,011

Total extraordinary loss

37,533

Income before income taxes

101,410

Income taxes – current

28,389

Income taxes – deferred

4,972

Total income taxes

33,362

Net income

68,047

Net income attributable to non-controlling interests

1,685

Net income attributable to owners of the parent

66,361

36,414

19,262

173,532

29,202

263,081

19,104

172,108

5,897

53,126

88,562

797,856

1,420

12,793

20,525

184,91068,036

612,937

2,560

23,06365,476589,874

Consolidated Statements of Comprehensive Income
Years ended March 31, 2018 and 2019

Millions of yen

2018

Net income
Other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land

Foreign currency translation adjustments

Remeasurements of defined benefit plans
Share of other comprehensive income of associates accounted
for using equity method
Total other comprehensive income (Note 8.1)

¥ 68,047
1,766
(984)
5
519

¥

2019

68,036(2,635)
158
―

(670)

$

612,937(23,739)
1,423―(6,036)

1,625

2,945

26,532

3,009(1,268)(11,423)

5,944(1,471)(13,252)

Comprehensive income

73,991

66,565

599,685

Owners of the parent

72,22564,287579,162

Comprehensive income attributable to:Non-controlling interests

79

Thousands of U.S. dollars

2019

Hankyu Hanshin Holdings Integrated Report 2019

1,766

2,277

20,514

Consolidated Statements of Changes in Net Assets
Years ended March 31, 2018 and 2019

Millions of yen
Shareholders’equity
Commonstock

CapitalsurplusRetainedearnings

Less treasury
stock, at cost

Total
shareholders’equityBalance as of March 31, 2017
Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders
Change in scope of consolidation
Increase or decrease by corporate division
Changes in equity in affiliates accounted
for by equity-method treasury stock
Increase or decrease caused by organization restructuring ofcompanies to which the equity method is applicable
Net changes of items other than shareholders’equity
Total changes of items during the period¥99,474¥146,053¥527,884¥(13,537)¥759,875(10,689)129(9,360)66,361(24)(10,689)
119

Balance as of March 31, 2018
Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders
Change in scope of consolidation
Increase or decrease by corporate division
Changes in equity in affiliates accounted
for by equity-method treasury stock
Increase or decrease caused by organization restructuring ofcompanies to which the equity method is applicable
Net changes of items other than shareholders’equity
Total changes of items during the period
Balance as of March 31, 201999,474(9,360)66,361
(24)
(10)

－
165
(1,534)——

146,053

55,598583,482(9,896)65,4762

0

165(1,534)
(2)

(2)

(146)

(146)

(10,709)44,888(24,247)804,764(10,199)
45(9,896)65,4762(10,199)
45

537

537
2,666

2,666
—
0

0
—

—
99,474537
146,591

58,248641,731(10,153)(34,400)

48,633
853,397

Millions of yen
Accumulated other comprehensive income
Valuationdifference on Deferred gains oravailable-for-sale losses on hedges
securities¥22,545¥472¥5,546

Cumulative
Foreign currency
adjustments relatedtranslation
to retirement
adjustments
benefit plans¥100¥(1,591)

Total
accumulated
othercomprehensive
income¥27,074

Subscription
rights to shares

Non-controllinginterests

Total net assets¥496¥17,213¥804,659(9,360)66,361(24)(10,689)
119－
165(1,534)
(2)
(146)

4,601
4,601
27,146

(966)
(966)
(494)

29
29
5,575

507
507
607

1,716
1,716
125

5,887
5,887
32,961

(496)
(496)
－

11,572
11,572
28,786

16,96361,852866,512Financial Section and Corporate Data

Balance as of March 31, 2017
Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders
Change in scope of consolidation
Increase or decrease by corporate division
Changes in equity in affiliates accounted
for by equity-method treasury stock
Increase or decrease caused by organization restructuring ofcompanies to which the equity method is applicable
Net changes of items other than shareholders’equity
Total changes of items during the period
Balance as of March 31, 2018
Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders
Change in scope of consolidation
Increase or decrease by corporate division
Changes in equity in affiliates accounted
for by equity-method treasury stock
Increase or decrease caused by organization restructuring ofcompanies to which the equity method is applicable
Net changes of items other than shareholders’equity
Total changes of items during the period
Balance as of March 31, 2019

Revaluation
reserve for land

(9,896)65,4762(10,199)
45
537
2,666
－
0
－
(3,001)(3,001)
24,144

168
168
(325)

(52)
(52)
5,523

(771)
(771)
(163)

2,161
2,161
2,287

(1,496)(1,496)
31,465

－
－
－

1,731
1,731
30,517

235
48,868915,381

Hankyu Hanshin Holdings Integrated Report 201980

Financial Section and Corporate Data
Consolidated Statements of Changes in Net Assets

Thousands of U.S. dollars
Shareholders’equity

Balance as of March 31, 2018

Commonstock

CapitalsurplusRetainedearnings

Less treasury
stock, at cost

Total
shareholders’equity$896,162$1,315,793$5,256,595$(218,441)$7,250,126

Changes of items during the period:
Dividends from surplus(89,153)(89,153)

Net income attributable to owners of the parent

589,874

589,874

Reversal of revaluation reserve for land

18

Purchase of treasury stock18(91,883)

Disposal of treasury stock0

Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders

405

4,838

Change in scope of consolidation(91,883)405
4,838

24,01824,018—

Increase or decrease by corporate division

Changes in equity in affiliates accounted
for by equity-method treasury stock
Increase or decrease caused by organization restructuring ofcompanies to which the equity method is applicable

00―

Net changes of items other than shareholders’equity
Total changes of items during the period
Balance as of March 31, 2019

—

4,838

524,757(91,468)

438,135

896,162

1,320,640

5,781,360(309,910)

7,688,261

Thousands of U.S. dollars
Accumulated other comprehensive income
Valuationdifference on Deferred gains oravailable-for-sale losses on hedges
securities

Balance as of March 31, 2018

$244,559$ (4,450)

Revaluation
reserve for land

$50,225

Cumulative
Foreign currency
adjustments relatedtranslation
to retirement
adjustments
benefit plans$5,468$1,126

Total
accumulated
othercomprehensive
income$296,946

Subscription
rights to shares

Non-controllinginterests

Total net assets—$259,333$7,806,414

Changes of items during the period:
Dividends from surplus(89,153)

Net income attributable to owners of the parent

589,874
18

Reversal of revaluation reserve for land
Purchase of treasury stock(91,883)

Disposal of treasury stock

405

Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders

4,838

Change in scope of consolidation

24,018

Increase or decrease by corporate division

Changes in equity in affiliates accounted
for by equity-method treasury stock
Increase or decrease caused by organization restructuring ofcompanies to which the equity method is applicable

Net changes of items other than shareholders’equity

81

—
0
—
(27,036)

1,514

(468)

(6,946)

19,468(13,477)—

15,595

2,117

Total changes of items during the period(27,036)

1,514

(468)

(6,946)

19,468(13,477)—

15,595440,252

Balance as of March 31, 2019

217,514(2,928)49,757(1,468)20,604283,468—

274,928

8,246,676

Hankyu Hanshin Holdings Integrated Report 2019

Consolidated Statements of Cash Flows
Years ended March 31, 2018 and 2019

Millions of yen

2018

Thousands of U.S. dollars

2019

2019

Cash flows from operating activities:
Income before income taxes
Depreciation and amortisation
Impairment loss¥

101,410¥

88,562$

797,856

53,27654,172

488,036

819

19,262

173,532

Amortisation of goodwill

2,323

2,240

20,180Equity in (income) losses of affiliates(9,232)(4,962)(44,703)

(323)

464

4,180

Increase (decrease) in net defined benefit liability
Increase (decrease) in allowance for doubtful receivables

(52)

9

81

Interest and dividend income(1,331)(1,496)(13,477)

Interest expenses

10,0599,615

86,622

Loss on reduction of noncurrent assets

33,702

4,042

36,414

Loss on retirement of noncurrent assets

1,825

1,756

15,820(Income) losses on sales of noncurrent assets(1,046)(2,746)(24,739)

Gain on contributions for construction(32,483)(3,657)(32,946)

Decrease (increase) in trade receivables(8,806)(718)(6,468)Decrease (increase) in inventories(9,254)(4,003)(36,063)

Increase (decrease) in trade payables

6,525

1,094

9,856

Other

20,412(1,965)(17,703)

Subtotal

167,824

161,672

1,456,505

4,155

4,533

40,838Interest and dividends received
Interest paid

(10,154)(9,627)(86,730)

Income taxes (paid) refunded(26,005)(30,542)(275,153)

Net cash provided by operating activities

135,821126,035

1,135,450(102,863)(137,809)(1,241,523)

Cash flows from investing activities:
Purchases of noncurrent assets
Proceeds from sales of noncurrent assets

2,010

16,310146,937

Purchases of investment securities(7,807)(11,744)(105,802)

Receipt of contributions for construction

21,222

18,252

164,432(914)(1,169)(10,532)(88,351)(116,160)(1,046,486)

Other
Net cash used in investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term borrowings(33,954)

1,949

17,559Proceeds from long-term debt

56,14030,450274,324

Repayment of long-term debt

(43,293)(41,278)(371,874)—

19,866

178,973

Proceeds from new bonds issued(10,000)――

Purchases of treasury stock(10,689)(10,199)(91,883)

Dividends paid

(9,360)(9,896)(89,153)

(363)

(378)

(3,405)

Dividends paid to non-controlling shareholders ofconsolidated subsidiaries
Proceeds from share issuance to non-controlling shareholders

10,115

18

162

Other

(1,836)(1,703)(15,342)

Net cash used in financing activities(43,242)(11,171)(100,640)

360

(551)

(4,964)

Increase (decrease) in cash and cash equivalents

4,588(1,848)(16,649)

Cash and cash equivalents at beginning of year

22,53027,501

247,757

383

1,935

17,43227,501

27,589248,550

Effect of exchange rate changes on cash and cash equivalents

Increase in cash and cash equivalents from newly
consolidated subsidiary
Cash and cash equivalents at end of year

Hankyu Hanshin Holdings Integrated Report 2019

Financial Section and Corporate Data

Redemption of bonds

82

Financial Section and Corporate Data

Notes to the Consolidated Financial Statements
1. Framework for Preparing Consolidated Financial Statements 
1.1

Method of preparation for consolidated financial statements

1.3

Special measures to ensure the appropriateness of
consolidated financial statements and other reports

The Company’s consolidated financial statements were prepared inaccordance with the “Regulations Concerning Terminology, Forms, and

The Company makes special efforts to ensure the appropriateness of

Preparation Methods of Consolidated Financial Statements” (Finance Ministry

its consolidated financial statements and other reports. In addition to

Ordinance No. 28 of 1976).

subscribing to related publications, it has joined the Financial AccountingStandards Foundation and participates in seminars and other events held by

1.2

Audit verification

the Foundation, audit firms and other relevant organisations to establish a

The Company’s consolidated financial statements for the fiscal year ended

system for understanding the accounting standards in detail and responding

March 31, 2019 (April 1, 2018 to March 31, 2019) were audited by KPMG

suitably to changes made to them. The Company also compiles and provides

AZSA LLC, as per Article 193-2 (1) of Japan’s Financial Instruments andcommon manuals for preparing the consolidated financial information on

Exchange Act.

a Groupwide basis, and arranges training courses for accounting staff ataffiliates.

1.4

Translation into U.S. dollars

The U.S. dollar amounts have been translated, for convenience only, at ¥111
= US$1, the prevailing exchange rate on the Tokyo Foreign Exchange Market
as of March 31, 2019.

2. Basis of Preparation of Consolidated Financial Statements 
2.1

Scope of consolidation

2.3

Items related to fiscal year-ends, etc., for consolidated
subsidiaries

2.1.1 Number and names of consolidated subsidiaries
Number of consolidated subsidiaries—94.

The account closing date for Hankyu Hanshin Express (USA) Inc., Hankyu

Names of primary consolidated subsidiaries are listed on page 111.

Hanshin Express (Deutschland) GmbH and 19 other consolidated subsidiaries

Further, as from the fiscal year ended March 31, 2019, Mimamorumeis December 31. The consolidated financial statements have been prepared

Co. Ltd. and two other companies have been included in the scope ofusing the financial statements based on the closing date of each company,

consolidation due to their increased significance.

and major transactions conducted between the individual closing dates andAlso, Hanshin Truck Co. Ltd. has been excluded from the scope ofthe consolidated closing date have been adjusted for as necessary for the

consolidation due to the transfer of shares.

consolidation.

2.1.2 Names of major nonconsolidated subsidiaries

2.4

Hankyu Mediax Co., Ltd.

2.4.1

Nonconsolidated subsidiaries have been excluded from the scope ofI.

Accounting policies
Valuation standards and method for major assets

Securities

consolidation because the total amounts of their entire assets, sales, net

Available-for-sale securities:

income or loss (amount equivalent to equity interests), retained earningsa.

Available-for-sale securities with fair market values:(amount equivalent to equity interests) and other figures are limited, and the

The market value method is applied based on the market price, etc., ateffect on the consolidated financial statements as a whole is negligible.

the fiscal year-end. (Related valuation differences are directly included
under net assets and the cost of securities sold is determined by the

2.2

Items related to application of equity-method accounting

2.2.1 Number and names of affiliates for which equity method is appliedmoving average method.)b. Available-for-sale securities without fair market values:
The moving average cost method is applied.

Number of affiliates for which equity method is applied—11.

For investments in limited liability investment partnerships and similar

Names of primary companies are listed on page 111.

investments, however, the Company’s share of assets held by suchpartnerships is recorded.

2.2.2 Names of nonconsolidated subsidiaries and affiliates for which equity
method is not applied
The nonconsolidated subsidiaries (Hankyu Mediax Co., Ltd., etc.) and affiliates

II.

(OS Co., Ltd., etc.) to which the equity method does not apply use the cost

The market value method is applied.

Derivatives

method rather than the equity method because the total amounts of their
net income or loss (amount equivalent to equity interests), retained earnings

III. Inventories(amount equivalent to equity interests) and other figures are limited, and thea.

effect on the consolidated financial statements as a whole is negligible.

Land and buildings for sale:
The identified cost method is applied. (Balance sheet values arecalculated by writing down book values based on decreased profitability.)b. Other inventories:
The moving average cost method is applied. (Balance sheet values arecalculated by writing down book values based on decreased profitability.)

83

Hankyu Hanshin Holdings Integrated Report 2019

Notes to the Consolidated Financial Statements

2.4.2

Depreciation methods for major depreciable assets

2.4.6

Significant hedge accounting methods

I.

