To Be the World's Premier Logistics Provider

t 2012 Year ended March 31, 2012 ended March Year

Annual Repor To be the world’sTo premier logistics provider

Nippon Express Co., Ltd. Annual Report 2012 Creating an integrated global business model to serve Japan and the world

Contents

2 The Nippon Express Group— At a Glance 4 An Interview with the President 10 Corporate Governance 12 Directors, Officers & Corporate Auditors 13 Corporate Social Responsibility 14 Special Feature 16 Topics 18 Financial Section 65 Global Network 68 Company Information 69 Share Information

In this fiscal report, fiscal years are indicated according to the date of their commencement. Thus, fiscal 2011 is the year ended March 31, 2012. Creating an integrated global business model to serve Japan and the world

In fiscal 2010, the Nippon Express Group launched the “Nippon Express Group Corporate Strategy 2012 – Towards New Growth,” a three-year medium-term management plan underpinned by the basic strategy, “Growth as a Global Logistics Company.” Unfortunately, we were impacted by numerous external factors in fiscal 2011, including the Great East Japan Earthquake, flooding in Thailand and the European debt crisis. Nevertheless, Nippon Express was able to aggressively penetrate key regions while strengthening sales systems able to provide comprehensive logistics proposals and one-stop services. Moreover, thanks to our steady market development efforts, we were able to gain a foothold in new business fields and reached the next growth stage. In fiscal 2012, the final year of the current medium-term management plan, we will shift Nippon Express towards a truly global business model that eliminates all barriers between our domestic and overseas business bases, sales systems, products and services.

Caution Regarding Forward-Looking Statements This annual report contains information about forward-looking statements related to such matters as the Company’s plans, strategies and business results. These forward-looking statements represent judgements made by the Company based on information available at present and are inherently subject to a variety of risks and uncertainties. The Company’s actual activities and business results could differ significantly due to changes, including changes in the economic environment, business environment, demand and exchange rates. NIPPON EXPRESS Annual Report 2012 1 The Nippon Express Group—At a Glance

Business Overview Strengths and Characteristics Revenues by reportable segment

• One-stop comprehensive (Millions of yen)

logistics company 1,800,000 Distribution & Transportation 1,617,185 1,628,027 1,569,633 Domestic Companies 1,600,000 • International network Combined Business • Establishment of an 1,400,000 Security Transportation Heavy Haulage & Construction operating foundation 1,200,000 Air Freight Forwarding & Travel Marine & Harbor Transportation throughout Asia 1,000,000 Overseas Companies The Americas • Leader in the Japanese 800,000 logistics industry Europe 600,000 Asia & Oceania* East Asia • Expansion of value- 400,000 South Asia & Oceania added businesses 200,000 Goods Sales Other 0 10/3 11/3 12/3

* Nippon Express underwent an organizational change in fiscal 2010. Consequently, for overseas companies, Asia & Oceania has been divided into East Asia and South Asia & Oceania. As it is not possible to restate the fiscal 2009 results under the new reportable segments, such results are presented here in accordance with the previous segment designations.

Fiscal 2011 overview by segment

Distribution and Revenues Main products and services Transportation (Millions of yen) Domestic companies Railway utilization transportation, chartered truck services, combined delivery services, moving & relocation, warehousing & distribution processing, Combined Business 704,717 in-factory work, real estate rental, marine & harbor transportation, fine arts transportation, security transportation and heavy haulage & construction Security Transportation 58,764 Security transportation Heavy Haulage & Construction 40,048 Heavy haulage & construction Air Freight Forwarding & 205,407 Air freight forwarding and travel Travel Marine & harbor transportation, warehousing & Marine & Harbor Transportation 125,654 distribution processing and moving & relocation Overseas companies Air freight forwarding, ocean freight forwarding, The Americas 42,963 warehousing & distribution processing, moving & relocation, motor transportation and travel Air freight forwarding, ocean freight forwarding, Europe 46,453 warehousing & distribution processing, moving & relocation, motor transportation and travel Air freight forwarding, ocean freight forwarding, East Asia 72,967 warehousing & distribution processing, moving & relocation, motor transportation and travel Air freight forwarding, ocean freight forwarding, South Asia & Oceania 44,811 warehousing & distribution processing, moving & relocation, heavy haulage & construction and travel Goods Sales 374,076 Lease, sale of petroleum and others Other 40,368 Other Adjustment (128,206) Total 1,628,027

2 NIPPON EXPRESS Annual Report 2012 Overview by Region

Composition ratio by region comprising Distribution & Transportation, overseas companies

South Asia & 22% The Americas 21% Oceania

Fiscal 2011

East Asia 35% Europe 22%

(as of March 31, 2012) Business Bases Excluding Japan

East Asia Europe 23 companies, 106 business bases and 5,384 employees 16 companies, 68 business bases and China The Americas 2,278 employees 20 companies, 14 companies, 79 business bases and 118 business bases and 4,981 employees 2,362 employees

South Asia & Oceania Overseas network 20 companies, 38 countries 110 business bases and 214 cities 6,431 employees 402 business bases 16,455 overseas employees

Warehousing Scale

East Asia 513,759m2 Europe The Americas 2 345,944m 424,294m2

South Asia & Oceania 520,059m2 Worldwide total 1,804,056m2

NIPPON EXPRESS Annual Report 2012 3 An Interview with the President

4 NIPPON EXPRESS Annual Report 2012 Meeting stakeholder expectations as we leap forward into the next growth phase

We will accelerate the pace of global business expansion and implement our medium-term management plan while steadily engaging in business activities that will realize our long-term vision.

Q1 10 domestic regions and the four overseas regions. June 2012 marked your first anniversary as By taking the time to meet numerous stakeholders president of Nippon Express Co., Ltd. What face to face, I have gained a greater understanding of are your impressions of the past year? the high expectations they have of the Group as it works to achieve global growth. Meeting stakeholders Fiscal 2011 was characterized by major changes in has also given me a renewed awareness of my the external environment. These included severed mission to help grow the Nippon Express Group into supply chains in the aftermath of the Great East Japan an even stronger business. Earthquake (which struck in March 2011) and massive flooding in Thailand as well as the European debt crisis and other factors that negatively impacted the global economy. Under these circumstances, the Nippon Express Group steadily worked to make the Q2 Please tell us more about your assessment of leap forward toward becoming a truly global logistics the external factors impacting Nippon company. To this end, we continued to pursue new Express during fiscal 2011. growth under our “Nippon Express Group Corporate Strategy 2012 – Towards New Growth” medium-term management plan. Given the pressing need for quick Domestic markets gradually picked up in line with decision making amid a rapidly changing operating post-disaster recovery efforts. However, overall environment, fiscal 2011 went by very fast. economic conditions in Japan were unstable with the My first year as president began with visiting prospect of full recovery remaining elusive. This was numerous business bases located in Nippon Express’s due to major fluctuations in currency exchange rates

NIPPON EXPRESS Annual Report 2012 5 An Interview with the President

and a global fiscal slowdown caused by the European retirement obligations; and loss on disaster due to debt crisis. Domestic freight handling volume in fiscal damage caused by the Great East Japan Earthquake. All 2011 fell for the 12th consecutive year* mainly of these losses were recorded under extraordinary loss in because of the Great East Japan Earthquake and the previous fiscal year. stagnant consumer spending. Overseas, although transport-related demand in China and imports/ exports in the Americas and Europe have been steady, unfavorable currency exchange rates have cramped net sales figures. Q4 *Source: Nittsu Research Institute and Consulting, Inc., 2012 Fiscal Year Please describe Nippon Express’ efforts in Economic and Freight Transport Outlook (June 2012) fiscal 2011 to realize “Growth as a Global Logistics Company,” the first basic strategy of the Nippon Express Group Corporate Q3 Strategy 2012. What is your assessment of Nippon Express’s We are aiming to grow the proportion of sales from performance in fiscal 2011? overseas-related businesses to 33% in fiscal 2012. In fiscal 2011, the proportion of sales from overseas- Consolidated revenues in fiscal 2011 rose only slightly to related businesses dipped 0.1 of a percentage point ¥1,628.0 billion, up 0.7% compared with the previous compared with the previous fiscal year to 30.8%. This fiscal year. This lackluster result was attributable to decrease was primarily caused by sluggishness in air stagnation in domestic corporate logistics overall and freight forwarding as well as in marine and harbor the lesser impact of increases in real overseas net transportation originating from Japan over the course sales due to effect of unfavorable exchange rates on of the year, reflecting weak domestic economic amounts reported in local currencies. The impact of conditions. Along with this, overseas net sales showed currency exchange rates on net sales totaled a decline due to unfavorable exchange rates. In real approximately ¥12.9 billion. terms, the proportion of sales from overseas-related Turning to earnings, operating income increased businesses was 31.3% based on calculations that 18.6% year on year to ¥37.4 billion, reflecting higher eliminate the negative effect of exchange rates. earnings driven by strong performances in the Marine & To enhance overseas-related businesses, the Harbor Transportation segment in the first half of fiscal Group is improving multi-functional logistical 2011, Air Freight Forwarding & Travel segment in the complexes at its business bases located outside of second half and Heavy Haulage & Construction segment Japan while constructing a new distribution and during the entire fiscal year. Net income surged 215.5% transportation network. In addition, we are invigorating to ¥26.9 billion. This result reflected a gain on sales of our business and capital partnerships with local noncurrent assets in fiscal 2011 as well as decreases in companies. In fiscal 2011, we continued to strengthen loss on valuation of investment securities; loss on our business foundations in Asia through such actions adjustment for changes of accounting standard for asset as opening multifunctional warehouses and

6 NIPPON EXPRESS Annual Report 2012 representative offices as well as establishing local subsidiaries featuring various specialized functions. Moreover, we are aggressively undertaking M&A to accelerate our global business expansion. In fiscal 2011, Associated Global Systems, Inc. (AGS) became a wholly owned subsidiary of Nippon Express U.S.A., Inc. AGS, a mid-sized logistics company based in the United States, is engaged in domestic transport and boasts a solid reputation for the specialized transport of precision instruments and oversized cargo. These capabilities have allowed AGS to build a large customer base in the United States. Combining the strengths of Nippon Express in international transport with the solid logistics operations of AGS in the United vehicles as of March 31, 2012, exceeding Groupwide States has enabled the Group to expand in a single projections. Moreover, the Nippon Express Group has stroke the scope of the services it provides to significantly reduced power use in Japan thanks to its customers of both companies. energy conservation measures. Q5 Q6 Please tell us more about the medium-term Moving forward, please describe Nippon management plan’s second basic strategy: Express’ initiatives regarding the medium- Promotion of Strategic Environmental term management plan’s third basic strategy: Management Enhancement of Management Infrastructure

The Nippon Express Group is steadily promoting The Group’s very first overseas subsidiary was initiatives to reduce environmental impact by established in the United States 50 years ago. Since emphasizing the development and provision of then, we have established locally based subsidiaries in environmentally friendly logistics products and services various regions worldwide. As part of efforts to that utilize low-environmental load rail and ship integrate management operations while ensuring its transport. In addition, the Group conducts green ability to accurately respond to economic conditions, initiatives aimed at achieving a recycling society, legal systems and needs that differ from region to including the promotion of ecodriving; saving energy region, the Group appoints officers as regional general

at business bases, and conducting CO2 reduction managers to oversee operations in the Americas, projects through its overseas network. Owing to our Europe, East Asia, and South Asia & Oceania. The proactive efforts, we owned 5,638 eco-friendly appointment of these regional general managers has

NIPPON EXPRESS Annual Report 2012 7 An Interview with the President

operating in China. Owing to these functions, NE China will play a central role in assisting the Group’s various initiatives in that country. Q7 What are your performance forecasts for fiscal 2012?

Despite expectations of a recovery in domestic freight transportation in the first half of fiscal 2012 (demand for which had been sluggish following the previous also improved the speed of management decisions. year’s disaster), performance is now forecast to remain In September 2011, we established a Germany- weak. Consequently, we are working to boost based regional headquarters company to oversee productivity while decreasing costs, as a major operations in Europe. We also set up a regional increase in net sales is not expected in fiscal 2012. headquarters company in Singapore in April 2012 to Regarding international freight transportation, we handle businesses in South Asia & Oceania. Placing forecast higher demand for equipment transportation, local subsidiaries in Europe and South Asia & Oceania particularly marine and harbor transportation, due to under the control of these respective regional accelerating overseas expansion and the transfer of headquarters companies enables the Group to production abroad by Japanese companies, which are execute regional growth strategies that are optimal for plagued by energy- and currency exchange-related an entire area rather than being suited only to problems. In air freight forwarding, although the export individual subsidiaries. volume is expected to decline, we are working to Nippon Express relocated the regional general secure earnings by improving the efficiency of office for East Asia from Hong Kong to Shanghai in May operational management and controlling forwarding- 2011, reflecting Shanghai’s emergence as the region’s related costs. economic focal point. In addition, Nippon Express Overseas, there are indications that freight (China) Co., Ltd. (NE China) was recently certified by forwarding and domestic logistics operations in the the Beijing Municipal Commission of Commerce as a Americas and South Asia will remain strong. In “regional headquarters company” for a multinational contrast, amid signs that the European economy will corporation doing business in China’s highly regulated slow even further, economic conditions are expected market. Operating NE China as a regional to weaken in East Asia, particularly China, which headquarters company enables us to legally provide exports goods to Europe. Keeping a close eye on business and fund management, financial control and these trends, we will implement effective measures as other related services for local Group subsidiaries needed in Europe and East Asia.

8 NIPPON EXPRESS Annual Report 2012 Based on the aforementioned factors, on May 8, that encompasses such countries as India, 2012, Nippon Express announced the following Bangladesh and Myanmar. forecasts for fiscal 2012: consolidated revenues of ¥1,650.0 billion, up 1.3% year on year; operating income of ¥42.0 billion, up 12.0%; and net income of ¥30.0 billion, up 11.3%. Q9 In closing, do you have any messages you would like to convey to shareholders and Q8 investors? Please describe Nippon Express’s long-term I was particularly struck by how well employees vision in terms of “Growth as a Global carried out their duties during our efforts to assist in Logistics Company.” the reconstruction of areas damaged by the Great East Japan Earthquake. The superior quality of Nippon If we did not have a long-term vision, we would be Express’ personnel is the underlying strength of the unable to achieve “Growth as a Global Logistics Group. With this in mind, we will meet the high Company,” one of the basic strategies of the current expectations of our stakeholders by working together medium-term management plan. Setting the to further enhance corporate value. long-term target of increasing the proportion of sales We gratefully look forward to the continuing from overseas-related businesses to 50%, we will support of our shareholders and investors. continue to expand strategic businesses to reach this major goal. Currently, international freight transportation is not Interview June 2012 the only business area in which customers worldwide expect the Group to expand. We are also expanding into business fields involving logistics operations that play a role in maintaining supply chains connecting local production areas; high-value-added warehouse functions that oversee the transport of goods to various markets; and logistics in local regions and third Kenji Watanabe countries. The Group will also aggressively engage in President, Chief Executive Officer capital alliances with leading companies and M&A, which are indispensable to the rapid upgrading of systems to meet demand for services in terms of quality, price and speed. In addition to China and the rest of East Asia, we continue to rapidly build a business foundation focusing on South Asia, a region

NIPPON EXPRESS Annual Report 2012 9 Corporate Governance

n Our Thought on Corporate Governance Express has created effective control systems, including a compliance system, a risk management system, an internal Nippon Express’ fundamental thinking related with corporate audit system and a system to assure fair business operations governance is “the realization of speedy management through in all Group companies. In addition, with the enactment of the quick decision making” and “the establishment of a clear Corporate Law in May 2006, Nippon Express adopted and division of responsibility.” Specifically, since June 2001 the instituted the Basic Policy Relating to the Establishment of an number of the board members was reduced from 25 Internal Control System at a board of directors meeting. members or less to 15 members or less. Furthermore, the In accordance with a partial revision of the Securities term was shortened from two years to one year. All this Listing Regulations at the Tokyo Stock Exchange, the Basic resulted in revitalizing the board and speeded up decision Policy for the Exclusion of Antisocial Forces was adopted and making. Attempts were made to clarify each directors’ instituted at the Board of Directors meeting in April 2008, management responsibilities for each business year. providing a response to the need for a regulation to prevent At the same time, the Company has introduced a board the intervention of antisocial forces in our corporate activities. of executive officers with the goal of ensuring rapid execution of business operations. As of June 28, 2012, we have 14 n Creating a Crisis Management System directors and 28 executive officers (13 of those concurrently serve as directors). In addition, our auditors attend board Nipon Express has constructed our crisis management system meetings and other important conferences, review key under “the Crisis Management Codes” consisting of 4 codes; documents, visit our main facilities for audits, perform reviews “the Disaster Management Code”, “the Overseas Crisis at subsidiaries, and report all results at meetings of the board Management Code”, “the System Risk management Code” and of auditors and the board of directors. The board of auditors “the New Influenza Management Code.” We set the steps to be functions as a supervisory institution that operates from an taken against widespread disasters, new types of influenza, objective point of view. As of June 28, 2012, we have four information system risks, and terrorism-related risks. auditors (three of those are outside auditors). As a designated public institution under the Disaster Measures Basic Law and the Civil Protection Act (the Act n Creating a Internal Control System concerning the Measures for Protection of the People in Armed Attack Situations), Nippon Express transported emergency In order to conduct business fairly and efficiently, it is materials upon requests of the national and prefectural important to implement firm internal control systems. Nippon governments in large-scale disasters such as the Hanshin-Awaji

Corporate Governance Organization Chart

General Shareholders’ Meeting

Appointment and Removal Appointment and Removal Appointment and Removal

Findings Audit Accounting Auditor Board of Auditors Board of Directors Report

President Report Audit of Accounts Report Appointment Supervision Corporate Attorney Compliance Committee Board of Executive Officers

Crisis Management Committee Audit Perform Operations Audit Division

Audit Enforcement Division (Headquarters divisions, Headquarters departments, regional administration (domestic/overseas), each business division, each branch office, each group company)

10 NIPPON EXPRESS Annual Report 2012 Earthquake and the Niigata Prefecture Chuetsu-oki Earthquake. operations not only in times of emergency but also in other Also at the Great East Japan Earthquake which caused the challenging situations. In response, we developed BCM unprecedented damage to the country, we fulfilled a role as a (Business Continuity Management) as well as a BCP (Business designated public institution by working on to assist the affected Continuity Plan) specifically for Nippon Express in 2009. areas for rehabilitation and reconstruction. For instance, we As well as each company of the Nippon Express Group transported various emergency materials from day one when the places the health and lives of employees and their families first earthquake struck. when responding to states of emergencies caused by natural Concerning natural disasters, the Nippon Express Group disasters, industrial disasters and man-made disasters, we also Disaster Measures Regulations were adopted in October 2001, try to continue our business operations as much as possible in through which we are strengthening our cooperative effort within order for us to be able to fulfil our social responsibility sought as the Group. Our Reporting Procedures for Disasters establishes a designated public institution and a maintainer of social criteria for determining whether a report is required when a functions under the Disaster Measures Basic Law and the Civil disaster occurs (for example, in the case of an earthquake Protection Act. At the Great East Japan Earthquake, we tried to registering four or above on the Japanese seismic scale). Utilizing continue our business operations, starting with the transport of the Disaster Management System established on our intranet, emergency relief materials, by invoking a BCP (Business these reporting procedures provide an early-warning reporting Continuity Plan) swiftly. system between all branches and headquarters regarding the state of disasters, as well as a system for sharing information n Compliance Management Promotion System between branches. Furthermore, as well as we have prepared stockpiles for Stressing the importance of compliance management, emergencies including food and drinking water, we have Nippon Express established the Compliance Division in June brought in satellite phones and mobile phones with priority 2003. Also, in October of the same year, Compliance access in a time of disaster to enable us to respond to power Regulations were created, and, along with the establishment failures or disruptions in mobile phones or other telephone of a Compliance Committee chaired by the company networks. We installed them in related divisions at the head president and an internal whistle-blower system (Nittsu office and major branches across the country. Speak-up), several measures were undertaken to encourage Finally, as a counter-measure against influenza, we have honest and fair company activities. stocked hygienic items, such as masks, gloves and goggles. From 2010, we set every November as a “Compliance In response to the new strain of influenza that emerged in Month” and undertake a comprehensive review of legal April 2009, we provided staff with masks and took measures compliance and employee education across the country. to force infected staff or staff whose family had been infected Also we tried to enhance the awareness on compliance to stay home from work. by lending DVD or distributing leaflets for education to prevent power harassment to group companies in Japan and n Business Continuity (BCP) overseas. Furthermore, we distributed a “compliance card” to all employees and encourage them to conduct “self-checking In addition to the risk posed by the occurrence of natural on compliance” on a daily basis. disasters such as large earthquakes and typhoons, we are also now facing a threat like the spread of new influenza. n Personal Data Protection and Management System Even under emergency situations, it is now a company’s responsibility to take necessary measures and make plans for Along with the establishment of the Personal Data Protection both preparation and action in advance so that we are able to Division in February 2005, Nippon Express also established continue or recover quickly to fulfil our primary obligations as the Personal Data Protection Policy and Personal Data a transportation company. Nippon Express is appointed as a Protection Code—exemplifying Nippon Express’s designated public institution under the Disaster Measures commitment to personal data protection management. Basic Law and the Civil Protection Act, and in order for us to Ongoing education utilizing DVDs and e-learning is offered to fulfil its responsibility; we are required to continue our all employees in an attempt to make information about operations by society. personal data protection better known within the company. Under these circumstances, the request asking us to work The Nippon Express Group has also received various on “the comprehensive and systematic initiatives” as a company certifications related to the protection of personal data. is increasing which enable us to continue our business

