Creating Valueat a New StageANNUAL REPORT 2015

Hankyu Hanshin Holdings
Securities code: 9042

ANNUAL REPORT 2015

Contents

Key Facts

Financial Section and Corporate Data

   1
	  6
	   8
	  10
	  12
	  14

	  73 Consolidated Six-Year Summary
	  74 Consolidated Financial Review
	  77 Business Risks
	  78 Consolidated Balance Sheets	  80	Consolidated Statements of Income /Consolidated Statements of Comprehensive Income
	  81 Consolidated Statements of Changes in Net Assets
	  83 Consolidated Statements of Cash Flows	  84 Notes to the Consolidated Financial Statements
106 Major Rental Properties
107 Major Group Companies
108 Group History
109 Investor Information

Group Management Philosophy
Business ModelAt a Glance
Location of Our Business BaseBusiness Environment
Performance Highlights (Consolidated)

Business Policies and Strategies
	  18

To Our Stakeholders

	  26	Overview of the Hankyu Hanshin Holdings Group’s
Medium-Term Management Plan (Fiscal 2016–Fiscal 2019)	  30	Special Feature: Increasing the Value of the Umeda

Area as Our Most Important Base		

30	An Impressive Track Record of Accomplishing
Major Projects
34

Urban Development that Attracts People and Ideas

Core Businesses: Overview and Outlook
	  38
	  40
	  44
	  48
	  50
	  52
	  54

Search Index
Group Overview
1–17, 38–39, 106–109
Fiscal 2015 Business Performance
14–17, 19–20, 73–76

Core Business Highlights
Urban Transportation
Real EstateEntertainment and Communications
TravelInternational Transportation
Hotels

Forecasts for Fiscal 2016 Onward
Group: 25
Urban Transportation: 41
Real Estate: 45
Entertainment and Communications: 49
Travel: 51
International Transportation: 53
Hotels: 55

Medium-Term Management Plan and
Growth Strategies
21–24, 26–29, 30–37
Safety Initiatives
in the Railway Business
64–65, 66–70
Financial Policy andShareholder Returns
17, 24Social Responsibility and Management Organisation
	  56 Directors and Audit & Supervisory Board Members
	  58 Management Organisation
	  64 Principal Risks and Countermeasures	  66 Safety Initiatives in the Railway Business	  71	Corporate Social Responsibility—Social Contribution andEnvironmental Preservation Activities

Definition of the areas served by Hankyu and Hanshin lines:
Below are lists of areas with Hankyu Corporation andHanshin Electric Railway stations (including tier 2 operators).
Osaka Prefecture: Osaka City (Fukushima, Konohana, Nishi,
Naniwa, Nishi-Yodogawa, Higashi-Yodogawa, Yodogawa, Kita
and Chuo, out of a total of 24 wards); and Toyonaka, Ikeda, Suita,
Takatsuki, Ibaraki, Minoh, 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, Nishikyo,
out of a total of 11 wards); and Muko and Nagaokakyo cities andOyamazaki town

Forward-looking Statements
The reader is advised that this report contains forward-looking statements regarding the futureplans, strategies, and earnings performance of Hankyu Hanshin Holdings, Inc., which are not statements of historical fact but constitute estimates or projections based on facts known to theCompany’s management as of the time of writing. Actual results may therefore differ substantiallyfrom such statements.
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 177th period, audited by KPMG
AZSA LLC presented in somewhat changed 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 2015” refers to the fiscal year ended 31st March 2015. Other fiscal years are referred to in acorresponding manner in this Annual Report. Figures are basically rounded off. Sums expressed inunits of ¥100 million are rounded to the nearest ¥100 million.

Group Management Philosophy

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

Hankyu Hanshin Holdings • Annual Report 20151

Group Management Philosophy

ValuesWhat is important to us

Customers Come First
Everything we do is for the customer. That’s where it all starts.

2

Hankyu Hanshin Holdings • Annual Report 2015

Group Management Philosophy

Integrity
Build trust by always acting with integrity.

Hankyu Hanshin Holdings • Annual Report 20153

Group Management Philosophy

Foresight & Creativity
With our progressive spirit and flexible thinking, we can create a new sense of value.

4

Hankyu Hanshin Holdings • Annual Report 2015

Group Management Philosophy

Respect for People
Each of our employees is an invaluable resource.

Hankyu Hanshin Holdings • Annual Report 20155

Business Model

Pursuing Business Synergies, Aiming for GrowthWith the Urban Transportation Business and the Real Estate

generate stable cash flows, accounting for approximately 60% ofBusiness as its mainstays, the Hankyu Hanshin Holdings Grouprevenues from operations and 80% of operating income. A com-realises synergies by developing businesses that have strong

paratively stable contribution to revenues from operations andlinks with railways and real estate development. These include theoperating income from the Entertainment and Communications

Entertainment and Communications Business, the Travel Business,

Business is a feature of the profit structure of the Group that dif-the International Transportation Business, and the Hotels Business.

ferentiates it from other companies in the same business.

The Urban Transportation Business and the Real Estate Business©Takarazuka Revue Company

Coordinating the Group’s trains, buses, andtaxis to form a major network that provides
diverse urban transportation services in the
Kansai area

Urban
Transportation

Real Estate

Advancing businesses with high brand value,
including the Hanshin Tigers and the Hanshin
Koshien Stadium and the Takarazuka Revue

Offering high-quality global logistics services
mainly through Hankyu Hanshin Express

Entertainment andCommunications

TravelInternational
Transportation

HotelsHankyu Travel
International

Hankyu Hanshin
Express

Hankyu Hanshin
HotelsHankyu Corporation
Hanshin Electric Railway

Developing and managing housing, commercial facilities, and offices primarily in areas
served by our lines

Promoting sales of a rich lineup of travel packages under the mainstay Trapics brand throughvarious media, including newspapers, member
magazines, and the Internet

Revenues from operations breakdown

Operating one of Japan’s major hotel groups
through the Hankyu-Hanshin-Daiichi HotelGroup and managing The Ritz-Carlton, Osaka

Operating income breakdown
Hotels 1.3%

Hotels 8.7%

Other 5.7%

Urban Transportation

32.0

International Transportation

%

5.4%

International Transportation

3.1%

Other 1.1%

Travel 1.3%
Entertainment andCommunications

Urban Transportation

15.4%

Travel 4.4%¥

685.9 billion¥

Real Estate

94.0 billion

39.6

%

28.3

%

Entertainment andCommunications

15.5%
Note: For detailed figures, please see page 8.

6

Hankyu Hanshin Holdings • Annual Report 2015

Real Estate

Approx. 60%

Approx. 80%

38.2

%

Business Model

From the Enhancement of Line-Side Area Value to Corporate Value Creation
While railway operations remained the core business, the Hankyu

developing housing but also by establishing a baseball stadium,

Hanshin Holdings Group began developing line-side areas soon

theatres, and other entertainment facilities and such commercial

after its establishment. In other words, we have pursued a busi-

facilities as office buildings and shopping centres.

ness model that promotes population growth in line-side areas
to increase passengers using our railway services. We have heightened the appeal of the areas our lines serve not only by

Developing housing
in areas served by our lines

Operating entertainment facilities
in areas served by our lines

Operating hotels
in areas served by our lines
and in major cities nationwide

Developing housing
in areas served by our lines

Operating entertainment facilities
in areas served by our lines

Developing office buildings
and commercial facilities in areas
surrounding railway terminals

Thanks to continuous efforts to heighten their value, areas

Furthermore, high population densities give us opportunities

served by Hankyu and Hanshin lines are some of the mostto bolster cash flows and foster new growth drivers. For exam-sought after residential zones in the Kansai area. Their higher-ple, they enable us to attract customers to entertainment

than-average population densities testify to this popularity.

facilities and commercial facilities in line-side areas and pro-

Because they increase passengers, higher population ­densities

vide everyday services to line-side area residents to diversify

underpin railway transportation efficiency and cash flow stability.

our earnings sources.

Hankyu Hanshin Holdings • Annual Report 20157

At a Glance

Major Operating Companies

Urban Transportation

Fiscal 2015 Results¥

Operating Income¥

Segment Assets

¥

778.6

billion (YoY +1.9%)

Revenues fromOperations

¥

206.4

billion (YoY −1.0%)

Operating Income¥

Segment Assets

¥

993.3

billion (YoY −1.6%)

Revenues fromOperations

¥

112.6

billion (YoY +2.1%)

Operating Income¥

Segment Assets¥

Revenues fromOperations¥

Operating Income¥

Segment Assets

¥

68.0

billion (YoY −8.6%)

Revenues fromOperations

¥

39.4

billion (YoY +4.6%)

Operating Income¥

Segment Assets

¥

45.8

billion (YoY +15.2%)

Revenues fromOperations

¥

63.0

billion (YoY −1.0%)

Operating Income¥

Segment Assets¥

Hankyu Corporation

阪神電気鉄道Hanshin Electric Railway

Real EstateEntertainment andCommunications© Hanshin Tigers

TravelHankyu Travel International

International
Transportation
Hankyu Hanshin Express

HotelsHankyu Hanshin Hotels

8Hankyu Hanshin Holdings • Annual Report 2015

233.4

Revenues fromOperations

38.6

37.2

15.0

billion (YoY +0.2%)

billion (YoY −2.2%)

billion (YoY +5.8%)

143.2
32.0
1.2

3.1

1.2

billion (YoY −0.5%)

billion (YoY +0.3%)

billion (YoY −3.2%)

billion (YoY +0.2%)

billion (YoY +48.8%)

billion (YoY +50.2%)

82.2

billion (YoY −4.1%)

At a Glance% of Revenues from Operations,Operating Income, and Segment Assets

32.0

39.6

36.1

Nature of BusinessThis segment comprises railway operations (with Hankyu Corporation operating the Kobe,
Takarazuka and Kyoto lines out of Osaka-Umeda and Hanshin Electric Railway lines directly
linking Kobe with Osaka’s major northern and southern terminals, Osaka-Umeda and Namba).
Together, the Hankyu and Hanshin network, combined with other lines, and bus, taxi and otherurban transportation services, form a single large-scale network in the Kansai area, centred on
the cities of Kyoto, Osaka and Kobe.
Total length of lines operated:
Hankyu Corporation: 143.6 km Hanshin Electric Railway: 48.9 km(Including tier 2 railway operator)

The Real Estate segment derives its core revenue from leasing and management of commercial facilities and office buildings and its condominium business. Its attractive business portfolio includes rental properties located mainly in the Umeda area and along the Group’s rail lines,
such as Umeda Hankyu Building, Hankyu Sanban Gai Shopping Centre, HERBIS OSAKA, HERBIS
ENT, GRAND FRONT OSAKA, Hankyu Nishinomiya Gardens and the highly regarded Geo condominium brand in the Kansai area and Tokyo metropolitan area.

28.3
46.1
38.2

This segment offers a wide variety of live entertainment, centred on the sports business—thenationally popular and famous Hanshin Tigers professional baseball team and their homeground and high-school baseball mecca, Hanshin Koshien Stadium—and the stage revue
business, based on the hugely popular Takarazuka Revue, which celebrated its 100th anniversary in 2014. In addition, this segment runs a wide range of businesses such as broadcast andcommunications business and the information services business.

Since its establishment in 1948, while meeting the diversified needs of customers throughalways taking their perspective, Hankyu Travel International has sold its products via various
media through its five brands. They are the Trapics brand that provides enhanced content at
a reasonable price, the “Crystal Heart” brand, the “Hanshin Aviation Friends’ Tour” brand forrelaxed travel, the “e-very” brand for self-planning travel, and the “Royal Collection” brand for
luxurious travel. It provides safe, comfortable travel for customers’ inspiration and dreams, ranging from package tours through to original plans for individual customers, travel to Japan, andbusiness travel services.

15.5

In 1948, as Japan’s first International Air Transport Association (IATA) certified freight agency,
Hankyu Hanshin Express (Hankyu Corporation at that time) began international airline freighttransportation operations. Since then, regardless of whether for imports or exports, it has been
providing fast and safe door-to-door international transportation services. As a pioneer in international logistics, it utilises the track record and experience it has cultivated in developing its
overseas business over many years and provides high-quality customised logistic services andsupport for its customers with optimised supply chain management.

4.4
15.4
5.4
6.7
8.7
3.2

5.7

1.3
3.1
1.3
1.1

2.1
3.8

The Hankyu-Hanshin-Daiichi Hotel Group operates 49 hotels, consisting of 17 that are directly
managed and 32 belonging to chains operated by franchises. It is one of Japan’s leading hotel
chains with 10,626 guest rooms (as of 1st April 2015). As a hotel operator with many directly
managed hotels in the Tokyo and Kansai areas, Japan’s two largest markets, it offers a wide
range of hotel formats, from general-purpose “city hotels” to new style hotels (with very limited
function facilities). In addition to chain operations, it also manages The Ritz-Carlton, Osaka, avenerable international luxury brand with which it has formed an alliance.

2.0

Figures for % of revenues from operations and operating income are calculated based on the simple aggregate amount (including intersegment transactions) of eachsegment. Revenues from operations and operating income in other businesses accounted for 5.7% and 1.1%, respectively.
Hankyu Hanshin Holdings • Annual Report 20159

Location of Our Business BaseThe Hankyu Hanshin Holdings Group’s business base is theKansai area, which has a population of approximately 20 million.
This is second only to the Kanto area, centred on Tokyo. Further,
the Kansai area is one of Asia’s economic powerhouses. According
to a Cabinet Office survey,* in the fiscal year ended March 2013,
the Kansai area’s gross production reached US$936.5 billion,
surpassing that of Indonesia.
* Cabinet Office, Report on Prefectural Accounts for the Fiscal Year Ended March 2013

Hanshin area
Questionnaires about where local people
would prefer to live rank it as one of themost popular residential areas.

Tokyo

Tanigami

Kyoto
Kyoto
City

Hyogo

Shiga

Kobe City
Osaka City
Osaka

■ Areas of high population
densities

Kobe Rapid Transit
Railway Line

Shin-Kobe

Kobe
Sannomiya
Minatogawa
Shinkaichi

Nara

o

k
yu
nK
shi Lineku
Ho ilwayRa

Hankyu Kobe Line

Motomachi

NishidaiWakayama

Osaka BayThe Group’s railway network links the Kansai area’s major cities:
Osaka-Umeda, Kobe, and Kyoto. By heightening customer satisfaction and transportation efficiency simultaneously, we haveestablished an unshakable presence in the Kansai area.
Since the earliest days of its railway operations, the Grouphas developed housing, entertainment facilities, and commercial
facilities in the areas served by its lines. Furthermore, thanks toefforts to attract universities, almost 50 universities and colleges
are located in the areas served by our lines. Easy access to the

Kansai International Airport
The largest airport in western Japan, this is
the Kansai area’s gateway to the world.

Kansai area’s major cities and plentiful infrastructure for everyday
life make our line-side areas some of the most popular places tolive in the region. Consequently, in the Kansai area, high population densities differentiate these areas.
Kansai International Airport
10

Hankyu Hanshin Holdings • Annual Report 2015

N

Kyoto
Prefecture

Arashiyama
Kawaramachi

Hankyu Arashiyama Line Katsura

Kyoto

Kyoto
Japan’s iconic tourism destination, Kyoto
welcomes 50 million visitors from other partsof Japan and from overseas every year.
Nissei-chuo

Myokenguchi

Hankyu Kyoto Line

Osaka Prefecture

Nosé Electric
Railway Line

Hyogo
Prefecture

Hankyu Mino-o Line
Mino-oKawanishi-noseguchi
Kita-senri
Osaka Ishibashi
International
AirportHankyuTakarazuka
Line

KoyoenansenHankyu
Senri
Line

ink

Hankyu Itami
Itami Line

HankyuKoyo Line

Senri-chuo

Kita-Osaka Kyuko

HankyuImazu LineSh

Takarazuka

Esaka
ShukugawaNishinomiyakitaguchi

Tsukaguchi
ShinOsaka

Imazu
Imazu

Mukogawa

Daimotsu

Juso

Awaji

Tenjimbashisuji
6-chomeAmagasaki

Umeda

Kintetsu-Nara

Mukogawadanchimae

SubwaySakaisuji Line

Hanshin Main Line
Hanshin Mukogawa Line
Hanshin Namba Line

Osaka-Namba

Nara Prefecture

Kintetsu Nara LineUmeda
The Group’s most important base, theUmeda area, is the Kansai economic bloc’s
hub and one of Japan’s world-famous
shopping and entertainment districts.

Average number of passengers per day using stations ofprivate railway operators (non-JR) in fiscal 2015
(Thousand people)

1,109

Tokyu Shibuya Station
735

Keio Shinjuku Station

Hankyu Railway Network 143.6 km
Kobe Line

46.9 km		(Kobe Line, Imazu Line, Itami Line, Koyo Line)		(Takarazuka Line, Mino-o Line)		(Kyoto Line, Senri Line, Arashiyama Line)

Takarazuka Line
Kyoto Line
Kobe Rapid Transit Railway Line

28.5 km
65.4 km
2.8 km541

Hankyu Umeda Station
Odakyu Shinjuku Station

488

Seibu Ikebukuro Station

479

Hanshin Umeda Station

5 km

162

Source: Prepared by the Group based on documents
released by respective companies

Hanshin Electric Railway Network 48.9 km
Hanshin Line				

43.9 km(Hanshin Main Line, Hanshin Namba Line,
Mukogawa Line)
Kobe Rapid Transit Railway Line

5.0 kmHankyu Hanshin Holdings • Annual Report 201511

Business Environment

Population of areas served by Hankyu and Hanshin Lines (1991 = 100)

Due to aging of society, the Kansai area’s overall
population is declining gradually. Meanwhile,
the population is comparatively large in areas
served by Hankyu and Hanshin lines, a testament to convenience and brand popularity.
In these areas, the population has been trending upward since bottoming in 1996, the year
after the Great Hanshin (Kobe) Earthquake.

106

103

100

97

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14(CY)

Note: S ee the contents page for the definition of
the areas served by Hankyu and Hanshinlines.

Areas served by Hankyu and Hanshin lines
Kansai area
Sources: Prepared by the Company based on data from “Local Economy Directory,” published by Toyo Keizai, Inc.
and “Basic Resident Register,” published by the Ministry of Internal Affairs and Communications.

Population by age group, along Hankyu and Hanshin Lines (Population Census of Japan)(Million people)

6

5.50
5.41
5.43
5.37
5.32
5.23
0.49
0.42
0.57
0.65
0.83
1.01

5.56
1.20

4

3.65

3.80

3.92

3.81

3.81

3.72

3.64

1.23

1.11

0.91

0.76

80

85

90

95

0.72
00

0.72
05

0.72
10

2

0

According to the official Population Census
of Japan, although the population aged
below 15 remains stable, the population
aged between 15 and 64 is declining. The
latter group is the working-age population—
the main purchasers of commuter passes.
Note: Tallies do not add up to the total at the top
for each year as the age group is not known
in many cases. Unknowns account for thedifference.

(CY)

Young
Working age
Elderly
Source: P repared by the Company based on data from “2010 Population Census of Japan,” published by the
Ministry of Internal Affairs and Communications.

Average vacancy rates at office buildings

Favourable corporate results are fuellingdemand for office expansion and the integration of previously discrete offices. While vacancy
rates in Umeda spiked in fiscal 2014 due tothe April 2013 opening of the GRAND FRONTOSAKA Office Tower building, they have been
improving significantly since fiscal 2015.

(%)

15

10

5

0

06

07

08

09

Osaka business areas (all)Umeda area
Source: Miki Shoji. “Office Data.”

10

11

12

13

14

15

Tokyo business areas (all)(Comparison of average rents in April of respective years)

Average rents at office buildings

Solid demand for offices is slowing thedecline in office rents. However, a full-fledged
recovery in rents will require a marked reduction in office vacancy rates.

(¥/3.3 m2)

25,00020,00015,00010,000
5,000
0

06

07

08

09

Osaka business areas (all)Umeda area
Source: Miki Shoji. “Office Data.”

12Hankyu Hanshin Holdings • Annual Report 2015

10

11

12

13

14

15

Tokyo business areas (all)(Comparison of average rents in April of respective years)

Business Environment

New supply of condominiums

In 2014, the new supply of condominiums
decreased year on year due to rush demandin 2013 prior to the consumption tax increasein April 2014. The number of condominiums
sold was particularly low in suburban areas.
In the Tokyo metropolitan area and theKansai area, however, demand for condominiums in city centre areas is steady thanks tothe popularity of their convenience andvalue as assets.

(Unit)
100,000

84,14880,00074,46361,02160,00040,00056,47843,73333,064 30,146

30,21920,00036,37644,535 44,499 45,602

44,91322,744 19,784 21,716 20,219 23,266 24,691 18,814

0

05

06

07

08

09

10

11

12

13

14 (CY)Tokyo metropolitan area
Kansai area
Source: Real Estate Economic Institute Co., Ltd. “National Condominium Market Trends.”

Condominium prices (Tokyo metropolitan and Kansai areas)(¥ million)

80(¥ thousand/m2)
800

60

600

40

400

20

200

Due to steady demand, condominium prices
have been stable. However, they are trending
upward as a result of rising construction costs
accompanying higher material prices and alabour shortage in the construction industry.

0

0

05

06

07

08

09

10

11

12

13

14 (CY)Tokyo metropolitan area (average)
Kansai area (average)
Tokyo metropolitan area (right axis)
Kansai area (right axis)
Source: Real Estate Economic Institute Co., Ltd. “National Condominium Market Trends.”

Consolidated air cargo originating in Japan(Thousand ton)

2,000

1,500

1,305

1,308

1,323

1,000

983

934

09

10

1,076

996

856

862

13

14

996

500

International airfreight originating in Japan istrending upwards, reflecting export industries’ favourable performances as the yen
depreciates and Japanese companies’ business expansion overseas. Over the medium
term, international air transportation demandis expected to grow centred on Asia, which isseeing continued economic development.

0

06

07

08

11

12

15 (FY)

Source: Japan Aircargo Forwarders Association. “Airfreight Forwarding Results.”

Overseas visitors to Japan and Japanese travellers going overseas(Million people)

20

17.4

17.5

17.3

16.0

15

15.4

16.6

17.0

18.5

17.5

13.4

10

5

16.9

6.7

7.3

05

06

8.3

8.4

6.8

10.4

8.6

8.4
6.2

Since 2011, the number of overseas visitors
to Japan has been growing in step with yen
depreciation, the relaxation of requirements
for the issuance of tourist visas to individuals,
and a rise in the number of routes budget
airlines cover. In 2014, Japan welcomed morethan 13 million visitors, a record high. Given
that the government aims to increase this to
20 million by 2020, the number of overseas
visitors to Japan is likely to continue growing.

0

07

08

09

10

11

12

13

14 (CY)

Overseas visitors to Japan
Japanese travellers going overseas
Source: Japan National Tourist Organization. “Visitors Arrivals, Japanese Overseas Travellers.”

Hankyu Hanshin Holdings • Annual Report 201513

Performance Highlights (Consolidated)

Key Financial Indicators(¥ million)
20072

FY

2008

2009

2010

2011

2012

2013

¥ 682,439

Result of Operations:¥ [813,613]¥ 752,300¥ 683,715¥ 653,287¥ 638,770¥ 649,703

Operating income[94,800]

90,724

77,82370,12664,74373,80987,921

EBITDA3[146,500]

145,200

135,300

133,200

127,100

133,500

145,100

Ordinary income
Income before income taxes andminority interests

74,86974,88257,44550,40946,49465,39374,91465,30526,09834,06433,89932,76043,41962,192

Net income[40,507]627

20,55010,79318,06839,25239,702———

12,541

14,72844,99254,081

Capital expenditure

53,795

134,307

109,688

132,386

68,431

55,26759,512

Depreciation and amortisation

43,88851,57754,79860,41859,66956,96854,540

Revenues from operations

Comprehensive income

Cash Flows:¥

74,902¥ 108,597¥ 146,955¥ 103,252¥ 124,525¥ 127,655

Cash flows from investing activities(199,578)(100,058)(115,047)(132,737)(62,516)(44,295)(58,923)

Free cash flow

(120,596)(25,155)(6,449)14,21740,73580,23068,732132,289

36,718

7,014(24,200)(39,544)(78,978)(69,195)¥2,281,007

Cash flows from operating activities
4

Cash flows from financing activities

78,981¥

Financial Position:¥2,366,694¥2,348,476¥2,307,332¥2,337,331¥2,314,669¥2,274,380

Total net assets

522,286

476,639

473,878

480,633

486,947

524,801

573,154

Interest-bearing debt

1,209,382

1,271,100

1,275,620

1,282,583

1,251,665

1,183,647

1,126,633

¥

¥

¥

¥

¥

¥

¥

Total assets

Per Share Data (yen and U.S. dollars):
Net income

Basic

31.84

0.50

16.28

8.55

14.32

31.13

31.48

—

0.41

16.18

8.51

14.27

31.13

31.47

Net assets

405.35369.25366.96371.70377.17407.01443.63

Dividend

5.00

5.00

5.00

5.00

5.00

5.00

5.00

DilutedRatios:[11.7]

12.1

11.4

10.7

10.1

11.4

12.9

5

3.8

3.2

2.5

2.2

2.0

2.8

3.3

6

7.4

Operating income margin (%)
ROA (%)

[8.4]

0.1

4.4

2.3

3.8

7.9

Interest-bearing debt/EBITDA (times)

8.310

8.8

9.4

9.6

9.8

8.9

7.8

Equity ratio (%)

21.7

19.9

20.1

20.1

20.6

22.6

24.5

Debt/equity (D/E) ratio (times)7

2.4

2.7

2.8

2.7

2.6

2.3

2.0

ROE (%)

Stock Price Index:
Stock price at the end of fiscal year
(yen and U.S. dollars)Market capitalisation(¥ billion, $ million)

¥

713

¥

431

¥

447

¥

433

¥

384

¥

361

¥

569

906.5

548.0

568.3

550.5

488.2

459.0

723.4

PER (times)

22.4

862.0

27.5

50.6

26.8

11.6

18.1

PBR (times)

1.8

1.2

1.2

1.2

1.0

0.9

1.3

618,877

618,373618,585

605,963

603,233

608,632

615,324

179,871

180,906

182,997

193,620

205,202

218,560

221,133

2.95

3.08

5.88

8.90

11.22

7.29

11.50

Business Data:
Hankyu Railway (thousand)8
Hanshin Electric Railway (thousand)Average vacancy rates of rental office buildings(Umeda area, Osaka; %)98

1.	The U.S. dollar amounts have been translated, for convenience only, at ¥120 = $1, the prevailing exchange rate on the Tokyo Foreign Exchange Market at 31st March 2015.
2.	Since the second quarter of fiscal 2007, the results of Hanshin Electric Railway Co., Ltd. have been included in consolidated results due to its inclusion within the scopeof consolidation as a result of management integration. Figures in parentheses have been calculated based on the assumption that management integration was executedat the beginning of the fiscal year.
3.	EBITDA = operating income + depreciation expenses + amortisation of goodwill. EBITDA figures are rounded to the nearest ¥100 million.
4.	Free cash flow = cash flows from operating activities + cash flows from investing activities
5.	ROA = ordinary income/total assets (average of period-start and period-end totals)
6.	ROE = net income/equity (average of period-start and period-end totals)
7.	D/E ratio = interest-bearing debt/equity
8.	Annual number of passengers carried
9.	Average vacancy rate figures are overall rates for the Umeda city centre area at the end of March for major rental office buildings (including properties not owned by the Group)with a total floor area of at least 3,300 m2 and are based on “Latest Trends in the Office-Building Market in Osaka,” Miki Shoji Office Data.
10.	The figure has been calculated using EBITDA, which has been calculated based on the assumption that management integration was executed at the beginning of the fiscal year.

14

Hankyu Hanshin Holdings • Annual Report 2015

Performance Highlights (Consolidated)($ thousand1)
2015

2014

¥ 679,1572015¥   685,906$ 5,715,883

91,82894,026

783,550

149,200

150,100

1,250,833

81,191

85,590713,250

83,542

77,620646,833

46,352

54,201

451,675

55,941

71,034

591,950

80,722

68,115567,625

54,474

53,143442,858¥ 146,991¥  131,881$ 1,099,008(45,517)(52,529)(437,742)

101,474

79,352

661,266(105,079)(81,746)(681,217)¥2,286,928¥2,279,638$18,996,983

617,598

679,482

5,662,350

1,032,307

955,828

7,965,233

36.76¥    42.98$      0.36

36.75

42.95

0.36

477.69525.56

4.38

6.00

6.00

0.05

13.5

13.7

—

3.6

3.7

—

8.0

8.6

—

6.9

6.4

—

26.3

29.1

—

1.7

1.4

—

562

¥      743$      6.19

714.5

944.7

7,873

15.3

17.3

1.2

1.4

¥

¥

Revenues from operations: ¥685.9 billion(up 1.0%, or ¥6.7 billion, from the previous fiscal year)
Operating income: ¥94.0 billion(up 2.4%, or ¥2.2 billion, from the previous fiscal year)
The International Transportation Business performed well due to special demand and apickup in freight demand, while the Entertainment and Communications Business saw
the Hanshin Tigers professional baseball team and the Takarazuka Revue post favourable
results. Thanks to contributions from these businesses, revenues from operations
increased 1.0%, or ¥6.7 billion, year on year, to ¥685.9 billion, and operating income rose
2.4%, or ¥2.2 billion, to ¥94.0 billion.

Operating income: Factor analysis (YoY change)(¥ million)
FY2014FY201591,828International Transportation+1,002Entertainment and Communications+821
Hotels+406
Urban Transportation +59
Travel +3
Real Estate–835
Other +183
Adjustments+558
94,026

Net income: ¥54.2 billion(up 16.9%, or ¥7.8 billion, from the previous fiscal year)
Net non-operating loss (total non-operating expenses net of total non-operating income)
improved 20.7%, or ¥2.1 billion, year on year, to ¥8.4 billion, due to an increase in equity inincome of affiliates. Further, total extraordinary income net of total extraordinary loss wasa loss of ¥8.0 billion, compared with the previous fiscal year’s income of ¥2.3 billion,
because gain on sales of investment securities did not fully compensate for a decrease ingain on sales of noncurrent assets.
Net income was up 16.9%, or ¥7.8 billion, year on year, to ¥54.2 billion. In addition to
the abovementioned factors, this increase reflected higher operating income and a reversal of deferred tax assets and liabilities that resulted from a revision of the tax system,
which mainly comprised a reduction in total income taxes.

Net income: Factor analysis (YoY change)
Increase in revenues from operations+¥6.7 billion

Decrease in selling, general and administrative expenses+¥1.9 billion—

Decrease in total non-operating expenses+¥1.6 billion—

Increase in total non-operating income+¥0.6 billion

Increase in minority interests in income+¥0 billion

629,125

627,536—

Decrease in total income taxes+¥13.8 billion

226,004

227,203—

Increase in operating expenses and costs of sales of transportation–¥6.4 billion

Decrease in total extraordinary income–¥2.5 billion

Increase in total extraordinary loss–¥7.9 billion

9.22

7.84

—

Interest-bearing debt: ¥955.8 billion(down 7.4%, or ¥76.5 billion, from the previous fiscal year-end)
The outstanding balance of interest-bearing debt at the end of the fiscal year underreview amounted to ¥955.8 billion, a decrease of 7.4%, or ¥76.5 billion, from the previous
fiscal year-end. This was because proceeds from sales of investment securities and net
cash provided by operating activities were used to repay interest-bearing debt.

Hankyu Hanshin Holdings • Annual Report 201515

Performance Highlights (Consolidated)

Key Financial Indicators (Graphs)
Revenues from operations(¥ billion)

900[813.6]

752.3

683.7

653.3

638.8

649.7

682.4

679.2

685.9

09

10

11

12

13

14

15

600

300

0

07

08

(FY)

Operating income and operating income margin(¥ billion)

100[94.8]

90.7

87.9

80
60

77.8
[11.7]

12.1

70.1

64.7
10.1
10.7

11.4

91.8

(%)
20

94.0

16

73.8

13.5

12.9

11.4

13.7

12

40

8

20

4
0

0

07

08

Operating income

09

10

11

12

13

14

15

(FY)

Operating income margin (right axis)

EBITDA[146.5]

145.2

135.3

133.2

127.1

133.5

09

10

11

12

120

145.1

149.2

150.1

13

14

15

Operating income was ¥94.0 billion, reachinga new record for the second consecutive
fiscal year. This resulted from a 48.8% year-onyear rise in the operating income of theInternational Transportation Business—due
to currency rate fluctuations and special
demand for air transportation—and steady
railway operation revenue. These positive
factors as well as the abovementioned factors contributing to the increase in revenues
from operations more than offset a decreasein earnings accompanying the sale by theReal Estate Business of land for facilities in theprevious fiscal year.

Operating income rose 2.4% year on year, to¥94.0 billion; depreciation and amortisation
decreased 2.4%, to ¥53.1 billion; and amortisation of goodwill edged up 0.4%, to ¥2.9
billion. As a result, EBITDA reached ¥150.1
billion, surpassing ¥150.0 billion for the firsttime since the Group’s establishment in 2007.

(¥ billion)

160

In fiscal 2015, revenues from operations
increased 1.0%, or ¥6.7 billion, year on year,to ¥685.9 billion. This reflected a favour­
able performance by the Entertainment andCom­munications Business due to the Hanshin
Tigers professional baseball team reaching
the Japan Series and the popularity of theperformances of the Takarazuka Revue, whichcelebrated its 100th anniversary, and higher
revenues from construction and other businesses of the Other segment.

80

40

0

07

08

(FY)

Net income and ROE(¥ billion)

(%)

60

18

54.2

50
40
30

7.9
20.6

20

4.4

10

0.6
07

Net income

16

39.7

39.3

[8.4]

0

15

46.4

[40.5]

08

0.1

12

8.6

8.0

7.4

6

18.1
10.8

3.8

3

2.3
09

ROE (right axis)

Hankyu Hanshin Holdings • Annual Report 2015

10

9

0

11

12

13

14

15

(FY)

Net income rose 16.9%, or ¥7.8 billion, year on
year, to a new record of ¥54.2 billion, due to adecrease in income taxes—deferred accompanying a reduction in total income taxes anda reversal of deferred tax assets and liabilities.
As a result, ROE increased 0.6 percentage
points, to 8.6%.
Note: F rom the second quarter of fiscal 2007,
consolidated results of Hanshin Electric
Railway Co., Ltd. are included as a result ofmanagement integration in the scope of
consolidation of the Group. Figures in [ ] arecalculated assuming the management
integration had entered effect from the
beginning of the term.

Performance Highlights (Consolidated)

Total assets and ROA(¥ trillion)
2.5

2.37

2.0

2.35

2.34

2.31

2.31

2.28

2.27

3.8
3.2

1.5

4

3.7
3

2.0

2.2

1.0

2.28

3.6

3.3

2.8
2.5

2.29

(%)
5

2

0.5

1

0

0

07
Total assets

Total assets edged down 0.3%, or ¥7.3 billion,
from the previous fiscal year-end, to ¥2,279.6
billion, due to a decrease in land and buildings.
ROA edged up 0.1 percentage points, to 3.7%,
reflecting the record ordinary income that
resulted from higher revenues from operations.

08

09

10

11

12

13

14

15

(FY)

ROA (right axis)

Interest-bearing debt, D/E ratio, and interest-bearing debt/EBITDA(¥ trillion)
1.5(Times)
15

1.27

1.21
1.0

1.28

1.25

9.6

9.4

8.8

8.3*

1.28

1.18

9.8

1.13

8.9

1.03

7.8

6.9

6.4

0.5

2.7

2.4

2.8

2.6

2.7

2.3

2.0

1.7

08

09

10

11

12

13

14

5

1.4

0

07

10

0.96

15

The outstanding balance of interest-bearing
debt was down 7.4%, or ¥76.5 billion, fromthe previous fiscal year-end, to ¥955.8 billion,
due to the use of net cash provided by operating activities to repay interest-bearing debt.
Consequently, the D/E ratio decreased to 1.4
times. Also, the interest-bearing debt/EBITDA
ratio declined from 6.9 times to 6.4 times,
reflecting steady improvement in the
Company’s financial position.

0

(FY)

Interest-bearing debt
D/E ratio (right axis)
Interest-bearing debt/EBITDA (right axis)
* The figure has been calculated using EBITDA, which has been calculated based on the assumption thatmanagement integration was executed at the beginning of the fiscal year.

Cash flows(¥ billion)
150

100

147.0
108.6

79.0

103.3

74.9

50

–50

–150

－115.0－100.1－120.6–200

07－199.6

08

80.2

68.7

101.5

Net cash provided by operating activities was¥131.9 billion, reflecting a decrease in income
before income taxes and minority interestsand loss on impairment of fixed assets. Net
cash used in investing activities was ¥52.5 billion, reflecting lower proceeds from sales of
noncurrent assets. Net cash used in financing
activities was ¥81.7 billion due to repaymentof long-term debt.

131.9
79.4

－6.4

－25.2

–100

127.7

40.7

14.2

0

124.5

147.0

－62.5

－44.3

－58.9

－45.5

－52.5

14

15

－132.709

10

Net cash provided by operating activities
Free cash flow

11

12

13

(FY)

Net cash used in investing activities

Returns to shareholders(Yen)
10.00

(%)
1,000

1,000.0
58.5

8.00
6.00

5.00

5.00

5.00

4.00

5.00

30.7

2.00

60

5.00
5.00
34.9
16.1

15.7

6.00

6.00

45

5.00
30

15.9

16.3

14.0

0

15

In accordance with its policy of stable dividend payments, the Company has paid dividends based on a minimum level set at ¥6
per share since the appropriation of profits
for fiscal 2014. In fiscal 2016, the Company
will further enhance returns to shareholders
by raising the dividend to ¥7 per share andpurchasing treasury stock with a view to realizing a total payout ratio of 25%, a newly
established indicator.

0

07
Dividend per share

08

09

10

11

12

13

14

15

(FY)

Dividend payout ratio (right axis)

Hankyu Hanshin Holdings • Annual Report 201517

To Our Stakeholders

Moving to a new management stage,the Hankyu Hanshin Holdings Group will makea concerted effort to realise medium-to-long-term growthby enhancing the value of the areas served by its lines
while pursuing business opportunities in new markets.

Kazuo Sumi
President andRepresentative Director

In fiscal 2015, the year ended 31st March 2015, the Hankyu
Hanshin Holdings Group achieved higher revenues and earnings for the second consecutive year, posting record operating
income, ordinary income, and net income. These businessresults reflect steady efforts to strengthen the competitivenessof each core business and improve our financial position, strategies we have been implementing for some time. Moreover, theinterest-bearing debt/EBITDA ratio, which we view as the mostimportant management indicator, improved from the previous

18

Hankyu Hanshin Holdings • Annual Report 2015

fiscal year’s 6.9 times to 6.4 times. Favourable evaluation of thissteady improvement in our financial position and of our commitment to continuing to improve it while investing for growthin the medium-to-long term has led credit rating agencies to
upgrade our credit rating in each of the past two fiscal years. In
light of this progress, in fiscal 2016, the year ending 31st March
2016, we have begun full-fledged efforts as part of a new management phase in which we will establish the foundations of
future growth.



