Hankyu Hanshin Holdings
Securities code: 9042

ANNUAL REPORT2018

Mission

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

What 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 Annual Report 2018

Con t e n t s
Page

1

ProﬁleGroup Management Philosophy
History of the Hankyu Hanshin Holdings Group1
3
5

At a Glance

7

Service Area
Financial Highlights, Non-Financial Highlights

11

１ Strategy for Enhancement of Corporate Value

13

Message from Chairman
Message from President

13
15

Summary of Long-Term Management Vision for 2025 andMedium-Term Management Plan
Four Strategies for Medium-Term Management Plan
Value Creation Process of Hankyu Hanshin Holdings

2 Enhancing Our Corporate Value
Urban Transportation

21
23
29

31
31
33

Real EstateEntertainment and Communications

35
37

TravelInternational Transportation

39
41

Hotels3 The Basis of Enhanced Corporate Value

43

Directors and Audit & Supervisory Board Members

43

An Interview with an External Director

45

Management Organization

47

Safety Initiatives in the Railway Business

53

Social Contribution Initiatives

57

Environmental Initiatives

60

Health Management and Initiatives to Promote Women

Financial Section and Corporate Data
Consolidated Six-Year Summary

62

64
65

Consolidated Financial Review

66

Business Risks

70

Consolidated Balance Sheets

71

Consolidated Statements of Income / Consolidated
Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows

73
74
76

Notes to the Consolidated Financial Statements

77

List of Major Domestic Rental and Sales Properties

100

List of Overseas Sales Properties

101

Major Group Companies
Investor Information

102
103

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 annual 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 therefore diﬀer substantially from suchstatements.

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

The ﬁnancial section of this annual report includes a digest of information including consolidated ﬁnancial statements in the Company’s
Securities Report for the 180th period, audited by KPMG AZSA LLC and presented in a somewhat modiﬁed format. We have presented
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 annual report itself has not been audited by KPMG AZSA LLC.

Deﬁnition“Fiscal 2018”refers to the ﬁscal year ended 31st March 2018. Other ﬁscal years are referred to in a corresponding manner in this annual
report. Figures are basically rounded oﬀ. Sums expressed in units of ¥100 million are rounded to the nearest ¥100 million.

Hankyu Hanshin Holdings Annual Report 20182

Profile

History of the Hankyu Hanshin Holdings GroupBy suggesting an innovative lifestyle to the people, mainly in the Kansai area,
we have created prosperous communities and steadily expanded our business.
1924

Completion of
Takarazuka Grand
Theater

1913

Formation of Takarazuka
Girls’Revue (currently
Takarazuka Revue
Company)

1929

1910

Opening of Umeda
Hankyu Building(Beginning of operations of Hankyu Department
Store, Asia’s ﬁrst railway terminal department store)

Start of sales of Ikeda
Muromachi
Residential Land Plots

1926

HankyuOpening of
Takarazuka
Hotel

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

1910

1907

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

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

1964

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

1948

1921

Completion of New Opening of Hankyu
Hankyu Building
Sanbangai

1938

Launch of airline agency
business as Hankyu
Corporation’s agency
department Japan’s ﬁrstagency agreement
concluded with Pan
American Airways

Opening of Hotel new
Hankyu Osaka

1960

Hankyu Express
International Co., Ltd.
(currently Hankyu Travel
International Co., Ltd.) wasestablished independentlyof Hankyu Corporation

1920

1973

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

Opening of new Hankyu Umeda
Station as one of the largest
private railway terminals in Japan
Changing of company name toHankyu Corporation

1924

1899

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

1969

1962

Opening of DempoLine (currently
Hanshin NambaLine) between
Daimotsu andChidoribashi

of provision of air cargo
1948 Commencement
services as part of the business services

1939

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

HanshinBeginning of operations of Main Line
Osaka-ekimae underground extension(Relocation of Umeda Station)

1905

Beginning ofoperations linking
Kobe (Sannomiya)and outer Osaka(Deiribashi)

1941

1909

Completion of 30 rental
houses in front ofNishinomiya Station(Launch of land and buildings
leasing business)

1927

Launch of landand buildings
sales business

1924

Opening of Koshien
Stadium(Later renamed
Hanshin Koshien
Stadium)

3

Hankyu Hanshin Holdings Annual Report 2018

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

1935

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

1967

Opening of
Hotel Hanshin

Urban Transportation
Real EstateEntertainment and Communications
TravelInternational Transportation
HotelsProfileSep 2012

Nov 2008

Completion of Umeda
Hankyu Building(Full opening of Umeda
Main Store of Hankyu
Department Store in
November 2012)

Opening of Hankyu Nishinomiya Gardens

2014

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

May 2010

Opening of Umeda
Hankyu Building
Oﬃce Tower©Takarazuka Revue Company

Sep 2009

Opening of Hankyu
Department Store
Umeda Main Store
Phase I Building,
Umeda Hankyu
Building

Mar 2016

Opening of a logistics center inIndonesia as a joint project of thereal estate business and theinternational transportation business

Oct 2006

Establishment of Hankyu
Hanshin Holdings, Inc.

Mar 2010

Completion of the renovations ofHanshin Koshien Stadium

Apr 2018

Completion of Umeda 1-1
Project Phase I Building

Mar 2009

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

May 2017

Announcement of the Hankyu Hanshin HoldingsGroup’
s Long-Term Management Vision for 2025

Hankyu Hanshin Holdings Annual Report 2018

4

Profile
ProfileNature of BusinessAt a Glance
Urban Transportation

Real EstateEntertainment andCommunications

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 (non-JR) railway
operator with railway lines that directly link Kobe
with Osaka’s major northern and southernterminals, which are Osaka-Umeda and Namba,
respectively. The operating kilometers of Hankyu
Corporation and Hanshin Electric Railway are
143.6 km* and 48.9 km*, respectively.
* Including tier 2 railway operators

Real estate leasing businessThis business owns numerous oﬃce buildings
and facilities, mainly in Osaka-Umeda and theline-side areas of the Hankyu and Hanshin lines.
In recent years, the business has been actively
pursuing development of real estate in theTokyo metropolitan area. (For a list of principal
rental properties, please see page 100.)

Sports businessThis business manages the Hanshin Tigers
professional baseball team, which has a historyof more than 80 years, as well as the team’shome ground and high-school baseball mecca
Hanshin Koshien Stadium and manages related
businesses. The business also operates a musicbusiness (Billboard Live).

Real estate sales and other businessThis business markets condominiums, residential
land lots, and detached houses, mainly in theline-side areas of the Hankyu and Hanshin lines
and the Tokyo metropolitan area. In recent years
the business 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.
(See pages 100‒101 for major [domestic andoverseas] sales properties.)

Stage businessThis business manages the performances of the
Takarazuka Revue̶an organization which has
more than a century of history̶sells 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 manages and operates bus and taxi
services, which coordinate with railway services
to increase convenience in line-side areas.
Retailing businessThis business manages and operates convenience
stores and other shops mainly inside railway
stations on the Hankyu and Hanshin lines.

Major Operating
Companies*1

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

©Takarazuka Revue Company

Communication and media businessThis business operates a broadcast andcommunications business, which provides cable
television services (including multichannel
broadcasts, Internet, and ﬁxed telephone line
services), and an information services business,
which provides a variety of services based on
system development and other IT.

Hankyu Corporation

Hankyu Corporation

Hanshin Electric Railway

Revenues from operations

Revenues from operations

¥

236.0

Fiscal 2018 Results（YoY -¥

billion

0.5 %）

41.6（YoY -¥

billion

1.5 %）

799.5

3.2 %）¥

41.0（YoY -

billion

0.3 %）¥（YoY +

29.2%

billion

5.1 %）

Operating income¥

billion

2.4 %）

1,087.2

121.1（YoY +

Segment assets

Percentage Percentage of Percentage ofOperating Revenues fromof Assets
Income*2 Operations*2（YoY -

billionRevenues from operations

Operating income

Segment assets

¥

222.6
（YoY +

Operating income¥

Hanshin Electric Railway

Hankyu Hanshin Properties Corp.

17.8（YoY +

billion13.4 %）

Segment assets

billion

2.9 %）¥

150.9（YoY +

billion

2.5 %）
27.6%

38.1%
34.8%

*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 percentage of revenues from operations and operating income are calculated based on the simple aggregate amount (including intersegment transactions) of each segment.

5

Hankyu Hanshin Holdings Annual Report 2018

International
Transportation

TravelHotelsProfileTravel businessThis business plans, markets, arranges, andsupports travel for Japanese people in Japanand overseas and for non-Japanese visitors inJapan.
The business provides various travel services
which include: media sales to sell packaged
tours through advertisements in newspaper,internet and other media, individual tours withitinerary that can be 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 arrangementsfor overseas business trips.

International transportation businessThis business operates air freight, sea freight,
and logistics businesses as well as acomprehensive portfolio of businesses that are
ancillary or related to these operations. The
business has 49 bases in Japan and 128 bases
overseas as of August 1, 2018.

Hotels businessThis business operates a wide range of hotelformats, from“city hotels”through to businesshotels mainly comprising guest rooms forovernight stays.
The business operated 46 hotels, consisting of
18 directly managed hotels and 28 franchise
hotels, with 10,424 guest rooms as of April 1,
2018. In addition to the above hotels, thebusiness manages The Ritz-Carlton, Osaka,
based on an alliance with the Ritz-Carlton chainof international luxury hotels.

Hankyu Travel International

Hankyu Hanshin Express

Hankyu Hanshin Hotels

Revenues from operations

¥

34.0

（YoY +

billion13.6 %）

Operating income¥

2.1（YoY +¥（YoY +¥

billion222.6 %）

85.6
（YoY +

47.4%¥

billion

16.8 %）

2.8（YoY +

billion15.7 %）¥（YoY +

4.2%

billion

2.4 %）

Operating income¥

billion75.0 %）

52.5

67.2（YoY +

2.2（YoY -

Segment assets

15.0%
37.5%

83.7

Revenues from operations

Operating income

Segment assets¥

Revenues from operations

billion20.7 %）

Segment assets¥

billion35.7 %）

83.7（YoY +

10.4%
16.2%
6.6%

billion

1.3 %）

8.3%

5.3%

1.9%

2.5%

3.7%

2.3%

2.0%

3.6%

1.8%

1.5%

Hankyu Hanshin Holdings Annual Report 2018

6

Profile

Service Area

N

Kyoto
Prefecture

Expanding the service area from Kansai, centering around Umeda andits line-side areas to the Tokyo Metropolitan area and to Asia
Major rental facilities of the Group
Myokenguchi

Nissei-chuo

Nose Electric
Railway Line

Osaka
Prefecture

GRAND FRONT OSAKA

Oﬃces, Commercial facilities,
Hotel, Knowledge Capital, etc.

Applause Tower

Hotel, Commercial facilities,
Oﬃces, Theater, etc.

HEP FIVE

Umeda Hankyu Bldg.

Commercial facilities, Hall, etc.

Oﬃces, Department stores, etc.

HankyuMinoh Line
Minoh

Kawanishi-noseguchi

Hyogo
Prefecture

Kita-senri
Senri-Chuo

Osaka
International
AirportTakarazuka

Hankyu Imazu Line

HankyuItami Line

HankyuKoyo Line

Itami

HankyuTakarazuka
Line

KoyoenTanigamie El

Umekita Phase II

ectr

ic R

o
uk
Ky
in e
sh in
ku y L
Ho ilwa
Ra

Kob

ailw

ay

Kobe Rapid Transit
Railway Line

Hankyu Kobe Line

HankyuSenri
Line

Kita-Osaka Kyuko

Takarazuka Grand Theater

Ishibashi

Esaka
ShukugawaTsukaguchi
Nishinomiya-kitaguchi
Imazu

Imazu

Koshien Stadium

Shin-Kobe
Kobe
Sannomiya

Awaji

ShinOsaka

Mukogawa

Daimotsu

Amagasaki

Juso

Umeda

HanshinTenjimbashisuji
6-chome

Mukogawadanchi-Mae Mukogawa

Line

Umeda 1-1 Project
Shinkaichi

Motomachi

Hanshin Namba Line

Hanshin
Main Line

Osaka Bay

Nishidai

Osaka-Namba

Kobe Airport
Survey of prospective condominium purchasers regarding their preferredKansai residential area, conducted in ﬁscal 2019
Ranking

Hankyu Umeda Station andChayamachi Area

eda

ay Um

Subw
Sta.

JR Osaka Station
Subw
a Sta

Umed

ashi-

ay HigHanshin Umeda Station.

Oﬃces, Commercial facilities,
Theater, etc.

Nishi-Umeda Area

Subway Nishi-Umeda Sta.

Oﬃces, Hotel, Commercial facilities,
Multifunctional convention hall, etc.

HERBIS ENT

Ranking

Station

1

6

Esaka

2

Shukugawa

7

Senri-Chuo

3

Umeda

8

Ashiyagawa

4

Okamoto

9

Osaka

5

Takarazuka

10

MikageSource: A survey of prospective condominium
purchasers regarding their preferred residentialarea, conducted by seven major real estatedevelopers (Sumitomo Realty & Development
Co., Ltd., Daikyo Incorporated, Tokyu Land
Corporation, Tokyo Tatemono Co., Ltd., Nomura
Real Estate Development Co., Ltd., Mitsui
Fudosan Residential Co., Ltd., and Mitsubishi
Jisho Residence Co., Ltd.) and included in apress release dated September 27, 2018

KansaiHankyu Umeda Station

Umekita Area

HERBIS OSAKA

StationNishinomiya-kitaguchi

Umeda

Kansai International
AirportThe largest airport in westernJapan, this is the Kansaiarea’
s gateway to the world.

JR Osaka Station South Area
(Diamond District)
JR Kitashinchi Sta.

Kansai International Airport

7

Hankyu Hanshin Holdings Annual Report 2018

Hankyu Hanshin Holdings Annual Report 20188

Arashiyama
Kawaramachi

Urban Transportation

HankyuKatsuraArashiyama Line

HankyuCorporation

143.6 km

HankyuKyoto Line46.9 km(Kobe Line, Imazu Line, Itami Line, Koyo Line)

65.4 km(Takarazuka Line, Minoh Line)

Kyoto Line

Kobe Rapid Transit Railway Line

Takarazuka Line

28.5 km

¥1,740,000 m

2.8 km2¥

2

1,159 units

persons (FY2018)

Alma-Ata* Sum of tier 1 and tier 2 railway operations
for both Hankyu and Hanshin

Domestic travel turnoverin¥

5 countries
Ulan Bator

MONGOLIATAJIKISTAN

NORTH
KOREA

P´yongyang

Beijing

Seoul

SOUTH
KOREA

Tokyo

JAPAN

CHINA

Chuo-ku

Asia

NEPAL
Kathmandu

Japan

Overseas business area

The Philippines

Thailand

Kyoto, Osaka, Kobe

12 hotels(6th place in the industry)

BishkekShinjuku-ku
Chiyoda-ku
Minato-ku

136.1 billion(3th place in the industry)KYRGYZSTAN

Business development in the Tokyo Metropolitan area

Shibuya-ku

206.6 billion

Overseas sales
business operated

Profile790,000 m

Number of condominium units sold (FY2018)

persons (FY2018)

Overseas travel turnover

Approx.
KAZAKHSTAN

345.5 billion(6th place in the industry)RUSSIAOf which, Umeda area (as of FY2018)

Kobe Rapid Transit Railway Line 5.0 km

page 37

Total turnover

Approx.

( Hanshin Main Line, Hanshin Namba Line, Mukogawa Line)654,945,000
241,641,000

Travel（FY2018）

page 33

Leasable area (as of FY2018)

Hanshin Line 43.9 km

48.9 km

Annual number ofpassengers carried
Hanshin Electric Railway

Kobe Line(Kyoto Line, Senri Line, Arashiyama Line)

HanshinElectric Railway

Annual number ofpassengers carried
Hankyu Corporation

Real Estate

page 31

VietnamTokyo

Condominium sales in Vietnam

Umeda

MalaysiaTokyo area

Singapore

11 hotels

Indonesia

Distribution warehouse in Singapore

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

3,035,000

Stage businessAnnual total attendanceat Takarazuka revues(FY2018)
Communications
business ‒ other
Number of households
subscribing to cable TV(FY2018)

9page 35

Hotels (As of April 1, 2018)

persons©Takarazuka Revue Company

Approx.

2.80

Approx.

604,000

Hankyu Hanshin Holdings Annual Report 2018

million persons(Of which, Takarazuka Grand Theater:
approx. 1.19 million persons,Tokyo Takarazuka Theater:
approx. 990,000 persons)households(Of which, Baycom:
approx. 499,000 households,
Himeji Cable TV:
approx. 105,000 households)

Total numberof hotels

46(Directly managed:

page 41

page 39

Number of overseas bases

hotels18 hotels, Other: 28 hotels)

10,424

Total numberof guest rooms

International
Transportation (As of August 1, 2018)28

countries

128

locations

Number of domestic bases

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

49

locationsHankyu Hanshin Holdings Annual Report 201810

Profile

Financial Highlights
Key Financial Indicators (Graphs)
Revenues from operations

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

800
600

679.2

685.9

746.8

736.8

760.3

80

110.3
91.8

94.0

400

104.1

14.8

13.7

13.5

(%)
21

14.1

105.2
14
13.8
7

40

200
0

0

0
2014

2015

2016

2017

2018

2014

(FY)

Operating income

2015

2016

2017

(FY)

Operating income margin (right axis)

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

150

149.2

150.1

166.5

159.3

71.3

70.0

160.8

60

100

40

50

20

0

46.4

66.4

12

54.2
10.3

8.6

8.0

9.4

8

8.2

4

2015

2016

2017

2018

0
2014

(FY)

2015

2016

2017

Net income attributable to owners of the parent

Total assets and ROA(%)
6(¥ trillion)
1.5

4

1.0

1

2

0.5

0

0

0

2.29

2

3.6

Total assets(FY)

ROE (right axis)

2.28

2.28

2.35

4.6

3.8

4.3

2.41
4.3

(Times)
15

1.03

0.96

6.9

1.7
2014

2018

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

2015

2016

2017

2018

2014

(FY)

ROA (right axis)

Interest-bearing debt

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

Cash ﬂows

0.92

0.90

6.4

5.5

5.6

1.4

1.3

1.1

2015

2016

2017

0.87
5.4

1.0
2018

10

5

0
(FY)

D/E ratio (right axis)

Interest-bearing debt/EBITDA (right axis)

Returns to shareholders(¥ billion)
150
100

(%)
16

0
2014

147.0
101.5

50
0

-45.5

-50

131.9
79.4

-52.5

-100

124.8

115.6

2014

2015

(Yen)
50.00

135.8

（%）
50

40.00
46.0

30.8

-78.8

47.5

2016

Net cash provided by operating activities

30.00
20.00

-84.8

-88.4

-150
2017

2018

Hankyu Hanshin Holdings Annual Report 2018

30.00
16.3

30.00
14.0

35.00

35.00

25.0

25.0

40.00

(FY)

0

40
30

30.0

10.00

Net cash used in investing activities

Free cash ﬂow

11

2018

20
10

2014

Dividend per share

2015

2016

2017

2018

0
(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

320,753

649,400

317,491

642,784

309,363

302,505

612,515

297,608

200,000(Thousand kWh)
300,000

600,000

285,000

400,000

270,000

200,000

250,000

0

0

0
2013

2014

2015

2016

2017

Real estateEntertainment and communications

International transportation

HotelsOther

268,793

2014

(FY)

Urban transportation

277,2192015

262,463

262,154

262,998

2016

2017

2018

Profile400,000

658,607602,586

Electricity consumption during summer months (July‒September)（kl）
800,000(FY)

TravelEnergy consumption on crude oil-conversion basis (right axis)
In ﬁscal 2017, CO2 emissions were down 4.7% year on year, to 612,515 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 2017 was 262,998 kWh, down approx. 15% 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 Number of activities(¥ billion)
25(Activities)
120

20
15

3.3
3.3

2.8

1.8

4.7

10
5
0

13.7 1.5
4.9
Hankyu Hanshin

2014

16.1
1.1

13.0
0.6
4.4

4.0
Hankyu Hanshin

2015

12.7
0.9

Hankyu Hanshin

Safety-related capital investment

2016

80

5.8

2017

94

91

89

83

97

92

111

81
57

40

1.4
13.1

3.7
Hankyu Hanshin(Groups)
120

67
40

0

Hankyu Hanshin

2018

(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.

2014

80

2015

2016

2017

2018

0
(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 2018, such investments totaled¥13.1 billion at Hankyu Corporation and ¥5.8 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,
and measures for making stations barrier-free.

In accordance with a basic policy of creating towns and cities that people wil 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 its railway line-side areas, interms of ﬁnancing and advertisement, and make joint eﬀorts with the civic groups.
A survey conducted in ﬁscal 2016 targeting customers in the line-side cities andtowns found the tendency for customers that recognize our project to show
goodwill toward the Group as well as intention to live in the line-side area.

Governance Factors

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

Membership of the Board of Directors(People)
15

10

（%）
100
2
6

2
6

2
6

5
5

5

6

2014

2015

2016

0

80

96.7

96.7

97.2

97.2

85.0

60
2

2

3

3

4

4

2017

97.2
90.0

100.0
97.2
85.0

100.0
96.0
83.3

65.0

40
20
0

2018 (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 ﬁscal year)

The General Meeting of Shareholders held in June 2017 approved a reduction in thenumber of directors from 14 to nine, thereby increasing the proportion of external
directors. Two directors of the Company concurrently serve as directors of Group
companies to ensure that business management reﬂects viewpoints from the Group’soperations. 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.

2014

2015

2016

2017

2018

(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, theCompany 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 andliaise with relevant in-house departments and divisions. The Company provides external
directors and external Audit & Supervisory Board members with information about theCompany’s businesses, ﬁnancial position, and organizations mainly at meetings of the
Corporate Governance Committee. Also, the secretariat 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 Annual Report 201812

Strategy for Enhancement of Corporate Value

Message from Chairman

We will aim at sustainablegrowth with concerted
efforts of the entire Group.

Kazuo Sumi
Chairman and Representative Director,
Group Chief Executive Officer

13

Hankyu Hanshin Holdings Annual Report 2018

Establishment of“Medium-Term Management Plan”
Aiming at Fulfillment of Long-Term Management
VisionSince the formation of the Group in 2006, the member companiesof the Group have improved the competitiveness of each businesswith their concerted efforts, attempted to improve the profitabilityof the entire Group and increase its profits by making the best
financial position at the same time. Thus it has obtained results
However, when we foresee our business environment in the
future from the medium and long-term viewpoint, the lifestyles
and the living environments are expected to change significantly
as a result of the advancement of technical innovations etc. inaddition to the expected decrease in the line-side population as
an impact of the declining birthrate etc. Therefore, in order tobecome a corporate group aiming for growth under suchcircumstances, the Group publicly announced the “Hankyu
Hanshin Holdings Group Long-Term Management Vision for2025”last year as a vision showing what it wants to be in thelong term and the course to be taken and the strategy to be
implemented for fulfilling that vision. Then we newly establishedthe Medium-Term Management Plan in May this year for fulfillingourlong-term

continuously

management
enhancethevision.

We

corporate

will
value

endeavorbytosteadily

implementing policies and measures under this plan.

most attractive town in the Kansai area. We are going to start thelong-expected development of “Osaka Station North District(Umekita) Phase II Development Area*”in Umeda as the biggest
and final large-scale business site. Since the consortium including
the Group has been selected as its developer, the Group plans toengage in creating the town leading Kansai and then Asia in“Umekita.”* See page 24.

On the other hand, when taking the future change in the

population dynamics etc. into consideration it is indispensablefor the Group to expand its fields to the Tokyo metropolitan area

Strategy for Enhancement of Corporate Value

steadily.

the most important base of the Group, is still the busiest and1

use of its collective strength and endeavored to improve its

relatively advantageously in the Kansai area. In addition, Umeda,

with large-scale markets and foreign countries where growth isexpected in order for it to sustainably grow. We consider theGroup to have sufficient chances to make good use of its
advantages and know-how for its businesses accumulated andenhanced by it for many years in the line-side areas.
In promoting them one by one, we think that the role to beplayed by the real estate business is especially big among thebusinesses run by the Group. Therefore, in order to make thebest use of the collective strength of the real estate business of
the Group, we integrated and reorganized the Real Estate
Division of Hankyu Corporation, that of Hanshin Electric Railway
Co., Ltd. and Hankyu Reality Co., Ltd. in April this year to newly
establish Hankyu Hanshin Properties Corp. as the core company
for the real estate business.
From now on, Hankyu Hanshin Properties Corp. will lead not
only the creation of towns in Umeda and line-side areas but also
the building of the stable revenue base while possessing real
properties in the Tokyo metropolitan area and overseas. In“Enhancing Line-Side Areas and Expanding Fields”
In the“Hankyu Hanshin Holdings Group Long-Term Management

addition, it will concentrate its energies on the expansion of thescale of the real estate sales business and accelerate its efforts
further to grow the real estate business.

Vision for 2025,”we have adopted the slogan of“Enhancing LineSide Areas and Expanding Fields.”
In the Kansai area as the most important business base of theGroup, the integrated operation of the three airports consistingof Kansai International Airport, Osaka International Airport andKobe Airport has been started. In addition, new railway lines
relating to the Group are being planned. Thus the improvementin the traffic infrastructure is steadily progressing. In addition, thehealth-and-medicine-related businesses are concentrated in thatarea. The efforts to create new businesses capable of leading theworld are underway through the cooperation among industries,
government and universities such as the progressing researchand development of the most advanced medicine including
regenerative medicine. In addition, the number of inboundtourists has increased rapidly in recent years mainly in Osaka andWhile Satisfying Expectations from Stakeholders,the Entire Group Endeavors to Grow.
In order to enhance the medium and long-term corporate value,
the Group will continue to concentrate its concerted efforts on
the promotion of its social contribution activities and environmentfriendly business activities, the attachment of importance tocompliance, the thorough implementation of risk management,
etc. and fulfill its corporate social responsibility. And in order toimplement the Group Management Philosophy, we will promote
the growth of the entire Group while building reliable relationships
with stakeholders and endeavor to satisfy expectations frompersons concerned with concerted efforts of the entire Group.

Kyoto. Since this number is expected to steadily increase in the
future through holding the Rugby World Cup 2019, the World
Masters Games 2021, etc., Kansai is highly expected to become
an area attracting more and more attention in the world.
The line-side areas of the Group are located very near to theShin-Osaka Station of JR, the gateway of the Kansai area
belonging to the national land axis, and also very near the Osaka
International Airport and Kobe Airport among the air gateways.
Therefore, we consider these line-side areas to be locatedHankyu Hanshin Holdings Annual Report 201814

Strategy for Enhancement of Corporate Value

Message from President

We will drastically change our course to thegrowth-oriented one and actively and resolutely
attempt to achieve sustainable growth.

Takehiro Sugiyama
President and Representative Director

15

Hankyu Hanshin Holdings Annual Report 2018

The Revenues from Operations in Fiscal 2018 Hit
an All-Time High.
As the business results of the Group in fiscal 2018, the revenues
from operations were ¥760.3 billion, hitting an all-time highbecause of the strong performance of the sports business, thestage business and communication and media business in theentertainment and communications businesses, an increase inbusiness, the prosperous international transportation businessthe net income attributable to owners of the parent (¥66.4
billion) decreased over the previous fiscal year because of theworsened extraordinary income/loss etc. in addition to anincrease in tax expenses.
On the other hand, we could decrease the interest-bearing
debts over the balance at the end of the previous fiscal year
because of expansion of cash flow etc. although we suitably
made investments for growth. As a result, the interest-bearing
debt/EBITDA ratio was 5.4 times, an improvement over theprevious fiscal year.

FY2018 results

FY2017 results

Revenues from operations¥ 760.3 billion¥ 736.8 billion+ ¥ 23.5 billion+3.2%

Operating income¥ 105.2 billion¥ 104.1 billion+ ¥ 1.1 billion+1.1%

Ordinary income¥ 103.8 billion¥ 100.6 billion+ ¥ 3.2 billion

+3.1%

YoY

¥ 66.4 billion¥ 71.3 billion- ¥ 4.9 billion-6.9%

EBITDA¥ 160.8 billion¥ 159.3 billion+ ¥ 1.5 billion+0.9%Interest-bearing debt

¥ 866.8 billion¥ 899.5 billion- ¥ 32.7 billion-3.6%

5.4 times

5.6 times-0.2 pt

Net income attributable to owners of the parent

Interest-bearing debt/EBITDA ratio

Strategy for Enhancement of Corporate Value

mainly with air transportation and so on. In addition, the(¥103.8 billion) increased over the previous fiscal year. However,1

the number of customers traveling to Europe in the travel

operating income (¥105.2 billion) and the ordinary income

integration of the managements of Hankyu and Hanshin the target

Summary of Long-Term Management Vision

year, we have established the following four strategies under the

In order to become a corporate group aiming for growth even inbasis of two key points consisting of the business areas and theslogan of“enhancing line-side areas and expanding fields”on thethe society changing in the future, the Group established the“Hankyu Hanshin Holdings Group Long-Term Management Vision
for 2025”last year. In this Long-Term Management Vision, by

business models (stock businesses*1 or flow businesses*2). We
have determined to endeavor to enhance the sustainablecorporate value through these strategies.

making fiscal 2026 marking the twentieth anniversary of the*1 Businesses that own or use such stock as property and other fixed assets (including the railway business, real estate leasing business, broadcast and communications
business, and Hotels Business)*2 Businesses 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 Annual Report 201816

Strategy for Enhancement of Corporate Value

Specifically, we will promote the implementation of Strategies
1 to 4 so that we can become a corporate group capable ofbillion and the Interest-Bearing Debt/EBITDA Ratio of between 5
and 6 times in fiscal 2026.

earning operating income at the current level of ¥100 billion at

By achieving such aims, we will continue to secure the top-level

the minimum even in or around 2040 which will be affected

position among the major private railway companies for all

significantly by the change in population dynamics and thereby

indicators showing profitability and financial soundness.

aim at the operating income of ¥120 billion, the EBITDA of ¥200

Management indicators aimed at in ﬁscal 2026

Operatingincome¥ 120 billion

EBITDA¥ 200 billion

Proﬁtability

Financialsoundness

Interest-bearing
debt/
EBITDA ratio

Between

5 6
andIn this plan, we aim at becoming a corporate group capable ofEstablishment of Medium-Term Management Plan
for Fulfilment of Long-Term Management Vision

stably recording the operating income of ¥110 billion in fiscal

We have recently established the medium-term management

promoting policies and measures as follows in accordance withplan covering the term from fiscal 2019 to fiscal 2022 as aconcrete action plan for the first time to fulfill the long-term

2022 as the midterm target year so that we can reach the targetof the operating income of ¥120 billion in fiscal 2026 by
the four strategies as set forth in the long-term management
vision.

management vision.