NIPPON EXPRESS Annual Report 2012 11 Directors, Officers & Corporate Auditors (As of June 28, 2012)

President, Executive Vice Presidents, Chairman Chief Executive Officer Executive Officers

Jiro Nakamura Keiji Hagio

Masanori Kawai Kenji Watanabe

Directors, Managing Officers

Masao Hosokoshi Akira Ohinata Noboru Shibusawa Kiyofumi Miyachika Takahiro Ideno

Directors, Directors, Officers Managing Officers

Mitsuru Saito Hideo Hanaoka Yasuaki Nii Yutaka Ito Masahiko Hata

Managing Officers Officers Corporate Auditors (Full-Time) Corporate Auditor

Yoshiaki Ishii Nobuki Ando Kenji Fujii Shinichi Miyazaki Yuzuru Fujita*

Shuji Kojima Takaaki Ishii Yasuhiro Goto Zenjiro Watanabe*

Masahito Watanabe Hideaki Tabuchi Hiroyuki Murakami Masami Yamashita*

Takumi Shimauchi Yukinori Tsuji Katsuhiro Terai *Outside auditor

Takashi Wada Hisao Taketsu Yukio Yokoo

12 NIPPON EXPRESS Annual Report 2012 Corporate Social Responsibility

n Fundamental CSR Philosophy In April 2012, the Nippon Express Environmental Charter was revised to the Nippon Express Group Environmental Charter, Since the establishment of the Nippon Express Group, we have positioning it as a expanded our business both in Japan and overseas, set of policies that contributing to the development of industries and improvement all group companies in quality of life by delivering goods all over the world. should comply with. As a company that uses public infrastructure such as Nippon Express roads, rails, and seaports for its business, we are aware of our Group as a whole responsibility towards society at both the local and global levels. fulfils its It is very important for us to have high ethical standards beyond responsibility for the compliance with the law, and to act in a socially responsible way. global environment. Thus, recognizing our social responsibility, we have set the key strategies in the Nippon Express Group Corporate Strategy 2012 as “Growth as a Global Logistics Company,” “Promotion of Strategic Environmental Management,” “Enhancement of Management Infrastructure,” and “Promotion of Corporate Social Responsibility (CSR) Management,” and we will strive to implement them. The Nippon Express Group will continuously contribute to society through logistics and do Nippon Express Group Environmental Charter our utmost to live up to its trust. n Revisions to the Nippon Express Group Charter of Conduct Continuous assistance for rehabilitation Following the publication of ISO26000 (international standards and reconstruction regarding social responsibility) in November 2010, the Nippon As progress was made in rehabilitation and reconstruction Express Group revised the Nippon Express Charter of in the aftermath of the Great East Japan Earthquake, the Conduct (April 2011) based on recent changes related to nature of activities offered by our company also changed corporate social responsibility (CSR). The original Nippon from emergency evacuation assistance to continuous life Express Charter of Conduct, applicable only to Nippon support assistance. Express Co., was revised as the Nippon Express Group In March 2011, we provided transportation for the Charter of Conduct, and now embraces all Group affiliates in collective relocation of residents from Futabamachi, Japan and overseas. Fukushima Prefecture who had taken refuge at the While clearly stipulating respect for human rights, Saitama Super Arena. In April, we drained water with interactive communication with myriad stakeholders, the pump vehicles in the coastal areas where floodgates had been destroyed. Later, we were also engaged in removing respect for employee diversity essential to business floating cranes stranded at Miyako Port in Iwate globalisation and other initiatives, the Nippon Express Group Prefecture, transporting power plant equipment lent from Charter of Conduct also promotes conduct exceeding CSR the government of Thailand, and transporting requirements throughout the supply chain in a manner the manufacturing equipment to and from factories affected. Group is well positioned to implement. From December 2011, responding to requests from local * Refer to the Nippon Express Homepage to view the Nippon Express governments in the affected area, we transported about Group Charter of Conduct. 2,300 tons of rubble (disaster waste) to disposing facilities in http://www.nipponexpress.com/about/corporate/ areas willing to receive the rubble. (as of March 2012) charter/index.html Employees from various regions were dispatched to support operations at affected Nippon Express offices. n Environmental Initiatives Voluntary activities by employees have been increasingly widespread, such as “Tohoku Reconstruction Support As a professional logistics group, we will contribute to society Volunteer Activities” launched by employees and their by delivering goods to people around the world, while striving family members in the Kanto area. to achieve more energy-efficient “Earth-friendly logistics.”

NIPPON EXPRESS Annual Report 2012 13 Special Feature: Further Growth in Asia

Extending Nippon Express’s Asian Network to India The Nippon Express Group has established “Growth as a Global Logistics Company” as a basic strategy of the “Nippon Express Group Corporate Strategy 2012 –Towards New Growth,” medium-term management plan. The Group maintains global coverage through five regions, namely, Japan, the Americas, Europe, East Asia and South Asia & Oceania. Accordingly, we are working to broaden international transportation networks; making rapid management judgments in response to intra-regional market trends; and promoting the development of a sales structure that integrates regions. Among these, we began operations in Hong Kong in the 1970s to penetrate markets in East Asia. Since then, Nippon Express has actively engaged in partnerships with local companies, built a distribution network that extends throughout the region and, more recently, enhanced services featuring multiple transportation modes. Building on these efforts, we are establishing large-scale warehouses, opening new business bases and other initiatives to strengthen our business foundations and, in turn, secure distribution and transportation networks extending beyond India, the next key region.

Nippon Express’s expansion in Asia

Korea China Japan

Shanghai Super Express (SSE) Bangladesh SS7000 India Myanmar SS7000 Laos Shanghai–Huanan approx. 2,000 km Thailand The Philippines

SS7000 Huanan–Hanoi approx. 1,500 km

Mekong-India SS7000 Express Hanoi–Bangkok approx. 1,500 km

Southern Mekong Land Bridge Express SS7000 approx. 850km Bangkok–Singapore approx. 2,000 km

Major business bases

Nippon Express’s Expansion in South Asia

December December February November Commences a fully in-house consolidated door-to-door transport Opens an NE India office in Launches Mekong-India Express Completes construction of service to India bound from Tokyo, Nagoya, Kobe, Shanghai, Hong Bangalore Airport to provide high- intermodal transport service Neemrama Logistics Center, a Kong, Bangkok, the United States and Europe to India quality, high-speed, one-stop between Thailand and India multifunctional logistics Nippon Express services warehouse 2007 2009 2010

August October Establishes a representative Strengthens intermodal transport service office in Dhaka originating from Bangladesh, upgrading internal logistics as well as ocean freight forwarding

14 NIPPON EXPRESS Annual Report 2012 Nippon Express (India) Private Limited Advantage of services • Network of facilities that link India’s major cities • In-house freight forwarding and consistently accountable transport services through in-house customs clearance operations • Visualization of import/export air freight forwarding • 3PL operations (import/export hub functions, inventory control) • Numerous other services Company overview • Customs clearance • International freight transportation (air/marine forwarding) • Domestic freight transportation (delivery operations) • Third-party logistics (3PL) (export hub, import DC) • Moving & relocation • Others, incidental transport services, etc.

Areas of Penetration by Japanese Companies Nippon Express’s Core India and Bangladesh Strategy

in India * As of October 2010 South Asia & Oceania is overseen by the Singapore regional Source: The Japan-India Association Contemporary India Forum Quarterly Review No. 9 (Japanese only) general office and encompasses Malaysia, the Philippines, Delhi (135 business sites): URL: http://www.japan-india.com/english Thailand, Vietnam, Bangladesh, India, New Zealand and sales companies for home (Edition compiled from documents prepared by the electronics, equipment and other Japanese Embassy in India) Australia. In August 2011, Japan concluded the Comprehensive manufacturers, trading companies, The state of Uttar Pradesh including Economic Partnership Agreement (CEPA) with India, South Asia representative offices, etc. Noida (50 business sites) & Oceania’s largest economic zone. Amid expectations that automobile, home electronics and Gurgaon, Manesar and automotive parts manufacturers, etc. CEPA will foster closer ties between the two countries, Nippon the state of Rajasthan, all urban areas near Kolkata and suburban Express will focus on developing transport routes that connect Delhi (184 business sites): area (67 business sites) India with China and South Asia. Looking ahead, we will develop motorcycle and automotive trading companies, parts manufacturers, etc. chemical manufacturers, etc. logistics systems able to respond to internal demand in India. Bangladesh is an important base for Nippon Express in terms of routes that connect India with China and South Asia. Boasting a population of over 140 million as well as a burgeoning The state of Gujarat (29 business sites) garment industry, Bangladesh has significant market potential.

The Nippon Express Group’s Operations in India and The state of Goa Hyderabad (28 business sites) Bangladesh (7 business sites) Chennai (223 business sites): Nippon Express (India) Private Limited (NE India) has expanded Mumbai and suburbs home electronics, food, automobile, (143 business sites): automotive parts manufacturers, etc. its network in India to 14 business bases in 11 major cities companies engaging in (Kolkata, Hyderabad, Chennai, Bangalore, Trivandrum, Cochin, automobile sales, Bangalore (153 business sites): engineering, trading, finance, home electronics, food, automobile, Coimbatore, Pune, Mumbai, Delhi and Ahmadabad). In marine transportation, etc. The state of Kerala automotive parts manufacturers, etc. (37 business sites) Bangladesh, the Group established the local subsidiary, Nippon Pune (45 business sites): Express Bangladesh Ltd., in April 2012. automotive parts manufacturers

May June July December Conducts a truck driver workshop Establishes Nittsu Logistics (India) Commences customs clearance Redesigns the consolidated to raise awareness of driving Private Limited, a wholly owned operations the city of Pune in the western marine transport service, safety and energy conservation subsidiary specializing in Just-in- Indian state of Maharashtra after Maharaja Express, for India Time logistics obtaining a customs clearance license 2011 2012

February April Launches “NEX-FORWARDING Bengal SAT!” an intermodal Establishes Nippon Express Bangladesh transport service that combines air and marine transport to Ltd. as a local subsidiary in the People’s connect Bangladesh with Japan Republic of Bangladesh

NIPPON EXPRESS Annual Report 2012 15 Topics

In fiscal 2011, the Nippon Express Group took steps to invigorate its domestic businesses while accelerating overseas expansion in line with the medium-term management plan, “Nippon Express Group Corporate Strategy 2012 – Towards New Growth.” Despite having to respond to the Great East Japan Earthquake and other special factors, we have made progress in pursuing our objectives. In Japan, we are entering new sectors and industries, aggressively expanding value-added businesses and developing a high level of independent expertise. In the years ahead, Nippon Express will look to expand these differentiated businesses on a global scale. Overseas, Nippon Express is busily working to establish a business model that unifies operations both in Japan and abroad while realizing growth. To achieve these aims, we are building new organizational and sales systems that transcend boundaries between Japan and countries overseas as well as among various nations. In particular, we are working to retain our competitive superiority in Asian markets by developing products centered on China as well as the rest of East Asia; expanding services in Thailand, Cambodia, and Vietnam; and concentrating management resource investment to the region that extends from Bangladesh to India.

Domestic Topics Overseas Topics 1 1 Acquisition of AS9120 Quality Opened a Representative Office in Management Certification for the Phnom Penh Cambodia Aerospace Industry Nippon Express opened a representative Nippon Express has acquired AS9120 office in Phnom Penh, Cambodia, which certification at its Baraki Air Cargo has been experiencing steady economic Logistics Center, Chubu Airport Logistics 2 development driven principally by a Center, and seven locations in North booming textile industry. In 2015, import America since meeting with the relevant Entered the Clinical Drug Testing tariffs on transactions between countries quality management system requirements Logistics Business in the ASEAN Free Trade Area (AFTA) are for the aerospace industry. The AS9100 Nippon Express has opened its new scheduled to be abolished, spurring series of standards are designed to Clinical Drug Testing Logistics Center in expectations that companies from complement the ISO 9001 international Ota-ku, Tokyo. The new center is specially numerous countries will accelerate their quality standard with additional designed for the storage of experimental expansion into Cambodia. requirements stipulated by the drugs and medical devices. In addition to To date, Nippon Express has worked International Aerospace Quality Group the storage and management of such to augment its network in Cambodia by (IAQG), an organization founded by items, the center provides uniform, high- launching a road transport service and aerospace companies in Europe and the quality services, ranging from receipt and establishing an air and marine freight United States. The AS9120 Standard storage to shipment, thanks to its fully forwarding agency. The opening of our applies to organizations engaged in the trained staff of specialists. new representative office will allow us to storage and transport of AS9100-series Due to the revision of the ministerial develop a system able to meet a wide parts/materials and other products. ordinance regulating good clinical range of needs in Cambodia, extending Nippon Express will continue working to practices (GCP ordinance) in 2008, the from international air and marine transport expand the number of its AS9120-certified handling of experimental drugs and to road transport and warehousing locations while providing storage, medical devices by third parties is now services. transport and other services to the possible. Consequently, we can aerospace industry. accommodate the increasing number of customers who entrust the transport of such items to outside parties. Nippon Express will augment its services in line with the needs of this market.

16 NIPPON EXPRESS Annual Report 2012 4 Establishment of an Sales Office in 2 Russia’s Major Automotive Industry Center Commencement of Road Transport Services Connecting Thailand, Nippon Express (Russia) LLC became the Cambodia, and Vietnam first Japanese logistics company to open a new sales office in Togliatti in the To meet rapidly growing logistics needs in Russian Federation’s Samara Region, a the southern half of the Indochinese key center for that country’s automotive Peninsula, Nippon Express commenced industry. Russia has seen a growing sales related to the “Southern Mekong 3 number of automobiles sold domestically Land Bridge Express,” a door-to-door in recent years and is expected to become road transport service connecting Opened Song Than Logistics Center Europe’s largest automobile market. Thailand, Cambodia and Vietnam. By in Vietnam The Togliatti Sales Office offers realizing smooth logistics services through Nippon Express opened the Song Than transport services that utilize a wide the acquisition of transit licenses that Logistics Center, a multifunctional variety of modes (marine, air, railway and permit bonded transport, we have warehouse facility located in Binh Duong truck transport) while providing support for shortened lead times by two to seven Province, Vietnam. Very conveniently navigating Russia’s complex customs days compared with marine transport. In located approximately 20 km from major clearance procedures in order to ensure combination with the already expanded airport and seaport facilities, the Song seamless logistics. In addition, the Togliatti SS7000, a 7,000 km road transport route Than Logistics Center can provide Office is working to enhance its logistics that connects Shanghai and Singapore, services to Japanese-owned companies services within Russia. Nippon Express is working to further concentrated in industrial zones around enhance its regional logistic networks. nearby Ho Chi Minh City. The Song Than Logistics Center offers both bonded and general warehousing operations and includes specialized warehouses fully equipped with security systems to store hazardous goods. The Center undertakes distribution center (DC) and vendor management inventory (VMI) services for 5 imported components and exported goods while actively providing transport Augmentation of Transport and distribution services for expanding Operations in the United States markets in Vietnam. In addition, the Center Nippon Express U.S.A., Inc. acquired the is capable of handling a variety of small- American firm, Associated Global lot, high-mix shipments as well as meeting Systems, Inc. (AGS), a mid-sized logistics customer distribution processing needs. company engaged in domestic/ international transport and warehousing in the United States. In addition, AGS has a gained solid reputation for providing meticulous service in its mainstay domestic transport business. AGS also boasts an impressive degree of know-how in the types of special transport needed for precision instruments and oversized cargo, counting a number of American companies among its clients. Through the acquisition of AGS, Nippon Express will expand its logistics operations within the United States and reinforce its business infrastructure mainly through the mutual use of its networks. At the same time, we will work to enhance our locally- rooted logistics services around the world.

NIPPON EXPRESS Annual Report 2012 17 Financial Section

19 Management Discussion and Analysis

24 11-Year Summary

26 (1) Consolidated Financial Statements

26 Consolidated Balance Sheets

28 Consolidated Statements of Income 29 Consolidated Statements of Comprehensive Income 30 Consolidated Statements of Changes in Net Assets 31 Consolidated Statements of Cash Flows 32 Notes to Consolidated Financial Statements 63 (2) Other

64 Report of Independent Auditors

18 NIPPON EXPRESS Annual Report 2012 Management Discussion and Analysis

Corporate Overview n Distribution & Transportation, overseas companies 69 companies, including Nippon Express U.S.A., Inc. The Nippon Express Group consists of Nippon Express Co., Ltd. and its 276 subsidiaries, including 250 consolidated subsidiaries and 1 The Americas equity-method subsidiary, as well as 62 affiliates, of which 21 are Nippon Express U.S.A. and other subsidiaries engage in air freight equity-method affiliates, totaling 339 companies. In Japan, the forwarding, marine and harbor transportation, and warehousing Group’s Distribution & Transportation segment encompasses businesses in various cities in the Americas. In addition, Nippon domestic companies primarily operating in the following reportable Express Travel USA, Inc. operates a travel business. segments: the Combined Business (motor cargo transportation, railway forwarding), Air Freight Forwarding & Travel and Marine & Europe Harbor Transportation. The Distribution & Transportation segment also Nippon Express (U.K.) Ltd., Nippon Express (Nederland) B.V., Nippon operates companies overseas. The Group’s remaining reportable Express (Deutschland) GmbH, Nippon Express France S.A.S. and segments comprise Goods Sales-related businesses as well as real other subsidiaries engage in air freight forwarding, marine and harbor estate and other operations that are classified as Other. transportation, and warehousing businesses in various cities in The Nippon Express Group’s business operations by industry Europe. and reportable segment are as follows. East Asia n Distribution & Transportation, domestic companies Nippon Express (H.K.) Co., Ltd., Nippon Express (China) Co., Ltd., 225 companies, including Nippon Express Co., Ltd. and Nittsu Nippon Express (Taiwan) Co., Ltd. and other subsidiaries and affiliates Transport Co., Ltd. engage in air freight forwarding, ocean freight forwarding, and warehousing businesses in various cities in East Asia. Combined Business With a network of facilities throughout Japan, the Company engages South Asia & Oceania in businesses related to railway forwarding, motor cargo transportation Nippon Express (Singapore) Pte. Ltd., Nippon Express (Thailand) Co., services and warehousing operations. A portion of these businesses Ltd., Nippon Express (Australia) Pty., Ltd. and other subsidiaries and are undertaken by the Company’s subsidiaries and affiliates, including affiliates engage in air freight forwarding, marine and harbor Nittsu Transport, Bingo Express Co., Ltd., and Tokushima Express transportation, warehousing, and heavy haulage and construction Co., Ltd. businesses in various cities in South Asia and Oceania.

Security Transportation n Goods Sales The Company operates security guard and related businesses 33 companies, including Nittsu Shoji Co., Ltd. throughout Japan. Nittsu Shoji, Taiyo Nissan Auto Sales., Ltd., Nittsu Shoji U.S.A., Inc. and other domestic and overseas subsidiaries and affiliates engage in Heavy Haulage & Construction the sale and leasing of distribution equipment, sale of wrapping and The Company handles the transportation, erection and installation of packaging materials, sale and leasing of vehicles, sale of petroleum heavy cargo and pursues related businesses throughout Japan. and liquefied petroleum (LP) gas, vehicle maintenance and insurance sales. Air Freight Forwarding & Travel The Company operates the air freight forwarding, travel and other n Other related businesses. A portion of these businesses are operated by the 12 companies, including Nittsu Real Estate Co., Ltd. Company’s subsidiaries and affiliates. Nittsu Real Estate and other subsidiaries and affiliates mainly engage in real estate rental, mediation and appraisal as well as building and Marine & Harbor Transportation warehouse planning, design and management. In addition, this The Company engages in marine and harbor transportation at all key business segment conducts investigation and research through Nittsu domestic ports. The Company’s subsidiaries, including Nippon Research Institute and Consulting, Inc., offers financing through Shipping Co., Ltd., and affiliates undertake marine transportation and Nippon Express Capital Co., Ltd., provides driver training courses for coastal shipping, while the Company’s subsidiaries and affiliates the general public through Nittsu Driving School Co., Ltd., and operate the harbor transportation business at certain ports in Japan. operates an employee dispatching business through Careerroad Inc.