To Our Stakeholders

Fiscal 2015 Business Results 
Before giving an overview of initiatives to date and explaining
those going forward, I will report on business results in fiscal 2015.
In fiscal 2015, yen depreciation and concerns about security
overseas weakened the performance of the Travel Business. In
the Entertainment and Communications Business, however, theHanshin Tigers reached the Japan Series, and the performancesof the Takarazuka Revue, which celebrated its centenary, were
well received. Other business segments achieved favourable
business results overall. In the Urban Transportation Business, theHankyu and Hanshin lines performed steadily. As for the Real
Estate Business, office occupancy rates in the Umeda area rose,
while the International Transportation Business and the Hotels
Business realised solid business results. Consequently, the Group

recorded year-on-year increases of 1.0%, or ¥6.7 billion, in revenues from operations, to ¥685.9 billion, and 2.4%, or ¥2.2 billion,
in operating income, to ¥94.0 billion. Further, thanks to an
improvement in the financial account balance resulting from thereduction of interest-bearing debt, ordinary income rose 5.4%, or¥4.4 billion, year on year, to ¥85.6 billion, while net income grew
16.9%, or ¥7.8 billion, year on year, to ¥54.2 billion.
Net income was up significantly year on year. This improvement was primarily attributable to a reversal of deferred tax
assets and liabilities that arose from revision of the tax system
and which was a one-time factor limited to fiscal 2015.
Nevertheless, even excluding this one-time factor, net income
rose year on year.

Fiscal 2015 business results overview(¥ billion)

FY2014 results

FY2015 results

Revenues from operations

679.2

Operating income

YoY(Increase)

(%)

685.9

6.7

1.0

91.8

94.0

2.2

2.4

Ordinary income

81.2

85.6

4.4

5.4

Net income

46.4

54.2

7.8

16.9

Overview of Initiatives to Date Established through the management integration of Hankyu
Holdings, Inc. and Hanshin Electric Railway Co., Ltd. in October
2006, Hankyu Hanshin Holdings, Inc. announced its inaugural
medium-term management plan, Hankyu Hanshin HoldingsGroup 2007 Medium-Term Management Plan, in March 2007.
When the plan began, the Group was advancing several large
projects simultaneously, including the rebuilding of Umeda
Hankyu Building and the extension of the Hanshin Namba Line.
Consequently, interest-bearing debt rose temporarily, reaching
more than ¥1,280 billion, while the interest-bearing debt/EBITDA
ratio increased to more than nine times. Given this level of debt,
improving our financial position became an urgent managementtask. In particular, we viewed lowering the interest-bearing

debt/EBITDA ratio to around seven times as our most important
target and worked towards its achievement.
Specifically, we curbed capital investment with depreciation
and amortisation levels as a benchmark. Furthermore, based on
the stronger cash flow generation capabilities that accompanied
the completion of such major projects as Umeda Hankyu
Building, we gave priority to using surplus funds to improve ourfinancial position through the reduction of interest-bearing
debt. As a result, in fiscal 2014, we were able to reach themedium-term management plan’s management target of
an interest-bearing debt/EBITDA ratio of around seven times.
In fiscal 2015, EBITDA grew further, increasing ¥0.9 billion year on
year, to ¥150.1 billion, and surpassing ¥150 billion for the first

Hankyu Hanshin Holdings • Annual Report 201519

To Our Stakeholders

time since management integration in 2006. Meanwhile,interest-bearing debt moved below ¥1 trillion, to ¥955.8 billion,
because we allocated proceeds from the sale of investment
securities and net cash provided by operating activities torepayment. As a result, the interest-bearing debt/EBITDA ratio

decreased to 6.4 times, one of the lowest levels among major
private (non-JR) railway operators in Japan.

The Group reaches an interest-bearing debt/EBITDA ratio ofaround seven times, meeting the target set by the mediumterm management plan announced in 2007.

Improve cash flow generation through earnings from major
projects such as Hankyu Nishinomiya Gardens development,
the extension of the Hanshin Namba Line, the Hanshin Koshien
Stadium refurbishment, and the rebuilding of the Umeda
Hankyu Building.

Leveraging cash flow generation boosted through completion oflarge-scale projects, reduce total interest-bearing debt and steadily
improve our financial position by maintaining a certain level of strategic
capital outlays but at the same time keeping total capital investment
to roughly the equivalent to depreciation and amortisation costs.

(¥ billion)(¥ billion)

1,700

170

9.8 times
Interest-bearing
debt/EBITDA ratio

9.4 times

9.6 times

8.9 times

8.8 times

149.2

150.1

145.1

1,400

145.2

135.3

EBITDA (right axis)

1,271.1

1,100

140
133.5

133.2

7.8 times

127.1
1,275.6

1,282.6

1,251.7

Interest-bearing debt
(left axis)

6.9 times

1,183.6

6.4 times

110

1,126.6
1,032.3

Investment in developments for growth

Payback from major projects

955.8

Reconciling growth and financial soundness

800

80
2008

2009

2010

2011

2012

2013

2014

2015

3/20083/20093/20103/20113/20123/20133/20143/2015(FY)

Hankyu Nishinomiya Gardens Development (September 2004 – November 2008)
Extension of Hanshin Namba Line (Opening of new extension) (October 2003 – March 2009)
Renovation of Hanshin Koshien Stadium* (October 2007 – March 2010)

September 2009: Opening of
Department Store Building (Phase I)

April 2010: Completion of Office Tower

Rebuilding of Umeda Hankyu Building (May 2005 – November 2012)
November 2012: Grand opening of the Umeda Flagship Store ofHankyu Department Store

Osaka Station North District (Umekita)
Phase I Development Area Project (GRAND FRONT OSAKA)(March 2010 – March 2013)* Renovation work conducted during three off-seasons.

20

Hankyu Hanshin Holdings • Annual Report 2015

Note:	Project start times are as of works commencement. Also,
finish times are project completion dates (completion of A
and B blocks for Osaka Station North District (Umekita)
Phase I Development Area Project).

To Our Stakeholders

New Medium-Term Management Plan 
Changes in Business Conditions
The business conditions facing the Hankyu Hanshin HoldingsGroup have changed dramatically. The features of current conditions are the growing scale of the market in the Tokyo metropolitan area, the growth of markets in Asia centred on the ASEAN
region, and market expansion accompanying the rapid increase
in tourists from overseas. As our new medium-term management plan shows, we see such changes in business conditions as
new business opportunities and believe we must take further
action to sustain corporate value growth.

Basic Approach of the Medium-Term Management Plan
I believe that one of our strengths is progressiveness. In otherwords, we are ahead of the times and open to new ideas.
However, for a long time we have had to be defensive. We havecurbed growth investment and given priority to reducing interestbearing debt because improving our financial position has been
our most important management task. Having become more
profitable by cementing earnings foundations and improving
our financial position, we can finally realise our inherent progressiveness and provide customers with new value.
In this new management phase, we will lay foundations for
future growth. Accordingly, the two main business strategies of
our new medium-term management plan call on us to enhancevalue of the Umeda area and other line-side areas and develop newmarkets for medium-to-long-term growth.
Under the plan, with a view to growing future earnings, wehave earmarked roughly ¥340 billion for investment during thefour years from fiscal 2016. Of this, we will allocate approximately¥130 billion to investment in such major development projects
as the Umeda 1-1 Project and the development of new markets,
topics I will touch on later. This is more than twice the amountinvested from fiscal 2012 to fiscal 2015 and is approximately thesame investment level that we had between fiscal 2008 andfiscal 2011, when we were advancing several major projects,
such as the rebuilding of Umeda Hankyu Building.
Meanwhile, we will continue strengthening our financial
position because maintaining financial discipline over the
medium-to-long term as we steadily invest for growth is criticalto ensure fund-raising capabilities, and, by extension, investment
capabilities. Specifically, we will reduce interest-bearing debt toless than ¥900 billion by the end of fiscal 2019.
As well as investing for growth and strengthening our financial position, we will endeavour to further enhance returns toshareholders through dividends and acquisition of treasury
stock. Furthermore, to promote flexible allocation of cash flows
to returns to shareholders, we have introduced a total return
ratio as an indicator from fiscal 2016.

The preparation and implementation of growth strategies
premised on maintaining financial discipline (fiscal 2016 – fiscal 2019)

Investment
Approx. ¥340 billion
Grow income
Give priority to investment

Maintain and improve
capital efficiency

Cash flows
Approx. ¥450 billion**	Calculated using simplified method that deducts
interest expenses and income taxes from EBITDA

Acquire treasury stock

Returns to shareholders
Introduce total return ratio

Control debts
Reduce to less than¥900 billion

Hankyu Hanshin Holdings • Annual Report 201521

To Our Stakeholders

Business
Strategy 1

Enhance Value of the Umeda Area andOther Line-Side Areas

With respect to the areas served by its lines, the Group will promote further development by giving priority to allocation ofmanagement resources to the Umeda area, which is its largest
business base. At the same time, we will take measures toheighten the value of areas served by Hankyu and Hanshin lines.
Through these measures, the Group will maintain and enhancethe value of its assets.
Begun in October 2014, the Umeda 1-1 Project is a largescale redevelopment project that entails creating a single integrated building by reconstructing Dai Hanshin Building and theadjacent Shin Hankyu Building, which are situated at the centreof the Umeda area. This project is only possible thanks to the
management integration of Hankyu Holdings and Hanshin
Electric Railway nine years ago. Moreover, in conjunction withthis project, we have begun construction work to upgrade
Hanshin Umeda Station. The completion of these closely interlinked projects will enable the creation of new foot traffic flows
centred on Hanshin Umeda Station and promises to make touring the entire Umeda area more enjoyable for visitors, thereby
helping invigorate it.

Further, to make the Umeda area somewhere people wantto visit frequently, developing such physical infrastructure as
office buildings and commercial facilities is not enough. To
invigorate the area, I believe proactively fostering intangible
infrastructure through area management is indispensable.
Specifically, with local landowners we are developing initiatives
to energise the whole area, such as area events and emergency
drills that help create a sense of community. In addition, in 2014,
we opened a support base for entrepreneurs, GVH#5, which provides start-ups with small comfortable offices at affordable rents.
Being the largest landowner in the Umeda area makes us
uniquely qualified to facilitate this initiative. In this way, throughefforts to improve tangible and intangible infrastructure, we will
create business opportunities from a medium-to-long-term perspective. I am confident that, ultimately, our efforts will raise
Umeda’s prestige as an urban area, and enhance the value of ourassets as a consequence.
In areas other than the Umeda area that are served byHankyu and Hanshin lines, we will redouble efforts to enhancevalue. As part of these efforts, we aim to develop businesses that
address social issues in line-side areas. For example, we are developing private after-school day-care centres, After-School Kippo,
to help working parents with child rearing. Also, we are

Approach to investment (and trends in capital investment)
Major projects• Rebuilding of Umeda Hankyu Building• Extension of Hanshin Namba Line• Development ofHankyu Nishinomiya Gardens• Refurbishment of
Hanshin Koshien Stadium• Development of Umekita(GRAND FRONT OSAKA), etc.

Approx. ¥340 billion

Approx. ¥320 billion*

Approx. ¥130 billion

Approx. ¥240 billion*
Approx. ¥60 billion

Approx. ¥190 billion

Approx. ¥180 billion

Investment in major
development projects
and new market
development
Approx. ¥130 billion

Investment inmaintenance andrenewal of existing
infrastructure, etc.
Approx. ¥210 billion

FY2008 – FY2011

FY2012 – FY2015

FY2016 – FY2019

Investment in development for growth

Improvement in financial position throughcurbing of capital investment

Development of foundations for
medium-to-long-term growth* Excluding capital investment related to the repurchase of securitised assets and the exchange of the assets with Hankyu REIT Inc.

22

Hankyu Hanshin Holdings • Annual Report 2015

To Our Stakeholders

developing a provider of comprehensive support for the elderlythat establishes environments enabling the elderly to lead active
lives. Providing these services helps create urban areas in which
different generations can live with peace of mind. As a result,people will want to live in, remain long-term in, or keep visiting
areas served by Hankyu and Hanshin lines, which will foster
demand and add value to our line-side areas.
Business
Strategy 2

Develop New Markets for
Medium-to-Long-Term GrowthWith a view to extending earnings foundations through thedevelopment of new markets, the Hankyu Hanshin HoldingsGroup is concentrating efforts on expanding businesses in theTokyo metropolitan area and developing overseas markets. At
the moment, the population is rising in areas served by theGroup’s lines. However, given the aging of Japan’s population
overall, decline of the population in line-side areas is inevitable
over the medium-to-long term. Therefore, developing new markets will establish foundations for sustained growth.
In the Tokyo metropolitan area, we have decided to participate in an urban redevelopment project in front of Yotsuya
Station in Tokyo’s Shinjuku-ku. With its sights set on completion

70

Approx.

in 2019, the Real Estate Business is already holding discussions
with project partners and other related parties. Also, in the residential business, which develops condominiums and houses
under the Geo and Hapia brands, we intend to create and acquirebusiness opportunities while carefully analysing market trends.
The Hotels Business plans to open its fifth, and largest, hotel
under the REMM brand in spring 2017. Situated in one of Tokyo’s
most famous quarters, Roppongi in Minato-ku, it will be the chain’s
third hotel in the Tokyo metropolitan area. Mainly for overnightstays, the hotel will have 400 guest rooms, and cater to the growing demand from non-Japanese tourists.
As for the International Transportation Business, in responseto the increasing demand for logistics services in the ASEAN
region, we are creating comprehensive logistics businesses.
Specifically, in August 2014, we established a company inIndonesia that will offer logistics and warehousing services. Also,
construction of a logistics centre is under way. And, we began
developing a new logistics centre in Singapore in July 2015. In
addition, we intend to participate in a business that develops
and sells condominiums in Vietnam. Through this initiative, wewant to acquire business know-how with a view to expanding
our real estate business in the ASEAN region.
Other initiatives included the second visit of the Takarazuka
Revue to Taiwan in August 2015, with its performances again
proving hugely popular. Rather than limiting the success of these
performances to the entertainment area, we want to leverage itin businesses throughout the Group. For example, we willemphasise the appeal of our quality entertainment overseas tocreate demand from non-Japanese visitors.

%

Business Strategy 1

Enhance value ofthe Umeda area andother line-side areas●●

Umeda 1-1 Project
Ebie 1-Chome Development Plan, etc.

30

Approx.

%Business Strategy 2

Develop new markets
for medium-tolong-term growth
Redevelopment Project for
Area in Front of Yotsuya Station● REMM Roppongi● Development of logistics
centres overseas●

Hankyu Hanshin Holdings • Annual Report 201523

To Our Stakeholders

Policy on Returns to Shareholders
Regarding returns to shareholders, given the achievement of aninterest-bearing debt/EBITDA ratio of around seven times, which
was our most important management target, we changed ourdividend policy by increasing the annual dividend by ¥1 pershare for fiscal 2014 and endeavouring to pay stable annual dividends going forward with ¥6 per share as a lower limit. Since
then, our financial position has improved further, and we have
deemed that we can maintain net income at the ¥40 billion level.
Therefore, we have introduced a new approach to returns toshareholders by setting a total return ratio* of 25% as an indicator. Aiming for returns to shareholders based on this indicator, forfiscal 2016’s profit distribution, we plan to increase the annual
dividend by ¥1 per share to ¥7 per share and acquire treasury
stock so that we realise a total return ratio of 25%.
While strengthening returns to shareholders, I believe that
we should also meet the expectations of shareholders and investors by sustaining growth. As we advance into a new management phase, we are committed to taking maximum advantage
of our inherent progressiveness to enhance corporate value.
* The aggregate of the total annual dividend and purchases of treasury stock as apercentage of consolidated net income

Returns to shareholders(¥ billion)

(Yen)

Targeted Management Indicators(for the period through to fiscal 2019)
In light of the aforementioned, for the period from fiscal 2016
through to fiscal 2019, we have established three management
indicators that measure profitability, capital efficiency, and financial soundness.
Firstly, in relation to profitability, earnings levels are expected
to decrease due to higher depreciation and amortisation associated with the advancement of the Umeda 1-1 Project and the
manufacture of rolling stock. However, by focusing efforts ondeveloping foundations with a view to medium-to-long-term
growth, we will maintain operating income at the ¥80 billion level.
Further, we will realise stable net income at the ¥40 billion level.
Secondly, with regard to capital efficiency, while strengthening our financial position, we will achieve stable net income andacquire treasury stock to maintain ROE at around 6%.
Lastly, to reinforce financial soundness, we will mitigate therisk of interest rate increases and ensure fund-raising capabilities
through the steady reduction of interest-bearing debt and thelowering of it to less than ¥900 billion by the end of fiscal 2019.
Further, we will manage businesses mindful of the medium-tolong-term targets for financial soundness—keeping the interestbearing debt/EBITDA ratio between five and six times and theD/E ratio around one time—although we have not specified
fiscal years for reaching these targets.

15

15

13.0
4.1
10

10

6.3

6.3

5

5

2012

2013

5

7.6

7.6

6

6

2014

2015

8.9
7

5

2016
(Est.)(FY)

00

Total dividend

Acquisition of treasury stock

Dividend per share (right axis)

Numerical targets (for the period through to fiscal 2019)24

Profitability

Keep operating income at ¥80 billion level and keep net income at ¥40 billion level

Capital efficiency

Keep ROE at 6% level while strengthening financial standing

Financial soundness

Reduce interest-bearing debt to less than ¥900 billion by end of fiscal 2019

Financial soundness targeted overmedium-to-long term

Keep interest-bearing debt/EBITDA ratio between 5 and 6 times andD/E ratio around 1 time

Hankyu Hanshin Holdings • Annual Report 2015

To Our Stakeholders

Fiscal 2016 Business Results Outlook 
In fiscal 2016, the first fiscal year of our new management phase,
we expect a 2.1%, or ¥14.1 billion, year-on-year increase in revenues from operations, to ¥700 billion, and a 2.2%, or ¥2.0 billion,
decrease in operating income, to ¥92 billion. Although electricity
fees and depreciation and amortisation are likely to rise, theUrban Transportation Business is expected to perform steadily. In
addition, while the Real Estate Business will see rental income
decline as work progresses under the Umeda 1-1 Project,earnings from sales of land for facilities are expected to rise.
Meanwhile, the Entertainment and Communications Business is
projected to record lower earnings due to the absence of thebenefit of the Takarazuka Revue’s centenary year in 2014. In theReal Estate Business, although the outlook for the housing
market is uncertain, the Group will continue concerted efforts togrow earnings.

Fiscal 2016 management indicators outlook
FY2015 result

FY2016 estimate

Operating income¥94.0 billion¥92.0 billion

EBITDA¥150.1 billion¥150.0 billion

Interest-bearing debt

¥955.8 billion¥950.0 billion

Interest-bearing debt/EBITDA ratio

6.4 times

6.3 times

D/E ratio

1.4 times

1.4 times

Net income¥54.2 billion¥52.0 billion

8.6%

7.8%

¥930.2 billion¥925.0 billion

6.2 times

6.2 times

ROE(Reference)
Net interest-bearing debt*
Net interest-bearing debt/EBITDA ratio* Amount of interest-bearing debt less cash and deposits

Conclusion 
Since management integration, the Hankyu Hanshin Holdings Grouphas given first priority to strengthening its management foundations and financial position. Having strengthened our financial position, we are now able to move to a new management stage.

Therefore, the whole Group will show a greater appetite fortaking on challenges and seize new business opportunities proactively to reach management goals and sustain growth anddevelopment going forward.

September 2015

Kazuo Sumi
President and Representative Director

Hankyu Hanshin Holdings • Annual Report 201525

Overview of the Hankyu Hanshin Holdings Group’s Medium-Term Management Plan (Fiscal 2016–Fiscal 2019)

The Hankyu Hanshin Holdings Group’s Medium-Term Management Plan calls for the development of foundations for
medium-to-long-term growth in the period through to fiscal 2019. In accordance with this new management direction, weare advancing measures with a view to future growth.

Medium-Term Management Plan (fiscal 2016–fiscal 2019)

Period of developing foundations for medium-to-long-term growthBusiness strategies

Businessstrategy

1

Implementing two business strategies with a view to medium-to-long-term growth

Enhance value of the Umeda area
and other line-side areas
Create line-side areas people want to live in permanently
or visit frequently

Developline-side areas

Enhancingline-side area value

Combine businessstrategies

1 and 2Financial strategy

Develop additional
value inline-side areas

Businessstrategy2

Develop new markets for
medium-to-long-term growth
Expand businesses in Tokyo metropolitan areaand begin developing new businesses overseasTokyo
metropolitan area

Overseas

Capture burgeoning demand from non-Japanese tourists
Offset Japan’s sluggish consumer market and step up efforts to capture rapidly growing demand fromvisitors to Japan

Focus on forward-looking investment, while distributing cash flows in a flexible, balanced manner torealise continuous strengthening of financial standing and returns to shareholders

Forward-looking investment
Follow business strategies 1 and 2
and give priority to funding investment
regardless of previous investment levels

Returns to shareholders
Endeavour to increase them while maintaining balance withinvestment and strengthening of financial standing

Continuous strengthening of financial standing
Continue strengthening financial standing
to mitigate risk of future interest rate rises
and secure funding capacity over medium-to-long term

Numerical targets

Profitability

Keep operating income at ¥80 billion level andkeep net income at ¥40 billion level

While focusing efforts on developing foundations for medium-tolong-term growth, we will maintain operating income at a certain
level and achieve stable net income.

Capital efficiency

Keep ROE at 6% level

Given that we expect to achieve stable net income while strengthening our financial standing, we will maintain ROE at a certain level.

Financial soundness

Reduce interest-bearing debt toless than ¥900 billion by end of fiscal 2019

We will continue steadily strengthening our financial standing as aprovision for the risk of interest rate rises.

Financial soundness targetedover medium-to-long term

26

Hankyu Hanshin Holdings • Annual Report 2015

Keep interest-bearing debt/EBITDA ratio between 5 and 6 times and D/E ratio around 1 timeOverview of the Hankyu Hanshin Holdings Group’s Medium-Term Management Plan (Fiscal 2016–Fiscal 2019)
Urban
Transportation

Businessstrategy

1

Real EstateEntertainment andCommunications

International
Transportation

TravelHotelsEnhance value of the Umeda area and other line-side areas

Umeda 1-1 Project

Construction Work to Upgrade
Hanshin Umeda Station(Dai Hanshin Building and Shin Hankyu Building
rebuilding project)
Begun in October 2014, this project is rebuilding Dai Hanshin Building,which includes Hanshin Department Store’s Umeda Flagship Store, andShin Hankyu Building. We are making steady progress and plan tocomplete construction in 2022.

To coincide with the implementation of the Umeda 1-1 Project, in March
2015 we began construction work to upgrade Hanshin Umeda Stationand make it a facility befitting Hanshin Electric Railway’s largest terminal
station. Aiming to complete the work in spring 2023, we are widening
station spaces and platforms and installing automatic platform gates.

A conceptual illustration of the Hanshin Umeda Station
upon completion of upgrading work
East and west ticket gates
Relocate offices for station operations andbeautify ticket gate areas
Two incoming and outgoing
platforms on west ticket gate side
Install lifts and escalators

No. 4 line

A conceptual illustration of the Umeda 1-1 Project upon completion

Extend platform
New No. 1 line
Build a structure underground to createan additional space in the railway stationand thereby enable platform widening

Ebie 1-Chome Development Plan
In December 2014, we acquired land for a large-scale
development near Hanshin Noda Station, a stop for
express services. We are examining a development
plan that will invigorate the line-side area and create a
new urban area.

Plan summary
Location

1-9, Ebie 1-chome, Fukushima-ku, Osaka-city

Site area

Approx. 27,900 square metres

Site

Ebie-Higashi
Elementary
SchoolSagisu-Kami
Park

3 platforms
Install automatic
platform gates

Note: We may change the locations of lifts and escalators.

Kita-Osaka Kyuko Railway Line
Extension and Improvement Project
We plan to extend the Kita-Osaka Kyuko Railway Line 2.5 kilometres north from its
terminal station, Senri-Chuo Station. Aiming to obtain approval for railway operations
and a charter for railway track operations in fiscal 2016 and begin operations in fiscal
2021, the Osaka Prefectural Government, Minoh City, Kita-Osaka Kyuko Railway, andHankyu Corporation are advancing the project.

Senri-Chuo
StationApprox. 1.4 km
HighwayNo. 423(main line)

GroundMino-oSemba Station(provisional
name)Approx. 1.1 km

Shin-Mino-oStation(provisional
name)

JR zai e
To LinEbie Station

3

WISTE Shopping Centre
Hanshin Main Line
Noda Station

Underground section

Elevated section

2

Hankyu Hanshin Holdings • Annual Report 201527

Overview of the Hankyu Hanshin Holdings Group’s Medium-Term Management Plan (Fiscal 2016–Fiscal 2019)

Businessstrategy1Businessstrategy

Enhance value of the Umeda area andother line-side areas

2

Business Providing Comprehensive Support to the Elderly
Through a capital tie-up with Royal Communication Club Co., Ltd., we participated in abusiness that provides one-stop everyday support for active elderly people. In areas served
by Hankyu and Hanshin lines, we have established salons that provide an environment
conducive to developing new friendships after retirement. Moreover, the salons giveelderly people peace of mind. As well as providing a lively, fulfilling environment, the salons
include a help centre offering comprehensive support that ranges from addressing day-today problems through to responding in the event of sudden illness.

Develop new markets for

REMM Roppongi Plan
In Roppongi, we will open our fifth hotel under the
REMM brand (our third in the Tokyo metropolitanarea). REMM hotels mainly comprise guest rooms forovernight stays. Scheduled to open in spring 2017,
the new hotel will have 400 guest rooms, making it
the REMM chain’s largest hotel.

Business concept
Culture classes

Recreation

Responding tosudden illness

Providing fulfilment
TravelOne-stop services for
elderly people

ResortSafety confirmation

Providing peace of mind
Support ineveryday life

Nursing-care
supportMembers can solve any type of problem arising in day-to-day life bytelephoning the club at any time.

After-School Kippo
To help parents bringing up children in areas served byour lines, we opened a private after-school day-care
centre on 1st April 2015. By helping with child rearing,
we hope to help working men and women who are
pursuing careers.

Main Initiatives for New Businesses
Watching over Children Going to and Returning from School
In this system, children carry IC tags. When a child passes through the school gates on their way toor from school, the system automatically notifies their guardian by e-mail.

Condominium Projectin Ho Chi Minh City, Vietnam
We will participate in a condominium project in Ho
Chi Minh City, Vietnam, which one of the country’s
major housing developers, Nam Long Investment
Corporation, is advancing.

A conceptual illustration of the condominium upon completion

Geo and Hapia Residential
Businesses
While carefully monitoring market trends, we will
exploit condominium-related business opportunities andheighten recognition of the Geo brand. At the same time,
we intend to strengthen our business that develops
detached houses in towns under the Hapia brand.

Hanshin Ikiiki Day Service
This day-care service specialises in providing half-day
rehabilitation programs. We provide physical andemotional support to help clients have active lives intheir local towns.
Note: A s of July 2015, we operate facilities in Nishinomiya,
Amagasaki Kuise, Osaka Noda, and Minami-ibaraki.
Geo Gyoen Naito-cho

28

Hankyu Hanshin Holdings • Annual Report 2015

Overview of the Hankyu Hanshin Holdings Group’s Medium-Term Management Plan (Fiscal 2016–Fiscal 2019)
Urban
Transportation

Entertainment andCommunications

Real Estatemedium-to-long-term growthTokyo
metropolitan
area

Overseas

Redevelopment Projectfor Area in Front of Yotsuya Station
We are participating in an urban redevelopment project in front of
Yotsuya Station. The Urban Renaissance Agency is implementing the
project, which is slated for completion in fiscal 2020.
Sotob
ori-D

Site

ori

Tokyo Metro
Nanboku Line
Yotsuya Station

JR Yotsuya
StationTokyo Metro
Marunouchi Line
Yotsuya Station〒

International
Transportation

Combine business strategies

Hotels1 and 2

Capture burgeoning demand from
non-Japanese tourists
By exploiting existing operational foundations,
we will step up efforts to capture demand fromvisitors from overseas and develop new business
opportunities.

Development of Travel Products for
Non-Japanese Tourists

H
H

TravelProvide travel products that make the facilities of the Group
more convenient to use and encourage non-Japanese tourists
to make excursions to areas served by its lines

20

Main travel products

A conceptual illustration of
the building upon completion

Hankyu Tourist Pass, Hanshin Tourist Pass
Rokkosan Tourist Pass
Arima Onsen (hot spring) Taiko no Yu coupon for
non-Japanese tourists

Development of Logistics Centres Overseas
The International Transportation Business is creating comprehensive logistics
businesses in the ASEAN region by developing the Group’s logistics centres toenable the provision not only of forwarding services but also warehousing
services. As part of this initiative, the International Transportation Businessand the Real Estate Business are collaborating to develop logistics centresin the ASEAN region.

Strengthening of Promotion
Heighten Group’s profile overseas and unearth demand
from non-Japanese tourists
Main travel productsE stablish base in South Korea and implement sales andpromotion activities
Display at overseas travel expos in Taiwan, South Korea,
Hong Kong, Thailand, etc.
Strengthen overseas sales division of the Hotels Business

A conceptual illustration of the Singapore logistics centre
upon completion

Takarazuka Revue Performance in Taiwan
Following acclaimed performancesin 2013, the Takarazuka Revue held
encore performances in Taiwan inAugust 2015.

©Takarazuka Revue Company

Develop Capabilities for
Accommodating Needs of
Non-Japanese Tourists
Increase convenience and comfort for non-Japanese
tourists visiting our line-side areas
Main travel productsE stablish Hankyu Tourist Centre andHanshin Train Services CentreProvide free Wi-Fi (Hankyu-Hanshin
Welcome Wi-Fi) for non-Japanese tourists
Introduce China UnionPay card settlement
terminals to the Group’s facilities
Open reservation web site (Travel to Japan) for domestic
travel products under Trapics brandA press conference on 27th January 2015

Hankyu Hanshin Holdings • Annual Report 201529

Special Feature

Increasing the Value of the Umeda Area as Our Most Important BaseAn Impressive Track Record ofAccomplishing Major Projects
For more than a century, we have led development of the area surrounding our terminal railway stations in Umeda.
This continuous investment and development has enhanced the Umeda area’s urban functions and value.

Heightening Corporate Value through Constant Evolution of the Umeda Area
1

2

1992

Chayamachi ApplauseThis building gave a new lease of life to the Chayamachi area andbecame its landmark. With a 161-meter tower, the building includes
one of the Group’s flagship luxury hotels, Hotel Hankyu International;
high-end boutiques; two theatres, Umeda Arts Theater and Theater
Drama City that host premium live entertainment from around theworld; and offices.

2000

3

4

HEP FIVE

Comprising 153* famous specialty shops and restaurants from Japan and over­seas, an event hall, and amusement centres, this commercial facility offers a wealthof entertainment choices. In particular, HEP FIVE attracted significant attention
because it had the first air-conditioned Ferris wheel in Japan on its roof.
* Number of shops and restaurants when opened

Hankyu Hanshin Holdings・Annual Report 2015

HERBIS OSAKA

Aiming to create a world-class urban area befitting the 21st century, weconstructed HERBIS OSAKA as phase one of the Hanshin Nishi-Umeda
Development Project. Our overall concept for this high-rise multi­
purpose building was to realise an international business complex
and an urban hub for exchanges. Accordingly, it incorporates Japan’s
first Ritz-Carlton hotel, The Ritz-Carlton, Osaka; commercial facilities;
a multifunctional hall, HERBIS HALL; and intelligent offices.

1990

1998

30

1997

2004

HERBIS ENT

Following on from phase one of the Hanshin Nishi-Umeda
Development Project, which built HERBIS OSAKA, the project’s
second phase constructed HERBIS ENT. The building has added
to the selection of sophisticated entertainment available in thearea. As well as including commercial facilities and intelligent
offices, it is home to entertainment facilities, such as a theatre
dedicated to the Shiki Theatre Company, Osaka Shiki Theatre,
and a restaurant featuring live music, Billboard Live Osaka.

100 mSpecial Feature

Increasing the Value of the Umeda Area as Our Most Important Base

Urban Development that Attracts
People and Ideas

1

Chayamachi Applause
Hotel Hankyu International

Efforts to enhance the value of the Umeda area, our most important base, do not stop at building redevelopment.
To heighten the appeal of the area, we are advancing a variety of initiatives in partnership with local stakeholders.

NU chayamachi PLUS

Developing and Heightening
Umeda’s Potential through Area Management

NU chayamachi

6

Kita Hankyu Bldg.

GRAND FRONT OSAKA

Hankyu Umeda Station /Chayamachi Area

Nishi Hankyu Bldg.

The Umeda area is a transportation hub that has become
synonymous with the Kansai area. As well as the Hankyu Umeda
and Hanshin Umeda terminal stations, it is the site of JR Osaka
Station. The resulting convenience has increased the area’s
reputa­tion as a business district in recent years. Also, it is a mecca
for shopping, with Hankyu Department Store, Hanshin Depart­ment
Store, and many other department stores clustered in the area.
In fact, the Umeda area has Japan’s highest concentration ofshop floor space, surpassing that of Shinjuku in Tokyo.
With a view to raising the Umeda area’s value even further,
the Council for Collaboration in the Management of the Umeda
Area was established in 2009. The council traces its origins to
discussions held among West Japan Railway Company, Hankyu
Corporation, Hanshin Electric Railway, and the City of Osaka at a

Umeda
Centre Bldg.

8

Hankyu Umeda Station
Hotel new Hankyu Osaka
Hankyu Sanbangai

Umekita Area

HankyuTerminal Bldg.
Higashi Hankyu Bldg.

3

Sub

HEP FIVE

way

Umekita PlazaHEP NAVIO

Ume

Hankyu Grand Bldg.

tatio

da S

5

Umeda Hankyu Bldg.

n

JR Osaka Station

HankyuDepartment Store

7

Hanshin
Department Store

(m2)

2

HERBIS OSAKA

tion

Hanshin Sankei
Sakurabashi Bldg.

JR Osaka Station Minami Area
(Diamond District)a Sta

HERBIS ENT

Nishi-Umeda Area

Subway Nishi-Umeda Station

4

med

hi-U

igas

Umeda 1-1 Project

Comparison of commercial facilities’ shop areas by district

ay H

hi

ns

Ha

m
nU

n

tio

Sta

Subw

a
ed

symposium in the same year. At the time, many large development
projects were under way. As well as the rebuilding of Umeda
Hankyu Building, JR Osaka Station was undergoing major
redevelopment. While the concentration of commercial facilities
was rising in the Umeda area, companies were proceeding withprojects in comparative isolation from other projects. A memberof the council who is familiar with the situation at the time recalls
this caused concern that the area’s problem of being difficult tounderstand and difficult to walk through might not be addressed.
The symposium discussions reached a consensus that rather
than creating cutthroat competition in a limited market, allparties should develop the potential of the Umeda area together
to maximise economic benefits. This consensus laid thefoundations for the council’s establishment by four companies:
West Japan Railway Company, Hankyu Corporation, Hanshin
Electric Railway, and GRAND FRONT OSAKA TMO General
Incorporated Association.

Diamor Osaka

Commercial district (official designation)

6/20086/20106/20127/2015

Umeda (Kita-ku, Osaka)

480,148

520,910599,875

673,413

Namba / Shinsaibashi (Chuo-ku, Osaka)*

438,856

472,963453,713491,575

Tennnoji (Abeno-ku, Osaka)

127,577

137,527

216,963

223,592

Shibuya / Omotesando (Shibuya-ku, Tokyo)

419,226

416,304

424,164

413,934

Shinjuku (Shinjuku-ku, Tokyo)

424,994445,729

419,056

432,056
393,781

Ikebukuro (Toshima-ku, Tokyo)

389,093369,946

378,117

Ginza / Nihombashi (Chuo-ku, Tokyo)

347,969

343,877

358,448

332,076

Marunouchi / Yurakucho (Chiyoda-ku, Tokyo)

364,588355,378

339,351

346,222

Source: Toyo Keizai, Inc. “List of Large-Scale Retail Outlets 2016.”
Notes: Shop area calculated on basis of official designation in the above table. Shops surveyed are those with areas in excess of 1,000 square metres, as of July 2015, based on data onlarge-scale stores registered with prefectural governments under the Large-Scale Retail Stores Location Law.
* Including 54,042 square metres for Namba Parks (Naniwa-ku, Osaka)

JR Kitashinchi Station

The Ritz-Carlton, Osaka

The inside pages give an overview of projects since 2012.

Naoya Kuriyama

Satoko Doi

Real Estate Development Dept.
Real Estate Business Headquarters

Real Estate Development Dept.

Hankyu Corporation

Hankyu Hanshin Holdings • Annual Report 201531

34

Hanshin Electric Railway

7

Connecting the Umeda Area: Redeveloping the Area South of Railway Stations
From 2014

Umeda 1-1 Project

A conceptual illustration of development plans for the surrounding area
JR Osaka Station
South Gate Bldg.

Umeda
Hankyu Bldg.

Hankyu Umeda Station

Osaka Ekimae
Dai-Ichi Bldg.

Osaka Ekimae
Dai-Yon Bldg.
Osaka Ekimae
Dai-Ni Bldg.

Underground

Upgrade underpass
Make barrier free

Ground level

Osaka Ekimae
Dai-San Bldg.

Widen and beautify pavement

Aboveground2013

GRAND FRONT OSAKA

Increasing assets through the Umeda 1-1 Project(m2)

300,000

Establish elevated walkway
Use space above road

Total floor
space upapprox. 70%

200,000

100,000

Establish square6ashi-UOsaka
DT Tower

meda
Sta

Shin
HankyuBldg.

ay Hig

bw
Su

Osaka
Maru Bldg.

Subw

HiltonOsaka

tion

Dai Hanshin
Bldg.

Osaka Dai-ichi
Life Bldg.

ay
N

ish

i-U

me

da
S

tat

ion

HERBIS ENT

Symbolising the integration of Hankyu Corporation and Hanshin Electric Railway, theUmeda 1-1 Project began in earnest in 2014. The project will rebuild two separatebuildings to create a single integrated high-rise complex. Specifically, we will rebuild
Dai Hanshin Building, which includes Hanshin Department Store’s Umeda FlagshipStore, and the adjacent Shin Hankyu Building. Moreover, the project will use the space
above a road separating the two buildings. At the same time, plans call for thedevelopment of surrounding public facilities to strengthen urban functions, improvedisaster countermeasures, create public spaces, and give the area an aestheticallyappealing appearance. Through these efforts, we will realise a comfortable, sophisticatedurban area that heightens the Umeda area’s international competitiveness.

0

Shin Hankyu
Bldg. 53,000
Dai Hanshin
Bldg. 97,000
Before rebuilding

Situated in the Phase One Development Area (approximately 7 hectares) of the
Osaka Station North District (Umekita) (approximately 24 hectares), this multi­
purpose facility has offices, commercial facilities, a hotel, and condominiums.
A consortium of 12 companies including Hankyu Corporation developed thefacility, which celebrated its second anniversary in April 2015. In the space of two
years, it has received 12.3 million visitors, helping boost the Umeda area’s vitality.