■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 ④

17

times

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

Hankyu Hanshin Holdings Annual Report 2018

■B
 asic Way of Thinking about Medium-Term

However, Strategies 1 and 2 (stock businesses) among theabovementioned four strategies require considerable periods ofManagement Plan

time from making of investments until contributing to earning

The operating income recorded by the Group in these three fiscal

income. Also, Strategy 4 (ventures into new business fields)

years has continued to be on the level of ¥100 billion/year

requires considerable periods of time before such ventures can

excluding extraordinary income such as that from the sale of sites

stand on their own feet as independent businesses. Therefore,

for large-scale facilities. In this plan, in order to increase the basic

we will aim at increasing the operating income by ¥10 billion

income level from ¥100 billion to ¥120 billion by fiscal 2026, we

mainly with efforts in accordance with Strategy 3, that is, with thehave determined to allot funds by attaching importance toflow businesses, such as the condominium businesses including

investments for growth in accordance with the abovementioned

business and the international transportation business, during theof ¥110 billion as the mean amount between ¥100 billion andterm of the Long-Term Management Vision).

Eﬀects produced by extraordinary factors
such as sale of sites for facilities

Fiscal 2026
Final ﬁscal year in Long-Term
Management Vision

Fiscal 2022
Midterm target year(¥ billion)

120.0

120

110.3
104.1

100

91.8

110.0

105.2

94.0

+¥10 billion+¥10 billion
80

Strategy for Enhancement of Corporate Value

term of this plan (from fiscal 2019 to fiscal 2022 as the first-half¥120 billion in fiscal 2022 as the midterm target year.

Image of increasein operating income

1

those overseas, the information services business, the travel

Strategies 1 to 4 and then aim at recording the operating income

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

(FY)

On the other hand during the term from fiscal 2023 to fiscal 2026

income from the flow businesses, the ventures into new businessas the second-half term of the Long-Term Management Vision, we

fields, etc. We will thereby reach the target of the operatingplan to increase the operating income by ¥10 billion withincome of ¥120 billion in fiscal 2026.

contribution to earning income mainly made by the production ofeffects of investments in the stock businesses such as the Umeda
1-1 Project (See page 24) and additionally by a further increase in■Growth process toward fiscal 2026 (Image)
We will aim at an increase of income by¥10 billion until ﬁscal 2022 mainly with the ﬂow
businesses.

Fiscal 2022
Midtermtarget year

Fiscal 2026
Final ﬁscal year in Long-Term
Management Vision¥120 billion¥110 billion+¥10 billion
From ﬁscal 2016 to ﬁscal 2018
Substantial level of operating income
excluding extraordinary factors

About ¥100 billion

Expansion of ﬂow businesses
Investments in stock businesses
From ﬁscal 2019 to ﬁscal 2022
(Term of this plan)+¥10 billion
From ﬁscal 2023 to ﬁscal 2026

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

Hankyu Hanshin Holdings Annual Report 201818

Strategy for Enhancement of Corporate Value■F inancial Policy¥170 billion in the previous plan (the total of those during 4 years

In this plan, by considering that we shall endeavor to increase thefrom fiscal 2016 to fiscal 2019) will be increased to ¥270 billion

operating income and the EBITDA further in order to fulfill theby ¥100 billion for the current plan (the total of those during thelong-term management vision, we will attach importance to

4 years from fiscal 2019 to fiscal 2022). In addition, we will newly

investments for the growth in allotting funds in accordance withallot ¥100 billion as the allowance for strategic investments

Strategies 1 to 4 mentioned above.

(investments for implementing large-scale projects, M&A, etc.).

Specifically, the amount of investments for the growth that was■Capital investment (including lending)Investments for implementing big projects suchas Osaka Station North District (Umekita)
Phase II Development Project, M&A, etc.

¥610 billion
Allowance forstrategic investments¥390 billion¥100 billion

Investments for growth aiming at
fulﬁllment of Long-Term
Management Vision¥170 billion¥220 billion¥270 billion

Comparison withprevious plan

Investments for maintenance andrenewal of existing infrastructures etc.

¥100 billion¥240 billion

Previous plan
From ﬁscal 2016 to ﬁscal 2019
Total of 4 ﬁscal years

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

On the other hand, we will attach importance to the“interest-

return ratio to be an indicator of the returns to shareholders, andbearing debt /EBITDA ratio”as an indicator showing the financial

our basic policy is to endeavor to stably pay dividends andsoundness and thus continue to keep the soundness of ouracquire treasury shares. The total return ratio is planned to befinancial position.

30% in this plan.

Regarding the returns to shareholders, we consider the total

Forward-looking investment
While striking a balance with ﬁnancial soundness,

we will prioritize growthinvestment under strategies ❶ to ❹.

19

Maintaining ﬁnancial
soundness

Returns toshareholders

Prioritize the interest-bearing
debt/EBITDA ratio

Envisage a total return
ratio of 30%

Hankyu Hanshin Holdings Annual Report 2018

Operating
incomeGeneration of temporary income as
results of sale of sites for large-scale
facilities etc.

(¥ billion)
120

100

■M
 anagement Indicators in Fiscal 2022

104.1

105.2

110.0

110.0

We foresee that the operating income and the interest-bearing

80

By promoting the abovementioned efforts and policies, we will

debt/EBITDA ratio will be ¥110 billion and 5.4 times, respectively

aim at stably recording the operating income of ¥110 billion andin fiscal 2019 since the income from sale of sites for large-scale

the EBITDA of ¥180 billion in fiscal 2022 and making interest-0
facilities
etc. is generated temporarily.
2017

bearing debt/EBITDA ratio 5.9 times.

OperatingincomeGeneration of temporary income as
results of sale of sites for large-scale
facilities etc.

2019
(Forecasts)

2022(Forecasts)(FY)

Interest-bearing debt/EBITDA ratio

110.0

105.2

110.0

8
6

5.6

5.4

5.4

2017

2018

2019
(Forecasts)

5.9

4

80

2
0

0
2017

2018

2019
(Forecasts)

2022(Forecasts)(FY)

Interest-bearing debt/EBITDA ratio(times)Concentrationof Energies Also on Efforts Relating
10

2022
(FY)
(Forecasts)

and contribute to society.”Therefore, the Group is very highly
esteemed in society since it has been actively engaging in its

to ESG for Sustainable Growthsocial contribution activity named“Hankyu Hanshin Dreams andOne of the bases for the Group in aiming at sustainable
5.9 growth isawarded the prize (grand prize) of the“8th Career Education

4“Governance.”
The

2018.

Communities of the Future Project” etc. For example, it was

86Strategy for Enhancement of Corporate Value

104.1

1

(times)10(¥ billion)
120

100

2018

5.6

5.4

5.4

Group

continuously

the effort for ESG meaning “Environment,”“Society” andpromotesvariouspolicies and measures for these three areas.
2

Among other things, the Group declares in its management0
philosophy
that“By delivering‘Safety and Comfort’and‘Dreams
2017we create2018 satisfaction
2019
2022
(FY)
and Excitement,’
among ourcustomers(Forecasts)(Forecasts)

Award”by the Minister of Economy, Trade and Industry in fiscal
The Group currently concentrates its energies on the“Reformin Way of Working”as one of the contributions to“Society.”It
will newly promote the“Health-Oriented Management.”We will
aim at enhancing the corporate value further from the medium
and long-term viewpoint through these activities.

Strenuously Enhancing Sustainable Corporate Value
In order to firmly satisfy expectations from stakeholders, theGroupintends

tosteadily

implementthemedium-term

management plan established recently in order to fulfill the LongTerm Management Vision for 2025. It will also actively andresolutely aim at enhancing sustainable corporate value with theconcerted efforts of the Group.

Hankyu Hanshin Holdings Annual Report 201820

Strategy for Enhancement of Corporate Value

Summary of Long-Term Management Vision for 2025
and Medium-Term Management Plan
Result
実績 (2010年度)(Fiscal 2011)

Result
実績 (2014年度)(Fiscal 2015)

営業利益 income
OperatingResult
実績 (2017年度)(Fiscal 2018)

営業利益 income
Operating

64.7

94.0

¥ 647 億円
billion
EBITDAEBITDA

営業利益 income
Operating

105.2¥ 940 億円
billion¥ 1,052 億円
billion

EBITDAEBITDA

127.1

150.1

¥1,271 億円
billion
有利子負債
Interest-bearing
debt

EBITDAEBITDA

160.8¥1,501 億円
billion¥1,608 億円
billion

有利子負債
Interest-bearing
debt

1,251.7

有利子負債
Interest-bearing
debt

955.8

866.8

¥ 12,517 億円
billion¥ 9,558 億円
billion¥8,668 億円
billion

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
倍
9.8times

6.4
倍
6.4times

5.4
倍
5.4times

From ﬁscal 2008 to ﬁscal 20112007～2010年度
Capital investment
設備投資（成長投資）(Investment
for growth)Fromﬁscal 2012 to ﬁscal 2015
2011～2014年度
Capital investment
設備投資（成長投資）(Investment
for growth)Fromﬁscal 2016 to ﬁscal 20182015～2017年度
Capital investment
設備投資（成長投資）(Investment
for growth)億円¥ 3,200
320 billion

億円¥2,400240 billion

億円¥3,900390 billion(¥130 billion)億円）（1,300(¥60 billion
億円）)
（600

22

Strategy
戦略(¥170 billion億円）)（1,700１1

戦略
Strategy

From ﬁscal 2016

Fiscal 20182017年度Long-Term
Management Vision
長期ビジョン2025
for 2025「深める沿線“Enhancing
line-sideareas
and expanding
拡げるフィールド」
ﬁelds”

2015～2017年度
to ﬁscal 2018

From ﬁscal 20122011～2014年度
to ﬁscal 2015

• Further improvement in・財務体質の更なる改善
ﬁnancial position
・長期ビジョンの実現に• First step toward
fulﬁllmentof Long-Term
向けた第一歩Management Vision• Production of eﬀects of・大規模プロジェクトのlarge-scale projects• Steady効果発現
improvement inﬁnancial position
・財務体質の着実な改善

From ﬁscal 2007 to

2006～2010年度
ﬁscal 2011

開発プロジェクト
Development
projects

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

４4

Strategy
戦略• Reconstruction of 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）• Development of“Umekita”Phase I Development Area (Grand Front Osaka)
・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）

推進(From March 2010 to March 2013)

Development project
開発プロジェクト
• Development of Hankyu Nishinomiya Gardens• Reconstruction of Umeda
Hankyu Building (From May 2005)
・梅田阪急ビルの建替（2005年5月～）
・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)• Construction of Hanshin Namba Line (Opening of new extension)
・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）(From October 2003 to March 2009)21

Hankyu Hanshin Holdings Annual Report 2018

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

Fiscal 2026
Visionof corporateform
2025年度ありたい姿

Aiming at increase in income
フロー型事業を中心に100億円のby ¥10 billion mainly with
利益伸長を目指す
ﬂow businesses.

Operating income

営業利益

億円
120 billion
1,200

+¥10
＋100億円billion¥

EBITDAEBITDA億円
2,000
200 billion

1¥Strategy for Enhancement of Corporate Value+¥10billion＋100億円Interest-bearing
debt/EBITDA ratio
有利子負債／ EBITDA倍率

Fiscal2022
2021年度Fiscal 20192018年度Medium-Term
中期経営計画Management
Plan

BetweenMidterm
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
fulﬁllmentof Long-Term
具体的な実行計画
Management Vision

FY20192018年度計画
forecasts
営業利益 income
Operating

times

110.0

FY2022
2021年度計画
forecasts
営業利益
Operating income

億円¥ 1,100 billion*＊

EBITDAEBITDA

３3

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

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

Strategy
戦略

5 56倍台168.0

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

900.0

110.0

¥1,100 億円
billion*
EBITDAEBITDA

180.0

billion¥1,800 億円
有利子負債
Interest-bearing debt

1,070.0¥ 9,000 億円
billion¥10,700 億円
billion

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

5.4
倍
5.4times

5.9
倍
5.9times*＊2018年度の営業利益は、
The operating income 大規模なin ﬁscal2019 is expected to be ¥110
施設用地の売却益等が一時的に生
billion becauseof the temporary
ずるため、
1,100億円と予想
generation of income from saleof sites for large-scale facilities
etc.

Capitalinvestment
設備投資（2018～2021年度）(From ﬁscal 2019 to ﬁscal 2022)

6,100 億円
¥ 610 billion
戦略投資枠億円
Allowance forstrategic investments

1,000

長期ビジョンの実現 ¥Investment
for growthに向けた成長投資for fulﬁlment of Long-Term
Management Vision

既存インフラの ¥維持更新投資ほか
Investments
for maintenanceand renewal of existing
infrastructure etc.

100 billion

2,700 億円

270 billion

2,400 億円¥

240 billion

Hankyu Hanshin Holdings Annual Report 201822

Strategy for Enhancement of Corporate Value

Four Strategies for Medium-Term Management Plan
Strategy

1

Umeda and line-side areas + Stock businesses

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 lineside 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.

We will systematically reconstruct (enhance the value of) theConcrete Effort ❶ Enhancement of Value of Umeda Areabuildings in the Umeda area from the long-term viewpoint andenhance the values of the assets possessed by us.

■ Enlarged map of Umeda area

Head Oﬃce Building ofHankyu Corporation
Applause Tower
North Bldg.

Kitano Hankyu
Bldg.

GRAND FRONT OSAKA● Umekita Phase II

South Bldg.

Nishi Hankyu
Bldg.
Kita
HankyuBldg.
Hotel newHankyu Osakada Stay Ume

JR Osaka Station

NU chayamachi PLUSNU chayamachi
HankyuUmeda Station

Hankyu Sanban Gai
Shopping Center
Hankyu Terminal Bldg.

.

● Opening of hotel in
Yodobashi Umeda Tower

Hotel Hankyu
International

Umeda Center
Bldg.

Subwa

HankyuGrand HEP FIVE
Bldg.
HigashiUmeda
HEP NAVIO
Hankyu Bldg.
HankyuBldg.
Hanshin Umeda Sta.
(Hankyu Umeda Main Store)

In order to enhance the value of the entire Umeda area, we

23

Higashi

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

Shin Hankyu
Bldg.

-Umed
a Sta.

.
Sta
eda
Um

Dai Hanshin Building(Hanshin Department Store)

ay N

The Ritz-Carlton Osaka

HERBIS ENT

ishi-

HERBIS OSAKA

Osaka Nikko Bldg.

Umeda OS Bldg.

etc. In addition, we will concentrate our energies on establishingwill engage in the area management activities, urban promotion,a mechanism etc. to create new industries.

Umeda Snowman Festival

Membership office“GVH#5”

Hankyu Hanshin Holdings Annual Report 2018

Umeda 1-1 Project (Building Name: Osaka Umeda Twin Towers South)
According to this plan, we have carried out the comprehensive
reconstruction of the Dai Hanshin Building and the Shin Hankyu
Building since October 2014. The first phase building was completed
in April 2018 as scheduled. Hanshin Department Store (Hanshin
Umeda Main Store) was partially opened in the first phase building in
June, and the second phase construction was started in June.
By continuing the reconstruction and the improvement in thesurrounding public facilities comprehensively, we will endeavor toadvance the urban functions, reinforce the disaster-preventive1functions, create public spaces, form good views and so on in order tocreate the comfortable and high-quality town contributing to theStrategy for Enhancement of Corporate Value

reinforcement of international competitiveness.
The name of the building under this plan is“Osaka Umeda Twin
Towers South.”In the spring of 2022 when all work under this plan iscompleted, the Umeda Hankyu Building, where Hankyu Department
Store (Hankyu Umeda Main Store) is located, will be renamed“Osaka
Umeda Twin Towers North”as planned, and both buildings will becollectively named“Osaka Umeda Twin Towers”as planned.
Image after completion■Outline of“Osaka Umeda Twin Towers South”■ Project summary■ Oﬃce zone
We will create oﬃce spaces providing a senseof freedom and relaxation on high-rise ﬂoors
consisting of the 11th to 38th ﬂoors above
ground with the most up-to-date facilities, thearea per ﬂoor of about 4,500 m2 (the largest
scale in West Japan) and 2.9 m-high ceilings.

Oﬃce zone■ Conference zone

■ Department store zone

We will make good use of the large space ofabout 4,000 m2 (11th ﬂoor above ground)created by using the space over roads for theconstruction as the“place for transmitting
business information,”the“place for bringing
up human resources capable of playing activeroles internationally” and the “place forcultivating relationships among various typesof human resources.”

Conference zone
Department store zone

At the time of the total opening of the store inor around the autumn of 2021, the area will
become almost the same as that before thereconstruction, and the 11 ﬂoors (from the 2nd
ﬂoor under ground to the 9th ﬂoor above
ground) are planned to be occupied by thestore.

Location

1-1 Umeda, Kita-ku, Osaka

Site area

Approx. 12,200 square meters*

Total floor
space

Approx. 260,000 square metersSize

38 floors above ground and3 below groundPurpose

Department store, offices, halls,
etc.

Construction
completion

Around spring 2022

* Including 750 square meters of roadbetween Dai Hanshin Building and Shin
Hankyu Building

Road

Undergroundpassage

Parking lot etc.

・Image of composition of uses at time of entire completion

Osaka Station North District (Umekita) Phase II Development Area Project
Nine member companies of the joint venture including Hankyu
Corporation and six designing and business operating companies
including Hankyu Hanshin Properties Corporation formed theconsortium and tendered for the“Invitation of Developers for Osaka
Station North District (Umekita) Phase II Development Area (Urban
District proposed by Private Sector).”The consortium was selected
as the developer by the Urban Renaissance Agency recently.
We will engage in creating the town leading Kansai and then Asia
in the“Osaka Station North District (Umekita) Phase II Development
Area”under the philosophy and policy of“harmony between green
and innovation”for creating a town by making good use of theexperience in developing the advanced development district“Grand Front Osaka”Project.
(Advanced opening of town in or around summer of 2024)
Whole view of Osaka Station North District (Umekita) Phase II Development Area
(Expected image after completion)
Hankyu Hanshin Holdings Annual Report 201824

Strategy for Enhancement of Corporate Value

Concrete Effort ❷ Activation of Main Line-Side Areas

We will engage in keeping and enhancing attractions of the line-side
areas by promoting the development projects in main line-sidebases such as“Kobe Hankyu Building, Rebuilding of East Building
and Renewal of West Building Project” and “Ebie 1-Chome
Development Plan”and renewing facilities for rent under elevatedrailway tracks in the line-side areas.

New lines planned by Hankyu Corporation
Hankyu Corporation is studying three new line projects* in order toreinforce the connection between the line-side areas including Umeda
and the gateways of Kansai consisting of Kansai International Airport
and Osaka International Airport (Itami Airport) as air gateways and ShinOsaka 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 ofbeing continuously selected by many customers in the future.

Hankyu Nishinomiya Gardens Gate Building

Osaka International
Airport(Itami Airport)

We will construct a new building for rent serving as the gate of the
Hankyu Nishinomiya Gardens at the site in the east of the platform

Sanyo Shinkansen

Kobe-sannomiya

Hankyu Kobe Linefor the line bound for Imazu at Hankyu Nishinomiya Kitaguchi Station.
In addition, we will construct a facility for supporting upbringing ofchildren

under

the

at the platform for the

HankyuKobe Line

Hankyu Nishinomiya
Kitaguchi Sta.

beopenedinoraround the autumn of2018.

HankyuNishinomiya Gardens

Plannedlocation

Image after
completion

JR
Namba

Meishin
Expressway

Expansion of area of“Ebisuta Nishinomiya,”commercial facility
at Hanshin Nishinomiya Station
We will construct a new building (with three floors above ground)connected to existing Ebisuta Nishinomiya in the square in front of
the north side of Hanshin Nishinomiya Station. It will significantly
expand the area of Ebisuta Nishinomiya, and the area of the store
space and the number of stores will be increased by about 1.7
times and about 2.5 times, respectively. It is planned to be openedin October 2018.

Linear Chuo Shinkansen Tokaido Shinkansen
Hokuriku Shinkansen
Hankyu Kyoto Line

Kawaramachi

Umeda

Nakanoshima*
NaniwasujiConnection Line

Nishi-Hommachi*

JR Osaka Loop Line

Shin-Osaka
Connection Line

Nankai Shin-Namba*
JR Shin-Imamiya

Nankai Shin-Imamiya

HankyuImazu Line

Shin-Osaka

Juso

Kita Umeda*(Umekita)

Kobe Airport

line bound for Imazu.
They are planned to

Port Liner

NaniwasujiLineelevated railway track

To Takarazuka

HankyuTakarazuka Line■M
 ain Projects Planned to Start Businesses in Fiscal 2019

Nankai Main Line

Tennoji

Osaka Airport Line
*New Stations

JR Hanwa Line(provisional name)Kansai International
Airport* 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.
Osaka Airport Line: The line to diverge from the Takarazuka Line and be connected to
Osaka International Airport.

Concrete Effort ❹ Satisfaction of Demand from Inbound Tourists

We improve the system for receiving inbound tourists and also
implement various policies and measures for increasing revenues

National Route 2

from satisfying the demand from inbound tourists.

PlannedlocationImprovement in receiving system• Improvement in guiding system
(Station numbering; Multilingual displays of guiding signs;

Hansh

in Nishinom
Ebisu
iya Stta Nishinom a. &iyaInstallation of information centers for foreigners visiting Japan; etc.)• Improvement in free Wi-Fi• Improvement in settlement service

Image after completion• Improvement in usefulnessof airport limousine buses

Concrete Effort ❸ Improvement in Traffic Networks(Infrastructures) with New Railway Lines
Elongation and improvement of Kita-Osaka Kyuko Line
This is the project to elongate the line to the north by approximately 2.5
km from the current terminal Senri-Chuo Station of Kita-Osaka Kyuko
Railway Co., Ltd. We are carrying out the work with the aim of opening
it at the end of fiscal 2021. We endeavor to improve the usefulness ofthe public transportation by this elongation and expand the coming andgoing population by strengthening the south-north axis in Osaka.

Senri-Chuo
Sta.

Approx. 1.4 km

MinohSembaHandaimae
Sta.

Approx. 1.1 km

Tourist CenterMeasures for increasing revenues• Selling of Hankyu and Hanshin Tourist Passes

MinohKayano
Sta.

• Planning and selling of One-Day Bus Tours for inbound tourists• Opening of new hotels• Measures for increase in overnight stays of inbound tourists

Underground section

25

National Route 423(Shin-Midosuji St.)

Hankyu Hanshin Holdings Annual Report 2018

(Such as increase in number of guest rooms capable ofElevated section

accommodating not less than 2 guests)

Strategy

2 Tokyo metropolitan area and overseas markets + Stock businesses

Accumulate stock in the Tokyo metropolitan area and overseas markets
Construct a stable revenue base in the Tokyo metropolitan area and overseas 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. To compensate for reduction in the scale ofbusinesses in the Kansai area, we will diversify our property profile by acquiring additional assets including rental property inA ccumulation of Stocks in Center of Tokyo
Metropolitan Area

■M
 ain Projects

Bunkyo-ku

Taito-ku

Yotsuya Station District
Redevelopment Project

Kyobashi 2-6
Redevelopment Plan

Shinjuku-ku

Kyobashi 2-6 Redevelopment Plan

Chiyoda-ku

We are carrying out the redevelopment of the entire urban

Chuo-ku
Koto-ku

district where the Hanshin Green Building was located so that it

Ginza 3-chome Project

can be opened in the spring of 2019. Specifically, we will
construct a new multi-purpose building consisting of a hotel,

Plan for Opening of Remm Plus in Ginza

offices, etc. The high-rise portion will be occupied by the mainlyaccommodation-oriented hotel“Remm.”

Strategy for Enhancement of Corporate Value

Concrete Effort ❶1

the Tokyo metropolitan area’s large market and in overseas markets that are set to grow.

Minato-ku

Concrete Effort ❷ Opening of New Hotel in Tokyo Metropolitan Area

Opening of Remm+ (RemmPlus) in Ginza in Winter of 2019
Remm Plus will provide interior
Image after
completion

Yotsuya Station District 
Redevelopment Project
We will participate in the“Typedecorations full of a sense ofhigh quality and wider guest
rooms and beds with one-rankhigher brands with improved
comfort while inheriting theconcept of“Remm”Hotel.

1 Urban Redevelopment Project
for the District in Front of Yotsuya
Station” implemented by the
Urban Renaissance Agency (URUrban Agency) as the specificbusiness participant with other

Image of outward appearance

business operators with the aimof its completion at the beginningof 2020.

Concrete Effort ❸S
 tudying Acquisition of Overseas Stocks(Real Properties)

Image after completion

Ginza 3-chome Project
We will develop a commercial facility serving as the flagship in“Ginza,”one of the most popular commercial areas in Japan,
with the aim of its completion in the spring of 2020.

We make logistic warehouses operated in Indonesia andSingapore through cooperation and joint work between the realestate business and the international transportation business.
We will find whether the accumulation of stocks is possible or
not by advancing the study for the development of commercial
facilities by taking trials into consideration etc.

Hankyu Hanshin Holdings Annual Report 201826

Strategy for Enhancement of Corporate Value

3

Strategy

Flow businesses
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 tostrengthen competitive edge and achieve further business expansion.

Concrete Effort ❶E xpansion of Scale of Condominium

Businesses including those Overseas

services*2, we will accelerate our efforts to promote the businesses
mainly in the fields expected to grow such as building management,
the traffic-related system and the Internet and thus attempt toincrease our market shares. In addition, while making good use of
our experiences of introductions to the Kansai areas, we will

Domestic real estate sales businesses
The condominium business among the real estate sales businesssteadily promotes its business in the Kinki area and aims at

expand the contents of our businesses also in the Kanto area andthe Chubu area and thus endeavor to promote new businesses

expanding its business in themaking good use of the advanced technologies such as AI and IoT.

Tokyo metropolitan area to*1 The ability to build efficient systems by combining products manufactured

the same level of the number

by various companies.

of properties (the level of 800*2 The integrated service from building to operation, monitoring andmaintenance of systems.

properties per year) as that in
the Kinki area.
Geo Shinjuku Wakamatsucho

Overseas real estate sales business
By making good use of our experiences in Japan, we participate in thehouse sales business in Vietnam,

Concrete Effort ❸ Increase in Income from Travel BusinessWe have organized mainly planned and advertised tours to Europe
until now. However, we will improve our competitiveness of theplanned and advertised tours by taking such measures as increasing

Thailand, the Philippines, Indonesia

tours to areas other than Europe and specialized tours including

and Malaysia.

cruise and hiking tours. In addition, we will promote the structural

We will aim at expanding thereforms of our business in order to early establish the pillar (second

scale of the overseas real estatepillar) of our businesssales business by accelerating ourfollowing the planned

efforts in the ASEAN countries etc.

Image of Akari City (Ho Chi Minh
City, Vietnam) after completion

and advertised tours.

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

Increase in Volume of Cargoes Handled byInternational Transportation Business

While the percentage of the air freight business in the internationaltransportation businesses is high, we will aim at changing the

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

Indonesia

Concrete Effort ❷ Growth of Information Services Business

By making the best use of our advantages such as the ability tohandle multiple vendors*1 and the ability to provide one-stop

27

Concrete Effort ❹Hankyu Hanshin Holdings Annual Report 2018business portfolio to the balanced one by taking such measures
as reinforcing the sea freight business and expanding the logistic
business. We will also actively enter growing markets such as
those in Africa in addition to shifting the center of departures andarrivals from Japan to Asia.
In addition, by making good use of the capital and businesstie-up agreement executed with Seino Holdings Co., Ltd. in April,
we will endeavor to promote the finding of new customers, thedevelopment of the logistic business, etc.

Strategy

4Group-wide initiatives and new business fields

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

Make greater use of the Group’s collective strength and develop 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.

1E xpanding and Improving Service with

“S-POINT”Commonly Available in this area

Strategy for Enhancement of Corporate Value

Concrete Effort ❶Education business (ProgLab—Programming Laboratory)
We started the robot programming education business in 2016.
The number of students was as many as about 2,300 at the endof Augst 2018 including those of franchised schools operated in

We started the service with commonly available“S-POINT”in the

the Tokyo metropolitan area.

Kansai area in cooperation with H2O Retailing Group in April
2016. Since then, we have endeavored to acquire new members
for the S-POINT and increased the number of facilities one by one
inside and outside the Group where the S-POINT are available(member stores of S-POINT).
Since May 2018, the S-POINT service has been introduced toabout 2,700 “7-Eleven” convenience stores operated in six
prefectures* in the Kansai area as one ofthese efforts. We will endeavor to make the
S-POINT service the most competitive point
Concrete Effort ❸service in Kansai.
*O saka Prefecture, Kyoto Prefecture, Hyogo Prefecture,
Shiga Prefecture, Nara Prefecture and Wakayama PrefectureC oncrete Effort for Creation ofLine-Side ValueAfterschool (Private pupils-care service)
In order to create the line-side areas where childcare is easy, we
operate three pupils-care facilities“Afterschool Kippo”at Hankyu

Current state

Target for future

Number ofpoint members

Number ofpoint members

About 7.5 million

Toyonaka Station building, near Hankyu Nishinomiya Kitaguchi
Station and at Hankyu Ikeda Station building.

About 10 million

Concrete Effort ❷ Ventures into New Business Fields

Security business (Mimamorume—Watching eyes)
Since the start of the provision of the service, we have steadily

Hanshin Ikiiki Day Service

increased the number of members. About 230,000 members

In order to enable users to enjoy lively

used the service at the end of Augst 2018.

lives in towns where they are accustomed
toliving,we

providerehabilitation-

specific half-day services in the line-side
areas

of

HankyuandHanshin(14

locations).

Hankyu Hanshin Holdings Annual Report 201828

Strategy for Enhancement of Corporate Value

Value Creation Process of Hankyu Hanshin Holdings

Social problems

Change in external environment
surrounding Group and chances

Long-Term Management
Vision for 2025

ChangesHigh potentials in line-side
areas of Group in Kansai● Arrival of society

suﬀering full-scale
depopulation(Especially in
Kansai area)● Increase in aging

population

Urban Transportation

Expansion of demand frominbound tourists
Concentration of population into
center of Tokyo metropolitan area

Real Estate

Growth in Asia
(Especially in ASEAN)
Further advancement oftechnical innovations such as
AI and IoTEntertainment andCommunications● Tight labormarketChances● Decay of

Infrastructure● Enhancement ofPossibility to change Umeda
from “Umeda in Kansai” to“Umeda in Asia”by making
good use of the growth in
ASEAN.

TravelInternational
Transportation

quality of life

● Promotion ofdiversity● Harmony withenvironment

29

Hankyu Hanshin Holdings Annual Report 2018

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
get chances for growth bymaking good use of them.

HotelsESG

SloganValues provided
to stakeholders“Enhancing line-side areas and expanding ﬁelds”(From ﬁscal 2019 to ﬁscal 2022)

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

Flow businesses

Strategy 4

Strategy 2
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.

Shareholders
and investors
Return of proﬁts withsustainable growth
Enhancement ofvalue of share

Employees

Enhance economic
valueGroup-wide initiatives
andnew business ﬁelds

Make our railway
the absolute best among
the Kansai networks.