NIPPON EXPRESS Annual Report 2012 19 Management Discussion and Analysis

Performance Overview as eco-driving and increased energy-efficiency at business bases, and taking advantage of our overseas network to develop projects to cut

During the consolidated fiscal year under review, despite a temporary CO2 emissions, in order to create a recycling-oriented society. drop in corporate production and exports due to the effect of the Toward the “Enhancement of Management Infrastructure” and Great East Japan Earthquake that struck in March of last year, the “Promotion of Corporate Social Responsibility (CSR) Management,” Japanese economy experienced a moderate turnaround as supply we worked to build a stronger crisis management system by revising chains were restored after the disaster. Nevertheless, the situation the Business Continuity Plan (BCP) in an effort to reinforce remained extremely unstable due to the effect of factors such as the governance, while also striving to beef up our corporate competitive rapidly rising yen, as well as the slowdown in overseas economies power by further enhancing the capital investment that is the resulting from the European debt crisis. foundation of growth, and stepping up training and education for In the field of logistics, against the backdrop of these economic human resources. Furthermore, we were proactively engaged in the conditions, the overall situation was challenging, due to a partial promotion of CSR activities such as social contribution activities decrease in export freight, which had been performing well, and a centered on the environment, and the thorough implementation of persisting tendency toward decline in demand for domestic freight compliance measures. transportation. In this business environment, the Nippon Express Group made Business Results collective efforts to accomplish the medium-term management plan “Nippon Express Group Corporate Strategy 2012 – Towards New n Revenues and Operating Costs Growth,” by achieving the four basic strategies of “Growth as a Global As a result of the above, consolidated revenues increased ¥10.8 Logistics Company,” “Promotion of Strategic Environmental billion, or 0.7%, compared with the previous fiscal year, to ¥1,628.0 Management,” “Enhancement of Management Infrastructure,” and billion. “Promotion of Corporate Social Responsibility (CSR) Management.” Financial results by segment are as follows: Specifically, to ensure its “Growth as a Global Logistics Company,” the Group is enhancing multi-functional logistics facilities at its overseas In Distribution & Transportation, domestic companies, Combined bases and building a new distribution and transportation network in Business revenues fell ¥12.7 billion, or 1.8%, while those of Security order to develop its overseas-related businesses, while pressing Transportation shrank ¥0.7 billion, or 1.3%. The declines were ahead with business collaboration and capital tie-ups with local primarily attributable to a fall in demand for freight transportation and companies, as well as strengthening the overseas network, with the the impact of the Great East Japan Earthquake. In contrast, Heavy aim of ensuring the Group’s ability to swiftly and flexibly respond to the Haulage & Construction rose ¥5.6 billion, or 16.6%, thanks to higher increasingly diverse and sophisticated global business needs of our construction demand in Japan and overseas, while Air Freight customers. Forwarding & Travel recorded a ¥1.9 billion, or 1.0%, increase and With regard to the “Promotion of Strategic Environmental Marine & Harbor Transportation was up ¥1.4 billion, or 1.2%, owing Management,” the Group has steadily engaged in efforts to reduce its largely to the recovery of the world economy and an increase in export environmental burden by working proactively to develop and provide and import cargoes. environmentally friendly products and services using greener modes In Distribution & Transportation, overseas companies, revenues of transportation such as rail and sea, while promoting initiatives such rose ¥0.1 billion, or 0.4%, in the Americas, ¥1.3 billion, or 3.1%, in

Revenues Operating income Net income (Millions of yen) (Millions of yen) (Millions of yen)

2,000,000 60,000 40,000

50,000 1,500,000 30,000 40,000

1,000,000 30,000 20,000

20,000 500,000 10,000 10,000

0 0 0 08/3 09/3 10/3 11/3 12/3 08/3 09/3 10/3 11/3 12/3 08/3 09/3 10/3 11/3 12/3

20 NIPPON EXPRESS Annual Report 2012 Europe. However, revenues fell ¥3.9 billion, or 5.2%, in East Asia and Income before income taxes and minority interests amounted to ¥0.7 billion, or 1.7%, in South Asia & Oceania due mainly to the ¥49.4 billion. After deducting current income taxes, inhabitants’ tax, impact of currency exchange rate fluctuations. enterprise tax and other adjustments as well as minority interests, net In the Goods Sales segment, revenues improved ¥21.5 billion, income came to ¥26.9 billion, a rise of ¥18.4 billion, or 215.5%, from or 6.1%, largely because of an upswing in the unit selling price for the previous fiscal year. petroleum. In the Other business segment, revenues grew ¥4.3 billion, Net income per share was ¥17.66 higher year on year at or 12.2%. ¥25.85, while return on equity rose 3.88 percentage points to 5.68%. Operating costs came to ¥1,519.3 billion, an increase of ¥8.7 billion, or 0.6%, from the previous fiscal year. Gross profit improved by n Results by Reportable Segment ¥2.0 billion, or 2.0%, year on year to ¥108.6 billion and the ratio of Financial results by reportable segment are summarized below. gross profit to revenues was 0.1 of a percentage point higher at Indicated figures do not include consumption taxes. 6.7%. The rise in operating costs was mainly attributable to an upswing in vehicle chartering and subcontracting expenses 1. Combined Business (Distribution & Transportation, domestic accompanying an increase in net sales. companies) This segment suffered a decline in transactions due to a fall in demand n Selling, General and Administrative Expenses, for domestic freight transportation, in addition to the ongoing impact Operating Income and Ordinary Income of the Great East Japan Earthquake, and other factors. Consequently, Selling, general and administrative expenses declined ¥3.7 billion, or segment sales were ¥704.7 billion, a year-on-year decrease of ¥12.7 5.1%, year on year to ¥71.1 billion, mainly due to lower depreciation billion, or 1.8%, while operating income was ¥6.9 billion, a year-on- and amortization. year decrease of ¥1.4 billion, or 17.2%. As a result of the above, operating income stood at ¥37.4 billion, up ¥5.8 billion, or 18.6%, from the previous fiscal year. Ordinary 2. Security Transportation (Distribution & Transportation, domestic income stood at ¥47.4 billion, up ¥6.7 billion, or 16.6%, primarily companies) because of an increase in dividends income. As a result of a decline in demand for domestic freight transportation and a decrease in the unit prices of services, as well as other factors, n Other Income and Expenses and Net Income segment sales were down ¥0.7 billion, or 1.3% year on year, to ¥58.7 Extraordinary income was ¥8.3 billion, an increase of ¥2.7 billion, or billion, while operating income was up by ¥0.09 billion, or 5.2% year 48.3%, compared with the previous fiscal year, with extraordinary loss on year, to ¥1.8 billion. dropping ¥17.0 billion, or 73.1%, to ¥6.2 billion. The main reason for the increase in extraordinary income was the recording of a gain on 3. Heavy Haulage & Construction (Distribution & Transportation, sales of noncurrent assets, which rose ¥2.3 billion. The primary domestic companies) reasons for the fall in extraordinary loss was the recording of a loss on Backed mainly by an increase in demand for the construction of heavy adjustment for changes of accounting standard for asset retirement electrical equipment and overseas construction, segment sales obligations of ¥7.5 billion in fiscal 2010 and a ¥4.5 billion year-on-year increased ¥5.6 billion, or 16.6% year on year, to ¥40.0 billion, and decrease in loss on disaster due to damage caused by the Great East operating income rose ¥1.1 billion, or 42.2% year on year, to ¥3.8 billion. Japan Earthquake.

Net cash provided Total net assets Total assets by operating activities (Millions of yen) (Millions of yen) (Millions of yen)

600,000 1,500,000 150,000

500,000 1,200,000 120,000

400,000 900,000 90,000

300,000

600,000 60,000 200,000

300,000 30,000 100,000

0 0 0 08/3 09/3 10/3 11/3 12/3 08/3 09/3 10/3 11/3 12/3 08/3 09/3 10/3 11/3 12/3

NIPPON EXPRESS Annual Report 2012 21 Management Discussion and Analysis

4. Air Freight Forwarding & Travel (Distribution & Transportation, 9. South Asia & Oceania (Distribution & Transportation, overseas domestic companies) companies) Mainly owing to an increase in transactions in air freight export cargo, Although warehousing and other transactions were strong, segment segment sales were up ¥1.9 billion, or 1.0% year on year, to ¥205.4 sales declined ¥0.7 billion, or 1.7% year on year, to ¥44.8 billion, while billion, while operating income increased ¥5.6 billion, or 590.7% year operating income was up ¥0.2 billion, or 18.7%, to ¥1.6 billion, mainly on year, to ¥6.5 billion. due to the effect of exchange rates.

5. Marine & Harbor Transportation (Distribution & Transportation, 10. Goods Sales domestic companies) Although segment sales increased ¥21.5 billion, or 6.1% year on year, As a result of robust demand for freight transportation to the to ¥374.0 billion mainly due to a hike in the unit selling price for Americas, in addition to an increase in transactions mainly for import petroleum, operating income was down ¥0.09 billion, or 1.3% year on cargo, segment sales were ¥125.6 billion, a year-on-year increase of year, to ¥6.9 billion. ¥1.4 billion, or 1.2%, although operating income was ¥5.1 billion, a year-on-year decrease of ¥0.3 billion, or 6.2%. 11. Other Mainly due to healthy performance in construction of real estate, 6. The Americas (Distribution & Transportation, overseas companies) mediation transactions, and the logistics finance business, segment Mainly due to an increase in transactions for air freight export cargoes sales increased ¥4.3 billion, or 12.2% year on year, to ¥40.3 billion, such as electronics components, segment sales increased ¥0.1 while operating income was up by ¥0.4 billion, or 28.7% year on year, billion, or 0.4% year on year, to ¥42.9 billion, while operating income to ¥1.9 billion. rose ¥0.09 billion, or 6.2% year on year, to ¥1.6 billion. Cash Flows 7. Europe (Distribution & Transportation, overseas companies) Thanks mainly to an increase in transactions for automotive and Consolidated cash and cash equivalents (“cash”) amounted to ¥181.6 medical-related air freight export cargoes, as well as a hike in billion as of March 31, 2012. This represented a year-on-year increase transactions for home appliance-related import cargoes, segment of ¥74.5 billion. sales grew ¥1.3 billion, or 3.1% year on year, to ¥46.4 billion, and operating income was up ¥0.1 billion, or 6.2% year on year, to ¥1.8 Cash Flows from Operating Activities billion. Cash flows from operating activities resulted in a net inflow of ¥97.8 billion, an increase from ¥64.3 billion recorded in the previous fiscal 8. East Asia (Distribution & Transportation, overseas companies) year. This was mainly due to income before income taxes and minority Although demand for domestic freight transportation in China was interests of ¥49.4 billion as well as income taxes paid of ¥9.8 billion. solid, segment sales decreased ¥3.9 billion, or 5.2% year on year, to ¥72.9 billion, while operating income rose ¥0.2 billion, or 11.7% year Cash Flows from Investing Activities on year, to ¥2.3 billion, mainly due to the effect of exchange rates. Cash flows from investing activities resulted in a net outflow of ¥31.5 billion, a year-on-year decline in expenditures from ¥48.0 billion. This was mainly due to the decrease in payment for purchase of property

Cash and cash equivalents at end of year Equity per share Net income per share (Millions of yen) (Yen) (Yen)

200,000 500 35

30 400 150,000 25

300 20 100,000 15 200

10 50,000 100 5

0 0 0 08/3 09/3 10/3 11/3 12/3 08/3 09/3 10/3 11/3 12/3 08/3 09/3 10/3 11/3 12/3

22 NIPPON EXPRESS Annual Report 2012 and equipment to ¥42.5 billion, including for distribution centers, Equity per share amounted to ¥461.63, an increase of ¥13.34 warehousing upgrades and vehicle acquisitions, as well as proceeds compared with the position at the previous fiscal year-end. The equity from sale of property and equipment of ¥14.4 billion. ratio decreased 1.6 of a percentage point to 39.1%.

Cash Flows from Financing Activities Capital Investment Cash flows from financing activities resulted in a net inflow of ¥10.1 billion, a year-on-year turnaround from an expenditure of ¥26.2 billion. Total capital investment by the Nippon Express Group in fiscal 2011 This was mainly due to proceeds from long-term loans payable of amounted to ¥45.8 billion. Major items included changes to logistics ¥36.5 billion, payment of long-term loans payable of ¥46.9 billion, systems and the improvement of distribution depots to support proceeds from issuance of bonds of ¥30.0 billion, and cash dividends international freight operations. Other investments included the of ¥10.4 billion. development of commercial warehouses and the replacement of vehicles and transportation equipment. Financial Position Dividend Policy Assets Total assets as of March 31, 2012 amounted to ¥1,230.9 billion, an The Company regards the return of profits to shareholders as one of increase of ¥83.4 billion, or 7.3%, compared with the previous fiscal its most important priorities. We aim to maximize returns and maintain year-end. dividend stability while expanding our business operations, Current assets increased ¥97.7 billion, or 19.9%, to ¥588.2 strengthening our financial position, expanding shareholders’ equity billion mainly due to a rise in cash and cash in banks. Noncurrent and improving profit ratios. assets declined ¥14.3 billion, or 2.2%, to ¥642.7 billion largely The Company’s basic policy is to pay dividends from retained because of a decrease in property and equipment such as buildings. earnings twice a year in the form of interim and year-end dividends. The Board of Directors is responsible for decisions concerning the Liabilities and Net Assets interim dividend, while decisions on the year-end dividend are taken at Total liabilities amounted to ¥736.7 billion as of March 31, 2012, an the General Shareholders’ Meeting held following each fiscal year-end. increase of ¥69.1 billion, or 10.4%, compared with the previous fiscal At the 106th General Shareholders’ Meeting on June 28, 2012, year-end. we proposed and received approval to set the year-end dividend for Total current liabilities rose ¥81.1 billion, or 23.9%, to ¥421.6 fiscal 2011 at ¥5 per share. Together with the interim dividend of ¥5, billion, mainly as a result of increases in short-term loans payable, this brought the annual dividend to ¥10 per share. deposits, and accounts payable—trade. Total noncurrent liabilities The earnings retained within Nippon Express will be used for decreased ¥12.0 billion, or 3.7%, to ¥315.1 billion, primarily due to a investments mainly in the development of logistics bases and the decline in long-term loans payable. replacement of vehicles, to expand sales of our distribution and Net assets rose ¥14.3 billion, or 3.0%, to ¥494.2 billion as of transportation services and to improve our transportation efficiency. March 31, 2012. The main contributory factor in this increase was We will also utilize retained earnings to strengthen our financial growth in retained earnings. position as well as our corporate foundation.

Employees and Equity ratio Return on equity Average temporary employees (%) (%)

45 10 80,000

8 60,000 40 6

40,000

4 35 20,000 2

0 0 30 08/3 09/3 10/3 11/3 12/3 08/3 09/3 10/3 11/3 12/3 08/3 09/3 10/3 11/3 12/3 Employees Average temporary employees

NIPPON EXPRESS Annual Report 2012 23 11-Year Summary Nippon Express Co., Ltd and consolidated subsidiaries For the years ended March 31

Millions of yen Millions of yen 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 For the year: Revenues 1 ¥ 1,628,027 ¥ 1,617,185 ¥ 1,569,633 ¥ 1,828,946 ¥ 1,901,433 ¥ 1,866,267 ¥ 1,793,925 ¥ 1,753,306 ¥ 1,666,945 ¥ 1,676,918 ¥ 1,708,140 Revenues by industry segment up to the consolidated fiscal year ended March 31, 2010 2 Distribution and Transportation — — 1,284,772 1,524,639 1,597,284 1,580,546 1,522,325 1,485,266 1,419,156 1,429,489 1,454,133 Goods Sales — — 266,211 291,084 291,923 279,080 266,908 263,216 243,084 242,988 248,898 Other — — 18,649 13,222 12,225 6,640 4,690 4,823 4,703 4,440 5,108 Revenues by geographical segment up to the consolidated fiscal year ended March 31, 2010 2 Japan — — 1,412,630 1,616,285 1,682,699 1,666,887 1,631,402 1,605,602 1,556,828 1,566,037 1,590,309 The Americas — — 29,794 45,447 48,009 45,126 38,495 33,722 31,297 36,055 45,944 Europe — — 40,006 62,227 69,146 59,422 49,333 45,525 38,688 37,406 33,997 Asia & Oceania — — 87,201 104,986 101,578 94,831 74,693 68,455 40,130 37,419 37,889 Revenues by reportable segment from the consolidated fiscal year ended March 31, 2011 onward 2 Distribution & Transportation Domestic Companies Combined Business 698,476 711,308 745,058 — — — — — — — — Security Transportation 58,738 59,515 60,849 — — — — — — — — Heavy Haulage & Construction 39,530 33,744 38,872 — — — — — — — — Air Freight Forwarding & Travel 203,824 202,099 182,763 — — — — — — — — Marine & Harbor Transportation 116,843 116,059 103,959 — — — — — — — — Overseas Companies The Americas 31,959 32,898 29,794 — — — — — — — — Europe 41,781 40,309 40,006 — — — — — — — — East Asia 67,238 70,879 87,2013 South Asia & Oceania 42,191 42,878 — — — — — — — — Goods Sales 308,033 287,929 263,066 — — — — — — — — Other 19,409 19,561 18,061 — — — — — — — — Operating income 37,497 31,629 37,535 33,513 48,502 50,325 43,187 43,025 46,156 42,802 33,370 Net income 26,949 8,541 12,566 15,172 36,439 33,208 18,663 32,190 27,263 23,330 21,180

At year-end: Total net assets 4 494,205 479,898 495,883 484,337 520,823 517,516 488,205 444,940 421,128 367,551 375,390 Total assets 1,230,964 1,147,539 1,201,801 1,172,074 1,297,406 1,360,694 1,315,599 1,287,351 1,262,383 1,205,103 1,248,205 Net cash provided by operating activities 97,806 64,394 82,198 64,080 90,096 123,058 63,966 83,139 83,108 48,315 113,752 Cash and cash equivalents at end of year 181,614 107,062 121,187 93,031 144,639 170,109 150,615 145,983 138,236 136,149 165,625

Per share: (yen) Equity per share ¥ 461.63 ¥ 448.29 ¥ 464.38 ¥ 454.03 ¥ 489.26 ¥ 486.94 ¥ 467.80 ¥ 426.24 ¥ 403.38 ¥ 352.02 ¥ 353.99 Net income per share 25.85 8.19 12.05 14.55 34.94 31.84 17.71 30.64 25.93 22.08 19.97

Ratios: (%) Equity ratio 39.10% 40.74% 40.29% 40.40% 39.33% 37.33% 37.11% 34.56% 33.36% 30.50% 30.07% Return on equity 5.68 1.80 2.62 3.08 7.16 6.67 4.00 7.43 6.91 6.28 5.96

Other: Employees 65,759 66,924 65,916 71,352 69,177 67,773 65,562 65,321 64,699 65,160 66,716 (Average temporary employees) 15,765 16,583 19,406 22,801 24,434 23,796 24,190 24,400 25,321 25,701 27,263

1. Revenue figures do not include consumption taxes. 2. Effective from the consolidated fiscal year ended March 31, 2011, the Company has adopted the “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Statement No. 17 issued on March 27, 2009) and the “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No. 20 issued on March 21, 2008). The above listed revenues by industry, geographical and reportable segments do not include internal sales or money transfers between segments.

24 NIPPON EXPRESS Annual Report 2012 Millions of yen Millions of yen 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 For the year: Revenues 1 ¥ 1,628,027 ¥ 1,617,185 ¥ 1,569,633 ¥ 1,828,946 ¥ 1,901,433 ¥ 1,866,267 ¥ 1,793,925 ¥ 1,753,306 ¥ 1,666,945 ¥ 1,676,918 ¥ 1,708,140 Revenues by industry segment up to the consolidated fiscal year ended March 31, 2010 2 Distribution and Transportation — — 1,284,772 1,524,639 1,597,284 1,580,546 1,522,325 1,485,266 1,419,156 1,429,489 1,454,133 Goods Sales — — 266,211 291,084 291,923 279,080 266,908 263,216 243,084 242,988 248,898 Other — — 18,649 13,222 12,225 6,640 4,690 4,823 4,703 4,440 5,108 Revenues by geographical segment up to the consolidated fiscal year ended March 31, 2010 2 Japan — — 1,412,630 1,616,285 1,682,699 1,666,887 1,631,402 1,605,602 1,556,828 1,566,037 1,590,309 The Americas — — 29,794 45,447 48,009 45,126 38,495 33,722 31,297 36,055 45,944 Europe — — 40,006 62,227 69,146 59,422 49,333 45,525 38,688 37,406 33,997 Asia & Oceania — — 87,201 104,986 101,578 94,831 74,693 68,455 40,130 37,419 37,889 Revenues by reportable segment from the consolidated fiscal year ended March 31, 2011 onward 2 Distribution & Transportation Domestic Companies Combined Business 698,476 711,308 745,058 — — — — — — — — Security Transportation 58,738 59,515 60,849 — — — — — — — — Heavy Haulage & Construction 39,530 33,744 38,872 — — — — — — — — Air Freight Forwarding & Travel 203,824 202,099 182,763 — — — — — — — — Marine & Harbor Transportation 116,843 116,059 103,959 — — — — — — — — Overseas Companies The Americas 31,959 32,898 29,794 — — — — — — — — Europe 41,781 40,309 40,006 — — — — — — — — East Asia 67,238 70,879 87,2013 South Asia & Oceania 42,191 42,878 — — — — — — — — Goods Sales 308,033 287,929 263,066 — — — — — — — — Other 19,409 19,561 18,061 — — — — — — — — Operating income 37,497 31,629 37,535 33,513 48,502 50,325 43,187 43,025 46,156 42,802 33,370 Net income 26,949 8,541 12,566 15,172 36,439 33,208 18,663 32,190 27,263 23,330 21,180

Ratios: (%) Equity ratio 39.10% 40.74% 40.29% 40.40% 39.33% 37.33% 37.11% 34.56% 33.36% 30.50% 30.07% Return on equity 5.68 1.80 2.62 3.08 7.16 6.67 4.00 7.43 6.91 6.28 5.96

3. Nippon Express underwent an organizational change in the consolidated fiscal year ended March 31, 2011. Consequently, for Distribution & Transportation, overseas companies, Asia & Oceania has been divided into East Asia and South Asia & Oceania. As it is not possible to restate the results for the consolidated fiscal year ended March 31, 2010 under the new reportable segments, such results are presented here in accordance with the previous segment designations. 4. The calculation of net assets is carried out by applying the Accounting Standards for Description of Net Assets in the Balance Sheet (Accounting Standards Board of Japan, “Accounting Standards for Business Enterprises, No. 5” dated December 9, 2005) and the Application Guidelines for Accounting Standards and Others for Description of Net Assets in the Balance Sheet (Accounting Standards Board of Japan, “Application Guideline for Accounting Standards for Business Enterprises, No. 8” dated December 9, 2005) from the year ended March 31, 2007. NIPPON EXPRESS Annual Report 2012 25 (1) Consolidated Financial Statements Consolidated Balance Sheets Nippon Express Co., Ltd. and consolidated subsidiaries As of March 31, 2011 and 2012

