Our Business

Fiscal 2014 Core Business Operating Results Holdings

The Group comprises six core businesses: Urban Transportation, Real Estate, Entertainment and Communications, Travel, The Urban Transportation and Real Estate Businesses drive income International Transportation and Hotels. The businesses are operated by five core companies: Hankyu Corporation, Hanshin Electric and contribute to generating a stable cash flow. Railway Co., Ltd., Hankyu Travel International Co., Ltd., Hankyu Hanshin Express Co., Ltd., and Co., Ltd., with the aim of the organic growth of the entire Group. The major revenue pillars for the Group are the Urban Transportation Business and Real Estate Business, with both holding about 60% of revenues from operations and roughly 80% of operating income. Among these, the Urban Transportation Business’ railway business and the Real Estate Business’ leasing business account for more than half of Group profits, and generate a stable cash flow. A major characteristic of the Group is also that the Entertainment and Communications Business stably records about 10% of the Group’s total operating income. Forming a mega network in Expand businesses of high Offer high-quality global P.38 the Kansai area that provides P.48 brand value such as Hanshin P.54 logistics services mainly various urban transportation Tigers professional baseball through Hankyu Hanshin services linking Group rail- team, Hanshin Koshien Express ways, buses and taxis Stadium and Takarazuka Revenues from Operations Operating Income Revue

Approx.Approx. Approx.Approx. 60%60% 80%80%

¥67¥967.29.2 ¥91¥.891.8 billionbillion billionbillion

Urban Transportation 32.5% 40.3% Urban International Real Estate 28.9% 39.8% Real Estate Entertainment and Travel Hotels Transportation Communications Transportation Entertainment and Communications 15.3% 14.8% Travel 4.6% 1.3% Hankyu Corporation International Transportation 5.2% 2.1% Hankyu Travel Hankyu Hanshin Hankyu Hanshin Hotels 8.8% 0.8% International Express Hotels Other 4.8% 0.9% * Figures for % of revenues from operations are calculated based on the simple aggregate amount (including intersegment transactions) of each segment.

Operating Income by Core Business

(¥ billion) 100 4.1 4.8 80 11.2 14.2 4.2 11.1 10.1 60 3.0 10.0 37.3 38.0 30.9 29.1 40 24.0 Develop and manage Expanding sales, focusing on Operate ’s major hotel Urban Transportation high-quality housing, com- P.42 our mainstay Trapics brand P.51 groups under the Hankyu- P.57 20 Real Estate 37.2 38.5 mercial facilities and offices with its extensive travel Hanshin-Daiichi Hotel 31.0 29.4 32.3 in the areas served by our packages, through various Group, and manage The Entertainment and lines media including newspaper Ritz-Carlton, Communications 0 -1.0 advertising, member maga- 2010 2011 2012 2013 2014 (FY) zines, and the Web. Other Business Portfolio

Focusing on its Railway Business, the Group is working to enhance the value of the areas served by its stations by expanding Developing a Balanced Business Portfolio organic links primarily between the Real Estate Business and the Entertainment and Communications Business. In addition, we will realise a stable and balanced business portfolio by building on the unique strengths of each business. Looking ahead, the Capable of Sustainable Growth comprehensive strength of the entire Group will be redoubled in such areas as bolstering competitiveness in each core business, aiming to be a No.1 and only one company, and generating Groupwide synergies that transcend barriers between businesses.

Urban Transportation Travel Annual number of passengers carried (FY2014) Total length of lines operated Total travel billings: Overseas travel billings: Hankyu Railway Core Companies: Hankyu Corporation, Hanshin Electric Railway 143.6km Core Company: Hankyu Travel International No. 5 in the industry No. 3 in the industry

630 million Total travel billings* (FY2014) Total length of lines operated Hanshin Electric Railway 48.9km ¥408.7 billion 230 million * The total of both Hankyu Travel International and Hankyu Hanshin Business Travel

Real Estate International Transportation Leasable area (As of the end of March 2014) Of this total, Japan outbound export Japan inbound import approximately handling volume: handling volume: 800,000m2 are Core Companies: Hankyu Corporation, Hanshin Electric Railway Core Company: Hankyu Hanshin Express Approx. concentrated in No. 4 in the industry No. 4 in the industry the area