Property and equipment (excluding leased assets)

I.

a.

Replacement assets of railway operations:Deferred hedge accounting is applied.
Exceptional accounting applies to interest rate swaps that satisfy the

Replacement method (mainly the declining-balance method) is applied.
b. Other property and equipment:

Method of hedge accounting

requirements for exceptional accounting for interest rate swaps.

While property and equipment (excluding leased assets) are depreciated

Designation accounting applies to foreign currency-denominatedfor the most part using the declining balance method, there is also somereceivables and payables that have forward exchange contracts and which

use of the straight-line method.

satisfy the requirements for designation accounting.

However, regarding the abovementioned “Replacement assets ofrailway operations” and “Other property and equipment,” depreciation ofII.

buildings acquired on or after April 1, 1998 (excluding facilities attached

Main hedging instruments and hedged items are as follows:

Hedging instruments and hedged items

to buildings) and depreciation of facilities and structures that are

a. Hedging instruments: Forward exchange contracts, currency swap

attached to buildings and which were acquired on or after April 1, 2016

contracts, currency option contracts

are calculated using the straight-line method.

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

II.

Intangible assets (excluding leased assets)b. Hedging instruments: Interest rate swap contracts, interest rate option

Intangible assets (excluding leased assets) are amortised using the straight-

contracts

line method.

Hedged items: Loans payable and bonds

Internal-use software is amortised by the straight-line method over its
useful life (mainly 5 years).

III. Hedging policy
The Group is exposed to the risk of foreign exchange and interest rate

III. Lease assets

fluctuations and uses derivatives as a means of hedging these risks.

Lease assets are depreciated using the straight-line method with the leaseterm as the useful life and the residual value as zero.

IV. Method for evaluating the effectiveness of hedges
Other than when the effectiveness of hedges is obvious, hedge effectiveness

2.4.3
I.

Accounting standards for significant transactions

is evaluated semiannually using the comparison and analysis method.

Allowance for doubtful receivables

Allowance for doubtful receivables is provided based on the ratio of past

V. Other risk management methods concerning hedge accounting

loan loss experience for general accounts and individually estimatedInternal rules regarding the segregation of duties, maximum transaction

uncollectible amounts for certain individual accounts.

amounts, etc., have been established for the use of derivative transactions
based on which derivative transactions are used. The implementation andII.

Provision for bonuses

management of derivative transactions are carried out by the accounting

The Company recognises as provision for bonuses the amount expected todepartment with the approval of the decision makers in each Group

be paid to employees as bonuses for the fiscal year.

company. An internal control system has been developed to ensure that thecontract signing and termination comply with the internal rules.

2.4.4

Accounting methods for retirement benefits

In calculating the amount of retirement benefit obligations, the benefit formula2.4.7

method is used to distribute the estimated amount of retirement benefit into

Goodwill is amortised, in general, in equal amounts over five years. The

the period up to March 31, 2019.

goodwill resulting from the management integration with Hanshin Electric

Past service cost is recorded in expenses using the straight-line method
over a certain number of years (mainly 10 years), which is within the average

Method and period of amortisation of goodwill

Railway Co., Ltd. in the fiscal year ended March 31, 2007 is being amortisedin equal amounts over 20 years.

remaining years of service of the employees at the time when these costs are
incurred.

2.4.8

Scope of cash included in consolidated statements of cash flows

Actuarial differences are recorded in expenses using the straight-line

In preparing the consolidated statements of cash flows, cash on hand, readily

method over a certain number of years (mainly 10 years), which is within theavailable deposits and short-term highly liquid investments without material

average remaining years of service of the employees at the time when theserisk of changing their value and with maturities not exceeding three months

costs are incurred.

at the time of purchase are considered to be cash and cash equivalents.

Financial Section and Corporate Data

2.4.5

Basis for converting significant assets and liabilities in foreign
currencies into Japanese yen

The assets and liabilities of overseas subsidiaries are converted into yen
based on the spot exchange rate on the balance sheet date, and income
and expenses of overseas subsidiaries are converted into yen based on the
average exchange rate during the relevant period. Differences in conversion
are included in foreign currency translation adjustments and non-controllinginterests in the net assets section.

Hankyu Hanshin Holdings Integrated Report 201984

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

2.4.9
I.

Other significant matters for preparing consolidated financial

cost of noncurrent assets, after deducting the amounts equivalent to thestatements

contributions for construction, is recognised in extraordinary loss as loss on

Accounting for contributions for construction in railway operations

reduction of noncurrent assets.

The Company accepts contributions for construction from local governments
and other organisations that cover a portion of construction expenses arisingII.

from the construction of continuous grade separations in railway operations.

Accounting for consumption tax is based on the tax exclusion method.

Accounting for consumption tax

When construction is completed, noncurrent assets acquired as a result of
accepting these contributions for construction are recognised at acquisition

III. Adoption of consolidated tax payment systemcost after deducting the amounts equivalent to the said contributions for

A consolidated tax payment system has been adopted.

construction.
In the consolidated statements of income, gain on contributions forconstruction is recognised in extraordinary income, and the acquisition

3. Standards and Guidance Not Yet Adopted (Accounting Standard for Revenue Recognition)

On the ASBJ’s basic policy for development of accounting standard for

The following standard and guidance were issued but not yet adopted.

revenue recognition, the basic principles of IFRS No. 15 were incorporated•	“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,

into the ASBJ Statement No. 29 as starting points, the Statement was set out,

March 30, 2018)•	“Implementation Guidance on Accounting Standard for Revenue
Recognition” (ASBJ Guidance No. 30, March 30, 2018)from the viewpoint of comparability among financial statements which is oneof merits for consistency with IFRS No. 15. If there are any items which should
be considered in current practices in Japan, alternative treatments would be
added to the extent of not losing the comparability.

(1) Outline
The International Accounting Standard Board (“IASB”) and the Financial(2) Effective date

Accounting Standard Board (“FASB”) jointly developed comprehensive

Effective from the beginning of the fiscal year ended March 31, 2022.

accounting standard for revenue recognition and the Revenue from Contracts
with Customers was issued in May 2014 (IFRS No. 15 by IASB, and Topic 606(3) Effects of the application of the standards

by FASB).

The Company and its consolidated domestic subsidiaries are currently in the

IFRS No. 15 was applied for annual reporting periods beginning on
or after January 2018, Topic 606 was also applied from annual reporting

process of determining the effects of these new standards on the consolidated
financial statements.

periods beginning December 15, 2017. Based on such a situation, the ASBJ
developed the comprehensive accounting standard for revenue recognition/
the implementation guidance and issued them together.

4. Change in Method of Indication (Changes due to the partial reform of “The Accounting Standards for Tax
Effect Accounting”)“Income on sales of noncurrent assets,” having been reported in “Other”

The method has been changed so that deferred tax assets are reportedof extraordinary income until the fiscal year ended March 31, 2018, isseparately from investment and other assets, and deferred tax liabilities arereported separately from fiscal year ended March 31, 2019 due to its

reported under noncurrent liabilities as a result of application of the partial

increased significance.

reform of “The Accounting Standards for Tax Effect Accounting” (ASBJ No. 28,

As a result, in the consolidated statements of income for the fiscal year

February 16, 2018) from the outset of the fiscal year ended March 31, 2019.

ended March 31, 2018, “Other” of 2,685 million yen in extraordinary income

As a result, 6,038 million yen of “deferred tax assets” are reported undercurrent assets, 5,038 million yen of “deferred tax assets” are reported underinvestment and miscellaneous assets, and 1 million yen of “deferred tax
liabilities,” which were previously part of “miscellaneous” current liabilities are
now reported under noncurrent “deferred tax liabilities.”
Further, “total assets” and “total liabilities” declined respectively by
5,179 million yen as a result of offsetting the “deferred tax assets” against the“deferred tax liabilities.”
Also, we have added the content outlined by “The Accounting Standards
for Tax Effect Accounting” Comment 8 (excluding the total amounts forvaluation allowance) and Comment 9 as stipulated by Clause 3 to Clause 5of the partial reform of “The Accounting Standards for Tax Effect Accounting.”
However, we did not list the content that draws on the fiscal year ended
March 31, 2018, following the transitional measures outlined under Clause 7of the partial reform of “The Accounting Standards for Tax Effect Accounting.”

85(Consolidated statements of income)Hankyu Hanshin Holdings Integrated Report 2019is reported as “Income on sales of noncurrent assets” of 1,276 million yen
and “Other” of 1,408 million yen.

Notes to the Consolidated Financial Statements

5. Additional Information(Performance-based stock compensation plan for directors, etc., of the Company’s subsidiaries) 
5.1

Outline of transaction

5.2

Shares in the Company remaining under the trust

The Company has not adopted any stock compensation plan using a trust for

Shares in the Company remaining under the trust were listed as treasury

its directors, employees or others.

stock in the net assets section on a book value basis for trust (excluding

However for the purpose of enhancing consciousness to contribute toancillary expenses). The book value of, and the number of shares of thethe improvement in medium-and-long term performance and to increase

treasury stock at the end of the fiscal year ended March 31, 2018 were 1,430

corporate value by clarifying the linkage between performance and corporate

million yen and 357,968 shares, and at the year ended March 31, 2019, arevalue of the Group, Hankyu corporation, Hanshin Electric Railway Co., Ltd.,1,519 million yen and 377,008 shares respectively.

and Hankyu-Hanshin Real Estate Co. Ltd. have adopted a performance based
stock compensation plan using a trust of shares in the company (hereinafterreferred to as the “System”) for full-time directors and corporate officers,
excluding outside directors and nonresidents of Japan and employees ofother companies on loan to Hankyu-Hanshin Real Estate Co. Ltd. from othercompanies.
The System uses an officer compensation BIP (Board Incentive Plan)trust, under which shares in the company will be provided to, and money
equivalent to exchange value of shares in the company will be paid to,
directors and others based on performance and position.
The System will be effective for three years from the fiscal year ended
March 31, 2018 to the fiscal year ended March 31. 2020.

Financial Section and Corporate Data

Hankyu Hanshin Holdings Integrated Report 201986

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

6. Consolidated Balance Sheets 
6.1

Accumulated depreciation of property and equipment
Millions of yen

6.3

6.2

from the acquisition cost of noncurrent assets

Thousands of U.S. dollars

2018

2019

2019

¥1,144,599¥1,150,595$10,365,721

Accumulated contributions for construction directly deducted

Millions of yen

Thousands of U.S. dollars

2018

2019

2019

¥443,713¥445,997$4,017,991

Pledged assets and secured liabilities

The following table shows the assets pledged as collateral. Amounts in parentheses () indicate those related to a railway foundation.

Millions of yen

Thousands of U.S. dollars
2019

2018

2019

Property and equipment:¥201,129(¥201,129)¥200,392(¥200,392)$1,805,333

Machinery, equipment and vehicles

Buildings and structures

49,401(49,401)

50,614(50,614)455,982($1,805,333)(455,982)

Land

242,231(242,231)

242,100(242,100)

2,181,081(2,181,081)

Other

2,139

(2,139)3,018(3,018)27,189(27,189)

118

(118)

118

(118)

1,063

(1,063)

Intangible assets:
Other
Investments and other assets:
Investment securities

532

(—)

438

(—)

3,946

(—)

Other

120

(—)

176

(—)

1,586

(—)

Total

495,674(495,021)

496,859(496,244)

4,476,207(4,470,667)

In addition to the above, the Company pledged investment securities (fiscal year ended March 31, 2018: 800 million yen, fiscal year ended March 31, 2019:
800 million yen) as collateral for loans of third parties.
The following table shows the secured liabilities. Amounts in parentheses () indicate those related to a railway foundation.
Millions of yen

Thousands of U.S. dollars
2019

2018

2019

Current liabilities:
Short-term borrowings
Other¥9,354(¥9,263)¥9,446(¥9,446)$85,099($85,099)

92

(—)

90

(—)

811

(—)

Long-term liabilities:
Long-term debt

112,823(112,823)

113,477(113,477)

1,022,315(1,022,315)

Total

122,270(122,086)

123,014(122,923)

1,108,234(1,107,414)

6.4

The following table shows the securities of nonconsolidated subsidiaries and affiliates.
Millions of yen

Investment securities

87

Thousands of
U.S. dollars

2018

2019

2019

¥229,209¥239,486$2,157,532

Hankyu Hanshin Holdings Integrated Report 2019

Notes to the Consolidated Financial Statements

6.5

Two consolidated subsidiaries and an equity-method affiliate

6.6

revaluated land for business use based on the Law Concerning

The Company and its subsidiaries provide a liability guarantee for loans ofRevaluations of Land (Law No. 34, promulgated on March 31,

the companies, etc., listed below.

1998) and the Law to Partially Modify the Law Concerning
Revaluations of Land (Law No. 19, promulgated on March 31,
2001). Of the valuation differences identified as a result of this,Contingent liabilities

Fiscal year ended March 31, 2018
Millions of yen

the consolidated subsidiaries recorded the amount corresponding

Borrowers on loans for purchase of landand buildings¥20,633

to the taxes on the valuation difference in the liability section

Nishi-Osaka Railway Co., Ltd.

18,931

as “Deferred tax liabilities related to land revaluation” andthe amount attributable to minority shareholders as “noncontrolling interests.” The amount remaining after subtracting
these was recorded in the net assets section as “Revaluation
reserve for land.” The equity-method affiliate recorded thePT IZUMI SENTUL REALTY848

NNH MIZUKI JOINT STOCK COMPANY

401

Other (two companies)

54

Total

40,868amount corresponding to its equity in the valuation difference(after subtracting taxes) in the net assets section as “Revaluation

Fiscal year ended March 31, 2019

reserve for land.”•	Revaluation method

Millions of yen

Thousands of
U.S. dollars

The revaluation amounts were determined based on the revaluatedNishi-Osaka Railway Co., Ltd.

¥  18,204$  164,000

value of noncurrent assets provided for in Article 2, Paragraph 3 ofthe Enforcement Ordinance for the Law Concerning Land Revaluation

Borrowers on loans for purchase of landand buildings

12,724

114,631(Ordinance No. 119, promulgated on March 31, 1998).

PT IZUMI SENTUL REALTY

1,515

13,649SENA HHP 7 Company Limited

1,431

12,892

NNH MIZUKI JOINT STOCK COMPANY

480

4,324

Intraspeed Arcpro Kenya Limited

110

991

Other (four companies)

178

1,604

34,644

312,108•	Date of revaluation: March 31, 2002
Thousands of
U.S. dollars

Millions of yen
2018
Difference between themarket value as of March
31, 2019 of the lands forwhich reevaluation wasmade and the book valueof after reevaluation

2019

2019

Total
¥(6,343)¥(6,137)$(55,288)

In addition to the above, the Company submitted a letter of awareness for
management guidance (fiscal year ended March 31, 2018: 1,655 million yen,fiscal year ended March 31, 2019: 1,957 million yen) in connection with thefund procurement of affiliates.