Thousands of Millions of yen U.S. dollars ASSETS 2011 2012 2012 Current assets: Cash and cash in banks (Note 1) ¥ 113,149 ¥ 187,797 $ 2,284,917 Notes receivable—trade (Note 9) 11,934 15,880 193,216 Accounts receivable—trade 221,814 241,822 2,942,233 Inventories (Note 7) 4,806 5,119 62,292 Advance payments—trade 2,056 1,705 20,751 Prepaid expenses 7,921 8,405 102,274 Deferred tax assets 12,863 11,371 138,351 Lease investment assets (Note 1) 87,989 89,851 1,093,217 Other (Note 6) 28,990 27,101 329,746 Less: allowance for doubtful accounts (1,046) (843) (10,257) Total current assets 490,481 588,212 7,156,746 Noncurrent assets: Property and equipment Vehicles 171,293 166,605 2,027,073 Less: accumulated depreciation (151,339) (147,808) (1,798,373) Vehicles, net 19,953 18,796 228,700 Buildings 538,495 536,869 6,532,050 Less: accumulated depreciation (287,429) (294,444) (3,582,488) Buildings, net 251,066 242,424 2,949,562 Structures 64,501 64,098 779,885 Less: accumulated depreciation (49,383) (50,279) (611,752) Structures, net 15,117 13,818 168,132 Machinery and equipment 64,459 65,086 791,905 Less: accumulated depreciation (50,889) (50,963) (620,072) Machinery and equipment, net 13,570 14,122 171,832 Tools, furniture and fixtures 90,128 89,567 1,089,757 Less: accumulated depreciation (68,062) (69,354) (843,825) Tools, furniture and fixtures, net 22,066 20,213 245,931 Vessels 16,870 15,791 192,136 Less: accumulated depreciation (12,483) (12,261) (149,188) Vessels, net 4,387 3,529 42,947 Land 171,977 169,870 2,066,805 Leased assets 5,146 4,913 59,776 Less: accumulated depreciation (1,776) (1,998) (24,313) Leased assets, net 3,369 2,914 35,463 Construction in progress 2,631 5,511 67,059 Net property and equipment (Notes 1 and 2) 504,140 491,203 5,976,435 Intangible assets Leasehold rights 7,133 6,923 84,243 Other 20,227 18,193 221,356 Total intangible assets 27,360 25,117 305,600 Investments and other assets Investment securities (Notes 1 and 3) 87,795 86,764 1,055,660 Long-term loans receivable 1,335 3,522 42,863 Long-term loans to employees 1,305 990 12,056 Long-term prepaid expenses 2,976 3,773 45,911 Security deposits 14,250 14,369 174,828 Other (Note 3) 19,813 18,796 228,690 Less: allowance for doubtful accounts (1,919) (1,785) (21,729) Total investments and other assets 125,557 126,431 1,538,282 Total noncurrent assets 657,058 642,752 7,820,318 Total assets ¥ 1,147,539 ¥ 1,230,964 $14,977,065

The accompanying notes are an integral part of these statements. 26 NIPPON EXPRESS Annual Report 2012 Thousands of Millions of yen U.S. dollars LIABILITIES 2011 2012 2012 Current liabilities: Notes payable—trade (Note 9) ¥ 6,991 ¥ 11,104 $ 135,113 Accounts payable—trade (Note 1) 119,899 135,158 1,644,459 Short-term loans payable (Note 1) 49,925 78,556 955,791 Other payables 24,616 29,987 364,855 Income taxes payable 5,297 15,449 187,970 Consumption taxes payable 4,899 5,162 62,814 Unpaid expenses 17,010 17,083 207,847 Advances received 10,140 10,475 127,457 Deposits 40,302 58,201 708,138 Deposits from employees 29,670 29,486 358,757 Provision for bonuses 19,139 19,532 237,650 Provision for directors' bonuses 137 139 1,695 Allowance for warranties and repairs 360 119 1,458 Provision for loss on disaster 4,035 487 5,926 Other 7,980 10,656 129,653 Total current liabilities 340,408 421,601 5,129,591

Noncurrent liabilities: Bonds payable 50,000 80,000 973,354 Long-term loans payable (Note 1) 199,494 160,541 1,953,300 Provision for retirement benefits 37,540 38,870 472,929 Provision for directors' retirement benefits 418 394 4,798 Provision for special repairs 208 190 2,314 Deferred tax liabilities 17,510 14,054 171,003 Other (Note 1) 22,060 21,107 256,811 Total noncurrent liabilities 327,232 315,158 3,834,512 Total liabilities 667,641 736,759 8,964,103

NET ASSETS Shareholders' equity: Common stock 70,175 70,175 853,817 Additional paid-in capital 26,908 26,908 327,390 Retained earnings 375,785 392,305 4,773,149 Less: treasury stock (11,542) (11,549) (140,523) Total shareholders' equity 461,326 477,839 5,813,834

Accumulated other comprehensive income: Valuation differences on available-for-sale securities 26,370 27,756 337,716 Deferred gains on hedges 9 8 98 Foreign currency translation adjustments (20,255) (24,256) (295,132) Total accumulated other comprehensive income 6,125 3,508 42,682

Minority interests 12,446 12,858 156,444 Total net assets 479,898 494,205 6,012,961 Total liabilities and net assets ¥ 1,147,539 ¥ 1,230,964 $14,977,065

NIPPON EXPRESS Annual Report 2012 27 (1) Consolidated Financial Statements Consolidated Statements of Income Nippon Express Co., Ltd. and consolidated subsidiaries For the years ended March 31, 2011 and 2012

Thousands of Millions of yen U.S. dollars 2011 2012 2012 Revenues ¥ 1,617,185 ¥ 1,628,027 $19,808,102 Operating costs (Note 1) 1,510,590 1,519,353 18,485,868 Gross profit 106,595 108,674 1,322,234 Selling, general and administrative expenses: Salaries, compensation, and welfare expenses 41,018 41,030 499,212 Depreciation and amortization 4,706 3,953 48,100 Advertising expenses 4,088 3,910 47,576 Provision for allowance for doubtful accounts 352 — — Other 24,800 22,283 271,118 Total selling, general and administrative expenses (Note 1) 74,965 71,177 866,007 Operating income 31,629 37,497 456,226 Non-operating income: Interest income 434 554 6,745 Dividends income 2,223 3,037 36,961 Gain on sales of vehicles 306 399 4,854 Equity in earnings of affiliates 541 455 5,547 Gain on foreign exchange 1,888 2,217 26,983 Other 8,261 7,815 95,088 Total non-operating income 13,655 14,480 176,181 Non-operating expenses: Interest expenses 3,456 3,224 39,232 Loss on sale and retirement of vehicles 107 55 676 Other 1,032 1,255 15,280 Total non-operating expenses 4,596 4,536 55,190 Ordinary income 40,688 47,441 577,217 Extraordinary income: Gain on sales of noncurrent assets (Note 2) 5,233 7,586 92,304 Gain on sales of investment securities (Note 4) 46 146 1,779 Gains on prior year adjustment 139 — — Other 179 571 6,952 Total extraordinary income 5,598 8,304 101,037 Extraordinary loss: Loss on disposal of noncurrent assets (Note 3) 4,432 3,223 39,217 Loss on sales of investment securities (Note 5) 47 374 4,557 Loss on valuation of investment securities (Note 6) 5,892 196 2,393 Impairment loss — 169 2,056 Loss on adjustment for changes of accounting standard for asset retirement obligations 7,505 — — Loss on disaster (Note 7) 4,847 269 3,281 Loss on on prior year adjustment 34 — — Loss on settlement — 1,614 19,648 Other 535 410 4,992 Total extraordinary loss 23,296 6,258 76,148 Income before income taxes and minority interests 22,991 49,487 602,106 Income taxes: Current 9,799 20,092 244,467 Deferred 3,576 1,635 19,893 Total income taxes 13,376 21,727 264,361 Income before minority interests 9,615 27,759 337,744 Minority interests 1,073 809 9,854 Net income ¥ 8,541 ¥ 26,949 $ 327,889

The accompanying notes are an integral part of these statements.

28 NIPPON EXPRESS Annual Report 2012 Consolidated Statements of Comprehensive Income Nippon Express Co., Ltd. and consolidated subsidiaries For the years ended March 31, 2011 and 2012

Thousands of Millions of yen U.S. dollars 2011 2012 2012 Income before minority interests ¥ 9,615 ¥ 27,759 $ 337,744 Other comprehensive income: Valuation differences on available-for-sale securities (6,886) 1,393 16,953 Deferred gains (losses) on hedges (2) (2) (24) Foreign currency translation adjustments (7,971) (4,071) (49,533) Share of other comprehensive income of affiliates accounted for using the equity method (178) (104) (1,273) Other comprehensive income (Note 1) (15,038) (2,784) (33,878) Comprehensive income (5,423) 24,974 303,866 (Comprehensive income attributable to) Shareholders of Nippon Express (6,353) 24,332 296,048 Minority interests ¥ 929 ¥ 642 $ 7,817

The accompanying notes are an integral part of these statements.

NIPPON EXPRESS Annual Report 2012 29 (1) Consolidated Financial Statements Consolidated Statements of Changes in Net Assets Nippon Express Co., Ltd. and consolidated subsidiaries For the years ended March 31, 2011 and 2012

Thousands of Thousands of Millions of yen U.S. dollars Millions of yen U.S. dollars 2011 2012 2012 2011 2012 2012 Shareholders’ equity Accumulated other comprehensive Common stock income Valuation difference on available- Balance at beginning of the year ¥ 70,175 ¥ 70,175 $ 853,817 for-sale securities Total changes during the year — — — Balance at beginning of the year 33,248 26,370 320,851 Balance at end of the year 70,175 70,175 853,817 Net changes in items other Additional paid-in capital than shareholders’ equity (6,877) 1,386 16,864 Balance at beginning of the year 26,908 26,908 327,390 Total changes during the year (6,877) 1,386 16,864 Total changes during the year — — — Balance at end of the year 26,370 27,756 337,716 Balance at end of the year 26,908 26,908 327,390 Deferred gains (losses) on hedges Retained earnings Balance at beginning of the year 12 9 121 Balance at beginning of the year 377,675 375,785 4,572,152 Net changes in items other Changes during the year: than shareholders’ equity (2) (1) (22) Cash dividends (10,427) (10,427) (126,868) Total changes during the year (2) (1) (22) Net income 8,541 26,949 327,889 Balance at end of the year 9 8 98 Decrease in treasury stock (3) (1) (23) Foreign currency translation Total changes during the year (1,889) 16,519 200,997 adjustments Balance at end of the year 375,785 392,305 4,773,149 Balance at beginning of the year (12,241) (20,255) (246,450) Treasury stock Net changes in items other than shareholders’ equity (8,014) (4,001) (48,682) Balance at beginning of the year (11,524) (11,542) (140,434) Changes during the year: Total changes during the year (8,014) (4,001) (48,682) Increase in treasury stock (26) (11) (139) Balance at end of the year (20,255) (24,256) (295,132) Total accumulated other Decrease in treasury stock 8 4 50 comprehensive income Total changes during the year (17) (7) (88) Balance at beginning of the year 21,019 6,125 74,522 Balance at end of the year (11,542) (11,549) (140,523) Net changes in items other Total shareholders’ equity than shareholders’ equity (14,894) (2,616) (31,840) Balance at beginning of the year 463,234 461,326 5,612,925 Total changes during the year (14,894) (2,616) (31,840) Changes during the year: Balance at end of the year 6,125 3,508 42,682 Cash dividends (10,427) (10,427) (126,868) Minority interests Net income 8,541 26,949 327,889 Balance at beginning of the year 11,629 12,446 151,439 Increase in treasury stock (26) (11) (139) Net changes in items other Decrease in treasury stock 4 2 27 than shareholders’ equity 817 411 5,005 Total changes during the year (1,907) 16,512 200,908 Total changes during the year 817 411 5,005 Balance at end of the year ¥ 461,326 ¥ 477,839 $ 5,813,834 Balance at end of the year 12,446 12,858 156,444 Total net assets Balance at beginning of the year 495,893 479,848 5,838,887 Changes during the year: Cash dividends (10,427) (10,427) (126,868) Net income 8,541 26,949 327,889 Increase in treasury stock (26) (11) (139) Decrease in treasury stock 4 2 27 Net changes in items other than shareholders’ equity (14,077) (2,205) (26,835) Total changes during the year (15,985) 14,307 174,073 Balance at end of the year ¥479,898 ¥494,205 $6,012,961

The accompanying notes are an integral part of these statements.

30 NIPPON EXPRESS Annual Report 2012 Consolidated Statements of Cash Flows Nippon Express Co., Ltd. and consolidated subsidiaries For the years ended March 31, 2011 and 2012

Thousands of Millions of yen U.S. dollars 2011 2012 2012 Cash flows from operating activities: Income before income taxes and minority interests ¥ 22,991 ¥ 49,487 $ 602,106 Depreciation and amortization 52,470 48,390 588,760 Impairment loss — 169 2,056 Loss on adjustment for changes of accounting standard for asset 7,505 — — retirement obligations Loss on disaster 4,847 269 3,281 Loss on settlement — 1,614 19,648 Loss on sale or write-down of securities, net 5,894 425 5,171 Gain on sale or disposal of property and equipment, net (998) (4,706) (57,265) Increase in provision for bonuses 54 428 5,209 Increase (decrease) in provision for retirement benefits (1,483) 1,466 17,844 Interest and dividend income (2,657) (3,592) (43,706) Interest expense (Note 2) 3,456 3,224 39,232 Equity in earnings of unconsolidated subsidiaries and affiliates (541) (455) (5,547) (Increase) decrease in trade receivables 2,999 (26,807) (326,160) (Increase) decrease in inventories 162 (317) (3,864) Increase (decrease) in accounts payable (4,670) 19,362 235,584 Increase in consumption taxes payable 141 311 3,783 Other (9,017) 20,225 246,076 Sub-total 81,152 109,494 1,332,213 Interest and dividends received 2,964 3,881 47,231 Interest paid (Note 2) (3,604) (3,230) (39,307) Payment related to transfer of retirement benefit obligation (3,908) — — Payment for loss on disaster — (2,458) (29,907) Income taxes paid (12,209) (9,881) (120,224) Net cash provided by operating activities 64,394 97,806 1,190,005 Cash flows from investing activities: Payment for purchase of securities (517) (1,570) (19,111) Proceeds from sale of securities 326 581 7,077 Payment for purchase of property and equipment (58,008) (42,592) (518,214) Proceeds from sale of property and equipment 8,511 14,465 176,006 Other 1,601 (2,447) (29,783) Net cash used in investing activities (48,086) (31,563) (384,026) Cash flows from financing activities: Change in short-term loans payable (3,395) (115) (1,408) Change in commercial paper (7,000) 2,000 24,333 Proceeds from long-term loans payable 101,106 36,575 445,012 Payment for long-term loans payable (104,857) (46,988) (571,703) Proceeds from issuance of bonds — 30,000 365,007 Proceeds from stock issuance to minority shareholders 99 19 243 Cash dividends (10,427) (10,427) (126,868) Other (1,750) (935) (11,378) Net cash provided by (used in) financing activities (26,225) 10,129 123,239 Effect of exchange rate changes on cash and cash equivalents (4,207) (1,821) (22,158) Net increase (decrease) in cash and cash equivalents (14,124) 74,551 907,058 Cash and cash equivalents at beginning of year 121,187 107,062 1,302,626 Cash and cash equivalents at end of year (Note 1) ¥ 107,062 ¥ 181,614 $ 2,209,685

The accompanying notes are an integral part of these statements.

NIPPON EXPRESS Annual Report 2012 31 (1) Consolidated Financial Statements Notes to Consolidated Financial Statements Nippon Express Co., Ltd. and consolidated subsidiaries

1. Presentation of amounts in the consolidated financial statements The yen amounts are rounded off in millions and U.S. dollar amounts in thousands. The total Japanese yen and U.S. dollar amounts shown in the financial statements do not necessarily agree with the sum of the individual amounts. U.S. dollar amounts presented in the financial statements are included solely for convenience. The rate of ¥82.19 to US$1.00, prevailing on March 31, 2012, has been used for translation into U.S. dollar amounts in the financial statements. The inclusion of such amounts should not be construed as a representation that Japanese yen amounts have been or could in the future be converted into U.S. dollars at that or any other rate.

2. Basis of presentation of consolidated financial statements and summary of significant accounting policies (1) Scope of consolidation 1) There are 250 consolidated subsidiaries. The names of major subsidiaries are described in “Management Discussion and Analysis, Corporate Overview.” A total of seven companies, including Nippon Express Europe GmbH, are newly included in the scope of consolidation from the year ended March 31, 2012 due to establishment or share acquisition. Kato Transport Co., Ltd. was excluded from the scope of consolidation due to the sale of its shares. Toyama Nittsu Automobile Engineering Co., Ltd. was excluded due to a merger with other consolidated subsidiaries, and five companies including Nittsu Minami Iwate Transport Co., Ltd. were excluded due to liquidation.

2) A total of 26 subsidiaries, including Nittsu Energy Kanto, are excluded from the scope of consolidation as these companies are small, and their impact on the consolidated financial statements in terms of total assets, net sales, net income or loss and retained earnings corresponding to interest held by the Company is considered to be immaterial as a whole.

3) A total of 20 subsidiaries, including Nippon Express Travel U.S.A., Inc., held by 11 overseas consolidated subsidiaries, including Nippon Express U.S.A., Inc., are included in the scope of the consolidation.

(2) Application of equity-method 1) Companies to which the equity method is applied: a. Subsidiary: Awa Godo Tsuun Co., Ltd. b. Affiliates: There are 21 equity-method affiliates, including Nippon Vopack Co., Ltd. Effective the year ended March 31, 2012, Map Cargo S.A.S. has been included in the scope of equity method affiliates, as the Company newly acquired a portion of its shares.

2) A total of 25 subsidiaries, including Nittsu Energy Kanto, and 41 affiliates, including TOKYO KOUN CO., LTD., other than above 22 companies are excluded from the scope of subsidiaries or affiliates accounted for by the equity method, but are carried at cost, since their impact on the consolidated financial statements in terms of net income or loss and retained earnings corresponding to interest held by the Company is considered to be immaterial as a whole.

(3) Accounting period of the consolidated subsidiaries A total of 62 overseas consolidated subsidiaries, including Nippon Express U.S.A., Inc., have a balance sheet date of December 31. In preparing the accompanying consolidated financial statements, the financial statements as of December 31 and for the year then ended are used in consolidation after making necessary adjustments for significant transactions occurring from January 1 through March 31. One equity-method affiliate has a balance sheet date of August 31 and eight equity-method affiliates have a balance sheet date of December 31. Significant transactions between these dates and March 31 are reflected in computing the equity earnings attributable to the Group.

(4) Significant accounting policies 1) Valuation methods a. Securities Available-for-sale Securities - Available-for-sale securities with market value Available-for-sale securities with market value are stated at fair value based on the market price as of the balance sheet date with any unrealized gains or losses, net of applicable taxes, reported as a component of accumulated other comprehensive income. Cost of sold securities is stated using the moving average method. - Available-for-sale securities without market value Available-for-sale securities without market value are stated at cost using the moving-average method. b. Derivatives Derivatives are stated at fair value. c. Inventories Inventories are stated primarily at the lower of cost determined by the moving-average method (balance sheet amounts are written down on the basis of any decreased profitability).

32 NIPPON EXPRESS Annual Report 2012 2) Depreciation and amortization a. Property and equipment, except for leased assets Depreciation of property and equipment, except for buildings, is mainly computed by the declining-balance method over the applicable useful lives. Buildings are depreciated by the straight-line method over their estimated lives. Overseas consolidated subsidiaries mainly use the straight-line method over the estimated lives of the assets. Useful lives of assets are principally as follows: Vehicles 3 to 7 years Buildings and structures 3 to 60 years Machinery and equipment, tools, furniture and fixtures and vessels 2 to 20 years b. Intangible fixed assets, except for leased assets Amortization of intangible fixed assets is computed by the straight-line method over the estimated useful lives. Software costs for internal use are amortized using the straight-line method over the available period (five years). Overseas consolidated subsidiaries mainly use straight-line method over the estimated lives. c. Leased assets Depreciation of leased assets is computed by the straight-line method with zero residual value, assuming the lease period as the useful life.

3) Allowances and provisions a. Allowance for doubtful accounts To provide for potential loss on receivables, the Company provides an allowance for the expected amount of irrecoverable receivables. Allowances for ordinary bad debts are computed, based on the historical rate of default. For specific debts where recovery is doubtful, the Company considers the likelihood of recovery on an individual basis. The allowance for doubtful accounts is adjusted after offsetting receivables and payables between consolidated subsidiaries. b. Provision for bonuses Provision for bonuses is provided at an estimated amount to be paid to the employees by the Company and its consolidated subsidiaries based on services rendered during the current fiscal year. c. Provision for directors’ bonuses Provision for directors’ bonuses is provided at an estimated amount to be paid to the directors by the Company and its consolidated subsidiaries based on services rendered during the current fiscal year. d. Allowance for warranties and repairs Allowance for warranties and repairs is provided at an estimated amount based on the past experience of certain consolidated subsidiaries to provide quality assurance from initial purchase on sales of new cars. e. Provision for retirement benefits To prepare for lump-sum retirement and severance payments, an accrual is stated at the present value of the estimated future obligations arising from services rendered to the end of the fiscal year. The retirement benefits obligation is attributed to each period by the straight-line method over the years of service of employees. Actuarial gain and loss are amortized in the year following the year in which the gain or loss is recognized primarily by the straight-line method over the period of the average remaining service years of the employees. f. Provision for directors’ retirement benefits Certain consolidated subsidiaries provide a reserve for the future payment of retirement benefits to directors, based on the amounts required to be paid according to their internal rules. g. Provision for special repairs Provision for special repairs is provided at an estimated amount for the future repairs of vessels based on the past experience of certain consolidated subsidiaries. h. Provision for loss on disaster Restoration costs related to the Great East Japan Earthquake likely to accrue after the end of the fiscal year, including primarily costs for repairs, have been rationally estimated and recorded in the consolidated balance sheets.