2 1.7 million m Sales* (FY2014) Number of condominiums sold for FY2014 ¥78.5 billion 1,356 * Includes the equivalent amount of initial export freight charges Entertainment and Hotels Total attendances (FY2014*) Communications Number of rooms* (Home games) * Total attendance at Hanshin Core Companies: Hankyu Corporation, Hanshin Electric Railway Tigers home games during Core Company: Hankyu Hanshin Hotels 10,326 the 2013 season

Approx. 2.77 million Group hotels* Takarazuka Revue (Including nationwide stage productions) 48 Approx. 2.50 million * As of 31st March 2014 Arashiyama

Kawara Hankyu Railway Network 143.6km Hanshin Electric Railway Network 48.9km Pref. machi

Our Railway Network Line 46.9km Hanshin Line 43.9km Katsura Kyoto (Kobe Line, Imazu Line, Itami Line, Koyo Line) (, Hanshin Line, Mukogawa Line) The Group’s railway network connects the Kansai economy’s main urban area, Takarazuka Line 28.5km Kobe Railway Line 5.0km Kobe and Kyoto, and neighbouring cities (Takarazuka Line, Mino-o Line) Our Strength with Umeda (Osaka) as a starting point. 65.4km From the Group’s initial start-up, we have (Kyoto Line, Senri Line, Arashiyama Line) contributed to the creation and develop- Kobe Rapid Transit Railway Line 2.8km ment of culture through our high-quality New station “Nishiyama-tennozan Station” homes, commercial facilities, and amuse- Myokenguchi The Potential ment facilities, as well as attracting univer- Nissei-chuo sities and so on, and we have developed Hankyu Kyoto Line together with the people of the region. of the Kansai Area Nosé Electric Railway Line Osaka Pref. Hyogo Pref. Hankyu Mino-o Line

Kita-Osaka Kyuko Line N Extension Project Population: Mino-o Kawanishi-noseguchi About 16% of Japan Kita-senri

Osaka Senri- Takarazuka International Ishibashi chuo Airport Kita-Osaka Kyuko Kyoto Railway Line Area: Kansai Tokyo Hyogo Kyoto City Shiga Itami Hankyu Koyo Hankyu Itami Line About 7% of Japan Kobe City Line Osaka City Tanigami Hankyu Takarazuka Line Koyoen Esaka Osaka Hokushin Kyuko Railway Line Nara Shukugawa Tsukaguchi Awaji Hankyu Kobe Line -kitaguchi Shin-Osaka Hankyu Building Kyoto Shin-Osaka Wakayama Imazu (Construction completed in July 2012) Nara Pref. Kansai Tokyo Hyogo Kyoto City Shiga Imazu Mukogawa Daimotsu Juso The Kansai area, the Group’s Kobe City Kobe Rapid Transit Railway Line Tenjimbashisuji- rokuchome Rebuilding of Umeda Hankyu Building business base, has a popu- Osaka City Shin-Kobe Umeda (Grand opening held in November 2012) Osaka lation of about 20 million, Mukogawadanchi-mae GRAND FRONT OSAKA (Opened in April 2013) Nara Kobe Hanshin Main Line Umeda 1-1 Project making it the second largest Subway Minatogawa populated area in Japan. The Wakayama Shinkaichi Motomachi Improvement works at economic scale of the Kansai Nishidai Hanshin Sannomiya Station (Completed in March 2013) area, on the basis of GDP, Osaka-Namba Kintetsu Nara Line is approximately $971.0 billion, boasting one of Asia’s largest To Kintetsu-Nara Top ranked area in survey of economies. preferred residential areas To Himeji