Umeda 1-1
Bldg.
(provisionalname)260,000

After rebuilding

2014

2010

8

5

2012

Umeda Hankyu Building*Over seven and half years, we replaced the building in which the Umeda
Flagship Store of Hankyu Department Store (opened in 1929) was locatedwhile it remained open for business. We constructed a high-rise
multipurpose building with two floors below ground and 41 floors above
ground and a floor area of approximately 254,000 square metres. The
building has advanced environmental performance and is barrier free. At
the same time, we redeveloped pedestrian flow lines that link Hankyu
Umeda Station, Hanshin Umeda Station, JR Osaka Station, and undergroundrailway stations. As a result, roughly 30,000 pedestrians per hour—one anda half times more than before redevelopment—pass along the flow lines
during commuting periods. This initiative has added to the convenience of
the Umeda area as a transportation hub.
* 2009: Opening of phase I department store
annex; 2010: Opening of office tower; 2012:
Opening of phase II department store annex
and full opening

Increasing rentable floor space in the
Umeda Area
Thanks to continuous investment and development, the rentable floor space of the Hankyu
Hanshin Holdings Group’s properties reached
800,000 square metres as of 31st March 2015.
Buildings completed between April 2000 andMarch 2015
Approx. 300,000 m2

Buildings completed between
April 1990 and March 2000
Approx. 200,000 m2

Pursuing Growth by Catering to the Increasing Number ofVisitors to the Umeda Area and Diversifying Needs
2015

Makeover Construction Work in Hankyu Umeda Station

Hankyu Umeda Station boasts the most platforms and railway lines of any private (non-JR) railway station in Japan,
and about half a million people use it each day. The March 2015 completion of makeover construction work, begun
five years earlier, transformed the 40-year-old Hankyu Umeda Station into an even more attractive and convenient
space. In addition to providing safe flow lines for customers, the upgraded railway station incorporates more
information technology and is better able to accommodate the needs of non-Japanese customers. For example, therailway station has more digital signage for advertising and terminals that display information in five languages:
Japanese, English, Korean, and Chinese (traditional and simplified Chinese characters).

Buildings completed before
April 1990
Approx. 300,000 m2

Hankyu Hanshin Holdings • Annual Report 201533

7

Connecting the Umeda Area: Redeveloping the Area South of Railway Stations
From 2014

Umeda 1-1 Project

A conceptual illustration of development plans for the surrounding area
JR Osaka Station
South Gate Bldg.

Umeda
Hankyu Bldg.

Hankyu Umeda Station

Osaka Ekimae
Dai-Ichi Bldg.

Osaka Ekimae
Dai-Yon Bldg.
Osaka Ekimae
Dai-Ni Bldg.

Underground

Upgrade underpass
Make barrier free

Ground level

Osaka Ekimae
Dai-San Bldg.

Widen and beautify pavement

Aboveground2013

GRAND FRONT OSAKA

Increasing assets through the Umeda 1-1 Project(m2)

300,000

Establish elevated walkway
Use space above road

Total floor
space upapprox. 70%

200,000

100,000

Establish square6ashi-UOsaka
DT Tower

meda
Sta

Shin
HankyuBldg.

ay Hig

bw
Su

Osaka
Maru Bldg.

Subw

HiltonOsaka

tion

Dai Hanshin
Bldg.

Osaka Dai-ichi
Life Bldg.

ay
N

ish

i-U

me

da
S

tat

ion

HERBIS ENT

Symbolising the integration of Hankyu Corporation and Hanshin Electric Railway, theUmeda 1-1 Project began in earnest in 2014. The project will rebuild two separatebuildings to create a single integrated high-rise complex. Specifically, we will rebuild
Dai Hanshin Building, which includes Hanshin Department Store’s Umeda FlagshipStore, and the adjacent Shin Hankyu Building. Moreover, the project will use the space
above a road separating the two buildings. At the same time, plans call for thedevelopment of surrounding public facilities to strengthen urban functions, improvedisaster countermeasures, create public spaces, and give the area an aestheticallyappealing appearance. Through these efforts, we will realise a comfortable, sophisticatedurban area that heightens the Umeda area’s international competitiveness.

0

Shin Hankyu
Bldg. 53,000
Dai Hanshin
Bldg. 97,000
Before rebuilding

Situated in the Phase One Development Area (approximately 7 hectares) of the
Osaka Station North District (Umekita) (approximately 24 hectares), this multi­
purpose facility has offices, commercial facilities, a hotel, and condominiums.
A consortium of 12 companies including Hankyu Corporation developed thefacility, which celebrated its second anniversary in April 2015. In the space of two
years, it has received 12.3 million visitors, helping boost the Umeda area’s vitality.

Umeda 1-1
Bldg.
(provisionalname)260,000

After rebuilding

2014

2010

8

5

2012

Umeda Hankyu Building*Over seven and half years, we replaced the building in which the Umeda
Flagship Store of Hankyu Department Store (opened in 1929) was locatedwhile it remained open for business. We constructed a high-rise
multipurpose building with two floors below ground and 41 floors above
ground and a floor area of approximately 254,000 square metres. The
building has advanced environmental performance and is barrier free. At
the same time, we redeveloped pedestrian flow lines that link Hankyu
Umeda Station, Hanshin Umeda Station, JR Osaka Station, and undergroundrailway stations. As a result, roughly 30,000 pedestrians per hour—one anda half times more than before redevelopment—pass along the flow lines
during commuting periods. This initiative has added to the convenience of
the Umeda area as a transportation hub.
* 2009: Opening of phase I department store
annex; 2010: Opening of office tower; 2012:
Opening of phase II department store annex
and full opening

Increasing rentable floor space in the
Umeda Area
Thanks to continuous investment and development, the rentable floor space of the Hankyu
Hanshin Holdings Group’s properties reached
800,000 square metres as of 31st March 2015.
Buildings completed between April 2000 andMarch 2015
Approx. 300,000 m2

Buildings completed between
April 1990 and March 2000
Approx. 200,000 m2

Pursuing Growth by Catering to the Increasing Number ofVisitors to the Umeda Area and Diversifying Needs
2015

Makeover Construction Work in Hankyu Umeda Station

Hankyu Umeda Station boasts the most platforms and railway lines of any private (non-JR) railway station in Japan,
and about half a million people use it each day. The March 2015 completion of makeover construction work, begun
five years earlier, transformed the 40-year-old Hankyu Umeda Station into an even more attractive and convenient
space. In addition to providing safe flow lines for customers, the upgraded railway station incorporates more
information technology and is better able to accommodate the needs of non-Japanese customers. For example, therailway station has more digital signage for advertising and terminals that display information in five languages:
Japanese, English, Korean, and Chinese (traditional and simplified Chinese characters).

Buildings completed before
April 1990
Approx. 300,000 m2

Hankyu Hanshin Holdings • Annual Report 201533

100 mSpecial Feature

Increasing the Value of the Umeda Area as Our Most Important Base

Urban Development that Attracts
People and Ideas

1

Chayamachi Applause
Hotel Hankyu International

Efforts to enhance the value of the Umeda area, our most important base, do not stop at building redevelopment.
To heighten the appeal of the area, we are advancing a variety of initiatives in partnership with local stakeholders.

NU chayamachi PLUS

Developing and Heightening
Umeda’s Potential through Area Management

NU chayamachi

6

Kita Hankyu Bldg.

GRAND FRONT OSAKA

Hankyu Umeda Station /Chayamachi Area

Nishi Hankyu Bldg.

The Umeda area is a transportation hub that has become
synonymous with the Kansai area. As well as the Hankyu Umeda
and Hanshin Umeda terminal stations, it is the site of JR Osaka
Station. The resulting convenience has increased the area’s
reputa­tion as a business district in recent years. Also, it is a mecca
for shopping, with Hankyu Department Store, Hanshin Depart­ment
Store, and many other department stores clustered in the area.
In fact, the Umeda area has Japan’s highest concentration ofshop floor space, surpassing that of Shinjuku in Tokyo.
With a view to raising the Umeda area’s value even further,
the Council for Collaboration in the Management of the Umeda
Area was established in 2009. The council traces its origins to
discussions held among West Japan Railway Company, Hankyu
Corporation, Hanshin Electric Railway, and the City of Osaka at a

Umeda
Centre Bldg.

8

Hankyu Umeda Station
Hotel new Hankyu Osaka
Hankyu Sanbangai

Umekita Area

HankyuTerminal Bldg.
Higashi Hankyu Bldg.

3

Sub

HEP FIVE

way

Umekita PlazaHEP NAVIO

Ume

Hankyu Grand Bldg.

tatio

da S

5

Umeda Hankyu Bldg.

n

JR Osaka Station

HankyuDepartment Store

7

Hanshin
Department Store

(m2)

2

HERBIS OSAKA

tion

Hanshin Sankei
Sakurabashi Bldg.

JR Osaka Station Minami Area
(Diamond District)a Sta

HERBIS ENT

Nishi-Umeda Area

Subway Nishi-Umeda Station

4

med

hi-U

igas

Umeda 1-1 Project

Comparison of commercial facilities’ shop areas by district

ay H

hi

ns

Ha

m
nU

n

tio

Sta

Subw

a
ed

symposium in the same year. At the time, many large development
projects were under way. As well as the rebuilding of Umeda
Hankyu Building, JR Osaka Station was undergoing major
redevelopment. While the concentration of commercial facilities
was rising in the Umeda area, companies were proceeding withprojects in comparative isolation from other projects. A memberof the council who is familiar with the situation at the time recalls
this caused concern that the area’s problem of being difficult tounderstand and difficult to walk through might not be addressed.
The symposium discussions reached a consensus that rather
than creating cutthroat competition in a limited market, allparties should develop the potential of the Umeda area together
to maximise economic benefits. This consensus laid thefoundations for the council’s establishment by four companies:
West Japan Railway Company, Hankyu Corporation, Hanshin
Electric Railway, and GRAND FRONT OSAKA TMO General
Incorporated Association.

Diamor Osaka

Commercial district (official designation)

6/20086/20106/20127/2015

Umeda (Kita-ku, Osaka)

480,148

520,910599,875

673,413

Namba / Shinsaibashi (Chuo-ku, Osaka)*

438,856

472,963453,713491,575

Tennnoji (Abeno-ku, Osaka)

127,577

137,527

216,963

223,592

Shibuya / Omotesando (Shibuya-ku, Tokyo)

419,226

416,304

424,164

413,934

Shinjuku (Shinjuku-ku, Tokyo)

424,994445,729

419,056

432,056
393,781

Ikebukuro (Toshima-ku, Tokyo)

389,093369,946

378,117

Ginza / Nihombashi (Chuo-ku, Tokyo)

347,969

343,877

358,448

332,076

Marunouchi / Yurakucho (Chiyoda-ku, Tokyo)

364,588355,378

339,351

346,222

Source: Toyo Keizai, Inc. “List of Large-Scale Retail Outlets 2016.”
Notes: Shop area calculated on basis of official designation in the above table. Shops surveyed are those with areas in excess of 1,000 square metres, as of July 2015, based on data onlarge-scale stores registered with prefectural governments under the Large-Scale Retail Stores Location Law.
* Including 54,042 square metres for Namba Parks (Naniwa-ku, Osaka)

JR Kitashinchi Station

The Ritz-Carlton, Osaka

The inside pages give an overview of projects since 2012.

Naoya Kuriyama

Satoko Doi

Real Estate Development Dept.
Real Estate Business Headquarters

Real Estate Development Dept.

Hankyu Corporation

Hankyu Hanshin Holdings • Annual Report 201531

34

Hanshin Electric Railway

Special Feature

Increasing the Value of the Umeda Area as Our Most Important Base

Cultivating Awareness of Urban
Development through Area Management
The first task of the Council for Collaboration in the Managementof the Umeda Area was to improve the guidance information
available in the area. Visitors complained about a lack of
uniformity. Prior to the establishment of the council, respective
companies independently produced the maps and signs
installed in the Umeda area. To exacerbate matters, construction
accompanying the multiple large-scale development projects
under way was blocking or diverting access routes to certain
areas. Concern that the area would lose favour with visitors if
nothing was done spurred the creation of an Umeda area map. A
council member explains, “After preparing a map, we distributed
it to information counter personnel of commercial facilities andrepeatedly upgraded it based on feedback from visitors. This
process heightened our awareness of area management.”
In recent years, national and local government agencies
have been responding flexibly to such initiatives. Consequently,
collaborations have begun between the public and private
sectors to heighten the value of areas without being impeded by
distinctions between public property, such as roads, and thepremises of nearby facilities. For example, the Ministry of Land,
Infrastructure, Transport and Tourism has provided grants toinitiatives aimed at improving the business environment,
including projects to establish multilingual area maps and street
signs. Also, the City of Osaka recently enforced an ordinance that
promotes area management activities in Osaka and began
operating a system enabling bodies that manage public spaces
to occupy pavement space free of charge.

A street-side cafe using part of a public pavement (GRAND FRONT OSAKA)

Establishing Networks among Tenantsand Local Companies that Underpin
Visitor Endorsement
Another aspect of the activities of the Council for Collaborationin the Management of the Umeda Area is using public spaces tohold seasonal events. The council is steadily accumulating
quantitative data on the measurable benefits of area manage­
ment. These efforts include conducting questionnaires targeting
visitors to such events as the Umeda Yukata Festival in summer
and the Umeda Snowman Festival in winter and assessing theadvertising impact of articles on Umeda area events in a rangeof media.
A member of the council emphasises that the benefits ofholding events extend beyond attracting additional visitors andgenerating publicity. The events help cultivate and steadilystrengthen collaborative networks that are essential intangible

Yuhei Kawabata

Shiho Fujiwara

Real Estate Development Dept.

Real Estate Development Dept.
Real Estate Business Headquarters

Hanshin Electric Railway

Hankyu Corporation

35

Special Feature

Increasing the Value of the Umeda Area as Our Most Important Baseassets in urban development. These networks comprise such
Umeda area stakeholders as tenants of commercial facilities thatthe Hankyu Hanshin Holdings Group owns and companies andcom­mercial facilities that are not council members. According to
the member, the council already has its sights set on the next
step. “We want to create new activities and accelerate efforts tocreate and publicise the appeal of Umeda by using the area’s
collaborative network to propose initiatives based on matching
stakeholders with complementary attributes.”

incubator for new businesses. Moreover, in March 2015, Hankyu
Corporation provided financial backup by establishing andinvesting in a fund, Umeda Start-up Fund No. 1, which provides
businesses with seed capital. In this way, we have evolved GVH#5
into a business base that provides three essentials: personnel,
infrastructure, and capital.

The Umeda Yukata Festival

Aiming to Enhance the Umeda Area’s
Value as a Business Base*	Calculated by the Group based on the “New Listings” information of Japan ExchangeGroup, Inc.

Attracting attention as a source of new value in the Umeda area,
our business-support membership office, GVH#5, opened in
November 2014. This Hankyu Hanshin Holdings Group initiative
aims to make the Umeda area, one of Osaka’s most famous
business districts and the Group’s most important base, thebirthplace of new businesses.
Of the 55 companies that newly listed on the stock andsecurities exchanges of Japan Exchange Group, Inc. between
January and July 2015, only four* are headquartered in Osaka.
Rather than a lack of start-ups in Osaka, the conspicuous

36

concentration of new companies in Tokyo is attributable to
Osaka’s lack of a strong support infrastructure that is able tocontinuously attract start-ups. The manager of GVH#5 explains
the situation. “What gives Tokyo an overwhelming advantage is alively community centred on start-ups, which provides the basis
for friendly rivalry between entrepreneurs and support from
more experienced entrepreneurs and other start-up supporters.
We established GVH#5 to help form such a community.”
GVH#5 provides its members, venture companies, with officespace. Also, based on a tie-up with SunBridge Global Ventures
Inc., which has incubated many venture companies, GVH#5
provides business support through such specialists as lawyers
and accountants and other “supporter members.” The goal ofthis initiative is to gather quality start-ups aiming to develop
global businesses with Osaka as their base at GVH#5, form acommunity, and heighten the Umeda area’s profile as an

Creating a Place Conducive
to Intellectual Exchanges
The Hankyu Hanshin Holdings Group enables gatherings ofpersonnel who create value that is unique to the Umeda area.
Established in 2012, Umeda MAG aims to become a “magnetic
field” that creates the future by attracting highly creative,
intelligent individuals who will shape the coming era andproviding a base for personnel development and exchanges
among personnel from different industries. To date, Umeda

Shisa Yoshimi

Fumito Otani

Umeda Business Creation Group
Real Estate Development Dept.
Real Estate Business Headquarters

Manager
Real Estate Development Dept.
Real Estate Business Headquarters

Hankyu Corporation

Hankyu Corporation

The Umeda Snowman Festival (right) anda promotional business card used bymembers of the Council for Collaborationin the Management of the Umeda Area

MAG has provided a wide range of opportunities for exchanges
among personnel who are responsible for invigorating the
Umeda area. These include management strategy seminars forbusiness people; the “Overseas Student Summit,” which promotes
networking and exchanges among those working in the Umeda
area and students from overseas; seminars on such traditional
culture as kamigata kodan storytelling; and hands-on-experiencework­shops encouraging participants to consider the practicalities
of urban development.
During the more than three years since the establishment of
Umeda MAG, total net participants in its activities has surpassed
600, with many people returning to participate in successive
events. “Participants in previous management strategy seminars
interact with those participating in the current year’s seminars.
This widens networks among participants and forms
communities.” explains a manager of Umeda MAG. Because they
have unique knowledge, some seminar participants become
speakers at subsequent seminars or become involved in theplanning of seminars. Thus, Umeda MAG is building a distinctive
position as a place for intellectual exchanges.
Underlying this initiative is a belief that people create thevalue of urban areas. With the development of a series of new
office buildings, maintaining the competitiveness of existingbuildings based on functionality alone will be challenging.
However, the added value of being a hub for personnel
exchanges will become a feature of buildings and the area,
thereby strengthening their competitiveness.

Umeda MAG, a base for personnel development andexchanges among personnel from different industries

Enhancing the Area’s Value froma Long-Term Perspective
Current activities, including urban development, the fostering ofventure companies, and exchanges among personnel, will taketime to come to fruition. Therefore, the focus of these activities
must be on maximising the creation of future value, somethingthat is not easily measured on a cost-benefit basis. A member ofthe council emphasises the importance of long-term com­mit­
ment. “In urban development, setting out a far-sighted vision for
the future is critical.”Today, large numbers of people visit the Umeda area for
shopping, tourism, and business. To ensure the area continues toattract people and businesses going forward, we must
continuously heighten its appeal from new perspectives.
Through area management, we aim to raise the area’s value andheighten the Umeda area’s profile and reputation not only
domestically but also worldwide. The Hankyu Hanshin HoldingsGroup will continue taking on the challenge of enhancing thevalue of the Umeda area as the foundation of its business.

Takeshi Hashimoto

Megumi MomoManager
Real Estate Development Dept.

Real Estate Development Dept.

Hanshin Electric Railway

Hanshin Electric Railway

37

Core Business Highlights

Main Business Lines

Urban Transportation P.40

Railway operations:Hankyu Corporation, Hanshin Electric Railway, Nosé Electric Railway, Kita-Osaka Kyuko Railway, Hokushin Kyuko
Railway, Kobe Rapid Transit Railway

Automobile business (bus, taxi):
Hankyu Bus, Hanshin Bus, Hankyu Kanko Bus, Osaka Airport Transport, Hankyu Denen Bus, Hankyu Taxi, Hanshin Taxi

Retailing business:
Eki Retail Service Hankyu Hanshin, Hankyu Style Labels

Advertising business:
Hankyu Corporation, Hankyu Advertising Agency

Real Estate

P.44

Real estate leasing business:
Extensive property holdings, mainly in the Umeda area and along Hankyu and Hanshin lines (for details of major
properties, please see page 106)
Major companies: Hankyu Corporation, Hanshin Electric Railway, Hankyu Realty

Real estate sales and other business:
We market condominiums, residential land lots, and detached houses, mainly alongside the Hankyu and Hanshinlines in the Kansai area. In recent years we have also focused on the Tokyo metropolitan area. We are engaged inproperty 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.
Major companies: Hankyu Corporation, Hanshin Electric Railway, Hankyu Realty, Hankyu Hanshin Building
Management, Hankyu REIT Asset Management

Entertainment andCommunications

P.48

Sports business:
Professional baseball business (the Hanshin Tigers) and management and operation of Hanshin Koshien Stadium,and related businesses; music business (Billboard Live)

Stage businesses:
Takarazuka Revue and related businesses, operation of Umeda Arts Theatre and promotion of stage productions

Communication and media businesses:
Information services business, broadcast and communications business

Leisure businesses:
Management of Mt. Rokko business©Takarazuka Revue Company

Travel

P.50

International
Transportation

P.52

Hotels

P.54

Travel Business:
Hankyu Travel International, Hankyu Hanshin Business Travel, Hankyu Travel Support

International Transportation Business:
Hankyu Hanshin Express, Hankyu Hanshin Logipartners, 19 overseas subsidiaries of Hankyu Hanshin Express

Principal directly operated hotels:
Hotel Hankyu International
Hotel new Hankyu Osaka
Dai-ichi Hotel Tokyo
The Ritz-Carlton, Osaka** The Ritz-Carlton, Osaka is operated by the Ritz-Carlton hotel chain under the management of Hanshin Hotel Systems.

38

Hankyu Hanshin Holdings • Annual Report 2015

Core Business Highlights

Revenues from Operations (¥ billion) (right axis)
and Operating Income (¥ billion)
60

40

300

249.3

234.6

233.4

37.2

38.5

38.6

238.3
34.7

20

2014

2015

2016 (FY)(Est.)

60

300

198.3

208.6

206.4

38.0

37.3

225.8
43.8

37.2

20

0

2013

2014

2015

110.4

112.6

14.2

15.0

2016 (FY)(Est.)

30

150

102.7
11.2

106.0
11.5

0

4

200

100

0

10

100

2015

2016 (FY)(Est.)

34.1

33.0

32.0

32.3

40
30
20

2

1.5

1.2

1.2

2013

2014

2015

2016 (FY)(Est.)

36.7

37.7

39.4

39.3

1

10

0

3.1
1.8

2.1

40
30

2.4

1

20
10

0

Although air freight exports have been declining in recent years due to the transfer ofmanufacturing overseas, worldwide logistics demand promises to grow steadily centred
on Asia. Further, as the manufacturing industry and other industries globalise their business activities, supply chains extending from raw material procurement through to thedelivery of products to consumers are becoming more complex, which is heightening
demand for forwarders able to provide comprehensive solutions.

0

2013

2014

2015

2016 (FY)(Est.)

64.7

63.7

63.0

64.9

2.0

80

1.2

1.0
0.5

External factors, including economic trends, currency fluctuations, social conditions,
earthquakes, and other natural disasters, affect the business conditions of the Travel
Business. Partly as a result of such factors, the number of Japanese overseas travellers has
been stagnant. Meanwhile, the number of overseas visitors to Japan has been risingsteadily due to such factors as yen depreciation and an increase in the number of flightsthat low cost carriers provide to the country.

0

3

1.5

According to the Ministry of Internal Affairs and Communications Statistics Bureau’s
Family Income and Expenditure Survey, recreational service expenditure of total households in 2014 decreased 4.1% year on year. This decline is attributable to an increase in
consumption tax. Nevertheless, demand for recreational services remains firm.

0

2014

2.5

2

In the Umeda area, the market for rentable office space has seen vacancy rates improve
gradually. They deteriorated temporarily due to a significant supply of new office floor
space following the opening of the Grand Front Osaka Office Tower building in April
2013. Subsequently, however, the number of contracts concluded picked up thanks totenants relocating from other areas and large-scale business relocations accompanying
the merging and consolidation of offices. As for the conditions in the housing market,
despite an upward trend in sales prices stemming from higher land prices and construction costs, sales have been steady in the Tokyo metropolitan area and the Kansai area. As
a result, the sales inventory is at a low level.

50

2013

3

4

In the Kansai area, the population has been declining in recent years as society ages. The
decrease is particularly pronounced in the group aged between 15 and 64. Consequently,
the Urban Transportation Business faces challenging business conditions. Areas servedby the Group’s railway lines, however, are comparatively popular. As a result, in theseareas the population has been trending upward since bottoming in 1996, the year after
the Great Hanshin (Kobe) Earthquake.

0

2013

20

200

100

0

40

Market Conditions

0.8
0.5

1.4

60
40
20

0

0

2013

2014

2015

2016 (FY)(Est.)

According to the “White Paper on Leisure 2015,” hotel revenues rose 11% year on year,
achieving double-digit growth for the second consecutive year. The main driver of thisgrowth has been a surge in the number of overseas visitors to Japan. A shortage ofaccommodation for the Tokyo Summer Olympic and Paralympic Games 2020 has led to
stepped-up building of new hotels and renovation of existing hotels. On the other hand,
there is concern that hotel operators’ expense burden could increase due to the enforcement of the amended Act for Promotion of Renovation for Earthquake-Resistant
Structures of Buildings, which makes checking the earthquake resistance of large facilities mandatory.

Hankyu Hanshin Holdings • Annual Report 201539

Urban Transportation

Priority Tasks
1 	Provide quality railway services and other related
services evelop personnel
D
Strengthen Group collaboration
Enhance services and convenience
Enhance value of line-side areas and publicise them
Enhance appeal of railway stations
2 	Increase convenience of existing infrastructureand expand railway network evelop railway stations and construct continuousD
grade separations
Expand and strengthen railway network3 	Ensure safe, reliable transportation andpeace of mindE nhance security
Develop rolling stock4 	Expand feeder transportation and extend
catchment areas of railway lines and stations
S trengthen coordination with buses, taxis, station
car parks, and rental bicycles

Basic Strategy
The Urban Transportation Business will grow bystrengthening the operational foundations thatenable safe, reliable, and comfortable services while
creating advanced urban transportation services inan environmentally and socially responsible manner.
Specifically, we will strengthen coordination withconnecting transportation services and feeder transportation services and extend their coverages areas.
Also, we will increase and improve railway stations’ability to provide services and information. Suchefforts will expand the Group’s businesses in line-side
areas, attract outside companies to the areas,
strengthen lifestyle services and economic functions,and heighten line-side value.

40

Hankyu Hanshin Holdings • Annual Report 2015

Urban Transportation

Fiscal 2015 Review of Operations
In the Urban Transportation Business, railway operation revenue

Hanshin Umeda Station and proceeded with construction work to

declined only slightly because steady performances by the Hankyu

upgrade Koshien Station. Further, in a project for continuous gradeand Hanshin lines offset the absence of rush demand toward theseparation on the Hanshin Main Line within Nishinomiya (between

end of the previous fiscal year, prior to the consumption tax increase.

Koshien and Mukogawa stations), we changed the outbound line to

However, revenues from operations edged down 0.5%, or ¥1,135

an elevated railway track to shorten interruptions due to railway

million, year on year, to ¥233,419 million, reflecting the suspension ofcrossings and increase the safety and comfort of customers. Other

certain express bus routes and a reduction in the number of taxis ininitiatives included an effort to attract more customers through theoperation in the automobile business. Meanwhile, operating income

joint launch by Hankyu Corporation and Hanshin Electric Railway ofrose 0.2%, or ¥59 million, year on year, to ¥38,553 million, thanks toa Kobe Rapid Transit Railway Line round-trip ticket limited to week-

lower expenses arising from railway station name changes and theends and national holidays.

introduction of railway station numbering and from opening of aIn the automobile business, we heightened customer conve-

new railway station (Nishiyama Tennozan Station) in the railway

nience by beginning sales of IC card (hanica) passes for those com-business.

muting to work or school.

The railway business completed makeover construction work in

As for the retailing business, in April 2014, the Group integrated

Hankyu Umeda Station, renewing the interior decoration to give abusinesses responsible for the management of stores inside andgreater sense of unity and increasing advertising media by installingnear railway stations with a view to strengthening services and rais-

more digital signage. Also, we began construction work to upgrade

ing management efficiency.

Hankyu Corporation and Hanshin Electric Railway: Performance results
Fare revenues (¥ million)*

HankyuHanshin

Passenger volumes (thousands)*

FY2015FY2014

Change%FY2015FY2014

Change%Other tickets

60,91061,630

–719

–1.2%

308,843

313,241–4,397–1.4%

Commuter pass

31,54931,299250

0.8%

318,692

315,884

2,807

0.9%

Total

92,45992,929

–469

–0.5%

627,536

629,125–1,589–0.3%

Other tickets

20,286

20,26026

0.1%

112,000

112,360

–359

–0.3%

Commuter pass

11,107

11,00899

0.9%

115,203

113,644

1,558

1.4%

Total

31,39431,269125

0.4%

227,203

226,004

1,199

0.5%

* Sum of tier 1 and tier 2 operators for both Hankyu and Hanshin

Fiscal 2016 Outlook
In the railway business, we anticipate a pickup from fiscal 2015’s

March 2016, we project a 2.1%, or ¥4.9 billion, year-on-year increase

decrease in revenues from operations, which resulted from thein revenues from operations, to ¥238.3 billion. However, due toabsence of fiscal 2014’s rush demand prior to the consumption tax

higher power costs and depreciation and amortization, we expect

increase. Also, population growth in line-side areas is likely to boost

operating income to decrease 10.0%, or ¥3.9 billion year on year, torailway operation revenue. Consequently, in fiscal 2016, ending 31st

¥34.7 billion.

Hankyu Corporation and Hanshin Electric Railway:
Performance forecasts (fiscal 2016)

Urban Transportation Business: Outlook for revenues fromoperations and operating income(¥ billion)

FY2016

Fare revenues (¥ million)*
FY2015
ChangeHankyu94,37892,459

1,918

2.1%

Hanshin

31,762

31,394

368

1.2%

%

Passenger volumes (thousands)*
FY2016FY2015

Change%Hankyu640,351

627,536

12,814

2.0%

Hanshin

229,966

227,203

2,762

1.2%

* Sum of tier 1 and tier 2 operators for both Hankyu and Hanshin(¥ billion)

50

234.6

233.4

40

38.5

38.6

238.3

250
200

34.7

30

150

20

100

10

50

0

0

2014
Operating income

2015

2016
(Est.)(FY)

Revenues from operations (right axis)

Hankyu Hanshin Holdings • Annual Report 201541

Urban Transportation

Medium-Term Management Plan: Ongoing Project
Kita-Osaka Kyuko Railway Line Extension and Improvement Project

The project will begin after the conclusion of a basic contract.

The Osaka Prefectural Government, Minoh City, Kita-Osaka Kyuko

Furthermore, to maximise the project’s benefits, the parties plan to

Railway, and Hankyu Corporation explored the possibility of extend-

consider specific plans for urban development in line-side areas.

ing the Kita-Osaka Kyuko Railway Line from Senri-Chuo Station to
Shin-Mino-o Station (provisional name). The aims of these deliberations were to strengthen Osaka’s north-south axis, reduce traffic
congestion on National Highway No. 423 (Shin-Midosuji), and improvethe convenience of public transportation in northern Osaka. In
March 2014, the four parties concluded a basic agreement on theoverview of the line and the cost burden ratio. Going forward, theproject will undertake the legal procedures needed to establish
commercial operations, including finalization of urban development

Development plan summary● Extension distance:

2.5 km, from Senri-Chuo Station to
Shin-Mino-o Station (provisional name)● New stations:Mino-o-Semba Station (provisional name)and Shin-Mino-o Station (provisional name)● Estimated project cost: ¥65 billion● Demand:

42,000 people per day

plans and application for railway project licenses and permits.

Fiscal 2015 Initiatives
Completion of Makeover Construction Work

Renovation of Hanshin Umeda Station Begins

in Hankyu Umeda Station

On 3rd March 2015, Hanshin Electric Railway began construction

From the summer of 2010, Hankyu Corporation began makeoverwork to upgrade Hanshin Umeda Station in Kita-ku, Osaka. Currently,

construction work in Hankyu Umeda Station to render it a unified,the company is working with Hankyu Corporation to rebuild the Dai

sophisticated space befitting the “face” of the Osaka-Umeda area.

Hanshin Building, which Hanshin Department Store’s Umeda

Completed in March 2015, this construction project followed a design

Flagship Store occupies, and upgrading surrounding public facilities

concept that sought to create a “Hankyu-style theatre space.”

under the Umeda 1-1 Project. In conjunction with this work, on the

Accordingly, as well as construction, the project has made effective

north side of Hanshin Umeda Station we have begun widening anduse of lighting to renew the Hankyu Umeda Station’s spaces based on

upgrading an east-west underpass (the urban development project’s

five themes: approach, gate, lobby, stage, and galleria. In a passage

passageway No. 1 in front of Osaka Station). While implementing thisthat many customers use and which links the central ticket gate exit

widening work, we plan to construct an integrated structure on theon the first floor to JR Osaka Station and Grand Front Osaka, we havefloor directly beneath the underpass to create additional space in theestablished a new “rest area,” usable for short breaks or as a meeting

railway station, thereby enabling the widening of platforms. Also, we

point. Also, the area has stools and includes multifunctional 20-inch

plan to install automatic platform gates and make the west ticket

touch panels that customers can use to view maps of Hankyu Umeda

gate exit area barrier free. This construction work to upgrade Hanshin

Station and its environs, train timetables, and locker availability.

Umeda Station will transform it into a station customers can use evenmore comfortably and with greater peace of mind.

The new “rest area” in the passage on the first floor linking
the Hankyu Umeda Station and JR Osaka Station

42

Hankyu Hanshin Holdings • Annual Report 2015

A conceptual illustration of the renovated Hanshin Umeda Station

Urban Transportation

Introduction of New Rolling Stock That Offers Comfortable Cabins

less energy than the existing 5000 series rolling stock and about 20%

While Saving Energy

less than the previous 9000 series and 9300 series rolling stock.

Since fiscal 2014, Hankyu Corporation has been steadily introducing
1000 series and 1300 series rolling stock to all of its railway lines. As

Hanshin Electric Railway 5700 Series Rolling Stockwell as more comfortable cabins, the new rolling stock features dra-On 24th August 2015, we began operating Jet Silver 5700 series roll-

matically improved environmental performance. Further, in theing stock on local services to make them more passenger and envi-

summer of 2015, Hanshin Electric Railway introduced to local ser-ronment friendly. Incorporating the latest technology, this newvices new 5700 series rolling stock that benefits passengers and therolling stock has inherited many of the basic features of Jet Car roll-environment. As a company responsible for urban transportation

ing stock, including advanced acceleration and deceleration perfor-

infrastructure, after confirming safety and reliability, we will incorpo-

mance. The design of the new rolling stock reflects feedback fromrate leading-edge technology and advance the development ofcustomers. To ensure worry-free, comfortable conditions inside

new rolling stock that realises comfortable cabins and energy-saving

trains, we have arranged the seating partitions in a generous mannerperformance simultaneously.

so that those sitting or standing are comfortable, included buttons
for opening and closing doors to maintain a comfortable cabin tem-Hankyu Corporation 1000 Series and 1300 Series Rolling Stockperature when trains are stationary, and introduced liquid crystal

Hankyu Corporation’s new 1000 series and 1300 series rolling stock

displays inside trains showing journey information. Furthermore, we

reduces noise within trains, making them more comfortable for pas-

have reduced energy consumption roughly 60% versus standard

sengers, and saves energy. To realise significant energy saving andlocal service rolling stock, which uses resistance control, by introduc-noise reduction, we adopted an adjustable voltage adjustable fre-ing the main circuit system that we adopted for the previously intro-

quency (AVAF) inverter controller and, for the 1000 series, a totally

duced Hankyu Corporation 1000 series and 1300 series rolling stock

enclosed, self-cooling-type permanent magnet synchronous motor.

and by introducing LED lighting.

In addition, we introduced light-emitting diode (LED) lighting
throughout, including cabin lighting, headlights, tail lights, and marker
lights. As a result, the new rolling stock consumes approximately 50%

Hanshin Electric Railway 5700 series rolling stock

Hankyu Corporation 1000 series rolling stock

Power consumed during one round trip between
Hankyu Umeda and Kobe Sannomiya Stations*
（kWh）


0

500

1,000

1,500

2,000

5000
series9000
series50

Approx.
%reduction

A barrier-free design that also improves comfort

1000
series* Operating as a local service: Travel distance of 64.6 km

Hankyu Hanshin Holdings • Annual Report 201543

Real Estate		Priority Tasks
1 	Enhance appeal of and revitalise Umeda area andother areas served by our lines romote Umeda 1-1 Project steadily (Dai Hanshin
P
Building and Shin Hankyu Building rebuilding project)Enhance value of the Umeda area and other areas
served by Hankyu and Hanshin lines by planningand advancing new development projects andimplementing plans for renewal of facilities inline-side areas
2 	Respond flexibly in anticipation of changes inbusiness conditions for real estate sales business lan and develop condominiums matchingP
customer needs and advance business and sales
in anticipation of changes in market conditions
Develop detached houses in towns while marketing residential land lots steadily (Yamatedai,
Nakajima, and Saito)
Develop supply network and acquire business
opportunities in Tokyo metropolitan area andincrease brand recognition of Geo condominiums
and Hapia detached houses
3 	Grow Group’s Real Estate Business further throughstable management of real estate funds and REIT
businesses
 ursue external growth of Real Estate BusinessPthrough linkage with Hankyu REIT
Increase fee-based revenues from asset andproperty management
4 	Strengthen business in Tokyo metropolitan areaand develop businesses overseas
Increase rental revenue over medium-to-long termby acquiring revenue-generating properties andparticipating in redevelopment projects in Tokyo
metropolitan area
Accumulate business expertise by developing andowning logistics warehouses and participating incondominium businesses overseas

Basic Strategy
The Umeda area is the Hankyu Hanshin HoldingsGroup’s most important business base. Centred on
this area, the Real Estate Business will strengthen its
management and operation of the leasing businessand maintain or improve the vacancy rates of owned
properties. At the same time, we will enhance theentire area’s appeal and ability to attract customers.
Further, through the real estate sales business we willheighten the value of areas served by Hankyu andHanshin lines. Moreover, we will develop a presence insuch new markets as the Tokyo metropolitan area andoverseas markets to broaden earnings foundations.
44

Hankyu Hanshin Holdings • Annual Report 2015

Real Estate

Fiscal 2015 Review of Operations
The Real Estate Business recorded year-on-year decreases of 1.0%, orOsaka), Saito Mino-o Residence (Minoh, Osaka Prefecture), Hapia¥2,166 million, in revenues from operations, to ¥206,444 million, andGarden Neyagawa (Neyagawa, Osaka Prefecture), and Hankyu

2.2%, or ¥835 million, in operating income, to ¥37,173 million. Rental

Takarazuka Yamatedai Cleas (Takarazuka, Hyogo Prefecture).

revenue rose because higher occupancy rates of offices in Grand
Front Osaka and other parts of the Umeda area counteracted adecrease in rental revenue (rental floor space) accompanying the
beginning of demolition under the Umeda 1-1 Project. However,* Condominium unit sales in the previous fiscal year (fiscal 2014) were 1,356 units.
Condominium unit sales in the fiscal year under review (fiscal 2015) were 1,374
units. The number of condominiums sold (number of deliveries) includes units inshared buildings in which the Group only owns a portion of the units.

operating income declined year on year due to the absence of theprevious fiscal year’s gain on sale of land for commercial facilities.
Amid tough business conditions, the real estate leasing businesstook steps to heighten competitiveness and maintain the occupancy
rates of commercial facilities and office buildings. For example, thebusiness completed renewal of a commercial facility of Hanshin
Kuise Station, Yotte Kuise (Amagasaki, Hyogo Prefecture), in May 2014
_ chayamachi (Kita-ku, Osaka) in August of the same year.
and of NU

To help entrepreneurs create new businesses and heighten thecompetitiveness of Osaka-Umeda as a business base, we opened amembership office, GVH#5, in November 2014 and formed andinvested in a fund that provides businesses with seed capital, Umeda
Start-up Fund No. 1, in March 2015. Other initiatives included commencing a new large-scale development project, the Umeda 1-1

GVH#5

Project, in October 2014; beginning the demolition of Shin Hankyu
Building in the same month; and beginning the demolition of theDai Hanshin Building East Wing in February 2015.
In the real estate sales business, sales of condominiums in the
Kansai area included Geo-Tower Takatsuki Muse Garden (Takatsuki,
Osaka Prefecture), Geo-Shinmachi (Nishi-ku, Osaka), and Geo-Hankyu
Kawanishi Residence Mark (Kawanishi, Hyogo Prefecture). Sales ofcondominiums in the Tokyo metropolitan area included GeoDaikanyama (Meguro-ku, Tokyo) and Geo-Kaminoge (Setagaya-ku,
Tokyo).* As for sales of residential land lots and detached houses, wesold Osaka Nakajima Koen Toshi Hapia Garden (Nishi-Yodogawa-ku,
Geo-Tower Takatsuki Muse Garden

Saito Mino-O Residence

Fiscal 2016 Outlook
Earnings from sales of land for facilities are likely to compensate for adecrease in rental revenue (rental floor space) as work on the Umeda
1-1 Project progresses. As a result, in fiscal 2016, ending 31st March
2016, we expect revenues from operations to increase 9.4%, or ¥19.4
billion, year on year, to ¥225.8 billion. We also anticipate a 17.8%, or¥6.6 billion, year-on-year rise in operating income, to ¥43.8 billion.