4) Revenue and expenses a. Finance lease revenue Finance lease revenue and related cost of revenue are recorded when the lease payment is received. b. Completed construction The percentage-of-completion method is applied to the contracts if the outcome of the construction activity is deemed certain for the percentage of the contractor’s obligation performed at the balance sheet date; otherwise, the completed-contract method is applied. The percentage of completion is determined using the ratio of cost incurred to the estimated total cost.

NIPPON EXPRESS Annual Report 2012 33 (1) Consolidated Financial Statements

5) Hedge accounting a. Hedge accounting method Deferred hedge accounting is adopted. Receivables and payables denominated in foreign currencies for which forward foreign exchange contracts are used to hedge the risk of currency fluctuation are translated at the contracted rate if the forward contracts qualify for hedge accounting. b. Hedging instruments and hedged items - Hedging instruments Forward foreign exchange contracts - Hedged items Receivables and payables denominated in foreign currencies and foreign currency-denominated forecasted transactions c. Hedging policy The Company and its consolidated subsidiaries use derivatives only for the purpose of hedging the exposure of assets and liabilities to market fluctuation risk. d. Method for evaluating hedging effectiveness The Company and its consolidated subsidiaries use internally available management data to assess the hedging effectiveness. e. Other Forward foreign exchange contracts used by the Company and its consolidated subsidiaries are overseen by the Management Department based on the application form submitted by each trading section. The Internal Audit Department periodically examines the execution and controls on the forward foreign exchange contracts.

6) Amortization of goodwill Goodwill is amortized in equal installments over 5 years.

7) Cash and cash equivalents in the consolidated statements of cash flows Cash and cash equivalents include cash at hand, demand deposits at banks and highly liquid short-term investments with negligible risk of fluctuation in value and maturities of less than three months.

8) Accounting method for consumption tax Consumption taxes with respect to the Company and its domestic subsidiaries are excluded from respective transaction amounts. This is not applicable to overseas consolidated subsidiaries.

9) Deferred assets Bond issuance costs are fully charged to income as incurred.

10) Of the equity method affiliates, domestic subsidiaries and affiliates (16 companies) apply basically the same accounting standards as the Company while certain foreign subsidiaries (6 companies) apply accounting standards prevailing in the country in which they operate, none of which are materially different from the accounting standards applied by the Company.

3. Additional information Effective April, 2011, the Company has adopted Accounting Standards Board of Japan (ASBJ) Statement No. 24 “Accounting Standard for Accounting Changes and Error Corrections” issued on December 4, 2009 and ASBJ Guidance No. 24 “Guidance on Accounting Standard for Accounting Changes and Error Corrections” issued on December 4, 2009 for accounting changes and corrections of prior period errors.

4. Notes to Consolidated Balance Sheets *(1) Assets pledged as collateral and secured payables Assets pledged as collateral are as follows:

2011 2012 2012 (As of March 31, 2011) (As of March 31, 2012) (As of March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Time deposits 155 150 1,828 Buildings 5,926 5,446 66,268 Structures 105 60 730 Machinery and equipment 12 9 110 Land 3,960 3,449 41,965 Investment securities 467 455 5,546 Lease investment assets 380 223 2,718 Total 11,007 9,794 119,167

34 NIPPON EXPRESS Annual Report 2012 The Company’s secured payables are as follows:

2011 2012 2012 (As of March 31, 2011) (As of March 31, 2012) (As of March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Accounts payable—trade 3,162 4,745 57,743 Long-term loans payable 2,255 1,449 17,641 Short-term loans payable and 1,869 829 10,093 others Total 7,287 7,025 85,477

*(2) Acquisition cost of the assets acquired as substitute for the assets transferred due to expropriation are stated at the book values of such transferred assets, where the difference between the acquisition cost and book values (provision for cost reduction) are as follows: 2011 2012 2012 (As of March 31, 2011) (As of March 31, 2012) (As of March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Buildings 132 1,038 12,637 Machinery and equipment 137 215 2,616 Vehicles 10 43 529 Land 186 85 1,039 Structures and others 179 3 39 Total 646 1,386 16,863

*(3) Investments in unconsolidated subsidiaries and affiliates are as follows: 2011 2012 2012 (As of March 31, 2011) (As of March 31, 2012) (As of March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Equity securities (included in 9,929 9,788 119,097 investment securities) Investments in capital or partnerships (included in Other 1,760 1,899 23,115 under investments and other assets)

(4) Notes discounted with banks 2011 2012 2012 (As of March 31, 2011) (As of March 31, 2012) (As of March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) 46 — —

(5) Guarantees of loans The Company has provided guarantees of loans to unconsolidated subsidiaries and affiliates in respect of their borrowings from financial institutions.

(2011) As of March 31, 2011 Guaranteed amount Guaranteed party Type (Millions of yen) World Cargo Distribution Center Co., Ltd. 678 Loan guarantee Kobe Port International Distribution Center 578 Loan guarantee Co., Ltd. Yokkaichi Port International Freight Center 11 Loan guarantee Co., Ltd. Guarantees for employees’ housing loans 6 Loan guarantee Nittsu Shoji U.S.A., Inc. 163 Loan guarantee Total 1,439

NIPPON EXPRESS Annual Report 2012 35 (1) Consolidated Financial Statements

(2012) As of March 31, 2012 Guaranteed amount Guaranteed amount Guaranteed party Type (Millions of yen) (Thousands of U.S. dollars) World Cargo Distribution Center 571 6,956 Loan guarantee Co., Ltd. Kobe Port International 495 6,030 Loan guarantee Distribution Center Co., Ltd. Yokkaichi Port International 3 47 Loan guarantee Freight Center Co., Ltd. Guarantees for employees’ 3 38 Loan guarantee housing loans Nittsu Shoji U.S.A., Inc. 139 1,700 Loan guarantee Total 1,214 14,772

*(6) (2011) “Other current assets” include a reserve payment resulting from sales of notes receivable as part of asset securitization in the amount of ¥3,421 million.

(2012) “Other current assets” include a reserve payment resulting from sales of notes receivable as part of asset securitization in the amount of ¥2,975 million (US$36,203 thousand).

*(7) Inventories 2011 2012 2012 (As of March 31, 2011) (As of March 31, 2012) (As of March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Merchandise and finished goods 2,269 2,561 31,160 Work in process 337 335 4,080 Raw materials and stores 2,200 2,223 27,050

(8) Contingent liabilities (2011) In March 2009, the Fair Trade Commission issued a cease and desist order as well as an order to pay a punitive levy, after it determined that the Company had breached the Antimonopoly Act, in respect of a fuel surcharge applied by its international air cargo transport service. In a related matter, the Company is being investigated by the U.S. Department of Justice on suspicion of similar charges in respect of the U.S. competition law. At this point in time, it is difficult to make a reasonable estimation of the amount of any fines to be payable in association with these charges.

(2012) Not applicable.

*(9) (2011) Not applicable.

(2012) Notes due at the end of the fiscal year are settled on the date of clearance. As March 31, 2012 was a bank holiday, the following notes due as of that date are included in their respective balances in the consolidated balance sheets.

(Millions of yen) (Thousands of U.S. dollars) Notes receivable—trade 948 11,536 Notes payable—trade 1,709 20,793

36 NIPPON EXPRESS Annual Report 2012 5. Notes to Consolidated Statements of Income *(1) Provisions for various reserves recognized in operating costs and selling, general and administrative expenses are as follows: (2011) Operating costs Selling, general, and administrative expenses (Millions of yen) (Millions of yen) Provision for bonuses 16,634 2,519 Provision for directors’ bonuses — 137 Allowance for warranties and repairs — 360 Provision for retirement benefits 15,774 1,529 Provision for directors’ retirement benefits — 160 Provision for special repairs 77 —

(2012) Selling, general, and Selling, general, and Operating costs Operating costs administrative expenses administrative expenses (Millions of yen) (Thousands of U.S. dollars) (Millions of yen) (Thousands of U.S. dollars) Provision for bonuses 16,855 205,083 2,664 32,420 Provision for directors’ bonuses — 139 1,695 Allowance for warranties and repairs — 3 41 Provision for retirement benefits 16,200 197,106 1,588 19,327 Provision for directors’ retirement benefits — 160 1,948 Provision for special repairs 67 826 —

*(2) Breakdown of gain on sales of property and equipment 2011 2012 2012 (From April 1, 2010 to March 31, 2011) (From April 1, 2011 to March 31, 2012) (From April 1, 2011 to March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Land 4,631 6,948 84,542 Buildings 327 365 4,445 Intangible assets and others 273 272 3,316 Total 5,233 7,586 92,304

*(3) Breakdown of loss on disposal of property and equipment 2011 2012 2012 (From April 1, 2010 to March 31, 2011) (From April 1, 2011 to March 31, 2012) (From April 1, 2011 to March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Buildings 2,344 1,728 21,026 Structures 310 177 2,164 Machinery and equipment 116 193 2,352 Tools, furniture and fixtures 256 142 1,735 Land 175 577 7,027 Intangible assets and others 1,228 403 4,910 Total 4,432 3,223 39,217

*(4) Breakdown of gain on sales of securities 2011 2012 2012 (From April 1, 2010 to March 31, 2011) (From April 1, 2011 to March 31, 2012) (From April 1, 2011 to March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Available-for-sale securities 46 146 1,779 Total 46 146 1,779

*(5) Breakdown of loss on sales of securities 2011 2012 2012 (From April 1, 2010 to March 31, 2011) (From April 1, 2011 to March 31, 2012) (From April 1, 2011 to March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Available-for-sale securities 47 374 4,557 Total 47 374 4,557

NIPPON EXPRESS Annual Report 2012 37 (1) Consolidated Financial Statements

*(6) Loss on valuation of golf membership included in the loss on valuation of investment securities 2011 2012 2012 (From April 1, 2010 to March 31, 2011) (From April 1, 2011 to March 31, 2012) (From April 1, 2011 to March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) 20 43 530

*(7) Loss on disaster (2011) A provision has been recorded for expenses required to restore facilities damaged by the Great East Japan Earthquake. A breakdown of the loss on disaster is as follows: (Millions of yen) Expenses for the restoration of noncurrent assets 3,372 Loss on damages to noncurrent assets 665 Other 809

(2012) A description is omitted because the amount is immaterial.

6. Notes to Consolidated Statements of Comprehensive Income 2012 (From April 1, 2011 to March 31, 2012) *(1) Reclassification adjustments and tax effects on components of other comprehensive income (Millions of yen) (Thousands of U.S. dollars) Valuation differences on available-for-sale securities Amount recognized during the year (1,713) (20,844) Reclassification adjustments 206 2,508 Before tax effect adjustment (1,507) (18,336) Tax effects 2,900 35,290 Valuation differences on available-for-sale securities 1,393 16,953 Deferred gains (losses) on hedges Amount recognized during the year (3) (40) Tax effects 1 15 Deferred gains (losses) on hedges (2) (24) Foreign currency translation adjustments Amount recognized during the year (4,079) (49,635) Reclassification adjustments 8 102 Foreign currency translation adjustments (4,071) (49,533) Share of other comprehensive income of affiliates accounted for using the equity method Amount recognized during the current fiscal year (104) (1,273) Total other comprehensive income (2,784) (33,877)

7. Notes to Consolidated Statements of Changes in Net Assets 2011 (From April 1, 2010 to March 31, 2011) (1) Class and number of shares issued Number of shares Number of shares Class of shares Increase Decrease as of April 1, 2010 as of March 31, 2011 Common stock (Thousand shares) 1,062,299 — — 1,062,299

(2) Class and number of treasury stock Number of shares Number of shares Class of shares Increase Decrease as of April1, 2010 as of March 31, 2011 Common stock (Thousand shares) 19,500 72 14 19,559

(Reasons for changes) The increase in common stock in treasury is due to the purchase of shares of less than one unit. The decrease in common stock in treasury is due to the transfer of shares of less than one unit.

38 NIPPON EXPRESS Annual Report 2012 (3) Dividends 1) Dividends paid Total amount of dividends Dividend per share Resolution Class of shares Record date Effective date (Millions of yen) (yen) General Shareholders’ Meeting Common stock 5,213 5.0 March 31, 2010 June 30, 2010 held on June 29, 2010 Board of Directors’ Meeting Common stock 5,213 5.0 September 30, 2010 December 3, 2010 held on October 29, 2010

2) Dividends whose record date falls during the year ended March 31, 2011, but whose effective date is in the following fiscal year Total amount of Dividend per share Resolution Class of shares Source of dividends dividends Record date Effective date (yen) (Millions of yen) General Shareholders’ Meeting Retained Common stock 5,213 5.0 March 31, 2011 June 30, 2011 held on June 29, 2011 earnings

2012 (From April 1, 2011 to March 31, 2012) (1) Class and number of shares issued Number of shares Number of shares Class of shares Increase Decrease as of April 1, 2011 as of March 31, 2012 Common stock (Thousand shares) 1,062,299 — — 1,062,299

(2) Class and number of treasury stock Number of shares Number of shares Class of shares Increase Decrease as of April 1, 2011 as of March 31, 2012 Common stock (Thousand shares) 19,559 35 7 19,588

(3) Dividends 1) Dividends paid Total amount of dividends Dividend per share Resolution Class of shares Record date Effective date (Millions of yen) (yen) General Shareholders’ Common stock 5,213 5.0 March 31, 2011 June 30, 2011 Meeting held on June 29, 2011 Board of Directors’ Meeting held on Common stock 5,213 5.0 September 30, 2011 December 2, 2011 October 31, 2011

Total amount of dividends Dividend per share Resolution Class of shares Record date Effective date (Thousands of U.S. dollars) (U.S. dollars) General Shareholders’ Common stock 63,434 0.06 March 31, 2011 June 30, 2011 Meeting held on June 29, 2011 Board of Directors’ Meeting held on Common stock 63,433 0.06 September 30, 2011 December 2, 2011 October 31, 2011

2) Dividends whose record date falls in the year ended March 31, 2012, but whose effective date is in the following fiscal year Total amount of Dividend per share Resolution Class of shares Source of dividends dividends Record date Effective date (yen) (Millions of yen) General Shareholders’ Common stock Retained earnings 5,213 5.0 March 31, 2012 June 29, 2012 Meeting held on June 28, 2012

NIPPON EXPRESS Annual Report 2012 39 (1) Consolidated Financial Statements

Total amount of Dividend per share Resolution Class of shares Source of dividends dividends Record date Effective date (U.S. dollars) (Thousands of U.S. dollars) General Shareholders’ Common stock Retained earnings 63,432 0.06 March 31, 2012 June 29, 2012 Meeting held on June 28, 2012

8. Notes to Consolidated Statements of Cash Flows *(1) Reconciliation of the year-end balance of cash and cash equivalents with cash and cash in banks in the consolidated balance sheets 2011 2012 2012 (From April 1, 2010 to March 31, 2011) (From April 1, 2011 to March 31, 2012) (From April 1, 2011 to March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Cash and cash in banks 113,149 187,797 2,284,917 Time deposits with maturities of (5,931) (6,033) (73,403) over three months Time deposits pledged as (155) (150) (1,828) collateral for debts Cash and cash equivalents 107,062 181,614 2,209,685

*(2) (2011) “Interest expenses” as well as “Interest expenses paid” in cash flows from operating activities are presented excluding ¥982 million in financing costs included in cost of sales in the Goods Sales business (leasing business).

(2012) “Interest expenses” as well as “Interest expenses paid” in cash flows from operating activities are presented excluding ¥801 million (US$ 9,756 thousand) in financing costs included in cost of sales in the Goods Sales business (leasing business).

9. Notes to Leases (1) Finance leases

(Lessee) —

(Lessor) Breakdown of lease investment assets 2011 2012 2012 (As of March 31, 2011) (As of March 31, 2012) (As of March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Gross lease receivables 89,627 90,783 1,104,556 Estimated residual values 1,114 1,194 14,533 Unearned interest income (2,752) (2,126) (25,871) Lease investment assets 87,989 89,851 1,093,217

Lease receivables and maturities of gross lease receivables corresponding to lease investment assets subsequent to March 31, 2011 and 2012 are as follows: 2011 (As of March 31, 2011) Lease receivables Lease investment assets (Millions of yen) (Millions of yen) Due in one year or less 3,153 30,891 Due after one year through two years 2,672 23,931 Due after two years through three years 1,647 16,980 Due after three years through four years 886 10,052 Due after four years through five years 418 3,974 Due after five years 495 3,797

40 NIPPON EXPRESS Annual Report 2012 2012 (As of March 31, 2012) Lease receivables Lease receivables Lease investment assets Lease investment assets (Millions of yen) (Thousands of U.S. dollars) (Millions of yen) (Thousands of U.S. dollars) Due in one year or less 3,161 38,460 30,826 375,062 Due after one year 2,134 25,976 23,977 291,737 through two years Due after two years 1,319 16,054 16,896 205,578 through three years Due after three years 795 9,681 10,326 125,646 through four years Due after four years 434 5,280 4,487 54,603 through five years Due after five years 447 5,440 4,267 51,928

(2) Operating leases Future payment obligations under non-cancellable operating leases are as follows:

(Lessee) 2011 2012 2012 (As of March 31, 2011) (As of March 31, 2012) (As of March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Portion due within one year 18,205 17,968 218,623 Thereafter 110,059 103,669 1,261,337 Total 128,264 121,638 1,479,961

(Lessor) —

10. Financial instruments 2011 (From April 1, 2010 to March 31, 2011)

(1) Financial instruments and related disclosures 1) Group policy for financial instruments The Group raises necessary funds for capital investments mainly by bank loans and issuance of bonds. Short-term working funds are raised mainly by bank loans. Derivatives are used only for hedging purposes to manage the exposure of assets and liabilities to risks of market fluctuation. Mainly forward foreign currency contracts are utilized to hedge foreign exchange risk on receivables and payables denominated in foreign currencies as described below. The Group does not enter into derivatives for speculative or trading purposes.

2) Nature and risk of financial instruments and risk management system Trade receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its customer credit risk by managing payment terms and balances by monitoring periodically the financial positions of customers in accordance with internal guidelines. Although foreign currency trade receivables are exposed to foreign currency fluctuation risk, they are partially hedged by forward foreign currency contracts. Investment securities mainly consisting of equity shares of customers or suppliers owned for business or capital alliance purposes are exposed to the risk of market price fluctuations and their holding status is continuously reviewed by monitoring the market value and financial position of the issuers on a regular basis and considering relationships with the counterparties. The payment terms of trade payables are almost all less than one year. Although some are denominated in foreign currencies and exposed to foreign currency fluctuation risk, they are partially hedged using forward foreign currency contracts. Short-term loans payable are mainly used for operations and the main objective of long-term loans and bonds is to raise necessary funds for capital investments. Maturities of bonds are within eight years after the balance sheet date and interest expenses of long-term loans are fixed by the fixed interest rate. Derivatives mainly include forward foreign currency contracts, which are used to hedge foreign exchange risk on trade receivables and payables denominated in foreign currencies. The effectiveness of hedging is assessed using internal effectiveness management data. Derivative transactions are overseen by the Management Department based on the application form submitted by each trading section, and the Internal Audit Department periodically examines the execution and controls on the derivative transactions. In using derivatives, the Group only enters into the contracts with highly rated financial institutions, and it believes that credit risk posed by default is quite limited. With respect to liquidity risk related to fund raising, the Group manages its liquidity risk by controlling the funds of the Group as a whole on a timely basis, diversifying the funding instruments, obtaining commitment lines from financial institutions and making adjustments for the short-term and long-term fund considering market environments.

NIPPON EXPRESS Annual Report 2012 41 (1) Consolidated Financial Statements

3) Supplementary explanation about the fair values of financial instruments The fair values of financial instruments comprise the quoted market price and other rationally computed values, if market price is not available. Since various factors are considered in computing the values, such values may change depending on the assumptions used. The contract amounts of derivatives described in Note “Derivatives” do not represent the exposure to the market risk related to the derivatives.

(2) Fair value of financial instruments Carrying amount, fair value and related unrealized gain (loss) on financial instruments at March 31, 2011 are as follows: Millions of yen Carrying amount (*1) Fair value (*1) Unrealized gain (loss) 1) Cash and cash in banks 113,149 113,149 —

2) Accounts receivable—trade 221,814 221,814 —

3) Lease investment assets 87,989 89,009 1,019

4) Investment securities Available-for-sale securities 67,263 67,263 —

5) Accounts payable—trade (119,899) (119,899) —

6) Short-term loans payable (3,375) (3,375) —

7) Bonds (50,000) (51,818) (1,818)

8) Long-term loans payable (246,044) (246,438) (394)

9) Derivatives (*2) a. To which hedge accounting (31) (31) — is not applied b. To which hedge accounting 6 6 — is applied

(*1) Liabilities are presented in parentheses. (*2) Receivables and payables incurred as a result of derivatives are presented on a net basis.