7. Consolidated Statements of Income 
7.1

The breakdown of selling, general and administrative expenses
is shown below

7.2

The retirement benefit expenses and the main expense items
and monetary amounts within the amounts of allowance andThousands of
U.S. dollars

Millions of yen

provision included in the costs of revenues from operations areshown below.

2018

2019

2019

Personnel expenses¥14,334¥14,752$132,901

Expenses

11,108

7,686

69,243

2018

2019

2019

Taxes

1,000

746

6,721

Retirement benefit expenses¥8,485¥7,797$70,243

866

934

8,414

Provision for bonuses

4,582

4,546

40,955

Depreciation andamortisation
Amortisation of goodwill

2,323

2,240

20,180Total

29,63326,361

237,486

Millions of yen

Thousands of
U.S. dollars

Financial Section and Corporate Data

Hankyu Hanshin Holdings Integrated Report 201988

Financial Section and Corporate Data

7.3

Loss on impairment

Fiscal year ended March 31, 2018
Our Group recorded loss on impairment on the following asset groups.
Millions of yen
Use

Type

RegionAmountRental Real Estate Assets (1 item)

Other intangible assets, etc.

Osaka

¥ 407

International Transportation Assets (14 items)

Buildings and Structures, etc.

Chiba, etc.

411

(Method of asset grouping)
Our Group includes each business or property as group assets for account management purposes.
（Circumstances causing loss on impairment）
Under non-operational losses we listed as loss on impairment (819 million yen), the decline in value from book value to the amount recoverable on noncurrent asset
groups that continuously listed operational losses with little likelihood to return to profitability, and noncurrent asset groups, etc. where the decision was made tomove or evict in order to restore the property.
(Breakdown of loss on impairment)
Millions of yen
Other intangible assets, etc.

¥ 698

Buildings and Structures, etc.

121

Total

819

(Method of calculation of the recoverable value)
We determined the recoverable value from the net liquidation value.
We used a value determined by the expected liquidation value or residual value with regard to net liquidation value.

Fiscal year ended March 31, 2019
Our Group listed loss on impairment on the following asset groups.
Millions of yen
Use
Railway Operational Assets (1 item) (Note 1)

Type

RegionBuildings and Structures, etc.

Hyogo

Retailing Business Assets, etc. (20 items) (Note 2) Buildings and Structures, etc.

Osaka, etc.

Thousands of
U.S. dollars

Amount¥19,163$172,640

99

892(Method of asset grouping)
Our Group includes each business or property as group assets for account management purposes.
Note:
1.	In order to reduce train fares, the Kobe City Government approached our subsidiary Hankyu Corporation and proposed the commencement of discussions regarding theunification of operation of the Hokushin Kyuko Electric Railway (Shin-Kobe Station–Tanigami Station) under the Kobe City Transportation Bureau. Hankyu Corporation cameto the conclusion that such efforts would contribute to the stimulation of the Kobe Sannomiya area, a key business location for our Group, and entered into the discussion.
As a result, it was decided that the Group would aim to transfer railway assets related to the Hokushin Kyuko Electric Railway to the Kobe City Transportation Bureau in
the first half of fiscal 2021. A basic agreement was concluded on March 29, 2019. As a result, under extraordinary loss we recorded as loss on impairment (19,163 million
yen) ($172,640 thousand), the decline in value from book value of the railway operational assets to the amount recoverable.
2.	Under extraordinary loss we recorded as loss on impairment the amount of (99 million yen) ($892 thousand), the decline in value from book value to the amountrecoverable for noncurrent assets for which it was decided that operations would be closed or dismantled.
(Breakdown of loss on impairment)

Buildings and Structures

Millions of yen

Thousands of
U.S. dollars¥ 15,954$143,730

Land, etc.

3,308

29,802

Total

19,262

173,532(Method of calculation of the recoverable value)
We determined the recoverable value from the net liquidation value.
We used a value determined by the expected liquidation value or residual value with regard to net liquidation value.

89

Hankyu Hanshin Holdings Integrated Report 2019

Notes to the Consolidated Financial Statements

8. Consolidated Statements of Comprehensive Income 
8.1

Reclassification adjustments and tax effects related to other comprehensive income
Millions of yen

Thousands of U.S. dollars

2018

2019

2019

¥2,559)¥(4,193)＄(37,775)

(7)

365

3,288

2,552)(3,827)(34,477)

Valuation difference on available-for-sale securities:
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax (expense) or benefit

(785)

1,192

10,739Valuation difference on available-for-sale securities

1,766)(2,635)(23,739)(1,504)

240

2,162

—

—

—)

(1,504)

240

2,162

Deferred gains or losses on hedges:
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax (expense) or benefit

520)

(82)

(739)

Deferred gains or losses on hedges

(984)

158

1,423

Increase (decrease) during the year

—

—

—)

Reclassification adjustments

—

—

—)

Subtotal, before tax

—

—

—)

Tax (expense) or benefit

5)

—

—)

Revaluation reserve for land

5)

—

—)

Increase (decrease) during the year

468)

(670)

(6,036)

Reclassification adjustments

51)

—

—)

Subtotal, before tax

519)

(670)

(6,036)

Revaluation reserve for land:

Foreign currency translation adjustments:

Tax (expense) or benefit

—)

—

—)

519)

(670)

(6,036)

1,462)

3,919

35,306

948)

594

5,351

2,411)

4,513

40,658Tax (expense) or benefit(785)(1,568)(14,126)

Remeasurements of defined benefit plans

1,625)

2,945

26,532

3,023)(1,294)(11,658)

(14)

26

234

3,009)(1,268)(11,423)

5,944)(1,471)(13,252)

Foreign currency translation adjustments
Remeasurements of defined benefit plans:
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax

Share of other comprehensive income of associates accounted for using
equity method:
Increase (decrease) during the year
Reclassification adjustments
Share of other comprehensive income of associates accounted forusing equity method
Total other comprehensive income

9. Consolidated Statements of Changes in Net Assets 
Fiscal year ended March 31, 2018

9.1

Matters concerning types and total number of outstanding shares, and types and number of outstanding treasury stock(Thousands of shares)
Number of shares as of April 1, 2017

Increase in number of shares

Decrease in number of shares

Number of shares as of March 31, 2018

Number of shares issued:
Total

254,281——254,281254,281——254,281

4,508

2,788

34

7,262

4,508

2,788

34

7,262

Financial Section and Corporate Data

Common stock
Treasury stock, at cost:
Common stock (Notes 1, 2 and 3)
Total
Notes:
1.

The number of treasury stock at the end of the fiscal year ended March 31, 2018 includes 357,968 shares in the Company owned by the officer’s compensation BIP trust.

(Overview of reasons for fluctuations)
2.	The increment of 2,788 thousand treasury ordinary stock consists of: the increment of 2,268 thousand treasury stock acquired under the resolution of the Board of
Directors’ meeting; the increment of 376 thousand treasury stock (shares in the Company) acquired by the officer’s compensation BIP trust; the increment of 121
thousand treasury stock (shares in the Company) caused by organization restructuring of affiliates to which the equity method is applicable; the increment of 20
thousand treasury stock caused by purchase of odd-lot shares; and the increment of 1 thousand treasury stock (shares in the Company) caused by change in equity
ratio against affiliates to which the equity method is applicable.
3.

The decrement of 34 thousand treasury ordinary stock consists of: the decrement of 18 thousand treasury stock (shares in the Company) delivered by the officer’s compensation
BIP trust; the decrement of 15 thousand shares caused by execution of stock option; and the decrement of 0 thousand shares caused by selling of odd-lot shares.

Hankyu Hanshin Holdings Integrated Report 201990

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

9.2

Items concerning stock acquisition right

There is no relevant item.

9.3

Items related to dividends

Fiscal year ended March 31, 2018
9.3.1

Dividends paid
(Resolution)

Type of shares

Dividends paid
(Millions of yen)

Dividend per share(Yen)

Record date

Effective dateJune 13, 2017
Annual General Meetingof Shareholders

Common stock¥4,389¥17.5

March 31, 2017

June 14, 2017

November 2, 2017
Board of Directors

Common stock

4,970

20

September 30, 2017

December 1, 2017

Note: For the lower figure (the portion approved by a resolution of the Board of Directors on November 2, 2017), the total amount of dividend includes 7 million
yen of dividend for the shares in the Company owned by the officer’s compensation BIP trust.
9.3.2

Dividends whose effective date falls in the fiscal year following the fiscal year of the record date
(Resolution)

Type of shares

Dividends paid
(Millions of yen)

Source of dividends

Dividend per share(Yen)

Record date

Effective dateJune 13, 2018
Annual General Meetingof Shareholders

Common stock¥4,970Retained earnings¥20

March 31, 2018

June 14, 2018

Note: The total amount of dividend includes 7 million yen of dividend for the shares in the Company owned by the officer’s compensation BIP trust.

Fiscal year ended March 31, 2019
9.4

Matters concerning types and total number of outstanding shares, and types and number of outstanding treasury stock(Thousands of shares)
Number of shares as of April 1, 2018

Increase in number of shares

Decrease in number of shares

Number of shares as of March 31, 2019

254,281——254,281254,281——254,281

7,262

2,290

11

9,541

7,262

2,290

11

9,541

Number of shares issued:
Common stock
Total
Treasury stock, at cost:
Common stock (Notes 1, 2 and 3)
Total
Notes:
1.	The number of treasury stock at the end of the fiscal year ended March 31, 2019 includes 377,008 shares in the Company owned by the officer’s compensation BIP
trust.
(Overview of reasons for fluctuations)
2.	The increment of 2,290 thousand treasury ordinary stock consists of: the increment of 2,244 thousand treasury stock acquired under the resolution of the Board of
Directors’ meeting; the increment of 30 thousand treasury stock (shares in the Company) acquired by the officer’s compensation BIP trust; and the increment of 16
thousand treasury stock caused by the purchase of odd-lot shares.
3.	The decrement of 11 thousand treasury ordinary stock consists of: the decrement of 10 thousand treasury stock (shares in the Company) delivered by the officer's
compensation BIP trust; the decrement of 0 thousand treasury stock due the sale of odd-lot shares; and the decrement of 0 thousand treasury stock (shares in the
Company) caused by change in equity ratio against affiliates to which the equity method is applicable.

9.5

Items concerning stock acquisition right

There is no relevant item.

91

Hankyu Hanshin Holdings Integrated Report 2019

Notes to the Consolidated Financial Statements

9.6

Items related to dividends

Fiscal year ended March 31, 2019
9.6.1

Dividends paid
(Resolution)

Type of shares

June 13, 2018
Annual General Meetingof Shareholders
November 1, 2018
Board of Directors

Dividends paid

Dividend per share

Record date

Effective date

$0.18

March 31, 2018

June 14, 2018

0.18

September 30, 2018

December 3, 2018

(Millions of yen)(Thousands of
U.S. dollars)(Yen)(U.S. dollars)Common stock¥4,970$44,775¥20

Common stock

4,925

44,36920

Note:
1.	For the upper figure (the portion approved by a resolution at the annual General Meeting of Shareholders on June 13, 2018), the total amount of dividend
includes 7 million yen of dividend for the shares in the Company owned by the officer’s compensation BIP trust.
2. 	For the lower figure (the portion approved by a resolution of the Board of Directors on November 1, 2018), the total amount of dividend includes 7 million yenof dividend for the shares in the Company owned by the officer’s compensation BIP trust.

9.6.2

Dividends whose effective date falls in the fiscal year following the fiscal year of the record date
Dividends paid

(Resolution)

Type ofsharesJune 13, 2019
Annual General Meetingof Shareholders

Commonstock(Millions of yen)(Thousands of
U.S. dollars)¥4,925$44,369

Source ofdividends
Retainedearnings

Dividend per share(Yen)(U.S. dollars)

¥20

$0.18

Record date

Effective date

March 31, 2019

June 14, 2019

Note: The total amount of dividend includes 7 million yen of dividend for the shares in the Company owned by the officer’s compensation BIP trust.

10. Consolidated Statements of Cash Flows 
Relationship between cash and cash equivalents at fiscal year-end and amounts shown on consolidated balance sheets
Thousands of
U.S. dollars

Millions of yen
Cash and deposits in the consolidated balance sheets
Deposits with maturities over 3 months
Securities
Cash and cash equivalents in the cash flow statements

2018

2019

2019

¥28,836)¥28,856$259,964(1,334)(1,444)(13,009)

—

177

1,595

27,501)

27,589248,550

11. Lease Transactions <As lessee><As lessor>

Future lease payments for non-cancellable leases in connection with

Future lease receivables for non-cancellable leases in connection with

operating lease transactions

operating lease transactions
Millions of yen

Thousands of
U.S. dollars

Millions of yen

Thousands of
U.S. dollars

2019

2019

2018

2019

2019

¥ 3,585¥  5,187$   46,730

Due within one year

¥ 1,494¥   2,436$   21,946

Due after one year

20,426

22,683204,351

Due after one year

18,481

22,740204,865

Total

24,012

27,870251,081

Total

19,97525,177

226,820

Hankyu Hanshin Holdings Integrated Report 2019

Financial Section and Corporate Data2018
Due within one year

92

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

12. Financial Instruments 
12.1 Matters regarding financial instruments

is exposed to interest rate fluctuation risk (market risk), which is limited by fixing

12.1.1 Policy on financial instrumentsinterest rates through interest rate swap transactions. In addition, liquidity risk—

It is the Group’s policy to limit the investment of its funds to short-term deposits

the risk that payment will not be made by the due date—is limited by the timely

which are highly secure, and the Group raises funds mainly through loans frompreparation of financing plans and proper fund management. Also, surplus funds offinancial institutions, bonds and commercial paper. Derivative transactions are

the Group companies are concentrated and used effectively through centralisation

used to avoid risk, as discussed later, and it is our policy to refrain from speculativeof Group funds by using a cash management system. The immediate raising of funds

transactions.

from financial institutions became possible through the establishment of backup
financing such as commitment lines. In addition, the Company maintained a properbalance between direct financing and indirect financing and diversifies the raising of

12.1.2 Details of the financial instruments used, the risk involved and the risk

funds by using multiple financial institutions, thus securing liquidity.

management system
Trade receivables, namely note receivables and trade account receivables, are exposed

Regarding the use of derivative transactions, internal regulations pre-scribe

to the credit risk of customers. The Group limits its exposure to this credit risk by

the division of duties and transaction limits. Forward exchange contracts are used

controlling due dates and balances by customer and by making periodical checks ofto hedge exchange rate fluctuation risk involved in a portion of foreign currency-

the credit conditions of major customers pursuant to the internal regulations of each

denominated assets and liabilities. The purpose of interest rate swap transactions

company.

is to hedge the interest rate fluctuation risk of certain loans. These derivative

Investment securities consist mainly of stocks and bonds and are exposed totransactions involve credit risk because if the other party to a transaction defaults

market price fluctuation risk. However, fair values and the financial condition of theunder the terms of contract or becomes bankrupt then the benefit that would haveissuers are checked periodically, and the risk management system is confirmed.

been obtained in the future if the transaction had continued will not be received.

Almost all trade payables, namely note payables and trade account payables, have

However, credit risk is limited by carrying out transactions only with financial

a payment date that falls within one year. Some assets and liabilities denominated ininstitutions with high credit ratings.

foreign currencies are exposed to exchange rate fluctuation risk (market risk), which isMore information regarding the means and objectives of hedging, hedging

limited through forward exchange contracts.

policy and the method of evaluating the effectiveness of hedges related to hedge

Short-term borrowings and commercial paper are used mainly to raise short-accounting for derivative transactions is described in Note 2.4, “Accounting

term funds for working capital, and long-term debt and bonds are used mainly to raise

policies,” and Note 2.4.6, “Significant hedge accounting methods,” outlined in Notethe long-term funds necessary for capital investment plans. Some floating-rate debt

2, “Basis of Preparation of Consolidated Financial Statements.”

12.2 Matters regarding fair values of financial instruments
Book value recorded in the consolidated balance sheet, fair value and differences between them are as shown below.
Millions of yen
Book value

Fair value(1) Cash and deposits¥ 28,836¥ 28,836(2) Trade receivables

92,61992,619(3) Investment securities

46,609Thousands of U.S. dollars
2019

2018
Difference

2019Book value

Fair value

DifferenceBook value

Fair value

Difference—¥  28,856¥  28,856¥      ——

93,154

93,154—$    259,964 $    259,964
839,225

839,225$          —   —

46,609042,402

42,402—382,000

382,000——

Assets¥Liabilities(4) Trade payables

46,891

46,891—

48,05448,054—432,919432,919(5) Short-term borrowings (*1)

100,721

100,721—102,670

102,670—924,955924,955—(6) Bonds (*2)

92,00094,984

2,984

112,000

115,136

3,136

1,009,009

1,037,261

28,252(7) Long-term debt (*1)

666,710

690,457

23,747655,740

676,259

20,5185,907,568

6,092,423

184,847

(806)

(806)

—

(514)

(514)

—

(4,631)(4,631)—(8) Derivative transactions (*3)(*1) Current portion of long-term debt is included in (7) Long-term debt.
(*2) Current portion of bonds is included.
(*3) The net receivables/liabilities incurred as a result of derivative transactions are shown in net figures, net liabilities are shown in parenthesis.
Notes:
1. Method for calculating the fair values of financial instruments and matters regarding securities and derivative transactions(1) Cash and deposits and (2) Trade receivablesThe fair values of these are almost equal to their book values because they will be settled within a short period of time. As a result, their fair values are based on
their book values.
(3) Investment securities
The fair values of investment securities are based on prices quoted by stock exchanges, and the fair values of bonds are based on prices quoted by stock
exchanges or prices presented by trading financial institutions. Securities categorised by the purpose for which they are held are described in Note 13, “Securities.”(4) Trade payables, (5) Short-term borrowings
The fair values of these are almost equal to their book values because they will be settled within a short period of time. As a result, their fair values are based on
their book values.
(6) Bonds
The fair values of bonds are based on market prices.
(7) Long-term debt
The fair value of fixed-rate long-term debt is based on a method of calculation whereby the total principal and interest is discounted at an interest rate that isassumed for the introduction of similar new debt. The fair value of floating-rate long-term debt is based on the book value because the fair value of floating-ratelong-term debt reflects market interest rates within a short period of time and closely approximates the book values.
(8) Derivative transactionsPlease see Note 14, “Derivatives.”

93

Hankyu Hanshin Holdings Integrated Report 2019

Notes to the Consolidated Financial Statements

2. The book value of financial instruments whose fair value is extremely difficult to ascertain
Thousands of
U.S. dollars

Millions of yen
2018

2019

2019

¥ 5,994¥  6,327$  57,000

4,049

3,555

32,02790——Classification
Non-listed equity securities and bonds
Investments in limited liability investment partnerships and similar investments
Negotiable certificates of deposit

It is extremely difficult to ascertain the fair value of these financial instruments because market prices are not available and future cash flows cannot be estimated.
As a result, they are not included in (3) Investment securities.

3. The securities of nonconsolidated subsidiaries and affiliated companies are not included in (3) Investment securities.
4. Supplementary explanation regarding fair value of financial instruments
The fair value of financial instruments is based on market price. If market prices are not available, the fair value of financial instruments is reasonably calculated.
Certain assumptions are used to calculate the value. As a result, if different assumptions are used, the values may differ. For derivative contracts, the amount of thecontract which is indicated in Note 14, “Derivatives” does not indicate the market risk involved in derivative transactions themselves.
5. Redemption and repayment schedule of monetary claims and investment securities with maturities
Fiscal year ended March 31, 2018
Millions of yen
Due after one
Due within one
year through five
year
years
¥

—

Due after five
years throughten years¥—

Due after ten
years

Cash and deposits¥ 28,836

Trade receivables

92,619

—

—

¥

—
—

Held-to-maturity debt securities(government bonds, etc.)

—

9

—

—

Available-for-sale securities with maturities(government bonds, etc.)

—

345

96

300

121,456

355

96

300

Investment securities:

Total

Fiscal year ended March 31, 2019
Millions of yen
Due after one
Due within one
year through five
year
years

Thousands of U.S. dollars

Due after five
years throughten years

Due after ten
years

Due after one
Due within one
year through five
year
years

Due after five
years throughten years

Due after ten
years

Cash and deposits¥   28,856¥     —

¥     —

¥     —

$  259,964$      —

$      —

$      —

Trade receivables

93,154———

839,225

—

—

—

—

—

—

—

—

—

—

—

141

261

34

300

1,270

2,351

306

2,703

122,152

261

34

300

1,100,468

2,351

306

2,703

Investment securities:
Held-to-maturity debt securities(government bonds, etc.)
Available-for-sale securities with maturities(government bonds, etc.)
Total

6. Amount of planned redemption and repayment of bonds and long-term debt after the consolidated closing dateFiscal year ended March 31, 2018

Bonds
Long-term debt
Total

¥

Due after five
years throughten years

Due after ten
years

—

¥ 62,000¥ 10,000¥ 20,000

41,369165,820

298,099

161,420

41,369227,820

308,099

181,420

Financial Section and Corporate Data

Millions of yen
Due after one
Due within one
year through five
year
years

Fiscal year ended March 31, 2019
Millions of yen
Due after one
Due within one
year through five
year
years
Bonds
Long-term debt
Total

Due after five
years throughten years

Thousands of U.S. dollars
Due after ten
years

Due after one
Due within one
year through five
year
years

Due after five
years throughten years

Due after ten
years$    270,270¥ 20,000¥   52,000¥   10,000¥   30,000$  180,180$    468,468$      90,090

34,365222,245

275,383

123,745

309,595

2,002,207

2,480,928

1,114,820

54,365274,245285,383

153,745489,775

2,470,676

2,571,018

1,385,090

Hankyu Hanshin Holdings Integrated Report 201994

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

13. Securities 
13.1 Held-to-maturity debt securities
Millions of yen

Thousands of U.S. dollars
2019

2018
Classification

2019

Book value

Fair value

DifferenceBook value

Fair value

DifferenceBook value

Fair value

Difference

¥9

¥10

¥0

¥—

¥—

¥—

＄—

＄—

＄—

Securities with fair value
exceeding book value

13.2 Available-for-sale securities
Millions of yen

Thousands of U.S. dollars
2019

2018
Classification
Securities withbook value
exceedingacquisition cost

(1) Equity securities

Book value

Acquisition
cost

DifferenceBook value

Acquisition
cost

DifferenceBook value

Acquisitioncost¥ 42,627¥ 24,154¥ 18,472¥  38,684¥  24,122¥  14,562$  348,505$  217,315 $  131,189(2) Bonds

Securities withbook value
not exceedingacquisition cost

Subtotal

2019
Difference

441

428

13

438

428

9

3,946

3,856

81

43,06924,58318,485

39,122

24,55014,571

352,450

221,171

131,270

Equity securities

3,530

3,979

(449)

3,280

3,582

(302)

29,55032,270(2,721)

Subtotal

3,530

3,979

(449)

3,280

3,582

(302)

29,55032,270(2,721)

46,59928,562

18,03642,402

28,133

14,269382,000

253,450

128,550

Total

Notes: Unlisted equity securities and others (fiscal year ended March 31, 2018: 10,135 million yen, fiscal year ended March 31, 2019: 9,883 million yen) are notincluded in the above table because it is extremely difficult to determine their market value as there are no market price therefor and future cash flows
cannot be reasonably estimated.

14. Derivatives 
14.1 Derivative transactions for which hedge accounting has not been applied
Currency
Fiscal year ended March 31, 2018
Millions of yen

Classification

Type

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)

Valuation
gain/loss¥     3¥   —¥    (0)¥    (0)Forward exchange contracts:Transactions
other than market
transactions

Buy contract
Indian rupee
Currency swap contracts:
Receive yen, pay US dollar

598

598

(81)

(81)

Total

601

598

(81)

(81)

Fiscal year ended March 31, 2019
Millions of yen

Classification

Contract
amountFair value(Note)

Valuation
gain/loss

Contract
amountPortion ofcontract
amountexceeding
one year

Fair value(Note)

Valuation
gain/loss

¥ 598

¥ 598

¥  (49)¥  (49)$  5,387$  5,387$  (441)$  (441)

598

598

(49)

(49)

5,387

5,387

(441)

(441)

Type

Forward exchange contracts:Transactions
other than market Currency swap contracts:
transactions
Receive yen, pay US dollar
Total

Thousands of U.S. dollars

Portion ofcontract
amountexceeding
one year

Notes:
1. F air value calculation
Fair value is based mainly on prices quoted from counterparty financial institutions.
2. Regarding the above currency swap contracts, in nonconsolidated financial statements hedge accounting is applied for monetary payables and receivables related
to transactions between consolidated subsidiaries. In consolidated financial statements, however, hedge accounting is not applied because the said hedged items
are eliminated.

95

Hankyu Hanshin Holdings Integrated Report 2019

Notes to the Consolidated Financial Statements

14.2 Derivative transactions for which hedge accounting has been applied
14.2.1 Currency
Fiscal year ended March 31, 2018

Millions of yen

Classification

Portion of contract
amount exceeding
one yearType

Main hedged
items

Contract
amountFair value(Note)

Forward exchange contracts
Sell contract

Trade receivables

US dollar
Primarymethod¥Japanese yen
Buy contract

111
18

¥

—
—

¥

(0)
0

Trade payables

Japanese yen

746

—

(5)

US dollar

13

—

(0)

Singapore dollar

0

—

(0)

Thai baht

0

—

(0)

Forward exchange contracts
Buy contractEuroDesignationof forward
exchange
contracts,
etc.

Trade payables(forecast transactions)

10,655—(189)

US dollar

6,416

—

(374)

Canadian dollar

1,103

—

(72)

Swiss franc

1,044

—

(28)

Australian dollar

537

—

(33)

Singapore dollar

327

—

(9)

Pound sterling

301

—

(1)

Indian rupee

135

—

(7)

New Zealand dollar

124

—

(2)

39

—

Forward exchange contracts
Sell contract

Trade receivables

US dollar
Buy contract
US dollar

Trade payables
1,398

—

Euro

839

—

Thai baht

140—

Singapore dollar

66—

Hong Kong dollar

62—Australian dollar

49—

New Zealand dollar

37—

Pound sterling

12—

Canadian dollar

8—

Indian rupee

7—

Swiss franc

2—

24,200—Total(Note 2)

(725)

Financial Section and Corporate Data

Hankyu Hanshin Holdings Integrated Report 201996

Financial Section and Corporate Data

Fiscal year ended March 31, 2019

Classification

Millions of yen
Main hedged
items

Type

Thousands of U.S. dollars

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)

Contract
amountPortion of contract
amount exceeding
one year¥$

Fair value(Note)

Forward exchange contracts
Sell contract

Trade receivables

Japanese yen

Primarymethod8¥     —

¥      072$     —

$    0

US dollar

5

—

0

45

—

0

Pound sterling

1

—

0

9

—

0
117

Buy contract

Trade payables

Japanese yen

803

—

13

7,234

—

US dollar

17

—

(0)

153

—

(0)

Singapore dollar

0

—

(0)

0

—

(0)

Euro

0

—

(0)

0

—

(0)

Forward exchange contracts

Designationof forward
exchange
contracts,etc.

Buy contract

Trade payables

Euro(forecast transactions)

13,311—(400)

119,919—(3,604)

US dollar

6,910

—

(29)

62,252—(261)

Canadian dollar

1,096

—

(31)

9,874

—

(279)

Swiss franc

1,000

—

(11)

9,009

—

(99)

Australian dollar

617

—

(10)

5,559

—

(90)

Singapore dollar

427

—

2

3,847

—

18

New Zealand dollar

102

—

1

919

—

9

South African rand

10

—

0

90

—

0

143

—

1,288

—

US dollar

1,329

—

11,973

—

Euro

1,283

—

11,559—Australian dollar

112

—

1,009

—

Singapore dollar

100

—

901

—

Hong Kong dollar

59

—

532

—

New Zealand dollar

58

—

523

—

Thai baht

50

—

450

—

Pound sterling

13

—

117

—

Canadian dollar

10

—

90

—

South African rand

4

—

36

—

1

—

9

—

27,487—

247,631—

Forward exchange contracts
Sell contract

Trade receivables

US dollar
Buy contract

Trade payables

Swiss franc
Total(Note 2)(465)

(Note 2)

(4,189)Note:
1. Fair value is based mainly on prices quoted from counterparty financial institutions.
2. Designation of forward exchange contracts, etc., are treated together with trade receivables and trade payables that are subject to hedging; therefore, theirmarket values are recorded together with those of trade receivables and trade payables.

97

Hankyu Hanshin Holdings Integrated Report 2019

Notes to the Consolidated Financial Statements

14.2.2 Interest rate
Fiscal year ended March 31, 2018
Millions of yen
ClassificationExceptional
accounting ofinterest rate
swaps

Main hedged
items

Type
Interest rate swap contracts:
Pay fixed rate/
Receive floating rateLong-term debt

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)¥ 174,130¥ 172,005¥ (9,991)

174,130

172,005(9,991)

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)¥   167,551¥   159,801¥   (10,329)$  1,509,468$  1,439,649$  (93,054)

167,551

159,801(10,329)$  1,509,468$  1,439,649$  (93,054)

Total
Fiscal year ended March 31, 2019

ClassificationExceptional
accounting ofinterest rateswaps

Millions of yen
Main hedged
items

Type
Interest rate swap contracts:
Pay fixed rate/
Receive floating rateLong-term debt

Total

Thousands of U.S. dollars

Note: Fair value is based mainly on prices quoted from counterparty financial institutions.

15. Retirement Benefits 
15.1 Overview of retirement benefit plans
Some consolidated subsidiaries of the Company provide a defined benefit plan (defined benefit pension plan and lump-sum payment plan) or a defined contribution
plan. Hankyu Corporation has set up the retirement benefit trust.
In addition, some consolidated subsidiaries subscribe to the employees’ pension funds plan in the multi-employer plan. Among them, the Company has used
the same accounting treatment as it used for defined contribution plans when the amount of plan assets corresponding to contributions by the Company cannot be
rationally calculated.

15.2 Defined benefit plan

15.2.3 Table of reconciliation between the balance of retirement benefit
obligations and of plan assets, and the liabilities for retirement benefit

15.2.1 Table of movement in retirement benefit obligations
Thousands of
U.S. dollars

Millions of yen

Balance at beginningof the year
Service cost

2018

2019

2019

¥132,471¥  133,360$ 1,201,441

7,739

8,020

72,252

Interest cost

300

297

2,676

Actuarial loss (gain)

253

(418)

(3,766)(7,466)(6,613)(59,577)

Past service cost

—

(877)

(7,901)

Other

62

(18)

(162)

133,360

133,751

1,204,964

Retirement benefits paid

Balance at end of the year

Note: Amounts in the table above include the retirement benefit obligationsof consolidated subsidiaries using simplified methods.

2018

2019

2019

¥ 78,206¥   81,767$  736,640

Expected returnon plan assets

1,143

1,131

10,189Actuarial loss (gain)

1,716

2,622

23,622Contribution paidby the employer

4,738

4,173

37,595Retirement benefits paid

(4,037)(3,470)(31,261)

Other

Millions of yen

Funded retirement benefit
obligations
Plan assets

Thousands of
U.S. dollars

2018

2019

2019

¥ 72,696¥  72,458$  652,775(81,767)(86,137)(776,009)(9,071)(13,678)(123,225)Unfunded retirement benefit
obligations

60,664

61,292552,180Total net defined benefit
liability and asset

51,59347,614428,955

Net defined benefit liability

61,65462,209560,441

Net defined benefit asset(10,061)(14,595)(131,486)Total net defined benefit
liability and asset

51,59347,614428,955

—

(88)

(793)

81,767

86,137776,009

Financial Section and Corporate Data

Thousands of
U.S. dollars

Millions of yen

Balance at end of the year

balance sheet, as of the end of fiscal year

Note: A mounts in the table above include the retirement benefit obligations

15.2.2 Table of movement in plan assets

Balance at beginningof the year

and assets for retirement benefit recorded in the consolidated

and plan assets of consolidated subsidiaries using simplified methods.

Note: Amounts in the table above include the plan assets of consolidated
subsidiaries using simplified methods.

Hankyu Hanshin Holdings Integrated Report 201998

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

15.2.7 Items relating to plan assets

15.2.4 The breakdown of retirement benefit expenses
Thousands of
U.S. dollars

Millions of yen
2018

2019

2019

Service cost

¥ 7,739¥  8,020$  72,252

Interest cost

300

297

2,676

(1,143)(1,131)(10,189)

1,005

732

6,595

(57)

(138)

(1,243)Expected return on plan
assetsAmortisation of actuarial
differencesAmortisation of past service
cost
Other
Retirement benefit expenses

59

58

523

7,904

7,838

70,613

Notes:(I) Breakdown of major plan assets
Ratio of the major types of assets to total assets are as follows:
2018

2019

Bonds

35%

34%

Equity securities

32

34

Cash and deposits

3

2

General accounts of life insurance

28

27

Other

2

3

Total

100

100

Note: The retirement benefits trust established for the Company’s pension
plan constituted 9% of total plan assets in the previous fiscal year and
12% of total plan assets in the current fiscal year.

1. Amounts in the table above include the retirement benefit expenses of
consolidated subsidiaries using simplified methods.
2. In addition to the retirement benefit expenses shown above, the Company(II) Method of determining the long-term expected rate of return on plan

made extra retirement payments of 6 million yen in the fiscal year ended

assets

March 31, 2018, and 0 million yen in the fiscal year ended March 31,

Current and target asset allocations and historical and expected returns

2019. Both are recorded as costs of revenues from operations.

on various categories of plan assets have been considered in determining
the long-term expected rate of return on plan assets.

15.2.5	Remeasurements of defined benefit plans

15.2.8 Items relating to actuarial assumptions

The breakdown of items related to remeasurements of defined benefit

Major actuarial assumptions

plans (prior to the deduction of the tax effect) is as follows:
Millions of yen
2019

2018

Thousands of
U.S. dollars
2019

Past service cost

¥ (57)¥   739$   6,658

Actuarial differences

2,468

3,774

34,000

Total

2,411

4,513

40,6582018

2019

Discount rate

Mainly 0.0%

Mainly 0.0%

Long-term expected rate of return onplan assets

Mainly 2.0%

Mainly 2.0%

Expected rate of salary increase

Mainly 2.0%

Mainly 2.0%

15.3 Defined contribution plan
The amount of the required contribution for the consolidated subsidiaries’

15.2.6 Cumulative adjustments of retirement benefit plans
The breakdown of items related to cumulative adjustments ofdefined contribution plan (including employees’ pension funds plan in theretirement benefit plans (prior to the deduction of the tax effect) is as

multi-employer plan to which the same accounting method is applied as forfollows:

the defined contribution plan) was 39 million yen in the fiscal year ended
Millions of yen

Unrecognized past service
costUnrecognized actuarial
differences
Total

Thousands of
U.S. dollars

2018

2019

2019

¥ (303)¥   (1,042)$   (9,387)

239(3,534)(31,838)(63)(4,576)(41,225)

Note: The above relates to consolidated subsidiaries. In addition to theabove items, the remeasurements of defined benefit plans include
unrecognized items (the amount corresponding to equity) of equitymethod affiliates.

99

Hankyu Hanshin Holdings Integrated Report 2019

March 31, 2018 and 49 million yen in the fiscal year ended March 31, 2019.

Notes to the Consolidated Financial Statements

16. Deferred Tax 
16.1 Significant components of the Company’s deferred tax assets and liabilities
Thousands of U.S.
dollars

Millions of yen
2018

2019

2019
$  496,595

Deferred tax assets:
Gain on donation by related companies for tax purposes.

—¥   55,122

Net defined benefit liability¥

16,90015,326

138,072

Loss on impairment of fixed assets

9,417

12,985

116,982
99,288

Temporary difference related to investments in subsidiaries—

11,021

Loss on revaluation of real estate for sale

23,7189,271

83,523Tax loss carryforwards (Note 2)

10,298

8,349

75,216

Loss on adjustment of transferred profit and loss

2,572

5,844

52,649Unrealized profit from assets

4,877

5,118

46,108Provision for bonuses

1,878

1,809

16,297

Enterprise taxes and business office taxes

1,285

836

7,532

965

728

6,559

Losses on revaluation of investment securities
Other
Subtotal of deferred tax assets

10,9109,053

81,55982,825

135,468

1,220,432—(2,872)(25,874)

Valuation allowance from tax loss carryforwards (Note 2)
Valuation allowance from the total of future deductible temporary
differences—(77,312)(696,505)

Subtotal of valuation allowance (Note 1)(24,227)(80,185)(722,387)

Less amounts offset against deferred tax liabilities(53,559)(48,317)(435,288)

5,038

6,965

62,748

Total deferred tax assets
Deferred tax liabilities:
Gain on reversal of difference from land revaluation (Note 3)(130,447)(130,553)(1,176,153)

Revaluation of assets on consolidation(79,074)(78,653)(708,586)

Net unrealized holding gains on securities(15,954)(14,760)(132,973)

Gain on valuation of properties of business reorganization(1,796)(1,769)(15,937)

Other(5,662)(5,747)(51,775)(232,935)(231,485)(2,085,450)

53,55948,317435,288Total deferred tax liabilities(179,375)(183,167)(1,650,153)

Net deferred tax liabilities(174,336)(176,201)(1,587,396)Subtotal of deferred tax liabilities
Less amounts offset against deferred tax assets

Note:
1. T
 he 55,957 million yen increase in valuation allowance is predominantly due to the 55,122 yen gain in valuation allowance from receipt of shares in an affiliatedcompany for tax purposes.
2. T he expiration of tax loss carryforwards, the related valuation allowance and the resulting net deferred tax assets as of the fiscal year ended March 31, 2019were as follows:
Millions of yen
Within one year

Over one year
to two years

Over two years
to three years

Over three years
to four years

Over four years
to five years

Total

¥ 800

¥ 631

¥ 876

¥ 5,41381¥ 545¥ 8,349

Valuation allowance

(795)

(575)

(867)

(179)

(67)

(386)

(2,872)

Deferred tax assets

4

55

9

5,233

14

158

5,476*2

Tax loss carryforwards (*1)¥

Over five years

Financial Section and Corporate Data

Thousands of U.S. dollars
Within one year

Over one year
to two years

Over two years
to three years

Over three years
to four years$ 7,207$ 5,685$ 7,892$ 48,766

Valuation allowance(7,162)(5,180)(7,811)

Deferred tax assets

36

495

81

Tax loss carryforwards (*1)

Over four years
to five years

Over five years

Total

730

$ 4,910$ 75,216(1,613)(604)(3,477)(25,874)

47,144126

1,423

49,333*2$*1. Tax loss carryforwards were calculated based on the statutory tax rate.
*2. Of the total tax loss carryforwards of 8,349 million yen, 5,476 million yen were deferred tax assets. This 5,476 million yen of deferred tax assets comprised
mainly 4,854 million yen of deferred tax assets of Hankyu Corporation, which is a member of the consolidated tax group to which the Company is theconsolidated parent corporation. The deferred tax assets were made when for tax purposes a valuation loss on properties for sale was recorded at Hankyu
Corporation in the fiscal year ended March 31, 2014. Of the deferred tax assets, the losses carried for tax purposes have been determined to be recoverablefrom taxable income we expect in the future.
Note:
3. The Company reversed “Surplus from land revaluation” when, as a result of a (physical) absorption-type corporate split on April 1, 2005, it handed over all of its
land to Hankyu Corporation (which changed its name from Hankyu Corporation Spin-Off Preparation Inc. to Hankyu Corporation on the same day). As a result,“Deferred tax liabilities related to land revaluation” has been recorded as “Deferred tax liabilities” starting from the fiscal year ended March 31, 2006.

Hankyu Hanshin Holdings Integrated Report 2019100

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

16.2 Reconciliation of the significant differences between the statutory tax rate and the effective tax rate reflected in the accompanying consolidated
statements of income
2018

2019

30.8%

30.6%

Elimination of dividends received fromconsolidated subsidiary companies etc.

15.3

17.9

Difference of tax rates from Parent Company

2.4

2.4

Valuation allowance

0.5

2.0

Statutory tax rate
(Adjustment)

Amortisation of goodwill

0.7

0.8

Per capita portion of inhabitant tax

0.4

0.5

Nondeductible expenses
Nontaxable income
Temporary difference related to investments in
subsidiaries
Profit or loss from investments with equity
method affiliates

0.5

0.4

(15.6)(17.8)—(12.2)

(2.8)

(1.7)

Other
Effective tax rate

0.7

0.3

32.9

23.2

17. Asset Retirement Obligations 
Omitted as the significance was negligible.

18. Rental Property 
Some consolidated subsidiaries own rental property, such as office buildings

Notes:

for lease and commercial facilities for lease in the Kita Ward of Osaka and1. Book value is acquisition cost less accumulated depreciation.

other areas. Rental profit and loss related to such rental property in the fiscal

2. For increase/decrease during the fiscal year ended March 31, 2018, main

year ended March 31, 2018 was 30,563 million yen (major rental revenues are

increase was acquisitions of real estate of 18,514 million yen, and mainrecorded in revenues from operations and major rental expenses are recorded

decrease were depreciation of 12,555 million yen. For increase/decreasein costs of revenues from operations). Rental profit and loss related to suchduring the fiscal year ended March 31, 2019, main increase was acquisitions

rental property in the fiscal year ended March 31, 2019 was 32,434 million yenof real estate of 42,062 million yen, and main decrease was sales of real

(major rental revenues are recorded in revenues from operations and major

estate of 13,437 million yen and depreciation of 12,450 million yen.

rental expenses are recorded in costs of revenues from operations). Income

3. F air value as of the end of the fiscal year is the appraisal value according to

on sales of noncurrent assets was 2,289 million yen (recorded as extraordinary

an outside real estate appraiser based on Japanese Real Estate Appraisal

profit).

Standards in the case of key properties and the fair value based on indicators

Book value recorded in the consolidated balance sheet, increase/decreaseduring the fiscal year and market value for such rental property are as follows:

Millions of yen

Thousands of
U.S. dollars

2018

2019

2019

¥ 616,481¥ 623,463$ 5,616,784

Book value (Note 1):Balance at beginningof the year
Increase/decrease (Note 2)

6,982

16,193

145,883

Balance at end of the year

623,463639,657

5,762,676

853,278

894,928

8,062,414Fair value at endof the year (Note 3)such as the assessed value of noncurrent assets and road tax rating in thecase of other properties.
4. Properties under development are not included in the above table because
it is difficult to determine the market value under development. Furthermore,
properties under development recorded in the consolidated balance sheet for
the fiscal year ended March 31, 2018 and for the fiscal year ended March 31,
2019 were 137,722 million yen and 156,605 million yen, respectively.

19. Segment Information 
19.1 Segment information
19.1.1 Summary of reportable segments
The Group’s reportable segments, which make financial information for units of the Group available, are regularly reviewed by the Board of Directors to determine theallocation of management resources and evaluate business results.
The Group, centering on six core companies of Hankyu Corporation, Hanshin Electric Railway Co., Ltd., Hankyu Hanshin Properties Corp., Hankyu Travel International
Co., Ltd., Hankyu Hanshin Express Co., Ltd. and Hankyu Hanshin Hotels Co., Ltd., is running a business centering around six business areas of urban transportation, realestate, entertainment and communications, travel, international transportation, and hotels, under the leadership of the Company in charge of management of the Group.
The nature of business in each reportable segment is as follows:
Urban Transportation: Railway operations, automobile, retailing and advertising businesses
Real Estate: Rental real estate, real estate sales and other businesses
Entertainment and Communications: Sports-related businesses, stage events, communications and media, and other businesses
Travel: Travel services
International Transportation: International cargo services
Hotels: Hotel ownership and management business

101

Hankyu Hanshin Holdings Integrated Report 2019

Notes to the Consolidated Financial Statements

19.1.2 Method used to calculate revenues from operations, income (or loss), assets and other items for each reportable segment
The accounting treatment for each reportable business segment is based on the methods described in the “Basis of Preparation of Consolidated Financial Statements,”
including Internal transactions (lease transactions of lands and buildings, etc.) that are calculated through management accounting at companies with businesses covering
multiple segments.
Income (or loss) for each reportable segment refers to a figure based on operating income (or loss).
Intersegment revenues from operations and transfers are mainly based on similar data as those of general conditions for transaction.
19.1.3 Information regarding totals for revenues from operations, income (loss), assets and other items by reportable segment
Fiscal year ended March 31, 2018
Millions of yen
Reportable segment
Urban
Transportation

Real
EstateEntertainment
andCommunications

TravelInternational
Transportation

HotelsSubtotal

Other(Note 1)

Total

Amounts
appearing in
Adjustment the consolidated(Note 2)
financialstatements(Note 3)

Revenues from operations:
I. Customers¥231,048¥ 204,879¥112,006¥ 34,008¥ 83,630¥ 65,973¥ 731,547¥ 28,270¥ 759,818

II. Intersegment

4,919

17,706

9,071

13

76

1,274

33,063

14,54047,603¥(47,603)434¥ 760,252—

Total

235,967

222,586

121,078

34,022

83,707

67,248764,61042,811

807,422(47,169)

760,252

Segment income (loss)

41,586

40,95417,750

2,055

2,777

2,216

107,340

1,929

109,269(4,058)105,211

Segment assets

799,345

1,086,146

150,93185,57052,46083,652

2,258,107

35,3642,293,471

111,4542,404,926

26,661

16,536

6,792

680

662

2,099

53,434411

53,846(569)

53,27635,001

39,928

7,559

538

732

2,298

86,060665

86,725(321)

86,404

Other items:
Depreciation andamortisationIncrease in property andequipment and intangible assets

1. The "Other" segment refers to a business segment not included in reportable segments, and includes construction business, etc.
2. The main item in the adjusted amount of the segment income or loss for the fiscal year was amortisation of goodwill of (2,238) million yen (amortisation of
goodwill mainly having originated from management integration with Hanshin Electric Railway Co., Ltd. in fiscal 2007).
In addition to the balance of unamortised goodwill of 18,335 million yen (amortisation of goodwill mainly having originated from management integration
with Hanshin Electric Railway Co., Ltd. in fiscal 2007), the adjusted amount for segment assets includes, surplus working capital (cash and deposits), long-term
investment funds (investment securities), unallocated assets such as lands, and intersegment eliminations, at the Company, Hankyu Corporation and Hanshin
Electric Railway Co., Ltd.
3. Segment profit and loss is adjusted with operating income in the consolidated statement of income.
4. The “partial reform of‘The Accounting Standards for Tax Effect Accounting’” (ASBJ No. 28, February 16, 2018), etc., has been applied from the outset of the fiscal
year ended March 31, 2019, and with regard to the segment assets of the fiscal year ended March 31, 2018, the accounting standard has been retroactively
applied.
Fiscal year ended March 31, 2019
Millions of yen
Reportable segment
Urban
Transportation

Real
EstateEntertainment
andCommunications

International
Transportation

TravelHotelsSubtotal

Other(Note 1)¥

Total

Amounts appearing
Adjustment in the consolidated(Note 2) financial statements(Note 3)

Revenues from operations:¥ 233,622¥ 219,828¥ 117,815

63,707¥ 760,417

30,632¥ 791,049

II. Intersegment

4,939

17,447

8,716

9

66

1,216

32,395

12,78445,180(45,180)—

Total

238,562

237,276

126,531

35,52889,99064,923792,81343,417836,230(44,803)

791,427

I. Customers¥

35,518¥89,924¥¥377¥ 791,427

Segment income (loss)

43,45549,25018,759

1,764

2,392

1,214

116,8362,333

119,169(4,231)

114,937

Segment assets

800,209

1,144,513

158,555

91,60348,92584,071

2,327,879

37,5202,365,400

100,823

2,466,223

27,354

16,640

7,037

653

619

2,140

54,446360

54,806(634)

54,172

33,79162,448

7,923

831

678

1,961

107,635

1,452

109,087

5,280

114,368

Other items:

Financial Section and Corporate Data

Depreciation andamortisationIncrease in property andequipment and intangible assets

Thousands of U.S. dollars
Reportable segment
Urban
Transportation

Real
EstateEntertainment
andCommunications

TravelInternational
Transportation

319,982$

HotelsSubtotal

Other(Note 1)

Total

Amounts appearing
Adjustment in the consolidated(Note 2) financial statements(Note 3)

Revenues from operations:$ 2,104,703$ 1,980,432$ 1,061,396

573,937$ 6,850,604

275,964$ 7,126,568

II. Intersegment

44,495

157,180

78,52381

595

10,955

291,847

115,171407,027(407,027)

—

Total

2,149,207

2,137,622

1,139,919

320,072

810,721584,892

7,142,459

391,1447,533,604(403,631)

7,129,973

I. Customers

Segment income (loss)
Segment assets$

810,126

$

$

$

3,396

$ 7,129,973

391,486

443,694

169,000

15,892

21,55010,937

1,052,577

21,0181,073,595(38,117)

1,035,468

7,209,090

10,310,928

1,428,423

825,252

440,766

757,396

20,971,883

338,018

21,309,910

908,315

22,218,225

246,432

149,910

63,396

5,883

5,577

19,279490,505

3,243

493,748(5,712)

488,036

304,423562,595

71,378

7,486

6,108

17,667

969,685

13,081

982,766

47,5681,030,342

Other items:
Depreciation andamortisationIncrease in property andequipment and intangible assets

Hankyu Hanshin Holdings Integrated Report 2019102

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

Notes
1. The "Other" segment refers to a business segment not included in reportable segments, and includes construction business, etc.
2. The main item in the adjusted amount of the segment income or loss for the fiscal year was amortisation of goodwill of (2,238) million yen (amortisation of
goodwill mainly having originated from management integration with Hanshin Electric Railway Co., Ltd. in fiscal 2007).
In addition to the balance of unamortised goodwill of 16,174 million yen (amortisation of goodwill mainly having originated from management integration
with Hanshin Electric Railway Co., Ltd. in fiscal 2007), the adjusted amount for segment assets includes, surplus working capital (cash and deposits), long-term
investment funds (investment securities), unallocated assets such as lands, and intersegment eliminations, at the Company, Hankyu Corporation and Hanshin
Electric Railway Co., Ltd.
3. Segment profit and loss is adjusted with operating income in the consolidated statement of income.

19.2

Related information

Fiscal years ended March 31, 2018 and 201919.2.1 Information by product and service
Information about product and service categories is the same as that described in Note 19.1.3, “Information regarding totals for revenues from operations, income(loss), assets and other items by reportable segment.”
19.2.2 Information by region
I.

Revenues from operations

Since over 90% of revenues from operations in the consolidated statements of income are revenues from external customers in Japan, a breakdown by region isomitted.
II.

Property and equipment

Since over 90% of the total value of property and equipment in the consolidated balance sheets relates to property and equipment in Japan, a breakdown by
region is omitted.
19.2.3 Information about important customers
No single external customer accounts for more than 10% of the revenues from operations reported in the consolidated statements of income.

19.3 Information regarding impairment loss on noncurrent assets for each reported segment
Fiscal year ended March 31, 2018
Millions of yen
Reportable segment

Loss on impairment

Urban
Transportation

Real
EstateEntertainment
andCommunications

TravelInternational
Transportation

HotelsSubtotal

¥ 44

¥ 407

¥ —

¥ 5

¥ 259

¥ 101

¥ 819

Other

Total

¥—

¥ 819

Other

Total

¥—

¥ 19,262

Other

Total

$—

$173,532

Amounts appearing
Adjustment in the consolidated
financial statements
¥—

¥ 819

Fiscal year ended March 31, 2019
Millions of yen
Reportable segment

Loss on impairment

Urban
Transportation

Real
EstateEntertainment
andCommunications

TravelInternational
Transportation

HotelsSubtotal¥ 19,227

¥—

¥—

¥—

¥ 15

¥ 20

¥ 19,262

Amounts appearing
Adjustment in the consolidated
financial statements¥—¥ 19,262

Thousands of U.S. dollars
Reportable segment

Loss on impairment

Urban
Transportation

Real
EstateEntertainment
andCommunications

TravelInternational
Transportation

HotelsSubtotal$173,216

$—

$—

$—

$ 135

$ 180

$173,532

19.4 Information regarding amortisation of goodwill and the balance of unamortised goodwill by reportable segment
Omitted as the significance was negligible.

19.5 Information regarding gains from negative goodwill by reportable segment
Omitted as the significance was negligible.

103

Hankyu Hanshin Holdings Integrated Report 2019

Amounts appearing
Adjustment in the consolidated
financial statements$—$173,532

Notes to the Consolidated Financial Statements

20. Related-Party Transactions 
20.1 Related-party transactions
20.1.1 Transactions between the company submitting the consolidated financial statements and related parties
No items
20.1.2 Transactions between consolidated subsidiaries of the company submitting the consolidated financial statements and related parties
20.1.2.1 Non-consolidated subsidiary or related company of the company that submitted the financial statements.
Fiscal year ended March 31, 2018
No items
Fiscal year ended March 31, 2019

Type

Subsidiaryof Related
Company

Name ofCompany, etc.

Address

Amount ofcapital (Millionsof yen)Business¥ 200

Department
store
business

Hankyu Hanshin
Kita-ku,
Department
Osaka CityStores, Inc.

Votinginterest

Relationshipwith related
party

Details oftransaction

None

Lease of realestateacceptanceofdeposits

Transaction
amounts(Millions (Thousands of
U.S. dollars)of yen)¥ 3,294

Item$29,676 Deposit

Balance as of March
31, 2019(Millionsof yen)(Thousands of
U.S. dollars)¥27,099 $244,135

Notes:
1. The transaction amount and the balance as of the end of the fiscal year do not include any consumption tax.
2. The terms and conditions for transaction and policies for determining terms and conditions for transaction
Terms and conditions for deposits are determined in the same way as general transactions.
20.1.2.2 Directors and principal shareholders (only individual shareholders) of the company submitting the consolidated financial statements
Fiscal year ended March 31, 2018
Type

Name ofrelated party

Address

Amount ofcapital(Millions of yen)

Business

Votinginterest

Relationshipwith related
party

Details oftransaction

Audit &Supervisory
Board
MemberHaruo
Sakaguchi—¥ —Auditorof theCompany

Directly
0.0%

Lease of realestateLease ofreal estateCompany
in whichdirector orclose family
thereofholds
majority ofvoting rights

Tateishi
Sangyo Co.,Ltd.

Ikeda City,
Osaka

100

Real estatebusiness

Directly
0.1%

Sale of realestateConcurrent
post(director)

Sale of realestateBusiness

Votinginterest

Relationshipwith related
party

Details oftransaction

Directly
0.0%

Lease of realestateLease ofreal estateTransaction
amounts(Millions of yen)¥

Item

Balance as ofMarch 31, 2018
(Millions of yen)53

Deposit

¥ 40

1,995

Deposit20

Fiscal year ended March 31, 2019

Type

Address

Haruo
Sakaguchi—(Millions (Thousands of
U.S. dollars)of yen)

¥  —

$  —

Auditorof theCompany

Balance as ofMarch 31, 2019

Transaction
amounts
Item(Millions (Thousands of
U.S. dollars)of yen)¥      53 $     477

(Millions (Thousands ofof yen) U.S. dollars)

Deposit

¥  40

$360

Financial Section and Corporate DataAudit &Supervisory
Board
MemberAmount of capital

Name ofrelated
party

Notes
1. The transaction amount and the balance as of the end of the fiscal year do not include any consumption tax.
2. Terms and conditions for transaction, and policies for determining terms and conditions for transaction
Terms and conditions for lease and for sales are determined by referencing to similar transaction cases in the neighboring area.
3. Koichi Kobayashi, an Auditor of the Company, and his close family own 77% of the voting rights in Tateishi Sangyo Co., Ltd.

20.2 Notes about parent company and major affiliated companies
No items

Hankyu Hanshin Holdings Integrated Report 2019104

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

21. Per Share Information 
Net assets per share, net income per share and diluted net income per share for the fiscal year, and the basis for their respective calculations are as shown below.
2018

2019

¥3,391.35¥  3,615.52

Total net assets (Millions of yen / Thousands of U.S. dollars)¥866,512¥  915,381$ 8,246,676

Amount to be deducted from total net assets(Millions of yen / Thousands of U.S. dollars)¥28,786¥    30,517$    274,928(Of the amount, non-controlling interests)¥[28,786]¥   [30,517]$   [274,928]

Net assets at the end of the fiscal year related to common shares(Millions of yen / Thousands of U.S. dollars)¥837,726¥  884,863$ 7,971,739

Common shares issued (Thousands of shares)

254,281254,281

Treasury stock shares (Thousands of shares)

6,103

8,381

(1) Net assets per share (Yen / U.S. dollars)

2019$        32.57(Basis for the calculation)Common shares held by consolidated subsidiaries and equity-method affiliates(Thousands of shares)

1,159

1,159

Common shares used to calculate net assets per share (Thousands of shares)

247,018

244,740¥267.91¥   266.86$       2.40

¥66,361¥  65,476$ 589,874

¥ —

¥  —

$—

¥66,361¥  65,476$ 589,874

247,700

245,353¥267.81¥  266.86(2) Net income per share (Yen / U.S. dollars)(Basis for the calculation)Net income attributable to owners of the parent(Millions of yen / Thousands of U.S. dollars)Amount not belonging to common stockholders(Millions of yen / Thousands of U.S. dollars)Net income attributable to owners of the parent related to common shares(Millions of yen / Thousands of U.S. dollars)
Average number of common shares during term (Thousands of shares)(3) Net income per share—diluted (Yen / U.S. dollars)$       2.40

(Basis for the calculation)Adjustment to net income attributable to owners of the parent(Millions of yen / Thousands of U.S. dollars)¥(17)¥  (0)$ (0)(Equity in income of affiliates)¥[(17)]¥  [(0)]$ [(0)]

Increase in number of common shares (Thousands of shares)

26—(Of the amount, subscription rights to shares)

[26]

[—]

Summary of potential shares that were not included in the calculation of diluted
income per share because their effect was not dilutive

—

—

—

Note:
In calculating net assets per share, the number of the shares in the Company owned by the officer’s compensation BIP trust are included in that of treasury stock
shares to be excluded from the total number of outstanding shares at the end of the fiscal year. Furthermore, in calculating net income per share and diluted net
income per share for the current fiscal year, the number of the shares in the Company owned by the officer’s compensation BIP trust are included in that of treasury
stock shares to be excluded in calculating the average number of the shares during the current fiscal year. The number of such treasury stock shares deducted in
calculating net assets per share and diluted net income per share for the fiscal year ended March 31, 2018 was 357,968, and for the fiscal year ended March 31,
2019 is 377,008, and the average number of treasury stock shares deducted in calculating net income per share and diluted net income per share for the fiscal year
ended March 31, 2018, was 288,051, and for the fiscal year ended March 31, 2019, is 375,143.

22. Subsequent Events 
22.1 Acquisition of treasury stock
Pursuant to Article 156 of the Companies Act of Japan as applied mutatis mutandis under Article 165, paragraph 3 of the same act, a meeting of the Board of
Directors convened on May 15, 2019 decided the following items in relation to the acquisition of treasury stock.
22.1.1 Reason for acquisition of treasury stock
To enhance shareholder returns and enhance capital efficiency
22.1.2 Details of items related to acquisition(1) Type of shares acquired: Shares of common stock of the Company(2)	Total number of shares available for acquisition: 3,000,000 shares (upper limit)
(1.22% of total number of outstanding shares (excluding treasury stock))(3) Total amount of acquisition: 9,800,000,000 yen (upper limit)(4) Period of acquisition: From May 23, 2019 to September 20, 2019105

Hankyu Hanshin Holdings Integrated Report 2019

Notes to the Consolidated Financial Statements

23. Consolidated Supplementary Statements 
23.1 Corporate bond statements

Balance asof March 31,
2019¥10,000(10,000)

Thousands of
U.S. dollars
Balance asof March 31,
2019＄ 90,090(90,090)

Interest rate

Security

Redemption date

1.87%

None

Oct 23, 2019

Millions of yen
Company

Name

Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.
Hankyu Hanshin Holdings, Inc.

Series 38 unsecured
corporate bonds
Series 40 unsecured
corporate bonds
Series 41 unsecured
corporate bonds
Series 42 unsecured
corporate bonds
Series 45 unsecured
corporate bonds
Series 46 unsecured
corporate bonds
Series 47 unsecured
corporate bonds
Series 48 unsecured
corporate bonds
Series 49 unsecured
corporate bonds
Series 50 unsecured
corporate bonds
Series 51 unsecured
corporate bonds

Total

Issue date

Balance asof April 1,
2018

Oct 23, 2009

¥10,000

Sep 22, 2010

15,00015,000135,135

1.43

None

Sep 18, 2020

Sep 22, 2010

7,000

7,000

63,063

1.72

None

Sep 22, 2022

Mar 17, 2011

10,00010,00090,090

1.54

None

Mar 17, 2021

Mar 14, 2013

10,00010,000(10,000)

90,090(90,090)

0.589

None

Mar 13, 2020

Oct 25, 2013

10,00010,00090,090

0.819

None

Oct 25, 2023

Jul 18, 2014

10,00010,00090,090

1.202

None

Jul 18, 2029

Dec 15, 2016

10,00010,00090,090

0.120

None

Dec 15, 2021

Dec 15, 2016

10,00010,00090,090

0.817

None

Dec 15, 2036

Sep 13, 2018—

10,00090,090

0.345

None

Sep 13, 2028

Sep 13, 2018—

10,00090,090

0.789

None

Sep 13, 2038

92,000112,000(20,000)

1,009,009(180,180)

—

—

—

—

—

Notes:
1. The figures in parenthesis for the balance as of March 31, 2019 are the amount payable within one year of the total outstanding, and are listed as current
liabilities under the consolidated balance sheet.
2. The amount of bonds scheduled to be redeemed within five years subsequent to March 31, 2019 are as follows.

Millions of yen

Thousands of
U.S. dollars¥ 20,000$  180,180

Due after one year through two years

Due within one year

25,000225,225

Due after two years through three years

10,00090,090Due after three years through four years

7,000

63,063Due after four years through five years

10,00090,09023.2 Statements of loans payable

Balance as ofApril 1, 2018

Balance as ofMarch 31, 2019

Thousands of
U.S. dollars
Balance as ofMarch 31, 2019¥100,721¥  102,670$    924,955

41,36934,365309,595

Millions of yen
Item
Short-term borrowings
Current portion of long-term debt
Current portion of lease obligations

Average interest

Repayment deadline rate

0.446%

—

0.995

—

1,493

1,567

14,117—Long-term debt (excluding current portion)

625,340

621,375

5,597,973

0.880

2020 – 2039—

Lease obligations (excluding current portion)

5,076

45,730—2020 – 2027

—

—

—

—

—

Total

774,758

765,055

6,892,387——

Notes:
1. The balances refer to those after the elimination of transactions between
companies in the consolidation group.
2. “Average interest rate” of loans payable refers to the weighted averageinterest rate for outstanding loans as of the end of the fiscal year ended
March 31, 2019.
3. For lease obligations, “average interest rate” is not shown because theCompany mainly uses the method that includes the amount of interest
in total lease obligations and that spreads the total amount of interest
equally over each fiscal year of the lease period.
4. Repayment schedule of long-term debts and lease obligations (excluding
those scheduled to be repaid within one year) within five years subsequent
to March 31, 2019 are as follows.

Millions of yen

Thousands of
U.S. dollars

Due after one year through two years¥41,726$  375,910

Due after two years through three years

44,823403,811

Due after three years through four years

46,253416,694

Due after four years through five years

89,442805,784

Millions of yen

Thousands of
U.S. dollars

Due after one year through two years¥1,374$  12,378

Due after two years through three years

1,183

10,658Due after three years through four years

1,002

9,027

Due after four years through five years

843

7,595

Long-term debt

Lease obligations

Hankyu Hanshin Holdings Integrated Report 2019

Financial Section and Corporate Data

5,832

Other interest-bearing debt

106

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

23.3 Schedule of asset retirement obligations
Omitted as the significance was negligible.

24. Others Quarterly financial information in fiscal year ended March 31, 2019
1st Quarter

2nd Quarter

3rd Quarter

4th Quarter¥ 192,429¥ 374,792¥ 576,457¥ 791,427

Income before income taxes (Millions of yen)

30,032

52,921

90,32988,562

Net income attributable to owners of the parent (Millions of yen)

19,19733,85358,78265,476

Net income per share for quarter (of the fiscal year ended March 31, 2019) (yen)77.82

137.68239.40266.86

Cumulative period
Revenues from operations (Millions of yen)

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter$ 1,733,595$ 3,376,505$ 5,193,306$ 7,129,973

Income before income taxes (Thousands of U.S. dollars)

270,559

476,766

813,775

797,856

Net income attributable to owners of the parent (Thousands of U.S. dollars)

172,946

304,982

529,568

589,874

0.70

1.24

2.16

2.40

Cumulative period
Revenues from operations (Thousands of U.S. dollars)

Net income per share for quarter (of the fiscal year ended March 31, 2019) (U.S. dollars)
Accounting period

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Net income per share for quarter of the fiscal year (Yen)¥ 77.82¥ 59.80¥ 101.86¥ 27.35

Accounting period

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter$ 0.70$ 0.54$ 0.92$ 0.25

Net income per share for quarter of the fiscal year (U.S. dollars)

107

Hankyu Hanshin Holdings Integrated Report 2019

List of Major Domestic Rental and Sales Properties
Major rental properties

As of March 31, 2019

Leasable area*1(1,000 m2)

Property nameLocation

Completed

Umeda Hankyu Bldg.

Kita-ku, Osaka

2012

213

Umeda Hanshin Daiichi Bldg. (HERBIS OSAKA)

Kita-ku, Osaka

1997

82

Osaka Umeda Twin Towers South

Kita-ku, Osaka

2018

58

Umeda Hanshin Daini Bldg. (HERBIS ENT)

Kita-ku, Osaka

2004

55

Offices, Commercial facilities, Theater (Osaka Shiki Theater)

Hankyu Chayamachi Bldg. (Applause Tower)

Kita-ku, Osaka

1992

52

Hotel (Hotel Hankyu International), Offices,
Commercial facilities

Hankyu Sanban Gai Shopping Centre

Kita-ku, Osaka

1969

39

Commercial facilities

Hankyu Grand Bldg.

Kita-ku, Osaka

1977

36

Offices, Commercial facilities

GRAND FRONT OSAKA

Kita-ku, Osaka

2013

14

Offices, Commercial facilities, Knowledge Capital, Hotel(InterContinental Hotel Osaka)

Hankyu Terminal Bldg.

Kita-ku, Osaka

1972

27

Offices, Commercial facilities

Hankyu Five Bldg. (HEP FIVE)

Kita-ku, Osaka

1998

20

Commercial facilities

Navio Hankyu (HEP NAVIO)

Kita-ku, Osaka

1980

16

Commercial facilities

Kita Hankyu Bldg.

Kita-ku, Osaka

1971

13

Offices, Commercial facilities

NU chayamachi

Kita-ku, Osaka

2005

12

Commercial facilities

Noda Hanshin Bldg. (WISTE)

Fukushima-ku, Osaka

1992

32

Commercial facilities, Offices

Shin-Osaka Hankyu Bldg.

Yodogawa-ku, Osaka

2012

24

Offices, Hotel (remm Shin-Osaka), Commercial facilities

Hankyu Nishinomiya Gardens

Nishinomiya, Hyogo

2008

117

Hankyu Kawaramachi Bldg.

Shimogyo-ku, Kyoto

1974

38

Use

Department stores (Hankyu Department Store), Offices
Hotels (The Ritz-Carlton, Osaka), Offices,
Commercial facilities,
Multifunctional convention hall*2

Department store (Hanshin Department Store)

Commercial facilities, Department stores(Hankyu Department Store)
Department stores (Takashimaya)*1 Leasable area does not include areas for public use.
*2 PhaseⅠ

Major properties sold in fiscal 2019
Property name

Major properties sold in fiscal 2020
Location

Total units

Condominium

Property nameLocation

Total units

Geo Fukushima Noda The Marks*3

Fukushima-ku, Osaka

566

Geo Kobe Nakayamate-dori*3

Chuo-ku, Kobe

256

Condominium
315

Wellith Ibaraki

Ibaraki, Osaka216

The Residence Osaka Suminodo

Daito, Osaka191

Geo Kyoto Katsuragawa

Minami-ku, Kyoto

98

Scenes Tsukaguchi*3

Amagasaki, Hyogo

166

Cielia Saito*3

Ibaraki, Osaka98

Geo Mukonoso

Amagasaki, Hyogo104

Geo Takarazuka Minamiguchi

Takarazuka, Hyogo64

Geo Takatsuki Ohata-cho

Takatsuki, Osaka55

Geo Nishinomiya Kitaguchi The Clair

Nishinomiya, Hyogo51

Geo Itami Chuo

Itami, Hyogo43

Geo Kyoto Oike-Aburanokoji
The Terrace *3

Nakakyo-ku, Kyoto

49

Geo Nishinomiya Kitaguchi Nagata-cho

Nishinomiya, Hyogo29

Geo Ibaraki Nishichujyo

Ibaraki, Osaka47

Geo Kobe Motoyama Nakamachi

Higashinada-ku, Kobe

20

Geo Kashiwanoha Campus*3

Kashiwa, Chiba

226

Lefond Geo Ikeda*3

Ikeda, Osaka77

Geo Shinjuku Hyakunin-cho

Shinjuku-ku, Tokyo79

Geo Shinjyuku Wakamatsu-cho*3

Shinjuku-ku, Tokyo123

Geo MiyamaedairaMiyamae-ku, Kawasaki

45

Geo Nishikasai Seishin-cho

Edogawa-ku, Tokyo55

Geo Nerima Kitamachi

Nerima-ku, Tokyo45

Geo Chiyoda Otemachi*3

Chiyoda-ku, Tokyo

56

Geo Bunkyo Sengoku

Bunkyo-ku, Tokyo

45

Hapia Garden Yao Akegawa-Minami

Yao, Osaka

30

Hapia Garden Ibaraki

Ibaraki, Osaka

57

Hapia Garden Kobe Takamaru

Kobe, Hyogo

24

Amagasaki-shi, Oshonishimachi 4-chome

Amagasaki, Hyogo

41

Hapia Garden Mukogawa Sorail

Amagasaki, Hyogo

20

Hapia Garden Itami Koyanosato

Itami, Hyogo

12

Hapia Garden Tamagawagakuen-mae

Machida, Tokyo

17

Hapia Avenue Mitaka Jindaiji*3

Mitaka, Tokyo

26

Hapia Garden Koyama 3-chome

Nerima-ku, Tokyo

6

Hapia Avenue Southan Beach Chigasaki

Chigasaki, Kanagawa

16

Hapia Garden Hamadayama

Suginami-ku, Tokyo

4

Sagamihara-shi, Minami-ku,
Kamitsurumahoncho

Sagamihara,
Kanagawa

11*3

Detached house*3 Joint-venture properties*3

Financial Section and Corporate Data

Shimamoto-cho,Mishima-gun,Osaka

Geo Hankyu Minase Heart Square

Detached house*3

Hankyu Hanshin Holdings Integrated Report 2019108

Financial Section and Corporate Data

List of Overseas Sales Properties (As of June 30, 2019)

Country

Property Name

FLORA-ANH DAO-FUJI RESIDENCE

Vietnam

FLORA-KIKYO-MIZUKI PARK

Thailand

Malaysia

Condominium

500

Condominium

789

Detached house

84

Condominium

234

Condominium

Approx. 3,760

Detached house

Approx. 100

Townhouse(Terraced houses)

Approx. 60

Business Partner

Completion

Nam Long Investment Corporation,
Nishi-Nippon Railroad Co., Ltd.

Completed in 2016

Nam Long Investment Corporation,
Nishi-Nippon Railroad Co., Ltd.

Completed in 20172017 or later

Nam Long Investment Corporation,
Nishi-Nippon Railroad Co., Ltd.

Completed in 2018

Nam Long Investment Corporation,
Nishi-Nippon Railroad Co., Ltd.

2019 or later(scheduled)

Nam Long Investment Corporation,
Nishi-Nippon Railroad Co., Ltd.

Unscheduled

Condominium

Approx. 5,230

Niche Mono Sukhumvit-Bearing

Condominium

1,275

SENA Development2019 (scheduled)Niche Pride Taopoon-Interchange

Condominium

742

SENA Development

2020 (scheduled)

PITI Ekkamai

Condominium

879

SENA Development

2022 (scheduled)Niche Mono Mega Space Bangna

Condominium

795

SENA Development

2020 (scheduled)Niche Mono Charoen Nakorn

Condominium

537

SENA Development

2020 (scheduled)

PITI Sukhumvit 101

Condominium

Approx. 170

SENA Development

2021 (scheduled)Niche Mono Ramkhamhaeng

Condominium

1,698

SENA Development

2022 (scheduled)Niche Pride Sathorn-Thapra

Condominium

Approx. 820

SENA Development

2022 (scheduled)

SENA-Azu Rama 9

Condominium

Approx. 570

SENA Development

2021 (scheduled)Niche Pride Somdet Chaopraya

Condominium

Approx. 210

SENA Development

2021 (scheduled)Niche Mono Chaeng Watthana

Condominium

Approx. 1,930

SENA Development

2021 (scheduled)

Bang Pho Project (Tentative name)Condominium

Approx. 430

SENA Development

2022 (scheduled)Niche Mono Itsaraphap

Condominium

Approx. 260

SENA Development

2021 (scheduled)

PA Alvarez Properties

2019 or later(scheduled)

PA Alvarez Properties

2021 or later(scheduled)

PA Alvarez Properties

2021 or later(scheduled)

Sinar Mas Land and others

2019 or later(scheduled)

Sumitomo Corporation, Sentul City

2019 (scheduled)

Ireka Corporation Berhad

2020 or later(scheduled)

Idesia Dasmariñas Phase 2

Idesia Lipa (Tentative name)Indonesia

Total Units

AKARI CITY

Idesia Dasmariñas

The
Philippines

Residence TypeThe ZORA

Detached house456

Townhouse(Terraced houses)

463

Detached house

Approx. 710

Townhouse(Terraced houses)

Approx. 290

Detached house

Approx. 580

Townhouse(Terraced houses)

Approx. 580

Detached house

543

Residence with shops

158

Opus Park

Condominium

1,077

RIMBUN KASIA

Condominium

Approx. 850*The above information includes that which is correct as of the time of our involvement.

109

Hankyu Hanshin Holdings Integrated Report 2019

List of Hankyu-Hanshin-Daiichi Hotels (As of August 1, 2019)
List of hotels
HotelsGuest rooms● Directly managed hotels (Hankyu Hanshin Hotels)

20

5,419

● Other (franchises etc.)

27

5,593

Total

47

11,012

The above figures do not include The Ritz-Carlton, Osaka (Kita-ku, Osaka; 291 rooms)

Directly managed hotels
Name

Guest
rooms

Name

Guest
rooms

Other
Name

278

Hotel new Hankyu Osaka Annex

302

Tokyo Dai-ichi Hotel Iwanuma Resort

Dai-ichi Hotel Annex

180

Osaka Umeda OS hotel*

283

Tokyo Dai-ichi Hotel Tsuruoka

Dai-ichi Hotel Tokyo Seafort

132

Hotel Hanshin Osaka

290

Tokyo Dai-ichi Hotel Yonezawa

Hotel Hanshin Annex Osaka254

Tokyo Dai-ichi Hotel Shin-Shirakawa

Dai-ichi Hotel Tokyo

81

Kichijoji Dai-ichi Hotel

Guest
rooms

52

123

Name

Amano Hashidate Hotel

Guest
rooms

52

Osaka Dai-ichi Hotel

460

62

Hotel Bay Gulls

240

163

Arima Kirari Hotel54

remm Hibiya

255

remm Shin-Osaka

296

Ginza Creston

93

143

remm Akihabara

260

Senri Hankyu Hotel Osaka

203

Ours Inn Hankyu

1,388

Kure Hankyu Hotelremm Roppongi

400

Hotel Hankyu Expo Park Osaka

99

Dai-ichi Hotel Ryogoku

334Tokyo Dai-ichi Hotel Shimonoseki

77remm Tokyo Kyobashi

272

Takarazuka Hotel

129

Dai-ichi Inn Ikebukuro

139

Takamatsu Kokusai Hotel

101

Hotel Hankyu International

168

Hotel new Hankyu Kyoto

325

Dai-ichi Inn Shonan

108

JR Hotel Clement Takamatsu

300

Hotel new Hankyu Osaka

961

remm Kagoshima

251

Toyama Dai-ichi Hotel110

JR Hotel Clement Tokushima

250*Hankyu Hanshin Hotels is entrusted with management

Dai-ichi Inn Shinminato

36

The Crown Palais New Hankyu Kochi

242

Tokyo Dai-ichi Hotel Nishiki

233

Tokyo Dai-ichi Hotel Matsuyama

122

Hotel Boston Plaza Kusatsu

216

Imabari Kokusai Hotel

355

Hotel Royal Hill Fukuchiyama & Spa

70

Hotel Ichibata

70

Location ● Directly managed hotels ● Hotel chain ● Hotels scheduled to open

Artist’s
impression

Hotel Hanshin Annex Osaka

Hotel Hankyu RESPIRE OSAKA

Opened May 15, 2019(254 rooms)

Scheduled opening November 27, 2019
(1,030 rooms [planned])

Artist’s
impression

remm Tokyo Kyobashi

Scheduled opening spring 2020(200 rooms)

Opened April 3, 2019(272 rooms)

Kyoto/Osaka/
Kobe areas● 11 hotels
Artist’s
impression

Reconstruction of Kobe Hankyu East Bldg.;
Planned renewal of West Bldg.
Scheduled completion spring 2021

● 2 hotels

Financial Section and Corporate Data

Takarazuka Hotel (Relocation)

Tokyo area

● 8 hotels● 4 hotels
Artist’s
impression

remm plus Ginza
Scheduled opening December 24, 2019(238 rooms)
Hankyu Hanshin Holdings Integrated Report 2019110

Financial Section and Corporate Data

Major Group Companies (As of April 1, 2019)■ Consolidated Subsidiaries■ Urban Transportation■ Entertainment

Name of company

Railway operations

Hankyu Corporation

Name of company

SportsHanshin Tigers Baseball Club, Ltd.

Nose Electric Railway Co., Ltd.

Hanshin Contents Link Corporation

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

Takarazuka Creative Arts Co., Ltd.
Umeda Arts Theater Co., Ltd.

Hanshin Taxi Co., Ltd.
Hankyu Corporation
Eki Retail Service Hankyu Hanshin Co., Ltd.
Hankyu Style Labels Co., Ltd.
Hankyu Corporation
Hankyu Advertising Agency Inc.
Other

Alna Sharyo Co., Ltd.
Hankyu Sekkei Consultant
Hanshin Station Net Co., Ltd.

■ Real Estate
Real estate leasing

Hankyu Corporation

Hankyu Bus Co., Ltd.
Hankyu Taxi Inc.

Advertising

Mt. Rokko Cable Car & Tourism Co.
Stage

Kobe Rapid Transit Railway Co., Ltd.
Hanshin Bus Co., Ltd.

Retailing

Hanshin Electric Railway Co., Ltd.

Hanshin Electric Railway Co., Ltd.

Name of company■ Information and Communication Technology
Name of company

Information andCommunication
Technology■ Travel
Travel agency

Hanshin Electric Railway Co., Ltd.
Hankyu Hanshin Properties Corp.
Hankyu Hanshin Building Management Co., Ltd.
Hankyu Hanshin High Security Service Co., Ltd.

Hankyu Travel International Co., Ltd.

Name of company

International

Hankyu Hanshin Express Co., Ltd.

transportation

Hankyu Hanshin Logipartners Co., Ltd.
HHE (USA) Inc.
HHE (Deutschland) GmbHHHE (HK) Limited

Hankyu Hanshin Properties Corp.
other business

Name of company■ International Transportation

Hanshin Electric Railway Co., Ltd.
Hankyu Corporation

Bay Communications Inc.

Hankyu Travel Support Co., Ltd.

Hankyu Corporation

Real estate sales andItec Hankyu Hanshin Co., Ltd.

HHE Southeast Asia Pte. Ltd.
HHE: Hankyu Hanshin Express■ Hotels
Hotel management

Name of company

Hankyu Hanshin Hotels Co., Ltd.

Hankyu Hanshin Clean Service Co., Ltd.

Hanshin Hotel Systems Co., Ltd.

Hankyu Hanshin REIT Asset Management, Inc.

Hankyu Hanshin Restaurants Co., Ltd.

Hankyu Hanshin Housing Support Ltd.

Arima View Hotel Co., Ltd.

■ Other
Construction

Name of company

Hanshin Kensetsu Co., Ltd.
Chuo Densetsu Co., Ltd.

Outsourcing services
for personnel andaccounting services

Hankyu Hanshin Business
Associate Co., Ltd.

Credit and point card Hankyu Hanshin Card Co., Ltd.
Group finance■ Equity-Method Affiliates
Main business

Name of company

Department store

H2O Retailing Corporation(Securities code: 8242)

Railway operations

Nishi-Osaka Railway Co., Ltd.
Kobe Electric Railway Co., Ltd.
(Securities code: 9046)

Motion picturebusiness
Real estate leasing
Commercial
broadcasting111

Toho Co., Ltd. (Securities code: 9602)
Tokyo Rakutenchi Co., Ltd.
(Securities code: 8842)
Kansai Television Co., Ltd.

Hankyu Hanshin Holdings Integrated Report 2019

Hankyu Hanshin Financial Support Co., Ltd.

Investor Information (As of March 31, 2019)
Hankyu Hanshin Holdings, Inc.
Head OfficePaid-in Capital¥99,474 million

1-16-1, Shibata, Kita-ku, Osaka 530-0012, Japan

Fiscal Year-End

March 31

Number of Employees

22,654 (consolidated)

Authorised Shares

640,000,000

Issued Shares

254,281,385

Phone: +81-6-6373-5001(Group Planning Div., IR Office)Fax: +81-6-6373-5042
Tokyo Office (Personnel and General Affairs Div.)

Number of Shareholders 77,451

Toho Twin Tower Bldg.,
1-5-2, Yurakucho, Chiyoda-ku, Tokyo 100-0006, Japan
Phone: +81-3-3503-1568
Fax: +81-3-3508-0249

Unit of Trading

100 shares

Stock Exchange Listing

Tokyo

Transfer Agent

Mitsubishi UFJ Trust and Banking Corporation

Principal Shareholders

Ownership Breakdown
National government and local
public organizations

Number of shares(Thousands)

Percentage(%)

Japan Trustee Services Bank, Ltd. (Trust account)

13,151

5.34

The Master Trust Bank of Japan, Ltd. (Trust account)

12,843

5.22

Nippon Life Insurance Company(Standing Proxy: The Master Trust Bank of Japan, Ltd.)

5,224

2.12

Japan Trustee Services Bank, Ltd. (Trust account 5)

4,955

2.01

H2O Retailing Corporation

4,207

1.71

State Street Bank West Client–Treaty 505234 (Standing Proxy:
Mizuho Bank, Ltd. Settlement & Clearing Services Division)

Securities
companies

4,095

1.66

0.65%

Sumitomo Mitsui Banking Corporation

3,581

1.45

Name

JP MORGAN CHASE BANK 385151 Mizuho Bank, Ltd.
Settlement & Clearing Services Division)

3,485

1.42

Japan Trustee Services Bank, Ltd. (Trust account 1)

3,304

1.34

Japan Trustee Services Bank, Ltd. (Trust account 9)

3,257

1.32

0.00%
Financial
institutions
28.74%

Individuals
and others

41.76%

Other
corporations

Foreigncorporations
and individuals

8.55%

20.31%

Stock Price and Annual Trading Volume (Tokyo Stock Exchange)
Stock price (¥)

Nikkei average (¥)
25,000

5,000

4,000

Stock Price(left axis)

20,00015,0003,000

Nikkei Average (right axis)

2,000

10,000

1,000

5,000

0

0

180,000

Financial Section and Corporate Data

90,0000
Trading volume(Thousand shares)

2010

2011

2012

2013

2014

2015

2016

2017

2018

Notes:
1. The stock prices are as of March 31, of each year. The trading volumes are for years ended March 31.
2. The data takes into account the reverse stock split and the change of trading unit conducted with an effective date of August 1, 2016.

Hankyu Hanshin Holdings Integrated Report 2019112

Financial Section and Corporate Data

Website Information

Corporate Website of Hankyu Hanshin Holdings
The corporate website of Hankyu Hanshin Holdings presents
an outline of the Group, news releases, and details of CSR
initiatives in addition to providing governance information.
It also publishes up-to-date information on each business aswell as a message from management.

https://www.hankyu-hanshin.co.jp/

Information for Shareholders and Other Investors

Group Guide

The Group’s investor relations website provides presentation

We compile an annual Group Guide to aid in understanding

materials on corporate financial results as well as aof the Group outline. This Group Guide includes a message

Q&A section. In addition, it provides statutory disclosure

from management, a list of Group companies, and an outline

documents such as financial statements and securitiesof the scope of Group businesses. It is published in bothreports. It also includes the business strategies and financial

English-language and Japanese-language editions.

policies comprising the Long-Term Management Vision andhttps://www.hankyu-hanshin.co.jp/file_sys/irRel
atedInfoEn/242_6de97dc5180211eddff1c8456
7e91fa018f09889.pdf

Medium-Term Management Plan.

https://www.hankyu-hanshin.co.jp/ir/

113

CSR Initiatives ▶︎ Environmental Preservation

CSR Initiatives ▶︎ Social Contribution

The Group implements a variety of initiatives intended to

Our Group engages in a variety of social contribution

reduce the environmental impacts of each of its businesses.

initiatives in order to implement the Group Management

This website includes examples of initiatives as well as

Philosophy. This website includes a video outlining theseexternal evaluations.

initiatives and provides a report detailing their content.

https://www.hankyu-hanshin.co.jp/csr/eco/https://www.hankyu-hanshin.co.jp/yume-machi/

Hankyu Hanshin Holdings Integrated Report 2019

Financial Section and Corporate Data

Hankyu Hanshin Holdings Integrated Report 2019114

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/en/

Hankyu Hanshin Toho Group

Printed in Japan