Strength 15,534 Sources: IMF/World Economic and Financial Surveys 2011 1 ($ billion) 15,000 Cabinet Office, Government of Japan, Survey of Preferred Residential Areas (Kansai Area) “Prefectural Accounts FY2011” Tenga chaya Rank Place Location 7,322 1 Nishinomiya Nishinomiya, Hyogo 11 Mikage Kobe, Hyogo (Higashi-nada-ku) 6,000 5,906 One of Asia’s Ability to create value in 2 Ashiya Ashiya, Hyogo 12 Namba Osaka (Chuo-ku) 3 Shukugawa Nishinomiya, Hyogo 13 Takarazuka Takarazuka, Hyogo 4,000 3,631 Largest Economies 2,785 areas served by our stations 4 Umeda Osaka (Kita-ku) 14 Tennoji Osaka (Tennoji-ku) 2,000 5 Kobe Kobe, Hyogo (Chuo-ku) 15 Toyonaka Toyonaka, Osaka 1,169 1,114 971 846 834 0 6 Okamoto Kobe, Hyogo (Higashi-nada-ku) 16 Downtown Kobe Kobe United States China Japan Germany France Mexico Korea Kansai Area Indonesia Netherlands As a result of valuing the relationships of trust with residents living 7 Kyoto Kyoto 17 Ibaraki Ibaraki, Osaka

(15th) (2nd) (3rd)

(5th) along the railway line, our long-term efforts to enhance the value of (14th) 8 Sannomiya Kobe, Hyogo (Chuo-ku) 18 Fukushima Osaka (Fukushima-ku)

(4th)

(16th) the areas served by our stations have been well received. At present,

(17th) 9 Senri-chuo Toyonaka, Osaka 19 Abeno Osaka (Abeno-ku) (1st ) the area along the Group’s rail lines has, on the whole, become highly 10 Takatsuki Takatsuki, Osaka 20 Motomachi Kobe, Hyogo (Chuo-ku) popular within the Kansai area. This creative ability for enhancing the Source: Survey by Sumitomo Realty & Development and six other major real estate firms (26th September 2013) area along our rail lines is one of the strengths of our Group. Strength 2 Strength 3

Leveraging our strong presence in Umeda, Ownership of content with strong brand value Kansai’s economic centre

The Umeda area of Osaka, the Group’s most important base, is one of the most famous shopping and entertainment districts of The Group delivers inspiration and dreams through the Hanshin Tigers professional baseball team/Hanshin Koshien Stadium and the Japan, served by the Umeda stations of the Hankyu and Hanshin lines and the Osaka Municipal Subway as well as JR Osaka Station. Takarazuka Revue, both of which are unique assets that are popular and enthusiastically supported not only in Kansai area but through- It is Kansai’s economic centre. In the Umeda area, the Group operates railway network terminuses serving both the Hankyu and out Japan. These two powerful attractions are assets that none of our rivals have. Hanshin networks, and also runs key commercial facility, office building, hotel, theatre and other businesses, demonstrating its They help increase passenger numbers in the areas served by our significant presence in the area. stations when there is a show or a game on. They also con- tribute greatly to increased brand recognition for the Group.

20 14

15

16 1 18 17 5 2 12 13 19 Hankyu Umeda Sta.

JR OSAKA Sta. 6 7

Hanshin Umeda Sta. 8 9 11 3 10 4

Umeda 1-1 Project ©Takarazuka Revue Company

■ Owned solely by the Group ■ Joint ownership ■ Owned by Hankyu REIT Inc.

1 HERBIS OSAKA 8 HEP NAVIO 15 Hankyu Corporation Head Office 2 HERBIS ENT 9 HEP FIVE 16 Kitano Hankyu Bldg. 3 Dai Hanshin Bldg./Hanshin Umeda Sta. 10 Higashi Hankyu Bldg. 17 Kita Hankyu Bldg. 4 Shin Hankyu Bldg. 11 Umeda Centre Bldg. 18 Nishi Hankyu Bldg. 5 Umeda Hankyu Bldg. 12 NU chayamachi 19 Hotel new Hankyu Osaka 6 Hankyu Grand Bldg. 13 NU chayamachi Plus 20 GRAND FRONT OSAKA

7 Hankyu Umeda Sta./Hankyu Sanban Gai Shopping Centre/Hankyu Terminal Bldg. 14 Applause Tower * HEP FIVE is jointly owned with Hankyu REIT Inc. ©Hanshin Tigers Core Business Highlights

Revenues from Operations (¥ billion) Operating Income (¥ billion) Nature of Business

Urban Transportation P.38 % of Revenues from Operations Revenues from 249.3 234.6 37.2 38.5 This segment comprises railway operations (with Hankyu Corporation operating the Kobe, Takarazuka Operations ¥ billion 230.2 36.5 234.6 and Kyoto lines out of Umeda (Osaka) and Hanshin Electric Railway lines directly linking Kobe with (YoY −5.9%) Osaka’s major northern and southern terminals, Umeda and Namba). Together, the Hankyu and Operating Hanshin network, combined with other lines, and bus, taxi and other urban transportation services, Income Margin 16.4% form a single large-scale network in the Kansai area, centred on the cities of Kyoto, Osaka and Kobe. Segment Assets ¥764.1 billion Total length of lines operated: 32.5% (YoY +0.5%) 2013 2014 2015 (FY) 2013 2014 2015 (FY) Hankyu Corporation: 143.6km Hanshin Electric Railway: 48.9km (Est.) (Est.) (Including tier 2 railway operator)

Real Estate P.42 % of Revenues from Operations Revenues from 37.3 38.0 The Real Estate segment derives its core revenue from leasing and management of commercial facili- Operations ¥ billion 208.6 206.3 35.8 208.6 198.3 ties and office buildings and its condominium business. Its attractive business portfolio includes rental (YoY +5.2%) properties located mainly in the Umeda area and along the Group’s rail lines, such as Umeda Hankyu Operating Building, Hankyu Sanban Gai Shopping Centre, HERBIS OSAKA, HERBIS ENT, GRAND FRONT OSAKA, Income Margin 18.2% Hankyu Nishinomiya Gardens and the highly regarded Geo condominium brand in the Kansai area and Segment Tokyo metropolitan area. Assets ¥1,009.4 billion % 2013 2014 2015 (FY) 2013 2014 2015 (FY) 28.9 (YoY −0.7%) (Est.) (Est.)

Entertainment and Communications P.48 % of Revenues from Operations Revenues from 110.4 14.2 This segment offers a wide variety of live entertainment, centred on the sports business — the Operations ¥ billion 102.7 109.7 110.4 nationally popular and famous Hanshin Tigers professional baseball team and their home ground (YoY +7.5%) 11.2 11.4 and high-school baseball mecca, Hanshin Koshien Stadium — and the stage revue business, based Operating on the hugely popular Takarazuka Revue, which celebrated its 100th anniversary in 2014. In addition, Income Margin 12.8% this segment runs wide range of businesses such as broadcast and communications business and the Segment information services business. Assets ¥142.8 billion % (YoY +0.9%) 2013 2014 2015 (FY) 2013 2014 2015 (FY) ©Hanshin Tigers 15.3 (Est.) (Est.)

Travel P.51 % of Revenues from Operations Revenues from 34.1 33.0 33.3 2.5 Since its establishment in 1948, while meeting the diversified needs of customers through always Operations ¥ billion 33.0 taking their perspective, Hankyu Travel International has sold its products via various media through (YoY −3.2%) 1.8 its five brands. They are the Trapics brand that provide enhanced content at a reasonable price, the Operating 1.2 “Crystal Heart” brand, the “Hanshin Aviation Friends’ Tour” brand for relaxed travel, the “e-very” brand Income Margin 3.7% for self-planning travel, and the “Royal Collection” brand for luxurious travel. It provides safe, comforta- Segment ble travel for customers’ inspiration and dreams, ranging from package tours through to original plans Assets ¥74.5 billion % (YoY +3.7%) 2013 2014 2015 (FY) 2013 2014 2015 (FY) for individual customers, travel to Japan, and business travel services. 4.6 (Est.) (Est.)

International Transportation P.54 % of Revenues from Operations Revenues from 37.7 38.6 In 1948, as Japan’s first International Air Transport Association (IATA) certified freight agency, Hankyu Operations ¥ billion 36.7 2.3 37.7 2.1 Hanshin Express (Hankyu Corporation at that time) began international airline freight transportation (YoY +2.6%) 1.8 operations. Since then, regardless of whether for imports or exports, it has been providing fast and safe Operating door-to-door international transportation services. As a pioneer in international logistics, it utilises the Income Margin 5.4% track record and experience it has cultivated in developing its overseas business over many years and Segment provides high-quality customised logistic services and support for its customers with optimised supply Assets ¥39.8 billion % (YoY +21.8%) 2013 2014 2015 (FY) 2013 2014 2015 (FY) chain management. 5.2 (Est.) (Est.)

Hotels P.57 % of Revenues from Operations Revenues from 1.0 The Hankyu-Hanshin-Daiichi Hotel Group operates 48 hotels, consisting of 17 that are directly man- Operations ¥ billion 63.7 64.7 63.7 64.3 0.8 aged and 31 belonging to chains operated by franchises. It is one of Japan’s leading hotel chains with (YoY −1.5%) 10,326 guest rooms (as of 31st March 2014). As a hotel operator with many directly managed hotels in 0.5 Operating the Tokyo and Kansai areas, Japan’s two largest markets, it offers a wide range of hotel formats, from Income Margin 1.3% general-purpose “city hotels” to new style hotels (with very limited function facilities). In addition to Segment chain operations, it also manages The Ritz-Carlton, Osaka, a venerable international luxury brand with Assets ¥85.7 billion % (YoY −1.7%) 2013 2014 2015 (FY) 2013 2014 2015 (FY) which it has formed an alliance. 8.8 (Est.) (Est.) Notes: 1. Figures for % of revenues from operations are calculated based on the simple aggregate amount (including intersegment transactions) of each segment (fiscal 2014 results). 2. Revenues from operations in other businesses accounted for 4.8%. Major Group Companies (As of 31st March 2014) Investor Information (As of 31st March 2014)

Consolidated Subsidiaries , Inc.

■ Urban Transportation ■ Entertainment and Communications Head Office: Paid-in Capital: ¥99,474 million Name of Company Name of Company 1-16-1, Shibata, Kita-ku, Osaka 530-0012, Japan Fiscal Year-End: 31st March Hankyu Corporation Hanshin Electric Railway Co., Ltd. Phone: +81-6-6373-5001 Hanshin Electric Railway Co., Ltd. Hanshin Tigers Baseball Club, Ltd. Number of Employees: 20,913 (consolidated basis) Sports (Group Planning Div., IR Office) Nosé Electric Railway Co., Ltd. Hanshin Contents Link Corporation Fax: +81-6-6373-5042 Authorised Shares: 3,200,000,000 Kita-Osaka Kyuko Railway Co., Ltd. Wellness Hanshin Inc. Railway Operations Issued Shares: 1,271,406,928 Hankyu Corporation Tokyo Office (Personnel and General Affairs Div.): Hokushin Kyuko Railway Co., Ltd. Number of Shareholders: 87,811 Kobe Rapid Transit Railway Co., Ltd. Takarazuka Creative Arts Co., Ltd. Twin Tower Bldg., Hankyu Hanshin Railway Technology Co., Ltd. Stage Takarazuka Stage Co., Ltd. 1-5-2, Yurakucho, Chiyoda-ku, Tokyo 100-0006, Japan Unit of Trading: 1,000 shares Hankyu Hanshin Electric System Umeda Arts Theater Co., Ltd. Phone: +81-3-3503-1568 Stock Exchange Listing: Tokyo Hankyu Bus Co., Ltd. Hankyu Communications Co., Ltd. Fax: +81-3-3508-0249 Transfer Agent: Mitsubishi UFJ Trust and Banking Hanshin Bus Co., Ltd. Itec Hankyu Hanshin Co., Ltd. Communication and Corporation Hankyu Kanko Bus Co., Ltd. Bay Communications Inc. Media Osaka Airport Transport Co., Ltd. Himeji Cable Television Co., Ltd. Mt. Rokko Cable Car & Tourism Company Automobile Hankyu Denen Bus Co., Ltd. Leisure, etc. Principal Shareholders: Ownership Breakdown: Hankyu Taxi Inc. Number of shares Percentage National government and Hanshin Taxi Co., Ltd. Individuals ■ Travel Name (thousands) (%) local public organisations Hankyu Hanshin Motor Technology Co., Ltd. and others Name of Company 0.00% Japan Trustee Services Bank, Ltd. (Trust account) 52,780 4.15 47.55% Financial Nippon Rent-A-Car Hankyu Inc. Hankyu Travel International Co., Ltd. institutions The Master Trust Bank of Japan, Ltd. (Trust account) 35,853 2.82 Hankyu Corporation Travel Agency Hankyu Hanshin Business Travel Co., Ltd. 25.16% Nippon Life Insurance Company 31,583 2.48 Retailing Hankyu Retails Corporation Hankyu Travel Support Co., Ltd. Sumitomo Mitsui Banking Corporation 21,909 1.72 Securities Iina Dining Co., Ltd. companies Hankyu Corporation H2O Retailing Corporation 21,037 1.65 0.71% Advertising ■ Hankyu Advertising Agency Inc. International Transportation Japan Trustee Services Bank, Ltd. Name of Company (The Sumitomo Mitsui Trust & Banking Co., Ltd. Retirement Benefit Trust Account) 13,665 1.07 Other Other Alna Sharyo Co., Ltd. Hankyu Hanshin Express Co., Ltd. corporations State Street Bank West Client Treaty 9.39% Hankyu Hanshin Logipartners Co., Ltd. (Standing Proxy: Mizuho Bank, Ltd. Settlement & Clearing Services Division) 13,578 1.07 ■ Real Estate International HHE (USA) INC. Japan Trustee Services Bank, Ltd. (Trust account 2) 13,244 1.04 Foreign corporations Name of Company Transportation HHE (DEUTSCHLAND) GMBH Japan Trustee Services Bank, Ltd. (Trust account 3) 13,217 1.04 and individuals Hankyu Corporation HHE (HK) LTD. Japan Trustee Services Bank, Ltd. (Trust account 5) 12,925 1.02 17.20% Hanshin Electric Railway Co., Ltd. HHE (SINGAPORE) PTE. LTD. Real estate leasing Hankyu Realty Co., Ltd. HHE: HANKYU HANSHIN EXPRESS Osaka Diamond Chikagai Co., Ltd. Hanshin Real Estate Co., Ltd. ■ Hotels Hankyu Corporation Name of Company Stock Price Range and Trading Volume (Tokyo Stock Exchange): Hanshin Electric Railway Co., Ltd. Hankyu Hanshin Hotels Co., Ltd. Hankyu Realty Co., Ltd. Hanshin Hotel Systems Co., Ltd. Stock Price (¥) Nikkei Average (¥) Real estate sales and Hankyu Hanshin Building Management Co., Ltd. other business Hotel Management Amanohashidate Hotel Co., Ltd. 650 18,000 Hankyu Hanshin High Security Service Co., Ltd. Arima View Hotel Co., Ltd. Hankyu Hanshin Clean Service Co., Ltd. Hankyu Hanshin Restaurants Co., Ltd. Hankyu REIT Asset Management, Inc. 500 12,000 ■ Other Nikkei Average (right scale) Name of Company Hanshin Construction Co., Ltd. 350 6,000 Construction Chuo-Densetsu Co., Ltd. Group Finance Hankyu Hanshin Financial Support Co., Ltd. Stock Price (left scale) 200 Outsourcing Services 0 for Personnel and Hankyu Hanshin Business Associate Co., Ltd. 200,000 Accounting Services

100,000

Equity-method Affiliates Trading Volume 0 (thousand shares) 4 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 2 3 Main Business Name of Company

H2O Retailing Corporation FY2012 FY2013 FY2014 Department Store [Securities code: 8242] High 385 588 648 Nishi-Osaka Railway Co., Ltd. Low Railway Operations Kobe Electric Railway Co., Ltd. 290 349 492 [Securities code: 9046] At year-end 361 569 562 Real Estate Leasing Tokyo Rakutenchi Co., Ltd. [Securities code: 8842] Motion Picture Business Toho Co., Ltd. [Securities code: 9602] Commercial Broadcasting Kansai Telecasting Corporation