(Note 1) Computation method of fair values of financial instruments and other matters concerning securities and derivatives 1) Cash and cash in banks and 2) accounts receivable—trade: Due to the short maturities of these instruments, the carrying amount approximates fair value. 3) Lease investment assets: The fair value of lease investment assets is computed by discounting the aggregate value of the principal and interest using the interest rate assumed if entering into an identical lease agreement. 4) Investment securities: The fair value of equity securities is determined by the quoted price of the stock exchange. 5) Accounts payable—trade and 6) short-term loans payable: Due to the short maturities of these instruments, the carrying amount approximates fair value. Short-term loans payable do not include the current portion of long-term loans payable. 7) Bonds The fair value of bonds issued by the Company is computed with reference to their quoted market prices. 8) Long-term loans payable: The fair value of long-term loans payable is computed by discounting the aggregate value of the principal and interest on long- term loans payable classified by period using the interest rate assumed if the entering into an identical loan agreement. Long- term loans payable include the current portion. 9) Derivatives: Information on the fair value of derivatives is included in Note 12 “Derivatives.”

(Note 2) Unlisted equity securities whose carrying amount is ¥10,602 million are not included in (4) investment securities—available-for- sale securities, since there is no quoted market price and it is very difficult to determine fair values by estimating future cash flows.

42 NIPPON EXPRESS Annual Report 2012 (Note 3) The redemption schedule for monetary receivables and other securities with contractual maturities subsequent to the year end Millions of yen Due in one year or less Due after one year through five years Due after five years through ten years Cash and cash in banks 113,149 — — Accounts receivable—trade 221,814 — — Lease investment assets 29,580 53,562 4,846 (Note 4) Repayment schedule for short-term loans payable, bonds and long-term loans payable subsequent to the year end Millions of yen Due in one year or Due after one year Due after two years Due after three years Due after four years Due after five years less through two years through three years through four years through five years Short-term loans payable 3,375 — — — — — Bonds — — — 15,000 — 35,000 Long-term loans payable 46,550 70,546 41,641 10,567 31,775 44,963

2012 (From April 1, 2011 to March 31, 2012)

(1) Financial instruments and related disclosures 1) Group policy for financial instruments The Group raises necessary funds for capital investments mainly by bank loans and issuance of bonds. Short-term working funds are raised mainly by bank loans. Derivatives are used only for hedging purposes to manage the exposure of assets and liabilities to risks of market fluctuation. Mainly forward foreign currency contracts are utilized to avoid foreign exchange risk on receivables and payables denominated in foreign currencies as described below. The Group does not enter into derivatives for speculative or trading purposes.

2) Nature and risk of financial instruments and risk management system Trade receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its customer credit risk by managing payment terms and balances by monitoring periodically the financial positions of customers in accordance with internal guidelines. Although foreign currency trade receivables are exposed to foreign currency fluctuation risk, they are partially hedged by forward foreign currency contracts. Investment securities mainly consisting of equity shares of customers or suppliers owned for business or capital alliance purposes are exposed to the risk of market price fluctuations and their holding status is continuously reviewed by monitoring the market value and financial position of the issuers on a regular basis and considering relationships with the counterparties. The payment terms of trade payables are almost all less than one year. Although some of them are denominated in foreign currencies and exposed to foreign currency fluctuation risk, they are partially hedged using forward foreign currency contracts. Short- term loans payable are mainly used for operations and the main objective of long-term loans and bonds is to raise necessary funds for capital investments. Maturities of bonds are within nine years after the balance sheet date and interest expenses of long-term loans are fixed by the fixed interest rate. Derivatives mainly include forward foreign currency contracts, which are used to hedge foreign exchange risk on trade receivables and payables denominated in foreign currencies. The effectiveness of hedging is assessed using internal effectiveness management data. Derivative transactions are overseen by the Management Department based on the application form submitted by each trading section, and the Internal Audit Department periodically examines the execution and controls on the derivative transactions. In using derivatives, the Group only enters into the contracts with highly rated financial institutions and it believes that credit risk arising from default is quite limited. With respect to liquidity risk related to fund raising, the Group manages its liquidity risk by controlling the funds of the Group as a whole on a timely basis, diversifying the funding instruments, obtaining commitment lines from financial institutions and making adjustments for the short-term and long-term fund considering market environments.

NIPPON EXPRESS Annual Report 2012 43 (1) Consolidated Financial Statements

(2) Fair value of financial instruments Carrying amount, fair value and related unrealized gain (loss) on financial instruments at March 31, 2012 are as follows: Millions of yen Carrying amount (*1) Fair value (*1) Unrealized gain (loss) 1) Cash and cash in banks 187,797 187,797 —

2) Accounts receivable—trade 241,822 241,822 —

3) Lease investment assets 89,851 90,290 439

4) Investment securities Available-for-sale securities 66,501 66,501 —

5) Accounts payable—trade (135,158) (135,158) —

6) Short-term loans payable (3,133) (3,133) —

7) Bonds (80,000) (82,521) (2,521)

8) Long-term loans payable (235,964) (239,310) (3,346)

9) Derivatives (*2) a. To which hedge accounting — — — is not applied b. To which hedge accounting 13 13 — is applied

Thousands of U.S. dollars Carrying amount (*1) Fair value (*1) Unrealized gain (loss) 1) Cash and cash in banks 2,284,917 2,284,917 —

2) Accounts receivable—trade 2,942,233 2,942,233 —

3) Lease investment assets 1,093,217 1,098,560 5,342

4) Investment securities Available-for-sale securities 809,117 809,117 —

5) Accounts payable—trade (1,644,459) (1,644,459) —

6) Short-term loans payable (38,130) (38,130) —

7) Bonds (973,354) (1,004,033) (27,393)

8) Long-term loans payable (2,870,962) (2,911,675) (40,712)

9) Derivatives (*2) a. To which hedge accounting — — — is not applied b. To which hedge accounting 158 158 — is applied

44 NIPPON EXPRESS Annual Report 2012 (*1) Liabilities are presented in parentheses. (*2) Receivables and payables incurred as a result of derivatives are presented on a net basis.

(Note 1) Computation method of fair values of financial instruments and other matters concerning securities and derivatives 1) Cash and cash in banks and 2) accounts receivable—trade: Due to the short maturities of these instruments, the carrying amount approximates fair value. 3) Lease investment assets: The fair value of lease investment assets is computed by discounting the aggregate value of the principal and interest using the interest rate assumed if entering into an identical lease agreement. 4) Investment securities: The fair value of equity securities is determined by the quoted price of the stock exchange. 5) Accounts payable—trade and (6) short-term loans payable: Due to the short maturities of these instruments, the carrying amount approximates fair value. Short-term loans payable do not include the current portion of long-term loans payable. 7) Bonds The fair value of bonds issued by the Company is computed with reference to their quoted market prices. 8) Long-term loans payable: The fair value of long-term loans payable is computed by discounting the aggregate value of the principal and interest on long- term loans payable classified by period using the interest rate assumed if the entering into an identical lease agreement. Long- term loans payable include the current portion. 9) Derivatives: Information on the fair value of derivatives is included in Note 12 “Derivatives.”

(Note 2) Unlisted equity securities whose carrying amount is ¥10,474 million (US$127,444 thousand) are not included in (4) investment securities—available-for-sale securities, since there is no quoted market price and it is very difficult to determine fair values by estimating future cash flows.

(Note 3) The redemption schedule for monetary receivables and other securities with contractual maturities subsequent to the year end Millions of yen Thousands of U.S. dollars Due in one year Due after one year Due after five years Due in one year Due after one year Due after five years or less through five years through ten years or less through five years through ten years Cash and cash in banks 187,797 — — 2,284,917 — — Accounts receivable—trade 241,822 — — 2,942,233 — — Lease investment assets 29,810 54,632 5,408 362,704 664,713 65,799 (Note 4) Repayment schedule for short-term loans payable, bonds and long-term loans payable subsequent to the year end Millions of yen Thousands of U.S. dollars Due in one year Due after one year Due in one year Due after one year Due after five years Due after five years or less through five years* or less through five years* Short-term loans payable 3,133 — — 38,130 — — Bonds — 35,000 45,000 — 425,842 547,511 Long-term loans payable 75,422 116,948 43,593 917,661 1,422,900 530,400 * For scheduled repayment amounts per year of short-term loans payable, bonds and long-term loans payable due after one year through five years, please refer to “Schedule of bonds” and “Schedule of loans” in the supplementary schedules to the consolidated financial statements.

NIPPON EXPRESS Annual Report 2012 45 (1) Consolidated Financial Statements

11. Securities 2011 (March 31, 2011)

(1) Available-for-sale securities

Millions of yen Carrying value Acquisition cost Unrealized gain (loss) Carrying value exceeds acquisition cost: 1) Equity securities 65,273 20,185 45,087 2) Other — — — Sub-total 65,273 20,185 45,087 Acquisition cost exceeds carrying value: 1) Equity securities 1,989 2,386 (396) 2) Other — — — Sub-total 1,989 2,386 (396) Total 67,263 22,571 44,691 (Note) Acquisition cost is presented after deducting impairment loss. Impairment loss on available-for-sale securities with fair value amounted to ¥80 million for the year ended March 31, 2011. The Company recognizes impairment loss when the fair value declines more than 50% of its acquisition cost and determines if it is necessary to recognize impairment loss after considering the movements of the individual fair value when the fair value declines to between 30% and 50% of the acquisition cost.

(2) Available-for-sale securities sold during 2011 (From April 1, 2010 to March 31, 2011)

Millions of yen Carrying value Total gains on sales Total losses on sales 1) Equity securities 308 46 47 2) Other — — — Total 308 46 47

2012 (March 31, 2012)

(1) Available-for-sale securities

Millions of yen Carrying value Acquisition cost Unrealized gain (loss) Carrying value exceeds acquisition cost: 1) Equity securities 63,625 19,445 44,179 2) Other — — — Sub-total 63,625 19,445 44,179 Acquisition cost exceeds carrying value: 1) Equity securities 2,888 3,883 (995) 2) Other — — — Sub-total 2,888 3,883 (995) Total 66,514 23,329 43,184

46 NIPPON EXPRESS Annual Report 2012 Thousands of U.S. dollars Category Carrying value Acquisition cost Unrealized gain (loss) Carrying value exceeds acquisition cost: 1) Equity securities 774,124 236,597 537,526 2) Other — — — Sub-total 774,124 236,597 537,526 Acquisition cost exceeds carrying value: 1) Equity securities 35,147 47,254 (12,107) 2) Other — — — Sub-total 35,147 47,254 (12,107) Total 809,271 283,852 525,419 (Note) Acquisition cost is presented after deducting impairment loss. Impairment loss on available-for-sale securities with fair value amounted to ¥11 million (US$134 thousand) for the year ended March 31, 2012. The Company recognizes impairment loss when the fair value declines more than 50% of its acquisition cost and determines if it is necessary to recognize impairment loss after considering the movements of the individual fair value when the fair value declines to between 30% and 50% of the acquisition cost.

(2) Available-for-sale securities sold during 2012 (From April 1, 2011 to March 31, 2012)

Millions of yen Carrying value Total gains on sales Total losses on sales 1) Equity securities 417 146 374 2) Other — — — Total 417 146 374

Thousands of U.S. dollars Carrying value Total gains on sales Total losses on sales 1) Equity securities 5,082 1,779 4,557 2) Other — — — Total 5,082 1,779 4,557

12. Derivatives 2011 (March 31, 2011)

(1) Derivative transactions to which hedge accounting is not applied at March 31, 2011 1) Currency-related derivatives Millions of yen Contract amount Contract amount due Type of derivative transaction Fair value (*1) Unrealized gain (loss) (notional principal) after one year Transactions other than Currency swap contracts: 135 — (31) (31) market Receive U.S.$/ Pay JPY (*1) Fair value is based on information obtained from the counter party financial institution.

NIPPON EXPRESS Annual Report 2012 47 (1) Consolidated Financial Statements

(2) Derivative transactions to which hedge accounting is applied at March 31, 2011 1) Currency-related derivatives Millions of yen Type of derivative Contract amount Contract amount due after Hedge accounting method Major hedged items Fair value (*1) transaction (notional principal) one year Deferral hedge Forward foreign Forecasted currency contracts: transactions on Selling US$ and other receivables and currencies payables in foreign 2,375 — (0) currencies Forward foreign currency contracts: Buying US$ and other currencies 1,238 — 6 Designation method Forward foreign currency contracts: Selling US$ and other Accounts currencies receivable—trade 302 — (*2) Forward foreign currency contracts: Buying US$ and Accounts other currencies payable—trade 805 — (*1) Fair value is based on information obtained from the counterparty financial institution. (*2) Fair values of derivatives are included in the fair values of the related accounts receivable—trade and accounts payable—trade.

2012 (March 31, 2012)

(1) Derivative transactions to which hedge accounting is not applied at March 31, 2012 Not applicable.

(2) Derivative transactions to which hedge accounting is applied at March 31, 2012 1) Currency-related derivatives Millions of yen Type of derivative Contract amount Contract amount due after Hedge accounting method Major hedged items Fair value (*1) transaction (notional principal) one year Deferral hedge Forward foreign Forecasted currency contracts: transactions on Selling US$ and other receivables and currencies payables in foreign 266 — (1) currencies Forward foreign currency contracts: Buying US$ and other currencies 482 — 14 Designation method Forward foreign currency contracts: Selling US$ and other Accounts currencies receivable—trade 266 — (*2) Forward foreign currency contracts: Buying US$ and Accounts other currencies payable—trade 1,518 —

48 NIPPON EXPRESS Annual Report 2012 Thousands of U.S. dollars Type of derivative Contract amount Contract amount due after Hedge accounting method Major hedged items Fair value (*1) transaction (notional principal) one year Deferral hedge Forward foreign Forecasted currency contracts: transactions on Selling US$ and other receivables and currencies payables in foreign 3,243 — (19) currencies Forward foreign currency contracts: Buying US$ and other currencies 5,867 — 178 Designation method Forward foreign currency contracts: Selling US$ and other Accounts currencies receivable—trade 3,238 — (*2) Forward foreign currency contracts: Buying US$ and Accounts other currencies payable—trade 18,480 — (*1) Fair value is based on information obtained from the counterparty financial institution. (*2) Fair values of derivatives are included in the fair values of the related accounts receivable—trade and accounts payable—trade.

13. Retirement benefit

(1) Overview of retirement benefit plans The Company and domestic consolidated subsidiaries have two types of defined-benefit retirement plans: a retirement lump sum payment plan and a defined-benefit corporate pension plan. Moreover, the Company and some domestic consolidated subsidiaries adopt defined contribution pension plans while some overseas consolidated subsidiaries have defined benefit pension plans. There are also cases when an employee is given a severance pay premium on leaving the Company. Further, the Company adopts a retirement allowance trust.

(2) Retirement benefits obligation

Thousands of Millions of yen U.S. dollars 2011 2012 2012 (As of March 31, 2011) (As of March 31, 2012) (As of March 31, 2012) A. Projected benefits obligation (166,427) (170,108) (2,069,693) B. Plan assets at fair market value 42,940 43,008 523,275 C. Unfunded retirement benefit (123,486) (127,100) (1,546,418) obligation (A+B) D. Unrecognized actuarial net loss 87,598 89,239 1,085,766 E. Unrecognized prior service cost (1,652) (1,009) (12,277) F. Retirement benefits obligation at (37,540) (38,870) (472,929) end of year (C+D+E) G. Provision for retirement benefits (37,540) (38,870) (472,929) (F) (Note) Some consolidated subsidiaries use the simplified method for calculating retirement benefits obligation.

NIPPON EXPRESS Annual Report 2012 49 (1) Consolidated Financial Statements

(3) Pension expense

Thousands of Millions of yen U.S. dollars 2011 2012 2012 (From April 1, 2010 (From April 1, 2011 (From April 1, 2011 to March 31, 2011) to March 31, 2012) to March 31, 2012) A. Service cost 7,369 6,819 82,974 B. Interest cost on projected benefits 3,227 2,947 35,860 obligation C. Expected return on plan assets (504) (520) (6,336) D. Amortization of unrecognized 7,760 9,097 110,682 actuarial net loss E. Prior service cost recognized (549) (554) (6,747) F. Net periodic pension cost 17,304 17,788 216,434 (A+B+C+D+E) G. Other 6,929 3,200 38,940 Total 24,233 20,989 255,374 (Note) Net periodic pension cost of consolidated subsidiaries using the simplified method are included in “A. Service cost.” “G. Other” is the premium paid to a defined contribution pension plan.

(4) Actuarial assumptions used to determine costs and obligations for retirement benefits

2011 2012 (From April 1, 2010 (From April 1, 2011 to March 31, 2011) to March 31, 2012) A. Allocation of projected benefits obligation Straight-line method Same as previous year B. Discount rate Mainly 1.75% Mainly 1.50% C. Expected rate of return on plan assets Mainly 2.5% Same as previous year D. Recognition period of prior service cost 15 years (Past service obligations are Same as previous year recognized evenly over fifteen years (a period not exceeding the expected average remaining working lives of employees) from the time of occurrence). E. Amortization period of actuarial net loss (gain) 12–15 years (Actuarial losses are Same as previous year recognized evenly over twelve to fifteen years (a period not exceeding the expected average remaining working lives of employees) following the respective fiscal years when such losses are recognized).

50 NIPPON EXPRESS Annual Report 2012 14. Income taxes (1) The significant components of the Company’s deferred tax assets and liabilities as of March 31, 2011 and 2012 are as follows: 2011 2012 2012 (As of March 31, 2011) (As of March 31, 2012) (As of March 31, 2012) (Millions of yen) (Millions of yen) (Thousands of U.S. dollars) Deferred tax assets: (Current) Allowance for doubtful accounts 185 95 1,163 Accrued bonuses 7,508 7,148 86,976 Enterprise tax payable 460 1,177 14,325 Lease transactions 658 342 4,168 Other 8,397 6,500 79,087 Total 17,210 15,264 185,720

(Noncurrent) Allowance for doubtful accounts 619 441 5,371 Retirement benefits 42,625 36,791 447,636 Unrealized gains 3,308 3,278 39,884 Impairment losses 3,390 3,025 36,813 Asset retirement obligations 3,294 2,764 33,629 Other 9,291 8,678 105,587 Total 62,530 54,978 668,924

Sub-total 79,740 70,243 854,644 Valuation allowance (14,582) (12,224) (148,728) Total deferred tax assets 65,158 58,019 705,915

Deferred tax liabilities: (Current) Reserve for deferred gains on fixed assets (1,063) (992) 12,073 Other (2,759) (2,579) 31,379 Total (3,823) (3,571) 43,452

(Noncurrent) Reserve for deferred gains on fixed assets (18,852) (16,450) 200,153 Gain on securities contribution to (20,960) (18,333) 186,018 employees’ retirement benefits trust Valuation differences on available-for-sale (18,189) (15,288) 223,068 securities Other (2,879) (2,763) 33,620 Total (60,881) (52,836) 642,861

Total deferred tax liabilities (64,705) (56,408) 686,313

Total net deferred tax assets—current 12,863 11,371 138,351 Total net deferred tax liabilities—current (32) (54) (658) Total net deferred tax assets—noncurrent 5,132 4,348 52,911 Total net deferred tax liabilities—noncurrent (17,510) (14,054) (171,003)

NIPPON EXPRESS Annual Report 2012 51 (1) Consolidated Financial Statements

(2) Reconciliation between the statutory tax rate and the effective tax rate after adoption of tax effect accounting

2011 2012 (From April 1, 2010 to March 31, 2011) (From April 1, 2011 to March 31, 2012) Statutory rate 40.7% 40.7% (Adjustment) Non-deductible items 4.7% 3.8% Non-taxable items (5.2)% (3.7) % Per capita inhabitants’ tax 5.0% 2.6% Changes in valuation allowance 22.2% (4.8) % Difference in tax rate applicable to foreign (3.6)% (2.9) % subsidiaries Reduction of year-end deferred tax assets — 2.2% due to the change of tax rate Other, net (5.6)% 5.9% Effective tax rates 58.2% 43.9%

(3) Revision of deferred tax assets and deferred tax liabilities due to the change of tax rates Following the enactment of the “Act for Partial Amendment of the Income Tax Act, etc. for the Purpose of Creating a Taxation System Responding to Changes in Economic and Social Structures” and “Act on Special Measures for Securing Financial Resources Necessary to Implement Measures for Reconstruction following the Great East Japan Earthquake” issued on December 2, 2011, statutory rates applied to the computation of deferred tax assets and deferred tax liabilities (limited to those expected to be reversed on or after April 1, 2012) have been revised from 40.7% to 38.0% for temporary differences expected to be recovered or settled between April 1, 2012 and March 31, 2015, to 35.6% for temporary differences expected to be recovered or settled on or after April 1, 2015. As a result of these revisions, deferred tax liabilities (net of deferred tax assets) decreased by ¥1,197 million (US$14,566 thousand), while income taxes—deferred, net valuation differences on available-for-sale securities and net deferred gains on hedges as of and for the year ended March 31, 2012, increased by ¥993 million (US$12,087 thousand), ¥2,190 million (US$26,649 thousand) and ¥0 million (US$4 thousand), respectively.

15. Asset retirement obligations 2011 (From April 1, 2010 to March 31, 2011) Asset retirement obligations that are stated in consolidated balance sheets 1) Description of the asset retirement obligations Asset retirement obligations are stated in respect of the Company’s obligations to restore the premises it occupies to their original conditions under the property lease contracts for warehouses and the fixed term land lease contracts for leased properties. Asset retirement obligations are also stated for the Company’s obligations to eliminate hazardous substances from the warehouses in which such substances are used.

2) Method for calculating the asset retirement obligations The asset retirement obligations are calculated using a 0.160%–2.315% periodic discount rate over the two to fifty years duration of use in most cases, and estimated based on the useful life.