Enhance social value

Tokyo metropolitan area
and overseas markets+
Stock businesses

Strategy 1

Enhance daily life
(customer) value

Strategy 1

Provision of advanced
goods and services
based on needsof customers

Strategy for Enhancement of Corporate Value

Medium-Term
Management Plan

Customers

1

Vision of corporate form

Sustainably enhance
corporate value

Upbringing of various
types of human resources
and increase in motivation

Suppliers
Fair and reasonabletransactions

Local
communities
Enhancementof value ofline-side areas

Globalenvironment
Protection ofenvironmental
resources(Environment, society and corporate governance)

Improvement of social problems

Hankyu Hanshin Holdings Annual Report 201830

Enhancing Our Corporate Value

Urban Transportation

We remain focused on enhancing the value of our railways
by providing safe and comfortable transportation services.

Yoshifumi Nomura

Hiroshi Sasaki

Senior Managing Director,
Hankyu Corporation

Managing Director,
Hanshin Electric Railway Co., Ltd.

Basic Policies❸ Ensure reliable transportation● Enhance security❶P rovide quality urban transportation services and otherrelated services● Develop rolling stock❹E xpand feeder services and extend catchment areas of● Develop personnel

railway lines and stations● Strengthen Group collaboration● Advance sales measures in the bus and taxi businesses● Enhance services and convenience● Enhance bicycle parking areas at railway stations and bicycle rental
services● Enhance value of line-side areas and publicize them
● Enhance appeal of railway stations❷ Increase convenience and reliability of existing infrastructure● Collaborate with line-side area municipal authorities, chambers ofcommerce and industry, and companies

and expand railway network● Develop railway stations and lines● Expand and strengthen railway network

Fiscal 2018
Breakdown of revenues
Other
from operations

29.2%

HotelsInternational
Transportation

TravelUrban
Transportation

Revenues from operations
Operating income margin (right axis)（ %）(¥ billion)
250

233.4

239.5

200

¥ 760.3 billion

17.2

16.5

（YoY +3.2%）

237.1

17.8

236.0

17.6

241.7

17.8

25

20

150

15

100

10

50

5

Real EstateEntertainment andCommunications

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

Business Environment
While the population of the entire Kansai area remains on a

0

2015

2016

2017

2018

2019
(Est.)(FY)

with the local populations trending upward. Moreover, thenumber of international visitors to the Kansai region of Japan isincreasing annually, so we anticipate an increase in business
opportunities in the medium term as we take advantage of thisdownward trend, Umeda and other line-side areas of our Groupfavorable situation.

represent 17 of the top 20 railway stations according to the* Survey of condominium operators of Sumitomo Reality & Development and“Survey of preferred Kansai residential areas”* conducted by
Major7. These areas clearly continue to enjoy high popularity,

31

0

Hankyu Hanshin Holdings Annual Report 2018seven other companies (September 2018)

along all routes of both companies. These included expanding the

Fiscal 2018 Review of Operations

coverage area for bus location services and enabling customers to
use smartphones to check the status of bus services and expectedarrival times for routes managed by Hankyu Bus Co., Ltd., adding to

Our Urban Transportation Business introduced four new models of

the Hanshin Bus Co., Ltd. routes already offering bus location services.

rolling stock for Hankyu Corporation, renovated the local train cars on

Our retailing business sought to heighten the appeal of railway

the Hanshin Electric Railway, and endeavored to enhance customer

stations through initiatives such as opening Nescafé Stands in some

comfort by expanding the barrier-free facilities inside our rail cars. We

railway stations along the Hankyu line under a new business format.

also installed mobile fences at Senri-Chuo Station, Momoyamadai

New Nescafé Stands were also opened in selected railway stations

Station, and Ryokuchi-Koen Station in order to improve safety andalong the Hanshin Electric Railway.

security on the Kita-Osaka Kyuko Railway. Similarly, in an effort toAs a result, although Hankyu Corporation and Hanshin Electricenhance passenger information services provided via smartphone,

Railway posted stable performance in the railway business, revenues

we introduced a service that provides information on train schedules,

from operations declined by ¥1,169 million from the previous fiscal

locations of trains in transit, and train destination guides at eachyear to ¥235,967 million due to a decrease in consolidated

station. This service is provided through the TOKK App available forsubsidiaries. Operating income declined by ¥651 million year-on-year

download from Hankyu Railway website, while the similar Hanshin

to ¥41,586 million, resulting in a decline in both revenues and profits.

App can be downloaded from the Hanshin Electric Railway website.
Our automobile business took steps to provide identical services■ Hankyu Corporation and Hanshin Electric Railway: Performance results
Fare revenues (Millions of yen)
ChangeOther tickets

63,13762,720Commuter pass33,19832,628

Total

96,335

Other tickets

Passenger volumes (Thousands)%

FY2018FY2017

Change

%

＋417

＋0.7%

319,939

318,064＋1,875

＋0.6%

＋570

＋1.7%

335,005

329,305＋5,70095,348

＋987

＋1.0%

654,945647,369＋7,576＋1.7%
2

21,63821,136

＋501

＋2.4%

119,567

116,998＋2,569＋2.2%

Commuter pass

11,797

11,563

＋234

＋2.0%

122,073

119,768＋2,305

＋1.9%

Total

33,43632,699

＋736

＋2.3%

241,641

236,766＋4,875

＋2.1%

＋1.2%

Enhancing Our Corporate Value

Hanshin

FY20172

HankyuFY2018

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

Initiatives Implemented Under Our Medium-Term
Management Planbarriers. Hanshin Electric Railway is conducting improvement workat Umeda Station and plans to complete this renovation projectby the end of fiscal 2023.
Regarding efforts to capture inbound demand, we are also

Our Urban Transportation Business is promoting initiatives

working on sales strategies that include developing more appealing

intended to enhance the value of our line-side areas with the goalpromotions for Taiwan and selling in-bound tickets, specifically ourof ensuring safe and stable transportation and public confidence

Hankyu Tourist Pass and Hanshin Tourist Pass. In addition, we arewhile making ours the most outstanding railway in the Kansai

developing policies to attract foreign visitors to Japan through the

network.

creation of a more welcoming environment by expanding services

As an example of our safety and security efforts, Hankyu
Corporation is proceeding with the construction of platform doors

at stations and in vehicles by providing free Wi-Fi, modern
washroom facilities, and new trains for tourists.

at Juso Station in response to rising demand for movable platform

side, although costs will decrease, depreciation expenses are

Fiscal 2019 Outlook

expected to increase in the wake of new investment in rollingstock and renewed investment in station equipment.

Regarding revenues from railway operations, we expect that bothHankyu Corporation and Hanshin Electric Railway will record
increased revenues as a result of population growth in rail-side
areas and increased demand from visitors to Japan. On the cost

As a result of these initiatives, revenues from our Urban
Transportation Business in fiscal 2019 are expected to increase by¥5.7 billion, to ¥241.7 billion, while operating income is expected
to reach ¥42.9 billion, an increase of ¥1.3 billion year-on-year.

■ Hankyu Corporation and Hanshin Electric Railway: Performance forecasts (Fiscal 2019)
Fare revenues (Millions of yen)
FY2019FY2018ChangeHankyu97,673

96,335

Hanshin

34,17233,436

1. Revenues of less than one million yen have been

Passenger volumes (Thousands)
FY2019FY2018Change%+1,337+1.4% 663,511

654,945+8,565

+1.3%

+736

+2.2% 246,786

241,641+5,144+2.1%%

rounded 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 Annual Report 201832

Enhancing Our Corporate Value

Real Estate

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

Yusuke Kusu

President and Representative Director,
Hankyu Hanshin Properties Corporation

Executive Vice President and Representative Director,
Hankyu Hanshin Properties Corporation

Basic Policies● Develop supply network and acquire business opportunities in the Tokyo
metropolitan area
● Ensure stable revenues from the real estate sales business by increasing
efforts focused on medium-to-long-term projects❶E nhance appeal of and revitalize Umeda area and otherareas served by our lines● Promote Umeda 1-1 Project (Osaka Umeda Twin Towers South) andPhase II of Umekita Development Plan and other development projects.

❸ S trengthen and grow real estate funds and REIT businesses● Pursue external growth of the Real Estate Business through linkage with
Hankyu Hanshin REIT, Inc.

● Step up efforts to foster intangible assets that heighten the Umeda area’s● Increase fee-based revenues from asset and property management

appeal● Enhance value of the Umeda area and other areas served by the Hankyu
and Hanshin lines by planning and advancing new development projects❹ S trengthen business in the Tokyo metropolitan area anddevelop businesses overseas

and implementing plans for renewal of commercial facilities❷M aintain and heighten earnings level of the real estate sales● Expand business over the medium-to-long term by acquiring revenuegenerating properties and participating in redevelopment projects in thebusiness

Tokyo metropolitan area

● Plan and develop condominiums matching customer needs and advance● Develop and own logistics warehouses and participate in condominium
businesses overseas to accumulate business expertise and gather

business and sales in anticipation of changes in market conditions

information with a view to further business expansion● Develop detached houses in towns while marketing residential land lots
steadily (Yamatedai and Saito)

Fiscal 2018
Breakdown of revenues
Other
from operations
Hotels

Revenues from operations
Urban
Transportation

（ %）

250

International
Transportation

TravelOperating income margin (right axis)(¥ billion)200¥ 760.3 billion

150（YoY +3.2%）

206.4

220.9

215.7

222.6

19.5

25

20

22.6
18.0

236.2

18.4

20.3
15

100

10

50

5

Real EstateEntertainment andCommunications

27.6%

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

33

Hankyu Hanshin Holdings Annual Report 2018

0

0

2015

2016

2017

2018

2019
(Est.)(FY)

Business Environment
We anticipate that our real estate leasing business will maintain

Initiatives Implemented Under Our Medium-Term
Management Plan

its steady pace into the future in light of the recent growth trend

For the period from fiscal 2019 to fiscal 2022 of this management

in foreign visitors to Japan in addition to increasing demand,plan, we intend to increase operating income with a focus on flow

primarily in Umeda, for office space. It is also likely that businessbusinesses, while in our Real Estate Business we aim to expand theopportunities will increase as redevelopment progresses inscale of condominium unit sales. We are committed to continued

Umeda and in line-side areas.

land acquisition with careful selection of candidate properties; at

Looking to the real estate sales business, we assume that thethe same time, we will closely monitor the effects of increases inentire Kansai region will continue to be affected by the population

the consumption tax as well as rising construction costs. We will

decline over the medium and long terms. The Umeda area and ouralso seek to expand the scale of our business, not only in theline-side areas, however, remain relatively popular, so we expect

Kansai region where our brands have achieved penetration, butcorrespondingly steady growth. Furthermore, continued growth inalso in the Tokyo metropolitan area and locations outside Japan.

demand is expected in the Tokyo Metropolitan Area, where

Additionally, in order to enhance the value of the Umeda areainternationaland our line-side areas, the core business foundation of our Group,

markets such as the ASEAN region, which is undergoing remarkable

we will seek the medium- and long-term growth of our leasing

growth.

business by improving and revitalizing the appeal of our commercial

population

concentrationisaccelerating,andfacilities. In parallel with this, we will develop new areas andbusinesses to drive future growth.

Fiscal 2018 Review of Operations

on two priorities: strengthening the competitiveness of our

Fiscal 2019 Outlook2

In fiscal 2019, despite the fact that depreciation expenses will

increasing their occupancy rates.

increase with the progress of the Umeda 1-1 Project, we expect

In our real estate leasing business, profit declined due tothat our leasing business will post an increase in office revenue

increased repair expenses and expenses targeted at renovation

while maintaining a high occupancy rate and improve its appeal by

and improving the appeal of our commercial facilities despite

replacing stores and renovating commercial facilities. We therefore

increased revenue arising from steady performance of our rental

project increased profit as a result of such measures.

buildings in the Umeda area and elsewhere.

Enhancing Our Corporate Value

commercial facilities and office buildings; and maintaining or2During the period under review, our Real Estate Business refocused

In the residential property sales business, although we anticipate

With regard to real estate sales and other business, profit

a decline in gross profit in our condominium business and an

declined due to increased selling costs, although sales rose due toincrease in selling expenses, we expect profit to increase from theincreased sales of condominium units.

sale of land for facilities.

As a result, revenue from operations increased by ¥6,876

As a result of these efforts, we expect revenue from our Realmillion relative to the preceding fiscal year to ¥222,586 million.

Estate Business to increase in fiscal 2019 by ¥13.6 billion, toOperating income decreased by ¥1,016 million year-on-year to¥236.2 billion, while operating income will increase by ¥7 billion,¥40,954 million.

to ¥48 billion, year-on-year.

Hankyu Hanshin Holdings Annual Report 201834

Enhancing Our Corporate ValueEntertainment and With original content and outstanding services,
we offer dreams as well as excitement.
Communications
Koji Momokita

Junichi Otsuka

Takashi Mizobuchi

Director,
Hanshin Electric Railway Co., Ltd.

Managing Director,
Hankyu Corporation

Director,
Hanshin Electric Railway Co., Ltd.

Basic Policies❸ S ustain growth of the communication and media businesses● Grow earnings in the information services business continuously by increasing❶M aximize value of the Hanshin Tigers and Koshien brands● Forge a team that contends for the championship on a regular basis● Increase the appeal of Koshien Stadium and expand the stadium businesswith focus on the Kanto and Chubu areas, and catering to new IT markets● Achieve stable earnings in the broadcast and communications business by
expanding and improving regionally based products and services, acquiring
customers mainly through communications services, and retaining customers❷M aximize value of the Takarazuka brandthrough the introduction and development of lifestyle services● Maintain the high capacity utilization and financial performance of the
Takarazuka Revue❹A dvance growth of other entertainment businesses and the● Develop content business actively

leisure business● Increase overseas business● Expand the music business and Mt. Rokko businesses

Fiscal 2018
Breakdown of revenues
Other
from operations

Revenues from operations
Urban
Transportation

HotelsTravel150120¥ 760.3 billion（YoY +3.2%）

Entertainment andCommunications

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

business

13.3
112.6

13.6
112.5

13.6
115.2

15

13.4

121.1

12

124.5

90

9

60

6

30

3

encompassing

0

2015

2016

2017

2018

2019
(Est.)(FY)

such high-quality content, we seek to further strengthen customer
loyalty and maximize brand value.
theHanshinTigersprofessional baseball team and Hanshin Koshien Stadium as wellas the Takarazuka Revue stage presentation all enjoy loyal
support and renown not only in the Kansai area but also acrossthe country. So they are not in other companies in the same

Hankyu Hanshin Holdings Annual Report 20180

industry and we have our own strengths. By continuing to provide

Business Environment
sports（ %）14.7

Real Estate

15.0%

The

Operating income margin (right axis)(¥ billion)

International
Transportation

35

earnings in target growth markets, developing businesses outside the Group

Our communication and media business, meanwhile, is
expected to post steady market growth in the field of information
services, particularly in the contracting of system development andin the construction and maintenance of e-commerce websites.

Fiscal 2018 Review of Operations
In our sports business, sales and profits increased as a result of theInitiatives Implemented Under Our Medium-Term
Management Plan

Hanshin Tigers’success in reaching the Climax Series playoff games,

Our sports business is focused on the Hanshin Tigers; we are

the rising number of fans attending regular season games, and strong

committed to creating a team that remains competitive while

growth in sales at concessions for merchandise and food. As for ourenhancing the facilities and services offered at Koshien Stadium. In

stage business, all performances of the stage revue business were

our stage business, we have dedicated ourselves to providing awell-received and brought in higher revenue and earnings, including

steady stream of high-quality productions at the Takarazuka

the Snow Troupe’s performances of“A Passage Through the Light

Revue. While striving to maximize the brand value of both— Maximilien Robespierre, the Revolutionary”and“Super Voyager!

businesses, we will actively promote strategies to cultivate new— To the Ocean of Hope.”fans as we seek to maintain and improve profit levels.

In the information services business, sales and profits increased

In the communications and media businesses, we will utilize

as a result of two factors: strong sales of construction andmulti-vendor response capabilities while providing one-stop

maintenance services for e-commerce websites; and an increase

service, as these represent our strengths in the information services

in cable television subscribers in the broadcast and communications

business. We will also focus on growth sectors by emphasizing

business.

building management, transportation-related systems, and the

As a result, revenue from operations in the entertainment andInternet. In so doing, we will expand our market share in the Kanto

communications business increased by ¥5,884 million to ¥121,078

and Chubu areas, going beyond our traditional territory in the

million, operating profit increased by ¥2,094 million from theKansai area.

previous year to ¥17,750 million, resulted in higher revenue andearnings.

2,500

2,690

Enhancing Our Corporate Value

In our sports business, we anticipate that the Hanshin Tigers will

3,500

2,772

2

(Thousands of people)

3,000

2

Fiscal 2019 Outlook

Total attendance at Hanshin Tigers home games

2,878

2,911

attract roughly the same number of fans as in fiscal 2018, and we

3,035

assume that profits will remain stable.
In the stage business, we are likely to experience a decline fromthe rather strong performance posted in the preceding year with a

2,000

concomitant decrease in sales of related products. Thus, we

1,500

expect that profits will decrease from the level we achieved infiscal 2018.

1,000

In the communications and media businesses, we will focus on

500

the sustainable growth of our information services business and

0

2013

2014

2015

2016

2017

(CY)

promotion of the regional broadband wireless access (BWA)
business.
As a result, revenue from operations in our Entertainment andCommunications Business in fiscal 2019 is expected to increase by¥3.4 billion, to ¥124.5 billion, year-on-year, while operating profit
is forecast to decline by ¥1.1 billion, to ¥16.7 billion.

©Takarazuka Revue Company

Hankyu Hanshin Holdings Annual Report 201836

Enhancing Our Corporate Value

TravelWe offer a travel experience that responds to customer desires while seeking
to establish a revenue base that can secure a certain level of profitability.
Seiji Matsuda
President and Representative Director,
Hankyu Travel International Co., Ltd.

Basic Policies❶ S trengthen competitiveness of travel packages❷E stablish a second pillar● Strengthen areas outside Europe● Strengthen initiatives for non-Japanese tourists● Strengthen specialized products● Expand group and business travel services and create stable source of● Expand customer base among new demographics

revenues● Revise cost structure for advertising expenses, etc.

Fiscal 2018
Breakdown of revenues
Other
from operations

Revenues from operations
Urban
Transportation

HotelsInternational
Transportation

Travel

¥ 760.3 billion

4.2%

Operating income margin (right axis)(¥ billion)

（ %）

40

8

30

（YoY +3.2%）

32.0

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

3.8

10

2.2

However,recentgeopolitical

deterioration

in

the

instability,
purchasing

environment for airline tickets and the like accompanying the

37

2

2.1

0

0

2015

2016

2017

2018

2019
(Est.)(FY)

In addition, with the emergence of online travel agents, we

our travel packages, focused mainly on Europe, that represent ourdisasters,

3.7

significant effect on the business environment.

Our Travel Business has traditionally secured steady profits fromnatural6

6.0

increase in foreign visitors to Japan, and other factors have had aBusiness Environment

frequent

34.8

4Entertainment andCommunications

business.

34.0
29.9

20

Real Estate

mainstay

30.5

Hankyu Hanshin Holdings Annual Report 2018

anticipate increased changes in travel industry markets as well as
more intense competition, so we are taking responsibility for
restructuring the business without being bound by conventional
stereotypes.

year-on-year due to the strong performance of Hokkaido, Kanto, andFiscal 2018 Review of Operations

other regions of Japan.
We tapped into the ongoing growth in overseas demand by

In fiscal 2018, overseas travel performed strongly as a result of theEuropean economy’s recovery from the influence of terrorist attacks
and other factors as well as growth in visitors from China and other
Asian nations. Looking to domestic travel products, while travel
demand in Shikoku retreated from the growth evident in thepreceding fiscal year, the overall volume of transactions increased

proactively marketing travel products for visitors to Japan. Proactive
marketing efforts helped to increase the number of visitors from
Europe.
As a result, revenue from operations increased by ¥4,083 million
year-on-year, to ¥34,022 million, while operating income increasedby ¥1,418 million to ¥2,055 million.

■ Travel billings ranked
Total travel billings (Fiscal 2018)
Rank

Company name

Overseas travel billings (Fiscal 2018)

Domestic travel billings (Fiscal 2018)¥ billion

Rank¥ billion

Rank

Company nameCompany name¥ billion

1,715.1

1

JTB

595.5

1

JTB

Rakuten

610.1

2

HIS

392.1

2

Rakuten

1,032.1
557.5

3

KNT-CT Holdings

490.8

3

Hankyu Travel International*

206.6

3

KNT-CT Holdings

315.3

4

HIS

487.6

4

KNT-CT Holdings

154.5

4

Nippon Travel Agency

273.3

5

Nippon Travel Agency

433.8

5

Nippon Travel Agency

120.4

5

ANA Sales

167.4

6

Hankyu Travel International*

345.5

6

JALPAK

54.9

6

Hankyu Travel International*

136.1

7

ANA Sales

191.2

7

DeNA Travel

49.0

7

JALPAK

128.2

8

JALPAK

183.2

8

Nissin Travel Service

48.5

8

Tobu Top Tours

100.9

9

Tobu Top Tours

139.2

9

Rakuten

40.6

9

JR TOKAI TOURS

96.2

10

JR TOKAI TOURS

98.9

10

M.O. TOURIST

39.5

10

Meitetsu World Travel

77.0

2

Enhancing Our Corporate Value

JTB

2

2

1

Source: Japan Tourism Agency Bulletin,“Business Volume for Major Travel Agents (April 2017 to March 2018)”
Note: Billings are rounded down to the nearest ¥100 million.
* The total of Hankyu Travel International Co., Ltd., Hankyu Hanshin Business Travel Co., Ltd., and Hanshin Travel International Co., Ltd.

Initiatives Implemented Under Our Medium-Term
Management Plan

Fiscal 2019 Outlook

For our Travel Business, we have identified the period of fiscal

in demand for travel outside Europe in fiscal 2019, we also expect

2018 to 2020 as a time to address structural reforms intended toa decline in profitability due to an increase in expenses arisingstrengthen the competitiveness of our mainstay travel packages

from our structural reforms.

Regarding international travel, although we anticipate an increase

and to promptly establish a“second pillar”as an adjunct to ourAs a result of these efforts, in our Travel Business we expect

mainstay business. Hence, we are actively pursuing measures to¥34.8 billion in revenues from operations in fiscal 2019, whichreform our business structure.

represents an increase of ¥0.8 billion compared with the precedingSpecifically, we will focus on strengthening the competitivenessof our travel packages outside of Europe (including domestic travelfiscal year, while operating income is expected to be ¥1.3 billion,a decrease of ¥0.8 billion.

packages), and the planning of specialized packages such as
cruises and hiking adventures. We are also working to strengthen
our personal travel products by launching Travel Coordination, ournew booking website intended for personalized travel planning.
In order to establish this second pillar, we are taking steps tostrengthen our ability to take advantage of demand from foreign
tourists and expand the scale of group and business travel services,thus establishing a stable source of revenue.
Through these efforts, we aim to transform our business by
capturing a stable and consistent level of profitability even in theface of external variables such as terrorism and natural disasters.

Hankyu Hanshin Holdings Annual Report 201838

Enhancing Our Corporate Value

International
Transportation

We aim to transition toward a balanced portfolio and build on ourcore air freight business by further strengthening our sea freight
and logistics services businesses.
Seisaku Okafuji

Kazuhiro Tanimura

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

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

Basic Policies❷D evelop and implement optimal measures for profit growth● Strengthen sales capabilities globally❶R eform to establish a balanced business portfolio● Strengthen air freight, sea freight, and logistics services businesses globally● Invest management resources in growing markets● Increase handling volume❸E nsure robust global governance● Optimize business management capabilities by enhancing risk
management and compliance awarenessFiscal 2018
Breakdown of revenues
Other
from operations

Revenues from operations
Urban
Transportation

HotelsInternational
Transportation

10.4%

TravelOperating income margin (right axis)(¥ billion)

（ %）

100

10

80

¥ 760.3 billion

7.9

83.7

83.6

8

71.7

60

（YoY +3.2%）

40

6

39.4

Real EstateEntertainment andCommunications

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

Business Environment

39

76.1

2.3

20

4

3.3
2.6

2.2

2

0

0

2015

2016

2017

2018

2019
(Est.)(FY)

Note: As of ﬁscal 2016, revenues from operations will be presented
on a gross basis rather than a net basis (total transactions net of
freight costs).

uptrend, despite a temporarily setback following the credit crisisof 2008. Regarding the amount of international air freight handled
by the various regions, major airports in Asia—including Hong Kong,

As Japanese-affiliated companies continue to establish production

Incheon, and Shanghai—have risen to the top of internationalbases around the globe, freight volumes to and from Japan havecargo-handling rankings. In addition, while the volume of maritime

been shrinking; meanwhile, air freight and sea freight volumes

container cargo has remained unchanged in North America andacross the entire global logistics market have been on a long-term

Europe, it has continued to grow in Asia and other regions.

Hankyu Hanshin Holdings Annual Report 2018

In addition, Hankyu Hanshin Express, the core company of our

Fiscal 2018 Review of Operations

international transportation business, aims to advance businessIn fiscal 2018, sales remained strong in Japan, East Asia, andwhich has strengths in the truck route and logistics business indevelopment by sharing expertise with Seino Holdings Co., Ltd.,
Japan and with whom we have entered into a capital andEurope, particularly in air freight. This circumstance prompted us

business alliance.

to open new bases in Nairobi, Kenya; Bawal, India; and Monterrey,

As a result, revenues from operations increased by ¥12,037

Mexico. Moreover, as part of our initiative to further expand our

million, to ¥83,707 million, compared with the preceding fiscal

global network, we opened logistics warehouses in western

year while operating income increased by ¥1,189 million, toSingapore as well as in the U.S.A. and Vietnam. These steps

2,777 million.

reflected our focus on strengthening our logistics business andexpanding our warehouses.
■ Network of overseas bases● Establishment of a new base and logistics facilities in India● Expanding our business in North America• In April 2018, we established a warehouse in Chennai and asales oﬃce within the automobile industry cluster in Ahmedabad.
In August, we established a sales oﬃce in the textile industry
cluster in Coimbatore. Our goal is to use our expansion in India
as a springboard for further business growth.

• In December 2017, we opened a sales oﬃce in Monterrey as a gateway
for U.S.A.-Mexico logistics focused on the automobile industry innorthern Mexico.
• In the U.S.A., we promoted continued growth by opening sales oﬃces in
Boston and Miami and expanding our warehouses in Chicago, Atlanta,
and Dallas.

Amsterdam

Rotterdam
Brussels

LondonMoscow

Beijing
Guangzhou

Milan

Hong Kong
IncheonBucheonHai PhongDelhi

KampalaEntebbeNairobiMombasa

Bawal

Seoul

ShanghaiTaipei
Kaohsiung

Dubai
Chiang Mai
Mumbai
DanangManilaPune
YangonChennaiBangalore
Coimbatore
ButterWorthJakartaPenangSingapore

Kuala Lumpur

Johannesburg

Los Angeles

Busan

Hanoi
Bangkok

Chicago
McAllenMonterrey
Bajio

Taichung
Cebu
Laem Chabang
Binh Duong
Ho Chi Minh
Phnom Penh

DetroitToronto
New York
BostonCincinnati
Miami

Atlanta
Dallas● Local subsidiary● Branch/Office● Representative office2

Enhancing Our Corporate Value

Ahmadabad

SeattleSan Francisco

2

Paris
Dusseldorf
PrahaFrankfurt

Number of locations:
49 in Japan, 128 outside Japan(as of August 1, 2018)

Mexico City

Sao Paulo

Pasir Gudang

Port Klang

DurbanJohor Bahru

Cape Town● Strengthening business development in Africa● Underpinning our logistics business and network in the ASEAN region• In April 2018, we acquired Intraspeed South Africa (Pty) Ltd., afreight forwarder, as a subsidiary; we also acquired Intraspeed’s
two companies in Kenya and Uganda as subsidiaries. We remaincommitted to ongoing development in Africa.

• In addition to launching logistics operations in December 2017 at thelogistics center we opened in Ho Chi Minh City, Vietnam, we opened ans economic capital, in July 2018.
oﬃce in Danang, Vietnam’Initiatives Implemented Under Our Medium-Term
Management Plan

Fiscal 2019 Outlook

Our International Transportation Business seeks to achievelogistics services business in fiscal 2019, earnings are likely tosustainable growth in its mainstay air freight business while further

decline due to reduced handling volume in our air freight business,

expanding our sea freight business and logistics services business

which handled large volumes in the preceding fiscal year.

Although we expect to increase our sea freight business andin order to realize the third strategy of our medium-term

As a result of these efforts, we anticipate revenue frommanagement plan, “strengthening the competitiveness of our flow

operations for fiscal 2019 will be ¥83.6 billion, down ¥ 0.1 billion

business.” Moreover, we will continue to enlarge our global

year-on-year, while operating income will decrease ¥0.6 billion

network and expand our handling of incoming and outgoingyear-on-year to ¥2.2 billion.

international cargo by developing our business mainly in Asia, in
addition to transporting to and from Japan, as part of our transition
to a more balanced business portfolio. Additionally, throughcapital and business alliances with Seino Holdings Co., Ltd., we aim
to achieve a synergistic effect and steadily grow by providing newlogistics

servicestoourcustomersbyfulfilling

mutuallycomplementary functions both inside and outside Japan. Throughthe planning period, we will actively promote these efforts alongwith plans to secure increased profitability in fiscal 2022.

Hankyu Hanshin Holdings Annual Report 201840

Enhancing Our Corporate Value

Hotels

We will continue to open new hotels and improve the profitability ofexisting locations while providing genuine hospitality and renowned service.
Yoshihiro Nakagawa

Kazuhide Fujimoto

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

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

Basic Policies■ Locations of hotels in the Hankyu-Hanshin-Daiichi Hotel Group❶ Improve profitability of existing hotels● Directly managed hotels(As of April 1, 2018)

Hotels● Maintain and enhance product value through appropriate investment❷ Expand network by opening new hotels(Hankyu Hanshin Hotels)● Other(franchises etc.)● Implement plan to open new hotels, which mainly comprise guest rooms

Total

Guest rooms

18

4,890

28

5,534

46

10,424Tokyo
metropolitan area

7 hotels
4 hotelsfor overnight stays❸ Establish our market leadership in the Umeda area

Kyoto, Osaka, Kobe

10 hotels
2 hotels● Clarify our long-term management policy for our most important foothold,the Umeda area

Fiscal 2018
Breakdown of revenues
Other
from operations

Revenues from operations
Urban
Transportation

Hotels8.3%

International
Transportation
TravelOperating income margin (right axis)(¥ billion)

（ %）

100

10

80

¥ 760.3 billion

8

630

60

（YoY +3.2%）

40

4.8

Real EstateEntertainment andCommunications

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

Business Environment

41

680

20

656

672

664

6

4

4.3

3.3

3.2

2

1.9

0

0

2015

2016

2017

2018

2019
(Est.)(FY)

sharp increase in the number of accommodations being offered in
private residences will have a corresponding effect on our hotelbusiness.

In the domestic hotel market, both in Kansai and the Tokyo

Furthermore, the supply of hotel rooms is increasing, especially in

Metropolitan Area, the ratio of foreign guests has been on a significant

major cities, to provide lodging for the visitors expected at the Tokyo

uptrend with the increase in inbound travel. Meanwhile, in addition to

Olympics and Paralympic Games in 2020. Clearly, ongoing

the overheated competition for guests due to the opening rush of

improvements in the quality of our functions and services are essential

new hotels and the use of online travel agents, we believe that thein order to increase the competitiveness of our hotel business.

Hankyu Hanshin Holdings Annual Report 2018

stays; moreover, REMM Plus No. 1, which represents our new

Fiscal 2018 Review of Operations

REMM brand, is expected to open in Ginza, Tokyo in the winter of
2019. In early spring 2020, we plan to open one of the largest

Despite an increase in revenue accruing from the opening of
REMM Roppongi in March 2017, our Hotels Business registered ayear-on-year decline in profit due to higher expenses and reduced
overnight stays at existing hotels.
Looking to the accommodation division, although the room
occupancy rate remained high, the average room rate declined incomparison with the preceding fiscal year due to the impact ofcompetition from private accommodations and the opening of
new hotels.
Revenue in the restaurant division was also lower than that ofthe preceding fiscal year due to the closure of non-hotel

hotels (about 1,000 rooms) in Yodobashi Umeda Tower in the
Umeda area. In the spring of 2021, we are scheduled to open ahotel in Sannomiya, Kobe that will offer mainly guest rooms forovernight stays. Going forward, we intend to expand earnings
mainly in the accommodation sector by capturing the steady
growth in demand from visitors to Japan. We will accomplish thisby opening new hotels focused on accommodations in carefully
selected locations offering the greatest convenience.
In addition, we are targeting earnings growth in fiscal 2022
through stringent revenue management and facility renewal while
improving the profitability of existing hotels.

restaurants; however, the banquet division posted higher yearon-year revenues as a result of the favorable performance of its
businesses, which included corporate and event sales.

Fiscal 2019 Outlook

As a result, revenues from operations increased by ¥1,608
million year-on-year to ¥67,248 million, while operating income

In fiscal 2019, we expect a decline in revenue from operations

declined by ¥579 million, to ¥2,216 million.

arising from the closure of some hotels and the termination of acontract to manage the Rokko Mountain Hotel in fiscal 2018.

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

Looking to costs, outsourcing expenses are expected toincrease due to a review of unit prices for cleaning in addition to

20,00016,00012,000

8,000

92.2

93.9

88.6

90.5

15,853

95.4

94.3
90.8

17,221

16,665

14,61914,140（ %）88.7
15,44913,54911,616

100

80

60

40

4,000

20

0

0

2015

2016

2017

2018

(FY)

Non-Japanese guests as a percentage ofovernight-stay guests
Tokyo metropolitan area（%）

Meanwhile, we anticipate operating income in fiscal 2019 to becomparable to that of the previous fiscal year as a result of
anticipated increases in average room rates at existing hotels.
As a result of these efforts, we forecast revenues from operations
in fiscal 2019 to reach ¥66.4 billion, representing a year-on-year
decline of ¥0.8 billion, while operating income is expected to
decline by ¥0.1 billion, to ¥2.1 billion.
Visitors to Japan

Nationwide(Millions of people)

Percentage visiting Kansai area(right axis)

30

10

40

31.4

30

38.6

38.1

36.9

37.0

42.3

5

40.6

0

13.1
10

10.0

（%）

19.74

10.36

50

42.1

40.0

7.89

40
30

10.24

12.08
20

4.79

3.45

60

10
0

2014

2015

2016

2017

（CY）

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

25.0

14.9

24.04
42.6

13.41

2013

22.7
20

35.7

33.3

15

50

Kansai area

28.69

25
20

Kansai area

Enhancing Our Corporate Value

Kansai area occupancy rate

2

Tokyo metropolitan area occupancy rate

（Yen）

2

repair costs arising from renovations of facilities.

Kansai area ADR

for Foreigners Visiting Japan,”Japan Tourism Agency

17.3
12.3

0

2012

2013

2014

2015

2016

2017

2018

(FY)

Initiatives Implemented Under Our Medium-Term
Management Plan
In our Hotels Business, Kyobashi, Tokyo as well as Fukushima,
Osaka, will be the locations of hotels we plan to open around thespring of 2019 that will mainly comprise guest rooms for overnight

Illustration of Yodobashi
Umeda Tower

Hankyu Hanshin Holdings Annual Report 2018

42

The Basis of Enhanced Corporate Value

Directors and Audit & Supervisory Board Members(As of June 13, 2018)

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)2008 Director, Hankyu Hanshin Hotels (Current position)2016 Director, Hanshin Electric Railway (Current position)2017 Executive Vice President, Hankyu Hanshin Holdings

2014 Chairman, Hankyu Corporation (Current position)2016 Director, Hankyu Travel International (Current position)2017 Chairman, Hankyu Hanshin Holdings (Current position)2016 Director, Hankyu Hanshin Express (Current position)

Group Chief Executive Oﬃcer

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)

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)

Yoshishige Shimatani

Naoya Araki

Yoshihiro Nakagawa

Director (Part-time)

Director (Part-time)

Director (Part-time)1975 Joined Toho

1981 Joined Hankyu Department Store

1976 Joined Hankyu Corporation2011 President, Toho (Current position)2012 President, Hankyu Hanshin Department Stores2005 Director, Hankyu Corporation

2015 Director, Hankyu Hanshin Holdings (Current position)(Current position)2012 Representative Director, H2O Retailing (Current position)2017 Director, Hankyu Hanshin Holdings (Current position)2007 Managing Director, Hankyu Corporation2013 Representative and Senior Managing Director,
Hankyu Corporation2014 President, Hankyu Corporation2014 Director, Hankyu Hanshin Holdings (Current position)2017 Chairman, Hankyu Hanshin Hotels (Current position)

43

Hankyu Hanshin Holdings Annual Report 2018

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 Electric Railway

2005 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(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)

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 Oﬃce1999 Professor of Faculty of Business Administration, Graduate

1999 Chief Prosecutor, Saga District Public Prosecutor’s OﬃceSchool of Kobe University

2002 Chief Prosecutor, Kobe District Public Prosecutor’s Oﬃce2008 President of the University of Marketing and Distribution Sciences

2003 Notary, Osaka Legal Aﬀairs Bureau

2010 Audit & Supervisory Board Member, Hankyu Hanshin Holdings

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

The Basis of Enhanced Corporate Value

Michiari Komiyama

Audit & Supervisory Board Member (External*2)(Current position)2013 Audit & Supervisory Board Member, Hankyu Hanshin Hotels

3

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 and Mr. Shosuke Mori 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 and Mr. Mori 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 Annual Report 2018

44

The Basis of Enhanced Corporate Value

An Interview with an External Director

As we continue to enhance ourcorporate governance, we areengaging in active discussions
intended to advance our Long-Term
Management Vision for 2025.
Shosuke Mori
External Director

On the Evolution of Corporate Governance

Q You were appointed as an external director

in 2010. Considering the Board of Directors’
management oversight and decision-making
responsibilities, what are your thoughts on
how the Board’s effectiveness has evolved?

At the time of my appointment as an external director, theprospects for improvement of our financial situation and otherissues such as the Group’s restructuring showed promise. Since
then, in order for the company to maintain the trust of our

If I were to offer a comment, of course it is essential that westrengthen corporate governance, but rather than simply accept
the values inherent in Western-style management as they are, I
would prefer that our management emphasize the outstanding
business ethics that Japanese companies have been cultivating formany years. This can be encapsulated in the phrase, sanpo yoshi,
which emphasizes the success of three stakeholders—the vendor,
the customer, and society.
I also intend to continue engaging in active discussions ofcorporate governance with the Board of Directors, in recognitionof the reality that we are a corporate citizen responsible for oursocial mission.

stakeholders and customers, our Group has been working to
improve transparency and soundness of management, comply
with laws and regulations, and ensure appropriate and timely
information disclosure. I believe our Group has been diligent insteadily underpinning our corporate governance.
In the preceding fiscal year, the number of directors was
reduced from 14 to nine in an effort to strengthen the supervisory
function of the Board of Directors and ensure managementtransparency.

45

On Achieving Our Long-Term Management Vision

Q What Management issues do you think

are key to bringing the Group’s Long-Term
Management Vision for 2025 to fruition?

To realize such efforts, I feel that we have engaged in

When we review the details of our Long-term Vision, which sets

constructive discussions, such as inviting opinions from various

out four business strategies based on two categories summarized

perspectives, including even our own external directors.

under the slogan “enhancing line-side areas and expanding

In light of recent trends in governance reform, the Board offields,” it is clear how we are focused on distinct businessDirectors has narrowed down the number of measures andterritories—which comprise Umeda and line-side areas as well asreports in the interests of urgency; moreover, regarding thethe Tokyo metropolitan area and territories outside Japan—asadministrative aspects of the Board of Directors, we explain themwell as our business model, which addresses“stock”businesses

in brief yet to a greater extent than before, and we take sufficientand “flow” businesses. I think that emphasizing our goal oftime to discuss them. So, I feel the effectiveness of the Board ofsustainably enhanced corporate value has given us great

Directors has been growing.

motivation.

Hankyu Hanshin Holdings Annual Report 2018

various

visit frequently, despite the overall decline in population. Line-environmental changes and risks we are likely to encounter along

Meanwhile,ofcourse,wemustaddresstheside areas are the foundations, so to speak, of many local

the path to achieving our vision, including Japan’s waning birthcommunities, as various value-added services do indeed further

rate and population decline and the increasing occurrence ofincrease the value of these territories, as a result leading to thenatural disasters in the Kansai area. Therefore, it is essential thatfurther prosperity of our Group.

we deal with these challenges in a proactive manner.

Meanwhile, various projects are under way that, in addition toMoreover, in order to steadily implement our four strategies, it

attracting a growing stream of visitors to the Kansai region ofis important that all employees of the Group buy into the intent

Japan, will spark the further development of the Kansai economy.

and approach incorporated in the strategy and fulfill their duties

The Umekita Phase II Development Project is one such example.

with a strong sense of mission in their respective positions.

In view of these trends, I believe that, by building on the value

For that reason, it is crucial to involve all our employees whoof the Group, we will further enhance the appeal of the Kansai

are active in the front lines and to ensure they interact with one

region, attract people throughout Kansai, and boost employment.

another on a daily basis so that our strategy is instilled in

In that respect, it is essential that we raise awareness among

everyone throughout our Group.

people in Japan and around the world regarding the charms of

Of course, it goes without saying that the basis of ourmanagement approach is to emphasize two priorities without
fail: “safety

first” and “meetingour

corporatesocialresponsibilities.”

the region, including the Takarazuka Revue Company and theHanshin Tigers professional baseball team.
In the same vein, I believe it is important to promote measures
supporting the development of the Kansai region under the

As a corporate Group that, through the railway business,
supports social infrastructure—much like the electric company

unified “All Kansai” system calling for collaboration amongindustry, government, and academia.

where I serve as a counselor—these two priorities are the lifeline

Certainly, our Group has amassed considerable experienceof management. Regarding safety measures in particular, I urge

and expertise concerning Umeda and our line-side areas. We are

all to consider being proactive in assigning management

confident that we can play a central role in the “All Kansai”

resources to this issue in the future. In addition to keeping theregime while fully utilizing our strengths to address major social

management team itself at the forefront of these initiatives, I ask

challenges such as revitalization of the community and theour entire Group to take a twin-pronged approach involving bothcreation of new industries. I remain dedicated to fulfilling mya “hardware” and “software” approach, in other words by

responsibilities as an external director in order to make theseresearching

objectives a reality.

andadopting

thelatestsafetytechnologies,

disseminating messages to employees on an ongoing basis, andproviding training opportunities. I think I might have theopportunity to offer some advice in light of my own experience inthis regard.

3
The Basis of Enhanced Corporate ValueOn Contributing to the Development of Kansai

Q Considering the likelihood of population

decline in the Kansai region over the longterm, what role should Hankyu Hanshin
Holdings play in terms of promoting future
development?

For more than 100 years, the businesses comprising our Group
have been enhancing the value of our line-side areas in addition
to providing urban transportation and operating real estatebusinesses mainly in Umeda and across these line-side areas.
Fortunately, I feel that many who live in these line-side areas takegreat pride in the region and have high hopes for the future.
In that sense, our Group recognizes that further vitalization of
Umeda and these line-side areas stands as our greatest mission;in fact, our Long-Term Management Vision for 2025 explicitly
identifies this very goal: making our line-side areas“the absolute
best among the Kansai networks.”
By steadily promoting this strategy, I strongly believe that wewill attract people to Umeda and these line-side areas, thus
leading to growth in both the resident and non-resident
populations. This will help to support the development of towns
that many people will either desire to live in for years to come or

Hankyu Hanshin Holdings Annual Report 2018

46

The Basis of Enhanced Corporate ValueManagement Organization■ Corporate Governance System

Corporate Governance
X-X

Principles

company, and the conduct of operations is basically the responsibilityof Group member companies. Hankyu Hanshin Holdings’principalrole is supervision and oversight of the entire Group—meaning thatthese functions are separate from the conduct of Group businesses.

■ Basic Approach to Corporate Governance
2-1

2-2

Through this system, the Company realizes supervision and3-1

oversight and enhances the overall governance of the Group by:■ Making decisions regarding the Group’s management policies

Based on the Group mission and values set out in its Groupand strategies,

Management Philosophy, the Company aims to remain a■ Deciding on the approval of the medium-term or annualcompany that customers and other stakeholders trust. To thismanagement plans of all core businesses,

end, the Company is strengthening and increasing corporate■ Requiring timely submission of progress reports by operating

governance by heightening the transparency and soundness ofbusinessmanagement

4-10

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

Figures in boxes correspond to the principles of Japan’s Corporate
Governance Code.
(Descriptions refer to the code in effect prior to the revisions adopted
in June 2018.)

Principles

4-1

and

ensuring

appropriate,

companies, andtimely■ Having Group companies obtain approval before taking actions

disclosure.

that affect the Group’s management significantly (for example,

Reflecting this basic approach, the Company has establishedthe policies below with a view to sustaining growth and enhancing

investments above a certain threshold).

corporate value over the medium-to-long term.

With regard to the above matters, the Board of Directors,■ We shall respect shareholders’rights and ensure equality.

which includes external directors, makes approval decisions and■ We shall take into consideration the interests of shareholders

receives reports. Moreover, to undertake preliminary reviews theand other stakeholders and cooperate with stakeholders

Company has established a Group Management Committee,

appropriately.

which includes representatives of the Group’s core businesses.
Further, to ensure transparency in the appointment and■ We shall disclose corporate information appropriately andcompensation of the Company’s directors and to facilitate

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

coordination among external directors, the Group has establishedand duties appropriately and ensure advanced oversight andthe Corporate Governance Committee, which comprises external

decision making.

directors and external Audit & Supervisory Board members whoare independent of the Company, the president and representative■ We shall have constructive dialogue with shareholders with adirector, and standing Audit & Supervisory Board members.

view to sustaining our growth and enhancing corporate value

In addition, as part of efforts to strengthen its overallover the medium-to-long term.

capabilities, the Company is strengthening the governance offunding.

Measuresincludecentralizing

funding

under

the

Company and distributing funds to operating companies within
the limits set out in business plans that the Company has
approved.

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 GovernanceCommittee

Selection / Dismissal /Supervision

Chairman & President
CallGroup Companies
Directors (representative of each core business)

47

Hankyu Hanshin Holdings Annual Report 2018

ReportReportGroup Management Committee
Participate

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

Accounting audit

External Audit & Supervisory
Board Members: 3

Cooperation

Group Auditing Division

Participate(as observer)

Audit

Staﬀ of Audit &Supervisory Board
Members

Appointment / Dismissal

ReportCooperation

Accounting Auditors(CPAs)

■ Management Organization(1) Board of Directors and Directors
Principles

4-1

4-2

4-6

4-11

The external directors appointed to the Board are selected fromamongstpersonswithextensive

experiencein

corporate

management, with the aim of strengthening the management
oversight function of the Board of Directors with respect to the

The Board of Directors enhances governance of the entire Group

Group as a whole, and also in the expectation that the externaland oversight of respective companies by deciding on matters

directors will provide advice to the Company’s management from apursuant to statutory laws and regulations and the articles ofbroad perspective. Similarly, the external Audit & Supervisory Board

incorporation based on regulations and standards that the Board ofmembers whom we appoint are selected from amongst persons

Directors has established, by deciding on the approval of

possessing high-level specialist expertise in the fields of compliancemanagement policies and strategies of the Company and the Groupand business administration.

as well as the management plans of core businesses, and by

Further, to ensure that it assesses the independence of externalrequiring timely reporting from operating companies about Group

directors and external Audit & Supervisory Board members

companies’significant investments.

objectively, in light of the Tokyo Stock Exchange’s independence

Aiming to strengthen the management oversight of the Board of
Directors and ensure the transparency of business management by
increasing the proportion of external directors, the Company

requirements, the Company has established the Independence
Criteria below.

reduced the number of directors from 14 to nine at the General

Independence criteria

Meeting of Shareholders held in June 2017. Under the new system,

To be deemed independent, external directors and external Audit

the Company is strengthening monitoring and oversight and raising& Supervisory Board members must not belong to any of thethe standard of decision making by appointing five of its nine

following categories.

directors as part-time directors, including two external directors

s major shareholders
1. Executing persons*1 of the Company’

who are independent of the Company and have abundant(shareholders owning 10% or more of the Company’s total voting

experience in corporate management.

(2) Audit & Supervisory Board and Audit & Supervisory
Board Members
Principle 4-4

rights)
2. Executing persons of entities for which the Company is a majors majorbusiness partner*2 or executing persons of the Company’business partners
3. Consultants, accounting experts, or legal experts receiving

The Company has adopted the Audit & Supervisory Board systemsignificant amounts of money or property*3 from the Company

to ensure adequate management oversight. We have five Audit &that are other than executive compensation (or if a company,

Supervisory Board members, who monitor the business operations

union, or other organization receives the said property, this refers

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 persons belonging to the said organization)
4. Persons*4 who have recently belonged to any of the categories (a)through (d) below(a) Persons stated in 1, 2, or 3 above

professionalism in Group auditing. In this way, we are working to(b) Executing persons of the Company’s parent company or

further ensure sound decision making in the conduct of operations.

directors of the Company’s parent company who are notexecuting persons

example by involving them in the Group Management Committee(c) Audit & Supervisory Board members of the Company’s parent

and other meetings within the Group. The Audit & Supervisory

company (This item applies when external Audit & Supervisory

Board meets once a month, in principle, to discuss and pass

Board members are to be appointed as independent external

resolutions on important matters.

Audit & Supervisory Board members.)

In addition, as part of the auditing of the Group’s business(d) Executing persons of the Company’s fellow subsidiaries

operations, the Audit & Supervisory Board members peruse when

5. Close relatives (within the second degree of kinship) of any of theappropriate auditing plans and results of audits of the Group

persons stated in (a) through (h) below (excluding persons who

Auditing Division, composed of internal audit staff. The Audit &are not significant)Supervisory Board members also receive from the Group Auditing(a) Persons stated in 1, 2, 3, or 4 above

Division regular reports (and ad hoc reports when required) on(b) Accounting advisors of the Company (This includes employeesinternal audits at the Company and its subsidiaries, including on the

conducting required duties if the said accounting advisor is astate of operation of the whistle-blowing system.

company. Same hereinafter.) (This item applies when external

At the same time, the Audit & Supervisory Board members
receive regular status reports from the accounting auditors (CPAs)

Audit & Supervisory Board members are to be appointed as
independent external Audit & Supervisory Board members.)

and take part in on-site audits by the accounting auditors including(c) Executing persons of the Company’s subsidiaries

those of Group companies.

s subsidiaries or(d) Accounting advisors of the Company’(3) Roles and functions of External Directors and External
Audit & Supervisory Board Members
Principles 4-7 4-9
The Company appoints independent external directors and Audit &directors of the Company’s subsidiaries who are not executing
persons (This item applies when external Audit & Supervisory
Board members are to be appointed as independent external
Audit & Supervisory Board members.)(e) Executing persons of the Company’s parent company or

Supervisory Board members with the aim of further enhancing thedirectors of the Company’s parent company who are notgovernance of the Group through their contributions to meetings ofexecuting persons

the Board of Directors and the Audit & Supervisory Board, as well asother activities.

The Basis of Enhanced Corporate Value

We provide full backup to Audit & Supervisory Board members, for3

to provide an independent viewpoint and ensure a high degree of(f ) Audit & Supervisory Board members of the Company’s parent
company (This item applies when external Audit & Supervisory
Hankyu Hanshin Holdings Annual Report 2018

48

The Basis of Enhanced Corporate Value

Board members are to be appointed as independent external
Audit & Supervisory Board members.)(g) Executing persons of the Company’s fellow subsidiaries

Reasons for election of outside director Principle
Name

Reasons for appointment(h) Persons who have recently belonged to the categories (b)through (d) above or who have been executing persons of theCompany (This includes directors who are not executing
persons when external Audit & Supervisory Board members

3-1

Noriyuki
Inoue(Independent
Director)

are to be appointed as independent external Audit &Representative director for many years at Daikin
Industries, Ltd. Also served as vice-chairman of
Kansai Economic Federation. Appointed for his
wealth of management experience, perspectivefrom top business circles, and ability to provide
independent input.

Supervisory Board members.)
6. Executing persons of the Hankyu Hanshin Toho Group*1 Executing persons refers to executive directors, executive officers, corporate
officers, managers, and other employees.

*2 Major business partners refers to entities belonging to any of the following
categories.

(1) Entities that in their most recent fiscal year have received payments equivalent

Shosuke Mori
(Independent
Director)

to 2% or more of total annual consolidated sales from the Company or its
core companies (Hankyu Corporation, Hanshin Electric Railway, Hankyu Travel
International, Hankyu Hanshin Express, and Hankyu Hanshin Hotels)s most recent fiscal year have made payments to(2) Entities that in the Company’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.

the Company or its core companies equivalent to 2% or more of total annual
consolidated sales(3) Regardless of (1) and (2) above, entities that, in relation to financial institutions
from which the Company borrows funds, are indispensable in fund-raising of theCompany and upon which it is reliant to the extent that there are no substitutes
for the said entities*3. Significant amounts of money or property refers to money or property equivalent
to an average of ¥10 million or more per year over the previous three fiscal years.
*4.“Persons who have recently belonged to any of the categories (a) through (d)Reasons for election of outside corporate auditor Principle
Name

3-1

Reasons for appointment

Haruo
Sakaguchi(Independent
Board Member)

Currently a lawyer. Appointed to advise on more
compliance-based management and for his ability
to provide independent input.

below”refers to persons who can be deemed equivalent to persons who atpresent materially belong to any of the categories (a) through (d). For example,
this includes persons who belong to any of the categories (a) through (d) when
the General Meeting of Shareholders approves resolutions appointing the said
independent Board members as external directors or external Audit & Supervisory
Board members.

Junzo Ishii(Independent
Board Member)■ Policies and Procedures for the Appointment of
Directors and Audit & Supervisory Board Members
Principle

3-1

Policy for the appointment of Directors
The Company appoints personnel who are well acquainted withthe businesses of the Hankyu Hanshin Holdings Group as directors

Michiari
Komiyama(Independent
Board Member)

as well as appointing personnel from H2O Retailing Corporation

Former Professor of Faculty of Business Administration
within the Graduate School of Kobe University andformer President of the University of Marketingand Distribution Sciences. Appointed for his ability
to express useful opinions based on his high-levelspecialist expertise in business administration and for
his ability to provide independent input.
A member of the legal profession who has served inimportant positions, including chief prosecutor of
the Kobe District Public Prosecutor’s Office, and who
is currently active as a lawyer. Appointed because,
given his experience, he is expected to provide
valuable opinions, particularly about ensuring
compliance in business management.

and Toho Co., Ltd., as directors to strengthen collaborative
relationships with the Hankyu Hanshin Toho Group.
In addition, to raise the standard of decision making andstrengthen oversight, the Company appoints independent external
directors who have abundant experience and expertise.

Policy for the appointment of Audit & Supervisory Board Members

Principle

3-1(1) Policy
The Company’s compensation system for directors motivates them

To ensure Audit & Supervisory Board members conduct audits

to enhance the Company’s enterprise value and business

effectively and efficiently, the Company has established the Audit &performance. Compensation comprises two elements: basic

Supervisory Board and appoints internal standing Audit &monetary

Supervisory Board members and external Audit & Supervisory Board

compensation linked to business performance.

compensation

paid

accordingtopositionandmembers. The Company appoints internal Audit & Supervisory

However, the compensation of external directors and other part-

Board members who have appropriate expertise in finance,time directors only comprises monetary compensation paid based

accounting, or law and abundant experience in business fields. Also,on the type of duties positions entail.

the Company appoints external Audit & Supervisory Board members
who are independent of the Company and have abundant
experience and expertise.

49■ Compensation of Directors

Note: The payment of retirement benefits to directors was discontinued in April 2004
to heighten transparency of the compensation system.

Further, stock-based compensation is paid through a trust to

Appointment procedure

directors who concurrently serve as directors of Hankyu Corporation

Following consultation with the Corporate Governance Committee,and Hanshin Electric Railway as part of compensation from thethe Board of Directors decides on the appointment of candidates

Company. Thus, as with other shareholders, directors who

for the positions of Audit & Supervisory Board member and director

concurrently serve as directors of these two core companies of thebased on the abovementioned appointment policies.

Group benefit if share prices rise but incur losses if they decline. The

Hankyu Hanshin Holdings Annual Report 2018

intention of the system is to motivate directors to improveearnings or individuals and groups that successfully launch initiatives

companies’ business performances and thereby enhance theor make significant contributions at their units.

enterprise value of the entire Group over the medium-to-long term.

■ Shares Held for Strategic Reasons(2) Procedure
Following

consultation

with

the

Corporate

GovernancePrinciple

1-4

Committee with respect to the compensation system and

The Company acquires shares held for strategic reasons with a viewcontent of compensation, the Board of Directors decides on

to building relationships of trust with various stakeholders andcompensation based on the abovementioned policy.

enhancing corporate value over the medium-to-long term by
maintaining business relationships or strengthening collaborations
with partner companies and maintaining relationships with regional
companies. In exercising voting rights associated with the shares,■ Other Deliberative Bodies

the Company’s criterion is whether proposals will contribute to the(1) Corporate Governance Committee

enhancement of the investee’s corporate value over the medium-to-With a view to ensuring the transparency of executive appointments

long term. Further, the Board of Directors verifies the economic

and compensation and enabling coordination among externalrationality and aims of owning shares held for strategic reasons.

directors and external Audit & Supervisory Board members, theCompany has established the Corporate Governance Committee,
which comprises four representative directors, two external■ Abolition of Anti-Takeover Measuresdirectors, two standing Audit & Supervisory Board members, andAfter considering recent trends related to such measures and changes

three external Audit & Supervisory Board members. The committee

in the business environment, the Company has decided to abolish anti-

acts in an advisory capacity with respect to the appointment of

takeover measures that have already been set to expire at thecandidates to the position of director and the details of theconclusion of the General Meeting of Shareholders held in 2018.

compensation system for directors. Also, the committee provides
external directors with information in relation to the Group’sbusinesses, financial status, and organization.

■ Abolition of Senior Advisors System
To(2) Group Management Committee

strengthen

corporate

governanceandheightenthetransparency of business management and given that it has not

The members of the Group Management Committee include

elected senior advisors at present, the Company received

fulltime directors, specifically the chairman and representative

approval from the General Meeting of Shareholders held on June

director, the president and representative director, the executive

13, 2017 to abolish a provision of the articles of incorporation

vice president and representative director, and the representative

concerning the election of senior advisors.

director; executive officers; and representatives of each of the
Attendance at Meetings of the Board of Directors and the Auditand decide on the approval of resolutions of the Board of Directors;& Supervisory Board

3

Group’
s core businesses. The committee convenes to deliberate
the management strategies and business plans of Group companies;
and significant Group management matters, such as investments
above a certain threshold and reorganization.

(3) Core Business Strategy Councils
Each core business has a Core Business Strategy Council, comprising
the Company’s chairman and representative director, president andrepresentative director, executive vice president and representative
director, representative director, the executive officer in charge ofthe Group Planning Division, and representatives of each corebusiness. In relation to respective core businesses, the councils
deliberatesignificant

matters

concerning

futurebusinessdevelopment as well as the preparation and progress management(performance evaluation) of business plans.

The Basis of Enhanced Corporate Valuesystems and rules for maintenance of the holding company system;

External Directors
Name

Attendance at meetingsof the Board of Directors

Noriyuki Inoue

Attended 8 of 9 meetings

Shosuke Mori

Attended 7 of 9 meetings

External Audit & Supervisory Board Members
Name

Attendance at meetingsof the Board of Directors

Attendance at meetingsof the Audit & Supervisory Board

Haruo Sakaguchi

Attended
all 9 meetings

Attended
all 11 Meetings

Junzo Ishii

Attended
8 of 9 meetings

Attended
all 11 Meetings

Michiari Komiyama

Attended
all 7 meetings

Attended
all 9 Meetings(4) The Group Presidents’Meeting—Initiatives to foster
solidarity within the Group

Evaluation of the Board of Directors’effectiveness

The Hankyu Hanshin Holdings Group comprises over 150 GroupA summary of the process, items, and results of an evaluation ofcompanies. The Group Presidents’Meeting, held twice a year,

the effectiveness of the Board of Directors conducted in fiscal

brings together presidents of those Group subsidiaries and affiliates.

2019 is as shown below.

It is designed to foster a deeper sense of solidarity within the Groupand ensure that the Group philosophy and management policies

1. Evaluation processpermeate the entire organization. The Group Presidents’Meeting

At a meeting of the Board of Directors held on April 2018, allaims to encourage a joint sense of commitment to the Medium-

directors were interviewed with respect to the administration ofTerm Management Plan. Awards are given to companies that boost

the Board of Directors in fiscal 2018.
Hankyu Hanshin Holdings Annual Report 201850

The Basis of Enhanced Corporate Value

2. Evaluation items
Accountability

Content of handouts, content and methodof explanations at meetings of the Board of
Directors, etc.

Appropriatenessof conductof meetings

Duration, questions and answers, etc.

Other

Other points about overall administration of
the Board of Directors

3. Evaluation results
The results of investigative interviews indicated that conduct ofmeetings of the Board of Directors was adequate, explanationsof the status of business management were appropriate, and theBoard of Directors was effective and generally administeredappropriately in fiscal 2018.
Further, results of an evaluation in fiscal 2017 included
requests to establish a discussion forum during formulation of the
management plan. In response, the Company held briefings onpolicy formulation for the medium-term management plan at theBoard of Directors’meeting held in November 2017.
Number of Meetings of Deliberative Bodies Held

Internal Control System
Principles

2-1

2-2

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:■ A Group Management Philosophy was compiled following themanagement integration of Hankyu Holdings and Hanshin
Electric Railway, along with a Group mission (what we try toachieve), a statement of values (what is important to us), anda code of conduct (what actions to take to realize them). We
ensure that all employees from executive down understandthem.
■ We ensure compliance-focused management by compilingand distributing a Compliance Manual, and have established a
dedicated whistle-blowing system. (For further information on
the Company’s compliance activities, please refer to thefollowing section.)

Corporate Governance Committee

2 meetings■ We have established the Group Auditing Division, composed

Group Management Committee

13 meetingsof internal audit staff under the direct control of the president,Core Business Strategy Councils

2 meetings

The Group Presidents’Meeting

2 meetings

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 each■ Dialogue with Shareholders and Investors
Measures to Enhance the Effectiveness of theCompany’s General Meeting of Shareholders andFacilitate the Exercise of Voting Rights
Principle 1-2
Remarks

Early dispatchof notices ofconvocation

51

To allow shareholders sufficient time to examine
the items for resolution at the shareholders’meeting before exercising their voting rights,
the Company sends out notices of convocation
at the earliest possible date. For the General
Meeting of Shareholders held in June 2018, theCompany sent out notices of convocation on
May 23, 2018, 21 days before the meeting.

Avoidance of the“busiest day”forshareholder
meetings

To enable as many shareholders as possible toattend its General Meeting of Shareholders,the Company held its 2018 General Meeting of
Shareholders on June 13, 2018, 15 days before
the“busiest day”on which a large proportionof Japanese companies hold their generalshareholders’meetings.

Online andelectronic voting

To enable shareholders who cannot attend theCompany’s General Meeting of Shareholders to
exercise their voting rights and to make voting
more convenient, the Company accepts votes
exercised via the Internet.
Also, the Company participates in the electronic
voting platform operated by ICJ Inc.

Other

On its website, the Company posts noticesof convocation of the General Meeting of
Shareholders and notices of resolutions passed
at the meeting in Japanese and English.

Hankyu Hanshin Holdings Annual Report 2018

Group 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 internal
controls at the Company and its subsidiaries (including
implementation status for risk management and promotion ofcompliance-based management measures). Through suchmeasures, they deepen their links with, and strengthen therole of, internal control divisions.
■ With regard to systems for “Management Assessment andAudit Concerning Internal Control Over Financial Reporting,”asection of the Financial Instruments and Exchange Act, theCompany responds appropriately by carrying out management
evaluations on a consolidated basis, in line with in-house rules.

■ Establishment of Risk Management CommitteesComplianceIn 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

As a system to ensure compliance-focused management, theon appropriate responses.

Group has set up a dedicated compliance office, and is working

In addition, we are setting up compliance promotion offices at

to raise awareness of compliance issues among executives andmajor Group companies such as Hankyu Corporation, Hanshin

employees by means of the measures detailed below.

Electric Railway, Hankyu Travel International, Hankyu Hanshin■ Compliance Manual and Training Programs

The Company’s Compliance Manual and Compliance Card express the determination of the Company not to tolerate violationof laws or social norms or betrayal of customer trust by any of its
Group companies’approximately 22,000 officers and employees.
It also aims to raise awareness by pointing out cases where compliance errors can easily be made.
The Company provides intensive compliance training on aGroup-wide basis for new employees, midcareer hires, and newly
appointed executives. In addition, all Group companies arrange

Express, and Hankyu Hanshin Hotels. At other companies we areappointing“compliance leaders,”to ensure our response is on aGroup-wide basis.
Overview of Group complianceHankyu Hanshin HoldingsCore companies● Information to Group companies

Compliance promotion oﬃce

● Guidance and training for Group
companies

and other awareness-raising activities● Risk Management Committee
secretariat

their own training programs tailored to job grade and function,● Corporate Ethics Consultation Deskwith the aim of further increasing compliance awareness.

● Internal auditing(internal whistle-blower procedures)

Other Group companies
Complianceleaders■ Corporate Ethics Consultation Desk(Internal Whistle-Blower Procedures)
Principle

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

ILiaise with compliance departmentsof higher-level companies

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 and notification facility, and when necessary we will use lawyers andother outside specialists to improve its effectiveness.

Corporate Ethics Consultation Desk
Audit &
Supervisory
Board
memberConsultation
Desk

Reports

The Basis of Enhanced Corporate Value

Reports

3

Audit &
Supervisory
Board
memberReports

President

Directs

Consultation
Desk

Reports

President

Approves /Directs

Reporting of investigation progress and ﬁndings

Consultation
Desk

Hankyu Hanshin Holdings Annual Report 2018

52

The Basis of Enhanced Corporate Value

Safety Initiatives in the Railway Business

Safety Policy and Safety Objective
The shared mission of Hankyu Corporation and Hanshin
Electric Railway is to ensure the absolute safety of railway
transportation. Toward this end, we strictly observe all safety
policies, focus on achieving our safety objectives, and strive
daily to improve safety measures and ensure safety during
emergencies by devising solutions employing aspects of both
“hardware”and“software.”

Positions and Roles◎ President
The President determines the implementation, 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 perspectivesof safety and feasibility and instructs on improvements.

Hankyu Corporation◎ Chief Safety Manager
In order to prioritize securing the safety of railway facilities androlling stock and the handling of operations, and to control andmanage transportation operations in each division, the Chief Safety

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

Manager works to disseminate safety management regulations andto ensure compliance with related laws and regulations; to increaseawareness of safety as the Group’s most important priority; toconfirm

theimplementationoftransportation

operations,management conditions, and the progress made in implementing

Safety Policy and Safety Priority Measures

Provide safe, high-quality transportation
services that fully justify public trust—Hankyu
Corporation: Safety and comfort■1
 . Strive to prevent accidents for which webear responsibility.

a. Enforce stringent policies and comply with work procedures
b. Promote measures to prevent accidents for which 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 operationse. Promote measures to accelerate accident prevention■2
 . Strive to prevent recurrence of accidents forwhich we bear responsibility

a. Prevent the recurrence of previous accidents and incidentsb. Formulate and implement countermeasures by convening theInvestigative Committee for Measures to Prevent Accidents

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; and providing 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
the capabilities of train crews and periodically confirms and submits
reports on the progress being made in improving their capabilities.
◎ Other Managers and Responsible Persons
In each division, other managers and responsible persons maintainand manage the facilities they are responsible for in order to ensure
there are no obstacles to realizing safe transportation.

Safety Management Promotion Committees◎ President
Safety Management Promotion Committees discuss, investigate,■3
 . Address risks to business continuity

a. Reduce risks from natural disasters and implement preventive
measuresb. Conduct risk assessments in order to analyze, identify, andshare risks

53

Hankyu Hanshin Holdings Annual Report 2018

and report on a variety of proposals for transportation safety. These
committees include the Group Safety Management Promotion
Committee, on which the President serves as chairperson; theBusiness Division Safety Management Promotion Committee, on
which the Chief Safety Manager serves as chairperson; and thedivisional safety management promotion committees.

■ Safety management system

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

■M aintenance of Safety Management Systems

President

The Company shall implement continuous verification procedures

Directors

to ensure that safety management systems are operating

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

appropriately.

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,
Technical Division(Chief Electrical
Facilities Manager)

Manager,
Kobe LineOperations

Manager,
Takarazuka LineOperations

Manager,
Kyoto LineOperations

Deputy Operations
Manager (CrewTraining Manager)

Deputy Operations
Manager (CrewTraining Manager)

Deputy Operations
Manager (CrewTraining Manager)

Manager,
Technical Division(Chief Rolling
Stock Manager)

Positions and Roles◎ President
The President has the ultimate responsibility for ensuring transport
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
operations, maintaining the capabilities of train crews, and otherGroup Safety Management
Promotion Committee

related operations.
◎Chief Crew Training Managers (the Heads of the East Rolling

Business Division Safety
Management Promotion
Committee
Investigative Committee to
Improve the Safety andSecurity of Operations

Transport Division
Safety Management
Promotion
Committee

Stock Yard and the West Rolling Stock Yard)
Under the direction of the Chief Train Operations Manager, theInvestigative Committee for
Measures to Prevent Accidents

Chief Crew Training Managers are responsible for ensuring all crew
are properly qualified.

Technical Division (civilengineering facilities)
Safety Management
Promotion Committee

Technical Division(electrical facilities)
Safety Management
Promotion Committee◎ Electrical Division Manager

Technical Division(rolling stock)
Safety Management
Promotion Committee

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

Hanshin Electric Railway

Under the direction of the Chief Safety Manager, the Rolling Stock
Division Manager has overall control of items relating to rolling stock.

3◎ Engineering Division Manager

The Basis of Enhanced Corporate Value

Under the direction of the Chief Safety Manager, the Engineering

Safety Objective

Division Manager has overall control of items relating to track, civilengineering, and construction facilities.

■M aintaining the Elimination of Accidents for
Which We Bear Responsibility■ Safety management system

In fiscal 2018, we again achieved the safety objective of“maintaining the elimination of accidents for which we bear
responsibility,”receiving an award from the director of the Kinki
Transportation Bureau of the Ministry of Land, Infrastructure,
Transport and Tourism for maintaining this achievement for a

President

Directors

The Railway Safety Council has been
established as an organization thatspecializes in promoting safety
management.

Urban Transportation
Business

period of 32 years and 11 months. We remain committed toensuring continued safety in fiscal 2019 as well.

Railway Safety Council
Chief Safety Manager(Head of Urban
Transportation Business)

Safety Policy

Deputy Head of Urban
Transportation Business■M aximum Priority on Safety

The President, directors, and employees shall do everything
possibletoensuresafetyofoperations,

based

on

the

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

Manager,
Rolling Stock
DivisionManager,Engineering
Divisionunderstanding that putting the highest priority on ensuring safety
is the mission of railway businesses.

Chief Crew Training Managers(Head, East Rolling Stock Yard)(Head, West Rolling Stock Yard)■C ompliance with Laws and Regulations

The Company shall comply with all laws and regulations related
Hankyu Hanshin Holdings Annual Report 2018

54

The Basis of Enhanced Corporate Value

Safety Enhancement Initiatives
To ensure the safety of customers, we are proactively taking
personnel-related measures to enhance education and training
as well as infrastructure-related measures to improve equipment
and facilities.

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

We have many different types of electrical equipment, including
signal safety equipment, secure communications equipment,
railway crossing safety equipment, power equipment, railway
track equipment, and substation equipment, which we inspect

1. Training and Education

regularly based on prescribed inspection schedules.

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

■ 2. Inspecting railway tracks

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

■ 3. Inspecting structures

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.

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

During rain storms, we direct trains to reduce speed or suspend
operations based on information obtained from the rain gauges,
wind gauges, and water meters installed alongside our railway
lines

and

meteorologicalinformation

from

the

Examples of Initiatives Undertaken in
Fiscal 2018

Japan

Meteorological Agency.

■2
 . Responding to earthquakes

Hankyu Corporation

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 forthe emergency suspension of operations of trains on line
segments in earthquake zones.

■3 . Responding to actions of third parties, suchas acts of terrorism

Improving the Safety of Infrastructure
In order to enhance the safety of station platforms in fiscal 2018, we
made steady progress with construction of the Hankyu Line’s firstmovable fencing for platforms. We installed a series of fixed fencesat the end of platforms at terminal stations.
Moreover, to enhance security at grade crossings, we continued

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

to install grade crossing warning systems and barrier-failureof terrorism, could cause serious incidents with extremely

detection systems. We completed the installation of these systems

significant effects on society, or if such a warning calls forat all our grade crossings (262 in total).

continued vigilance, or if suspicious items or persons are
discovered or damage is incurred, we take measures appropriate
to the threat level.
Further, we are advancing the installation of security cameras
on station platforms and in station concourses to prevent crime.

Fixed fencing installed at end of platform

55

Hankyu Hanshin Holdings Annual Report 2018

Improving the Safety of Personnel
We focused on improving the safety of station platforms witheffective measures to ensure that employees were able to hearand observe customers who might require assistance.
We also worked to improve employee response capabilities
and qualifications through evacuation drills for a potential Nankai
Trough Earthquake accompanied by a tsunami; we also
conducted unscheduled emergency response drills.

Railway elevation project between Improving Koshien Station
Sumiyoshi and Ashiya

In addition, to eliminate human error leading to accidents andincidents, we have focused on fostering a workplace culture that
instills basic behaviors and strict adherence to work procedures.
We have emphasized personnel training in order to develop
employees with a strong commitment to accident elimination.

Fixed fencing installed at the head Floor caution markings along theof the platform
platform edge

Improving the Safety of Personnel
We continued our employee training and education and focused

Evacuation drill fora potential Nankai
Trough Earthquakeon technology succession and improving safety awareness. We
emphasized collaboration between departments through various
training and education efforts and utilized a safety suggestion box
system to identify and share hidden risks in the field while raisingawareness among employees in the course of their duties. We
continued to promote transportation safety.
Moreover, in order to improve safety in stations, we continued
to implement educational and awareness-raising measuresrequiring personnel to proactively call out and monitor for visually3handicapped customers.

The Basis of Enhanced Corporate Value

Disaster response drill
for a potential Nankai
Trough Earthquake

Hanshin Electric Railway

Improving the Safety of Infrastructure

Emergency response drill

We have been working to improve operational safety byimplementing improvements at Koshien Station and Umeda Station
as well as track elevation projects to eliminate grade crossings in
the city of Kobe. Notably, Koshien Station, the gateway to Hanshin
Koshien Stadium, can become quite crowded during professional
baseball games. In order to improve the safety and convenience of
those using this station, we undertook a construction project tocreate a barrier-free station by widening the platform and installing
an elevator. Construction of these station facilities was completed

Technical Department study meeting concerning“calling out and monitoring”
for customer safety

in September 2017.
Inaddition

to

these

efforts,

we

implemented

tangible

improvements by installing fixed fencing at the end of the station
platform; in addition we provided caution markings on the floor at
the edge of the platform on a trial basis.

Hankyu Hanshin Holdings Annual Report 2018

56

The Basis of Enhanced Corporate Value

Social Contribution Initiatives

Social Contribution Policy

greenery and a railway that extends
towards

thefuture,reflecting

thedreams of children and communities

Hankyu Hanshin Dreams and Communitiesof the Future Projectrich in natural blessings.

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 to sustainablecommunity building with environment-friendly developments that provide
local residents with security, peace of mind, and cultural enrichment.
Themes of specific initiatives
1. Creating a safe, comfortable, and environmentally aware
local community
2. Contributing to the preservation of biodiversity and the

Basic Policy
We intend to promote the creation of towns and cities along ourline-side areas that people will truly want to live in.

natural environment
3. Promoting sustainable lifestyles
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■O ur links to the future: Environment-Friendly

waste reduction

Development and Human Capital Development

To realize“towns and cities that people will truly want to live in,”weare promoting actions in two priority areas:“environment-friendly
community development,” which enriches communities both

Human Capital Development

socially and culturally; and“human capital development,”which

We are creating opportunities for the healthy development ofshoulders the task of building communities for future generations.

ambitious children, upon whose shoulders the task of building the■ Hankyu Hanshin Dreams and Communities of the Future Projectcommunities of the future rests.

❶ Collaboration with Group companies
Certification and promotion system for the social
contribution initiatives of each Group company

Themes of specific initiatives
1. Enabling children to experience and learn about nature and ecology
2. Fostering mental enrichment in children through cultural and artistic
activities
3. Supporting the healthy development of children through sports❷ Collaboration with civil society
Dreams and Communitiesof the Future Fund etc.

❸ Collaboration with Group employees
Social Contribution Point System

4. Enabling children to gain a deepen understanding of society andtheir communities
5. Cultivating in children a sense of compassion and acknowledgementof diversity

Concept Behind Our Symbols
To demonstrate our commitment to the development of local
communities, our symbols depict a young girl with hearts or

6. Instilling in children the wisdom of their parents and grandparents
7. Supporting children with disabilities,
children orphaned by traffic accidents ordisasters,

childrenwelfare facilities

57

Hankyu Hanshin Holdings Annual Report 2018

insingle-parent

families, and children confined to social

Contributing to SDGs
Social Contribution Initiatives and SDGs
The sustainable development goals (SDGs) adopted by theUnited Nations in 2015 encompass 17 common goals intended
to address poverty, health, education, the environment, and avariety of other social issues. While the various governments of
the world are committed to working together to implement
solutions to these issues, this effort also calls for the active
involvement of private enterprises and individuals.
Through the Hankyu Hanshin Dreams and Communities of the
Future Project, our social contribution initiative, our Group is
promoting initiatives that help to resolve social issues identified
in the SDGs. We believe it is essential to contribute to local
development in the interests of happy and vibrant communities.

classes offered by the Hankyu Hanshin Dreams and Communities
Challenge Troop as well as an experiential learning program for

Addressing SDGs through Social Contribution
Initiatives

career education called the Dreams and Communities Exciting
Work Program. These address two SDGs,“1. No Poverty”andUnder the Hankyu Hanshin Dreams and Communities of the“4. Quality Education.”

Future Project, we are developing initiatives closely focused on

In addition, the Hankyu Hanshin Dreams and Communities of

helping to meet the SDGs.

the Future Project addresses“17. Partnerships to Achieve theOur 100% biodiesel fuel bus, for example, which is part of ourGoals,”which is one of the most important points in promoting

Urban Transportation Business, is reducing carbon dioxidesuch initiatives. It reflects the basis of all efforts by Groupemissions and utilizing resources efficiently in support of two ofcompanies and employees to collaborate with customers,

the 17 goals identified under the SDGs:“7. Affordable and Clean

citizens’groups, and others in our local communities.

Energy”and“13. Climate Action.”

Going forward, our Group will continue to accelerate efforts

Similarly, as part of our commitment to fair education for all,to achieve the SDGs.

our efforts directed toward elementary school students include

3

Main SDGs targeted by the initiatives of the Hankyu Hanshin Dreams
and Communities of the Future Project

The Basis of Enhanced Corporate Value

Basic policy and two priority areas of the Hankyu Hanshin Dreams and Communities Project
Creating Communities People Truly Want to Live in
Creating a community environment

Fostering the next generation

Partnerships■ Partnership with local communities■ Partnership with Group employees

・ Hankyu Hanshin Dreams and Communitiesof the Future Fund・ Social Contribution Point System■ Partnership with Group companies• 100% biodiesel fueled bus placed in service• Candle Night for One Million People in Osaka City
• Clean Hiking• Hankyu Hanshin Dreams and Communities
Challenge Troop• Accommodations and donations plan tosupport children in diﬃcult circumstances• In fiscal 2018, 92 initiatives were certified (compared with 83

Group Social Contribution Initiatives in Fiscal 2018
1. Partnership with Group companies 
Establishing a certification and promotion system for thesocial contribution initiatives of each Group company
We promote the initiatives of our Group companies throughpublic relations, sponsorships, and additional contributions.

in fiscal 2014, 89 in fiscal 2015, 91 in fiscal 2016, and 94 in
fiscal 2017).
• The Challenge Troop welcomed 2,628 elementary school
students, a record high.
• A total of 90 initiatives were certified at the beginning of fiscal
2019 (additional submissions were received during the term).

Hankyu Hanshin Holdings Annual Report 2018

58

The Basis of Enhanced Corporate Value

2.Partnership with citizens’groups 

3. Partnership with Group employees

Hankyu Hanshin Dreams and Communities of the Future Fund
(Grant Program to Citizens’Groups)

Social Contribution Point System
We award points to individual employees and retirees who

We subsidize citizens’groups in the Hankyu Hanshin service

engage in volunteer initiatives and promote such volunteer

area through donations raised by our employees and additional

opportunities and related information.

contributions from the company.

• Achievements awarded points• In fiscal 2018, 14 of the 86 institutions submitting applications

Participating employees: 2,253 employees at 71 companies

received a total of ¥9 million.

(for a year-on-year increase of 181• Initiatives providing not only financial support but also public

employees)

relations support were undertaken. We also held partnership

Points awarded: 15,281 points (January to December 2017)

events with other entities at stations, commercial facilities, and• Funds supporting organizations where employees are engaged

elsewhere.

as volunteers (Supporting a total of 43 organizations with ¥1

Participating employees: 1,352 employees at 69 companies (anincreaseof

41

employeesasmillion)of

December 31, 2017)
Cumulative total: ¥58.5 million to 111 groups

Winner of the Economy, Trade and Industry Minister’s Grand Prix at the Eighth
Career Education Awards
In January of this year, two initiatives under the Hankyu Hanshin Dreams and Communities of the Future Project—the
Hankyu Hanshin Dreams and Communities Challenge Troop for elementary school students; and the Dreams andCommunities Exciting Work Program providing elementary school students with class visits from businesspeople—wereawarded the Economy, Trade and Industry Minister’s Grand Prix at the Eighth Career Education Awards presented by the
Ministry of Economy, Trade and Industry.
The Career Education Awards were established to encourage and publicize the educational support efforts of companies
and economic organizations. The Ministry of Economy, Trade and Industry presents these awards for initiatives it views as
outstanding in each division. In addition, the Economy, Trade and Industry Minister’s Grand Prix is presented for the bestcomprehensive effort among all recipients.

Outline of Hankyu Hanshin Dreams andCommunities Challenge Troop

Outline of Hankyu Hanshin Dreams andCommunities Exciting Work ProgramThis experiential learning program provides elementary

Throughschool students with a variety of work experiences andCorporation

learning opportunities in the business world during theirlectures on the various kinds of careers available locallysummerGroup’
s businesses,

as well as the town development initiatives of Hankyu

facilities, and personnel all play a role in this project.

Corporation’s founder, Ichizo Kobayashi. As of the end

From its launch in fiscal 2011 to fiscal 2018, this initiativeof the preceding fiscal year, this program—implemented

welcomed more than 12,000 children to a total of 265

in fiscal 2017—provided about 6,000 children from 72

programs.

schools with an opportunity to learn about future

vacation

period.

The

thisprogram,visit

career opportunities.

59

Hankyu Hanshin Holdings Annual Report 2018

employees

elementary

schoolsofHankyutopresent

Environmental Initiatives

Environmental Preservation Activities

sustainable development goals (SDGs) adopted at the United
Nations Summit:“7. Affordable and Clean Energy”“11.
;
Sustainable
Cities and Communities”;“13. Climate Action”; and“15. Life on
Land.”

Our Basic Approach to ESG
As part of our efforts to address issues related to ESG (Environment,
Society,

Governance),

our

Group

has

formulated

a

Basic

Environmental Philosophy and Basic Environmental Policies in
addition to proactively implementing our own environmental
preservation initiatives. In the interests of preventing global
warming, we have promoted energy-efficiency programs throughout
our Group and have focused on reducing CO₂ emissions. In
addition to promoting resource conservation, we are developing
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 the following

Basic Environmental Philosophy
Mindful that global environmental preservation is a task facing
all mankind, the Hankyu Hanshin Holdings Group works for asustainable society through environmental activities aimed athanding down a sounder global and human environment to thenext generation.

Nose Electric Railway, and Hokushin Kyuko Railway.
For example, in cars equipped with regenerative braking
systems, the braking force produced when the brakes are■S ettsu-shi Station, a Carbon-Neutral Railway

generate power. A total of 30% to 50% of this electric power isactivated is applied to the motor in the form of rotational force totransmitted through the overhead wires as an additional source

In 2010, the Hankyu Kyoto Line opened Japan’s first railway
station designed to achieve zero CO₂ emissions. Settsu-shi

of power for use by other accelerating trains.
In

addition,

HankyuElectric

Railwayispromotingthe

Station incorporates a variety of environmental measures such as

introduction of aluminum railway cars, which are about 10%

photovoltaic panels and LED lighting. As result, CO₂ emissions

lighter than conventional steel cars. Because of this weight

have been reduced to about half the level emitted by areduction, aluminum cars require less electric power to drive

conventional

railway

them; likewise, the required braking effort is also reduced. We

station; the remaining

are committed to increasing the number of energy-efficient

CO₂ is offset by forest

railway cars in use at each of our companies.

conservation

The Basis of Enhanced Corporate Value

Station3

Preventing Global Warming and Promoting
Energy Efficiency

credits,so the practical effectis zero emissions.

Hankyu Settsu-shi Station■A doption of Additional Energy-Efficient RollingStock

As part of our efforts to prevent global warming, we are planning
to increase our use of energy-efficient rolling stock at Hankyu

Hanshin Electric Railway Series 5700 train

Corporation, Hanshin Electric Railway, Kita-Osaka Kyuko Railway,

Hankyu Hanshin Holdings Annual Report 201860

The Basis of Enhanced Corporate Value■ Introduction of Energy-efficient Equipment

In recognition of their excellent environmental performance,
Osaka Umeda Twin Towers South, Hankyu Nishinomiya Gardens,
and HEP Five have all been awarded the DBJ Green Building
Certification from the Development Bank of Japan Inc.
In addition, we are introducing LED lighting at our railway
stations and at other facilities of our Group companies.

Efforts to Preserve the Natural Environment■P reserving Community Forests

Some of our employees volunteered to undertake forest
maintenance work in a community forest known as“Japan’s Top
Satoyama”that is located along the Nose Electric Railway in the
Kurokawa district. They carried out this work from January to
March 2011 in collaboration with the Kawanishi Satoyama Club,■R
 aising 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
Festival to participate in uchimizu—the practice of sprinkling thea local forest volunteer organization.
We are also engaged in preserving this forest by promoting“satoyama hiking”and marketing the“Nose Myoken–Satoyama
Gurutto Tour Pass”in addition to other efforts to publicize thiscommunity forest.

streets 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.

Maintaining our
precious forest

Uchimizu event in
Umeda

■P
 romoting Greening of Our Offices andFacilities

Some of the offices in our Group companies have chosen to
adopt“green walls”and“green roofs”on their buildings. As forwall greening, Hankyu Settsu-shi Station and the Nishiyamatennozan Station as well as the commercial facilities of NU
Chayamachi Plus and Hanshin Koshien Stadium have implemented
thisinnovation.

Meanwhile,

NU

Chayamachi

andHankyuNishinomiya Gardens are two of our commercial facilities that
Candle Night for One
Million People

have chosen to implement rooftop greening projects.
In 2010, the Organization for Landscape and Urban GreenInfrastructure selected Hankyu Nishinomiya Gardens as one of
the“100 Green Companies Contributing to the Conservation of■ Installation of Photovoltaic Panels

Solar power generation facilities have been installed in each of

Biodiversity.”Moreover, Settsu-shi Station received the 4th Osaka
Prefectural Governor’s Award for Excellence in Greening in 2011.

our Group facilities including Hankyu Settsu-shi Station, Hanshin
Oishi Station, and the Silver Umbrella of Hanshin Koshien Stadium.
The photovoltaic panels installed in Hanshin Koshien Stadium
generate about 221,000 kWh annually (as of 2010), which isequivalent to the electric energy consumed in one year toilluminate night games played in the same stadium.

Hankyu Nishinomiya Gardens

Hanshin Koshien
Stadium

61

Hankyu Hanshin Holdings Annual Report 2018

Health Management andInitiatives to Promote Women

Supporting HealthManagement

management is one of our priorities.
In April 2018, we adopted the Hankyu Hanshin Holdings Group’s
Declaration on Employee Health Management, a policy that

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

clarifies the need for employees and their families to expand theirhealth awareness in the interests of good health management. In
this way, we are working to raise the health awareness of eachindividual as we take steps to create worker-friendly workplaces.
Having implemented the Hankyu Hanshin Wellness Challenge as

Our Group holds“respect for others”as one of its most important

our way forward, we intend to actively promote the health of eachvalues and believes that the health of employees and their families

individual as we strive to create work environments that enable allis the cornerstone of our company’s future. For this reason, healthto live and work in good health.

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 ourcustomers 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.

3

The Hankyu Hanshin Holdings Group declares its active support of the wellbeing of each individual. Under the Hankyu

The Basis of Enhanced Corporate Value

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• Improving individual awareness ofgood health• Improving exercise level, eating habits,
and other lifestyle issues• Encouraging employees and theirfamily members to undergo thoroughperiodic medical checkups❷ Mental Health• Provision of stress checks• Provision of mental health education• Prevention of mental health disorders• Improving the system of mental health leave and work
resumption• Prevention of lifestyle-related diseases andprovision of specific health guidance• Provision of thorough medical examinations for
those in need and continuation of treatment• Prevention of infectious diseases• Early cancer detection• Promotion of smoking cessation❸ Workplace Health• Promoting work-life balance by optimizing
work hours• Creating a workplace with a sense of vitality
and fellowship• Implementing measure against second-handsmoke inhalation

Hankyu Hanshin Holdings Annual Report 2018

62

The Basis of Enhanced Corporate Value

Extending a Healthy Lifespan
Our Group wishes a long, healthy, and prosperous life to all who live in our line-side areas; toward this end, we aim torealize our goal of line-side areas where residents can enjoy extended and healthy lives. As one of our initiatives, wecreated the Hankyu Hanshin Line-Side Areas Wellness Plus website to support the health of all living in Hankyu Hanshinline-side areas. Provided in collaboration with line-side local governments, medical institutions, universities, and private
enterprises, this website provides information of use to those interested in maintaining their health.
As one example, Hanshin Electric Railway, in collaboration with Hyogo Medical University Hospital located near
Mukogawa Station, presents the Hanshin Line-side Areas Health Lecture six times annually. At each presentation, a doctorfrom the hospital is invited to deliver a lecture on health and medical care, the latest available treatments, or a related
subject.

Promoting Female
Participation in the
Workforce

4. Details of initiatives
All initiatives were implemented as of April 2018.
◦ Proactive hiring of women• Enhancement of information on each corporate website
introducing systems related to childcare support

Development of the Action Plan for Women’sActive Participation in the Workforce
In April this year, in keeping with The Act on Promotion of Women’s• When recruiting recent graduates (through websites andother media), enhancement of the introductory information
regarding active roles for female workers◦ Increasing the percentage of females in managerial positions• Expansion of measures to support a balance between work

Active Participation and Advancement in the Workplace, ourand childcare 

Group formulated the Action Plan for Women’s Active Participation(Publishing of pamphlets to increase understanding andin the Workforce for implementation by Hankyu Hanshin Holdings,

support among supervisory personnel and publicizing ofHankyu Corporation, and Hanshin Electric Railway.

company systems and procedures, etc.)

Through the implementation of this action plan, we will steadily• Support to facilitate the return to work of those on childcare

create an organization in which both men and women can play anleave

active role in the interests of providing higher quality services to(Regular provision of information to workers on leave,

provide attractive line-side areas and preferred residential areas.

implementation of work resumption support seminars, etc.)

Action Plan for Women’s Active Participationin the Workforce(Hankyu Hanshin Holdings, Hankyu Corporation, Hanshin Electric Railway)

1. Plan Period

Work Resumption
Support Seminar

April 1, 2018–March 31, 2023
2. Issues
The percentage of female workers in managerial positions is low.
◦ Publication of information on the current status of female
participation• Percentage of general career-track positions filled by female
employees: 41.0% (Hired as of fiscal 2019)• Percentage

ofmanagerial

positionsfilledbyfemaleemployees: 4.4% (As of April 1, 2018)
3. Goals
We will actively increase female employment by recruiting
females for a minimum of 30% of general career-track positions.
We will steadily increase the percentage of female workers inmanagerial positions.
(Aiming for more than 5% by fiscal 2023.)

63

Hankyu Hanshin Holdings Annual Report 2018

Financial Section and Corporate Data
Page

Consolidated Six-Year Summary

65

Consolidated Financial Review

66

Business Risks

70

Consolidated Balance Sheets

71

Consolidated Statements of Income / Consolidated
Statements of Comprehensive Income

73

Consolidated Statements of Changes in Net Assets

74

Consolidated Statements of Cash Flows76

Notes to the Consolidated Financial Statements

77

List of Major Domestic Rental and Sales Properties

100

List of Overseas Sales Properties

101

Major Group Companies

102

Investor Information

103

Financial Section and Corporate Data

Hankyu Hanshin Holdings Annual Report 201864

Financial Section and Corporate Data

Consolidated Six-Year Summary
2013

2014

2015

20166

2017

2018

2018
$ 7,172,189

Result of Operations (Millions of yen and thousands of U.S. dollars) :1

Revenues from operations¥ 682,439¥ 679,157¥ 685,906¥ 746,792¥ 736,763¥ 760,252

Operating income

87,921

91,82894,026110,293

104,058

105,211

992,557

EBITDA2

145,100

149,200

150,100

166,500

159,300

160,800

1,516,981

Ordinary income

74,914

81,191

85,590104,479

100,607

103,774

979,000

Income before income taxes

62,192

83,542

77,62096,087

100,805

101,410956,698

Net income attributable to owners of the parent

39,702

46,352

54,201

69,971

71,302

66,361

626,047

Comprehensive income

54,081

55,941

71,034

63,842

79,28873,991

698,028

Capital expenditure

59,51280,722

68,11566,63986,21286,404815,132

Depreciation and amortisation

54,54054,474

53,14353,70152,80053,276502,604

Cash Flows (Millions of yen and thousands of U.S. dollars):
Cash flows from operating activities¥ 127,655¥ 146,991¥ 131,881¥ 124,838¥ 115,633¥ 135,821$ 1,281,330

Cash flows from investing activities(58,923)(45,517)(52,529)(78,843)(84,845)(88,351)(833,500)

Cash flows from financing activities(69,195)(105,079)(81,746)(47,278)(30,595)(43,242)(407,943)

817(1,840)(1,125)(1,978)

(480)

4,588

43,28325,581

24,49723,49722,363

22,53027,501

259,443

Increase (decrease) in cash andcash equivalents
Cash and cash equivalents at end of year

Financial Position (Millions of yen and thousands of U.S. dollars):
Total assets¥2,281,007¥2,286,928¥2,279,638¥2,282,180¥2,349,831¥2,410,105$22,736,840

573,154

617,598

679,482

724,237

804,659

866,5128,174,642

1,126,633

1,032,307

955,828

916,570

899,523

866,758

8,176,962¥¥Total net assets
Interest-bearing debt
Per Share Data (Yen and U.S. dollars):
Basic

42.98

¥ 277.88¥ 285.11

31.47

36.75

42.95

277.67284.86267.81

2.53

Net assets

443.63477.69525.562,815.96

3,150.67

3,391.35

31.99

Dividend

5.00

6.00

6.00

35.00

35.00

40.00

0.38

Operating income margin (%)

12.9

13.5

13.7

14.8

14.1

13.8

—

ROA (%)3

3.3

3.6

3.7

4.6

4.3

4.4

—

ROE (%)4

7.4

8.0

8.6

10.3

9.4

8.2

—

Interest-bearing debt/EBITDA (Times)

7.8

6.9

6.4

5.5

5.6

5.4

—

Equity ratio (%)

24.5

26.3

29.1

31.0

33.5

34.8

—

Debt/equity (D/E) ratio (Times)5

2.0

1.7

1.4

1.3

1.1

1.0

—

1,271,406

1,271,406

1,271,406

254,281254,281254,281—

20,751

20,913

21,037

21,607

21,86022,152—

Net income attributable toowners of the parent

31.48

Diluted

36.76

¥

¥

267.91$

2.53

Ratios:Others:Number of outstanding shares (Thousands)
Number of employees

1.	The U.S. dollar amounts have been translated, for convenience only, at ¥106 = US$1, the prevailing exchange rate on the Tokyo Foreign Exchange Market as of March 31,
2018.

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.	Since fiscal 2018, Hankyu Corporation and Hanshin Electric Railway Co., Ltd., our subsidiary companies, have operated the Board Incentive Plan Trust, and the shares of theCompany 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.

65

Hankyu Hanshin Holdings Annual Report 2018

Consolidated Financial Review
increase of ¥3,167 million (3.1%) over the previous consolidated

Analysis of Operating Results for Fiscal 2018

fiscal year, because of an increase in income from investments(Year ended March 31, 2018)accounted for with the equity method, a decrease in payment ofinterest as a result of a reduction of consolidated interest-bearing

The revenues from operations were ¥760,252 million, an increasedebts and other factors as well as the abovementioned increase inof ¥23,489 million (3.2%) over the previous consolidated fiscal

income.

year, because of the strong performance in the Sports Business,

Extraordinary income/loss worsened, however, by ¥2,562

Stage Business and Communication and Media Business in the

million. The amount received as user’s share of construction

Entertainment and Communications Business, an increase in thecosts etc. as extraordinary income and the loss from advanced

number of customers in the Travel Business, especially thosedepreciation of fixed assets etc. as an extraordinary loss weretraveling to Europe, the prosperous International Transportation

recorded.
Net income vesting in the shareholders of the Parent

Business mainly with air transportation and so on.
As a result, operating income was ¥105,211 million, an

Company was ¥66,361 million, a decrease of ¥4,941 million

increase of ¥1,153 million (1.1%) over the previous consolidated(6.9%) over the previous consolidated fiscal year, because of the

fiscal year.

worsened extraordinary income/loss etc. in addition to an increasein tax expenses.

Ordinary income also increased to ¥103,774 million, an

Analysis of operating income(¥ million)

104,058

FY2017

Increase in revenues from operations＋23,489

Increase in operating expenses and costs of sales*－22,147

Decrease in personnel expenses＋316

Increase in expenses－682

Decrease in taxes＋24

Decrease in depreciation and amortisation＋48

Decrease in amortisation of goodwill＋103

105,211

FY2018YoY diﬀerence ＋1,153* Included in cost of revenues from operations, retirement beneﬁt expenses increased +29.

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

Real EstateEntertainment andCommunications

TravelInternational
Transportation

HotelsOther

Adjustment

Consolidated

Revenues fromoperations
FY2018

235,967

222,586

121,078

34,022

83,707

67,24842,811(47,169)

FY2017

237,136

215,709

115,193

29,93871,67065,64042,646(41,172)

736,763−1,169+6,876+5,884+4,083+12,037+1,608+164−5,997+23,489

FY201841,586

40,95417,750

2,055

2,777

2,216

1,929

(4,058)105,211

FY201742,237

41,97015,655

637

1,587

2,795

1,340

(2,167)104,058

YoY difference−651−1,016+2,094+1,418+1,189−579+588−1,890+1,153

Reference page

P. 31

P. 33

P. 35

P. 37

P. 39

P. 41

—

—

—

YoY difference

760,252

Operating income

Hankyu Hanshin Holdings Annual Report 201866

Financial Section and Corporate Data

Review of Financial Position¥1,578 million over the end of the previous consolidated fiscal
year, because of a decrease in interest-bearing debts etc. despite
an increase in the amount in arrears etc.
Total net assets were ¥866,512 million, an increase of

1. Assets, Liabilities, and Net Assets¥61,852 million over the end of the previous consolidated fiscal

Total assets at the end of the consolidated fiscal year underreview were ¥2,410,105 million, an increase of ¥60,273 million
over the end of the previous consolidated fiscal year, because ofyear, because of an increase in retained earnings etc.
As a result, the equity ratio was 34.8%, and the ROE was
8.2%.

an increase in investment securities etc.
Total liabilities were ¥1,543,592 million, a decrease of

AssetsLiabilities and net assets(¥ billion)(¥ billion)
Total assets¥2,410.1 billion

Total assets¥2,349.8 billion
307.9
37.3

Noncurrent assets+33.8
Main cause:
Increase ininvestment
securities

1734.7270.0
FY2017
Current assets
Intangible assets

67

328.9
35.2

1749.5Current assets+26.5
Main cause:
Increase in tradereceivables

Property and equipment
Investments and other assets

Hankyu Hanshin Holdings Annual Report 2018

Total liabilities
and net assets¥2,349.8 billion

296.5
FY2018804.7

1,125.9

419.3

Total liabilities
and net assets¥2,410.1 billion
Net assets+61.9
Main cause:
Increase inretained earnings
Long-term liabilities+10.8
Main cause:
Increase inlong-term debt

1,136.7

Current liabilities‒12.4
Main cause:
Decrease in
short-term borrowings

406.9

FY2017
Current liabilities

866.5

Long-term liabilities

FY2018
Net 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 ¥88,351 million, an

fiscal year were ¥27,501 million, an increase of ¥4,971 million

increase of 4.1% year-on-year, because of purchases of noncurrent

over the end of the previous consolidated fiscal year.

assets of ¥102,863 million, purchases of investment securitiesof ¥7,807 million, receipt of contributions for construction of(1) Cash Flows from Operating Activities¥21,222 million, etc.

Net cash provided in operating activities was ¥135,821 million,
an increase of 17.5% year-on-year, because of income before(3) Cash Flows from Financing Activities

income taxes of ¥101,410 million, depreciation and amortisation

Net cash used in financing activities was ¥43,242 million, anof ¥53,276 million, paid corporation and other taxes of ¥26,005

increase of 41.3% year-on-year, because of a net decrease inmillion, etc.

borrowings of ¥21,107 million, redemption of bonds of ¥10,000
million, purchases of treasury stock of ¥10,689 million, dividends
paid of ¥9,360 million, etc.

Cash ﬂows(¥ billion)

Cash ﬂows frominvesting activities‒3.5

Cash ﬂows fromoperating activities
＋20.2

+7.2

+22.4 －10.1

Cash ﬂows fromﬁnancing activities
‒12.6
－4.3
－33.4

+3.7

27.5

Year ended March 31, 2018

+0.6

+26.6

Other

22.5

+0.5

－3.3

－19.9

+20.0

－5.4
－0.5

Dividends paid

Financial Section and Corporate Dataand equipment such as the Umeda 1-1 Project and the building

Purchases of treasury stock

fiscal year, because, despite making investments in facilities

Redemption of bondsof ¥32,764 million over the end of the previous consolidated

Proceeds from new bonds issued

the consolidated fiscal year was ¥866,758 million, a decrease

Net decrease in short-term borrowings

The outstanding balance of interest-bearing debt at the end of

Other

Receipt of contributions for construction

Purchases of investment securities

Purchases of noncurrent assets

Other

Income taxes paid

Depreciation and amortisation

Income before income taxes

Year ended March 31, 2017

3. Fund Procurement

The ratio of interest-bearing debt/EBITDA (operating income+ depreciation expenses + amortisation of goodwill), which is thebenchmark the Company uses for assessing the soundness of its
financial position, stood at 5.4 times at the end of the fiscal year
compared with 5.6 times at the end of the previous fiscal year.

of new rolling stock, the amount of cash flows from operating
activities etc. exceeded the amount of such investments.

Hankyu Hanshin Holdings Annual Report 201868

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 ¥86,404 million, recording an increase of ¥192 million(0.2%) over the previous consolidated fiscal year.

The following is a breakdown for each business segment.

(Millions of yen)(%)

FY2018YoY

Urban Transportation

35,001

12.3

Real Estate

39,928−7.5

Entertainment and Communications

7,559

2.3

538

2.0

TravelInternational Transportation

732

90.6

2,298

−27.8

Other

665

7.6

Total

86,725

0.4

(321)

−65.5

86,4040.2

HotelsAdjustment
Consolidated

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 implemented the Umeda 1-1 Project

HotelsIn the Hotels Business, Hankyu Hanshin Hotels refurbished theguest rooms of its hotels.

etc.

Entertainment and Communications

The Entertainment and Communications Business renewed thetransmission lines of main lines.

TravelIn the Travel Business, Hankyu Travel International stepped-up
Internet sales and invested in IT systems for in-house operations.

69

Hankyu Hanshin Holdings Annual Report 2018

Depreciation and amortisation in the consolidated fiscal
year under review was ¥53,276 million, recording an increase of¥476 million (0.9%) 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, 2018.

Legal Risk

In September 2007, Kobe Electric Railway (an equity-method

In accordance with the stipulations of Article 3 of the Railway

affiliate) temporarily suspended support for the rehabilitation ofBusiness Law, the Group must obtain separate permissions from the

Hokushin Kyuko Railway. To uphold the rehabilitation project,

Ministry of Land, Infrastructure, Transport and Tourism (MLIT) for

additional financing was extended to Hokushin Kyuko Railway byeach category of railway operations on each route that it intends to

Hankyu Corporation.

operate. Moreover, under Article 16 of the Law, a railway operator

We will continue to provide assistance to ensure that Hokushinmust obtain the Ministry’s approval for the passenger fares it intends

Kyuko Railway can conduct smooth and efficient operations as a tierto set and on each occasion when it wishes to change the fares.

2 railway operator. However, the business performance and financial

Consequently, there is a certain risk that the Group’s railway opera-

position of the Group could be affected by changes in this plan.

tions may be constrained in some way by the MLIT’s administrationof these regulations.

Interest-Bearing Debt

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

The balance of interest-bearing debt held by the Group as of theassets, property and equipment and intangible assets, investment

end of March 2018, on a consolidated basis, was ¥866,758 million.

securities, and other assets, the recording of impairment losses or

As a result of the acquisition of shares in Hanshin Electric Railway

valuation losses would likely have a negative impact on the earnings

through a successful public tender offer (takeover bid) on June

performance and financial position of the Hankyu Hanshin Holdings

27, 2006, Hanshin Electric Railway has become a consolidated

Group.

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,

Declining Birth Rate

In the Group’s mainstay Kyoto-Osaka-Kobe area, demographic

so the Group is not expected to have any significant difficulty inchanges accompanying the declining birth rate are expected to

repaying its debts.

lower demand for railway, bus, and taxi services and other types of

The Group will take measures to diversify its fund procurement

passenger transportation and to lower demand in other businessmethods to deal with an increase in interest-bearing debt resulting

areas. In addition, securing personnel is likely to become difficult asfrom the integration, and will use all possible means to minimise thean imbalance between supply and demand develops in the labour

negative impact of interest rate movements. But in the unlikely event

market. Such contingencies could affect the business performancethat interest rates rise suddenly and in excess of our projec-tions,and financial position of the Group.

this could exert an adverse effect on the business performance andfinancial position of the Group.

Affiliated Companies

Natural Disasters

Operating as it does across an extremely wide range of businesses in its
Urban Transportation, Real Estate, Entertainment and Communications,
Travel, International Transportation, and Hotels segments, the Group

Kyuko Railway Line (run by consolidated subsidiary Hokushin Kyuko

has a correspondingly large assortment of facilities necessary for the

Railway), Hankyu Corporation (a consolidated subsidiary) has agreed

conduct of business, such as railway installations and buildings andto a plan transferring railway facilities held by Hokushin Kyuko

retail outlets for rent. In the event of earthquakes or other major

Railway to Kobe Rapid Transit Railway (a consolidated subsidiary)

disasters, the business performance and financial position of theand retaining railway business as a tier 2 railway operator.

Group could be adversely affected by damage to these facilities.

Financial Section and Corporate Data

In order to ensure greater convenience for users of the Hokushin

To facilitate the plan, in fiscal 2003 Hankyu Corporation
provided Kobe Rapid Transit Railway with financing for part of thefunds necessary to purchase the facilities.

Hankyu Hanshin Holdings Annual Report 201870

Financial Section and Corporate Data

Consolidated Balance Sheets
As of March 31, 2017 and 2018

Millions of yen

2017

Thousands of U.S. dollars

2018

2018

AssetsCurrent assets:
Cash and deposits¥24,255¥

28,836$

272,038

Trade receivables

83,492

92,619873,764

Land and buildings for sale

107,234

116,177

1,096,009

Finished products and merchandise

2,368

2,609

24,613Work in progress

3,724

3,364

31,736

Materials and supplies

4,524

4,644

43,811

Deferred tax assets

7,044

6,038

56,962

Other

37,60642,435400,330

(260)

(239)

(2,255)269,992

296,487

2,797,047

563,652

565,783

5,337,575

Allowance for doubtful receivables
Total current assets

Noncurrent assets:
Property and equipment:
Buildings and structures–net (Note 6.3)
Machinery, equipment and vehicles–net (Note 6.3)

57,52564,081

604,538

Land (Notes 6.3 and 6.5)

935,126

940,894

8,876,358

Construction in progress

158,847

160,9311,518,217

Other–net (Note 6.3)

19,552

17,840168,302

1,734,702

1,749,531

16,505,009

Total property and equipment (Notes 6.1 and 6.2)
Intangible assets:
Goodwill

20,822

18,457

174,123

Other (Notes 6.2 and 6.3)

16,461

16,756

158,075

Total intangible assets

37,28435,214332,208

267,979

285,953

2,697,670

Investments and other assets:
Investment securities (Notes 6.3 and 6.4)
Deferred tax assets

4,146

4,179

39,425Net defined benefit asset

7,194

10,061

94,915

Other (Note 6.3)

28,81028,894

272,585

(279)

(217)

(2,047)

Allowance for doubtful receivables
Total investments and other assets
Total noncurrent assets
Total assets

71

Hankyu Hanshin Holdings Annual Report 2018

307,852

328,871

3,102,557

2,079,839

2,113,617

19,939,783

2,349,831

2,410,105

22,736,840

Millions of yen

2017

Thousands of U.S. dollars

2018

2018

Liabilities:
Current liabilities:
Trade payables¥

40,086¥

46,891$

442,368

Accrued expenses

17,93821,032

198,415

Short-term borrowings (Note 6.3)

178,408

142,091

1,340,481

Current portion of bonds

10,000——

Lease obligations

1,795

1,493

14,085

Income taxes payable

9,704

11,811

111,425

Provision for bonuses

4,620

4,405

41,557

Other (Note 6.3)

156,737

179,185

1,690,425

Total current liabilities

419,291

406,911

3,838,783

Long-term debt (Note 6.3)

610,523

625,340

5,899,434

Bonds

92,00092,000867,925

Lease obligations

6,795

5,832

55,019Long-term liabilities:

179,530

184,552

1,741,057

Deferred tax liabilities related to land revaluation (Note 6.5)

5,152

5,152

48,604

Net defined benefit liability

61,45961,654

581,642

Deferred tax liabilities

Long-term deferred contribution for construction

60,84652,586

496,094

Other

109,571

109,561

1,033,594

1,125,879

1,136,681

10,723,406

1,545,171

1,543,592

14,562,189

Common stock

99,474

99,474

938,434

Capital surplus

146,053

146,053

1,377,858

Retained earnings

527,884

583,4825,504,547

Less treasury stock, at cost

(13,537)(24,247)(228,745)

Total shareholders’equity

759,875

804,764

7,592,113

22,54527,146

256,094

472

(494)

(4,660)

Revaluation reserve for land (Note 6.5)

5,546

5,575

52,594Foreign currency translation adjustments

100

607

5,726

Total long-term liabilities
Total liabilities
Net assets:
Shareholders’equity:

Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges(1,591)

125

1,179

Total accumulated other comprehensive income

27,07432,961

310,953496——

Non-controlling interests (Note 6.5)

17,21328,786

271,566

Total net assets

804,659

866,5128,174,642

2,349,831

2,410,105

22,736,840

Subscription rights to shares

Total liabilities and net assets

Hankyu Hanshin Holdings Annual Report 2018

Financial Section and Corporate Data

Cumulative adjustments related to retirement benefit plans72

Financial Section and Corporate Data

Consolidated Statements of Income
Years ended March 31, 2017 and 2018

Millions of yen

2017

Revenues from operations¥

Thousands of U.S. dollars

2018736,763¥

2018

760,252$ 7,172,189

625,4075,900,066

655,041

6,179,632

Costs of revenues from operations:Operating expenses and cost of sales of transportation

603,260

Selling, general and administrative expenses (Note 7.1)

29,443

Total costs of revenues from operations (Note 7.2)

632,704

Operating income

29,633

279,557

105,211104,058

992,557

Non-operating income:Interest income

115

Dividend income

976

119

1,123

1,212

11,4349,232

Equity in income of affiliates

8,630

Miscellaneous income

2,066

Total non-operating income

11,78912,791

Interest expenses

11,1661,450

10,059Loss on retirement of noncurrent assets

87,0942,227

21,009120,670

Non-operating expenses:

94,896

1,825

17,217

100,607

14,228103,774

134,226

Gain on contributions for construction

2,114
2,140

32,483

306,443

Other
Total extraordinary income

4,255

35,168331,774

Loss on reduction of noncurrent assets

2,180
1,877

33,702

317,943

Other
Total extraordinary loss

4,057

354,085

Income before income taxes

100,805

37,533

Income taxes – current

26,081

28,389267,82133,362

314,736

Miscellaneous expenses

2,623

Total non-operating expenses

15,240Ordinary income

2,342

22,094

979,000

Extraordinary income:

2,685

25,330Extraordinary loss:

Income taxes – deferred

1,850

Total income taxes

27,931

Net income

72,873

Net income attributable to non-controlling interests

1,570

Net income attributable to owners of the parent

71,302

3,831

36,142

101,410956,698

4,972

46,906

68,047

641,953

1,685

15,896

66,361

626,047

Consolidated Statements of Comprehensive Income
Years ended March 31, 2017 and 2018

Millions of yen

2017

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)

¥ 72,873
3,213
1,390
—
(914)

¥

2018

68,047
1,766

(984)
5

519

$

641,953
16,660(9,283)
47

4,896

901

1,625

15,330

1,824

3,009

28,387

6,414

5,944

56,075Comprehensive income

79,28873,991

698,028

Owners of the parent

77,73772,225681,368

Comprehensive income attributable to:Non-controlling interests

73

Thousands of U.S. dollars

2018

Hankyu Hanshin Holdings Annual Report 2018

1,551

1,766

16,660Consolidated Statements of Changes in Net Assets
Years ended March 31, 2017 and 2018

Millions of yen
Shareholders’equity
Total
shareholders’equityCommonstock

CapitalsurplusRetainedearnings

Less treasury
stock, at cost

Balance as of March 31, 2016
Cumulative effect of changes in accounting policies
Balance at beginning of the current fiscal year
reflecting changes in accounting policies
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¥145,974¥449,535
15,281¥(8,289)¥686,695
15,281

99,474145,974

464,817(8,289)701,976(5,271)53(8,803)71,3020(5,271)
44—

79

63,067(5,247)57,898

Balance as of March 31, 2017
Cumulative effect of changes in accounting policies
Balance at beginning of the current fiscal year
reflecting changes in accounting policies
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

99,474

146,053

527,884(13,537)

759,875—

99,474

146,053

527,884(13,537)

759,875(10,689)129(9,360)66,361(24)(10,689)
119(8,803)71,302
0
(9)
79

79
577

577
—
(30)

(30)
—

(9,360)66,361
(24)
(10)

－
165
(1,534)—
99,474—
146,053

55,598583,482

165(1,534)
(2)

(2)

(146)

(146)

(10,709)(24,247)

44,888804,764
Millions of yen

Accumulated other comprehensive income
Valuationdifference on Deferred gains oravailable-for-sale losses on hedges
securities

Cumulative
Foreign currency
adjustments relatedtranslation
to retirement
adjustments
benefit plans

Total
accumulated
othercomprehensive
incomeSubscription
rights to shares

Non-controllinginterests

Total net assets¥17,684¥(896)¥5,598¥1,072¥(2,818)¥20,639—¥424¥16,478¥724,237
15,281

17,684

(896)

5,598

1,072

(2,818)20,639424

16,478739,519(8,803)71,3020(5,271)
44
79
577
—
(30)
—

4,861
4,861
22,545

1,369
1,369
472

(52)
(52)
5,546

(971)
(971)
100

1,227
1,227
(1,591)

6,434
6,434
27,074
—

72
72
496

735
735
17,2137,241
65,140804,659—

22,545

472

5,546

100

(1,591)

27,074496

17,213804,659

Financial Section and Corporate Data

Balance as of March 31, 2016
Cumulative effect of changes in accounting policies
Balance at beginning of the current fiscal year
reflecting changes in accounting policies
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, 2017
Cumulative effect of changes in accounting policies
Balance at beginning of the current fiscal year
reflecting changes in accounting policies
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

Revaluation
reserve for land

(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

16,96361,852866,512

Hankyu Hanshin Holdings Annual Report 201874

Financial Section and Corporate Data
Consolidated Statements of Changes in Net Assets

Thousands of U.S. dollars
Shareholders’equity

Balance as of March 31, 2017

Commonstock

CapitalsurplusRetainedearnings

Less treasury
stock, at cost

Total
shareholders’equity$938,434$1,377,858$4,980,038$(127,708)$7,168,632

938,434

1,377,858

4,980,038(127,708)

7,168,632

Cumulative effect of changes in accounting policies

Balance at beginning of the current fiscal year
reflecting changes in accounting policies
Changes of items during the period:
Dividends from surplus(88,302)(88,302)

Net income attributable to owners of the parent

626,047

626,047

Reversal of revaluation reserve for land

(226)

Purchase of treasury stock
Disposal of treasury stock(94)

Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders(226)(100,840)(100,840)

1,217

1,123
—

Change in scope of consolidation

1,557

Increase or decrease by corporate division

1,557(14,472)

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(14,472)
(19)

(19)

(1,377)(1,377)

Net changes of items other than shareholders’equity
Total changes of items during the period
Balance as of March 31, 2018—―524,509(101,028)

423,472

938,434

1,377,858

5,504,547(228,745)

7,592,113

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, 2017

$212,689$4,453

Revaluation
reserve for land

$52,321

Cumulative
Foreign currency
adjustments relatedtranslation
to retirement
adjustments
benefit plans$943$(15,009)

Cumulative effect of changes in accounting policies

Balance at beginning of the current fiscal year
reflecting changes in accounting policies

Total
accumulated
othercomprehensive
income$255,415

Subscription
rights to shares

Non-controllinginterests

Total net assets$4,679$162,387$7,591,123

4,679

162,387

7,591,123—
212,689

4,453

52,321

943(15,009)

255,415—

Changes of items during the period:
Dividends from surplus(88,302)

Net income attributable to owners of the parent

626,047

Reversal of revaluation reserve for land

(226)

Purchase of treasury stock(100,840)

Disposal of treasury stock

1,123

Change in scope of consolidation

1,557

Change in treasury stock of parent arising fromtransactions with non-controlling interest shareholders—(14,472)

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

43,406(9,113)

274

4,783

16,18955,538(4,679)109,170

160,028

Total changes of items during the period

43,406(9,113)

274

4,783

16,18955,538(4,679)109,170

583,509

Balance as of March 31, 2018

256,094(4,660)52,594

5,726

1,179

310,953—

271,566

8,174,642

Net changes of items other than shareholders’equity

75

(19)
(1,377)

Hankyu Hanshin Holdings Annual Report 2018

Consolidated Statements of Cash Flows
Years ended March 31, 2017 and 2018

Millions of yen

2017

Thousands of U.S. dollars

2018

2018

Cash flows from operating activities:
Income before income taxes¥

100,805¥

101,410$

956,698

Depreciation and amortisation

52,80053,276502,604

Amortisation of goodwill

2,426

2,323

21,915Equity in (income) losses of affiliates(8,630)(9,232)(87,094)

(179)

(323)

(3,047)

Increase (decrease) in net defined benefit liability
Increase (decrease) in allowance for doubtful receivables

20

(52)

(491)

Interest and dividend income(1,092)(1,331)(12,557)

Interest expenses

11,166

10,05994,896

Loss on reduction of noncurrent assets

2,180

33,702

317,943

Loss on retirement of noncurrent assets

1,450

1,825

17,217

Gain on contributions for construction(2,114)(32,483)(306,443)

Decrease (increase) in trade receivables(10,595)(8,806)(83,075)

Decrease (increase) in inventories(2,506)(9,254)(87,302)

Increase (decrease) in trade payables

3,083

6,525

61,557

Other(2,393)

20,186

190,434

Subtotal

146,420

167,824

1,583,245

3,208

4,155

39,198Interest and dividends received
Interest paid

(11,282)(10,154)(95,792)

Income taxes (paid) refunded(22,714)(26,005)(245,330)

Net cash provided by operating activities

115,633

135,821

1,281,330(92,767)(102,863)(970,406)

2,186

2,010

18,962

Cash flows from investing activities:
Purchases of noncurrent assets
Proceeds from sales of noncurrent assets
Purchases of investment securities(11,527)(7,807)(73,651)

Receipt of contributions for construction

13,973

21,222200,208

Other

3,289

(914)

(8,623)(84,845)(88,351)(833,500)

Net cash used in investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term borrowings(546)(33,954)(320,321)

Proceeds from long-term debt

65,19056,140529,623(408,425)(68,576)(43,293)

19,858——

Redemption of bonds(30,000)(10,000)(94,340)

Purchases of treasury stock(5,271)(10,689)(100,840)

Dividends paid

(8,803)(9,360)(88,302)

(406)

(363)

(3,425)

Dividends paid to non-controlling shareholders ofconsolidated subsidiaries
Proceeds from share issuance to non-controlling shareholders—

10,11595,425Other(2,038)(1,836)(17,321)

Net cash used in financing activities(407,943)(30,595)(43,242)

Effect of exchange rate changes on cash and cash equivalents

(673)

360

3,396

Increase (decrease) in cash and cash equivalents

(480)

4,588

43,28322,363

22,530212,547

648

383

3,613

22,53027,501

259,443

Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents from newly
consolidated subsidiary
Cash and cash equivalents at end of year

Hankyu Hanshin Holdings Annual Report 2018

Financial Section and Corporate Data

Repayment of long-term debt
Proceeds from new bonds issued

76

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 ofand financial statements

consolidated financial statements and other reports

The Company’s consolidated financial statements were prepared in

The Company makes special efforts to ensure the appropriateness ofaccordance with the “Regulations Concerning Terminology, Forms, andits consolidated financial statements and other reports. In addition to

Preparation Methods of Consolidated Financial Statements” (Finance Ministrysubscribing to related publications, it has joined the Financial Accounting

Ordinance No. 28 of 1976).

Standards Foundation and participates in seminars and other events held by
the Foundation, audit firms and other relevant organisations to establish a

1.2

Audit verification

system for understanding the accounting standards in detail and responding

The Company’s consolidated financial statements for the fiscal year ended

suitably to changes made to them. The Company also compiles and provides

March 31, 2018 (April 1, 2017 to March 31, 2018) were audited by KPMG

common manuals for preparing the consolidated financial information on

AZSA LLC, as per Article 193-2 (1) of Japan’s Financial Instruments anda Groupwide basis, and arranges training courses for accounting staff at

Exchange Act.

affiliates.

1.4

Translation into U.S. dollars

The U.S. dollar amounts have been translated, for convenience only, at ¥106
= US$1, the prevailing exchange rate on the Tokyo Foreign Exchange Market
as of March 31, 2018.

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—92.

The account closing date for Hankyu Hanshin Express (USA) Inc., Hankyu

Names of primary consolidated subsidiaries are listed on page 105.

Hanshin Express (Deutschland) GmbH and 19 other consolidated subsidiaries

Further, as from the fiscal year ended March 31, 2018, Hanshin Travelis December 31. The consolidated financial statements have been preparedInternational Co., Ltd. and one other company have been included in theusing the financial statements based on the closing date of each company,

scope of consolidation due to their increased significance.

and major transactions conducted between the individual closing dates andAlso, Hankyu Hanshin Railway Technology Co., Ltd. has been excluded
from the scope of consolidation because it has been dissolved due to its

the consolidated closing date have been adjusted for as necessary for the
consolidation.

merger, and Hankyu Communications Co., Ltd. and one other company havebeen excluded from the scope of consolidation due to their completion of

2.4

liquidation.

2.4.1
I.

Accounting policies
Valuation standards and method for major assets

Securities

2.1.2 Names of major nonconsolidated subsidiaries

Available-for-sale securities:

Hankyu Mediax Co., Ltd.

a.

Available-for-sale securities with fair market values:

Nonconsolidated subsidiaries have been excluded from the scope of

The market value method is applied based on the market price, etc., atconsolidation because the total amounts of their entire assets, sales, net

the fiscal year-end. (Related valuation differences are directly included

income or loss (amount equivalent to equity interests), retained earnings

under net assets and the cost of securities sold is determined by the(amount equivalent to equity interests) and other figures are limited, and theeffect on the consolidated financial statements as a whole is negligible.

moving average method.)b. Available-for-sale securities without fair market values:
The moving average cost method is applied.

2.2

Items related to application of equity-method accounting

For investments in limited liability investment partnerships and similar

2.2.1 Number and names of affiliates for which equity method is appliedinvestments, however, the Company’s share of assets held by such

Number of affiliates for which equity method is applied—11.

partnerships is recorded.

Names of primary companies are listed on page 105.
II.
2.2.2 Names of nonconsolidated subsidiaries and affiliates for which equity

Derivatives

The market value method is applied.

method is not applied
The nonconsolidated subsidiaries (Hankyu Mediax Co., Ltd., etc.) and affiliates

III. Inventories(OS Co., Ltd., etc.) to which the equity method does not apply use the costa.

Land and buildings for sale:method rather than the equity method because the total amounts of their

The identified cost method is applied. (Balance sheet values are

net income or loss (amount equivalent to equity interests), retained earnings

calculated by writing down book values based on decreased profitability.)(amount equivalent to equity interests) and other figures are limited, and theeffect on the consolidated financial statements as a whole is negligible.

b. Other inventories:
The moving average cost method is applied. (Balance sheet values arecalculated by writing down book values based on decreased profitability.)

77

Hankyu Hanshin Holdings Annual Report 2018

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:

to buildings) and depreciation of facilities and structures that are

a. Hedging instruments: Forward exchange contracts, currency swap

Hedging instruments and hedged items

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, 2018.

goodwill resulting from the management integration with Hanshin Electric

Prior 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 Annual Report 201878

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 (Implementation Guidance on Tax Effect Accounting)(Accounting Standard for Revenue Recognition)

The following guidance were issued but not yet adopted.

The following standard and guidance were issued but not yet adopted.

•	“Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No.

•	“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,

28, February 16, 2018 (hereinafter, “Guidance No. 28”))•	“Implementation Guidance on Recoverability of Deferred Tax Assets”(ASBJ Guidance No. 26 (revised 2018), February 16, 2018 (hereinafter,

March 30, 2018)•	“Implementation Guidance on Accounting Standard for Revenue
Recognition” (ASBJ Guidance No. 30, March 30, 2018)“Guidance No. 26”))(1) Outline(1) Outline

The International Accounting Standard Board (“IASB”) and the Financial“Implementation Guidance on Tax Effect Accounting” have been reviewed

Accounting Standard Board (“FASB”) jointly developed comprehensive

and amended at the following points deemed necessary in transferring

accounting standard for revenue recognition and the Revenue from Contracts

the control over the operational guidelines for tax effect accounting fromwith Customers was issued in May 2014 (IFRS No. 15 by IASB, and Topic 606

the Japanese Institute of Certified Public Accountants to the Accounting

by FASB).

Standard Board of Japan, basically following their contents.

IFRS No. 15 was applied for annual reporting periods beginning on
or after January 2018, Topic 606 was also applied from annual reporting(Main accounting treatments which have been reviewed and amended)periods beginning December 15, 2017. Based on such a situation, the ASBJ•	Treatments for taxable temporary differences for investments indeveloped the comprehensive accounting standard for revenue recognition/

subsidiaries within the context of non-consolidated financial statements•	Treatments in determining recoverability of deferred tax assets in acompany which was categorized as‘Type1’ according to the guidance

the implementation guidance and issued them together.
On the ASBJ’s basic policy for development of accounting standard forrevenue recognition, the basic principles of IFRS No. 15 were incorporated
into the ASBJ Statement No. 29 as starting points, the Statement was set out,

(2) Effective datefrom the viewpoint of comparability among financial statements which is one

Effective from the beginning of the fiscal year ending March 31, 2019.

of 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(3) Effects of the application of the standards

added to the extent of not losing the comparability.

The Company and its consolidated domestic subsidiaries are currently
in the process of determining the effects of these new standards on the(2) Effective dateconsolidated financial statements.

Effective from the beginning of the fiscal year ending March 31, 2022.
(3) Effects of the application of the standards
The Company and its consolidated domestic subsidiaries are currently in theprocess of determining the effects of these new standards on the consolidated
financial statements.

79

Hankyu Hanshin Holdings Annual Report 2018

Notes to the Consolidated Financial Statements

4. Change in Method of Indication(Consolidated statements of income) “Loss on retirement of noncurrent assets,” having been indicated in the item

As a result, in the consolidated statements of income for the fiscal year

“Miscellaneous expenses” of the non-operating expenses until the fiscal year

ended March 31, 2017, the item “Miscellaneous expenses” of 4,073 million

ended March 31, 2017, is indicated independently as from the fiscal year

yen in the non-operating expenses is rearranged to “Loss on retirement ofended March 31, 2018 due to its increased significance.

noncurrent assets” of 1,450 million yen and “Miscellaneous expenses” of 2,623
million yen.

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 trust for

Shares in the Company remaining under the trust were recorded as treasury

its directors, employees or others; provided, however, that, for the purpose

stock in the net assets section on a book value basis for trust (excludingof enhancing consciousness to contribute to the improvement in medium-

ancillary expenses). The book value of, and the number of shares of, theand-long term performance and to the increase in corporate value bytreasury stock at the end of the fiscal year ended March 31, 2018 are 1,430

clarifying the linkage between performance of and corporate value of themillion yen and 357,968 shares, respectively.

Group, Hankyu Corporation, a subsidiary of the Company, has adopted aperformance-based stock compensation plan using the trust of shares in
the Company (hereinafter referred to as “System”) for full-time directors andcorporate officers (excluding outside directors and non-residents in Japan),and Hanshin Electric Railway Co., Ltd., a subsidiary of the Company, has
adopted a System for full-time directors (excluding outside directors and nonresidents in Japan).
The System is a system using a mechanism named an officer’s 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 or others, according to their 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 Annual Report 201880

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

2017

2018

2018

¥1,123,035¥1,144,599$10,798,104

Accumulated contributions for construction directly deducted

Millions of yen

Thousands of U.S. dollars

2017

2018

2018

¥413,812¥443,713$4,185,972

Pledged assets and secured liabilities

The following table shows the assets pledged as collateral. () indicates those relating to a railway foundation.
Millions of yen

Thousands of U.S. dollars
2018

2017

2018

Property and equipment:¥208,550(¥208,550)¥201,129(¥201,129)$1,897,443

Machinery, equipment and vehicles

Buildings and structures

44,980(44,980)

49,401(49,401)

466,047($1,897,443)(466,047)Land

255,965(255,965)

242,231(242,231)

2,285,198(2,285,198)

Other

2,780

2,780)

2,139(2,139)20,179(20,179)

128

(128)

118

(118)

1,113

(1,113)

Intangible assets:
Other
Investments and other assets:
1,007

(—)

532

(—)

5,019

(—)

Other

Investment securities

76

(—)

120

(—)

1,132

(—)

Total

513,489(512,406)

495,674(495,021)

4,676,170(4,670,009)

In addition to the above, the Company pledged investment securities (fiscal year ended March 31, 2017: 800 million yen, fiscal year ended March 31, 2018:
800 million yen) as collateral for loans of third parties.
The following table shows the secured liabilities. () indicates those relating to a railway foundation.
Millions of yen

Thousands of U.S. dollars
2018

2017

2018

Current liabilities:
Short-term borrowings
Other¥9,748(¥9,309)¥9,354(¥9,263)$88,245($87,387)

76

(—)

92

(—)

868

(—)

Long-term liabilities:
Long-term debt

110,691(110,596)

112,823(112,823)

1,064,368(1,064,368)

Total

120,516(119,905)

122,270(122,086)

1,153,491(1,151,755)

6.4

The following table shows the securities of nonconsolidated subsidiaries and affiliates.
Millions of yen

Investment securities

81

Thousands of
U.S. dollars

2017

2018

2018

¥213,951¥229,209$2,162,349

Hankyu Hanshin Holdings Annual Report 2018

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,the consolidated subsidiaries recorded the amount corresponding
to the taxes on the valuation difference in the liability section
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 theContingent liabilities

Fiscal year ended March 31, 2017
Millions of yen
Nishi-Osaka Railway Co., Ltd.

¥19,781

Borrowers on loans for purchase of landand buildings

10,089Other (two companies)

65

Total

29,936

Fiscal year ended March 31, 2018

amount corresponding to its equity in the valuation difference

Millions of yen

Thousands of
U.S. dollars

Borrowers on loans for purchase of landand buildings¥20,633$194,651

Nishi-Osaka Railway Co., Ltd.

18,931

178,594

PT IZUMI SENTUL REALTY

848

8,000

NNH MIZUKI JOINT STOCK COMPANY

401

3,783

Other (two companies)

54

509

40,868385,547(after subtracting taxes) in the net assets section as “Revaluation
reserve for land.”•	Revaluation methodThe revaluation amounts were determined based on the revaluatedvalue of noncurrent assets provided for in Article 2, Paragraph 3 ofthe Enforcement Ordinance for the Law Concerning Land Revaluation(Ordinance No. 119, promulgated on March 31, 1998).

Total•	Date of revaluation: March 31, 2002
Millions of yen
2017
Difference between themarket value as of March
31, 2018 of the lands forwhich reevaluation wasmade and the book value
thereof after reevaluation

2018

Thousands of
U.S. dollars

In addition to the above, the Company submitted a letter of awareness for

2018

fiscal year ended March 31, 2018: 1,655 million yen) in connection with the

management guidance (fiscal year ended March 31, 2017: 1,587 million yen,fund procurement of affiliates.

¥(6,084)¥(6,343)$(59,840)

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.

2017

2018

2018

Personnel expenses¥14,651¥14,334$135,226

Expenses

10,425

11,108104,792

2017

2018

2018

Taxes

1,025

1,000

9,434

Retirement benefit expenses¥8,457¥8,485$80,047

914

866

8,170

Provision for bonuses

4,716

4,582

43,226

Depreciation andamortisation
Amortisation of goodwill

2,426

2,323

21,915

Total

29,443

29,633

279,557

Millions of yen

Thousands of
U.S. dollars

Financial Section and Corporate Data

Hankyu Hanshin Holdings Annual Report 201882

Financial Section and Corporate Data
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

2017

2018

2018
$24,142)

Valuation difference on available-for-sale securities:
Increase (decrease) during the year

¥5,295)¥2,559)Reclassification adjustments

(672)

(7)

(66)

Subtotal, before tax

4,623)

2,552)

24,075)Tax (expense) or benefit(1,410)(785)(7,406)

Valuation difference on available-for-sale securities

3,213)

1,766)

16,660)2,124)(1,504)(14,189)

—)

—

—)

2,124)(1,504)(14,189)

Deferred gains or losses on hedges:
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax (expense) or benefit

(734)

520)

4,906)

Deferred gains or losses on hedges

1,390)(984)(9,283)

Increase (decrease) during the year

—)

—

—)

Reclassification adjustments

—)

—

—)

Subtotal, before tax

—)

—

—)

Tax (expense) or benefit

—)

5)

47)

Revaluation reserve for land

—)

5)

47)

(914)

468)

4,415)

—)

51)

481)

(914)

519)

4,896)

Revaluation reserve for land:

Foreign currency translation adjustments:
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax (expense) or benefit
Foreign currency translation adjustments

—)

—)

—)

(914)

519)

4,896)
13,792)Remeasurements of defined benefit plans:
Increase (decrease) during the year101)

1,462)

Reclassification adjustments

1,242)

948)

8,943)

Subtotal, before tax

1,344)

2,411)

22,745)Tax (expense) or benefit

(442)

(785)

(7,406)

Remeasurements of defined benefit plans

901)

1,625)

15,330)1,762)

3,023)

28,519)

61)

(14)

(132)

1,824)

3,009)

28,387)

6,414)

5,944)

56,075)

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, 2017 (April 1, 2016 to March 31, 2017)

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, 2016

Increase in number of shares

Decrease in number of shares

Number of shares as of March 31, 2017

Number of shares issued:
Common stock (Notes 1 and 2)
Total

1,271,406—

1,017,125

254,281

1,271,406—

1,017,125

254,281

15,466

6,930

17,887

4,508

15,466

6,930

17,887

4,508

Treasury stock, at cost:
Common stock (Notes 1, 3 and 4)
Total(Overview of reasons for fluctuations)
Notes:
1.	Hankyu Hanshin Holdings, Inc. consolidated shares at the ratio of 5 shares to 1 share with an effective date of August 1, 2016.
2.	The decrease of 1,017,125 thousand shares of common stock was due to a result of consolidation of shares.
3.	The increase of 6,930 thousand shares of treasury stock was due to the increase of 6,837 thousand shares of treasury stock by resolution of the Board of Directors (before consolidationof shares: 6,826 thousand shares, after consolidation of shares: 11 thousand shares); the purchase of 73 thousand odd-lot shares (before consolidation of shares: 46 thousand shares,
after consolidation of shares: 26 thousand shares); and an increase of 19 thousand shares (after consolidation of shares) due to the change of interest for equity-method affiliates.
4.	The decrease of 17,887 thousand shares of treasury stock was due to a decrease of 17,807 thousand shares due to a result of consolidation of shares; a decrease of 78 thousand
shares (after consolidation of shares) due to the exercise of stock option rights; and a decrease of 1 thousand shares (before consolidation of shares: 1 thousand shares, after
consolidation of shares: 0 thousand shares) due to the sale of odd-lot shares.

83

Hankyu Hanshin Holdings Annual Report 2018

Notes to the Consolidated Financial Statements

9.2

Items related to subscription rights to sharesFiscal year ended March 31, 2017
Number of shares subject to share subscription rights

Balance as of March 31, 2017Classification

Breakdown of newshare subscription
rightsType of sharessubject to sharesubscription rights

As of April 1,
2016

Increase

Decrease

As of March 31,
2017

The Company(Parent company)

Subscription rights as
stock options

—

—

—

—

—

¥496

—

—

—

—

—

496

Total

9.3

(Millions of yen)

Items related to dividends

Fiscal year ended March 31, 2017
9.3.1

Dividends paid
(Resolution)

Type of shares

Dividends paid
(Millions of yen)

Dividend per share(Yen)

Record date

Effective dateJune 14, 2016
Annual General Meetingof Shareholders

Common stock¥4,413¥3.5

March 31, 2016

June 15, 2016

October 27, 2016
Board of Directors

Common stock

4,389

17.5

September 30, 2016

December 1, 2016

Note:The Company consolidated its shares at the rate of 5 ordinary shares into 1 ordinary share on August 1, 2016. The lower figure (the portion approved by aresolution of the Board of Directors on October 27, 2016) is dividend per share after the share consolidation. The upper figure (the portion approved by aresolution of the Annual General Meeting of Shareholders on June 14, 2016) is actual amount of dividend per share before the share consolidation.
9.3.2

Dividends whose effective date falls in the fiscal year following the fiscal year of the record date
(Resolution)

Type of shares

June 13, 2017
Annual General Meetingof Shareholders

Common stock

Dividends paid
(Millions of yen)
¥4,389Source of dividends

Retained earnings

Dividend per share
(Yen)
¥17.5

Record date

Effective date

March 31, 2017

June 14, 2017

Fiscal year ended March 31, 2018 (April 1, 2017 to March 31, 2018)
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, 2017

Increase in number of shares

Decrease in number of shares

Number of shares as of March 31, 2018

Number of shares issued:
Common stockTotal

254,281——254,281254,281——254,281

4,508

2,788

34

7,262

4,508

2,788

34

7,262

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.

Financial Section and Corporate Data

(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 (sharesin 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 theincrement 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 oddlot shares.

9.5

Items concerning stock acquisition right

There is no relevant item.

Hankyu Hanshin Holdings Annual Report 201884

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

9.6

Items related to dividends

Fiscal year ended March 31, 2017
9.6.1

Dividends paid
(Resolution)

Type of shares

June 13, 2017
Annual General Meetingof Shareholders
November 2, 2017
Board of Directors

Dividends paid

Dividend per share

Record date

Effective date

$0.16

March 31, 2017

June 14, 20170.18

September 30, 2017

December 1, 2017

(Millions of yen)(Thousands of
U.S. dollars)(Yen)(U.S. dollars)Common stock¥4,389$41,406¥17.5

Common stock

4,970

46,88720

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.

9.6.2

Dividends whose effective date falls in the fiscal year following the fiscal year of the record date
Dividends paid

(Resolution)

Type ofsharesJune 13, 2018
Annual General Meetingof Shareholders

Commonstock(Millions of yen)(Thousands of
U.S. dollars)¥4,970$46,887

Source ofdividends
Retainedearnings

Dividend per share(Yen)(U.S. dollars)

¥20

$0.19

Record date

Effective date

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.

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

2017

2018

2018

¥24,255)¥28,836)$272,038)

Deposits with maturities over 3 months(1,725)(1,334)(12,585)

Cash and cash equivalents in the cash flow statements

22,530)27,501)

259,443)

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

85

Thousands of
U.S. dollars

Millions of yen

2017

2018

2018

Due within one year

¥ 4,775¥ 3,585$ 33,821

Due within one year

Due after one year

22,04820,426

192,698

Total

26,82324,012

226,528

Hankyu Hanshin Holdings Annual Report 2018

Thousands of
U.S. dollars

2017

2018

2018

965

¥ 1,494$ 14,094

Due after one year

10,09618,481

174,349

Total

11,062

19,975

188,443¥

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 “2.4 Accounting policies”

term funds for working capital, and long-term debt and bonds are used mainly to raise“2.4.6 Significant hedge accounting methods” out-lined in “2. Basis of Preparation of

the long-term funds necessary for capital investment plans. Some floating-rate debt

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

Thousands of U.S. dollars
2018

2017

2018

Book value

Fair value

DifferenceBook value

Fair value

DifferenceBook value

¥

¥

¥

¥

$

Fair value

Difference

Assets(1) Cash and deposits—¥ 28,836¥ 28,836

272,038 $272,038(2) Trade receivables

24,25583,492

24,255)83,492)—

92,61992,619——873,764

873,764$——(3) Investment securities

43,94743,947)046,60946,6090439,708

439,7080—

Liabilities(4) Trade payables

40,08640,086)—

46,891

46,891—

442,368

442,368(5) Short-term borrowings (*1)

134,676

134,676)—

100,721

100,721—950,198

950,198—(6) Bonds (*2)

102,000

105,387)

3,387

92,00094,984

2,984

867,925

896,075

28,151(7) Long-term debt (*1)

654,255

677,774)

23,519666,710

690,457

23,747

6,289,717

6,513,745

224,028—(10,950)——(10,775)——(101,651)—(8) Derivative transactions(*1) Current portion of long-term debt is included in (7) Long-term debt.
(*2) Current portion of bonds is included.
Notes:

Financial Section and Corporate Data

1. Method for calculating the fair values of financial instruments and matters regarding securities and derivative transactions(1) Cash and deposits, (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 “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 “14. Derivatives.”

Hankyu Hanshin Holdings Annual Report 201886

Financial Section and Corporate Data
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
2017

2018

2018

¥ 5,810¥ 5,994$ 56,547

3,735

4,049

38,198

534

90

849

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, 2017
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¥ 24,255

Trade receivables

83,492

—

—

¥

—
—

Held-to-maturity debt securities(government bonds, etc.)

—

9

—

—

Available-for-sale securities with maturities(government bonds, etc.)

26

281

165

300

107,755

291

165

300

Investment securities:

Total

Fiscal year ended March 31, 2018
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¥ 28,836—$ 272,038

Trade receivables

92,619———873,764

—

—
—

$

—
—

—

9

—

—

—

85

—

—

—

345

96

300

—

3,255

906

2,830

121,456

355

96

300

1,145,811

3,349

906

2,830

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, 2017
Millions of yen

Bonds

Due after one
Due within one
year through five
year
years

Due after five
years throughten years

Due after ten
years¥ 10,000¥ 55,000¥ 17,000¥ 20,000

43,732

153,047

292,859

164,616

53,732208,047

309,859

184,616Long-term debt
Total
Fiscal year ended March 31, 2018

Millions of yen
Due after one
Due within one
year through five
year
years
Bonds
Long-term debt
Total

87

Hankyu Hanshin Holdings Annual Report 2018¥

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

$

$

$

—

¥ 62,000¥ 10,000¥ 20,000

41,369165,820

298,099

161,420390,274—$

1,564,340

584,906

2,812,255

94,3401,522,830

188,679

41,369227,820

308,099

181,420390,274

2,149,245

2,906,594

1,711,509

Notes to the Consolidated Financial Statements

13. Securities 
13.1 Held-to-maturity debt securities
Millions of yen

Thousands of U.S. dollars
2018

2017
Classification

2018

Book value

Fair value

DifferenceBook value

Fair value

DifferenceBook value

Fair value

Difference

¥9

¥10

¥0

¥9

¥10

¥0

$85

$94

$0

Securities with fair value
exceeding book value

13.2 Available-for-sale securities
Millions of yen

Thousands of U.S. dollars
2018

2017
Classification
Securities withbook value
exceedingacquisition cost

(1) Equity securities

Securities withbook value
not exceedingacquisition cost

(1) Equity securities

2018

Book value

Acquisition
cost

DifferenceBook value

Acquisition
cost

DifferenceBook value

Acquisitioncost¥ 39,641¥ 23,291¥ 16,350¥ 42,627¥ 24,154¥ 18,472$ 402,142$ 227,868 $ 174,264

473

454

18

441

428

13

4,160

4,038

123

40,11423,746

16,36843,06924,58318,485406,311

231,915

174,387

3,822

4,634

(811)

3,530

3,979

(449)

33,30237,538(4,236)

—

—

—

—

—

—

—

—

—

3,822

4,634

(811)

3,530

3,979

(449)

33,30237,538(4,236)43,93728,38015,556

46,59928,562

18,036439,613

269,453

170,151(2) Bonds
Subtotal(2) Bonds
Subtotal

Total

Difference

Notes: Unlisted equity securities and others (fiscal year ended March 31, 2017: 10,080 million yen, fiscal year ended March 31, 2018: 10,135 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, 2017
Millions of yen

Classification

Type

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)¥(3)

Forward exchange contracts:
Buy contract
76¥ —Australian dollar

¥

26

—

1

Canadian dollar

8

—

(0)

New Zealand dollar

7

—

0

Receive yen, pay US dollar

598

598

(50)

Receive yen, pay Thai baht

495

—

(5)

1,211

598

(58)

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)

¥ —

¥(0)

Euro
Transactions
other than market
transactions

Currency swap contracts:

Total
Fiscal year ended March 31, 2018

Classification

Type

Thousands of U.S. dollars
Contract
amountPortion of contract
amount exceeding
one year

Financial Section and Corporate Data

Millions of yen

Fair value(Note)

Forward exchange contracts:Transactions
other than market
transactions

Buy contract
Indian rupee

¥

3

$

28

$

—

$

(0)

Currency swap contracts:
Receive yen, pay US dollar

598

598

(81)

5,642

5,642

(764)

Total

601

598

(81)

5,670

5,642

(764)

Notes:
1. Fair 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.

Hankyu Hanshin Holdings Annual Report 201888

Financial Section and Corporate Data
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, 2017

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

15Japanese yen
PrimarymethodBuy contract

¥

10

—

¥

0

—

0

Trade payables
553

—

(18)

US dollar

8

—

(0)

Singapore dollar

0

—

(0)

Thai baht

0

—

(0)

Euro

0

—

(0)

47

—

0

Japanese yen

Forward exchange contracts:
Sell contract

Trade receivables

US dollar
Buy contract

Trade payables

Euro

8,446

—

231

US dollar

6,550

294

327

Canadian dollar

854

—

66

Swiss Franc

846

—

43

Australian dollar

463

—

37

Singapore dollar

351

—

20

Sterling pound

302

—

25

New Zealand dollar

250

—

14

Hong Kong dollar

94

—

(0)

Thai baht

68

—

0

18,865294

748

Fiscal year ended March 31, 2018

Millions of yen

Classification

Contract
amountPortion of contract
amount exceeding
one yearDesignationof forward
exchange
contracts,
etc.

Total

Type

Main hedged
items

Thousands of U.S. dollars
Fair value(Note)

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)

Forward exchange contracts:
Sell contract

Trade receivables

US dollar
Primarymethod¥Japanese yen
Buy contract

111

¥

18

—
—

¥

(0)

$

1,047

0

170

$

—

$

(0)

—

0

Trade payables

Japanese yen

746

—

(5)

7,038

—

(47)

US dollar

13

—

(0)

123

—

(0)

Singapore dollar

0

—

(0)

0

—

(0)

Thai baht

0

—

(0)

0

—

(0)

39

—

(0)

368

—

(0)

Forward exchange contracts:
Sell contract

Trade receivables

US dollar
Buy contractDesignationof forward
exchange
contracts,
etc.

Trade payables

Euro

11,494—(140)

108,434—(1,321)

US dollar

7,815

—

(402)

73,726—(3,792)

Canadian dollar

1,112

—

(72)

10,491—(679)

Swiss Franc

1,047

—

(28)

9,877

—

(264)

Australian dollar

586

—

(33)

5,528

—

(311)

Singapore dollar

394

—

(8)

3,717

—

(75)

Sterling pound

313

—

(1)

2,953

—

(9)

New Zealand dollar

161

—

(1)

1,519

—

(9)

Indian rupee

142

—

(7)

1,340

—

(66)

Thai baht

140

—

0

1,321

—

0

Hong Kong dollar

62

—

(0)

585

—

(0)

24,200—(702)

228,302—(6,623)Total

Note: Fair value is based mainly on prices quoted from counterparty financial institutions.

89

Hankyu Hanshin Holdings Annual Report 2018

Notes to the Consolidated Financial Statements

14.2.2 Interest rate
Fiscal year ended March 31, 2017
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)¥ 188,909¥ 183,909¥ (11,641)

188,909

183,909(11,641)

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)¥ 174,130¥ 172,005¥ (9,991)$ 1,642,736$ 1,622,689$ (94,255)

174,130

172,005(9,991)$ 1,642,736$ 1,622,689$ (94,255)

Total
Fiscal year ended March 31, 2018

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
2017

2018

2018

¥133,174¥132,471$1,249,726

7,869

7,739

73,009Interest cost

293

300

2,830

Actuarial loss (gain)

(110)

253

2,387

(8,602)(7,466)(70,434)

(152)

62

585

132,471

133,360

1,258,113

Balance at beginningof the year
Service cost

Retirement benefits paid
Other
Balance at end of the yearof consolidated subsidiaries using simplified methods.

Thousands of
U.S. dollars

Expected returnon plan assets
Actuarial loss (gain)

2017

2018

2018

¥ 77,281¥ 78,206$ 737,792

1,072

1,143

10,783
16,189(8)

1,716

Contribution paidby the employer

4,751

4,738

44,698Retirement benefits paid

(4,841)(4,037)(38,085)

Other
Balance at end of the year

(48)

—

—

78,206

81,767

771,387

Thousands of
U.S. dollars

2017

2018

2018

¥ 73,063¥ 72,696$ 685,811(78,206)(81,767)(771,387)(5,142)(9,071)(85,575)Unfunded retirement benefit
obligations

59,40760,664572,302Total net defined benefit
liability and asset

54,264

51,593

486,726
581,642Funded retirement benefit
obligations
Plan assets

Net defined benefit liability

61,45961,654

Net defined benefit asset(7,194)(10,061)(94,915)Total net defined benefit
liability and asset

54,264

51,593

486,726

Note: Amounts in the table above include the retirement benefit obligations

Financial Section and Corporate Data

15.2.2 Table of movement in plan assets

Balance at beginningof the year

balance sheet, as of the end of fiscal year
Millions of yen

Note: Amounts in the table above include the retirement benefit obligations

Millions of yen

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 Annual Report 201890

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
2017

2018

2018

Service cost

¥ 7,869¥ 7,739$ 73,009

Interest cost

293

300

2,830

(1,072)(1,143)(10,783)

1,500

1,005

9,481

(258)

(57)

(538)

Expected return on plan
assetsAmortisation of actuarial
differencesAmortisation of prior service
cost
Other
Retirement benefit expenses

65

59

557

8,398

7,904

74,566

Notes:
1. Amounts in the table above include the retirement benefit expenses of(I) Breakdown of major plan assets
Ratio of the major types of assets to total assets are as follows:
2017

2018

Bonds

35%

35%

Equity securities

32

32

Cash and deposits

2

3

General accounts of life insurance

29

28

Other

2

2

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
9% of total plan assets in the current fiscal year.

consolidated subsidiaries using simplified methods.
2. In addition to the retirement benefit expenses shown above, the Company
made extra retirement payments, of 75 million yen in the fiscal year ended
March 31, 2017 which is recorded as costs of revenues from operations
and extraordinary loss, and of 6 million yen in the fiscal year ended March
31, 2018 which is recorded as costs of revenues from operations.

assetsCurrent and target asset allocations and historical and expected returns
on various categories of plan assets have been considered in determining
the long-term expected rate of return on plan assets.
15.2.8 Items relating to actuarial assumptions

15.2.5	Remeasurements of defined benefit plans
The breakdown of items related to remeasurements of defined benefit
plans (prior to the deduction of the tax effect) is as follows:
Thousands of
U.S. dollars

Millions of yen
2017

2018

¥ (258)¥ (57)

Actuarial differences

1,602

2,468

23,283

Total

1,344

2,411

22,745

Prior service cost(II) Method of determining the long-term expected rate of return on plan

2018$

Major actuarial assumptions
2017

2018

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 2.5%

Mainly 2.0%(538)

15.3 Defined contribution plan
The amount of the required contribution for the consolidated subsidiaries’
defined contribution plan (including employees’ pension funds plan in the

15.2.6 Cumulative adjustments of retirement benefit plans
The breakdown of items related to cumulative adjustments ofmulti-employer plan to which the same accounting method is applied as for

retirement benefit plans (prior to the deduction of the tax effect) is as

the defined contribution plan) was 60 million yen in the fiscal year ended

follows:

March 31, 2017 and 39 million yen in the fiscal year ended March 31, 2018.
Thousands of
U.S. dollars

Millions of yen
Unrecognized prior service
costUnrecognized actuarial
differences
Total

2017

2018

2018

¥ (360)¥ (303)$ (2,858)

2,708

239

2,255

2,348

(63)

(594)

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.

91

Hankyu Hanshin Holdings Annual Report 2018

Notes to the Consolidated Financial Statements

16. Stock Options, etc. 
Cost amount and account associated with stock options
Thousands of
U.S. dollars

Millions of yen
Operating expenses and cost of sales of transportation and cost of sales

2017

2018

2018

¥113

¥ —

$ —

Note: The Company had been issuing stock acquisition rights as stock-based compensation stock option to full-time directors of Hankyu Corporation and Hanshin
Electric Railway Co., Ltd., subsidiaries of the Company (hereinafter referred to as “Target Subsidiaries”). However, in connection with adoption by Target
Subsidiaries of a performance-based stock compensation plan using the trust of shares in the Company (hereinafter referred to as “New System”) on May
17, 2017, issuance and granting of stock acquisition rights as stock-based compensation stock option were abolished concurrently, and any dormant stockacquisition rights having granted to full-time directors of Target Subsidiaries were waived by the relevant directors, etc. on May 31, 2017 and have beenshifted to the New System.

17. Deferred Tax 
17.1 Significant components of the Company’s deferred tax assets
and liabilities

tax rate and the effective tax rate reflected in the accompanying
Thousands of
U.S. dollars

Millions of yen

2017

2018
30.8%

Elimination of dividends received fromconsolidated subsidiary companies etc.

16.5

15.3

Difference of tax rates from Parent Company

2.2

2.4

Amortisation of goodwill

0.7

0.7

Valuation allowance

(3.9)

0.5

46,009Nondeductible expenses

0.4

0.5

2,572

24,264Per capita portion of inhabitant tax

0.4

0.4

1,872

1,878

17,717

Nontaxable income(16.4)(15.6)

1,279

1,285

12,123

Profit or loss from investments with equity
method affiliates

(2.6)

(2.8)

Other

(0.5)

0.7

27.7

32.9

2018

2018

Loss on revaluation of realestate for sale

¥ 24,844¥ 23,718$ 223,755

Net defined benefit liability

17,762

16,900159,434

Tax loss carryforwards

14,661

10,29897,151

Loss on impairment of fixed
assets

9,268

9,417

88,840

Unrealized profit from assets

4,376

4,877

Loss on adjustment oftransferred profit and loss

2,669

Provision for bonuses

Deferred tax assets:

1,147

965

9,104

10,747

10,910102,925

88,63082,825

781,368

Valuation allowance(23,631)(24,227)(228,557)

Less amounts offset against
deferred tax liabilities(53,807)(48,380)(456,415)

Total deferred tax assets

11,191

10,217

96,387(130,694)(130,447)(1,230,632)(79,481)(79,074)(745,981)(15,170)(15,954)(150,509)(1,826)(1,796)(16,943)

Other
Subtotal of deferred tax
assetsconsolidated statements of income

30.8%

2017

Enterprise taxes and businessoffice taxes
Losses on revaluation of
investment securities

17.2 A reconciliation of the significant differences between the statutory

Statutory tax rate
(Adjustment)

Effective tax rate

Deferred tax liabilities:
Gain on reversal of difference
from land revaluationRevaluation of assets on
consolidationNet unrealized holding gains
on securitiesGain on valuation of propertiesof business reorganization
Subtotal of deferred tax
liabilities
Less amounts offset against
deferred tax assets(6,166)(5,662)(53,415)(233,340)(232,935)(2,197,500)

53,807

48,380456,415Total deferred tax liabilities(179,532)(184,554)(1,741,075)

Net deferred tax liabilities(168,341)(174,336)(1,644,679)

Financial Section and Corporate Data

Other

Note: The Company reversed “Surplus from land revaluation” when, as aresult 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 Annual Report 201892

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

18. Asset Retirement Obligations 
Omitted as the significance was negligible.

19. 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, 2017, main

year ended March 31, 2017 was 30,911 million yen (major rental revenues are

increase was acquisitions of real estate of 12,017 million yen, and mainrecorded in revenues from operations and major rental expenses are recorded

decrease were depreciation of 12,634 million yen and exclusion of properties

in costs of revenues from operations). Rental profit and loss related to suchfor which development began of 6,281 million yen. For increase/decrease

rental property in the fiscal year ended March 31, 2018 was 30,563 million yen

during the fiscal year ended March 31, 2018, main increase was acquisitions(major rental revenues are recorded in revenues from operations and majorof real estate of 18,514 million yen, and main decrease was depreciation of
12,555 million yen.

rental expenses are recorded in costs of revenues from operations).
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

2017

2018

2018

¥623,357¥616,481$5,815,858

Increase/decrease (Note 2)(6,875)

6,982

65,868

Balance at end of the year

616,481623,4635,881,726

811,096853,278

8,049,792

Book value (Note 1):Balance at beginningof the year

Fair value at endof the year (Note 3)

3. Fair value as of the end of the fiscal year is the appraisal value according toan outside real estate appraiser based on Japanese Real Estate Appraisal
Standards in the case of key properties and the fair value based on indicatorssuch 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, 2017 and for the fiscal year ended March 31,2018 were 121,942 million yen and 137,722 million yen, respectively.

20. Segment Information 
20.1 Segment information
20.1.1 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 five core companies of Hankyu Corporation, Hanshin Electric Railway Co., Ltd., 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, real estate, entertainment andcommunications, 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* As from the fiscal year ended March 31, 2019, in addition to five core companies mentioned above, Hankyu Hanshin Properties Corp. is also expected to act asa core company for real estate business of the Group.

20.1.2 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.

93

Hankyu Hanshin Holdings Annual Report 2018

Notes to the Consolidated Financial Statements

20.1.3 Information regarding totals for revenues from operations, income (loss), assets and other items by reportable segment
Fiscal year ended March 31, 2017
Millions of yen
Reportable segment
Urban
Transportation

Entertainment
andCommunications

TravelInternational
Transportation

HotelsSubtotal

Other(Note 1)

¥ 198,663 ¥ 107,162

Real
EstateTotal

Amounts
appearing in
Adjustment the consolidated(Note 2)
financialstatements(Note 3)

Revenues from operations:
I. Customers¥ 29,926¥ 71,631¥ 64,358¥ 704,048¥32,284¥ 736,332

II. Intersegment¥232,306
4,830

17,046

8,031

12

38

1,281

31,24010,362

41,603¥(41,603)430¥ 736,763—

Total

237,136

215,709

115,193

29,93871,67065,640735,288

42,646

777,935(41,172)

736,763

Segment income (loss)

42,237

41,97015,655

637

1,587

2,795

104,8851,340

106,225(2,167)104,058

Segment assets

802,238

1,056,719

147,30773,93838,65882,5622,201,424

34,1442,235,569

114,261

2,349,831

25,91916,800

6,729

726

680

1,877

52,734546

53,280(480)

52,80031,15843,144

7,388

528

384

3,182

85,787618

86,406(193)

86,212Other items:
Depreciation andamortisationIncrease in property andequipment and intangible assets

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 (Amortisation of goodwill mainly
having originated from management integration with Hanshin Electric Railway Co., Ltd. In the fiscal year ended March 31, 2007).
In addition to the balance of unamortised goodwill of ¥20,496 million (refers mainly to the amortisation of goodwill having originated from management integration
with Hanshin Electric Railway Co., Ltd. in the fiscal year ended March 31, 2007), the adjusted amount for segment assets includes, surplus working capital (cash anddeposits), long-term investment funds (investment securities), unallocated assets such as lands, and Intersegment eliminations, at the Company, Hankyu Corporation andHanshin Electric Railway Co., Ltd.
3. Segment profit and loss is adjusted with operating income in the consolidated statement of income.
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
Adjustment in the consolidated(Note 2) financial statements(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

799,472

1,087,224

150,93185,57052,46083,652

2,259,312

35,364

2,294,676

115,428

2,410,105

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

Thousands of U.S. dollars
Reportable segment
Urban
Transportation

Real
EstateEntertainment
andCommunications

TravelInternational
Transportation

HotelsSubtotal

Other(Note 1)

Total

Amounts appearing
Adjustment in the consolidated(Note 2) financial statements(Note 3)

Revenues from operations:$788,962$622,387$ 6,901,387$266,698$ 7,168,094 $46,406167,038

85,575123717

12,019311,915

137,170449,085(449,085)

—

Total

2,226,104

2,099,868

1,142,245

320,962789,689

634,415

7,213,302

403,877

7,617,189(444,991)

7,172,189

Segment income (loss)
Segment assets$2,179,698 $ 1,932,821 $1,056,660

4,094 $ 7,172,189

392,321386,358

167,453

19,387

26,19820,906

1,012,642

18,1981,030,840(38,283)

992,557

7,542,189

10,256,830

1,423,877

807,264

494,906

789,170

21,314,264

333,623

21,647,887

1,088,943

22,736,840

251,519

156,000

64,075

6,415

6,245

19,802504,094

3,877

507,981(5,368)502,604

330,198

376,679

71,311

5,075

6,906

21,679811,887

6,274

818,160(3,028)815,132

Financial Section and Corporate Data

$320,830

II. Intersegment

I. Customers

Other items:
Depreciation andamortisationIncrease in property andequipment and intangible assets

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 (Amortisation of goodwill
mainly having originated from management integration with Hanshin Electric Railway Co., Ltd. In the fiscal year ended March 31, 2007).
In addition to the balance of unamortised goodwill of ¥18,335 million (refers mainly to the amortisation of goodwill having originated from management
integration with Hanshin Electric Railway Co., Ltd. in the fiscal year ended March 31, 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.

Hankyu Hanshin Holdings Annual Report 201894

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

20.2 Related information
Fiscal year ended March 31, 2017 (April 1, 2016 to March 31, 2017) and fiscal year ended March 31, 2018 (April 1, 2017 to March 31, 2018)
20.2.1 Information by product and service
Information about product and service categories is the same as that described in Note 20.1.3, “Information regarding totals for revenues from operations, income(loss), assets and other items by reportable segment.”
20.2.2 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.
20.2.3 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.

20.3 Information regarding loss on impairment of fixed assets by reportable segment
Omitted as the significance was negligible.

20.4 Information regarding amortisation of goodwill and the balance of unamortised goodwill by reportable segment
Omitted as the significance was negligible.

20.5 Information regarding gains from negative goodwill by reportable segment
Omitted as the significance was negligible.

95

Hankyu Hanshin Holdings Annual Report 2018

Notes to the Consolidated Financial Statements

21. Related-Party Transactions 
21.1 Related-party transactions
21.1.1 Transactions between the company submitting the consolidated financial statements and related parties
No items
21.1.2 Transactions between consolidated subsidiaries of the company submitting the consolidated financial statements and related parties
Directors and principal shareholders (only individual shareholders) of the company submitting the consolidated financial statements
Fiscal year ended March 31, 2017Type

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

Transaction
amounts(Millions of yen)¥

Item

Balance as ofMarch 31, 2017
(Millions of yen)47

Deposit

¥ 40

1,146

Advance

205

Fiscal year ended March 31, 2018
Amount of capital

Name ofrelatedparty

AddressAudit &Supervisory
Board
MemberHaruo
Sakaguchi—Company
in whichdirector orclose family
thereofholds
majority ofvoting rights

Tateishi
SangyoCo., Ltd.

Ikeda City,
Osaka

Type

(Millions (Thousands ofof yen)U.S. dollars)

¥ —

100

$ —

Auditorof theCompany

Directly
0.0%

Lease of realestateLease ofreal estate

943

Real estatebusiness

Directly
0.1%

Sale of realestateConcurrent
post(director)

Sale of realestateBalance as ofMarch 31, 2017

Transaction
amounts
Item(Millions (Thousands ofof yen)U.S. dollars)

¥

53 $

1,995

(Millions (Thousands ofof yen) U.S. dollars)

500

Deposit

¥ 40

$377

18,821

Deposit

20

189

Notes
1. The transaction amount does not include consumption tax, etc., and the balance, excluding deposits, as of the end of the fiscal year does not include any
consumption tax, etc.
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.

21.2 Notes about parent company and major affiliated companies
No items

Financial Section and Corporate Data

Hankyu Hanshin Holdings Annual Report 201896

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

22. 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.
2017

2018

2018

¥3,150.67¥3,391.35$31.99Total net assets (Millions of yen / Thousands of U.S. dollars)¥804,659¥866,512$8,174,642

Amount to be deducted from total net assets(Millions of yen / Thousands of U.S. dollars)¥17,710¥28,786

271,566(1) Net assets per share (Yen / U.S. dollars)(Basis for the calculation)(Of the amount, subscription rights to shares)¥[496]¥ —$ —(Of the amount, non-controlling interests)¥[17,213]¥[28,786]$[271,566]

Net assets at the end of the fiscal year related to common shares(Millions of yen / Thousands of U.S. dollars)¥786,949¥837,726$7,903,075

Common shares issued (Thousands of shares)

254,281254,281

Treasury stock shares (Thousands of shares)

3,471

6,103

Common shares held by consolidated subsidiaries and equity-method affiliates(Thousands of shares)

1,036

1,159

Common shares used to calculate net assets per share (Thousands of shares)(2) Net income per share (Yen / U.S. dollars)

249,772

247,018¥285.11¥267.91$2.53¥71,302¥66,361$626,047

¥ —

¥ —

$ —

¥71,302¥66,361$626,047(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)

250,089

247,700¥284.86¥267.81

¥(14)

¥[17]

$[160]¥[(14)]¥[17]$[160]$2.53(Basis for the calculation)Adjustment to net income attributable to owners of the parent(Millions of yen / Thousands of U.S. dollars)(Equity in income of affiliates)
Increase in number of common shares (Thousands of shares)(Of the amount, subscription rights to shares)Summary of potential shares that were not included in the calculation of diluted
income per share because their effect was not dilutive

171

26

[171]

[26]

—

—

—

Notes
1. 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 oftreasury stock shares to be excluded in calculating the average number of the shares during the current fiscal year. The number of such treasury stock sharesdeducted in calculating net assets per share at the end of the fiscal year ended March 31, 2018 is 357,968, and the average number of the treasury stock sharesdeducted in calculating net income per share and diluted net income per share for the fiscal year ended March 31, 2018 is 288,051.
2. The Company consolidated its shares at the rate of 5 ordinary shares into 1 ordinary share on August 1, 2016, and the net income per share and diluted net
income per share for the fiscal year ended March 31, 2017 were calculated under the assumption that said consolidation was carried out at the beginning of the
fiscal year ended March 31, 2017.

23. Subsequent Events 
23.1 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, 2018 decided the following items in relation to the acquisition of treasury stock.
23.1.1 Reason for acquisition of treasury stock
To enhance shareholder returns and enhance capital efficiency
23.1.2 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)
(1.21% of total number of outstanding shares (excluding treasury stock))(3) Total amount of acquisition: 10,000,000,000 yen (upper limit)(4) Period of acquisition: From May 24, 2018 to July 31, 201897

Hankyu Hanshin Holdings Annual Report 2018

Notes to the Consolidated Financial Statements

24. Consolidated Supplementary Statements 
24.1 Corporate bond statements

Issue date

Balance asof April 1,
2017

Balance asof March 31,
2018

Thousands of
U.S. dollars
Balance asof March 31,
2018

Oct 23, 2009

¥ 10,000¥10,000

Sept 22, 2010

15,000

Sept 22, 2010

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.

Series 38 unsecured
corporate bonds
Series 40 unsecured
corporate bonds
Series 41 unsecured
corporate bonds
Series 42 unsecured
corporate bonds
Series 44 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

TotalInterest rate

Security

Redemption date

$ 94,340

1.87%

None

Oct 23, 201915,000141,509

1.43

None

Sept 18, 2020

7,000

7,000

66,0381.72

None

Sept 22, 2022

Mar 17, 2011

10,00010,00094,340

1.54

None

Mar 17, 2021

Oct 25, 2012

10,000

—

—

0.406

None

Oct 25, 2017

Mar 14, 2013

10,00010,00094,340

0.589

None

Mar 13, 2020

Oct 25, 2013

10,00010,00094,340

0.819

None

Oct 25, 2023

Jul 18, 2014

10,00010,00094,340

1.202

None

Jul 18, 2029

Dec 15, 2016

10,00010,00094,340

0.120

None

Dec 15, 2021

Dec 15, 2016

10,00010,00094,340

0.817

None

Dec 15, 2036—

102,000

92,000867,925

—

—

—

—

Note: The amount of bonds scheduled to be redeemed within five years subsequent to March 31, 2018 are as follows.
Millions of yen
Due within one year¥—

Thousands of
U.S. dollars$—

Due after one year through two years

20,000188,679

Due after two years through three years

25,000235,849

Due after three years through four years

10,00094,340Due after four years through five years

7,000

66,03824.2 Statements of loans payable
Millions of yen

Thousands of
U.S. dollars
Balance as ofMarch 31, 2018

Balance as ofApril 1, 2017

Balance as ofMarch 31, 2018

¥134,676¥100,721$ 950,198

Current portion of long-term debt

43,732

41,369390,274

0.730—

Current portion of lease obligations

1,795

1,493

14,085——Long-term debt (excluding current portion)

610,523

625,340

5,899,434

0.912

2019 – 2038

Lease obligations (excluding current portion)

6,795

5,832

55,019—2020 – 2027

Other interest-bearing debt

—

—

—

—

—

Total

797,523774,758

7,309,038

—

—

Item
Short-term borrowings

Average interest

Repayment deadline rate

0.427%—

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 average
March 31, 2018.
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, 2018 are as follows.

Thousands of
U.S. dollars

Due after one year through two years¥34,365$324,198

Due after two years through three years

34,456

325,057

Due after three years through four years

44,269417,632

Due after four years through five years

52,729497,443

Millions of yen

Thousands of
U.S. dollars

Due after one year through two years¥1,389$13,104

Due after two years through three years

1,193

11,255Due after three years through four years

1,002

9,453

Due after four years through five years

847

7,991

Lease obligations

Financial Section and Corporate Datainterest rate for outstanding loans as of the end of the fiscal year ended

Millions of yen

Long-term debt

24.3 Schedule of asset retirement obligations
Omitted as the significance was negligible.

Hankyu Hanshin Holdings Annual Report 201898

Financial Section and Corporate Data
Notes to the Consolidated Financial Statements

25. Others Quarterly financial information in fiscal year ended March 31, 2018
1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Revenues from operations (Millions of yen)

¥180,214¥361,906¥541,376¥760,252

Income before income taxes (Millions of yen)

34,326

62,577

85,147

101,410Net income attributable to owners of the parent (Millions of yen)

23,231

41,64957,33366,361

Net income per share for quarter (of the fiscal year ended March 31, 2018) (yen)93.22

167.74231.27267.91

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter$1,700,132$3,414,208$5,107,321$7,172,189

Income before income taxes (Thousands of U.S. dollars)

323,830

590,349

803,274

956,698

Net income attributable to owners of the parent (Thousands of U.S. dollars)

219,160

392,915

540,877

626,047

0.88

1.58

2.18

2.53

Cumulative period

Cumulative period
Revenues from operations (Thousands of U.S. dollars)

Net income per share for quarter (of the fiscal year ended March 31, 2018) (U.S. dollars)
Accounting period

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Net income per share for quarter of the fiscal year (Yen)¥93.22¥74.47¥63.49¥36.55

Accounting period

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

$0.88

$0.70

$0.60

$0.34

Net income per share for quarter of the fiscal year (U.S. dollars)

99

Hankyu Hanshin Holdings Annual Report 2018

List of Major Domestic Rental and Sales Properties
Major rental properties

As of May 1, 2018

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

40

Commercial facilities

Hankyu Grand Bldg.

Kita-ku, Osaka

1977

36

Offices, Commercial facilities

GRAND FRONT OSAKA

Kita-ku, Osaka

2013

28

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

108

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 Phase I

Major properties sold in fiscal 2018
Property name

Major properties sold in fiscal 2019
Location

Total numberof units

Condominium

Property nameLocation

Total numberof units

Condominium

Geo Tenroku Twin Towers

Kita-ku, Osaka358

Geo Hankyu Minase Heart Square

Mishima-gun, Osaka

315

Cielia Saito (First phase)*3

Ibaraki, Osaka

208

Wellith Ibaraki*3

Ibaraki, Osaka216

Geo Ibaraki Togu-cho

Ibaraki, Osaka45

Geo Kyoto Katsuragawa

Minami-ku, Kyoto

Geo Nishinomiya Kitaguchi The Grace

Nishinomiya, Hyogo

40

Cielia Saito (Second phase)*3

Ibaraki, Osaka98

Geo Nishinomiya Kitaguchi Kawarabayashi-cho

Nishinomiya, Hyogo

35

Lefond Geo Ikeda*3

Ikeda, Osaka77

Geo Nishinomiya Kitaguchi Yakushi-cho

Nishinomiya, Hyogo29

Geo Takarazuka Minamiguchi

Takarazuka, Hyogo64

Geo Fukagawa Sumiyoshi

Koto-ku, Tokyo

190

Geo Nishinomiya Kitaguchi The Clair

Nishinomiya, Hyogo51

Geo Yotsuya Araki-cho

Shinjuku-ku, Tokyo

Geo Shinjyuku Wakamatsu-cho

Shinjuku-ku, Tokyo123

Primce Style Higashi Nihombashi*3

Chuo-ku, Tokyo

73 4

Geo Chiyoda Otemachi*3

Chiyoda-ku, Tokyo57

Geo Yotsuya Sanei-cho

Shinjuku-ku, Tokyo

61

Geo Nishikasai Seishin-cho

Edogawa-ku, Tokyo55

Geo Utsukushigaoka 2-chome Hills

Yokohama, Kanagawa

52

Geo Setagaya Matsubara

Setagaya-ku, Tokyo

39

Geo Minamiaoyama

Minato-ku, Tokyo

25

Geo Minamiyukigaya

Ota-ku, Tokyo

23

Geo Grande Motoazabu

Minato-ku, Tokyo

19

Geo Motoakasaka

Minato-ku, Tokyo

22

Ibaraki, Osaka

57

Hapia Garden Yao Akegawa-Minami

Yao, Osaka

30

Hapia Garden Kobe Takamaru

Tarumi-ku, Kobe

24

Hapia Garden Mukogawa Sorail

Amagasaki, Hyogo

20

131

*

*4

*3

*4

Financial Section and Corporate Data

Detached house
Hapia Garden Ibaraki*498

Detached house

Hankyu Saito Garden Front Saito
Minoh Residence

Minoh, Osaka48

Hapia Garden Tarumi Seiryodai

Tarumi-ku, Kobe

17

Machida-shi Tamagawagakuen 2-chome

Machida, Tokyo

17

Hapia Garden Shimo Shakujii

Nerima-ku, Tokyo

13

Hapia Garden Koyama 3-chome

Nerima-ku, Tokyo

6

Hapia Garden Komae Izumi Tamagawa

Komae, Tokyo

9

Hapia Garden Hamadayama

Suginami-ku, Tokyo

4

Hapia Garden Yokohama Yamate Nibangai

Naka-ku, Yokohama

7*3 Joint-venture properties*4 Including unsold condominium units

Hankyu Hanshin Holdings Annual Report 2018100

Financial Section and Corporate Data

List of Overseas Sales Properties

Country

Property Name

Residence TypeFLORA-ANH DAOFUJI RESIDENCE

Vietnam

FLORA-KIKYO-MIZUKI PARK

ThailandThe
Philippines

Indonesia

Malaysia

Total Units

Condominium

500

Condominium

789

Detached house

84

Condominium

234

Condominium

Approx. 4,670

Detached house

Approx. 100

Business Partner

Completion

Nam Long Investment Corporation,
Nishi-Nippon Railroad Co., Ltd.

Completed in 2016

Nam Long Investment Corporation,
Nishi-Nippon Railroad Co., Ltd.

2017 or later

Nam Long Investment Corporation,
Nishi-Nippon Railroad Co., Ltd.

2018 (scheduled)

Nam Long Investment Corporation,
Nishi-Nippon Railroad Co., Ltd.

2019 or later(scheduled)

Nam Long Investment Corporation,
Nishi-Nippon Railroad Co., Ltd.

Unscheduled

Townhouse

Approx. 60

AKARI CITY

Condominium

Approx. 4,600

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

2021 (scheduled)Niche Mono Mega Space Bangna

Condominium

Approx. 790

SENA Development

2020 (scheduled)Niche Mono Charoen Nakorn

Condominium

537

SENA Development

2020 (scheduled)

Detached house456

Townhouse

463

PA Alvarez Properties

2019 or later(scheduled)

Detached house

543

Residence with shops

158

Sinar Mas Land and others

2019 or later(scheduled)

Sumitomo Corporation, Sentul City

2019 (scheduled)

Ireka Corporation Berhad

2020 or later(scheduled)

Idesia Dasmariñas
The Zola
Opus Park

Condominium

1,095

RIMBUN KASIA

Condominium

Approx. 850

TaiwanMyanmar
Laos

ThailandCambodia

Vietnam

The Philippines

Malaysia

Singapore

Indonesia

101

Completed in 2017

Hankyu Hanshin Holdings Annual Report 2018

Major Group Companies (As of April 1, 2018)■ Consolidated Subsidiaries■ Urban Transportation■ Entertainment and Communications

Name of company

Railway operations

Hankyu Corporation

Name of company

SportsHanshin Electric Railway Co., Ltd.

Hanshin Tigers Baseball Club, Ltd.

Nose Electric Railway Co., Ltd.
Kita-Osaka Kyuko Railway Co., Ltd.

Hanshin Contents Link Corporation
Stage

Hokushin Kyuko Railway Co., Ltd.

Hankyu Corporation
Takarazuka Creative Arts Co., Ltd.

Kobe Rapid Transit Railway Co., Ltd.
Automobile

Hanshin Electric Railway Co., Ltd.

Umeda Arts Theater Co., Ltd.

Hankyu Bus Co., Ltd.

Communication

Itec Hankyu Hanshin Co., Ltd.

Hanshin Bus Co., Ltd.

and media

Bay Communications Inc.

Hankyu Taxi Inc.

Leisure, etc.

Mt. Rokko Cable Car & Tourism Co.

Hanshin Taxi Co., Ltd.
Advertising

Hankyu Corporation
Eki Retail Service Hankyu Hanshin Co., Ltd.
Hankyu Style Labels Co., Ltd.

Retailing■ Travel
Travel agency

Name of company

Hankyu Travel International Co., Ltd.
Hankyu Travel Support 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■ International Transportation

Name of company

International

Hankyu Hanshin Express Co., Ltd.

transportation

Hankyu Hanshin Logipartners Co., Ltd.
HHE (USA) Inc.

Name of company

HHE (Deutschland) GMBH

Hankyu Corporation

HHE (HK) Limited

Hanshin Electric Railway Co., Ltd.

HHE Southeast Asia Pte. Ltd.

Hankyu Hanshin Properties Corp.

HHE: Hankyu Hanshin Express

Hankyu Hanshin Estate Service Co., Ltd.
Real estate sales andHankyu Corporation

other business

Hanshin Electric Railway Co., Ltd.
Hankyu Hanshin Properties Corp.

■ Hotels
Hotel management

Hankyu Hanshin Restaurants Co., Ltd.

Hankyu Hanshin High Security Service Co., Ltd.

Arima View Hotel Co., Ltd.

Hankyu Hanshin Clean Service Co., Ltd.
Hankyu Hanshin Housing Support Ltd.

Hankyu Hanshin Hotels Co., Ltd.
Hanshin Hotel Systems Co., Ltd.

Hankyu Hanshin Building Management Co., Ltd.

Hankyu Hanshin REIT Asset Management, Inc.

Name of company■ 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.
Hankyu Hanshin Financial Support Co., Ltd.

Financial Section and Corporate Data

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
broadcasting

Toho Co., Ltd. (Securities code: 9602)
Tokyo Rakutenchi Co., Ltd.
(Securities code: 8842)
Kansai Telecasting Corporation

Hankyu Hanshin Holdings Annual Report 2018102

Financial Section and Corporate Data

Investor Information (As of March 31, 2018)
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

22,152 (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 77,240

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
Number of shares(Thousands)

Percentage(%)

Japan Trustee Services Bank, Ltd. (Trust account)

13,116

5.28

The Master Trust Bank of Japan, Ltd. (Trust account)

10,150

4.08

Nippon Life Insurance Company(Standing Proxy: The Master Trust Bank of Japan, Ltd.)

5,224

2.10

Name

National government and local
public organizations

Treasury stocks

0.00%

2.26%

Financial
institutions
28.34%

Japan Trustee Services Bank, Ltd. (Trust account 5)

4,827

1.94

State Street Bank West Client–Treaty 505234 (Standing Proxy:
Mizuho Bank, Ltd. Settlement & Clearing Services Division)

4,765

1.92

Sumitomo Mitsui Banking Corporation

4,381

1.76

H2O Retailing Corporation

4,207

1.69

Japan Trustee Services Bank, Ltd. (Trust account 1)

3,571

1.44

Japan Trustee Services Bank, Ltd. (Trust account 2)

3,535

1.42

Foreigncorporations
and individuals

Japan Trustee Services Bank, Ltd. (Trust account 7)

3,088

1.24

20.67%

Individuals
and others

Securities
companies

39.47%

0.73%
Other
corporations
8.54%

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

90,0000
Trading volume(Thousand shares)

2009

2010

2011

2012

2013

2014

2015

2016

2017

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.

103

Hankyu Hanshin Holdings Annual Report 20182018

Corporate Website of Hankyu Hanshin Holdings

The corporate website of Hankyu Hanshin Holdingspresents an outline of the Group, news releases, anddetails of CSR initiatives in addition to providing governanceinformation. It also publishes up-to-date information oneach business as well as a message from management.

https://www.hankyu-hanshin.co.jp/

Information for Shareholders and Other Investors

Group Guide

https://www.hankyu-hanshin.co.jp/ir/

https://www.hankyu-hanshin.co.jp/ir/
library/others/data/groupguide2018.pdf

CSR Initiatives

CSR Initiatives

The Group’s investor relations website provides
presentation materials on corporate financial results aswell as a Q&A section. In addition, it provides statutory
disclosure documents such as financial statements andsecurities reports. It also includes the business strategies
and financial policies comprising the Long-Term
Management Vision and Medium-Term Management Plan.

https://www.hankyu-hanshin.co.jp/csr/eco/Financial Section and Corporate Data

Environmental Preservation

The Group implements a variety of initiatives intended
to reduce the environmental impacts of each of its
businesses. This website includes examples of initiatives
as well as external evaluations.

We compile an annual Group Guide to aid inunderstanding of the Group outline. This Group Guide
includes a message from management, a list of Group
companies, and an outline of the scope of Groupbusinesses. It is published in both English-language andJapanese-language editions.

Social Contribution

Our Group engages in a variety of social contribution
initiatives in order to implement the Group Management
Philosophy. This website includes a video outlining these
initiatives and provides a report detailing their content.

https://www.hankyu-hanshin.co.jp/yume-machi/

Hankyu Hanshin Holdings Annual Report 2018104

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