Real Estate Business:
Outlook for revenues from operations and operating income(¥ billion)

(¥ billion)

60
48
36

208.6

206.4

225.8
43.8

38.0

37.2

250
200
150

24

100

12

50

0

0

2014
Operating income

2015

2016
(Est.)(FY)

Revenues from operations (right axis)

Hankyu Hanshin Holdings • Annual Report 201545

Real EstateMedium-Term Management Plan: Ongoing Project
Umeda 1-1 Project (Dai Hanshin Building and Shin Hankyu

Hanshin Department Store’s Umeda Flagship Store, which occupies

Building Rebuilding Project)

the building.

In accordance with the Medium-Term Management Plan, theEven by the Umeda area’s high standards, the Umeda 1-1 area

Hankyu Hanshin Holdings Group is implementing a business strat-

has outstanding accessibility. Therefore, we plan to exploit theegy that will enhance value of the Umeda area and other line-side

advantages of this location not only to build multipurpose buildings

areas. A large-scale development project, the Umeda 1-1 Project, is afor commercial premises and offices but also to establish a confer-major pillar of this strategy. After initiating work under phase I of theence zone that will invigorate businesses in the area by providing a

project (the demolition of Shin Hankyu Building) in October 2014,

venue for business-related information distribution, personnel

we began demolishing the Dai Hanshin Building East Wing indevelopment, and exchanges. Also, to improve pedestrian accessFebruary 2015 and began the new construction work of phase I into the area surrounding the location, we will strengthen the net-

July 2015. Aiming to complete construction in spring 2022, we will

work of pedestrian routes on three levels—an aboveground level,rebuild the Dai Hanshin Building while continuing operations ofan underground level, and a deck level.

The project began in October 2014. With a view to completing construction in 2022, we are advancing the project steadily withthe cooperation of local governments and other related parties.
Project summary

Construction plan summary

Location

1-1 Umeda, Kita-ku, Osaka

Site area

Approx. 12,200 square metres*

Total floor space

Approx. 260,000 square metresSize

38 floors above ground and 3 below

Purpose

Department store, offices, halls, etc.

Planned total investment¥89.7 billion

Construction completion

Around spring 2022

* Including 750 square metres of road between Dai Hanshin Building andShin Hankyu Building

October 2014

Phase I (begin Shin Hankyu Building demolition)

February 2015

Phase I
(begin Dai Hanshin Building East Wing demolition)

Around autumn 2015

Phase I (begin phase I construction)

Around spring 2018

Complete phase I construction (Shin Hankyu
Building and Dai Hanshin Building East Wing)and partially open new department store

Around spring 2018

Phase II (Begin Dai Hanshin Building West Wing
demolition)

Around spring 2019

Phase II (begin phase II construction)

Around autumn 2021

Complete phase II construction (new department
store part) and fully open new department store

Around spring 2022

Complete all construction and open offices

Phase I

Phase II  Dai Hanshin Building East Wing
(under construction)
 Shin Hankyu Building(under construction) Dai Hanshin Building West Wing(businesses operating)Conceptual illustration of the building exterior

46

Hankyu Hanshin Holdings • Annual Report 2015 Dai Hanshin Building West Wing
(under construction)
 Phase I (businesses operating)Real Estate

Opening a New Market
Following on from the development and ownership of logistics warehouses through collaboration with the International Transportation
Business, the Real Estate Business will participate in a new venture todevelop and sell condominiums in Vietnam’s Ho Chi Minh City.
Through such initiatives the Real Estate Business will gather information about real estate in ASEAN countries, gain an understanding of
local business conditions, and accumulate expertise in businessadvancement, which it will use to develop new markets overseas.

With Nishi-Nippon Railroad Co., Ltd., Hankyu Realty Co., Ltd. will participate in a condominium project in District 9 of Ho Chi Minh City. One of southern Vietnam’s major
housing developers, Nam Long Investment Corporation, is advancing this project.

Fiscal 2015 Initiatives
Steady Advancement of the Real Estate Sales Businessin demand after the rush demand associated with the consumption

The Hankyu Hanshin Holdings Group’s real estate sales business sells

tax increase. The Group supplied 1,256 individual condominium

condominiums, residential land lots, and detached houses. The

units in the Kansai area and the Tokyo metropolitan area, placing it

mainstay of this business is the sale of condominiums under the Geo

13th in the nationwide condominium supply ranking and second inbrand. We provide high-value-added condominiums in excellent

the ranking for the Kansai area. Further, from April 2014 to Marchlocations mainly in areas served by Hankyu and Hanshin lines but

2015, the Group supplied 1,374 individual condominium units.

also in other parts of the Kansai area and in the Tokyo metropolitan

In the near term, business conditions are expected to becomearea. In keeping with the Geo brand’s slogan, “quality and functional-

tougher due to a polarisation of sales as sales prices rise because ofity, wherever you live,” we are involved in all aspects of operations,high land prices, construction material prices, and labour costs.

from development through to sales and management. Thanks to

However, the Group will ensure its operations are viable by acquiring

these efforts, market research shows that the Geo brand has earned

carefully selected land based on monitoring of market trends and by

a strong reputation.

reducing costs without sacrificing functionality or quality.

Looking at trends in the condominium market in 2014, thenumber of individual condominium units supplied was 80,205,

Note: A ll of the figures above are from Real Estate Economic Institute Co., Ltd.
Reference was made to “National Condominium Market Trends 2014.”

the first decrease since 2009. This decline was attributable to a slump

Main properties delivered in fiscal 2015

Main properties scheduled for delivery in fiscal 2016

(Ordered by highest total number of condominium units first, with
Kansai area and Tokyo metropolitan area categorised separately)(Ordered by highest total number of condominium units first, with
Kansai area and Tokyo metropolitan area categorised separately)

Total number ofcondominium
units

Property nameLocationTakatsuki, Osaka477

Geo Senri Chuo1

Toyonaka, Osaka

514 2

Geo Shinmachi*

Osaka, Osaka382

Geo Hankyu Rakusaiguchi North
Residence

Muko, Kyoto

231

Geo Nishinomiya Kitaguchi Gardens*

Nishinomiya,
Hyogo

160

Geo Seishin Chuo

Kobe, Hyogo

205

Geo Tsurigane-cho

Osaka, Osaka123

Geo-Tower Minamihorie

Osaka, Osaka

2052

Geo Hankyu Kawanishi Residence Mark

Kawanishi, Hyogo

104

161

Kyoto, Kyoto

60

Geo Hankyu Rakusaiguchi South
Residence1

Muko, Kyoto

Geo Karasuma Gojo
Geo Ikeda Jonan 1-chome

Ikeda, Osaka

56

Nishinomiya,
Geo Nishinomiya Kitaguchi Hinokuchi-cho Hyogo36

Geo-Grande Ashiya

Ashiya, Hyogo

16

Geo Kobe Yamamotodori

Kobe, Hyogo36

Geo Kachidoki

Chuo, Tokyo

68

Geo Kaminoge

Setagaya, Tokyo

41

Geo Nishinomiya Kitaguchi Crowns

Nishinomiya,
Hyogo

20

Geo Daikanyama

Meguro, Tokyo

20

Tomihisa Cross Comfort Tower1

Shinjuku, Tokyo

1,0932

Geo Todoroki

Setagaya, Tokyo69

Geo Akasaka Tango-cho

Minato, Tokyo

23

Property nameLocation

Geo-Tower Takatsuki Muse Garden** Joint-venture properties

Total number ofcondominium
units

1. Joint-venture properties
2. Including unsold condominium units

Hankyu Hanshin Holdings • Annual Report 201547

 ntertainment andECommunications

		Priority Tasks
1 	Maximise value of Hanshin Tigers and Koshienbrands and Takarazuka brandImprove appeal of live events (create superior
attractions, train and acquire star talent, andincrease appeal of live-event venues)
Broaden fan base and improve customer retention(develop sales by taking maximum advantage ofcontent appeal and strengthen promotions
through external media)
Create value chain for live events, media, andsecondary contents (enhance appeal of established media, broaden range of media channels)
2 	Sustain growth of communications mediaE stablish competitive advantage and retain customers in broadcast and communications businessthrough marketing rooted in local communities
and strengthening of communications business oncentrate efforts on growth areas, expand inC
the Tokyo metropolitan area, and advancebusiness growth through M&A in information
services business©Takarazuka Revue Company

3 	Use leisure resources effectively
 ake maximum use of Mt. Rokko’s potential asMa management resource

Basic Strategy
With loyal fans and fame not only in the Kansai area
but also nationwide, the Hanshin Tigers and theHanshin Koshien Stadium and the Takarazuka Revuecontribute significantly to the enhancement of the
Hankyu Hanshin Holdings Group’s brand value as
unique strengths that other companies in the industry
do not possess. By continuing to develop powerfulbrands and high-quality performances that inspireand excite customers, we will enhance customer
loyalty and maximise brand value.

48

Hankyu Hanshin Holdings • Annual Report 2015

Entertainment and Communications

Fiscal 2015 Review of Operations
The Entertainment and Communications Business achieved year-

In the communications and media business, the broadcast andon-year increases of 2.1%, or ¥2,282 million, in revenues from opera-

communications business sought to increase subscriber numbers

tions, to ¥112,632 million, and 5.8%, or ¥821 million, in operating

amid intense competition by stepping up the marketing of discountincome, to ¥14,993 million. The business grew revenues and earn-plans for long-term cable television contracts and mobile phone set-ings because a favourable performance by the sports business,menu contracts.

which saw the Hanshin Tigers reach the Japan Series, and the popu-

As for the leisure business, in the Mt. Rokko area, we attracted

larity of the performances of the Takarazuka Revue, which celebrated

more customers through promotions integrating diverse content

its 100th anniversary, more than offset the effect of divesting part ofwith the natural beauty of Mt. Rokko. These included a Midsummer

the publishing business on 1st October 2014.

Snow Festival and Rokko Meets Art Walk 2014. In addition, the Mt.

In the sports business, the Hanshin Tigers competed at the topof the league until the end of the regular season; placed second in

Rokko Snow Park welcomed large numbers of visitors, includinggroups of non-Japanese tourists.

the league to enter the Climax Series, which they won; and reached
the Japan Series. We heightened the appeal of the Hanshin Koshien

Total attendances at Hanshin Tigers home games

Stadium by introducing a new official team of cheerleaders, Tigers(Thousand people)

Girls, and rolling out a range of merchandising and catering promotions. We also conducted promotions celebrating the stadium’s 90th
anniversary. These efforts attracted large numbers of customers to
the stadium.

4,000

3,000

3,006

2,898

2010

2011

2,728

2,772

2,690

2012

2013

2014

2,000

In the stage business, the stage revue business celebrated the100th anniversary of the Takarazuka Revue with commemorative

1,000

events and other related events, all of which sold out. All performances hosted by the Takarazuka Grand Theatre and the Tokyo

0

Takarazuka Theatre received favourable reviews. The theatre busi-(CY)

ness produced a range of performances that attracted strong public
interest, including a stage version of the popular film Oceans 11, held
in Osaka and Tokyo, and the Broadway musical Chicago, featuringstars from successive generations of the Takarazuka Revue.

Fiscal 2016 Outlook
In fiscal 2016, ending 31st March 2016, the Entertainment andCommunications Business is projected to record year-on-year
decreases of 5.9%, or ¥6.6 billion, in revenues from operations, to¥106.0 billion, and 23.3%, or ¥3.5 billion, in operating income, to¥11.5 billion. These decreases are likely to stem from the absence ofEntertainment and Communications Business: Outlook forrevenues from operations and operating income(¥ billion)

110.4

15

14.2

the previous fiscal year’s increase in revenues in the sports business,
which accompanied the Hanshin Tigers advance to the Japan series,(¥ billion)

20

112.6

106.0

15.0

120

90

11.5
10

60

5

30

and lower earnings in the stage business, resulting from the endingof the Takarazuka Revue’s 100th anniversary events.

0

0

2014
Operating income

2015

2016
(Est.)(FY)

Revenues from operations (right axis)

Hankyu Hanshin Holdings • Annual Report 201549

Travel		Priority Tasks
1 	Raise customer satisfaction levels
 anage quality rigorously
M
Manage risk rigorously
2 	Strengthen product planning reate products customers support
CExpand product lineup centred on original rangeof core brand travel packages
3 	Establish foundations of stable earnings
Improve structure of back-office departments
4 	Expand and improve management resources
Strengthen bases of overseas subsidiaries
Strengthen focus on tourists from overseas
Develop diverse personnel for the future

Basic Strategy
In the Travel Business, the mainstay operating company is Hankyu Travel International, which promotes
the Trapics brand and has earned customer endorsement for many years. As well as marketing travel
packages through such traditional media as newspapers, the company has also been focusing efforts on
mail-order sales and online sales in recent years.
Through dynamic, high-paced marketing and product roll-outs that exploit the characteristics of mailorder sales and online sales, we are developing an
extensive lineup of travel products that cater to diversifying travel demand.
Never resting on our laurels, we will continue toembrace change and improve our products evenfurther to create travel products that reflect customer
feedback and ensure we are a company society needs.

50

Hankyu Hanshin Holdings • Annual Report 2015

TravelFiscal 2015 Review of Operations
Revenues from operations decreased 3.2%, or ¥1,041 million, year on

the establishment of the 88 Sacred Places of Shikoku, sold briskly.

year, to ¥31,965 million. However, thanks to cost reductions, operating

Nevertheless, overall demand for domestic travel declined year on

income edged up 0.2%, or ¥3 million, year on year, to ¥1,227 million.

year due to lower consumer confidence after the consumption tax

Demand was favourable for overseas travel to destinations forincrease and the favourable performances of products related to thewhich flights from Haneda Airport have increased, such as Canada,ceremonies to move the shrines at Ise Jingu Shrine and the Grand

Taiwan, and other Asian destinations. However, demand for travel toShrine of Izumo in the previous fiscal year.
In relation to travel products for visitors to Japan, we advanced

Europe—the mainstay destination of the business—softenedslightly, reflecting further yen depreciation and security concerns.
Meanwhile, for domestic travel we expanded and improved our
lineup of timely products that take advantage of specific events. For

marketing activities steadily in Europe and Asia and grew thenumber of customers visiting Japan from overseas that used ourtravel products.

example, products for travel to Shikoku, marking 1,200 years sinceOverseas travel billings (FY2015)

Total travel billings (FY2015)
Rank

Company name¥ billion

Rank

Company nameDomestic travel billings (FY2015)¥ billion

Rank

Company name¥ billion

1JTB

1,509.3

1

JTB

477.9

1

JTB

979.8

2

KNT-CT Holdings

514.3

2

HIS

365.1

2

Rakuten Travel

369.0

3

HIS

425.5

3

JTB World Vacations

246.5

3

KNT-CT Holdings

340.5

4

Nippon Travel Agency

419.8

4

Hankyu Travel International*

234.7

4

Nippon Travel Agency

256.4

5

Rakuten Travel

388.9

5

KNT-CT Holdings

161.0

5

ANA Sales

181.3

6

Hankyu Travel International*

372.9

6

Nippon Travel Agency

141.2

6

Hankyu Travel International*

136.8

7

JTB World Vacations

246.5

7

JALPAK

63.5

7

JALPAK

114.0

8

ANA Sales

210.3

8

JTB Business Travel Solutions

53.7

8

JR TOKAI TOURS

94.0

9

JALPAK

177.5

9Travel Plaza International

50.0

9

Top Tour

78.9

10

Top Tour

113.1

10

Nissin Travel Service

44.8

10

Meitetsu World Travel

72.7

Source: Japan Tourism Agency Bulletin: Business Volume for Major Travel Agents (April 2014 to March 2015)
Note: Billings are rounded down to the nearest ¥100 million.
* The total of both Hankyu Travel International and Hankyu Hanshin Business Travel

Fiscal 2016 Outlook
In fiscal 2016, ending 31st March 2016, the Travel Business is expectedto achieve increases of 1.0%, or ¥0.3 billion, in revenues from operations, to ¥32.3 billion, and 22.2%, or ¥0.3 billion, in operating income,to ¥1.5 billion. We plan to achieve these increases by attracting morecustomers for domestic travel products, which will counteract theTravel Business: Outlook for revenues from operations andoperating income(¥ billion)

(¥ billion)

2.0

40

33.0

32.0

1.2

1.2

1.5

continuing negative effect on demand for overseas travel productsof yen depreciation, security concerns, and low consumer confidence.

32.3
1.5

30

1.0

20

0.5

10

0

0

2014
Operating income

2015

2016
(Est.)(FY)

Revenues from operations (right axis)

Hankyu Hanshin Holdings • Annual Report 201551

I nternational
Transportation

		Priority Tasks
1 	Build a global governance system
Strengthen control capabilities of bases
2 	Provide comprehensive solutions to growthindustries
 romote investment to expand logistics businessP
and increase sales catering to growth industries
3 	Construct a sales system that meets customerneeds
 romote sales that emphasise customers andP
expand sales, including sales to non-Japanesecompanies
4 	Build a system that can create high-value-added
services
Advance BPR1 and WSI2 and reform productdevelopment and existing services
5 	Expand the network in promising markets andstrengthen existing basesS tep up business development in emerging
countries of Africa, Latin America, and the ASEAN
region6 	Control information, knowledge, and financesand employ and train personnelInculcate Hankyu Hanshin Express Way among
personnel, employ and train personnel, andpromote ERM3
7 	Expand new business areasS trengthen logistics and marine transportation
businesses and create new businesses
1. BPR: Business Process Re-Engineering
2. WSI: Working Style Innovation
3. ERM: Enterprise Risk Management

Basic Strategy
The Hankyu Hanshin Holdings Group’s International
Transportation Business began in 1948, when it
became Japan’s first International Air Transport
Association (IATA) certified freight agency. The business developed a logistics business that offers services
including airfreight, sea freight, and product management. Since establishing a representative office in
New York in 1961, the International Transportation
Business has built a global network comprising 100
bases and spanning 22 countries.
We aim to be an innovative logistics provider thatoffers progressive high-value-added services worldwide centred on Asia. Furthermore, the International
Transportation Business uses the global perspective
and expertise that it has developed over many years toassist the Group’s development of businesses overseas.
52

Hankyu Hanshin Holdings • Annual Report 2015

International Transportation

Fiscal 2015 Review of Operations
In the International Transportation Business, revenues from opera-

in Johannesburg, South Africa—and a base in Changchun in China’s

tions rose 4.6%, or ¥1,723 million, year on year, to ¥39,419 million, as

northeast, where many Japanese companies have establishedcurrency fluctuations boosted the business results of overseas sub-operations. Also, aiming to expand our business in Indonesia, we

sidiaries. Operating income was up 48.8%, or ¥1,002 million, year on

established a company that will offer logistics and warehousing ser-year, to ¥3,053 million.

vices, PT. Hankyu Hanshin Logistics Indonesia, through a joint invest-

Overseas subsidiaries posted solid results as the United States,

ment by Hankyu Corporation, Hanshin Electric Railway Co., Ltd., and

the ASEAN region, and China continued to drive the recovery inHankyu Hanshin Express Co., Ltd., in August 2014. Construction of afreight demand. Meanwhile, subsidiaries in Japan saw import-

logistics centre is under way and due for completion in December

handling demand soften amid further yen depreciation, while

2015. Once the new company completes construction, it will

exports remained steady.

manage the logistics centre with an existing subsidiary in Indonesia.

With sights set on expanding and improving our global network
even further, we established a base in Africa’s growing market—

Our goal is to expand and improve our logistics network and offer
high-quality logistics services.

Network of bases: 34 domestic bases and 100 overseas bases (as of 31st March 2015)
Established a new base in Cambodia
In Phnom Penh, in July 2015, we established a representative office, which is
conducting market research with our
subsidiaries in Thailand and Vietnam.

Establishing logistics centres in the ASEAN region
We are building a logistics centre in Indonesia, which is experiencing
conspicuous growth. We plan to begin operations in January 2016.
Also, in spring 2017, we plan to begin providing warehousing andlogistics services in Singapore, an international logistics hub.

Rotterdam
Brussels
SeattleSan Francisco
Los Angeles
San Diego

ChicagoDetroitToronto
New York
Cincinnati
Atlanta
Dallas
McAllenLondonParis
Düsseldorf
PragueAmsterdam
Frankfurt

MoscowHong Kong
Seoul

Beijing
Guangzhou
Hanoi
Delhi
Bangkok

Milan

Mexico CityDubai

Sao Paulo

Opened a new office in Vietnam
We opened a new office at Noi Bai
International Airport in Vietnam in
January 2015.

Strengthening business developmentin east Africa
Following on from the April 2014 establishment of a base in Johannesburg,
South Africa, we are stepping up businessdevelopment in east Africa.
Johannesburg

Local subsidiary
BranchRepresentative office

Chiang Mai
MumbaiPune
ChennaiBangalore
PenangYangonBusan

ShanghaiTaipeiHai PhongPasir Gudang
Butterworth

ManilaKuala Lumpur
Port Klang
Johor Bharu

Kaohsiung
Taichung
Cebu
Laem Chabang
Dong Nai
Ho Chi Minh
Binh DuongJakarta
Singapore

Established base in India
In western India, in January 2015, we established a base in Pune,
which promises to continue attracting numerous companies fromJapan and other countries.

Fiscal 2016 Outlook
In fiscal 2016, ending 31st March 2016, the International
Transportation Business is expected to post year-on-year decreasesof 0.3%, or ¥0.1 billion, in revenues from operations, to ¥39.3 billion,and 21.4%, or ¥0.7 billion, in operating income, to ¥2.4 billion, reflecting the absence of fiscal 2015’s special demand for air transportation

Travel Business: Outlook for revenues from operations andoperating income(¥ billion) 

4

37.7

39.4

39.3

3.1

3

and a relative decrease in yen depreciation’s positive effect on earnings.

40

30

2.4

2.1

2

(¥ billion)

20

1

10

0

0

2014
Operating income

2015

2016
(Est.)(FY)

Revenues from operations (right axis)
Hankyu Hanshin Holdings • Annual Report 201553Hotels		Priority Tasks
1 	Improve profitability of existing hotels
2 	Expand network by opening new hotels
Implement plan to open new REMM hotels centred on Tokyo metropolitan area3 	Extend and enhance chainE nhance service functions of chain headquarters
Increase chain franchises

Basic Strategy
The Hankyu-Hanshin-Daiichi Hotel Group traces its
origins to the opening of the Takarazuka Hotel in
1926. Today, we are one of Japan’s leading hotel
groups and manage many different types of hotels.
Our chain comprises 49 hotels with 10,626 guest
rooms as of 1st April 2015.

54

Hankyu Hanshin Holdings • Annual Report 2015

Hotels

Fiscal 2015 Review of Operations
In the Hotels Business, revenues from operations declined 1.0%, or¥663 million, year on year, to ¥63,031 million, reflecting withdrawal
from a directly managed business engaged in the manufacture andsale of confectionery and the closure of certain restaurants in the

Average daily rates (ADR) and occupancy rates ofHankyu Hanshin Hotels in the Tokyo metropolitan area1
and Kansai area2(Yen)
20,000restaurant business in fiscal 2014. However, thanks to a solid performance in the accommodation area, which accompanied a rise in

15,000non-Japanese overnight guests, and the benefit arising from withdrawals and closures, operating income was up 50.2%, or ¥406 mil-

86.6

83.3
14,28810,00015,210
9,521

(%)
100

92.2

92.6

92.2

88.6

75

15,853

10,21011,61650

lion, year on year, to ¥1,216 million.
In fiscal 2015, we took measures to strengthen competitiveness.
These measures included renewing restaurants and banquet halls instages. For example, we renewed Hotel Hankyu International’s NIGHT
and DAY café restaurant and Dai-ichi Hotel Tokyo’s L’Etoile restaurant.
Furthermore, we began refurbishing the guest rooms of Hotel new
Hankyu Annex and Hotel new Hankyu Kyoto to cater to customer
demand. In addition, we planned and marketed a range of different
promotional packages for respective hotels, such as Hotel new
Hankyu Osaka, which celebrated its 50th anniversary in August 2014.

5,000

25

0

0

2013

2014

2015

(FY)

Tokyo metropolitan area ADR
Kansai area ADR
Tokyo metropolitan area occupancy rate (right axis)
Kansai area occupancy rate (right axis)
1. Hotels in Tokyo metropolitan area excluding Hotel new Hankyu Tsukiji
2. H
 otels in Kansai area including REMM Shin-Osaka, which opened
in September 2012

Fiscal 2016 Outlook
In fiscal 2016, ending 31st March 2016, the Hotels Business iswill result from a favourable performance by the accommodation

expected to achieve year-on-year growth of 3.0%, or ¥1.9 billion, in

area, as respective hotels see a continuation of fiscal 2015’s upward

revenues from operations, to ¥64.9 billion, and 15.1%, or ¥0.2 billion,

trend in demand from visitors to Japan, and an increase in banquet

in operating income, to ¥1.4 billion. We anticipate that this growthhall and restaurant guests.

Visitors to Japan(%)

Hotel Business: Outlook for revenues from operations andoperating income

36.0(¥ billion) 
2.0

34.5

1.5

33.0

1.0

(Million people) 

16

35.7
12

8

34.5

13.4
33.8

8.6

4

3.0

2.7

Nationwide

2011
Kansai area

2012

63.0

3.5

2013

64.9
1.4

60

40

0.8
4.8

0

2010

63.7

1.2
33.3

32.6
2.1

80

10.4
8.4

6.2

(¥ billion)

2014

31.5

0.5

0

0

(CY)

Percentage visiting Kansai area (right axis)

20

0

2014
Operating income

2015

2016
(Est.)(FY)

Revenues from operations (right axis)

Source: J apan Tourism Agency. “Consumption Trend Survey for Foreigners
Visiting Japan.”

Hankyu Hanshin Holdings • Annual Report 201555

Directors and Audit & Supervisory Board Members(As of 16th June 2015)

Directors

Kazuo Sumi

Shinya Sakai

Noriyuki Inoue

President and Representative Director

Representative Director

Director (External*)

1973 Joined Hankyu Corporation
2000 Director, Hankyu Corporation
2002 Managing Director, Hankyu Corporation
2003 President, Hankyu Corporation2005 President, Hankyu Holdings
2006 President, Hankyu Hanshin Holdings (Current position)2008 Director, Hankyu Hanshin Hotels (Current position)2013 Director, Hankyu Travel International (Current position)2013 Director, Hankyu Hanshin Express (Current position)2014 Chairman, Hankyu Corporation (Current position)1970 Joined Hanshin Electric Railway
2002 Director, Hanshin Electric Railway
2005 Managing Director, Hanshin Electric Railway
2006 President, Hanshin Electric Railway
2006	Representative Director, Hankyu Hanshin Holdings(Current position)2008	Chairman, Hanshin Tigers Baseball Club
(Current position)2011 Chairman, Hanshin Electric Railway (Current position)

1957 Joined Daikin Industries
1994 President, Daikin Industries
2002 Chairman and CEO, Daikin Industries
2003 Director, Hankyu Corporation2005 Director, Hankyu Holdings
2006 Director, Hankyu Hanshin Holdings (Current position)2014	Chairman of Daikin Industries andChief Global Group Officer (Current position)

Shosuke Mori

Shunichi Sugioka

Yoshishige Shimatani

Director (External*)

Director (Part-time)

Director (Part-time)

1963 Joined Kansai Electric Power2005 President, Kansai Electric Power2010 Director, Hankyu Hanshin Holdings (Current position)2010 Chairman, Kansai Electric Power (Current position)

1964 Joined Hankyu Department Store
2000 President, Hankyu Department Store
2000 Director, Hankyu Corporation2005 Chairman, Hankyu Department Store2005 Director, Hankyu Holdings
2006 Director, Hankyu Hanshin Holdings (Current position)2007 Chairman and CEO, H2O Retailing2008 Director, Hankyu Hanshin Hotels (Current position)2008 Chairman, Hankyu Hanshin Department Stores2015	Director and Senior Corporate Advisor,
H2O Retailing (Current position)2015	Director and Senior Corporate Advisor,
Hankyu Hanshin Department Stores (Current position)

1975 Joined Toho
2011 President, Toho (Current position)2015 Director, Hankyu Hanshin Holdings (Current position)

Takaoki Fujiwara

Yoshihiro Nakagawa

Ichiro Namai

Director (Part-time)

Director (Part-time)

Director (Part-time)1975 Joined Hanshin Electric Railway
2005 Director, Hanshin Electric Railway
2007 Managing Director, Hanshin Electric Railway
2011 President, Hanshin Electric Railway (Current position)2011 Director, Hankyu Hanshin Holdings (Current position)

1976 Joined Hankyu Corporation2005 Director, Hankyu Corporation2007 Managing Director, Hankyu Corporation2013	Representative and Senior Managing Director,
Hankyu Corporation2014 President, Hankyu Corporation (Current position)2014 Director, Hankyu Hanshin Holdings (Current position)

1971 Joined Hankyu Express International
2000 Director, Hankyu Express International
2008 Vice president, Hankyu Travel International
2008	Audit & Supervisory Board Member,
Hankyu Hanshin Hotels (Current position)2010 President, Hankyu Travel International
2013 Director, Hankyu Hanshin Holdings (Current position)2014	Chairman, Hankyu Travel International(Current position)* 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. Noriyuki Inoue and Mr. Shosuke Mori as external (independent) directors.

56

Hankyu Hanshin Holdings • Annual Report 2015

Directors and Audit & Supervisory Board Members

Seisaku Okafuji

Mitsuo Nozaki

Masao Shin

Director (Part-time)

Director
In charge of Personnel and General Affairs Div.

Director
In charge of Group Planning Div.
(Group Management Planning)

1974 Joined Hankyu Express International
2005 Director, Hankyu Express International
2008 Director, Hankyu Express International
2009 Director, Hankyu Hanshin Express International
2010	President, Hankyu Hanshin Express International(Current position)2013 Director, Hankyu Hanshin Holdings (Current position)

1981 Joined Hankyu Corporation2005 Director, Hankyu Corporation
2006 Director, Hankyu Holdings
2006 Director, Hankyu Hanshin Holdings (Current position)2007 Managing Director, Hankyu Corporation2013	Senior Managing Director, Hankyu Corporation(Current position)2013 Chairman, Hankyu Hanshin Hotels (Current position)

1981 Joined Hanshin Electric Railway
2006 Director, Hanshin Electric Railway
2006 Director, Hankyu Hanshin Holdings (Current position)2008 Managing Director, Hanshin Electric Railway
2013	Audit & Supervisory Board Member,
Hankyu Hanshin Hotels (Current position)2014	Senior Managing Director, Hanshin Electric Railway(Current position)

Audit &
Supervisory
Board
Members

Naohisa Nogami

Tsunenori Kawashima

Masayoshi Ishibashi

Director
In charge of Group Planning Div.
(Group Business Planning)
General Manager of Corporate Planning Dept.

Standing Audit & Supervisory Board Member

Standing Audit & Supervisory Board Member

1977 Joined Hankyu Corporation
2002 Director, Hankyu Corporation2005 Director, Hankyu Holdings
2005 Managing Director, Hankyu Corporation
2006 Representative Director, Hankyu Holdings
2006	Representative and Managing Director,
Hankyu Corporation
2006	Representative Director, Hankyu Hanshin Holdings
2009	Standing Audit & Supervisory Board Member,
Hankyu Corporation (Current position)2012	Standing Audit & Supervisory Board Member,
Hankyu Hanshin Holdings (Current position)

1979 Joined Hanshin Electric Railway
2008	President and Representative Director,
Hanshin Contents Link Corporation2013	Standing Audit & Supervisory Board Member,
Hankyu Hanshin Holdings (Current position)2013	Standing Audit & Supervisory Board Member,
Hanshin Electric Railway (Current position)

Takaharu Dohi

Haruo Sakaguchi

Junzo Ishii

Audit & Supervisory Board Member (External**)Audit & Supervisory Board Member (External**)Audit & Supervisory Board Member (External**)1958 Prosecutor
1996 Prosecutor-General (until 1998)
1998 Lawyer (Current position)
2002	Audit & Supervisory Board Member,
Hankyu Corporation (Current position)2005	Audit & Supervisory Board Member, Hankyu Holdings
2006	Audit & Supervisory Board Member,
Hankyu Hanshin Holdings (Current position)

1958 Lawyer (Current position)
1989 Vice Chairman, Japan Federation of Bar Associations
2006 Audit & Supervisory Board Member, Hankyu Holdings
2006	Audit & Supervisory Board Member,
Hankyu Corporation (Current position)
2006	Audit & Supervisory Board Member,
Hankyu Hanshin Holdings (Current position)2013	Audit & Supervisory Board Member,
Hankyu Hanshin Hotels (Current position)

1986 Professor of Faculty of Commerce, Doshisha University
1989	Professor of Faculty of Business Administration,
Kobe University
1999	Professor of Faculty of Business Administration,
Graduate School of Kobe University
2008	President of the University of Marketing andDistribution Sciences (Current position)2010	Audit & Supervisory Board Member,
Hankyu Hanshin Holdings (Current position)2010	Audit & Supervisory Board Member,
Hanshin Electric Railway (Current position)

1982 Joined Hankyu Corporation2007 Director, Hankyu Corporation2013 Managing Director, Hankyu Corporation2014	Senior Managing Director, Hankyu Corporation(Current position)2014	Audit & Supervisory Board Member,
Hankyu Travel International (Current position)2014	Audit & Supervisory Board Member,
Hankyu Hanshin Express (Current position)2014 Director, Hankyu Hanshin Holdings (Current position)** M r. Takaharu Dohi, Mr. Haruo Sakaguchi, and Mr. Junzo Ishii 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. Takaharu Dohi, Mr. Haruo Sakaguchi, and Mr. Junzo Ishii as external (independent)
Audit & Supervisory Board members.
Hankyu Hanshin Holdings • Annual Report 201557

Management Organisation

Corporate GovernanceGrants approval in cases where a Group company takes actions
that significantly affect Group management (for example,
when investments rise above a certain threshold).
In this way, the Company aims to improve its supervision and over-

Our Corporate Governance Systemsight of all Group companies, and raise overall Group governanceHankyu Hanshin Holdings, Inc. (or, the Company) is a pure holding

standards.

company, and conduct of operations is basically the responsibility of

In further governance measures, our Board of Directors, whichGroup member companies. Hankyu Hanshin Holdings’ principal role

includes external directors, receives reports with regard to the above

is supervision and oversight of the whole Group—meaning thatmatters, and approves management decisions. The Company has set

these functions are separate from conduct of Group businesses.

up a Group Management Committee including representatives ofUnder this structure, the Company:

core businesses of the Group to undertake preliminary reviews.

Makes decisions regarding Group management policy

In addition to these initiatives, and as part of our efforts toand strategy;

strengthen the Group’s overall capabilities, the Group is also

Approves the medium-term and annual management plans ofstrengthening governance with regard to fund procurement.

all core businesses;

Measures include centralising funding under the Company, andThe need for timely reporting of progress reports fromensuring that necessary funds are distributed to the operating com-

operating companies;

panies within specific parameters laid down in their business plansapproved by the Company.

Corporate Governance System
General Meeting of Shareholders
Appointment/Dismissal

Appointment/Dismissal

Board of Directors
Full-time: 5

Call/Report on
execution situation

Part-time: 8(including 2
External Directors)

Audit & Supervisory Board

Audit

Standing Audit & Supervisory
Board Members: 2

Selection/Dismissal/
Supervision

President

ReportReportCall

External Audit & Supervisory
Board Members: 3

Cooperation

Group Auditing Division

Appointment/Dismissal

ReportAccounting Auditors(CPAs)

Cooperation

Staff of Audit &Supervisory Board
Members

Participate (as observer)Group Management Committee
Participate

Accounting audit

Audit

Group Companies
Directors (representative of each core business)

Management Organisation(1) Board of Directors and Directors

system for full-time directors that is linked to business results to

The Board of Directors endeavours to enhance governance of theencourage the enhancement of corporate value and business results.

entire Group and oversight of respective companies by maintaining
the authority to approve the management policies and strategies of
the Company and the Group as well as the management plans ofcore businesses and by requiring timely reporting from operatingcompanies about the significant investments of Group companies.
Further, the Company endeavours to raise the standard of decision making and strengthen oversight functions by appointing eightof its 13 directors as part-time directors, including two external directors that are independent of the Company and have abundant experience in corporate management.

58

In addition, the Company has introduced a compensation

Hankyu Hanshin Holdings • Annual Report 2015

Notes
1. Number of members of the Board of Directors
	The articles of incorporation of the Company stipulate that the number of members of the Company’s Board of Directors shall be three or more.
2. Requirements for the election of directors
	The articles of incorporation of the Company stipulate that the approval of resolutions for the election of directors shall require the attendance of shareholders
that have at least one-third of the voting rights of shareholders for which voting
rights can be exercised and shall require a majority of these voting rights.
Furthermore, the articles of incorporation stipulate that such resolutions shall not
be approved through cumulative voting.

Management Organisation(2) Audit & Supervisory Board, Audit & Supervisory
Board Members
The Company adopts the Audit & Supervisory Board system toensure adequate management oversight. We have five Audit &Supervisory Board members, who monitor the business operations
and financial position of the Company and its subsidiaries, and audit

Relations with External Directors
Name

Noriyuki
Inoue(Independent
Director)

the performance of duties by the directors. Three of the five Audit &Supervisory Board members are external, to provide an independent
viewpoint and ensure a high degree of professionalism in Groupauditing. In this way, we are working to further ensure sound decisionmaking in the conduct of operations. We provide full backup to

Shosuke Mori
(Independent
Director)

Audit & Supervisory Board members, for example by involving themin the Group Management Committee and other meetings within

Reasons for Appointment

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, perspective from top business circles, and ability to provide independent input.
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.
Appointed for his wealth of management experience, perspective from top business circles, opinions from the viewpointof corporate social responsibility, and ability to provide independent input.

the Group. The Audit & Supervisory Board meets once a month, inprinciple, to discuss and pass resolutions on important matters.
In addition, as part of the auditing of the Group’s business operations, the Audit & Supervisory Board members peruse when appropriate auditing plans and results of audits of the Group Auditing
Division, composed of internal audit staff. The Audit & Supervisory
Board members also receive from the Group Auditing Division regular reports (and ad hoc reports when required) on internal audits at
the Company and its subsidiaries, including on the state of operationof the whistle-blowing system.

Relations with External Audit & Supervisory Board Members
Name

Reasons for Appointment

Takaharu
Dohi

Former prosecutor-general, currently a lawyer. Appointed
to advise on more compliance-based management andfor his ability to provide independent input.

(Independent
Board Member)

Haruo
Sakaguchi(Independent
Board Member)

At the same time, they receive regular status reports from theaccounting auditors (CPAs), and take part in on-site audits by theaccounting auditors including those of Group companies.
(3) External Directors and External Audit & Supervisory
Board Members

Junzo Ishii(Independent
Board Member)

Currently a lawyer. Appointed to advise on more compliance-based management and for his ability to provide independent input.
Former Professor of Business Administration within the
Graduate School of Kobe University, currently President of
the University of Marketing and Distribution Sciences.
Appointed for his ability to express useful opinions basedon his high-level specialist expertise in business administration and for his ability to provide independent input.

The Company appoints independent external directors and Audit &Supervisory Board members with the aim of further enhancing thegovernance of the Group through their contributions to meetings ofthe Board of Directors and the Audit & Supervisory Board, as well asother activities.
The external directors appointed to the Board are selected fromamongst persons with extensive experience in corporate management, with the aim of strengthening the management oversightfunction of the Board of Directors with respect to the Group as awhole, and also in the expectation that the external directors will
provide advice to the Company’s management from a broad perspective. Similarly, the external Audit & Supervisory Board members
whom we appoint are selected from amongst persons possessing
high-level specialist expertise in the fields of compliance and business administration.
When selecting candidate external directors and external Audit& Supervisory Board members for appointment, we employ the criteria laid down by the Tokyo Stock Exchange in evaluating the independence of the candidates. By the use of these selection criteria, weensure that the appointment of external directors and external Audit& Supervisory Board members does not constitute a problem of any
kind, and that their appointment poses no risk of conflict of interest
with general shareholders.

Hankyu Hanshin Holdings • Annual Report 201559

Management Organisation

Attendance at Meetings of the Board of Directors and Audit &Supervisory Board (Figures for Fiscal 2015)
External Directors
Name

Attendance at meetings of theBoard of Directors

Noriyuki Inoue

Attended 6 of 10 meetings

Shosuke Mori

Attended 7 of 10 meetings

Compensation for Directors and Audit & Supervisory
Board Members
Our system for determining compensation for directors is designed
to incentivise contributions that enhance the Group’s enterprisevalue and business performance. In this system, compensation comprises two elements: a basic portion determined according to thepost held by the director, and a bonus-type element linked to busi-

External Audit & Supervisory Board Members
Name

Attendance at meetings of theBoard of Directors

Attendance at meetings of the
Audit & Supervisory Board

Takaharu Dohi

Attended 9 of 10 meetings

Attended 11 of 12 meetings

Haruo Sakaguchi

Attended all 10 meetings

Attended all 12 meetings

Junzo Ishii

Attended all 10 meetings

Attended all 12 meetings

ness performance.
Half of the performance-linked compensation is paid into a fundused for the acquisition of shares in the Company (except in cases inwhich stock option-based compensation is the same amount or
greater than was given by the Company or its subsidiaries).
However, the compensation paid to part-time directors, including external directors, and to Audit & Supervisory Board members,
comprises only the portion determined by the post held, in light of

Other Deliberative Bodies

the nature of their duties.

(1) Group Management Committee

The total compensation paid to directors and Audit & Supervisory

The Group Management Committee, comprising full-time Directors

Board members is kept within the total compensation amount(President, representative directors, head of Personnel and Generalapproved by the Company’s shareholders at the General Meeting of

Affairs Division and head of Group Planning Division) and represen-

Shareholders. Compensation for individual directors is determined bytatives of each core business, meets to discuss resolutions of theresolution of the Board of Directors, while compensation for individual

Board of Directors, Group company management strategy and busi-

Audit & Supervisory Board members is determined by deliberation ofness planning and systems and rules for maintenance of the holding

Audit & Supervisory Board members.

company system, and major Group management matters, such as
investments beyond set parameters and reorganisations.

Note: The payment of retirement benefits to directors and Audit & Supervisory
Board members was discontinued in April 2004 in the interests of greatertransparency in the compensation system.

(2) Core Business Strategy Councils
Each core business has a Core Business Strategy Council, comprising

The Company does not offer stock options to its directors.

the President, representative directors, the director in charge of the

However, the Board of Directors of the Company has passed aGroup Planning Division of the Company and executives of eachresolution to issue warrants as a form of stock option-based com-core business. The councils deliberate future business development

pensation to the full-time directors (excluding directors concurrently

for each core business and discuss business plans and progress man-serving as employees of Hanshin Electric Railway Co., Ltd.) of its sub-agement (performance evaluation).

sidiaries, Hankyu Corporation and Hanshin Electric Railway Co., Ltd.
This measure has been taken to ensure that the directors of these(3) The Group Presidents’ Meeting—Initiatives to foster­solidarity within the Group

with the shareholders both the possibility of gain in the event of a

The Hankyu Hanshin Holdings Group comprises over 150 grouprise in their company’s share price and the risk of loss in the event

companies. The Group Presidents’ Meeting, held twice a year, brings

that the share price falls, and that, therefore, they will be further

together presidents of those Group subsidiaries and affiliates. It is

motivated to pursue the improvement of their company’s businessdesigned to foster a deeper sense of solidarity within the Group andperformance and the enhancement of its enterprise value over theensure that the Group philosophy and management policies perme-medium-to-long term.

ate the whole organisation. The Group Presidents’ Meeting aims toencourage a joint sense of commitment to the Medium-Term
Management Plan. Awards are made to companies that boost earnings or individuals and groups that successfully launch initiatives ormake significant contributions at their units.

Number of Meetings of Deliberative Bodies Held
(Figures for Fiscal 2015)

60

two companies, which are core members of the Group, share equallyGroup Management Committee

15 meetings

Core Business Strategy Councils

2 meetings

The Group Presidents’ Meeting

2 meetings

Hankyu Hanshin Holdings • Annual Report 2015

Management Organisation

Compensation Paid to Directors and Audit & Supervisory
Board Members

Directors(external)

Audit &
Supervisory Board
Members
Total

As a rule, the Company arranges results meetings for analysts andinstitutional investors in Japan after earnings announcements twice

No. of recipients

Total paid out in fiscal 2015
(Millions of yen)

15 (2)

110 (16)

management representatives.

17 (6)(mostly Japanese-language) materials necessary for investmenta year. Earnings results and business plans are discussed by senior
Our website (http://www.hankyu-hanshin.co.jp/ir/) includes

5 (3)judgements (earnings reports, securities reports, due disclosure(external)(external)

Investor Relations Activities

20 (5)

127 (22)

1.	Recipients of compensation in fiscal 2015 include two directors who retired at
the conclusion of the General Meeting of Shareholders held on 13th June 2014.
2.	In addition to the above, compensation received by external directors and Audit& Supervisory Board members from subsidiaries of the Company for their duties
as directors and Audit & Supervisory Board members amounted to ¥26 million
for fiscal 2015.

materials, and summaries of results meetings). The website also carries a profile of the Group and its competitive strengths, mainly for
individual investors.

Internal Control System

Of the Company’s full-time Directors and Audit & Supervisory
Board members, directors Kazuo Sumi, Mitsuo Nozaki and Naohisa
Nogami, and Audit & Supervisory Board member Tsunenori Kawashima
are also senior executives at the Company’s subsidiary Hankyu
Corporation. Director Shinya Sakai, Masao Shin, and Audit &Supervisory Board member Masayoshi Ishibashi, are also senior executives at the Company’s subsidiary Hanshin Electric Railway Co., Ltd.
They have received additional compensation from each company.

Dialogue with Shareholders and Investors
Measures Taken to Enhance the Effectivenessof the Company’s General Meeting of Shareholders
and to Facilitate the Exercise of Voting Rights
Remarks

Early dispatchof notices ofconvocation

Avoiding the“busiest day”
for shareholder
meetings

Online and­electronic voting

Other

To allow shareholders sufficient time to examine the items for resolution at the shareholders’meeting before exercising their voting rights, we
endeavor to send out the notices of convocation
at the earliest possible date. We sent out such
notices on 28th May 2015, 19 days before theGeneral Meeting of Shareholders.
To enable as many shareholders as possible toattend our general meeting of shareholders, we
held our 2015 General Meeting of Shareholders
on 16th June, 10 days before the “busiest day” onwhich a large proportion of Japanese companies
hold their general shareholders’ meetings.
To enable shareholders who cannot attend ourgeneral shareholders’ meetings to nevertheless
exercise their voting rights, as well as to makevoting more convenient, we accept votes madevia the internet, and we also participate in theelectronic voting platform operated by ICJ Inc.
Notices of convocation of general shareholders’meetings and of resolutions passed at the meetings are posted on the Company’s website. We
also post translations of the notices of convocation into English.

Overview
Recognising the importance of ensuring that the business operations of the Company are conducted in an appropriate manner, wehave established an internal control system for the entire Group, andrevise it when deemed necessary. As things stand, our internal control system is characterised as follows:A Group Management Philosophy was compiled following themanage­ment integration of Hankyu Holdings, Inc. and Hanshin
Electric Railway Co., Ltd., along with a Group mission (what we are try­
ing to achieve), statement of values (what we consider important)and a code of conduct (what actions to take to realise them). We
ensure that all employees from executive down understand them.
We ensure compliance-focused management by compiling anddistributing a Compliance Manual, and have established a dedicatedwhistle-blowing system. (For further information on the Company’s
compliance activities, please refer to the following section.)We have established the Group Auditing Division, composed ofinternal audit staff under the direct control of the President, forindependent monitoring of Groupwide business activities. It carries out internal audits into the Hankyu Hanshin Holdings Groupand all its operating companies.
To create a structure for ensuring appropriate operations, theGroup vests Audit & Supervisory Board members of each 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 creation of
an internal control system.
Audit & Supervisory Board members and the Group Auditing
Division receive regular reports from the Risk Management Officewith regard to creation and operation of internal controls at theCompany and its subsidiaries (including implementation status
for risk management and promotion of compliance-based management measures). Through such measures, they deepen theirlinks with, and strengthen the role of, internal control divisions.

Hankyu Hanshin Holdings • Annual Report 2015

61

Management Organisation

Concerning Internal Control Over Financial Reporting,” a section of

Corporate Ethics Consultation Desk
(internal whistleblower procedures)

the Financial Instruments and Exchange Act, the Company

We have set up a dedicated whistleblower hotline enabling all

responds appropriately by carrying out management evaluations

employees to discuss or quickly bring to management’s notice sus-

on a consolidated basis, in line with in-house rules.

pected or known legal violations and unethical conduct. BusinessWith regard to systems for “Management Assessment and Audit

partners are also welcome to use this consultation and notification

Measures for Avoidance of Contact with
Antisocial Elements

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

To ensure compliance and protect the interests of the Company, we
have a basic policy of avoiding all contact with antisocial elements

Corporate Ethics Consultation Desk

that pose a threat to public order and safety, such as criminal gangs
and companies associated with them, and sokaiya racketeers who
disrupt shareholder meetings, and of never yielding to extortion.
These policies are basic policies in our internal control system and are

Reports

Audit &
Supervisory
Board Member

Reports

Audit &
Supervisory
Board Member

clearly stated in the Hankyu Hanshin Holdings Group Compliance
Manual distributed among executives and employees of Group
companies.

Reports
Consultation
Desk

Directs
President

Consultation
Desk

Reports
Consultation
Desk

Specific measures include routinely strengthening communicaApproves/
Directs

tions with external organisations such as lawyers and the police, andintroducing into all contracts signed by Group companies’ clauses that

Reporting of investigation progress and findings

forbid contact with antisocial elements.
In addition to working to raise awareness of this issue throughConsultationDesk

information exchange and a range of employee training courses, weare aggressively involved in regional activities and gatherings aimed
at rooting out antisocial elements.
When an incident does occur, we respond as a single organisation,

Establishment of Risk Management Committees

rallying round the division in charge, and work in partnership withIn the case of identification of a major compliance issue during theoutside experts.

course of an Ethics Consultation, a risk management committee isconvened as soon as possible to discuss and decide on appropriate
responses.
In addition, we are setting up compliance promotion offices atCompliancemajor Group companies such as Hankyu Corporation, Hanshin
Electric Railway Co., Ltd., Hankyu Travel International Co., Ltd., Hankyu
Hanshin Express Co., Ltd. and Hankyu Hanshin Hotels Co., Ltd. At
other companies we are appointing “compliance leaders,” to ensure

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

Compliance Manual and Training Programmes
The Company’s Compliance Manual and Compliance Card express
the Company’s determination not to tolerate violation of laws orsocial norms or betrayal of customer trust, by any Group employee
from executives down. It also aims to raise awareness by pointing
out cases where compliance errors can easily be made.
The Company provides intensive compliance training on aGroupwide basis for new employees, mid-career hires and newly
appointed executives. In addition, all Group companies arrange theirown training programmes tailored to job grade and function, withthe aim of further increasing compliance awareness.

62

Hankyu Hanshin Holdings • Annual Report 2015

our response is on a Groupwide basis.

Management Organisation

For more details (in Japanese) of the Company’s basic policies

Overview of Group Compliance

•
•
•
•
•
•

regarding governance of joint-stock companies including these[symbols] Information to Group companies

takeover prevention measures, please see:
http://www.hankyuhanshin.co.jp/ir/library/others/data/bouei.pdf Guidance and training for Group companies Risk management Risk Management Committee secretariat Corporate Ethics Consultation Desk (­internal
whistle-blower procedures)

Compliance promotion officeInternal whistle-blowing, responsible
for planning and organising seminars
and other awareness-raising activities(Available only in Japanese) Internal auditing

Hankyu Hanshin Holdings

Hankyu Corporation

Hanshin Electric Railway

Hankyu Travel
International

Hankyu Hanshin Express

Hankyu Hanshin Hotels

Compliance leaders
Liaise with compliance departmentsof higher-level companies

Risk Management

Group Company

or

At the Company, risks to which many different divisions are exposed

Group Company

orare managed by the Risk Management Office, while risks arising inGroup Company

orGroup Companyorthe business operations of individual divisions are managed by risk
management units within the divisions themselves. In both cases,
risks are identified and analysed, and risk management systems areGroup Company

overhauled from time to time. We evaluate the likelihood of materi-Group Company

alisation of each risk and its frequency, as well as the extent of impact
in the event of materialisation and its importance. On that basis, weGroup Company

draw up measures to prevent the materialisation of risk or to mitigate

Group Company

its impact (“risk mitigation measures”). These measures are docu-

Group Company

mented in the form of risk management manuals, and the results ofGroup Company

risk analysis and how such a risk is being handled when a risk arises

Cross-Organisational Companiesorare, reported, as appropriate, to the Board of Directors.
We have also established a liaison system enabling the effective
transmission of information in the event of unforeseen circumstances.
Under this system, in the event of materialisation of a risk, executives

Measures to Prevent Takeovers

and employees immediately take risk-mitigation measures as specified in the above-mentioned documentation and other measures toprevent the further spread of the impact. They also submit reports topre-appointed risk management liaison personnel.
The Company provides supervision to all companies in the

To secure and further enhance the enterprise value of the Company,

Group so that the same system is operated by them all, and has set

and therefore the common interests of its shareholders, we believe

up a system enabling the transmission to the Company of accuratethat it is imperative to conduct business operations from a medium-

information in the event of an unforeseen development.

to-long-term perspective, to build and maintain a relationship of trust

A particular area of importance in this regard is the Company’swith local government institutions and residents in the areas served

core railway business, which entails direct risk to people’s lives

by our railway lines, and to place the highest management priority on

through accidents. Even in the event of minor mistakes and prob-

strengthening cohesion and collaboration within the Group, so as tolems where no individual responsibility arises, it is important to makeenhance the Group’s comprehensive power.

every effort to bring the number of problems and mistakes that

For this reason, we have introduced a system to prevent a take-could cause an accident as close to zero as possible, by continuing toover of the Company whereby, in the event of the appearance of a

meticulously train railway business staff, and share and analyse data.

potential buyer of the Company that wishes to raise their stake

Such painstaking efforts to forestall even one human error are one ofabove 20% or more of the Company’s outstanding shares, new sharethe foundation stones on which the Company ensures safety of

subscription rights are granted to shareholders who are, de facto,

operations and meets public expectations.

shareholders other than the potential buyer, to confirm a potential
buyer’s intention. This system was approved at the General Meetingof Shareholders held on 16th June 2015, and remains in effect forOn pages 66 to 70, readers will find a summary of the safety management systems at Hankyu Corporation and Hanshin Electric Railway, bothof which are our major private sector railway operators.

three years.

Hankyu Hanshin Holdings • Annual Report 2015

63

Principal Risks and Countermeasures

The Hankyu Hanshin Holdings Group’s approaches to risks related to businesses and other risks that may be of concern toinvestors are stated below.
Further, forward-looking statements in this report reflect the Group’s assessments as of 31st March 2015. Moreover,these statements do not negate the possibility of the said risks affecting the Group’s business results or financial position.

Principal risks

The Group’s countermeasures

Risks related to economic conditionsB orrowing rates could increase due to changes in financial
markets or fund raising from markets could become difficult.

T he Group limits exposure to the risk of interest rate increases bygiving priority to the undertaking of long-term loans with fixedS udden changes in financial markets could affect the Group’sbusiness results or financial position.

interest rates.
The Group secures financing by establishing backup lines ofcredit based on commitment lines set up with correspondent
financial institutions.

Changes in the economic climate could cause exchange rate
volatility.

The Group uses forward exchange contracts, currency swap
contracts and currency option contracts to mitigate exchangeG reater-than-expected volatility could affect the Group’s business results or financial position.

rate fluctuation risk associated with certain foreign currencydenominated monetary payables and receivables.
	 Further, the Group’s overseas sales were less than 10% ofconsolidated revenues from operations as of 31st March 2015.

Risks related to businesses
The further aging of society is expected to increase capital investment for safety countermeasures and construction to make facili-Through continuous initiatives to heighten the value of the
Umeda area and other areas served by Hankyu and Hanshinties barrier-free.

lines, the Group creates line-side areas in which people want toDue to population decline resulting from lower birthrates, the Group’s
railways, buses, and taxis could see demand for passenger transporta-

live permanently or visit frequently.

tion decrease. Also, demand could decrease in other business.

T he Group has set its sights on growing by developing suchnew markets as the Tokyo metropolitan area market and overseas markets.

A n accident in the railway business could cause customers great
suffering.

T he Group is keenly aware that being entrusted with passengers’
lives is a serious responsibility. Therefore, placing first priority on
ensuring the safety of customers is the basis of its business
management.
B ased on its strong commitment to putting customers first andgiving the highest priority to safety, the Group is implementing awide range of measures to upgrade tangible and intangible infrastructure and provide customers with improved safety.
For details about safety measures in the Urban Transportation Business, please see
pages 66 to 70.

P ower supply shortages could disrupt train operations and otherservices. Also, higher electric utility rates could increase power andT he Group is steadily introducing energy-saving equipment tocurb power consumption as much as possible.

other costs.

The Group takes rigorous measures to ensure employees areaware of the importance of cost reductions.
For details about the introduction of energy-saving rolling stock in the Urban
Transportation Business, please see page 43.

64

Hankyu Hanshin Holdings • Annual Report 2015

Principal Risks and Countermeasures

Principal risks

The Group’s countermeasuresA loss of trust in the quality and safety of products and services
that the Group sells and offers or in the information it provides

T he Group ensures the quality and safety of its products and services
and the appropriateness of the information it provides about them by

about them could lower revenues and lead to a deterioration in

confirming compliance with relevant laws and regulations andbusiness results.

checking quality and hygiene management and food labelling.

Natural disasters, such as earthquakes, typhoons, or floods, or actsof terrorism could significantly damage the Group’s businesses orIn the areas alongside their railway lines, Hankyu Corporation andHanshin Electric Railway Co., Ltd. have installed water meters fortransportation network infrastructure.

rivers and rain and wind gauges for collecting observation data.
Also, they use real-time information from meteorological observatories to ensure safe train operations.
If seismographs detect an earthquake with a seismic intensity offour or above, or if earthquake early warning systems forecast an
earthquake of the same seismic intensity, the Group immediately
begins procedures for the emergency suspension of the operations of all trains on line segments in earthquake zones.
If the Group recognises that continued vigilance is required withrespect to acts of terrorism or other acts, or if suspicious items or
persons are discovered or damage is incurred, it conducts crisis
management appropriate to the threat level.
The Group has established emergency response systems for minimising the effect on society in the unlikely event of an incident
that causes a long disruption to transportation services or results
in a large number of casualties.

An outbreak or epidemic of an infectious disease such as severe
acute respiratory syndrome (SARS) or a new strain of influenza
could restrict economic activities or discourage customers fromgoing out.

In preparation for the spread of an infectious disease, such as a newstrain of influenza, the Group’s core companies have directed theestablishment of business continuity plans for each business division.
	  During the outbreak of a new strain of influenza in 2009 and 2010,
the Group minimised the effect on its businesses by determining thelevel of risk through ongoing surveys of each business division in relation to infection rates among employees and their families.
In the railway business, which provides a particularly importantpart of society’s transportation infrastructure, the Group has established specific response plans in advance. For example, it has
prepared multiple timetables based on scenarios envisaging
shortages of transportation personnel due to the sudden spreadof an infectious disease.

For further information on risks related to businesses and other risks, please see page 77.

Hankyu Hanshin Holdings • Annual Report 201565

Safety Initiatives in the Railway Business

Every day, countless customers use the services of both Hankyu Corporation and Hanshin
Electric Railway and for precisely this reason, our mission is to ensure their absolute safety andpeace of mind. Our measures to improve safety on a day-to-day basis, and also to ensure safety
when problems occur, are all consolidated in the safety policy and objectives described below.

Safety policy and safety
objectives

Hankyu Corporation 
Safety objective
Maintaining elimination of accidents for which we bear responsibility
For the fiscal years from fiscal 2015 onward, we again set elimination of accidents for which we bear responsibility as our safety objective.
This has been our safety objective since 2006, and we will continue to do our utmost to achieve it.

Safety Policy and Safety Priority Measures
Provide safe, high-quality transportation services that fully justify public trust—Hankyu Corporation: Safety and comfort● Promote awareness to prevent accidents caused by customers● Heighten employees’ safety awarenessaccident examples● Create open workplace environments● Realise railways with higher safety levels● Conduct training to ensure development of personnel and handing● Expand and improve emergency responses during natural disasters

down of skills● Prevent accident recurrence rigorously by ensuring countermeasure
implementation

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

Deputy Head of Urban Transportation
Business

Manager, Urban
Transportation
Planning

Manager, Transport
DivisionManager, Technical
DivisionManager, Kobe
Line Operations

Manager, Takarazuka
Line Operations

Manager, Kyoto
Line Operations

Deputy Operations
Manager (CrewTraining Manager)

Deputy Operations
Manager (CrewTraining Manager)

Deputy Operations
Manager (CrewTraining Manager)(Head of Investment
and Financing Team)(Chief Train Operations (Chief Civil Engineering
Manager)
Facilities Manager)

Manager, Technical
Division(Chief Electrical
Facilities Manager)

Manager, Technical
Division(Chief Rolling StockManager)Group Safety Management
Promotion Committee

Technical Division (civilengineering facilities)
Safety Management
Promotion Committee

Investigative Committee for
Measures to Prevent Accidents

Technical Division(electrical facilities)
Safety Management
Promotion Committee

Hankyu Hanshin Holdings • Annual Report 2015

Chief Safety Manager
In order to prioritise securing the safety of railway facilities and rolling stockand the handling of operations, and to control and manage transportation
operations in each division, the Chief Safety Manager works to disseminate
safety management regulations and to ensure compliance with related laws
and ordinances; to increase awareness of safety as the Group’s most importantpriority; to confirm the implementation of transportation operations,management conditions, and the progress made in implementing the safety
improvement measures stipulated in the Medium-Term Management Plan;
and to implement improvement measures.

Chief 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 oftrain crews and periodically confirms and submits reports on the progress
being made in improving their capabilities.

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

President
The President determines the implementation, the management
organisation, and the rules of the railway business and when formulating the
Medium-Term Management Plan, which includes facilities and transportation,
personnel, investment, and budget, the President verifies and ascertains
the situation from the perspectives of safety and feasibility and instructs
on improvements.

Chief Train Operations Manager
The Chief Train Operations Manager manages operations-related duties,
including utilising the employees involved in operations, railway facilities, androlling stock; setting and revising the operations plan; managing train crews,
the operations of rolling stock, and train operations; and providing training fortrain crews and maintaining their capabilities.

The Safety Management Promotion Committees

Transport Division
Safety Management
Promotion Committee

and other large-scale disasters

Positions and roles

Safety Management System

66● Prevent accidents by using accident precursor information andTechnical Division(rolling stock) Safety
Management
Promotion Committee

Other managers and responsible persons
In each division, other managers and responsible persons maintain andmanage the facilities they are responsible for in order to ensure there are no
obstacles to realising safe transportation.
The safety management promotion committees discuss, investigate, andreport on a variety of proposals for transportation safety management. The
safety management promotion committees include the Group Safety
Management Promotion Committee, on which the President serves aschairperson; the Business Division Safety Management Promotion
Committee, on which the Chief Safety Manager serves as chairperson; andthe divisional safety management promotion committees.

Safety Initiatives in the Railway Business

Hanshin Electric Railway 
Safety objective
Maintaining elimination of accidents for which we bear responsibility
We have maintained elimination of accidents for which we bear responsibility since April 1985 up to the present day.

Safety Policy

Maximum priority on safety

Compliance with laws and regulations● The president, directors and employees shall● The Company shall comply with all laws anddo whatever they can to ensure safety ofoperations, based on the understanding that
putting the highest priority on ensuringsafety is the mission of railway businesses.

regulations related to safety and apply themrigorously and sincerely in its operations.

● The Company shall implement continuousverification procedures to ensure safety management systems are operating appropriately.

Positions and roles

Safety Management System

President
The President has the ultimate responsibility for ensuring transport safety.

President
The Railway Safety Council has been
established as an organisation that specialises
in promoting safety management.

Directors
Urban Transportation
Business
Railway Safety Council

Chief Safety Manager(Head of Urban
Transportation Business)

Manager,Manager,
Transport Division Electrical Division

Manager, Rolling
Stock Division

Chief Safety Manager (Head of Urban Transportation Business)
The Chief Safety Manager is responsible for overseeing all activities related toensuring transport safety.
 hief Train Operations Manager (Deputy Head of Urban Transportation
C
Business)
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 other related operations.
Transport Division Manager
Under the direction of the Chief Train Operations Manager, the Transport
Division Manager assists in train operations.

Chief Train Operations Manager*(Deputy Head of Urban
Transportation Business)

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

Maintenance of safety management
systems

Manager,Engineering
Division* Previously, the manager of the Transport Division served
as the Chief Train Operations Manager. Following
the establishment of the Deputy Head of the Urban
Transportation Business, however, the Deputy Head
serves as the Chief Train Operations Manager from fiscal
2014 onward.

 hief Crew Training Manager (the heads of the East Rolling Stock YardC
and the West Rolling Stock Yard)
Under the direction of the Chief Train Operations Manager, the Chief Crew
Training Manager is responsible for ensuring all crew are properly qualified.
Electrical Division Manager
Under the direction of the Chief Safety Manager, the Electrical Division
Manager has overall control of items relating to electrical facilities.
Rolling Stock Division Manager
Under the direction of the Chief Safety Manager, the Rolling Stock Division
Manager has overall control of items relating to rolling stock.
Engineering Division Manager
Under the direction of the Chief Safety Manager, the Engineering Division
Manager has overall control of items relating to track, civil engineering andconstruction facilities.

Hankyu Hanshin Holdings • Annual Report 201567

Safety Initiatives in the Railway BusinessInitiatives to Reinforce
the Safety Management System(Using the PDCA Cycle)

By applying our safety management system (PDCA cycle) to a range of safety initiatives, we areaiming to create a virtuous cycle of improvement based on even higher safety goals.

Revisions to the Railway Business Law in October 2006 required
railway companies to create new safety management systems dedicated to transport safety. Under our new safety man-DO

agement system, we are realising even higher levels of safety by

Safety management
implementation andoperation

applying the PDCA cycle, ensuring compliance with all related
laws and regulations, conducting operations that place the highest priority on safety, and fostering greater awareness of safetyissues among employees from directors down.

PLAN
Creation of safetycontrol plans andsystems

Continuous
improvement

CHECK
Safety management
and operational checks

ACT
Improvements(proposals for improvements) and revisions tosafety management
plans and systems

Safety Management
Implementation

To ensure customers’ safety and peace of mind, we implement safety measures for suchfamiliar infrastructure as platforms and railway crossings while undertaking such major initiatives as the construction of grade separations and employee training. The following are
examples of measures we implement year in, year out.

1. Training and Education 

68At government designated in-house training centres, Hankyu

act as instructors and provide rigorous one-to-one procedural

Corporation and Hanshin Electric Railway foster train drivers, train

training. Even after personnel have passed certification exams, we

conductors, and railway station operations personnel. During themaintain and heighten the skills, awareness, and qualifications of

training period, trainees hoping to become drivers or conductors

drivers, conductors, and operations personnel by holding safetyreceive education on academic subjects and practical skills inworkshops and seminars and conducting training based on aaccordance with a national curriculum. Also, experienced drivers

range of scenarios.

Hankyu Hanshin Holdings • Annual Report 2015

Safety Initiatives in the Railway BusinessTraining of Drivers, Conductors, and Operations Personnel through an Instructor System
As well as training drivers, conductors, and railway station opera-

appoints as instructors personnel who have at least seven years oftions personnel with national certification by providing education

operational experience, the recommendation of a superior, and theon academic subjects and practical skills, Hankyu Corporation

approval of their division’s general manager. Instructors shoulder aimplements training under an instructor system. In this system,

considerable responsibility because they must instruct trainees withwhen trainees who hope to become drivers, conductors, or railway

precision and empathy. At the same time, however, this responsibility

station operations personnel are learning their respective duties,

provides instructors with an opportunity for personal growth.
The training of drivers and conductors based on the instructor

an experienced employee is designated to act as an instructor andprovide them with on-the-job training.
On-the-job training with instructors lasts approximately one
month for conductors and approximately three and a half months for

system began roughly 50 years ago. Since then, while adapting thesystem to reflect changes in current needs, we have kept it at theheart of our safety training.

drivers. The mentoring relationship that this training process engenders promotes the sharing of a strong commitment to safety andnever causing an accident. By performing actual duties under thesupervision of an experienced instructor, candidates not only acquire
knowledge and skills but also an appreciation of the paramountimportance of ensuring safety in railway operations.
To foster personnel with advanced safety awareness, knowledge, and skills, securing the outstanding instructors that underpin the instructor system is indispensable. Therefore, Hankyu
Corporation concentrates efforts on training instructors. The company

2. Equipment-Based Countermeasures and Equipment Inspections 

Initiatives for Natural Disasters
1. Responding to rain storms

3. Responding to actions of third parties, such as acts of terrorism

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

If there is a warning that the actions of third parties, such as acts ofoperations based on information obtained from the rain gauges, wind

terrorism, could cause serious incidents with extremely significant

gauges, and water meters installed alongside our railway lines andeffects on society, or if such a warning calls for continued vigilance, or

meteorological information from the Japan Meteorological Agency.

if suspicious items or persons are discovered or damage is incurred,
we take measures appropriate to the threat level.

2. Responding to earthquakes
If earthquake early warning systems forecast an earthquake with a

Further, we have installed security cameras in railway stations
and station concourses to prevent crime.

seismic intensity of four or above, or if seismographs installed alongside our railway lines detect an earthquake of the same seismic intensity, we immediately begin procedures for the emergency suspensionof the operations of trains on line segments in earthquake zones.

Hankyu Hanshin Holdings • Annual Report 201569

Safety Initiatives in the Railway Business

Maintenance Work: Indispensable for Safe, Comfortable Operations
We have many different types of electrical equipment, including signal safety equipment, secure communication equipment, railway crossing
safety equipment, power equipment, railway track equipment, and substation equipment, which we inspect regularly based on prescribed
inspection schedules.

Scheduled inspection of a signal

Scheduled inspection of securecommunication equipment

Abrasion measurement by an overhead-wire-inspection vehicle

Inspection of substation equipment

Inspection of railway tracks is indispensable to ensuring the safe operation of rolling stock. Further, we implement corrective grinding of slightly
uneven parts of rail surfaces to improve ride comfort and implement corrections to reduce noise and vibration.

Railway track inspection vehicle

Vehicle for the corrective grinding of rails

We conduct inspections at our plants to maintain the safety of rolling stock. Regular inspections include train inspections, monthly status andfunction inspections, main component inspections, and overall inspections. In addition, we conduct unscheduled inspections as required.

A monthly status and function
inspection

An overall inspection

Main Component Inspections
We inspect the main components of power generation devices, running devices, brake devices, andother important devices every four years, or before rolling stock covers a distance of 600,000 km in thecourse of operations, whichever is the shorter period.

70

Hankyu Hanshin Holdings • Annual Report 2015

Corporate Social Responsibility—
Social Contribution and Environmental Preservation Activities

We believe contributing to local communities and preserving the environment are social responsibilities that it is incumbent upon us to fulfil and which are essential for our medium-to-long-term development. Therefore, the two pillars of ourcorporate social responsibility activities are social contributions, which develop towns and cities in partnership with local
communities, and environmental preservation activities promoting environment-friendly business activities.

Social Contribution Activities 
Our businesses are rooted in local communities. Therefore, invigorating areas served by our lines strengthens thefoundations of our businesses and grows medium-to-long-term earnings. Further, working in partnership with suchstakeholders as customers, citizens’ groups, Group companies, and employees and building trust helps enhance brandvalue. With this in mind, through the Hankyu Hanshin Dreams and Communities of the Future Project, the Groupis advancing social contribution activities aimed at working with many different stakeholders to develop towns andcities served by its lines.

Basic policy

We intend to promote the creation of towns and cities along our railway linesthat people will truly want to live in.

Priority areas Our social contribution activities focus on two priority areas: environment-friendly development, which improves the environment
in towns and cities, and human capital development, aimed at fostering the generation that will be responsible for the future of communities.
Environment-friendly development

Human capital development

As a Group with strong local roots, we are com-

We are creating opportunities for the healthy

mitted to sustainable community building with

development of ambitious children, upon whoseenvironment-friendly developments that provide

shoulders the task of building the communities of

local residents with security, peace of mind, andthe future rests.

cultural enrichment.

Fostering the Future Leaders of Communities

Example Initiative

The Hankyu Hanshin Dreams and Communities Challenge Troop are

we received applications from approximately 20,000 students for theexperience-based learning programmes for primary school students,

programmes’ 2,501 places. In 2014, reflecting high evaluation of thewhich we hold in summer. In response to the Ministry of Education,variety of our programmes as well as our expansion of them, we

Culture, Sports, Science and Technology’s promotion of career edu-

received a Good Design Award, which is a commendation that rec-cation, we encourage children to cultivate ambitions by providing

ognises outstanding products and systems. Other initiatives thatthem with opportunities to learn through first-hand experience. In

focus on the sound development of children living in areas served

the programmes, our frontline personnel conduct lessons for chil-by our lines include helping children experience art and culture.

dren in a variety of workplaces, including railway operations, hotels,

Furthermore, through the Hankyu Hanshin Dreams and Communities

baseball stadiums, theatres, and commercial facilities. Since weof the Future Fund, which is based on donations from employees, webegan the initiative in 2010, we have conducted more than 175 pro-

provide grants to citizens’ groups that address such problems as

grammes, and 7,174 primary school students have participated inchild abuse and truancy in areas served by our lines.

them. The programmes are popular with customers. In fiscal 2015,
Number of programmes and participants(Number of programmes)(People)

50

3,000

43
40
30
20

2,501

2,024

27

445
2011

Number of programmes

2,400
1,800
1,200

1,200

17

10
0

39

36

600

600

0

2012

2013

2014

2015

(FY)

The Hankyu Hanshin Holdings Group conducts a wide range of other social contribution activities. For details about these activities, please visit the Group’s web site.

http://www.hankyu-hanshin.co.jp/yume-machi/top.html(Available only in Japanese)

Number of participants (right scale)
Hankyu Hanshin Holdings • Annual Report 201571

Corporate Social Responsibility—Social Contribution and Environmental Preservation Activities

Environmental Preservation Activities 
The Group has established a Basic Environmental Philosophy and Basic Environmental Policies, which guide its environmental preservation
activities. We have implemented energy-saving measures for many years with a view to helping prevent global warming. In particular, since theGreat East Japan Earthquake, we have been stepping up efforts aimed at saving electricity, which has become a pressing task for society. At thesame time, we have taken a variety of measures to reduce our environmental burden. Further, to advance such activities Groupwide, the Grouphas established the Environment Committee, chaired by the president and representative director of Hankyu Hanshin Holdings, Inc., which
exercises control over all environmental preservation activities that Group companies implement within each core business.

Basic Concept

Mindful that global environmental preservation is a task facing all mankind, the Hankyu Hanshin HoldingsGroup works for a sustainable society through environmental activities aimed at handing down a sounderglobal and human environment to the next generation.

Example Initiative

Taking Measures to Prevent Global Warming

At all of our facilities, including railway stations, theatres, and office

2015, as a superior company in transportation-related efforts tobuildings, we are promoting the introduction of LED lighting, which

prevent global warming from the director of the Ministry of Land,

reduces electricity consumption and has a long service life that

Infrastructure, Transport and Tourism’s Kinki District Transport Bureau.

reduces waste. For example, the Ministry of the Environment has
selected our installation of LED lighting in the underground sections* Comparison only versus lighting that the project replaced with LED lightingof the Hankyu Kyoto Line, from Saiin Station to Kawaramachi Station,
as a model project for concentrated support for the development of
low-carbon communities. By installing LED lighting in 4,261 light
fixtures and signs between fiscal 2012 and fiscal 2013, we reduced
electricity use 54%* versus 1990 levels.
In recognition of such initiatives to reduce energy use significantly,
Hankyu Corporation received an award for the year ended 31st March

Example Initiative

Reducing and Recycling Waste

Environment-friendly business management has long been an inte-

Further, Hankyu Bus has buses that operate on biodiesel fuelgral part of the operations of Hankyu Bus Co., Ltd. Since 2005, six ofrefined from used edible oil. The oil is collected from Group hotels,

the company’s operating bases have acquired green management

food factories, and the residents of Geo brand condominiums that

accreditation for meeting required levels of environmental preserva-

Hankyu Realty Co., Ltd. sells. Thus, the initiative utilises an advantage

tion from the Foundation for Promoting Personal Mobility andresulting from the variety of businesses rooted in local communities

Ecological Transportation, an extra-departmental organisation of thethat the Group operates.

Ministry of Land, Infrastructure, Transport and Tourism.

The Hankyu Hanshin Holdings Group conducts a wide range of other environmental
preservation activities. For details about these activities, please visit the web site below.

http://www.hankyu-hanshin.co.jp/csr/eco/(Available only in Japanese)72

Hankyu Hanshin Holdings • Annual Report 2015

Consolidated Six-Year Summary

FY2010FY2011FY2012FY2013

FY2014FY2015FY2015¥  649,703¥  682,439¥  679,157¥  685,906$ 5,715,883

Result of Operations (millions of yen and thousands of U.S. dollars): *1
Revenues from operations¥  653,287¥   638,770

Operating income

70,12664,74373,80987,921

91,82894,026

783,550

EBITDA*2

133,200

127,100

133,500

145,100

149,200

150,100

1,250,833

Ordinary income

50,40946,49465,39374,914

81,191

85,590713,250

Income before income taxes and minority interests

33,89932,76043,41962,192

83,542

77,620646,833

Net income

10,79318,06839,25239,702

46,352

54,201

451,675

Comprehensive income

12,541

14,72844,99254,081

55,941

71,034

591,950

Capital expenditure

132,386

68,431

55,26759,51280,722

68,115567,625

Depreciation and amortisation

60,41859,66956,96854,54054,474

53,143442,858

Cash Flows (millions of yen and thousands of U.S. dollars):
Cash flows from operating activities¥  146,955¥   103,252¥  124,525¥  127,655¥  146,991¥  131,881$ 1,099,008

Cash flows from investing activities(132,737)(62,516)(44,295)(58,923)(45,517)(52,529)(437,742)

Cash flows from financing activities(24,200)(39,544)(78,978)(69,195)(105,079)(81,746)(681,217)

Increase (decrease) in cash and cash equivalents(9,680)

474

767

817

(1,840)(1,125)(9,375)

Cash and cash equivalents at end of year

21,44022,592

23,57225,581

24,49723,497

195,808¥2,337,331¥2,314,669¥2,274,380¥2,281,007¥2,286,928¥2,279,638$18,996,983

Total net assets

480,633

486,947

524,801

573,154

617,598

679,482

5,662,350

Interest-bearing debt

1,282,583

1,251,665

1,183,647

1,126,633

1,032,307

955,828

7,965,233¥     8.55

¥    14.32¥    31.13¥    31.48¥    36.76¥    42.98$      0.36

8.51

14.27

31.13

31.47

36.75

42.95

0.36

Net assets

371.70377.17407.01443.63477.69525.56

4.38

Dividend

5.00

5.00

5.00

5.00

6.00

6.00

0.05

Operating income margin (%)

10.7

10.1

11.4

12.9

13.5

13.7

—

ROA (%)*3

2.2

2.0

2.8

3.3

3.6

3.7

—

ROE (%)*4

2.3

3.8

7.9

7.4

8.0

8.6

—

Interest-bearing debt/EBITDA (times)

9.6

9.8

8.9

7.8

6.9

6.4

—

Equity ratio (%)

20.1

20.6

22.6

24.5

26.3

29.1

—

2.7

2.6

2.3

2.0

1.7

1.4

—

6.3

4.6

6.0

6.7

8.8

9.2

—

1,271,406

1,271,406

1,271,406

1,271,406

1,271,406

1,271,406—

20,93821,302

20,811

20,751

20,913

21,037—

Financial Position (millions of yen and thousands of U.S. dollars):
Total assets

Per Share Data (yen and U.S. dollars):
Net income—Basic
Net income—Diluted

Ratios:Debt/equity (D/E) ratio (times)*

5

Interest coverage ratio (times)*6
Others:Number of outstanding shares (thousands)
Number of employees*1. The U.S. dollar amounts have been translated, for convenience only, at ¥120 = $1, the prevailing exchange rate on the Tokyo Foreign Exchange Market as of 31st March 2015.
*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/equity (average of period-start and period-end totals)*5. D/E ratio = interest-bearing debt/equity*6. Interest coverage ratio = cash flows from operating income / interest expense

Hankyu Hanshin Holdings • Annual Report 201573

Consolidated Financial Review

Analysis of Operating Results for fiscal 2015 (fiscal year ended March 2015)
Revenues from operations increased 1.0%, or ¥6,748 million, year on
year, to ¥685,906 million. This reflected a favourable performance by
the Entertainment and Communications Business due to the
Hanshin Tigers professional baseball team reaching the Japan Series
and the popularity of the performances of the Takarazuka Revue,
which celebrated its 100th anniversary, and higher revenues fromconstruction and other businesses of the Other segment.
Operating income rose 2.4%, or ¥2,198 million, year on year, to¥94,026 million, thanks to the abovementioned increase in revenues
from operations and the curbing of expenses in each business segment.
Further, ordinary income was up 5.4%, or ¥4,398 million, year on
year, to ¥85,590 million, because of higher equity in income of affiliates and a decrease in interest expenses accompanying lower
interest-bearing debt.

Net income grew 16.9%, or ¥7,849 million, year on year, to¥54,201 million, thanks to a reversal of deferred tax assets and liabilities that resulted from revision of the tax system (a reduction in total
income taxes). This positive factor counteracted lower gain on sale ofproperty and equipment—due to sale of part of the equity held inHankyu Nishinomiya Gardens in the previous fiscal year—and adeterioration in total extraordinary income net of total extraordinary
loss, which arose from the recognition of loss on impairment of fixed
assets that was incurred as a result of the relocation and reconstruction of Takarazuka Hotel.
Note: Summary of consolidated business results: please also see To Our Stakeholders on
pages 18 to 20.

Analysis of operating income(¥ million)

91,828FY2014

Increase in revenues from operations+6,748

Increase in operating expenses and cost of sales of transportation*–6,416

Decrease in personnel expenses+176

Decrease in expenses

Decrease in selling,
general andadministrative
expenses*+1,867+1,291

Decrease in taxes+87

Decrease in depreciation and amortisation+326

Increase in amortisation of goodwill–13

94,026FY2015

YoY difference +2,198* Retirement benefit expenses are included in cost of revenues from operations, with the change being –321.

Segment Information
The following table shows business performance for each core segment. For a review of these results, please refer to the page indicated at thefoot of the table.
(¥ million)
Urban
Transportation

Real EstateEntertainment andCommunications

International
Transportation

FY2015

233,419

206,444

112,632

31,965FY2014

234,555

208,610

110,350

YoY difference–1,135–2,166FY201538,553

TravelHotelsOther

Adjustments

Consolidated

39,41963,031

41,678–42,684

685,906

33,006

37,696

63,69534,713–43,469

679,157+2,282–1,041+1,723–663+6,965+785+6,74837,173

14,993

1,227

3,053

1,216

1,032

–3,22394,026

Revenues fromoperations

Operating income

74

FY201438,49438,00814,172

1,224

2,051

809

849

–3,781

91,828YoY difference

+59

–835

+821

+3

+1,002

+406

+183

+558

+2,198Reference page

P.41

P.45

P.49

P.51

P.53

P.55

—

—

—

Hankyu Hanshin Holdings • Annual Report 2015

Consolidated Financial Review

Review of Financial Position
1. Assets, Liabilities, and Net Assets
Total assets at the end of the fiscal year under review stood at¥2,279,638 million, a decrease of ¥7,290 million from the previous
fiscal year-end. This mainly stemmed from the decrease in landand buildings.
Total liabilities decreased ¥69,174 million from the previous fiscal
year-end, to ¥1,600,155 million, due partly to the reduction in interestbearing debt.
Net assets increased ¥61,883 million from the previous fiscal yearend, to ¥679,482 million, due mainly to an increase in retained earnings.
As a result, the equity ratio stood at 29.1%, and ROE was 8.6%.

2. Cash Flows
Cash and cash equivalents decreased ¥1,000 million from the previous fiscal year-end, to ¥23,497 million.
(1) Cash Flows from Operating Activities
Net cash provided by operating activities was ¥131,881 million(down 10.3% year on year). The main factors were income before
income taxes and minority interests of ¥77,620 million, depreciation
and amortisation of ¥53,143 million, and income taxes paid of¥10,836 million.
(2) Cash Flows from Investing Activities
Net cash used in investing activities was ¥52,529 million (up 15.4%
year on year). This primarily reflected purchases of noncurrent assetsof ¥86,970 million, which counteracted receipt of contributions forconstruction of ¥21,098 million and proceeds from sale of investment securities of ¥19,747 million.
(3) Cash Flows from Financing Activities
Net cash used in financing activities was ¥81,746 million (down
22.2% year on year). This was due partly to a net decrease in borrowings of ¥6,077 million and dividends paid of ¥8,229 million.

Trends in cash flow indicators
FY2011FY2012FY2013

FY2014FY2015Equity ratio (%)

20.6

22.6

24.5

26.3

29.1

Equity ratio (%) (market value basis)

20.9

20.0

31.5

31.0

41.1

Cash flows/interest-bearing debt ratio (times)

12.1

9.5

8.8

7.0

7.2

Interest coverage ratio (times)

4.6

6.0

6.7

8.8

9.2

Notes: Equity ratio = equity/total assets
Equity ratio (market value basis) = market capitalisation/total assets
Cash flows/interest-bearing debt ratio = interest-bearing debt/operating cash flows
Interest coverage ratio = Net cash provided by operating activities/interest expense* Each index has been calculated in accordance with financial indicators on a consolidated basis.
* Market capitalisation has been calculated as follows: year-end closing stock price × total shares issued at year-end (after deduction of treasury stock).

3. Fund Procurement
The outstanding balance of consolidated interest-bearing debt at
the end of the fiscal year under review amounted to ¥955,828 million, a decrease of ¥76,479 million from the previous fiscal year-end.
This was because net cash provided by operating activities morethan compensated for acquisition of land for the Ebie 1-Chomedevelopment plan and capital expenditure for the building of new
rolling stock.

The ratio of consolidated interest-bearing debt/EBITDA (operating
income before amortisation), which is the benchmark the Company
uses for assessing the soundness of its financial position, stood at 6.4
times (compared with 6.9 times in the previous fiscal year).

Hankyu Hanshin Holdings • Annual Report 201575

Consolidated Financial Review

Consolidated Capital Expenditure and Depreciation and Amortisation
Capital expenditure in the fiscal year under review (consolidated basis; including intangible assets) decreased ¥12,607 million (15.6%) year on
year, to ¥68,115 million.
The following is a breakdown for each business segment.

FY201532,072 millions of yen

16.5%

Real Estate

25,828–40.6

Entertainment and Communications

6,092

9.5

660

–44.0

Travel476–17.6

Hotels

1,497

–17.6

Other

960

88.2

Total

67,587–16.2

International Transportation

Adjustments

527

411.7

Consolidated

68,115–15.6

Urban Transportation
The railway business carried out capital investment with a focus onsafety and service improvement, built new rolling stock, and improved
existing rolling stock.
Real Estate
The Real Estate Business acquired land for the Ebie 1-Chome development plan and implemented the Umeda 1-1 Project.
Entertainment and Communications
The Entertainment and Communications Business relocated theSumire Dormitory to a newly constructed building.
TravelIn the Travel Business, Hankyu Travel International Co., Ltd. invested
in systems to strengthen Internet sales.

76

YoY

Urban Transportation

Hankyu Hanshin Holdings • Annual Report 2015

International Transportation
In the International Transportation Business, Hankyu Hanshin Express
Co., Ltd. invested in systems to establish global IT-enabled alliances.
HotelsIn the Hotels Business, Hankyu Hanshin Hotels Co., Ltd. refurbishedthe guest rooms of its hotels.
Depreciation and amortisation decreased ¥1,331 million (2.4%)
from the previous year (consolidated basis), to ¥53,143 million.

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 report was determined by the Group to be current as of 31st March 2015.

Legal Risk

Affiliated Companies

In accordance with the stipulations of Article 3 of the Railway
Business Law, the Group must obtain separate permissions, from the
Ministry of Land, Infrastructure, Transport and Tourism (MLIT), foreach category of railway operations on each route that it intends tooperate. Moreover, under Article 16 of the Law, a railway operator
must obtain the Ministry’s approval for the passenger fares it intends
to set and on each occasion when it wishes to change the fares.
Consequently, there is a certain risk that the Group’s railway operations may be constrained in some way by the Ministry’s administration of these regulations.

In order to ensure greater convenience for users of the Hokushin
Kyuko Railway Line (run by consolidated subsidiary Hokushin Kyuko
Railway Co., Ltd.), Hankyu Corporation (a consolidated subsidiary)
has agreed to a plan transferring railway facilities held by Hokushin
Kyuko Railway to Kobe Rapid Transit Railway Co., Ltd. (a consolidated
subsidiary) and retaining railway business as a tier 2 railway operator.
To facilitate the plan, in fiscal 2003, Hankyu Corporation provided
Kobe Rapid Transit Railway with financing for part of the funds necessary to purchase the facilities.
In September 2007, Kobe Electric Railway Co., Ltd. (an equity
method affiliate), temporarily suspended support for the rehabilitation of Hokushin Kyuko Railway. To uphold the rehabilitation project,
additional financing was extended to Hokushin Kyuko Railway by
Hankyu Corporation. We will continue to provide assistance toensure that Hokushin Kyuko Railway can conduct smooth and efficient operations as a tier 2 railway operator. However, the businessperformance and financial position of the Group could be affectedby changes in this plan.

Progress in Large-Scale Development Projects
The Group seeks to utilise its working assets more effectively to facilitate the development of areas served by Hankyu and Hanshin lines.
To raise its asset effectiveness, the Group is pursuing the following
initiatives: “Umeda 1-1 Project” (rebuilding of the Dai Hanshin
Building and the Shin Hankyu Building) and further development of
the International Culture Park “Saito” (a new town). These projects are
all seen as key to the Group’s future growth, and management will
be working to steadily complete them. However, in the event of
rapid and major changes in the business environment, affecting land
prices or urban development plans, the business performance andfinancial position of the Group could be adversely affected.

Interest-Bearing Debt
The balance of interest-bearing debt held by the Group as of the endof March 2015, on a consolidated basis, was ¥955,828 million. As aresult of the acquisition of shares in Hanshin Electric Railway Co., Ltd.
through a successful public tender offer (takeover bid) on 27th June
2006, Hanshin Electric Railway has become a consolidated subsidiaryof Hankyu Holdings. This acquisition has resulted in an increase in
the balance of interest-bearing debt of the Group. On the other
hand, management integration between the Hankyu HoldingsGroup and Hanshin Electric Railway Group has increased cash flows,
so the Group is not expected to have any significant difficulty inrepaying its debts.
The Group will take measures to diversify its fund procurement
methods to deal with an increase in interest-bearing debt resulting
from the integration, and will use all possible means to minimise thenegative impact of interest rate movements. But in the unlikely
event that interest rates rise suddenly and in excess of our projections, this could exert an adverse effect on the business performanceand financial position of the Group.

Decline in the Market Value of Assets Held by Members ofthe Hankyu Hanshin Holdings GroupIn the case of a substantial decline in the market value of inventory
assets, property and equipment and intangible assets, investment
securities, and other assets, the recording of impairment losses orvaluation losses would likely have a negative impact on the earnings performance and financial position of the Hankyu Hanshin
Holdings Group.

Natural Disasters
Operating as it does a very wide range of businesses in its Urban
Transportation, Real Estate, Entertainment and Communications,
Travel, International Transportation, and Hotels segments, the Group
has a correspondingly large assortment of facilities necessary for
conduct of business, such as railway installations and buildings andretail outlets for rent. In the event of earthquakes or other majordisasters, the business performance and financial position of theGroup could be adversely affected by damage to these facilities.

Hankyu Hanshin Holdings • Annual Report 201577

Consolidated Balance Sheets
As of 31st March 2014 and 2015

Millions of yen

Thousands of U.S. dollars

2014

2015

2015

¥   25,368¥   25,614$   213,450

Assets:Current assets:   Cash and deposits   Trade receivables

80,06380,673672,275   Land and buildings for sale105,147

97,587813,225   Finished products and merchandise

2,503

2,300

19,167   Work in progress

4,079

4,440

37,000   Materials and supplies

4,206

4,321

36,008   Deferred tax assets

5,736

6,195

51,625  Other

44,16333,347

277,892

(349)

(291)

(2,425)

270,919

254,188

2,118,233   Buildings and structures—net [NOTE 5 ③]

596,308

580,155

4,834,625   Machinery, equipment and vehicles—net [NOTE 5 ③]

44,762

49,576413,133  Land [NOTES 5 ③ and ⑤]

921,004

919,147

7,659,558   Construction in progress

94,200119,077

992,308   Allowance for doubtful receivables   Total current assets

Noncurrent assets:
Property and equipment:  Other—net [NOTE 5 ③]   Total property and equipment [NOTES 5 ① and ②]

20,34918,806

156,717

1,676,624

1,686,763

14,056,358

Intangible assets:  Goodwill

33,68730,845

257,042  Other [NOTES 5 ② and ③]

17,71816,720139,333   Total intangible assets

51,40647,565396,375

246,617244,626

2,038,550

4,906

4,245

35,375Investments and other assets:  Investment securities [NOTES 5 ③ and ④]   Deferred tax assets   Net defined benefit asset

2,395

8,709

72,575  Other

34,53233,871

282,258   Allowance for doubtful receivables

(473)

(332)

(2,767)   Total investments and other assets

287,978

291,120

2,426,000

2,016,009

2,025,449

16,878,742

2,286,928

2,279,638

18,996,983

Total noncurrent assets
Total assets

78

Hankyu Hanshin Holdings • Annual Report 2015

Consolidated Balance Sheets

Millions of yen

Thousands of U.S. dollars

2014

2015

2015

$   353,575

Liabilities:
Current liabilities:¥   42,943¥   42,429  Accrued expenses

19,37318,938157,817  Short-term borrowings [NOTE 5 ③]

313,305

239,566

1,996,383   Current portion of bonds

20,000——  Lease obligations

2,028

1,831

15,258   Income taxes payable

5,729

15,220126,833   Provision for bonuses

4,214

4,148

34,567  Other [NOTE 5 ③]

156,626

149,639

1,246,992   Total current liabilities

564,220

471,774

3,931,450   Trade payables

Long-term liabilities:  Long-term debt [NOTE 5 ③]

585,300

594,047

4,950,392  Bonds

102,000

112,000

933,333

9,673

8,382

69,850  Lease obligations

189,178

189,698

1,580,817   Deferred tax liabilities related to land revaluation [NOTE 5 ⑤]

5,557

5,277

43,975   Net defined benefit liability

60,09356,950474,583   Long-term deferred contribution for construction

37,25844,941

374,508   Deferred tax liabilities  Other

116,047

117,082

975,683   Total long-term liabilities

1,105,109

1,128,381

9,403,175

1,669,330

1,600,155

13,334,625

Total liabilities

Net assets:  Shareholders’ equity:  Common stock

99,474

99,474

828,950  Capital surplus

150,027

150,027

1,250,225  Retained earnings

344,020

389,5113,245,925   Less treasury stock, at cost

(4,553)(4,534)(37,783)   Total shareholders’ equity

588,969

634,479

5,287,325   Valuation difference on available-for-sale securities

8,885

18,052

150,433   Deferred gains or losses on hedges

480

(143)

(1,192)   Revaluation reserve for land [NOTE 5 ⑤]

5,060

5,417

45,142   Foreign currency translation adjustments

366

1,756

14,633

Accumulated other comprehensive income:   Cumulative adjustments related to retirement benefit plans(1,712)

3,033

25,275   Total accumulated other comprehensive income

13,081

28,116234,300

208

318

2,650

Subscription rights to shares
Minority interests [NOTE 5 ⑤]15,33816,566

138,050

Total net assets

617,598

679,482

5,662,350

2,286,928

2,279,638

18,996,983

Total liabilities and net assets

Hankyu Hanshin Holdings • Annual Report 201579

Consolidated Statements of Income
Years ended 31st March 2014 and 2015

Millions of yen

Revenues from operations
Costs of revenues from operations:Operating expenses and cost of sales of transportation [NOTE 6 ①]
Selling, general and administrative expenses [NOTE 6 ②]
Total costs of revenues from operations [NOTE 6 ③]
Operating income
Non-operating income:Interest income
Dividends income
Equity in income of affiliates
Miscellaneous income
Total non-operating income
Non-operating expenses:
Interest expenses
Miscellaneous expenses
Total non-operating expenses
Ordinary income
Extraordinary income:Gain on contributions for construction
Gain on sales of noncurrent assets [NOTE 6 ④]
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary loss:
Loss on reduction of noncurrent assets
Loss on impairment of fixed assets [NOTE 6 ⑤]
Provision for loss on removal of property and equipment
Loss on sales of investment securities
Other
Total extraordinary loss
Income before income taxes and minority interests
Income taxes—current
Income taxes—deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income

Thousands of U.S. dollars

2014

2015

2015

¥679,157¥685,906$5,715,883

556,346
30,983587,329
91,828562,762
29,116591,879
94,026

4,689,683
242,633
4,932,325
783,550

130
1,341
3,798
2,575
7,845

124
1,399
4,543
2,358
8,425

1,033
11,65837,85819,65070,20816,2352,246
18,481
81,191

14,013
2,848
16,86285,590116,775
23,733
140,517713,250

1,885
8,508
641
682
11,718

4,557
973
3,436
282
9,249

37,9758,108
28,6332,350
77,075

1,910
2,297
1,146
4
4,009
9,367
83,542
7,042
28,57835,62047,921
1,569
46,352

4,408
5,125
—
4,886
2,799
17,21977,62025,095(3,246)
21,84855,772
1,570
54,201

36,73342,708—40,71723,325
143,492
646,833
209,125(27,050)
182,067
464,767
13,083451,675

Consolidated Statements of Comprehensive Income
Years ended 31st March 2014 and 2015

Millions of yen

Income before minority interests
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 7 ①]
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Minority interests

80

Hankyu Hanshin Holdings • Annual Report 2015

Thousands of U.S. dollars

2014

2015

2015

¥47,921¥55,772$464,767

4,443
(293)
(15)
2,180
—
1,704

5,920
(627)
279
1,564
4,594
3,531

49,333(5,225)
2,325
13,03338,28329,4258,019
55,941

15,262
71,034

127,183
591,950

54,201
1,739

69,2991,735

577,492
14,458

Consolidated Statements of Changes in Net Assets
Years ended 31st March 2014 and 2015

Millions of yen
Shareholders’ equity

Balance as of 1st April 2013
 Cumulative effect ofchanges in accounting policies
Balance at beginning of the fiscal year under review
reflecting changes in accounting policies
Changes of items during the period
Dividends from surplus
Net income
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in scope of consolidation Changes in equity in affiliates accounted
for by equity method-treasury stock Net changes of items other thanshareholders’ equity
Total changes of items during the period
Balance as of 31st March 2014
 Cumulative effect ofchanges in accounting policies
Balance at beginning of the fiscal year under review
reflecting changes in accounting policies
Changes of items during the period
Dividends from surplus
Net income
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in scope of consolidation Changes in equity in affiliates accounted
for by equity method-treasury stock Net changes of items other thanshareholders’ equity
Total changes of items during the period
Balance as of 31st March 2015

Common stock

CapitalsurplusRetainedearnings

Less treasury
stock, at cost

¥99,474¥150,027¥307,108¥(4,209)

Total
shareholders’equity¥552,400—

99,474150,027

307,108(4,209)(9,500)46,352
54
(13)
19

—
99,474—150,027

36,912
344,020(385)
41

150,027

343,622(0)(344)(4,553)36,568588,969(398)(4,553)(8,229)54,201
0
(169)
2

0
(83)

—
99,4740
150,027

45,889389,511(9,500)46,352
54
(385)
28
19

(0)

(398)
99,474552,400

588,570(8,229)54,201
0
(169)
2
(83)

186

186

19
(4,534)45,908634,479

Millions of yen
Accumulated other comprehensive income

Balance as of 1st April 2013
 Cumulative effect of changes
in accounting policies
Balance at beginning of the fiscal year under review reflecting changes in accounting policies
Changes of items during the period
Dividends from surplus
Net income
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in scope of consolidation Changes in equity in affiliates accounted
for by equity method-treasury stock Net changes of items other thanshareholders’ equity
Total changes of items during the period
Balance as of 31st March 2014
 Cumulative effect of changes
in accounting policies
Balance at beginning of the fiscal year under review reflecting changes in accounting policies
Changes of items during the period
Dividends from surplus
Net income
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in scope of consolidation Changes in equity in affiliates accounted
for by equity method-treasury stock Net changes of items other thanshareholders’ equity
Total changes of items during the period
Balance as of 31st March 2015

Valuationdifference on
available-forsale
securities¥  2,817

Deferred gains
Revaluation
or losses onreserve for land
hedges¥ 770¥5,130

Total
Subscription
Remeasurements accumulated
rights toof defined
othersharesbenefit plans comprehensive
income¥(1,719)¥     —¥  6,999¥112

Foreigncurrencytranslation
adjustments

Minority
interests¥13,642

—
2,817

770

5,130

(1,719)

—

6,999

Total
net assets¥573,154—

112

13,642

573,154(9,500)46,352
54
(385)
28
19
(0)

6,067

(289)

(70)

2,086

(1,712)

6,082

96

1,696

7,875

6,067
8,885

(289)
480

(70)
5,060

2,086
366

(1,712)(1,712)

6,082
13,081

96
208

1,696
15,33844,443
617,598

(30)

(429)

15,307617,168

—
8,885

480

5,060

366

(1,712)

13,081

208(8,229)54,201
0
(169)
2
(83)
186
9,166

(624)

357

1,389

4,745

15,035

109

1,259

16,404

9,166
18,052

(624)
(143)

357
5,417

1,389
1,756

4,745
3,033

15,035
28,116

109
318

1,259
16,56662,313
679,482

Hankyu Hanshin Holdings • Annual Report 201581

Consolidated Statements of Changes in Net Assets

Thousands of U.S. dollars
Shareholders’ equity

Balance as of 1st April 2014
 Cumulative effect of changes
in accounting policies
Balance at beginning of the fiscal year under review
reflecting changes in accounting policies
Changes of items during the period
Dividends from surplus
Net income
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in scope of consolidation Changes in equity in affiliates accounted
for by equity method-treasury stock Net changes of items other thanshareholders’ equity
Total changes of items during the period
Balance as of 31st March 2015

Common stock

CapitalsurplusRetainedearnings

Less treasury
stock, at cost$828,950$1,250,225$2,866,833$(37,942)

Total
shareholders’equity$4,908,075(3,317)
828,950

1,250,225

2,863,517(3,317)(37,942)(68,575)
451,675
0(1,408)
17

0
(692)

—
828,95001,250,225

382,408
3,245,925

4,904,750(68,575)
451,675
0(1,408)
17
(692)

1,550

1,550

158
(37,783)

382,567
5,287,325

Thousands of U.S. dollars
Accumulated other comprehensive income

Balance as of 1st April 2014
 Cumulative effect of changes
in accounting policies
Balance at beginning of the fiscal year under review
reflecting changes in accounting policies
Changes of items during the period
Dividends from surplus
Net income
Reversal of revaluation reserve for land
Purchase of treasury stock
Disposal of treasury stock
Change in scope of consolidation Changes in equity in affiliates accounted
for by equity method-treasury stock Net changes of items other thanshareholders’ equity
Total changes of items during the period
Balance as of 31st March 201582

Hankyu Hanshin Holdings • Annual Report 2015

Valuation
Foreigndifference on Deferred gains
Revaluation
currency
available-for- or losses onreserve for land translationsalehedgesadjustments
securities$ 74,042$ 4,000$42,167$ 3,050

Total
Subscription
Remeasurements accumulated
rights toof defined
othersharesbenefit plans comprehensive
income$(14,267)$109,008$1,733—74,0424,000

42,1673,050(14,267)

109,008

1,733

Minority
interests

Total
net assets$127,817$5,146,650(250)(3,575)

127,558

5,143,067(68,575)
451,675
0(1,408)
17
(692)
1,550

76,383(5,200)2,975

11,57539,542

125,292

908

10,492

136,700

76,383
150,433(5,200)(1,192)

2,975
45,142

11,575
14,63339,542
25,275125,292
234,300

908
2,650

10,492138,050

519,275
5,662,350

Consolidated Statements of Cash Flows
Years ended 31st March 2014 and 2015

Millions of yen

Thousands of U.S. dollars

2014

2015

2015

Cash flows from operating activities:¥     83,542¥    77,620$   646,833

Depreciation and amortisation

54,474

53,143442,858

Loss on impairment of fixed assets

2,297

5,125

42,708

Amortisation of goodwill

2,916

2,929

24,408Equity in (income) losses of affiliates(3,798)(4,543)(37,858)

Increase (decrease) in net defined benefit liability(726)(4,485)(37,375)(1,142)

Income before income taxes and minority interests

34

(137)

1,146

(383)

(3,192)

Interest and dividend income(1,471)(1,523)(12,692)

Interest expense

16,23514,013

116,775

Loss (gain) on sales of noncurrent assets(8,133)(492)(4,100)Loss on reduction of noncurrent assets

1,910

4,408

36,733

Loss (gain) on sales of investment securities

(637)

1,450

12,083Gain on contributions for construction(1,885)(4,557)(37,975)

Decrease (increase) in trade receivables(4,200)(216)(1,800)Decrease (increase) in inventories

12,106

8,362

69,683

Increase (decrease) in allowance for doubtful receivables Increase (decrease) in provision for loss on removal of property and equipment

877

(48)

(400)

Other

20,0783,540

29,500Subtotal

174,766

154,204

1,285,033

3,036

2,876

23,967(119,692)

Increase (decrease) in trade payables

Interest and dividends received
Interest paid

(16,797)(14,363)

Income taxes (paid) refunded(14,013)(10,836)(90,300)

Net cash provided by operating activities

146,991

131,8811,099,008

Cash flows from investing activities:
Purchases of noncurrent assets(89,845)(86,970)(724,750)

Proceeds from sales of noncurrent assets

21,6195,588

46,567Purchases of investment securities(2,438)(10,353)(86,275)

Proceeds from sale of investment securities

1,010

19,747

164,558

3,285

—

—

Receipt of contributions for construction

14,11521,098

175,817

Other

6,736

(1,640)(13,667)(45,517)(52,529)(437,742) Proceeds from sales of investments in subsidiaries resulting inchange in scope of consolidation

Net cash used in investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term borrowings(13,191)

2,363

19,692

Proceeds from long-term debt

105,350

90,100750,833

Repayment of long-term debt

(184,737)(153,170)(1,276,417)

9,934

9,930

82,750

Redemption of bonds(10,000)(20,000)(166,667)

Dividends paid

(9,500)(8,229)(68,575)

Proceeds from new bonds issued

Dividends paid to minority shareholders of consolidated subsidiaries

(329)

(485)

(4,042)Other(2,606)(2,255)(18,792)(105,079)(81,746)(681,217)

1,765

1,270

10,583

Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents(1,840)(1,125)(9,375)

Cash and cash equivalents at beginning of year

25,581

24,497204,142

755

125

1,042

24,49723,497

195,808

Increase in cash and cash equivalents from newly consolidated subsidiary
Cash and cash equivalents at end of year

Hankyu Hanshin Holdings • Annual Report 201583

Notes to the Consolidated Financial Statements

1 Framework for Preparing Consolidated Financial Statements ① Method of preparation for consolidated financial statements
The Company’s consolidated financial statements were prepared in accor-③ Special measures to ensure the appropriateness of consolidated
financial statements and other reports

dance with the “Regulations Concerning the Terminology, Forms and

The Company makes special efforts to ensure the appropriateness of its con-

Preparation Method of Consolidated Financial Statements” (Finance Ministrysolidated financial statements and other reports. In addition to subscribing to

Ordinance No. 28 of 1976, hereinafter, “Regulations for Consolidated Financial

related publications, it has joined the Financial Accounting Standards

Statements”).

Foundation and participates in seminars and other events held by theComparative information contained in the consolidated financial state-Foundation, audit firms and other relevant organisations to establish a systemments for the consolidated current fiscal year (1st April 2014 to 31st Marchfor understanding the accounting standards in detail and responding suitably2015) has been prepared based on the Regulations for Consolidated Financial

to changes made to them. The Company also compiles and provides common

Statements before the amendment, in accordance with “Cabinet Officemanuals for preparing the consolidated financial information on a group

Ordinance Partially Revising Regulation on Terminology, Forms andbasis, and arranges training courses for accounting staff at affiliates.

Preparation of Financial Statements” (Cabinet Office Ordinance No. 61, 21st
September 2012), Supplementary Provisions Article 3 Paragraph 2.

④ Translation into U.S. dollars
The U.S. dollar amounts have been translated, for convenience only, at ¥120 =② Audit verification$1, the prevailing exchange rate on the Tokyo Foreign Exchange Market as of

The Company’s consolidated financial statements for the current fiscal year

31st March 2015.

(1st April 2014 to 31st March 2015) were audited by KPMG AZSA LLC, as per
Article 193-2 (1) of the Financial Instruments and Exchange Act.

2 Basis of Preparation of Consolidated Financial Statements ① Scope of consolidationand major transactions conducted between the individual closing dates and(a) Number and names of consolidated subsidiaries

the consolidated closing date have been adjusted for as necessary for the

Number of consolidated subsidiaries—91.
		Names of primary consolidated subsidiaries are listed on page 107.

		

P&P HAMAMATSU Co., Ltd. has been included in the scope of consoli-

dation due to its increased significance.
		

Globaltech Co., Ltd. and four other companies have been excluded

from the scope of consolidation as their liquidation was completed.

consolidation.

④ Items related to accounting treatment and standards(a) Valuation standards and method for major assets
I. Securities
Available-for-sale securities
Available-for-sale securities with fair market values:(b) Names of major nonconsolidated subsidiaries
Hankyu Mediax Co., Ltd.
		

Nonconsolidated subsidiaries have been excluded from the scope of	The market value method is applied based on the market price, etc., at the
fiscal year-end. (Related valuation differences are directly included under
net assets and the cost of securities sold is determined by the moving

consolidation because the total amounts of their entire assets, sales, net

average method.)

income or loss (amount equivalent to equity interests), retained earnings

Available-for-sale securities without fair market values:(amount equivalent to equity interests) and other figures are limited, andthe effect on the consolidated financial statements as a whole is negligible.

The moving average cost method is applied.
		

For investments in limited liability investment partnerships and similar

investments, however, the Company’s share of assets held by such part-② Items related to application of equity-method accounting

nerships is recorded.

(a) Number and names of affiliates for which equity method is applied
Number of affiliates for which equity method is applied—10.
		Names of the major affiliates for which equity method is applied are

II. Derivatives
The market value method is applied.

listed on page 107.
III. Inventories(b)	Names of nonconsolidated subsidiaries and affiliates for which equity
method is not applied
	The nonconsolidated subsidiaries to which the equity method does not
apply (Hankyu Mediax Co., Ltd., etc.) and affiliates (OS Co., Ltd., etc.) use theLand and buildings for sale:	The identified cost method is applied. (Balance sheet values are calculated
by writing down book values based on decreased profitability.)
Other inventories:

cost method rather than the equity method because the total amounts of	The moving average cost method is applied. (Balance sheet values are

their net income or loss (amount equivalent to equity interests), retained

calculated by writing down book values based on decreased profitability.)

earnings (amount equivalent to equity interests) and other figures arelimited, and the effect on the consolidated financial statements as awhole is negligible.

(b) Depreciation methods for major depreciable assets
I. Property and equipment (excluding leased assets)
Replacement assets of railway operations:③ Items related to fiscal year-ends, etc., for consolidated subsidiaries
The account closing date for Hankyu Hanshin Express (USA) Inc., Hankyu
Hanshin Express (Deutschland) GMBH and 20 other consolidated subsidiaries

84

Replacement method (mainly declining-balance method) is applied.
Other property and equipment:		

While property and equipment (excluding leased assets) are depreci-

is 31st December. The consolidated financial statements have been prepared

ated for the most part using the declining balance method, there is alsousing the financial statements based on the closing date of each company,

some use of the straight-line method.

Hankyu Hanshin Holdings • Annual Report 2015

Notes to the Consolidated Financial Statements		

Depreciation of buildings acquired after 1st April 1998 (excluding facili-ties attached to buildings) is calculated using the straight-line method.

III. Hedging policy
	The Group is exposed to the risk of foreign exchange and interest rate
fluctuations and uses derivatives as a means of hedging these risks.

II. Intangible assets (excluding leased assets)	Intangible assets (excluding leased assets) are amortised using the		

IV. Method for evaluating the effectiveness of hedges
	
Other than when the effectiveness of hedges is obvious, hedge

straight-line method.
Furthermore, internal-use software is amortised by the straight-line

effectiveness is evaluated semiannually using the comparison andanalysis method.

method over its useful life (mainly 5 years).

V. Other risk management methods concerning hedge accounting

III. Lease assets
	Lease assets are depreciated using the straight-line method with the leaseterm as the useful life and the residual value as zero.

	Internal rules regarding the segregation of duties, maximum transaction
amounts, etc., have been established for the use of derivative transactions
based on which derivative transactions are used. The implementation and(c) Accounting standards for significant transactions

management of derivative transactions are carried out by the accounting
department with the approval of the decision makers in each Group

I. Allowance for doubtful receivables
	Allowance for doubtful receivables is provided based on the ratio of pastloan loss experience for general accounts and individually estimatedcompany. An internal control system has been developed to ensure thatthe contract signing and termination comply with the internal rules.

uncollectible amounts for certain individual accounts.
(g) Method and period of amortisation of goodwill
	Goodwill is amortised, in general, in equal amounts over five years. The

II. Provision for bonuses
	The Company recognises as provision for bonuses the amount expected
to be paid to employees as bonuses for the fiscal year.

goodwill resulting from the management integration with Hanshin
Electric Railway Co., Ltd. in the fiscal year ended 31st March 2007 is being
amortised in equal amounts over 20 years.

(d) Accounting methods for retirement benefits	When calculating retirement benefit obligations, the benefit formula
method is used to distribute the estimated amount of retirement benefits
into the period up to the end of the current fiscal year.

(h) Scope of cash included in consolidated statements of cash flows
	In preparing the consolidated statements of cash flows, cash on hand,readily available deposits and short-term highly liquid investments

Prior service cost is recorded in expenses using the straight-line

without material risk of changing their value and with maturities notmethod over a certain number of years (mainly 10 years), which is within

exceeding three months at the time of purchase are considered to be

the average remaining years of service of the employees at the time whencash and cash equivalents.

		these costs are incurred.
		

Actuarial differences are recorded in expenses using the straight-line(i) Other significant matters for preparing consolidated financial statements

method over a certain number of years (mainly 10 years), which is within

I. Accounting for contributions for construction in railway operations

the average remaining years of service of the employees at the time when	The Company accepts contributions for construction from local govern-

these costs are incurred.

ments and other organisations that cover a portion of construction(e)	Basis for converting significant assets and liabilities in foreign currency
into Japanese yen

expenses arising from the construction of continuous grade separations
in railway operations. When construction is completed, noncurrent assets

	The assets, liabilities, income and expenses of overseas subsidiaries are

acquired as a result of accepting these contributions for construction areconverted to yen based on the spot exchange rate on the balance sheet

recognised at acquisition cost after deducting the amounts equivalent to

date. Differences in conversion are included in foreign currency translation adjustments and minority interests in the net assets section.

the said contributions for construction.
		

Furthermore, in the consolidated statements of income, gain on con-tributions for construction is recognised in extraordinary income and the(f ) Significant hedge accounting methods

acquisition cost of noncurrent assets, after deducting the amounts

I. Method of hedge accounting

equivalent to the contributions for construction, is recognised in extraor-

Deferred hedge accounting is applied.
		

Exceptional accounting applies to interest rate swaps that satisfy therequirements for exceptional accounting for interest rate swaps.
		Designation accounting applies to foreign currency denominateddinary loss as loss on reduction of noncurrent assets.
II. Accounting for consumption tax

assets and liabilities with foreign exchange forward contracts.

Accounting for consumption tax is based on the tax exclusion method.

II. Hedging instruments and hedged items
Hedging instruments

III. Adoption of consolidated tax payment system

Foreign exchange contracts
Currency swap contracts
Currency option contracts

Hedged items

A consolidated tax payment system has been adopted.

Foreign currency trade receivables andtrade payables and future foreign currency transactions

Interest rate swap contracts Interest on bonds andInterest rate option contracts loans payable

Hankyu Hanshin Holdings • Annual Report 201585

Notes to the Consolidated Financial Statements

3 Changes in Accounting Policies ① Application of the accounting standard for retirement benefits

method of attributing expected benefit to periods from the straight-line attri-

The Company adopted article 35 of the “Accounting Standard for Retirement

bution method to a benefit formula basis and determining the discount rates.

Benefits” (ASBJ Statement No. 26, 17th May 2012 (hereinafter, “Statement No.

In accordance with article 37 of Statement No. 26, the effect of changing the26”)) and article 67 of the “Guidance on Accounting Standard for Retirement

determination of retirement benefit obligations and current service costs

Benefits” (ASBJ Guidance No. 25, 17th May 2012 (hereinafter, “Guidance No.

has been recognised in retained earnings at the beginning of the current25”)) from the current fiscal year, and have changed the determination of

fiscal year.

retirement benefit obligations and current service costs. In addition, theFurthermore, the effect of these changes on the consolidated financial

Company and its consolidated domestic subsidiaries have changed thestatements has been immaterial.

4 Accounting Standards Not Applied as Yet ① Accounting standards for business combinations(a) Summary— Accounting Standards for Business Combinations (ASBJ Statement No. 21,

	
The above standards and guidance have been revised primarily to

13th September 2013)

account for:—
Accounting Standards for Consolidated Financial Statements (ASBJ	1) How the changes of the shares in subsidiaries, over which the Company

Statement No. 22, 13th September 2013)

continues to have control, should be treated by the Company when addi-— Accounting Standard for Business Divestitures (ASBJ Statement No. 7, 13th

tional stock of a subsidiary is acquired.

September 2013)

2) Treatment of acquisition-related costs— Accounting Standard for Earnings per Share (ASBJ Statement No. 2, 13th	3) Presentation of current net income and the change of shareholders’September 2013)

equity from minority interests to non-controlling interests—Guidance on Accounting Standard for Business Combinations and4) Provisional application of accounting treatments

Accounting Standard for Business Divestitures (ASBJ Guidance No. 10, 13th
September 2013)(b) Effective date— Guidance on Accounting Standard for Earnings per Share (ASBJ Guidance

Effective from beginning of the fiscal year ending 31st March 2016.

No. 4, 13th September 2013)

		

Provisional application of the accounting standards is scheduled to

begin for business combinations effective after the beginning of the fiscal
year ending 31st March 2016.
(c) Effect of application of the standards
	The Company and its consolidated domestic subsidiaries are currently inthe process of determining the effects of these new standards on the
consolidated financial statements.

5 Consolidated Balance Sheets ① Accumulated depreciation of property and equipment
Millions of yen②
Accumulated contributions for construction directly deductedfrom the acquisition cost of noncurrent assets

Thousands of U.S. dollars

2014

2015

2015

¥1,044,359¥1,066,829$8,890,242

Millions of yen

Thousands of U.S. dollars

2014

2015

2015

¥373,682¥377,460$3,145,500③ Pledged assets and secured liabilities
The following table shows the assets pledged as collateral.
Millions of yen

Thousands of U.S. dollars
2015

2014

2015

Property and equipment:[$1,748,333]¥216,551[¥212,362]¥209,800[¥209,800]$1,748,333

Machinery, equipment and vehicles

34,633[34,633]

39,320[39,320]

327,667[327,667]

Land

266,480[255,955]

255,956[255,956]

2,132,967[2,132,967]

Other

1,864

[1,864]

1,564[1,564]

13,033[13,033]

128

[128]

128

[128]

1,067

[1,067]

Buildings and structures

Intangible assets:
Other
Investment and other assets:

86

Investment securities

13,236

[—]

9,311

[—]

77,592[—]  Total532,895[504,944]

516,082[506,770]

4,300,683[4,223,083]

Hankyu Hanshin Holdings • Annual Report 2015

Notes to the Consolidated Financial Statements

The following table shows the secured liabilities.
Millions of yen

Thousands of U.S. dollars
2015

2014

2015

Current liabilities:
Short-term borrowings¥ 13,805[¥  7,980]¥ 14,270[¥  8,159]$  118,917[$ 67,992]

86

[—]

77

[—]

642

[—]

Other
Long-term liabilities:
Long-term debt

107,291[99,703]111,846[109,143]

932,050[909,525]  Total121,182[107,683]

126,194[117,303]

1,051,617[977,525]

The amounts in brackets are the amounts for the Railway Foundation within the total of each category.

④ The following table shows the securities of nonconsolidated subsidiaries and affiliates.
Thousands of
U.S. dollars

Millions of yen

Investment securities

2014

2015

2015

¥170,790¥184,730$1,539,417⑤ Two consolidated subsidiaries and an equity-method affiliate revaluated land for business use based on the Law Concerning
Revaluations of Land (Law No. 34, promulgated on 31st March
1998) and the Law to Partially Modify the Law Concerning
Revaluations of Land (Law No. 19, promulgated on 31st March
2001). Of the valuation differences identified as a result of this, theconsolidated subsidiaries recorded the amount corresponding to
the taxes on the valuation difference in the liability section as“Deferred tax liabilities related to land revaluation” and the amount
belonging to minority shareholders as “Minority interests.” Theamount remaining after subtracting these was recorded in the net
assets section as “Revaluation reserve for land.” The equity-method
affiliates recorded the amount corresponding to its equity in thevaluation difference (after subtracting taxes) in the net assets
section as “Revaluation reserve for land.”Millions of yen

Thousands of U.S. dollars

2014

2015

2015

¥(6,067)¥(6,515)$(54,292)⑥ Contingent liabilities
The Company and its subsidiaries provide a liability guarantee for loans of thecompanies, etc., listed below.
Fiscal year ended 31st March 2014
Millions of yen

Nishi-Osaka Railway Co., Ltd.

¥22,054

Borrowers on loans for purchaseof land and buildings

7,373

Other (one company)

40

Total

29,467

Fiscal year ended 31st March 2015

• Revaluation method
The revaluation amounts were determined based on the revaluated value of
noncurrent assets provided for in Article 2, Paragraph 3 of the Enforcement
Ordinance for the Law Concerning Land Revaluation (Ordinance No. 119,
promulgated on 31st March 1998).
• Date of revaluation: 31st March 2002
• The difference between the market value of the land and the book value
after revaluation at the end of the previous fiscal year and current fiscal year:

Nishi-Osaka Railway Co., Ltd.

Millions of yen

Thousands of
U.S. dollars¥21,067$175,558

2,115

17,625

Borrowers on loans for purchaseof land and buildings

40

333

23,223

193,525

Other (one company)
Total

6 Consolidated Statements of Income ① Closing inventory is the amount after write-down of book value
due to a decline in profitability. As a result, valuation loss of inventory included in operating expenses and cost of sales were as follows:
Millions of yen

Thousands of U.S. dollars

2014

2015

2015

¥3,564¥4,454$37,117② The breakdown of selling, general and administrative expenses isshown below.
Thousands of
U.S. dollars

Millions of yen
2014

2015

2015

Personnel expenses¥15,297¥15,121$126,008

Expenses

11,224

9,933

82,775

Taxes

715

628

5,233

Depreciation andamortisation

829

503

4,192

Amortisation of goodwill

2,916

2,929

24,408

Total

30,98329,116242,633

Hankyu Hanshin Holdings • Annual Report 201587

Notes to the Consolidated Financial Statements③ The retirement benefit expenses and the main expense items andmonetary amounts within the amounts of allowance and provision
included in the costs of revenues from operations are shown below.
Thousands of
U.S. dollars

Millions of yen
2014

2015

2015

Retirement benefit
expenses¥7,067¥6,746$56,217

Provision for bonuses

4,415

4,250

35,417④ The breakdown of the gain on sales of noncurrent assets is asfollows:(d) Method of determining the recoverable value
The recoverable value is based on the net sale value or value in use.
		Standards, and/or fixed asset tax assessment values. The value in use
is based on the discounted future cash flow, mainly used 4.0% as a discount rate.
Fiscal year ended 31st March 2015
The Group recorded a loss on impairment of fixed assets for the following
asset groups.
Use

Fiscal year ended 31st March 2014
Millions of yen

Land, etc.

Hotel Total: 1¥8,508

Fiscal year ended 31st March 2015
Millions of yen

Thousands of
U.S. dollars¥973$8,108Land, etc.

⑤ Loss on impairment of fixed assets
The Group recorded a loss on impairment of fixed assets for the following
asset groups.
Type of assets

RegionGardens, etc. Total: 2
Property for rent Total: 6Land, etc.,
Hyogo
Land, etc.,
Hyogo, etc.
Buildings andWorking assets, etc. Total: 24
Hyogo, etc.
structures, etc.

Millions of yen¥1,214
539
542

Millions of Thousands ofyen
U.S. dollars

RegionBuildings andHyogo
structures, etc.

¥4,055$33,792

545

4,542

524

4,367

Facilities of International
Buildings andTokyo
Transportation
structures, etc.
Business Total: 1
Working assets, etc.
Land, etc.
Osaka, etc.
Total: 15

	The grouping of assets is based on the minimum unit that generates acash flow that is generally independent of the cash flows of other assets
or asset groups.
(b) Procedure up to the recognition of a loss on impairment of fixed assets
	The book values of fixed assets groups for which a decision for dismantlement has been taken, those whose market values have been declining
sharply from their book values due to a continuous decrease in land value,
and those that have continuously resulted in operating losses and whose(a) Method of grouping assets
	Assets are grouped by business based on management accounting orby property.

profitability is unlikely to recover in the future were reduced to the recoverable amount. The reduction has been recorded as “Loss on impairmentof fixed assets” in the amount of ¥5,125 million ($42,708 thousand) under(b) Recognition of a loss on impairment of fixed assets
	The book values of the fixed assets groups, the market values of whichhave been declining sharply from their book values due to a continuous
decrease in land value, and those that have continuously resulted in oper-

extraordinary loss.
(c) Breakdown of the loss on impairment
Type of assets

Millions of yen

Thousands of
U.S. dollars

ating losses and whose profitability is unlikely to recover in the future

Buildings and structures¥2,505$20,875

were reduced to the recoverable amount. The reduction has been

Land

2,468

20,567

recorded as “Loss on impairment of fixed assets” in the amount of ¥2,297

Construction in progress, etc.

million under extraordinary loss.

Total(c) Breakdown of the loss on impairment
Type of assets

Land
Buildings and structures
Machinery, equipment and vehicles
Total

88

Type of assets(a) Method of grouping assets

Fiscal year ended 31st March 2014

Use

Net sale values are determined by adjustments of the expected saleprices, appraised values based on the Japanese Real Estate Appraisal

Hankyu Hanshin Holdings • Annual Report 2015

Millions of yen¥1,392
793
111
2,297

151

1,258

5,125

42,708(d) Method of determining the recoverable value
The recoverable value is based on the net sale value or value in use.
		The net sale value is determined by rationally adjusting the expectedsale prices, appraised values based on the Japanese Real Estate Appraisal
Standards, and/or fixed asset tax assessment values.

Notes to the Consolidated Financial Statements

7 Consolidated Statements of Comprehensive Income ① Reclassification adjustments and tax effects related to other comprehensive income
Millions of yen

Thousands of U.S. dollars

2014

2015

2015

¥    6,922¥ 6,399$ 53,325

(72)

1,443

12,025   Subtotal, before tax

6,849

7,843

65,358   Tax (expense) or benefit(2,405)(1,923)(16,025)   Valuation difference on available-for-sale securities

4,443

5,920

49,333

Increase (decrease) during the year(755)

(1,143)(9,525)

Reclassification adjustments

221

147

1,225

(533)

(996)

(8,300)

Valuation difference on available-for-sale securities:
Increase (decrease) during the year
Reclassification adjustments

Deferred gains or losses on hedges:   Subtotal, before tax   Tax (expense) or benefit

239

368

3,067

   Deferred gains or losses on hedges

(293)

(627)

(5,225)

Increase (decrease) during the year

—

—

—

Reclassification adjustments

—

—

—

   Subtotal, before tax

—

—

—

   Tax (expense) or benefit

(15)

279

2,325

   Revaluation reserve for land

(15)

279

2,325

2,174

1,456

12,133

6

107

892

2,180

1,564

13,033

Revaluation reserve for land:

Foreign currency translation adjustments:
Increase (decrease) during the year
Reclassification adjustments   Subtotal, before tax

—

—

—

2,180

1,564

13,033

Increase (decrease) during the year

—

7,467

62,225

Reclassification adjustments

—

(425)

(3,542)

Subtotal, before tax

—

7,041

58,675Tax (expense) or benefit—(2,447)(20,392)—

4,594

38,283

1,718

3,469

28,908

(14)

62

517

   Tax (expense) or benefit   Foreign currency translation adjustments
Remeasurements of defined benefit plans:   Adjustments of retirement benefit
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
for using equity method

1,704

3,531

29,425    Total other comprehensive income

8,019

15,262

127,183

8 Consolidated Statements of Changes in Net Assets ① Items related to type and total number of shares issued and type and number of shares of treasury stock
Fiscal year ended 31st March 2014

No. of shares as of 1st April 2013

Increase in number of shares(Thousands of shares)

Decrease in number of shares

No. of shares as of 31st March 2014

No. of shares issued
Common stock  Total1,271,406——

1,271,406

1,271,406——

1,271,406

10,441

692

76

11,057

10,441

692

76

11,057

Treasury stock, at cost
Common stock (Notes 1 and 2)  Total(Overview of reasons for fluctuations)
Notes:
1. The increase of 692 thousand shares of treasury stock included an increase of 401 thousand shares due to the purchase of shares from shareholders whose whereabouts were uncertain
and an increase of 291 thousand shares due to the purchase of odd-lot shares.
2. The decrease of 76 thousand shares of treasury stock was due to a decrease of 64 thousand shares in conjunction with the exercise of stock-option rights and a decrease of 12 thousand
shares due to the sale of odd-lot shares.

Hankyu Hanshin Holdings • Annual Report 201589

Notes to the Consolidated Financial Statements

Fiscal year ended 31st March 2015

No. of shares as of 1st April 2014

Increase in number of shares(Thousands of shares)

Decrease in number of shares

No. of shares as of 31st March 2015

No. of shares issued
Common stock  Total1,271,406——

1,271,406

1,271,406——

1,271,406

11,057266

661

10,663

11,057266

661

10,663

Treasury stock, at cost
Common stock (Notes 1 and 2)  Total(Overview of reasons for fluctuations)
Notes:
1. The increase of 266 thousand shares of treasury stock was due to the purchase of odd-lot shares.
2. The decrease of 661 thousand shares of treasury stock was due to a decrease of 656 thousand shares due to the change of interest for equity-method affiliates and a decrease of 4 thousand shares due to the sale of odd-lot shares.

② Items related to subscription rights to sharesFiscal year ended 31st March 2014

The Company(Parent company)

Number of shares subject to share subscription rights

Type of sharessubject to sharesubscription rights

As of 1st
April 2013

Increase

Decrease

As of 31st
March 2014

Subscription rights
as stock options

—

—

—

—

—

¥208

Total

—

—

—

—

—

208

Type of sharessubject to sharesubscription rights

Number of shares subject to share subscription rights

Balance as of 31st March 2015

As of 1st
April 2014

Increase

Decrease

As of 31st
March 2015

Subscription rights
as stock options

—

—

—

—

Total

—

—

—

—

Breakdown of new sharesubscription rights

Classification

Balance as of 31st March 2014
(Millions of yen)

Fiscal year ended 31st March 2015
Breakdown of new sharesubscription rights

Classification

The Company(Parent company)(Millions of yen)(Thousands of
U.S. dollars)

—

¥318

$2,650

—

318

2,650

③ Items related to dividends
Fiscal year ended 31st March 2014(a) Dividends paid
(Resolution)

Type of shares

Dividends paid
(Millions of yen)

Dividend per share (Yen)

14th June 2013
General meeting ofshareholders

Common stock¥6,333¥5

31st October 2013
Board of Directors

Common stock

3,166

2.5 30th September 2013

Record date

Effective date

31st March 2013

17th June 2013
3rd December 2013(b) Dividends whose effective date falls in the fiscal year following the fiscal year of the record date

90

(Resolution)

Type of shares

Dividends paid
(Millions of yen)

Source of dividends

Dividend per share(Yen)

13th June 2014
General meeting ofshareholders

Common stock¥4,431Retained earnings¥3.5

Hankyu Hanshin Holdings • Annual Report 2015

Record date

Effective date

31st March 2014

16th June 2014

Notes to the Consolidated Financial Statements

Fiscal year ended 31st March 2015(a) Dividends paid
Dividends paid
(Resolution)

Type of shares

13th June 2014
General meeting ofshareholders
29th October 2014
Board of Directors

Dividend per share(Millionsof yen)(Thousands of
U.S. dollars)Commonstock¥4,431$36,925¥3.5

Common
stock

3,797

31,642

3(Yen)

Record date

Effective date

31st March 2014

16th June 2014

(U.S. dollars)$0.03

0.03 30th September 2014

1st December 2014(b) Dividends whose effective date falls in the fiscal year following the fiscal year of the record date
Dividends paid
(Resolution)

Type of shares

16th June 2015
General meeting ofshareholders

Commonstock

Dividend per share(Millionsof yen)(Thousands of
U.S. dollars)

Source of dividends¥3,797$31,642

Retained earnings(Yen)(U.S. dollars)

¥3

$0.03

Record date

Effective date

31st March 2015

16th June 2015

9 Consolidated Statements of Cash Flows ① Relationship between cash and cash equivalents at fiscal year-end
and amounts shown on consolidated balance sheets

Cash and deposits in the consolidated balance
sheets¥25,368excluded from the scope of consolidation due to the sale of its shares
Thousands of
U.S. dollars

Millions of yen
2014

2015

¥25,614② Major items of assets and liabilities of a company that has been

2015

$213,450

Deposits with maturities
over 3 months(871)(2,117)(17,642)Cash and cash equivalents in the cash flow
statements

24,49723,497

195,808

Fiscal year ended 31st March 2014
Book 1st. Corporation
Millions of yen

Current assets¥5,963

Noncurrent assets

2,619

Current liabilities

4,994

Long-term liabilities

25

Fiscal year ended 31st March 2015
No items

10 Lease Transactions <As lessee><As lessor>

Future lease payments for non-cancellable leases in connection with
operating lease transactions

Future lease receivables for non-cancellable leases in connection with
operating lease transactions

Thousands of
U.S. dollars

Millions of yen

Thousands of
U.S. dollars

Millions of yen

2014

2015

2015

2015

2015

Due within one year

¥ 3,799¥ 3,992$ 33,267

Due within one year¥  486¥  606$ 5,050

Due after one year

13,787

12,813

106,775

Due after one year

4,539

6,459

53,825

17,586

16,806140,050

5,025

7,065

58,875

Total

2014

Total

11 Financial Instruments ① Matters regarding financial instruments

through loans from financial institutions, bonds and commercial paper.

(a) Policy on financial instruments

Derivative transactions are used to avoid risk, as discussed later, and it is	It is the Group’s policy to limit the investment of its funds to short-term

our policy to refrain from speculative transactions.

deposits which are highly secure, and the Group raises funds mainly

Hankyu Hanshin Holdings • Annual Report 201591

Notes to the Consolidated Financial Statements(b)	Details of the financial instruments used, the risk involved, and the risk

companies are concentrated and used effectively through centralisation

management system

of Group funds by using the cash pool system, etc. The immediate raising	Trade receivables, namely note receivables and trade account receivables,of funds from financial institutions became possible through the estab-are exposed to the credit risk of customers. The Group limits its exposure

lishment of backup financing such as commitment lines. In addition, theto this credit risk by controlling due dates and balances by customer andCompany maintained a proper balance between direct financing andby making periodical checks of the credit conditions of major customers

indirect financing and diversifies the raising of funds by using multiple

pursuant to the internal regulations of each company.
		financial institutions, thus securing liquidity.

Marketable and investment securities consist mainly of stocks and		Regarding the use of derivative transactions, internal regulations pre-bonds and are exposed to market price fluctuation risk. However, fair

scribe the division of duties and transaction limits. Forward exchange

values and the financial condition of the issuers are checked periodically,

contracts are used to hedge exchange rate fluctuation risk involved in aand the risk management system is confirmed.

portion of foreign currency-denominated assets and liabilities. The		

Almost all trade payables, namely note payables and trade accountpurpose of interest rate swap transactions is to hedge the interest rate

payables, have a payment date that falls within one year. Some assets andfluctuation risk of certain loans. These derivative transactions involve

liabilities denominated in foreign currency are exposed to exchange ratecredit risk because, if the other party to a transaction defaults under thefluctuation risk (market risk), which is limited through forward exchange

terms of contract or becomes bankrupt, the benefit that would have been

contracts.

obtained in the future if the transaction had continued will not be		

Short-term borrowings and commercial paper are used mainly to raise

received. However, credit risk is limited by carrying out transactions only

short-term funds for working capital, and long-term debt and bonds areused mainly to raise the long-term funds necessary for capital investment

with financial institutions with high credit ratings.
		plans. Some floating-rate debt is exposed to interest rate fluctuation risk

More information regarding the means and objectives of hedging,hedging policy, and the method of evaluating the effectiveness of hedges(market risk), which is limited by fixing interest rates through interest rate

related to hedge accounting for derivative transactions, is described inswap transactions. In addition, liquidity risk, the risk that payment will not
be made by the due date, is limited by the timely preparation of financing“④ Items related to accounting treatment and standards” “(g) Significant
hedge accounting methods” outlined in “ 2 Basis of Preparation ofplans and proper fund management. Also, surplus funds of the Group

Consolidated Financial Statements.”② Matters regarding fair values of financial instruments
Book value, fair value and the differences between them as of the end of the previous fiscal year and current fiscal year are as shown below.
Millions of yen

Thousands of U.S. dollars
2015

2014

2015

Book value

Fair value

DifferenceBook value

Fair value

DifferenceBook value

Fair value

Difference(a) Cash and deposits¥ 25,368¥ 25,368¥    —¥ 25,614¥ 25,614¥    —$   213,450$   213,450$     —(b) Trade receivables

80,06380,063—80,67380,673—672,275

672,275—(c) Securities

55,62355,623043,87643,8760

365,633

365,633

0—AssetsLiabilities(d) Trade payables

42,94342,943—42,42942,429—353,575

353,575(e) Short-term borrowings (*1)

154,616

154,616—

156,950

156,950—

1,307,917

1,307,917—(f ) Bonds (*2)

122,000

125,860

3,860

112,000

116,270

4,270

933,333

968,91735,583(g) Long-term debt (*1)

743,988763,430

19,441

676,663

706,764

30,1005,638,858

5,889,700

250,833—(8,595)——(10,531)——(87,758)—(h) Derivative transactions(*1) Current portion of long-term debt is included in (g) Long-term debt.
(*2) Current portion of bonds is included.
(Note 1) Method for calculating the fair values of financial instruments and matters regarding securities and derivative transactions(a) Cash and deposits, (b) 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.
(c) Securities
		The fair values of stocks 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 “ 12 Securities.”(d) Trade payables, (e) 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.
(f ) Bonds
		 The fair values of bonds are based on market prices.
(g) Long-term debt
		The fair values of fixed-rate long-term debts are based on a method of calculation whereby the total principal and interest is discounted at an interest rate that is assumed for the
introduction of similar new debt. The fair values of floating-rate long-term debt are based on their book values because the fair values of floating-rate long-term debts reflect market
interest rates within a short period of time and closely approximate their book values.
(h) Derivative transactions
		 Described in “ 13 Derivatives.”

92

Hankyu Hanshin Holdings • Annual Report 2015

Notes to the Consolidated Financial Statements(Note 2) The book value of financial instruments whose fair value is extremely difficult to ascertain
Thousands of
U.S. dollars

Millions of yen
2014

2015

2015

Non-listed equity securities¥ 4,832¥4,873$40,608

Investments in limited liability investment partnerships andsimilar investments

2,265

2,333

19,442

Negotiable certificates of deposit

13,115

8,813

73,442

Classification

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 notincluded in (c) Securities.
(Note 3) The securities of nonconsolidated subsidiaries and affiliated companies are not included in (c) Securities.
(Note 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 the contract which is indicated in“15 Derivatives” does not indicate the market risk involved in derivative transactions themselves.
(Note 5) Redemption and repayment schedule of monetary claims and securities with maturities
Fiscal year ended 31st March 2014
Millions of yen
Due within
one year

Due after
one yearthroughfive years

Due after
five years
throughten years

Due after
ten years

Cash and deposits¥ 25,368

¥—

¥ —

¥—

Trade receivables

80,063

—

—

—

9

—

—

—

Securities: Held-to-maturity debt securities(government bonds, etc.) Available-for-sale securities with maturities(government bonds)

8

37

390

—

105,449

37

390

—

Due within
one year

Due after
one yearthroughfive years

Due after
five years
throughten years

Due after
ten years

Cash and deposits¥ 25,614

¥   —

¥   —

Trade receivables

80,673—— Held-to-maturity debt securities(government bonds, etc.)—9 Available-for-sale securities with maturities(government bonds)—
106,287  TotalFiscal year ended 31st March 2015
Millions of yen

Thousands of U.S. dollars
Due within
one year

Due after
one yearthroughfive years

Due after
five years
throughten years

Due after
ten years¥—$213,450

$   —

$   —

$—

—

672,275

—

—

—

—

—

—

75

—

—

185

288

—

—

1,542

2,400

—

195

288

—

885,725

1,625

2,400

—

Securities:  Total(Note 6) Amount of planned redemption and repayment of bonds and long-term debt after the consolidated closing dateFiscal year ended 31st March 2014
Millions of yen
Due within
one year

Due after
one yearthroughfive years

Due after
five years
throughten years

Due after
ten years

Bonds¥ 20,000¥ 40,000¥ 62,000¥     —

Long-term debt

158,688

233,975

193,783

157,541

178,688273,975

255,783

157,541

Total

Hankyu Hanshin Holdings • Annual Report 201593

Notes to the Consolidated Financial Statements

Fiscal year ended 31st March 2015
Millions of yen

Thousands of U.S. dollars

Due within
one year

Due after
one yearthroughfive years

Due after
five years
throughten years

Due after
ten years

Bonds¥     —

¥ 60,000¥ 42,000

Long-term debt

82,615

187,687

236,116

82,615

247,687

278,116

Total

Due within
one year

Due after
one yearthroughfive years

Due after
five years
throughten years

Due after
ten years¥ 10,000$     —$   500,000$   350,000$   83,333

170,244688,458

1,564,058

1,967,633

1,418,700

180,244688,458

2,064,058

2,317,633

1,502,033

12 Securities ① Held-to-maturity debt securities
Millions of yen

Thousands of U.S. dollars
2015

2014
Classification

2015

Book value

Fair value

DifferenceBook value

Fair value

DifferenceBook value

¥9

¥9

¥0

¥9

¥9

¥0

$75

Securities with fair value
exceeding book value

Fair value

Difference

$75

$0

② Available-for-sale securities
Millions of yen

Classification

Securities with book value exceedingacquisition cost:Thousands of U.S. dollars

2014

2015

2015

Book value

Acquisition
cost

DifferenceBook value

Acquisition
cost

DifferenceBook value

Acquisition
cost

Difference$124,983¥35,406¥22,112¥ 13,293¥34,791¥19,792¥14,998$289,925$164,933(b) Bonds

426

409

17

459

439

19

3,825

3,658

158

Subtotal

35,83322,522

13,31035,25020,23215,018

293,750

168,600

125,150

19,77030,093(10,323)

8,600

12,749(4,149)71,667106,242(34,575)

10

10

(0)

15

15

(0)

125

125

(0)

19,78030,103(10,323)

8,615

12,764(4,149)71,792

106,367(34,575)

55,61352,6252,987

43,86632,997

10,868365,550

274,975

90,567(a) Equity securities(a) Equity securities
Securities with book value not exceed- (b) Bonds
ing acquisition cost:
Subtotal
Total③ Available-for-sale securities sold during previous fiscal year and current fiscal year
Year ended 31st March 2014
Omitted as the significance was negligible.
Year ended 31st March 2015
Millions of yen
Classification

Equity securities

94

Hankyu Hanshin Holdings • Annual Report 2015

Thousands of U.S. dollars

Amount soldTotal gains
on saleTotal losses
on saleAmount soldTotal gains
on saleTotal losses
on sale¥19,681¥3,436¥4,879$164,008$28,633$40,658

Notes to the Consolidated Financial Statements

13 Derivatives ① Derivative transactions for which hedge accounting has not been applied
No items② Derivative transactions for which hedge accounting has been applied(a) Currency
Fiscal year ended 31st March 2014
Millions of yen
Classification

Type

Main hedged
items

Contract
amountPortion of contract
amount exceeding
one year

Fair value(Note)

Forward exchange contracts
Sell contract

Trade
receivables  U.S. dollar  Japanese yen
Buy contract¥   421¥—¥    1

13

—

(0)

Trade
payables  EuroDesignation  U.S. dollar of forward  Pound sterlingexchange
contracts, etc.   Swiss franc

19,533—913

10,030

—

237

26

—

0

2,057

—

114

  Canadian dollar

846

—

(0)

   New Zealand dollar

199

—

22

  Australian dollar

396

—

17

   Hong Kong dollar

90

—

0

  Singapore dollar

10

—

0

   Thai baht

89

—

(0)

  Japanese yen   Total

690

—

(24)

34,405—

1,282

Fiscal year ended 31st March 2015
Millions of yen
Classification

Type

Main hedged
items

Contract
amountPortion of contract
amount exceeding
one yearThousands 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  U.S. dollar  Japanese yen
Buy contract¥   840¥—¥  (0)$  7,000$—$    (0)

23

—

(0)

192

—

(0)

Trade
payables  EuroDesignation  U.S. dollar of forward  Pound sterlingexchange
contracts, etc.   Swiss franc

16,057—(896)

133,808—(7,467)

7,839

—

779

65,325

—

6,492

21

—

(0)

175

—

(0)

1,757

—

156

14,642—

1,300  Canadian dollar

(283)

1,198

—

(34)

9,983

—

   New Zealand dollar

150

—

9

1,250

—

75

  Australian dollar

308

—

(7)

2,567

—

(58)

   Hong Kong dollar

67

—

(0)

558

—

(0)

  Singapore dollar

236

—

(9)

1,967

—

(75)

   Thai baht

80

—

0

667

—

0

  Japanese yen

889

—

(13)

7,408

—

(108)

29,471—(17)

245,592—(142)   Total

Note: F air value calculation
Fair value is based mainly on prices quoted from counterparty financial institutions.

Hankyu Hanshin Holdings • Annual Report 201595

Notes to the Consolidated Financial Statements(b) Interest rate
Fiscal year ended 31st March 2014
Millions of yen
Classification

Main hedged
items

Contract
amountLong-term
debt¥342,802¥264,440¥(9,878)

342,802

264,440(9,878)Type

Deferral hedge accounting andInterest rate swap contracts
exceptional Pay fixed rate/accounting ofReceive floating rateinterest rate swaps

Portion of contract
amount exceeding
one year

Total

Fair value(Note)

Fiscal year ended 31st March 2015
Millions of yen
Classification

Main hedged
items

Contract
amountLong-term
debt¥255,235

255,235

Type

Deferral hedge accounting andInterest rate swap contracts
exceptional Pay fixed rate/accounting ofReceive floating rateinterest rate swaps

Total

Portion of contract
amount exceeding
one yearThousands of U.S. dollars
Portion of contract
amount exceeding
one year

Fair value(Note)

Contract
amount¥226,437¥(10,514)$2,126,958$1,886,975$(87,617)

226,437(10,514)

2,126,958

1,886,975(87,617)

Fair value(Note)

Note: Fair value calculation
Fair value is based mainly on prices quoted from counterparty financial institutions.

14 Retirement Benefits ① Overview of retirement benefit plans(b) Movements in plan assets

Some consolidated subsidiaries of the Company provide a defined benefit

2014

2015

2015

Balance at beginningof the year

¥64,541¥68,565$571,375

pension funds plan in the multi-employer plan. Among them, the Company Expected returnon plan assets

1,330

1,244

10,367has used the same accounting treatment as it used for defined contribution Actuarial loss (gain)

2,831

7,573

63,108plans when the amount of plan assets corresponding to contributions by the Contribution paidby the employer

4,281

4,805

40,042 Retirement benefits paid

(4,419)(4,519)(37,658)—(419)(3,492)

68,56577,249643,742

contribution plan. Hankyu Corporation has also established a retirement
benefits trust.
In addition, some consolidated subsidiaries subscribe to the employees’

Company cannot be rationally calculated.

② Defined benefit plan

 Other(a) Movement in retirement benefit obligations

Balance at end of the year
Thousands of
U.S. dollars

Millions of yen
2014

2015

2015

¥127,240¥126,263$1,052,192

—

(625)

(5,208)127,240

125,638

1,046,983 Service cost

6,414

7,342

61,183 Interest cost

2,011

1,048

8,733

 Actuarial loss (gain)

(378)

105

875

 Retirement benefits paid

(7,460)(7,999)(66,658) Loss (gain) in priorservice cost

(2,003)——

Balance at beginningof the year
 Cumulative effect of changes inaccounting policies
Balance at beginning of the fiscal year underreview reflecting changes
in accounting policies Other
Balance at end of the year

440

(645)

(5,375)

126,263

125,490

1,045,750

Note: Amounts in the table include the retirement benefit obligations of consolidated
subsidiaries using simplified methods.

96

Thousands of
U.S. dollars

Millions of yen

plan (defined benefit pension plan and lump-sum payment plan) or a defined

Hankyu Hanshin Holdings • Annual Report 2015

Note: Amounts in the table include the plan assets of consolidated subsidiaries using
simplified methods.

Notes to the Consolidated Financial Statements(c)	At the end of the year, reconciliation from retirement benefit obligations
and plan assets to net defined benefit liability (asset) recorded on the	The breakdown of items related to cumulative adjustments related toretirement benefit plans (prior to the deduction of the tax effect) is

consolidated balance sheets
Thousands of
U.S. dollars

Millions of yen
2014

2015

2015

Funded retirement
benefit obligations¥ 64,845¥ 66,970$ 558,083

Plan assets(68,565)(77,249)(643,742)(3,719)(10,278)(85,650)

61,41858,520487,667

Unfunded retirement
benefit obligations(f ) Cumulative adjustments related to retirement benefit plans

as follows:
Thousands of
U.S. dollars

Millions of yen

Total net defined benefit
liability and asset

57,69848,241

402,008

Net defined benefit
liability

60,09356,950474,583

Net defined benefit assets(2,395)(8,709)(72,575)

Total net defined benefit
liability and asset

57,69848,241

402,008

2014

2015

2015

Unrecognised priorservice cost

¥ 2,435¥1,534$12,783

Unrecognised actuarial
differences(3,464)

4,405

36,708

Other

(71)

—

—

Total

(1,101)

5,940

49,500Note: The above relates to consolidated subsidiaries. In addition to the above items, theremeasurements of defined benefit plans include unrecognised items (the amountcorresponding to equity) of equity-method affiliates.

(g) Items related to plan assets
I. Breakdown of major plan assets

Note: Amounts in the table include the retirement benefit obligations and plan assets ofconsolidated subsidiaries using simplified methods.

	The ratios of the major types of assets to total plan assets were as follows:
%
2015

2014

(d) The breakdown of retirement benefit expenses
Thousands of
U.S. dollars

Millions of yen

Bonds

30

33

Equity securities

32

36

2014

2015

2015

Cash and deposits

63Service cost

¥ 6,414¥ 7,342$ 61,183

Interest cost

2,011

1,048

8,733

General accountsof life insurance

31

28

Expected returnon plan assets(1,330)(1,244)(10,367)

Amortisation of actuarial
differences

577

403

3,358

Amortisation of priorservice cost

(689)

(900)

(7,500)

Other

288

141

1,175

Retirement benefit
expenses

7,272

6,790

56,583

Notes:
1. Amounts in the table include the retirement benefit expenses of consolidated subsidiaries using simplified methods.
2. In addition to the retirement benefit expenses shown above, the Company made extra
retirement payments of ¥26 million in the previous fiscal year and ¥52 million ($433
thousand) in the fiscal year under review, which it recorded as costs of revenues fromoperations and extraordinary loss.

(e) Remeasurements of defined benefit plans
	The breakdown of items related to remeasurements of defined benefit

Other

1

1

Total

100

100

Note: The retirement benefits trust established for the Company’s pension plan constituted 7% of total plan assets in the previous fiscal year and 10% of total plan
assets in the fiscal year under review.

II. Method of determining the long-term expected rate of return on plan
assetsCurrent and target asset allocations, 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.
(h) Items related to actuarial assumptions
The major actuarial assumptions at the end of the fiscal year
2014

2015

Discount rate

Mainly 2.0%

Mainly 1.0%

Long-term expected rateof return on plan assets

Mainly 2.0%

Mainly 2.0%

plans (prior to the deduction of the tax effect) is as follows:
Thousands of
U.S. dollars

Millions of yen
2014

2015

2015

Prior service cost¥—

¥ (900)$  (7,500)

Actuarial differences

—

7,870

65,583

Other

—

71

592

Total

—

7,041

58,675③ Defined contribution plan
The required contribution for the consolidated subsidiaries’ defined contribution plan (including employees’ pension funds plan in the multi-employer
plan to which the same accounting method is applied as for the defined
contribution plan) was ¥45 million for the previous fiscal year and ¥48 million($400 thousand) for the fiscal year under review.

Hankyu Hanshin Holdings • Annual Report 201597

Notes to the Consolidated Financial Statements

15 Stock Options, etc. ① Cost amount and account associated with stock options
Millions of yen
2015

2014

Operating expenses and cost of sales oftransportation andcost of sales¥118(b) Size of stock options and changes therein

Thousands of
U.S. dollars

¥109

2015

$908

② Details and size of stock options and changes therein(a) Details of stock options
Resolution date
Classification and numberof eligible persons
Class and number of shares (Note)
Grant date
Vesting conditions
Service period
Exercise period

Resolution date
Classification and numberof eligible persons
Class and number of shares (Note)
Grant date
Vesting conditions
Service period
Exercise period

Resolution date
Classification and numberof eligible persons
Class and number of shares (Note)
Grant date
Vesting conditions
Service period
Exercise period

16th June 2011
10 directors of subsidiaries
104,000 shares of common stock
25th July 2011
Not definedNot defined
From 26th July 2011
to 25th July 2041

ended 31st March 2015, the number of which is indicated in the equivalent
number of shares.
I. Number of stock options
16th June 29th March 14th June 29th March 27th March
2011
2012
2012
2013
2014

Resolution date
Before vested (shares) At the end of theprevious fiscal year
 Granted Expired Vested Unvested
After vested (shares) At the end of theprevious fiscal year
 Vested Exercised Expired Unexercised

—

—

—

—

—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

203,000—
203,000—

72,00080,000102,000

192,000————
72,000———80,000———102,000———
192,000

203,000——
203,000

29th March 2012
11 directors of subsidiaries

II. Unit price information

112,000 shares of common stock
25th April 2012
Not definedNot defined
From 26th April 2012
to 25th April 2042

Resolution date

14th June 2012

Exercise price
Average stock
price at exercise
Fair value unit price at the
grant date

16th June 29th March 14th June 29th March
2011
2012
2012
2013

27th March
2014

¥1

¥1

¥1

¥1

¥1
[US$0.01]

¥—

¥—

¥—

¥—

¥—
[US$ —]

¥311

¥361

¥387

¥615

¥541
[US$4.51]

8 directors of subsidiaries③ Estimation method for fair value unit price of stock options

102,000 shares of common stock
25th July 2012
Not definedNot defined
From 26th July 2012
to 25th July 2042

The following method was applied to fairly valuate the unit price of stock

Resolution date
Classification and numberof eligible persons
Class and number of shares (Note)
Grant date
Vesting conditions

29th March 2013

Service period

Not defined

Exercise period

From 26th April 2013
to 25th April 2043

18 directors of subsidiaries
192,000 shares of common stock
25th April 2013
Not defined

options granted during the current fiscal year.
(a) Valuation method used: Black–Scholes model(b) Major basic data and estimation method
Resolution date
Volatility of stock price (Note 1)
Expected life (Note 2)
Expected dividends (Note 3)
Risk-free interest rate (Note 4)

27th March 2014
22.20%
2.586 years¥6 [US$0.05] / share0.101%

Notes:
1. Volatility of stock price is based on the closing prices in regular transactions for theCompany’s common stock on individual transaction dates during the period of 2.586
years (23rd September 2011 through 25th April 2014).
2. Expected life is based on the actual length of service of eligible directors of subsidiaries
who had resigned in the past, and on the actual length of service of eligible persons asof the grant date.
3. Expected dividends are based on the forecast of dividends to be paid for the fiscal year
ended 31st March 2014.
4. Risk-free interest rate is the yield of government bonds for the period corresponding to
the expected life.

Resolution date
Classification and numberof eligible persons
Class and number of shares (Note)
Grant date
Vesting conditions

27th March 2014

203,000 shares of common stock
25th April 2014
Not defined④ Estimation method for the number of vested stock options

Service period

Not defined

stock options are the same in number.

Exercise period

From 26th April 2014
to 25th April 2044

20 directors of subsidiaries

Note: Indicated in the equivalent number of shares.

98

The covered stock options are those which existed during the fiscal year

Hankyu Hanshin Holdings • Annual Report 2015

Since the stock options were vested on the grant date, vested and granted

Notes to the Consolidated Financial Statements

16 Deferred Tax ① Significant components of the Company’s deferred tax assets and liabilities
Millions of yen
2014

2015

Thousands of
U.S. dollars
2015

Deferred tax assets:¥   29,828¥   26,923$   224,358 Tax loss carryforwards

21,314

16,536

137,800 Net defined benefit liability

21,00816,323136,025 Loss on impairmentof fixed assets

11,44010,213

85,108

7,065

6,850

57,083 Loss on adjustment oftransferred profit and loss

5,958

6,667

55,558 Unrealised profit from assets

5,904

4,095

34,125 Provision for bonuses

1,964

1,783

14,858 Enterprise taxes and businessoffice taxes

1,156

1,117

9,308
105,550 Other

13,663

12,666  Subtotal of deferred tax assets

119,305

103,177

859,808 Valuation allowance(47,088)(48,635)(405,292) Less amounts offset against
deferred tax liabilities(61,573)(44,100)(367,500)

Total deferred tax assets

10,643

10,44087,000 Gain on reversal of difference
from land revaluation(127,707)(124,437)(1,036,975) Revaluation of assets
on consolidation(93,987)(84,615)(705,125) Net unrealised holding gains
on securities(20,288)(16,300)(135,833) Gain on valuation of propertiesof business reorganisation(2,250)(1,995)(16,625)(6,550)(6,499)(54,158)(250,783)(233,849)(1,948,742) Less amounts offset against
deferred tax assets

61,573

44,100367,500 Total deferred tax liabilities(189,210)(189,748)(1,581,233) Net deferred tax liabilities(178,566)(179,307)(1,494,225) Subtotal of deferred tax liabilities

2014

2015

38.0%

35.6%

 Elimination of dividends fromconsolidated subsidiaries

9.8

14.4

 Amortisation of goodwill

1.1

5.4

 Valuation allowance

1.3

1.4

 Nondeductible expenses

0.6

0.6

 Per capita amount of inhabitants’ tax

0.5

0.5

 Non taxable income(11.0)(15.6) Equity in (income) losses of affiliates

(1.7)

(2.1)

 Downward adjustment of deferred tax assets (liability) at end of year
due to tax rate change

2.0(16.4)

Statutory tax rate

 Other

2.0

4.4

Effective tax rate

42.6

28.2

③ Amendments to the amount of deferred tax assets and liabilities
due to changes to the effective tax rate
The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 9 of 2015)
and the “Act for Partial Amendment of the Local Tax Act, etc.” (Act No. 2 of2015) were promulgated on 31st March 2015, and the income tax rate waslowered for consolidated fiscal years beginning on or after 1st April 2015.

Deferred tax liabilities: Other

tory tax rate and the effective tax rate reflected in the accompanying consolidated statements of income(Adjustment) Loss on revaluationof real estate for sale

 Losses on revaluationof investment securities② A reconciliation of the significant differences between the statu-

Note: The Company reversed the “Surplus from land revaluation” when, as a result of a(physical) absorption-type corporate split on 1st April 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 31st March 2006.

Accordingly, the effective statutory tax rate used to calculate deferred tax
assets and liabilities will be lowered from the previous effective statutory tax
rate of 35.6% to 33.0% for the consolidated fiscal year that began on 1st April
2015, due to the temporary differences that are expected to be cancelled, andto 32.2% for consolidated fiscal years beginning on or after 1st April 2016, due
to the temporary differences that are expected to be cancelled.
This change in tax rates resulted in decreases of ¥14,478 million ($120,650
thousand) in deferred tax liabilities (net of deferred tax assets), ¥12,708 million($105,900 thousand) in income taxes–deferred and ¥2 million ($17 thousand)in deferred gains or losses on hedges and increases of ¥1,624 million ($13,533
thousand) in valuation differences on available-for-sale securities and ¥148
million ($1,233 thousand) in cumulative adjustments related to retirement
benefit plans.
Furthermore, deferred tax liabilities related to land revaluation decreased¥279 million ($2,325 thousand), and revaluation reserve for land increased by
the same amount.

17 Asset Retirement Obligations 
Omitted as the significance was negligible.

Hankyu Hanshin Holdings • Annual Report 201599

Notes to the Consolidated Financial Statements

18 Rental Property 
Some consolidated subsidiaries own rental property, such as office buildings
for lease and commercial facilities for lease in the Kita Ward of Osaka and otherareas. Rental income related to such rental property in the fiscal year ended
31st March 2014 was ¥30,417 million (significant rental revenues are recorded
in revenues from operations and significant rental expenses are recorded incosts of revenues from operations). In the fiscal year ended 31st March 2014,
gain on sales of noncurrent assets of ¥8,093 million was recorded as extraordinary income, provision for loss on removal of property and equipment totaling ¥1,146 million was recorded as extraordinary loss. Rental income related
to such rental properties in the fiscal year ended 31st March 2015 was ¥31,048
million ($258,733 thousand) (significant rental revenues are recorded in revenues from operations and significant rental expenses are recorded in costs ofrevenues from operations).
Book value, increase/decrease and fair value were as follows:
Millions of yen

Thousands of
U.S. dollars

2014

2015

2015

¥671,176¥712,891$5,940,758

Notes:
1. Book value is acquisition cost less accumulated depreciation and loss on impairment of
fixed assets.
2. For the amounts for the fiscal year ended 31st March 2014, the main increases wereacquisitions of real estate of ¥35,754 million and completion of development propertiesof ¥32,553 million. The main decreases were depreciation of ¥15,009 million and sales ofreal estate of ¥10,875 million. For the amounts for the fiscal year ended 31st March 2015,
the main increase was acquisitions of real estate of ¥10,822 million ($90,183 thousand).
The main decreases were the exclusion of properties for which development has begunof ¥78,334 million ($652,783 thousand), depreciation of ¥14,111 million ($117,592 thousand) and sales of real estate of ¥4,635 million ($38,625 thousand).
3. Fair value as of the end of the fiscal year is the appraisal value according to an outside
real estate appraiser based on Japanese Real Estate Appraisal Standards in the case of
key properties and the fair value based on indicators such as the assessed value of
noncurrent assets and road tax rating in the case of other properties.
4. Property under development has not been included in the above table because of the
difficulty of ascertaining the market value of property that is in the process of development. Furthermore, property under development recognised in the consolidatedbalance sheet for the fiscal year under review was ¥86,101 million ($717,508 thousand).

Book value (Note 1): Balance at the beginningof yearIncrease/decrease (Note 2)

41,714(87,068)(725,567)

Balance at the end of year

712,891

625,8225,215,183

855,359

782,787

6,523,225

Fair value at the endof year (Note 3)

19 Segment Information ① Segment information(a) Summary of reportable segments
	The Company’s reportable segments are regularly reviewed using the segment-specific financial information available to enable the Board of Directors todetermine the allocation of management resources and evaluate business results.
		

The Group comprises six core businesses: “Urban Transportation,” “Real Estate,” “Entertainment and Communications,” “Travel,” “International Transportation”

and “Hotels.” The businesses are operated by five core companies: Hankyu Corporation, Hanshin Electric Railway Co., Ltd., Hankyu Travel International Co., Ltd.,
Hankyu Hanshin Express Co., Ltd. and Hankyu Hanshin Hotels Co., Ltd., under the leadership of the Company, which manages 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(b) Method used to calculate revenues from operations, income (loss), assets and other items for each reportable segment
	The accounting treatment for each reportable business segment is based on the methods described in “ 2 Basis of Preparation of Consolidated Financial
Statements,” and internal transactions (land and structure leases and rental transactions, etc.) that are calculated through management accounting at companies with businesses spanning multiple segments are included and recorded.

100

		

Income (loss) for each reportable segment refers to operating income (loss).

		Intersegment revenues from operations and transfers are based mainly on similar data as those of general transaction conditions.

Hankyu Hanshin Holdings • Annual Report 2015

Notes to the Consolidated Financial Statements(c) Information regarding totals for revenues from operations, income (loss), assets and other items by reportable segment
Fiscal year ended 31st March 2014
Millions of yen

Total

Adjustment(Note 2)

Amounts
appearing in
the consolidated
financialstatements(Note 3)

Reportable segment

Revenues from operations:
I. Customers
II. Intersegment   Total
Segment income (loss)
Segment assets
Other items  Depreciation andamortisation  Increase in property and equipment andintangible assets

Other(Note 1)

Urban
Transportation

Real EstateEntertainment
andCommunications

TravelInternational
Transportation

HotelsSubtotal¥228,701
5,853
234,555
38,494
764,053¥  191,397
17,212
208,61038,0081,009,407¥101,048
9,301
110,350
14,172
142,827¥32,96144
33,006
1,224
74,473¥37,682
13
37,696
2,051
39,786¥63,057
637
63,695809
85,730¥  654,850
33,064
687,914
94,7602,116,279¥23,795
10,917
34,713849
46,094¥  678,645
43,981
722,627
95,6102,162,374¥    512(43,981)(43,469)(3,781)
124,554¥  679,157—
679,157
91,8282,286,928

25,95118,017

7,059

806

703

2,089

54,627349

54,977(503)

54,474

27,52243,451

5,561

1,178

578

1,817

80,109510

80,619103

80,722

Amounts
appearing in
the consolidated
financialstatements(Note 3)Fiscal year ended 31st March 2015
Millions of yen
Reportable segment

Revenues from operations:
I. Customers
II. Intersegment   Total
Segment income (loss)
Segment assets
Other items  Depreciation andamortisation  Increase in property and equipment andintangible assets

Subtotal

Other(Note 1)

Total

Adjustment(Note 2)

Urban
Transportation

Real EstateEntertainment
andCommunications¥228,306
5,112
233,419
38,553
778,565¥189,680
16,763
206,444
37,173
993,303¥104,768
7,864
112,632
14,993
143,239¥31,93628
31,965
1,227
68,037¥39,411
7
39,4193,053
45,828¥62,344687
63,031
1,216
82,199¥  656,449
30,463686,912
96,2172,111,174¥28,976
12,701
41,678
1,032
43,769¥  685,425
43,165728,591
97,2502,154,943¥    480(43,165)(42,684)(3,223)
124,694¥  685,906—
685,906
94,0262,279,638

25,433

17,218

7,010

809

738

2,035

53,247479

53,726(582)

53,14332,07225,828

6,092

660

476

1,497

66,627960

67,587527

68,115Adjustment(Note 2)

Amounts
appearing in
the consolidated
financialstatements(Note 3)

TravelInternational
Transportation

HotelsThousands of U.S. dollars
Reportable segment
Urban
Transportation

Revenues from operations:
I. Customers$1,902,550
II. Intersegment42,600   Total
1,945,158
Segment income (loss)
321,275
Segment assets
6,488,042
Other items  Depreciation and
211,942
amortisation  Increase in property and equipment and
267,267
intangible assets

Other(Note 1)

Real EstateEntertainment
andCommunications

TravelInternational
Transportation$1,580,667
139,692
1,720,367
309,775
8,277,525$  873,067
65,533
938,600
124,942
1,193,658$266,133
233
266,375
10,225566,975$328,425
58
328,492
25,442
381,900

143,483

58,417

6,742

6,150

16,958443,725

3,992

447,717(4,850)442,858

215,233

50,767

5,500

3,967

12,475555,225

8,000

563,225

4,392

567,625

HotelsSubtotal

Total$519,533 $ 5,470,408 $241,467 $ 5,711,875 $    4,000 $ 5,715,883
5,725
253,858 105,842
359,708(359,708)—
525,258
5,724,267 347,317
6,071,592(355,700)
5,715,883
10,133801,808
8,600
810,417(26,858)
783,550684,992 17,593,117 364,742 17,957,858 1,039,117
18,996,983

Notes: 1.	The “Other” segment is a business segment not included in the reportable segments and includes construction, etc.
2.	The main item in the adjusted amount of segment profit and loss for the fiscal year was amortisation of goodwill (refers mainly to the amortisation of goodwill arising from the
management integration with Hanshin Electric Railway Co., Ltd. in the fiscal year ended 31st March 2007) of ¥(2,916) million in the previous fiscal year and ¥(2,666) million ($(22,217)
thousand) in the fiscal year under review.
		In addition to the balance of unamortised goodwill (refers mainly to the goodwill arising from the management integration with Hanshin Electric Railway Co., Ltd. in the fiscal year
ended 31st March 2007) of ¥33,511 million in the previous fiscal year and ¥30,205 million ($251,708 thousand) in the fiscal year under review, the segment assets’ adjusted amountconsists mainly of surplus working capital (cash and deposits); unallocated assets such as long-term investment funds (investment securities) and land, etc.; and intersegment eliminations at the Company, Hankyu Corporation and Hanshin Electric Railway Co., Ltd.
3.	Segment profit and loss is adjusted with the operating income of the Consolidated Statements of Income.

Hankyu Hanshin Holdings • Annual Report 2015101

Notes to the Consolidated Financial Statements② Related information(a) Information about product and service categories
	Information about product and service categories is the same as that described in “① Segment information”“(c) Information regarding totals for revenues fromoperations, income (loss), assets and other items by reportable segment.”(b) 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 description of regional
breakdown is omitted.
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.
(c) 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.

③ Information regarding loss on impairment of fixed assets by reportable segment
Fiscal year ended 31st March 2014
Millions of yen
Reportable segment
Urban
Transportation

Loss on impairmentof fixed assets¥69

Real EstateEntertainment
andCommunications¥547¥1,214

TravelInternational
Transportation¥—

Hotels¥—¥434

Subtotal¥2,266

Other

Total

¥—

¥2,266

Amounts
appearing in
Adjustment
the consolidated(Note)
financialstatements¥30¥2,297

Fiscal year ended 31st March 2015
Millions of yen
Reportable segment
Urban
Transportation

Loss on impairmentof fixed assets¥54

Real Estate¥291

Entertainment
andCommunications¥46

TravelInternational
Transportation

Hotels¥551¥4,055¥—

Subtotal¥4,999

Other

¥—

Total

¥4,999Amounts
appearing in
Adjustment
the consolidated(Note)
financialstatements¥125¥5,125

Thousands of U.S. dollars
Reportable segment

Loss on impairmentof fixed assets

Urban
Transportation

Real Estate$450$2,425Entertainment
andCommunications$383

Travel$—International
Transportation

HotelsSubtotal$4,592$33,792$41,658

Other

$—

Total

$41,658

Note: The amounts under “Adjustment” are the amounts for land, etc., not allocated to business segments.

④ Information regarding amortisation of goodwill and the balance of unamortised goodwill by reportable segment
Omitted as the significance is negligible.

⑤ Information regarding gains from negative goodwill by reportable segment
Omitted as the significance is negligible.

102

Hankyu Hanshin Holdings • Annual Report 2015

Amounts
appearing in
Adjustment
the consolidated(Note)
financialstatements$1,042$42,708

Notes to the Consolidated Financial Statements

20 Related Party Transactions① Related party transactions(a) Transactions between the company submitting the consolidated financial statements and related parties
No items(b) 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 31st March 2014
Type

Name ofrelated party

Address

Audit & Supervisory
Board Member

Haruo Sakaguchi—

Company in which director or close
Tateishi Sangyo
family thereof holds
Co., Ltd.
majority of voting
rightsBusiness

Voting interest

Relationshipwith related
party

Details oftransaction

Transaction
amounts(Millions of yen)

Item

Balance as of
31st March 2014
(Millions of yen)¥  —

Auditor of theCompany

Directly
0.0%

Lease of realestateRent income¥47

Deposit¥33

100

Real estatebusiness

34

Accounts
receivable

3

Amount ofcapital(Millions of yen)

Ikeda City,
Osaka

0.1%

Operation andOperation andmanagementof real estate management fee
Concurrent post for real estate(director)

Notes: 1. The transaction amount and the balance at the end of the fiscal year do not include consumption tax, etc.
2.	Transaction terms and conditions, and method of determining transaction terms and conditions, etc.
		 (1) The terms and conditions of the property lease are determined with reference to similar transactions in the neighbouring area.
		 (2) Director of a consolidated subsidiary of the Company, the Hankyu Corporation, Koichi Kobayashi and his close family own 77% of the voting rights in Tateishi Sangyo Co., Ltd.
Any decisions on operation and management of real estate are made by reference to neighbourhood transactions.

Fiscal year ended 31st March 2015
Amount of capital
Type

Name ofrelated party

Address

Audit & Supervisory
Board Member

Haruo Sakaguchi—

Company in which director or close
Tateishi Sangyo
family thereof holds
Co., Ltd.
majority of voting
rightsIkeda City,
Osaka

Business

Voting interest

Relationshipwith related
party

$ —

Auditorof theCompany

Directly
0.0%

Lease of realestate833

Real estatebusiness(Millions ofyen)(Thousandsof U.S.
dollars)

¥ —

100

0.1%

Balance as of 31st
March 2015

Transaction amounts
Details oftransaction(Millionsof yen)(Thousandsof U.S.
dollars)

Item

Rent income

¥47

$392

Operation andOperation
management
and manageof real estate
ment fee for
Concurrent post
real estate(director)

35

292

(Millionsof yen)(Thousandsof U.S.
dollars)

Deposit¥33$275

Accounts
receivable

325

Notes: 1. The transaction amount and the balance at the end of the fiscal year do not include consumption tax, etc.
2. Transaction terms and conditions, and method of determining transaction terms and conditions, etc.
		 (1) The terms and conditions of the property lease are determined with reference to similar transactions in the neighbouring area.
		 (2) Director of a consolidated subsidiary of the Company, the Hankyu Corporation, Koichi Kobayashi and his close family own 77% of the voting rights in Tateishi Sangyo Co., Ltd.
Any decisions on operation and management of real estate are made by reference to neighbourhood transactions.

② Notes about parent company and major affiliated companies
No items

21 Per Share Information 
The following tables show net assets per share, net income per share, diluted net income per share, and the basis for their respective calculations.
2015

2014

① Net assets per share (yen / U S. dollars)(Basis for the calculation)
Total net assets (Millions of yen / Thousands of U.S. dollars)
Amount to be deducted from total net assets(Millions of yen / Thousands of U.S. dollars)(Of the amount, subscription rights to shares)(Of the amount, minority interests)
Net assets at the end of the fiscal year related to common shares(Millions of yen / Thousands of U.S. dollars)Common shares issued (Thousands of shares)
Treasury stock shares (Thousands of shares)
Common shares held by consolidated subsidiaries and equity-method affiliates(Thousands of shares)
Common shares used to calculate net assets per share (Thousands of shares)

2015¥477.69¥525.56$4.38¥617,598¥679,482$5,662,350¥15,547¥16,885$140,708¥[208]¥[15,338]¥[318]¥[16,566]$[2,650]$[138,050]$5,521,633¥602,050¥662,596

1,271,406
5,312

1,271,406
5,573

5,745

5,089

1,260,349

1,260,743

Hankyu Hanshin Holdings • Annual Report 2015103

Notes to the Consolidated Financial Statements

2015

2014

② Net income per share (yen / U.S. dollars)

2015¥36.76¥42.98$0.36¥46,352¥54,201$451,675

¥—

¥—

$—

¥46,352¥54,201$451,675

1,260,858

1,261,127¥36.75¥42.95(Basis for the calculation)
Net income (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 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)$0.36(Basis for the calculation)
Adjustment to net income (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)
Summary of potential shares that were not included in the calculation ofdiluted income per share because their effect was not dilutive

¥(0)

¥(7)

$(58)

¥[(0)]¥[(7)]$[(58)]

432

634

[432]

[634]

—

—

22 Subsequent Events 
No items

23 Consolidated Supplementary Statements ① Corporate Bond Statements
Thousands of
U.S. dollars

Millions of yen
NameIssue date

Balance as of
1st April2014

Balance as of
31st March2015

Balance as of
31st March
2015

Interest rate

Security

Redemption
dateHankyu Hanshin Holdings, Inc.

Series 37 unsecured
corporate bonds

23rd Oct.
2009¥ 10,000¥      —

$     —

1.10%

None

23rd Oct.
2014

Hankyu Hanshin Holdings, Inc.

Series 38 unsecured
corporate bonds

23rd Oct.
2009

10,00010,00083,333

1.87

None

23rd Oct.
2019

Hankyu Hanshin Holdings, Inc.

Series 39 unsecured
corporate bonds

28th Jan.
2010

20,00020,000166,667

1.25

None

27th Jan.
2017

Hankyu Hanshin Holdings, Inc.

Series 40 unsecured
corporate bonds

22nd Sept.
2010

15,00015,000125,000

1.43

None

18th Sept.
2020

Hankyu Hanshin Holdings, Inc.

Series 41 unsecured
corporate bonds

22nd Sept.
2010

7,000

7,000

58,333

1.72

None

22nd Sept.
2022

Hankyu Hanshin Holdings, Inc.

Series 42 unsecured
corporate bonds

17th Mar.
2011

10,00010,00083,333

1.54

None

17th Mar.
2021

Hankyu Hanshin Holdings, Inc.

Series 43 unsecured
corporate bonds

9th Sept.
2011

10,00010,00083,3330.55

None

9th Sept.
2016

Hankyu Hanshin Holdings, Inc.

Series 44 unsecured
corporate bonds

25th Oct.
2012

10,00010,00083,333

0.406

None

25th Oct.
2017

Hankyu Hanshin Holdings, Inc.

Series 45 unsecured
corporate bonds

14th Mar.
2013

10,00010,00083,333

0.589

None

13th Mar.
2020

Hankyu Hanshin Holdings, Inc.

Series 46 unsecured
corporate bonds

25th Oct.
2013

10,00010,00083,333

0.819

None

25th Oct.
2023

Hankyu Hanshin Holdings, Inc.

Series 47 unsecured
corporate bonds

18th Jul.
2014—

10,00083,333

1.202

None

18th Jul.
2029

Hanshin Electric Railway Co., Ltd.

Series 14 unsecured
corporate bonds

23rd June
2004

10,000

—

—

2.22

None

23rd June
2014

—

—

122,000

112,000

933,333———

Company

Total

Note: Redemption schedule of bonds for five years subsequent to 31st March 2015

104

Millions of yen

Thousands of
U.S. dollars

Due within one year¥    —$     —

Due after one year through two years

30,000250,000

Due after two years through three years

10,00083,333Due after three years through four years——

Due after four years through five years

20,000166,667

Hankyu Hanshin Holdings • Annual Report 2015

Notes to the Consolidated Financial Statements② Statements of Loans Payable
Thousands of
U.S. dollars

Millions of yen
Balance as of
1st April 2014

Balance as of
31st March 2015

Balance as of
31st March 2015

Short-term borrowings¥154,616¥156,950$1,307,917

0.616%—

Current portion of long-term debt

158,688

82,615

688,458

1.414

—

Item

Average interest
rate

Repayment deadline

2,028

1,831

15,258——Long-term debt (excluding current portion)

585,300

594,047

4,950,392

1.135

2016 – 2034

Lease obligations (excluding current portion)

9,673

8,382

69,850—2017 – 2026

—

—

—

—

—

910,307843,828

7,031,900——

Current portion of lease obligations

Other interest-bearing debt
Total

Notes: 1.	The balances are expressed after the elimination of transactions with companies
in the consolidation group.
		
2.	The “Average interest rate” of loans payable is the weighted average interest rate
for outstanding loans payable as of the end of the current fiscal year.
		 3.	The “Average interest rate” is not shown for lease obligations because theCompany uses mainly the method that includes the amounts equal to interest
in total capital lease obligations and that spreads the total amount equal tointerest equally over each fiscal year of the lease period.
		 4.	Repayment schedule of long-term debt and lease obligations (excluding
current portion) within five years subsequent to 31st March 2015.

Millions of yen

Thousands of
U.S. dollars

Due after one year through two years¥70,588$588,233

Due after two years through three years

43,370361,417

Due after three years through four years

40,615

338,458

Due after four years through five years

33,112275,933

Millions of yen

Thousands of
U.S. dollars

Due after one year through two years¥1,608$13,400

Due after two years through three years

1,400

11,667

Due after three years through four years

922

7,683

Due after four years through five years

834

6,950

Long-term debt

Lease obligations③ Schedule of Asset Retirement Obligations
Omitted as the significance is negligible.

24 Others Quarterly financial information in fiscal year ended 31st March 2015
Cumulative period

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter¥170,787¥334,633¥522,501¥685,906

Income before income taxes and minority interests (Millions of yen)

25,65347,45974,592

77,620Net income (Millions of yen)

16,73028,96347,97354,201

Net income per share (yen)

13.27

22.96

38.04

42.98

Revenues from operations (Millions of yen)

Cumulative period

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter$1,423,225$2,788,608$4,354,175

Income before income taxes and minority interests (Thousands of U.S. dollars)

213,775

395,492

621,600

646,833

Net income (Thousands of U.S. dollars)

139,417

241,358

399,775

451,675

0.11

0.19

0.32

0.36

Revenues from operations (Thousands of U.S. dollars)

Net income per share (U.S. dollars)

Accounting period

1st Quarter¥13.27

Net income per share (yen)Accounting period

Net income per share (U.S. dollars)

1st Quarter$0.11

2nd Quarter¥9.70

2nd Quarter$0.08

3rd Quarter¥15.07

3rd Quarter$0.13$5,715,883

4th Quarter¥4.94

4th Quarter$0.04

Hankyu Hanshin Holdings • Annual Report 2015105

Major Rental Properties(As of 31st March 2015)

Property nameCompleted

Leasable area* (1,000 m2)

Umeda Hankyu Bldg.

2012

213

Department stores (Hankyu Department Store), Offices

Umeda Hanshin Daiichi Bldg. (HERBIS OSAKA)

1997

82

Hotels (The Ritz-Carlton, Osaka), Offices, Commercial facilities,
Multifunctional convention hall

Umeda Hanshin Daini Bldg. (HERBIS ENT)

2004

55

Offices, Commercial facilities, Theatre (Osaka Shiki Theatre)

Hankyu Chayamachi Bldg. (Applause Tower)

1992

52

Hotel (Hotel Hankyu International), Offices, Commercial facilities

Hankyu Sanban Gai Shopping Centre

1969

41

Commercial facilities

Hankyu Grand Bldg.

1977

36

Offices, Commercial facilities

GRAND FRONT OSAKA

2013

28

Offices, Commercial facilities, Knowledge Capital, Hotel(InterContinental Hotel Osaka)

Hankyu Terminal Bldg.

1972

27

Offices, Commercial facilities

Hankyu Five Bldg. (HEP FIVE)

1998

20

Commercial facilities

Navio Hankyu (HEP NAVIO)

1980

16

Commercial facilities

Kita Hankyu Bldg.

1971

13

Offices, Commercial facilities

NU chayamachi

2005

12

Commercial facilities

1992

32

Commercial facilities, Offices

2012

24

Offices, Hotel (REMM Shin-Osaka), Commercial facilities

2008

108

Commercial facilities, Department stores (Hankyu Department Store)

1974

38

Department stores (Takashimaya)

Use

Kita-ku, Osaka

Fukushima-ku, Osaka
Noda Hanshin Bldg. (WISTE)
Yodogawa-ku Osaka
Shin-Osaka Hankyu Bldg.
Nishinomiya City, Hyogo
Hankyu Nishinomiya Gardens
Shimogyo-ku, Kyoto
Hankyu Kawaramachi Bldg.
* Leasable area does not include areas for public use.

106

Hankyu Hanshin Holdings • Annual Report 2015

Major Group Companies(As of 31st March 2015)

Consolidated Subsidiaries● Urban Transportation
Name of company● Entertainment and Communications
Name of company

Railway operations

Hankyu Corporation
Hanshin Electric Railway Co., Ltd.
Nosé Electric Railway Co., Ltd.
Kita-Osaka Kyuko Railway Co., Ltd.
Hokushin Kyuko Railway Co., Ltd.
Kobe Rapid Transit Railway Co., Ltd.
Hankyu Hanshin Railway Technology Co., Ltd.
Hankyu Hanshin Electric System Co., Ltd.

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

Stage

Hankyu Corporation
Takarazuka Creative Arts Co., Ltd.
Takarazuka Stage Co., Ltd.
Umeda Arts Theater Co., Ltd.

Hankyu Bus Co., Ltd.
Hanshin Bus Co., Ltd.
Hankyu Kanko Bus Co., Ltd.
Osaka Airport Transport Co., Ltd.
Hankyu Denen Bus Co., Ltd.
Hankyu Taxi Inc.
Hanshin Taxi Co., Ltd.
Hankyu Hanshin Motor Technology Co., Ltd.
Nippon Rent-A-Car Hankyu Inc.

Communication andmedia

Itec Hankyu Hanshin Co., Ltd.
Bay Communications Inc.
Himeji Cable Television Co., Ltd.

Leisure, etc.

Mt. Rokko Cable Car & Tourism Co.

Automobile

Retailing

Hankyu Corporation
Eki Retail Service Hankyu Hanshin Co., Ltd.
Iina Dining Co., Ltd.

Advertising

Hankyu Corporation
Hankyu Advertising Agency Inc.

Other

Alna Sharyo Co., Ltd.

● Travel
Name of company

Travel agency● International Transportation
Name of company

Internationaltransportation● Real Estate
Name of company

Real estate leasing

Real estate sales andother business

Hankyu Corporation
Hanshin Electric Railway Co., Ltd.
Hankyu Realty Co., Ltd.
Osaka Diamond Chikagai Co., Ltd.
Hanshin Real Estate Co., Ltd.
Hankyu Corporation
Hanshin Electric Railway Co., Ltd.
Hankyu Realty Co., Ltd.
Hankyu Hanshin Building Management Co., Ltd.
Hankyu Hanshin High Security Service Co., Ltd.
Hankyu Hanshin Clean Service Co., Ltd.
Hankyu REIT Asset Management, Inc.

Hankyu Travel International Co., Ltd.
Hankyu Hanshin Business Travel Co., Ltd.
Hankyu Travel Support Co., Ltd.

Hankyu Hanshin Express Co., Ltd.
Hankyu Hanshin Logipartners Co., Ltd.
HHE (USA) Inc.
HHE (Deutschland) GMBH
HHE (HK) Limited
HHE (SINGAPORE) PTE. Ltd.
HHE: HANKYU HANSHIN EXPRESS● HotelsName of company

Hotel management

Hankyu Hanshin Hotels Co., Ltd.
Hanshin Hotel Systems Co., Ltd.
Amanohashidate Hotel Co., Ltd.
Arima View Hotel Co., Ltd.
Hankyu Hanshin Restaurants Co., Ltd.

● OtherName of company

Construction

Hanshin Kensetsu Co., Ltd.
Chuo Densetsu Co., Ltd.

Group financeHankyu Hanshin Financial Support Co., Ltd.

Outsourcing services for Hankyu Hanshin Business Associate Co., Ltd.
personnel andaccounting services

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]

Real estate leasing

Tokyo Rakutenchi Co., Ltd.
[Securities code: 8842]

Motion picture business Toho Co., Ltd. [Securities code: 9602]
Commercial broadcasting Kansai Telecasting Corporation

Hankyu Hanshin Holdings • Annual Report 2015107Group History● Hankyu Holdings, Inc.

● Hanshin Electric Railway Co., Ltd.
1899

1907

Founding of Mino-Arima Electric Railway Company(predecessor of Hankyu Corporation) by Ichizo Kobayashi

1910

Opening of Takarazuka Line (Umeda–Takarazuka) and Mino-o Line
(Ishihashi–Mino-o)

1913

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

1924

Completion of Takarazuka Grand Theatre

1929

Opening of Hankyu Department Store,
Asia’s first railway terminal department
store

1948

Launch of services as Pan American Airways agent

1964

Opening of Hotel new Hankyu Osaka

1973

Opening of New Hankyu Umeda Station as one of largest private
railway terminals in JapanFounding of Settsu Electric Railway(renamed Hanshin Electric Railway Co., Ltd. in same year)
Beginning of operations linking Kobe
(Sannomiya) and outer Osaka(Deiribashi)

1905

1924

Opening of Koshien Stadium (later Hanshin Koshien Stadium)

1933

Opening of Hanshin Mart at Hanshin Umeda Station(later Hanshin Department Store)

1935

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

1948

Launch of airline agency business

1985

Hanshin Tigers win Japan Series for first time

Changing of company name from Keihanshin Kyuko Railway
Company to Hankyu Corporation
1995
2005

Considerable damage to transportation and business infrastructure of Hankyu and Hanshin due to Great Hanshin Earthquake
Establishment of Hankyu Holdings, Inc.

2006

Establishment of Hankyu Hanshin Holdings, Inc.
Establishment of Hankyu-Hanshin-Daiichi Hotel Group2007

Announcement of Hankyu Hanshin Holdings Group 2007 Medium-Term Management Plan
Management integration of Hankyu and Hanshin department store businesses

2008

Opening of Hankyu Nishinomiya Gardens

2010

Completion of renovation of Hanshin Koshien Stadium,
opening of Museum of Hanshin Koshien StadiumCompletion of Umeda Hankyu Building Office Tower

108

Hankyu Hanshin Holdings • Annual Report 20152012

Completion of Umeda Hankyu Building,full opening of Umeda Flagship Store of Umeda Department Store

2015

Announcement of the Hankyu Hanshin Holdings Group’s
Medium-Term Management Plan (Fiscal 2016–Fiscal 2019)

Investor Information(As of 31st March 2015)

Hankyu Hanshin Holdings, Inc.
Head Office:Paid-in Capital:¥99,474 million

1-16-1, Shibata, Kita-ku, Osaka 530-0012, Japan

Fiscal Year-End:

31st March

Phone: +81-6-6373-5001

Number of Employees:

21,037 (consolidated)

Authorised Shares:

3,200,000,000

Issued Shares:

1,271,406,928(Group Planning Div., IR Office)Fax: +81-6-6373-5042
Tokyo Office (Personnel and General Affairs Div.):

Number of Shareholders: 80,475

Toho Twin Tower Bldg.,

Unit of Trading:

1,000 shares

Stock Exchange Listing:Tokyo

Transfer Agent:

Mitsubishi UFJ Trust and Banking Corporation

1-5-2, Yurakucho, Chiyoda-ku, Tokyo 100-0006, Japan
Phone: +81-3-3503-1568
Fax: +81-3-3508-0249

Principal Shareholders:Ownership Breakdown:
Name

Number of shares(thousands)

Percentage(%)

54,33838,63329,023
21,90921,037

4.27
3.04
2.28
1.72
1.65

14,9201.17

13,982
13,972

1.10
1.10

13,936

1.10

13,886

1.09

Japan Trustee Services Bank, Ltd. (Trust account)
The Master Trust Bank of Japan, Ltd. (Trust account)
Nippon Life Insurance Company
Sumitomo Mitsui Banking Corporation
H2O Retailing Corporation
State Street Bank West Client–Treaty 505234 (Standing Proxy:
Mizuho Bank, Ltd. Settlement & Clearing Services Division)
Japan Trustee Services Bank, Ltd. (Trust account 1)
Japan Trustee Services Bank, Ltd. (Trust account 5)
CBNY–GOVERNMENT OF NORWAY(Standing Proxy: Citibank Japan Ltd.)
Japan Trustee Services Bank, Ltd. (Trust account 6)

Individuals and others
43.89 %

National government andlocal public organisations
0.00 %
Financial institutions
26.52 %

Securities
companies
1.20 %
Other
corporations
9.35 %

Foreigncorporations
and individuals
19.05 %

Stock Price Range and Trading Volume (Tokyo Stock Exchange):
Stock Price (¥)
800

Nikkei Average (¥)
20,000600

15,000Stock Price (left axis)
400

10,000

Nikkei Average (right axis)
200

5,000

200,000

100,000

0
Trading Volume 4(thousand shares)

5

6

7

8

9 10 11 12 1

2

3 4

5

6

7

8

9 10 11 12 1

2

3

4

5

6

7

8

9 10 11 12 1

FY2013

FY2014FY2015

High

588

648

800

Low

349

492

533

At year-end

569

562

743

2

3

Hankyu Hanshin Holdings • Annual Report 2015109

Hankyu Hanshin Holdings, Inc. ANNUAL REPORT 2015

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