3) Changes in total asset retirement obligations during 2011 Millions of yen Balance at beginning of the year (Note) 11,177 Increase due to acquisition of property and equipment 172 Accretion adjustment 169 Decrease due to settlement (179) Other (7) Balance at end of the year 11,331 (Note) This balance at beginning of the year was the result of the adoption of ASBJ Statement No. 18 “Accounting Standard for Asset Retirement Obligations” issued on March 31, 2008 and ASBJ Guidance No. 21 “Guidance on Accounting Standard for Asset Retirement Obligations” issued on March 31, 2008.

2012 (From April 1, 2011 to March 31, 2012) Asset retirement obligations that are stated in consolidated balance sheets 1) Description of the asset retirement obligations Asset retirement obligations are stated in respect of the Company’s obligations to restore the premises it occupies to their original conditions under the property lease contracts for warehouses and the fixed term land lease contracts for leased properties. Asset retirement obligations are also stated for the Company’s obligations to eliminate hazardous substances from the warehouses in which such substances are used.

52 NIPPON EXPRESS Annual Report 2012 2) Method for calculating the asset retirement obligations The asset retirement obligations are calculated using a 0.160%–2.315% periodic discount rate over the two to fifty years duration of use in most cases, and estimated based on the useful life. 3) Changes in total asset retirement obligations during 2012 Millions of yen Thousands of U.S. dollars Balance at beginning of the year 11,331 137,868 Increase due to acquisition of property and 321 3,913 equipment Accretion adjustment 169 2,066 Decrease due to settlement (441) (5,370) Other (30) (366) Balance at end of the year 11,351 138,111

16. Investment and rental property 2011 (From April 1, 2010 to March 31, 2011)

The Company and certain consolidated subsidiaries hold some rental properties such as office buildings, parking lots and land throughout Japan. Net rental profit (rental income included in net sales less rental expenses included in cost of sales) and other losses (included in loss on disposal of noncurrent assets) on investment and rental property for the year ended March 31, 2011 were ¥5,556 million and ¥134 million, respectively. The carrying amounts, changes in balances and market prices of such properties are as follows:

Millions of yen Carrying amount Fair value April 1, 2010 Increase (decrease) March 31, 2011 as of March 31, 2011 34,095 8,354 42,450 112,901 (Notes) 1. Carrying amount recognized in the balance sheet is stated at acquisition cost less accumulated depreciation. 2. Increase during the year ended March 31, 2011 primarily consists of an increase in the number of properties. 3. Fair value of properties as of March 31, 2011 is measured by the real estate appraisal reports from the real estate appraisers for significant properties.

2012 (From April 1, 2011 to March 31, 2012)

The Company and certain consolidated subsidiaries hold some rental properties such as office buildings, parking lots and land throughout Japan. Net rental profit (rental income included in net sales less rental expenses included in cost of sales) and other losses (included in loss on disposal of noncurrent assets) on investment and rental property for the year ended March 31, 2012 were ¥5,457 million (US$66,399 thousand) and ¥1,163 million (US$14,153 thousand), respectively. The carrying amounts, changes in balances and market prices of such properties are as follows: Millions of yen Carrying amount Fair value April 1, 2011 Increase (decrease) March 31, 2012 as of March 31, 2012 42,450 1,153 43,603 123,973

Thousands of U.S. dollars Carrying amount Fair value April 1, 2011 Increase (decrease) March 31, 2012 as of March 31, 2012 516,487 14,032 530,520 1,508,374 (Notes) 1. Carrying amount recognized in the balance sheet is stated at acquisition cost less accumulated depreciation. 2. Increase during the year ended March 31, 2012 primarily consists of an increase in the number of properties. 3. Fair value of properties as of March 31, 2012 is measured by the real estate appraisal reports from the real estate appraisers for significant properties.

NIPPON EXPRESS Annual Report 2012 53 (1) Consolidated Financial Statements

[Segment information] (1) Outline of the reportable segments Reportable segments of the Company are its organizational units whose individual financial results can be identified separately, and serve as the basis and subject of regular review by the Board of Directors, for the purpose of allocating management resources and evaluating business performance. The Company’s head office comprises functional headquarters including the Domestic Business Headquarters, International Business Headquarters, and Sales Promotion Headquarters. Each headquarters is responsible for developing comprehensive strategies for its products and services both in Japan and abroad, and engages in business activities based on such strategies. Under each headquarters, regional general managers are appointed to cover specific geographic regions as well as business divisions specializing in specific products and services, providing a structure that allows regional management and/or concerned field offices to make optimum business decisions on their own. Under this principle, the Company has developed a segment structure in the form of matrix comprising segments by geographical region along with segments by products and services as classified based on mode of transportation such as air or marine, in which the domestic Distribution & Transportation business comprises five reportable segments including Combined Business, Security Transportation, Heavy Haulage & Construction, Air Freight Forwarding & Travel, and Marine & Harbor Transportation, while overseas Distribution & Transportation operations comprises four reportable segments, including the Americas, Europe, East Asia, and South Asia & Oceania, besides the two reportable segments outside Distribution and Transportation operations that are Goods Sales and Other. The Combined Business segment (Distribution & Transportation, domestic companies) includes subsidiaries/affiliates and branches in each geographical region (area). However, it is still presented as one reportable segment because of their similarity in the nature of business as well as financial characteristics. Also, the Combined Business segment (Distribution & Transportation, domestic companies) is presented on a combined basis with the Fine Arts business segment because of the similarity in the nature of business. Likewise, in Air Freight Forwarding & Travel (Distribution & Transportation, domestic companies), the Air Freight Forwarding business segment is presented on a combined basis with the Travel business segment. In each of the above cases, however, the impact of the presentation on a combined basis is minimal.

54 NIPPON EXPRESS Annual Report 2012 Main products and services as well as main lines of business in each reportable segment are as follows. Reportable segments Main products and services Main lines of business Railway utilization transportation, chartered truck services, combined delivery services, moving & relocation, warehousing & Railway forwarding, motor cargo Combined Business (Distribution & distribution processing, in-factory work, real transportation, warehousing and in-factory Transportation, domestic companies) estate rental, marine & harbor work transportation, fine arts transportation, security transportation and heavy haulage & construction Security Transportation (Distribution & Security guard business, motor cargo Security transportation Transportation, domestic companies) transportation Heavy Haulage & Construction (Distribution Heavy haulage & construction Heavy haulage and construction & Transportation, domestic companies) Air Freight Forwarding & Travel (Distribution Air freight forwarding and travel Air freight forwarding and travel & Transportation, domestic companies) Marine & harbor transportation, warehousing Marine & Harbor Transportation (Distribution Marine transportation, harbor transportation & distribution processing and moving & & Transportation, domestic companies) and warehousing relocation Air freight forwarding, marine & harbor The Americas transportation, warehousing & distribution (Distribution & Transportation, overseas processing, moving & relocation, motor companies) transportation and travel Air freight forwarding, marine & harbor Europe transportation, warehousing & distribution (Distribution & Transportation, overseas processing, moving & relocation, motor companies) transportation and travel Air freight forwarding, harbor transportation, warehousing, motor cargo transportation Air freight forwarding, marine & harbor East Asia and travel transportation, warehousing & distribution (Distribution & Transportation, overseas processing, moving & relocation, motor companies) transportation and travel Air freight forwarding, marine & harbor South Asia, Oceania transportation, warehousing & distribution (Distribution & Transportation, overseas processing, moving & relocation, heavy companies) haulage & construction and travel Sales and leasing of distribution equipment, wrapping and packing materials, vehicles, Goods Sales Lease, sale of petroleum and others petroleum and LP gas, etc., vehicle maintenance services and insurance sales Mediation, planning and designing and management of real estate, investigation Other Other and research, money lending, automobile operation instruction and employee dispatching

(2) Method for calculating the amounts of revenues, income or loss, assets, liabilities and other items by reportable segment Accounting principles for the reportable segments are the same as stated in “Basis of presentation of consolidated financial statements and summary of significant accounting policies.” Income in each reportable segment is stated on the basis of operating income. Intersegment revenues and money transfers are based on current market price.

NIPPON EXPRESS Annual Report 2012 55 (1) Consolidated Financial Statements

(3) Revenues, income (loss), assets, liabilities and other items by reportable segment

2011 (From April 1, 2010 to March 31, 2011) Millions of yen Distribution & Transportation Domestic companies Overseas companies Air Freight Marine & Combined Security Heavy Haulage Forwarding & Harbor The Americas Europe Business Transportation & Construction Travel Transportation Revenues Revenues from external customers 711,308 59,515 33,744 202,099 116,059 32,898 40,309 Intersegment 6,130 26 612 1,308 8,156 9,907 4,760 Total 717,439 59,542 34,356 203,408 124,216 42,806 45,069 Segment income 8,381 1,806 2,685 952 5,439 1,584 1,784 Segment assets 474,630 52,833 10,210 94,118 91,465 26,401 30,871 Other items Depreciation and amortization 25,929 3,236 1,036 4,362 4,621 852 837 Amortization of goodwill — — — — — — — Investment in affiliates accounted for by 4,935 — — 1,005 1,082 — — the equity method Increase in property and equipment and 28,157 2,580 536 3,476 6,323 1,264 640 intangible assets

Millions of yen Distribution & Transportation Overseas companies Adjustment Total Goods Sales Other Sub-total South Asia & (Note 1) (Note 2) East Asia Oceania Revenues Revenues from external customers 70,879 42,878 287,929 19,561 1,617,185 — 1,617,185 Intersegment 6,075 2,686 64,578 16,418 120,662 (120,662) — Total 76,955 45,564 352,507 35,980 1,737,847 (120,662) 1,617,185 Segment income 2,098 1,391 7,053 1,509 34,687 (3,057) 31,629 Segment assets 35,836 24,782 229,119 47,715 1,117,985 29,554 1,147,539 Other items Depreciation and amortization 442 589 5,415 723 48,048 3,515 51,563 Amortization of goodwill 278 342 285 — 906 — 906 Investment in affiliates accounted for by 1,277 1,407 — 2 9,711 — 9,711 the equity method Increase in property and equipment and 408 1,885 8,447 1,361 55,082 1,650 56,733 intangible assets (Notes) 1. Details of the adjustments are as follows: (1) The segment income adjustment of ¥(3,057) million includes ¥(1,627) million elimination of intersegment income, and ¥(1,532) million in corporate expenses not allocated to each reportable segment. The most significant portion of corporate expenses relates to corporate image advertising and the Company’s administration of group companies. (2) The segment assets adjustment of ¥29,554 million includes ¥(105,513) million elimination of intersegment income, and ¥137,631 million corporate assets not allocated to each reportable segment. Corporate assets mainly represent cash and cash in banks, securities and noncurrent assets held by head office not attributable to each reportable segment. (3) The depreciation and amortization adjustment represents the depreciation and amortization at head office not attributable to each reportable segment. (4) The adjustment in increase in property and equipment and intangible assets represents primarily the capital expenditures at head office not attributable to each reportable segment. 2. Segment income has been reconciled with operating income in consolidated financial statements.

56 NIPPON EXPRESS Annual Report 2012 2012 (From April 1, 2011 to March 31, 2012) Millions of yen Distribution & Transportation Domestic companies Overseas companies Air Freight Marine & Combined Security Heavy Haulage Forwarding & Harbor The Americas Europe Business Transportation & Construction Travel Transportation Revenues Revenues from external customers 698,476 58,738 39,530 203,824 116,843 31,959 41,781 Intersegment 6,240 26 517 1,583 8,811 11,004 4,671 Total 704,717 58,764 40,048 205,407 125,654 42,963 46,453 Segment income 6,941 1,899 3,817 6,579 5,100 1,682 1,895 Segment assets 473,389 77,631 14,418 96,806 90,881 30,488 28,817 Other items Depreciation and amortization 24,106 2,674 806 4,157 4,606 757 855 Amortization of goodwill — — — — — — — Investment in affiliates accounted for by 5,121 — — 1,003 1,100 — — the equity method Increase in property and equipment and 22,665 2,068 1,608 1,726 3,630 663 620 intangible assets Millions of yen Distribution & Transportation Overseas companies Adjustment Total Goods Sales Other Sub-total South Asia & (Note 1) (Note 2) East Asia Oceania Revenues Revenues from external customers 67,238 42,191 308,033 19,409 1,628,027 — 1,628,027 Intersegment 5,728 2,620 66,042 20,959 128,206 (128,206) — Total 72,967 44,811 374,076 40,368 1,756,234 (128,206) 1,628,027 Segment income 2,344 1,651 6,961 1,942 40,817 (3,320) 37,497 Segment assets 35,745 27,720 236,615 84,340 1,196,855 34,109 1,230,964 Other items Depreciation and amortization 410 749 5,517 658 45,299 3,090 48,390 Amortization of goodwill 278 227 275 — 781 — 781 Investment in affiliates accounted for by 1,298 1,356 — 1 9,882 — 9,882 the equity method Increase in property and equipment and 537 1,111 6,171 385 41,188 4,701 45,890 intangible assets

Thousands of U.S. dollars Distribution & Transportation Domestic companies Overseas companies Air Freight Marine & Combined Security Heavy Haulage Forwarding & Harbor The Americas Europe Business Transportation & Construction Travel Transportation Revenues Revenues from external customers 8,498,320 714,667 480,961 2,479,919 1,421,623 388,843 508,358 Intersegment 75,930 321 6,300 19,265 107,207 133,892 56,837 Total 8,574,250 714,989 487,262 2,499,184 1,528,830 522,736 565,195 Segment income 84,462 23,115 46,449 80,054 62,057 20,468 23,064 Segment assets 5,759,699 944,534 175,433 1,177,832 1,105,751 370,951 350,626 Other items Depreciation and amortization 293,300 32,537 9,808 50,585 56,051 9,212 10,412 Amortization of goodwill 0 0 0 0 0 0 0 Investment in affiliates accounted for by 62,317 — — 12,213 13,390 — — the equity method Increase in property and equipment and 275,763 25,167 19,568 21,012 44,173 8,068 7,545 intangible assets

NIPPON EXPRESS Annual Report 2012 57 (1) Consolidated Financial Statements

Thousands of U.S. dollars Distribution & Transportation Overseas companies Adjustment Total Goods Sales Other Sub-total South Asia & (Note 1) (Note 2) East Asia Oceania Revenues Revenues from external customers 818,083 513,343 3,747,825 236,156 19,808,102 — 19,808,102 Intersegment 69,702 31,881 803,531 255,006 1,559,877 (1,559,877) 0 Total 887,786 545,224 4,551,356 491,163 21,367,979 (1,559,877) 19,808,102 Segment income 28,521 20,090 84,703 23,632 496,621 (40,394) 456,226 Segment assets 434,907 337,267 2,878,880 1,026,168 14,562,052 415,012 14,977,065 Other items Depreciation and amortization 4,994 9,118 67,126 8,010 551,157 37,603 588,760 Amortization of goodwill 3,386 2,770 3,354 — 9,510 — 9,510 Investment in affiliates accounted for by 15,794 16,504 — 23 120,243 — 120,243 the equity method Increase in property and equipment and 6,543 13,519 75,088 4,689 501,139 57,201 558,341 intangible assets (Notes) 1. Details of the adjustments are as follows: (1) The segment income adjustment of ¥(3,320) million (US$(40,394) thousand) includes ¥(2,041) million (US$(24,843) thousand) for the elimination of intersegment income, and ¥(1,347) million (US$(16,399) thousand) of corporate expenses not allocated to each reportable segment. The most significant portion of corporate expenses relates to corporate image advertising and the Company’s administration of group companies. (2) The segment assets adjustment of ¥34,109 million (US$415,012 thousand) includes ¥(143,033) million (US$(1,740,284) thousand) for the elimination of intersegment income, and ¥180,020 million (US$2,190,294 thousand) of corporate assets not allocated to each reportable segment. Corporate assets mainly represent cash and cash in banks, securities and noncurrent assets held by head office not attributable to each reportable segment. (3) The depreciation and amortization adjustment represents the depreciation and amortization at head office not attributable to each reportable segment. (4) The adjustment in increase in property and equipment and intangible assets represents primarily the capital expenditures at head office not attributable to each reportable segment. 2. Segment income has been reconciled with operating income in consolidated financial statements.

[Related information] 2011 (From April 1, 2010 to March 31, 2011) 1. Information by products and services Millions of yen Railway Combined Warehousing Marine & Chartered Moving & In-factory Real estate Air freight utilization delivery & distribution Travel harbor truck services relocation work rental forwarding transportation services processing transportation Revenues from external 79,185 69,078 228,825 61,010 154,473 45,558 14,414 287,179 6,402 184,343 customers

Millions of yen Heavy Other Sales of Fine arts Security Sales of haulage & distribution & Lease petroleum, Other Total transportation transportation others construction transportation etc. Revenues from external 3,137 76,127 45,866 50,084 46,835 164,291 80,065 20,305 1,617,185 customers 2. Information by region (1) Revenues Millions of yen Japan The Americas Europe Asia & Oceania Total 1,267,542 81,801 71,758 196,082 1,617,185 (Notes) 1. The above amounts represent revenues of the Company and its consolidated subsidiaries based on countries and regions. 2. Countries and regions are categorized on the basis of geographic proximity. 3. Main countries and regions in each segment are as follows: (1) The Americas……….U.S.A., Canada, South and Central America (2) Europe………………United Kingdom, the Netherlands, Germany and other European countries, and Africa (3) Asia & Oceania…….China, Singapore, Australia and other Asian and Oceanian countries

58 NIPPON EXPRESS Annual Report 2012 (2) Property and equipment A description is omitted because the proportion of property and equipment held in Japan exceeds 90% of the balance of property and equipment stated on the consolidated balance sheets. 3. Information about major customers A description is omitted because there is no particular customer, from which revenue exceeds 10% of revenues stated on the consolidated statements of income.

2012 (From April 1, 2011 to March 31, 2012) 1. Information by products and services Millions of yen Railway Combined Warehousing Marine & Chartered Moving & In-factory Real estate Air freight utilization delivery & distribution Travel harbor truck services relocation work rental forwarding transportation services processing transportation Revenues from external 78,989 60,099 223,343 64,291 162,541 43,079 12,901 284,844 5,661 180,070 customers

Thousands of U.S. dollars Railway Combined Warehousing Marine & Chartered Moving & In-factory Real estate Air freight utilization delivery & distribution Travel harbor truck services relocation work rental forwarding transportation services processing transportation Revenues from external 961,056 731,228 2,717,404 782,232 1,977,637 524,140 156,973 3,465,677 68,882 2,190,902 customers

Thousands of U.S. dollars Heavy Other Sales of Fine arts Security Sales of haulage & distribution & Lease petroleum, Other Total transportation transportation others construction transportation etc. Revenues from external 36,508 913,369 630,224 621,498 566,691 2,227,346 991,634 244,694 19,808,102 customers

2. Information by region (1) Revenues Millions of yen Japan The Americas Europe Asia & Oceania Total 1,274,823 82,583 74,625 195,995 1,628,027

Thousands of U.S. dollars Japan The Americas Europe Asia & Oceania Total 15,510,685 1,004,791 907,959 2,384,666 19,808,102 (Notes) 1. The above amounts represent revenues of the Company and its consolidated subsidiaries based on countries and regions. 2. Countries and regions are categorized on the basis of geographic proximity. 3. Main countries and regions in each segment are as follows: (1) The Americas……….U.S.A., Canada, South and Central America (2) Europe………………United Kingdom, the Netherlands, Germany and other European countries, and Africa (3) Asia & Oceania…….China, Singapore, Australia and other Asian and Oceanian countries

(2) Property and equipment A description is omitted because the proportion of property and equipment held in Japan exceeds 90% of the balance of property and equipment stated on the consolidated balance sheets.

3. Information about major customers A description is omitted because there is no particular customer, revenue from which exceeds 10% of revenues stated on the consolidated statements of income.

NIPPON EXPRESS Annual Report 2012 59 (1) Consolidated Financial Statements

[Information about impairment loss on noncurrent assets by each reportable segment] 2011 (From April 1, 2010 to March 31, 2011) Not applicable.

2012 (From April 1, 2011 to March 31, 2012) A description is omitted because the amount is immaterial.

[Information about unamortized balance of goodwill by each reportable segment] 2011 (From April 1, 2010 to March 31, 2011) Millions of yen Distribution & Transportation Domestic companies Overseas companies Air Freight Combined Security Heavy Haulage & Marine & Harbor Forwarding & The Americas Europe Business Transportation Construction Transportation Travel Balance at end of the year — — — — — — —

Millions of yen Distribution & Transportation Overseas companies Goods Sales Other Total East Asia South Asia & Oceania Balance at end of the year 513 437 367 — 1,318 (Note) For the amortization of goodwill, please refer to “Segment information (3) Revenues, income (loss), assets, liabilities and other items by reportable segment.”

2012 (From April 1, 2011 to March 31, 2012) Millions of yen Distribution & Transportation Domestic companies Overseas companies Air Freight Combined Security Heavy Haulage & Marine & Harbor Forwarding & The Americas Europe Business Transportation Construction Transportation Travel Balance at end of the year — — — — — — —

Millions of yen Distribution & Transportation Overseas companies Goods Sales Other Total East Asia South Asia & Oceania Balance at end of the year 234 210 381 — 826

Thousands of U.S. dollars Distribution and transportation Domestic companies Overseas companies Air Freight Combined Security Heavy Haulage & Marine & Harbor Forwarding & The Americas Europe Business Transportation Construction Transportation Travel Balance at end of the year — — — — — — —

Thousands of U.S. dollars Distribution & Transportation Overseas companies Goods Sales Other Total East Asia South Asia & Oceania Balance at end of the year 2,855 2,558 4,645 — 10,060 (Note) For the amortization of goodwill, please refer to “Segment information (3) Revenues, income (loss), assets, liabilities and other items by reportable segment.”

[Information about gain on negative goodwill by each reportable segment] 2011 (From April 1, 2010 to March 31, 2011) A description is omitted because the amount is immaterial.

2012 (From April 1, 2011 to March 31, 2012) Not applicable.

60 NIPPON EXPRESS Annual Report 2012 17. Related party information 2011 (From April 1, 2010 to March 31, 2011) Not applicable.

2012 (From April 1, 2011 to March 31, 2012) Not applicable.

18. Per share information The amounts and bases for the computation of net assets per share and net income per share are set out below.

Yen U.S. dollars 2011 2012 2012 (March 31, 2011) (March 31, 2012) (March 31, 2012) (1) Net assets per share 448.29 461.63 561.66 Millions of yen Thousands of U.S. dollars 2011 2012 2012 (March 31, 2011) (March 31, 2012) (March 31, 2012) (Basis for calculation) Total net assets on consolidated 479,898 494,205 6,012,961 balance sheets Net assets related to common 467,451 481,347 5,856,516 stock Breakdown of difference: Minority interests 12,446 12,858 156,444 Number of common stock issued 1,062,299 1,062,299 — (1,000 shares) Treasury stock of common stock 19,559 19,588 — (1,000 shares) Number of common stock used to calculate net assets per share 1,042,740 1,042,711 — (1,000 shares)

Yen U.S. dollars 2011 2012 2012 (From April 1, 2010 to March 31, 2011) (From April 1, 2011 to March 31, 2012) (From April 1, 2011 to March 31, 2012) (2) Net income per share 8.19 25.85 31.45 Millions of yen Thousands of U.S. dollars 2011 2012 2012 (From April 1, 2010 to March 31, 2011) (From April 1, 2011 to March 31, 2012) (From April 1, 2011 to March 31, 2012) Net income 8,541 26,949 327,889 Net income related to common 8,541 26,949 327,889 stock Weighted average number of common stock during the year 1,042,770 1,042,724 — (1,000 shares) (Note) Diluted net income per share is not stated because there were no residual securities.

19. Significant subsequent events Not applicable.

NIPPON EXPRESS Annual Report 2012 61 20. Supplementary schedule [Schedule of bonds] Thousands of Millions of yen U.S. dollars Balance as of Balance as of Balance as of Interest rate Issuer Name of bond Issuance date Collateral Maturity April 1, 2011 March 31, 2012 March 31, 2012 (%) 3rd Unsecured January 30, January 30, 20,000 20,000 243,338 1.59 Unsecured Straight 2008 2018 Bonds 4th Unsecured June 1, 2009 15,000 15,000 182,503 1.12 Unsecured May 30, 2014 Straight Bonds 5th NIPPON Unsecured EXPRESS June 1, 2009 15,000 15,000 182,503 1.82 Unsecured May 31, 2019 Straight CO., LTD. Bonds 6th Unsecured October 20, October 20, — 20,000 243,338 0.46 Unsecured Straight 2011 2016 Bonds 7th Unsecured October 20, October 20, — 10,000 121,669 1.09 Unsecured Straight 2011 2021 Bonds Total — — 50,000 80,000 973,351 — — — (Note) The repayment schedule of bonds for five years subsequent to March 31, 2012, is summarized as follows: Millions of yen Due after one year Due after two years Due after three years Due after four years Due in one year or less through two years through three years through four years through five years — — 15,000 — 20,000 Thousands of U.S. dollars Due after one year Due after two years Due after three years Due after four years Due in one year or less through two years through three years through four years through five years — — 182,503 — 243,338

[Schedule of loans] Balance as of Balance as of Balance as of Average March 31, 2012 Category April 1, 2011 March 31, 2012 interest rate Due date (Thousands of U.S. (Millions of yen) (Millions of yen) (%) dollars) Short-term loans payable 3,375 3,133 38,130 0.7 — Current portion of long-term loans 46,550 75,422 917,661 1.1 — payable Current portion of lease 730 675 8,212 — — obligation Final due date: Long-term loans payable 199,494 160,541 1,953,300 1.1 September 17, (excluding current portion) 2029 Lease obligation Final due date: 3,116 2,659 32,353 — (excluding current portion) August 2, 2029 Other interest-bearing debt Commercial paper — 2,000 24,333 0.1 — (current portion) In-house savings deposits by 29,670 29,486 358,757 0.6 — employees Current portion of liabilities on transfer 54 — — — — of long-term receivables Total 282,991 273,918 3,332,746 — —

62 NIPPON EXPRESS Annual Report 2012 (Notes) 1. Average interest rates are stated at weighted average interest rates on the average balance of borrowings for the year. However, average interest rates are not stated for either the current portion of lease obligations or lease obligations (excluding current portion), since the interest portion in the total lease payment has been allocated to each fiscal year by the straight line method. 2. The repayment schedule of long-term loans payable and lease obligation (excluding current portion) for five years subsequent to March 31, 2012, is summarized as follows: Millions of yen Due after one year Due after two years Due after three years Due after four years through two years through three years through four years through five years Long-term loans payable 53,353 23,154 38,970 1,470 Lease obligation 515 417 861 105

Thousands of U.S. dollars Due after one year Due after two years Due after three years Due after four years through two years through three years through four years through five years Long-term loans payable 649,146 281,716 474,150 17,886 Lease obligation 6,278 5,082 10,484 1,283 3. Deposits in the in-house savings deposits by employees are recorded as Deposits from employees in the consolidated balance sheets. 4. Current portion of liabilities on transfer of long-term receivables is included in “Other” under current liabilities in the consolidated balance sheets.

[Schedule of asset retirement obligations] A description is omitted because the amounts of asset retirement obligations at the beginning of the year ended March 31, 2012 and the end of the year ended March 31, 2012 are both less than one percent of the total of liabilities and net assets of the respective fiscal years.

(2) Other Quarterly information in 2012 Millions of yen Three months ended Six months ended Nine months ended 2012 Jun. 30, 2011 Sep. 30, 2011 Dec. 31, 2011 From April 1, 2011 to From April 1, 2011 to From April 1, 2011 to From April 1, 2011 to June 30, 2011 September 30, 2011 December 31, 2011 March 31, 2012 Revenues 398,375 801,923 1,213,535 1,628,027 Income before income taxes and minority interests 10,646 18,346 30,999 49,487 Net income 5,573 9,983 16,903 26,949 Net income per share 5.35 9.57 16.21 25.85 (yen)

Thousands of U.S. dollars Three months ended Six months ended Nine months ended 2012 Jun. 30, 2011 Sep. 30, 2011 Dec. 31, 2011 From April 1, 2011 to From April 1, 2011 to From April 1, 2011 to From April 1, 2012 to June 30, 2011 September 30, 2011 December 31, 2011 March 31, 2012 Revenues 4,847,012 9,756,943 14,765,000 19,808,102 Income before income taxes and minority interests 129,538 223,221 377,164 602,106 Net income 67,816 121,473 205,662 327,889 Net income per share 0.07 0.12 0.20 0.31 (U.S. dollars)

1Q 2Q 3Q 4Q From April 1, 2011 to From July 1, 2011 to From October 1, 2011 to From January 1, 2012 to June 30, 2011 September 30, 2011 December 31, 2011 March 31, 2012 Net income per share 5.35 4.23 6.64 9.63 (yen)

NIPPON EXPRESS Annual Report 2012 63 Report of Independent Auditors

64 NIPPON EXPRESS Annual Report 2012 Global Network

The Americas

NIPPON EXPRESS U.S.A., INC. NIPPON EXPRESS DO BRASIL 590 Madison Avenue, 24th Floor Rua Fortaleza 53, Bela Vista New York, NY 10022, U.S.A. São Paulo, SP, CEP 01325-010, Brazil

NEX TRANSPORT, INC. NITTSU DO BRASIL COMERCIAL, LTDA. 13900 State Route 287 Rua Fortaleza 53, Bela Vista East Liberty, OH 43319, U.S.A. São Paulo, SP, CEP 01325-010, Brazil

NIPPON EXPRESS TRAVEL USA, INC. NIPPON EXPRESS DE MEXICO, S.A. DE C.V. 8 California Street, 8th Floor Avenida Michoacan No. 20, Col. Renovacion San Francisco, CA 94111, U.S.A. Del. Iztapalapa Parque Industrial FINSA Nave #5 Mexico D.F., C.P. 09209, Mexico NIPPON EXPRESS CANADA, LTD. 6250 Edwards Boulevard, Mississauga NEX GLOBAL LOGISTICS DE MEXICO, S.A. DE C.V. Ontario L5T 2X3, Canada Blvd. Bellas Artes #20240 B & C Ciudad Industrial Delegación Mesa de Otay, Tijuana Baja California, C.P. 22444, Mexico

Europe

NIPPON EXPRESS EUROPE GMBH NIPPON EXPRESS FRANCE, S.A.S. Hansaallee 249, 40549 Dusseldorf, Germany 1, Rue Du Chapelier, B.P. 18177 95702 Roissy Aeroport Charles De Gaulle, France NIPPON EXPRESS (DEUTSCHLAND) GMBH Marie-Bernays-Ring 23, 41199 Möenchengladbach NIPPON EXPRESS (ITALIA) S.R.L. F.R. Germany Via Londra 12, 20090 Segrate (MI), Italy

NIPPON EXPRESS (RUSSIA) LLC NIPPON EXPRESS (SCHWEIZ) AG 2nd Hutorskaya st. 38A, Bldg. No. 23 Grindel Strasse 19, 8303 Bassersdorf, Switzerland Moscow 127287, Russia NIPPON EXPRESS DE ESPAÑA, S.A. NEX Logistics Europe GmbH Centro de Carga Aerea, Aeropuerto de Barajas Marie-Bernays-Ring 23, 41199 Möenchengladbach Parcela 2.1, Nave 2, 28042 Madrid, Spain F. R. Germany NIPPON EXPRESS PORTUGAL S.A. NIPPON EXPRESS (U.K.) LTD. Aeroporto De Lisboa, Edificio 125, Piso 3 Heathrow 360, 2 Millington Road, Hayes Gab. 6, 1700 Lisbon, Portugal Middlesex UB3 4AZ, U.K. NIPPON EXPRESS (MIDDLE EAST) L.L.C. NIPPON EXPRESS (IRELAND) LTD. c/o Airlink Jebel Ali Logistics Centre, P.O. Box 17341 Unit 6, Plato Business Park, Damastown Jebel Ali, Dubai, United Arab Emirates Mulhuddart, Dublin 15, Ireland Nippon Express (Istanbul) Global Logistics A.S. NIPPON EXPRESS (NEDERLAND) B.V. Istanbul Dunya Ticaret Merkezi A2 Block Kat. 3 Cessnalaan 24, 1119 NL Schiphol-Rijk, The Netherlands No : 162, 34149 Sevketiye Mh. Bakirkoy, Istanbul, Turkey NIPPON EXPRESS EURO CARGO B.V. Cessnalaan 24, 1119 NL Schiphol-Rijk, The Netherlands

NIPPON EXPRESS (BELGIUM) N.V./S.A. Brucargo Bldg. 723, 1931 Zaventem, Belgium

NIPPON EXPRESS Annual Report 2012 65 Global Network

East Asia

NIPPON EXPRESS (H.K.) CO., LTD. NIPPON EXPRESS (XIAMEN) CO., LTD. 1101 Chinachem Golden Plaza No. 23-1B, Xiangxing 1 Road, Xiangyu Free Trade Zone 77 Mody Road, Tsim Sha Tsui East Xiamen 361006, P.R.C. Kowloon, Hong Kong NIPPON EXPRESS (SUZHOU) CO., LTD NIPPON EXPRESS (SHENZHEN) CO., LTD. No. 622 Changjiang Road B 105-36 Futian Free Trade Zone, Shenzhen, P.R.C. Suzhou New District, Suzhou Jiangsu 215011, P.R.C. NIPPON EXPRESS (ZHUHAI) CO., LTD. No.1 Ping Dong 5 Road Shanghai e-technology Co., Ltd. Nan Pin High-Technology Industry Area 3F, 126 Jiangchang No. 3 Road, Shanghai 200436, P.R.C. Zhuhai, Guangdong 519060, P.R.C. NITTSU SINOTRANS LOGISTIC DALIAN LTD. Nippon Express (South China) Co., Ltd. No. 6 Haitian Road Room1312, Hongchang Plaza, Shennan East Road Free Trade Zone of Dalian Luohu, Shenzhen, Guangdon 518002, P.R.C Dalian 116600, P.R.C.

NIPPON EXPRESS (CHINA) CO., LTD. NIPPON EXPRESS (SHANGHAI) CO., LTD. Room E508-513, ACLP International Building C-12-11F, Shanghai Mart No. 2299 No. 566 Shunping Road, Shunyi District Yan-an Road West Beijing 101300, P.R.C. Shanghai 200336, P.R.C.

NIPPON EXPRESS CARGO SERVICE (SHENZHEN) CO., LTD. NIPPON EXPRESS KOREA CO., LTD. 2F, West Side, Nippon Express Warehouse 11F Kyobo Securities B/D Yantain Port Free Trade Zone 26-4 Yeouido-Dong Shenzhen 518083, P.R.C. Yeoungdeungpo-Gu Seoul 150-737, Republic of Korea NIPPON EXPRESS GLOBAL LOGISTICS (SHANGHAI) CO., LTD. Nippon Express (Taiwan) Co., Ltd. 11, De Bao Lu, Wai Gao Qiao Free Trade Zone 14 Fl., No. 285, Section. 4, Chung Hsiao E. Road, Da-an District Shanghai 200131, P.R.C. Taipei City 10692, Taiwan, R.O.C.

South Asia & Oceania

NIPPON EXPRESS (SOUTH ASIA & OCEANIA) PTE, LTD. NIPPON EXPRESS (MALAYSIA) SDN, BHD. 40 ALPS Avenue, Singapore 498781 10th Floor, West Tower, Wisma Consplant 1, No. 2 Jalan SS16/4, 47500 Subang Jaya NIPPON EXPRESS (SINGAPORE) PTE., LTD. Selangor Darul Ehsan, Malaysia 40 Alps Avenue, Singapore 498781 NITTSU TRANSPORT SERVICE (M) SDN, BHD. NIPPON EXPRESS (AUSTRALIA) PTY., LTD. Lot 4286, Batu 12, Jalan Balakong, 43300 Sri Kembangan Airgate Business Park, 291 Coward Street Selangor Darul Ehsan, Malaysia Mascot, N.S.W. 2020, Australia NIPPON EXPRESS (PHILIPPINES) CORPORATION NIPPON EXPRESS (NEW ZEALAND) LTD. No. 8 Johann St., Bgry. Ibayo, Pascor Drive, Paranaque City 37 Andrew Baxter Drive, Airport Oaks, Mangere Metro Manila, Philippines (P.O. Box 73035, Auckland Int’l Airport) New Zealand

66 NIPPON EXPRESS Annual Report 2012 NEP LOGISTICS, INC. P.T. NITTSU LEMO INDONESIA LOGISTIK Unit 1, Lot 10, Phase 4, East Science Ave. Jl. Raya Cakung Cilincing Kav. 14 Laguna Technopark, Inc., Binan Cakung-Timur, Cakung Laguna, Philippines Jakarta 13910, Republic of Indonesia

HI-TECH NITTSU (THAILAND) CO., LTD. NIPPON EXPRESS (INDIA) PRIVATE LIMITED Lake Rajada Office Complex,193/88 Logistics Park, Plot No. 7, Road No. 10 21st Fl., Rachadapisek Road, Klong-Toey Export Promotion Indl. Park Bangkok 10110 Thailand Whitefield, Bangalore-560066, Republic of India

NIPPON EXPRESS (THAILAND) CO., LTD. NIPPON EXPRESS (VIETNAM) CO., LTD. 3195/16 11th Floor, Vibulthani Tower 1, Rama 4 Road R.5.3 E-town, 364 Cong Hoa Street Klong Ton, Klong Toey, Bangkok 10110, Thailand Tan Binh District Ho Chi Minh City Socialist Republic of Vietnam NIPPON EXPRESS ENGINEERING (THAILAND) CO., LTD. 3195/16 11th Floor, Vibulthani Tower 1, Rama 4 Road NITTSU LOGISTICS (INDIA) PRIVATE LIMITED Klong Ton, Klong Toey, Bangkok 10110, Thailand Logistics Park, Plot No. 7, Road No. 10 Export Promotion Industrial Park TBSC LOGISTICS CO., LTD Whitefield, Bangalore, Karnataka, India 14/3 Phaholyothin Road, Tambol Klongnung Amphur Klongluang, Pathumthani 12120, Thailand NIPPON EXPRESS (BANGLADESH) LTD. SPL Western Tower, 502, Plot No. 186 PT. NIPPON EXPRESS INDONESIA Gulshan-Tejgaon Link Road, Tejgaon Industrial Area Soewarna Business Park Block J lot 12 Dhaka-1208, Bangladesh Bandara International Soekarno-Hatta Jakarta 19110, Republic of Indonesia

Representative Offices

Moscow Representative Office Seoul Representative Office 2nd Hutorskaya St. 38A, Bldg. No. 23 c/o The Korea Express Co., Ltd. Moscow 127287, Russia 58-12, Seosomun-Dong, Chung-Ku, Seoul, 100-814, Republic of Korea

Johannesburg Representative Office Pusan Representative Office 11 Pomona Road, Cnr. Hawthone Road Korea Express Bldg., Room No. 909 Kempton Park 1619, South Africa 1211-1, Choryang-Dong, Dong-Ku, Pusan, 601-714, Republic of Korea

Phnom Penh Representative Office Dhaka Representative Office Intercontinental Hotel, Regency Complex C SPL Western Tower, 502, Plot No. 186 Suite No. 10-11A/168 Gulshan-Tejgaon Link Road, Tejgaon Industrial Area Monireth Blvd., Phnom Penh, Kingdom of Cambodia Dhaka-1208, Bangladesh

NIPPON EXPRESS Annual Report 2012 67 Company Information (As of March 31, 2012)

Name Nippon Express Co., Ltd.

Headquarters 1-9-3, Higashi Shimbashi, Minato-ku, Tokyo 105-8322, Japan Tel: +81 (3) 6251-1111

Formal establishment October 1, 1937

Paid-in capital ¥70,175 million

Employees 35,717

URL (Japanese) http://www.nittsu.co.jp/ (English) http://www.nipponexpress.com/

Areas of operation

1 Rail freight forwarding business 17 Packing and packaging business

2 Truck transportation business 18 Packaging, labeling and storage business for pharmaceuticals, quasi-pharmaceuticals, cosmetics 3 Truck freight forwarding business and medical equipment

4 Marine transportation business 19 Travel agency business

5 Coastal shipping business 20 Transportation, construction and installation of heavy goods and any incidental business thereto 6 Harbor transportation business 21 Sale, purchase and lease of real estate and any inci- 7 NVOCC marine transportation business dental business thereto

8 Air freight forwarding business 22 Security services business

9 Transportation businesses and forwarding 23 General worker dispatching business business other than as listed above 24 Waste management business 10 Freight transportation consignment business 25 Specified correspondence delivery service business 11 Warehousing business 26 Collection and processing of logistics information and 12 Construction business any incidental business thereto

13 Customs-clearance business 27 Sale of goods and commodities

14 Freight collection and settlement business 28 Any other business related to the above items

15 Air freight forwarding agency business 29 Investments in and financing of business listed in the above items 16 Non-life insurance agency business

68 NIPPON EXPRESS Annual Report 2012 Share Information (As of March 31, 2012)

Stock listing Tokyo, Osaka

Number of shares Total number of shares authorized 3,988,000,000 Total number of shares issued 1,062,299,281

Number of shareholders 84,162

Stock transfer agent Mitsubishi UFJ Trust and Banking Corporation

Distribution of shares

By type of shareholder Proportion of shares held

Individuals, others 97.7% Financial institutions 48.9% Other corporate 1.5% Overseas corporate 19.8% 84,162 Overseas corporate 0.5% 1,062,299 Individuals, others 21.8% shareholders Financial institutions 0.2% thousands of shares Other corporate 6.0% Financial instruments Treasury stock 1.8% and exchange dealers 0.1% Financial instruments Treasury stock 0.0% and exchange dealers 1.7%

Major shareholders Number of shares held Investment ratio (Thousands of shares) (%) The Master Trust Bank of Japan, Ltd. (Account in Trust) 93,313 8.9 Asahi Mutual Life Insurance Company 65,464 6.3 Nipponkoa Insurance Co., Ltd. 50,294 4.8 Japan Trustee Services Bank, Ltd. (Account in Trust) 45,112 4.3 Mizuho Trust & Banking Co., Ltd. as trustee for Retirement Benefit Trust of Mizuho Bank, Ltd. (re-entrusted by Trust & Custody Services Bank, Ltd.) 41,500 4.0 Mizuho Corporate Bank, Ltd. 41,477 4.0 Nippon Express Employees’ Shareholding Association 35,662 3.4 Japan Trustee Services Bank, Ltd. (Account in Trust No. 4) 21,507 2.1 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 20,554 2.0 SSBT OD05 OMNIBUS ACCOUNT - TREATY CLIENTS 18,786 1.8

Stock price movement

(Yen) 700

600

500

400

300 (Thousands of shares) 200 150,000

100 120,000

0 90,000

60,000

30,000

0 2009 2010 2011 2012 4 4 4 3

NIPPON EXPRESS Annual Report 2012 69 Nippon Express Co., Ltd. Annual Report 2012 6251-1111 ) 3 ( (English) http://www.nipponexpress.com/ (Japanese) http://www.nittsu.co.jp/ Printed in Japan August 2012

1-9-3, Higashi-Shimbashi, Minato-ku, Tokyo 105-8322, Japan 1-9-3, Higashi-Shimbashi, Minato-ku, Tokyo Phone: +81 URL: