Information
IR Information Annual Report FACT BOOK 2020 Evaluation from external organizations OLC’s Fact Book 2020 provides a wide range of long-term, historical Oriental Land Co., Ltd. has been data, including financial indicators selected for inclusion in the FTSE 4 and quantitative management data. Good Index Series since 2015. 2020 IR Website Year ended March 31, 2020 http://www.olc.co.jp/en/ir.html Oriental Land Co., Ltd. has been selected for inclusion in the FTSE Blossom Japan Index since 2017.
Oriental Land Co., Ltd. has been selected for inclusion in the MSCI Japan ESG Select Leaders Index* since 2017. Multi-Stakeholder
Information Oriental Land Co., Ltd. has been selected for inclusion in the MSCI Japan OLC Group Empowering Women Index* since 2017. CSR Report 2020
Oriental Land Co., Ltd. has been selected as a component of the S&P/JPX Carbon CSR Website Efficient Index since 2018. http://www.olc.co.jp/en/csr. html Oriental Land Tokyo Disneyland Construction Office Oriental Land Co., Ltd. has been selected (Maihama, Urayasu City, Chiba Prefecture) as a component of the Dow Jones The office when the company's head office was first moved to Maihama in 1981. Sustainability Index (DJSI) Asia Pacific since 2020.
For the second year in a row, beginning in 2019, Oriental Land Co., Ltd. has 60th Anniversary of Establishment been awarded the highest rank in the advertising services, media, and entertainment category at the Securities Analysts Association of Japan's (SAAJ) Awards for Excellence in Corporate Disclosure.
* The inclusion of Oriental Land Co., Ltd. in any MSCI index and the use of MSCI logos, trademarks, service marks or index names on our website do not constitute a sponsorship, endorsement or promotion of Oriental Land Co., Ltd. by MSCI or any of its affiliates. * The MSCI indexes are the exclusive property of MSCI. MSCI and the MSCI 1-1 Maihama, Urayasu, Chiba 279-8511, Japan index names and logos are trademarks or service marks of MSCI or its affiliates. http: //www.olc.co.jp/en/index.html http: //www.tokyodisneyresort.jp/en/index.html
“Oriental Land,” Oriental Land’s equivalent in Japanese, and the Oriental Land logo are registered trademarks or trademarks of Oriental Land Co., Ltd., in Japan and overseas. The names of other companies, other logos, product names, brands, etc., mentioned in this annual report are registered trademarks or trademarks of Oriental Land Co., Ltd., Disney Enterprises, Inc., or the applicable companies. To Our Stakeholders
We offer our sympathies to those who have
experienced COVID-19 and to those whose lives have been impacted
by the pandemic.
We once again express our admiration for all those who have
worked tirelessly to prevent the spread of the infection, including the many
healthcare professionals combating COVID-19 on the frontlines.
We hope for a speedy recovery and
the soonest possible end to the pandemic.
Response to COVID-19
January February March April May June July August
Feb. 18 Feb. 26 Feb. 28 Feb. 29 Mar. 16 Apr. 1 June 1 June 23 June 25 June 30 July 1
Set up ECC Theme Parks Postings on social Disney Hotels temporarily closed Ikspiari reopened Theme Parks reopened temporarily closed media restarted Disney Hotels Reopening of Tokyo Disneyland® and Tokyo DisneySea® Emergency Control Center (ECC) Theme Parks temporary closure announced reopened · Reopened (with operating time from 8.00 am to 8.00 pm) · Response to risks and other situations where a company-wide policy response is required *Attractions, entertainment, shops, and restaurants at both Theme Infectious Disease Response Coordination Reopening of Bon Parks either closed or operating with limits on Guest numbers Infectious Disease Division Voyage, store outside Response the Theme Parks · Organization under the control of the company president and Coordination Division other executives · Used ECC guidelines to consider COVID-19 countermeasures Reopening of Theme Parks announced Reopening of Disney Hotels announced
Oriental Land Annual Report 2020 1 Corporate Philosophy Derivation of Logo Contents Sixty Years of Progress...... 4
L Message from the Chairman ...... 8 Business Mission C Land Message from the President ...... 10 The whole land is Cosmos our business domain Value Creation Framework ...... 12 Vastness of space encapsulating “Ocean” Leading OLC Group Digest ...... 14 and “Land” Bold advancement The space in people’s into new fields Eleven-Year Consolidated Financial Highlights ... 18 hearts Non-Financial Highlights ...... 19 Creative Financial Highlights Creativity ...... 20 Interview with the President ...... 22
O Message from the Officer in Charge of the Finance/Accounting Department ...... 30 Ocean The magnificent, Focus: Theme Park operations under expansive ocean, COVID-19 pandemic ...... 32 Management Credo Code of Practices the source of life Segment Review ...... 35 Management stance aimed at What each of us can do Original realizing our business mission 1. Research and Innovation Uniqueness in OLC Group ESG Information ...... 36 1. Create dialogue 2. Independence and Enterprise business 2. Produce projects with originality 3. Passion and Action ESG Topics: Environmental Initiatives ... 38 and quality OLC-WAY ESG Topics: Human Resource Initiatives ... 40 3. Respect individuals and support Please refer to P43 their work Honesty ESG Topics: Initiatives for Safety and Security ... 41 4. Tirelessly innovate and evolve To focus on “only in the present” and “only on yourself” is insufficient. ESG Topics: BCP Initiatives ...... 42 5. Maintain profitable growth and Always take a long-term perspective, and think from an all-inclusive, optimal point of view. The symbol comprising these three letters of OLC embodies our business services Corporate Governance ...... 43 6. Build positive relationships Proactive Execution development throughout the world, our spirit of innovation and There is no growth without action. First, challenge yourself. Failure is the best teacher. advancement, and our harmonious organization. Board of Directors, Corporate Healthy Conflict Our corporate name Oriental Land Co., Ltd. infuses all of these Auditors and Corporate Officers ...... 50 The precedent is not necessarily the best. Discuss matters starting from zero and head toward the goal. concepts and expresses the determination of the Group to ensure Corporate Data/Stock Information ..... 52 harmony with nature while striking a balance with everything and to offer dreams, moving experiences, delight and contentment.
Production Policy Oriental Land Co., Ltd., Milial Resort Hotels Co., Ltd., Brighton Co., Ltd., and Maihama Resort Line Co., Ltd. operate Tokyo Disneyland, Tokyo DisneySea, Disney Hotels, and Disney Resort Line, respectively, under license from Disney Enterprises, Inc. All Tokyo Disney Resort-related activities This report has been designed as a communication tool to facilitate understanding of OLC Group management policies and business described in ESG Information-related pages of this report are implemented and managed by Oriental Land Co., Ltd. which manages and operates Tokyo Disney Resort under license from Disney Enterprises, Inc. strategies among a wide range of readers, including both private and institutional investors. This report starts with a reflection on OLC Group history from our founding until today in order to communicate the impact of the COVID-19 pandemic in an easy-to-understand Forward-looking statements way as well as to highlight our 60th anniversary celebrated on July 11, 2020. Photographs, charts, and tables have been used to Forecasts and other forward-looking statements are based on the judgments of management in consideration of information available as of the illustrate the Company’s operations in a visual manner in the report. In consideration of the environment, this report will be released publishing date of this report. However, the Company’s business is easily influenced by the preferences of Guests as well as by social and economic online in PDF format in January, 2021. trends. For this reason, the estimates and forecasts contained in this report may be impacted by unforeseen circumstances.
2 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 3 Sixtieth Anniversary of Oriental Land Sixty Years of Progress
1960– 1983– Founding of Oriental Land Co., Ltd., sea reclamation at Urayasu, Opening of Tokyo Disneyland, popularization of the Theme Park, negotiations with The Walt Disney Productions beginning of construction of Tokyo DisneySea
1960 1980 2000
1960 1974 1980 1983 1996 2000 • Founded Oriental Land Co., Ltd. • Concluded basic business alliance • Began construction of Tokyo • Opened Tokyo Disneyland • Established Maihama Resort Hotels • Opened Ikspiari and (3rd Floor of head office, Keisei Electric Railway Co., Ltd.) agreement with The Walt Disney Disneyland Co., Ltd. (currently Milial Resort Disney Ambassador Hotel Productions Hotels Co., Ltd.) (currently Disney Enterprises, Inc.) • Listed shares of OLC on the First 1962 1988 Section of the Tokyo Stock Exchange • President Kawasaki pays a courtesy 1975 • Announced of the second call on The Walt Disney Productions • Completed reclamation Park concept (currently The Walt Disney Company) work in Urayasu 1997 • Announced of the business 1964 overview of Tokyo DisneySea • Began reclamation work in 1979 Urayasu • Concluded basic business alliance 1998 agreement with The Walt Disney • Began construction of Tokyo DisneySea Keisei Electric Railway Co., Ltd. Head Office Productions (at the time of establishment) Urayasu City before (currently Disney Enterprises, Inc.) reclamation and OLC
1979 1982 1983 1998 Concluded basic business alliance agreement with At the time of establishment of Tokyo Disneyland Opened Tokyo Disneyland Began construction of Tokyo DisneySea The Walt Disney Productions (currently Disney Enterprises, Inc.)
4 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 5 2017– 2001– Further evolution of Tokyo Disney Resort through Large-Scale Development The opening of Tokyo DisneySea, growth as a Themed Resort and Expansion
Project image of Tokyo DisneySea Large-Scale Expansion 2000 2020
2001 2014 2017 • Opened Disney Resort Line • Surpassed 30 million annual attendance for the • Held groundbreaking ceremony for Tokyo DisneySea's Large-Scale Expansion Project • Opened Tokyo DisneySea two Theme Parks • Opened Tokyo DisneySea Hotel MiraCosta 2008 2018 • Opened Tokyo Disneyland Hotel • Announced Tokyo DisneySea Large-Scale Expansion Project 2016 • Announced plan for new Disney Hotel themed to the Disney and Pixar • Opened Tokyo Disney Celebration Hotel Toy Story film series 2019 • Announced the plan for groundbreaking ceremony for Tokyo DisneySea’s Large-Scale Expansion Project called Fantasy Springs
2020 • Opened new area and facilities following Tokyo Disneyland Large-Scale Development New area of Tokyo Disneyland Large-Scale Development
2001 2013 2019 Opened Tokyo DisneySea, Tokyo DisneySea Hotel 30th Anniversary of Tokyo Disney Resort Large-Scale Investment Plan in progress MiraCosta, and Disney Resort Line
6 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 7 Message from the Chairman
Looking back at FY2019, we were, up until January 2020, enjoying attendance levels comparable to FY2018 when we were celebrating Tokyo Disneyland’s 35th anniversary. I was encouraged by this and saw it as a clear sign that our multi-year effort on improving the Rebirth as a Theme Park experiential value was contributing to higher attendance and better satisfaction. The situation, however, took a drastic turn for the worst with the COVID-19 pandemic, and we experienced an extended temporary closure of the Parks, the likes of which we had “Second Establishment” never seen before. I believe the OLC Group’s business is predicated on people’s peace of mind. Given the significant threat posed by this battle against the invisible enemy, and how the world today is more uncertain than ever, we must be reborn with a new organization and management structure that will be able to adapt flexibly no matter what circumstances we find ourselves facing. Toshio Kagami Although we will be implementing organizational and management reforms, the value that Tokyo Disney Resort creates will never Representative Director, change. During our temporary closure, we heard from our stakeholders, including a lot of Guests, that they were anxiously waiting for the Chairman and CEO Parks to reopen, which made me realize once again that our company is supported by and lives alongside all of you, and our officers and employees worked together as one team to prepare for reopening to meet people’s expectations. Every one of the 123 days of park closure was spent examining ways to prioritize the health and safety of our Guests of Tokyo Disney Resort, and we went through days and days of trial and error with the strong conviction that we must preserve where dreams come true. In the long term, we believe plans to invest in physical assets that will contribute to Tokyo Disney Resort’s future growth are important, and we made the decision to continue with large-scale projects that have already been announced for FY2021 and beyond, such as the new Disney Hotel themed to the Disney and Pixar Toy Story film series, and Tokyo DisneySea’s “Fantasy Springs,” and so forth. On the other hand, on the more intangible front, such as how we deliver value, we must be flexible in finding the best way forward instead of insisting that we stick to how we have always done things in the past. While it may be difficult for us to predict when the COVID-19 pandemic is going to be over, we are building a new organization and management structure. The OLC group started at an office on the premises that didn't even have a phone, with only three desks, but only a dream. Now that we have reached our 60th anniversary, I recall my feelings from back then. I have always said to our company that the 60th anniversary is the same as the milestone kanreki (60th) birthday for a person, when you are reborn and start again but little did I know that such a pandemic would be occurring this year. It is an extremely difficult task to identify the challenges and find solutions in this world when the right answer is unclear, but we have a history of endeavoring to achieve unprecedented goals. Fishery compensation negotiations to reclaim land off the shores of Urayasu, inviting Disneyland to this location, opening Tokyo Disneyland, opening the second Park Tokyo DisneySea, and the continual growth of the Tokyo Disney Resort until today have involved overcoming many difficulties and challenges. The DNA of our predecessors has been passed on to our current officers and employees. My role is to guide all employees to think freely and be fresh in their mindset as they tackle change, and I will keep a long-term perspective looking at the past, present, and future as I lead the way. In keeping a broad perspective, anticipating opportunities and risks is also important from an ESG standpoint; it is even more important in this uncertain world to build hypotheses on strong beliefs and continue implementation without stopping. Providing deeper value at the Tokyo Disney Resort, which is our core business, is important as we aim to continue long-term growth but we also see the critical importance of pursuing new discoveries and the establishment of Oriental Land Innovations Co., Ltd. is one of our initiatives towards this goal. I believe that the reason our company has been able to continue for 60 years is because our shareholders, investors, and all other stakeholders have believed in and supported our business, and all officers and employees have worked together to respond to this trust. July 11th, 2020 marked the OLC Group’s 60th anniversary. Although there is still no telling when the COVID-19 pandemic is going to be The OLC Group will continue to offer dreams, moving experiences, happiness, and contentment to our audience, will consider this year to brought under control, we are extremely grateful that we have thus been able to celebrate our 60th anniversary, that Tokyo Disney Resort be the first year of our second establishment and will push forward to raise our corporate value. has been able to reopen, and that we have been able to start moving forward once again. None of this would have been possible without your abiding support and understanding as stakeholders, for which I would like to express my deepest gratitude. Our prolonged closure December 2020 caused a lot of concern, but I am truly thankful for the many words of encouragement you sent us.
8 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 9 Message from the President
The COVID-19 pandemic is proving to be the single biggest crisis the OLC Group has faced since Tokyo Disneyland first opened. A temporary four-month park closure resulted in almost zero revenue during that period as we battled an extremely tough business Transforming into a More environment. With the future so uncertain, my major concerns were the safe and secure reopening of our Theme Parks and determining what we should change and what we should not change in our business given the marked shift in people’s lifestyles and values. Robust Corporate Structure by As much as time permits, I habitually make a point of walking around the Theme Parks and talking with Guests. On these occasions, it helps to reaffirm the strong connection Guests have with our Theme Parks. Many Guests were young when we first opened, and they Pushing through Adversity now visit with their children and families. The history of Tokyo Disney Resort is indeed the accumulation of the memories of each of our Guests. We received many letters and messages on social media with words of encouragement when the pandemic forced us to temporarily close our doors. Because of this support, I recognize again that our business is part of “an industry for the heart” needed by many people and that we must never forget the value that our Theme Parks create. Kyoichiro Uenishi It’s true that people’s values and behaviors have changed significantly with the spread of COVID-19, but I also see this as the catalyst for Representative Director, President and COO the OLC Group to transform into a more robust corporate structure. To overcome the pandemic, we need to embrace new ideas and new paths that are not just an extension of past initiatives; We need to make radical changes to the way we do business in order to continue increasing both profitability and our experience value. That means reaffirming our essential nature and boldly staying true to it. To this end, we revised our profit structure and accelerated a specific discussion of how to increase Guest spending, which includes a more effective ticket strategy. This crisis cannot be overcome unless we bring fundamental change not only to our business strategy but also to our personnel, organizational structure, and cost framework. For this reason, given the current conditions and based on a long- term perspective, we formed a project team as an urgent, limited-time initiative to swiftly and rigorously scrutinize and control costs. Instead of retreating from adversity, I have asked all officers and employees to unite more than ever to ride out the difficult times and to stride forward with the focus firmly on the future. I always tell our Cast Members to stand in our Guests’ shoes and think about what they can do to bring improvements to our operations. Walt Disney said, “Disneyland will never be completed. It will continue to grow as long as there is imagination left in the world.” He left us with this beautiful sentiment. That’s exactly why we try to come up with and bring shape to ideas that exceed our Guests’ expectations. It is through trial and error that we continue to evolve, with the attitude and determination of our officers and employees as the source of our long-term sustainable growth. While we must continue checking for changes in consumers’ attitudes going forward, the intrinsic value that the OLC Group offers remains the same. We will never lose sight of our business mission to offer wonderful dreams, moving experiences, delight and contentment. I am confident that if we tackle each of the issues facing us one by one, we will become an even more valuable member of society. At the OLC Group, we celebrated our 60th anniversary in the fiscal year ended March 31, 2020. We would like to express our sincerest gratitude to all stakeholders for supporting us, including Guests and shareholders. You can expect to see us drive growth going forward over the long term, and we ask for your continued support as we do our best to make this a reality. December 2020
10 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 11 Value Creation Framework
Creating Happiness
Oriental Land Co., Ltd. (OLC) was established with a strong aspiration to “create a large-scale recreational facility, right here in Japan” when Maihama was still a part of the sea. Since then, we have carried on this aspiration to establish a business model grounded in unique competitive advantages as our biggest strength. We view corporate value as “continuing to present happiness to our Guests.” Based on this belief, we have evolved the Theme Parks and delivered happiness to Guests. Going forward, we believe we can deliver even more happiness through our core and new businesses in both structural and non-structural aspects, and we will continue our efforts to enhance its attractiveness. We will create new value and deliver greater happiness. As a result, corporate value will be improved for Guests as well as for shareholders. This is the goal of the OLC Group.
Unique Competitive Advantages Business Model Value Provided
Increase cash ow by Own vast land in a superb location License from Disney Enterprises, Inc. enhancing appeal that has unrivaled brand power Hotel 1.Extensive land Business Tokyo Disney Resort License agreements with Disney Enterprises, Inc. Approx. 2 million square meters of Segment Increasing Corporate Value contiguous land 10 kilometers (6 miles) Operation of Disney-branded from the city center arita nternational facilities in Tokyo Disney Resort o o tation Airport "Creating Happiness" 2.Immense market Royalties New Population of approx. 30 million with Proportionate to revenues substantial disposable income living o o nternational (yen-denominated) investments Airport within a 50-kilometer (30-mile) radius Theme Relationship with Disney Enterprises, Inc. Park 3.Convenient access OLC has no capital or personnel O er onder ul drea and 50 kilometers (30 miles) relationship Segment About 15 minutes by train from in radius o in e perien e Tokyo Station, about 30-60 minutes by shuttle bus from Haneda Airport and Narita International Airport reate deli t and ontent ent Our Cast Members provide magni cent hospitality Attract High Guest loyalty High employee loyalty more Guests Demand for happiness Raise the level of Raise the level Other and increase Guest satisfaction of employee Provision of happiness satisfaction Business Guest Segment spending Expand foundation of Tokyo Resort fans Secure employees with high motivation Joy of working in a business that has the objective Support from a wide range of fans of ful lling Guests’ emotional satisfaction acquired over more than 35 years Values shared among all employees
High Guest loyalty culminates High employee loyalty culminates in the in Park visits continuation of high-quality operations Enhance appeal through ongoing investment
Please refer to P36-37 CSR Five Values / ESG
Please refer to inside front cover Corporate Philosophy Business Mission Management Credo Code of Practices
12 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 13 OLC Group Digest
2016.6 Tokyo Disney 2008.7 Celebration Hotel opens Over Guests for the year 29.01 million Tokyo Disneyland Hotel opens 2001.9 Tokyo DisneySea and Tokyo DisneySea 2 0 Hotel MiraCosta open 2000.7 0 0 00 0 0 Ikspiari and Disney 2 01 Annual e e ar Ambassador Hotel open 2 22 2 0 attendan e illion people 2 2 2 2 2 2 2 2 2 2 2 2 02 2 i et pri e Adult en Listed on the First Section of the Tokyo Stock Exchange 22 0
0 1983.4 0 Tokyo Disneyland opens 2 7,400 7,400 7,400 7 00 6,900 6,400 0 0 6,200 6,200 6,200 0 0 5,800 5,800 5,800 5,800 5,800 5,500 5,500 5,500 5,500 5,500 5,500 5,100 5,200 5,200 5,200 4,800 4,800 4,800 4,800 4,400 4,400 4,400 4,200 4,200 4,200 4,200 4,200 Impact of the Impact of the 3,900 earthquake spread of disaster COVID-19
0 2 00 0 02 0 0 0 0 0 0 0 0 2 20
Tokyo Disneyland 5th Anniversary Tokyo Disneyland 10th Anniversary Tokyo Disneyland 15th Anniversary Tokyo Disneyland 20th Anniversary Tokyo Disney Resort 25th Anniversary Tokyo Disney Resort 30th Anniversary Tokyo Disney Resort 35th Anniversary
Tokyo DisneySea 5th Anniversary Tokyo DisneySea 10th Anniversary Tokyo DisneySea 15th Anniversary
Market Size of Amusement and Leisure Park Industry Market size (billion yen) Oriental Land’s market share (%)
851 Over ¥800 billion of revenues and still growing 793 764 777 741 724 659 655 657 632 630 648 643 640 614 625 623 599 585 567 585 559 562 542 508 484 473 50.9 48.3 49.5 48.4 45.9 47.6 47.7 47.9 47.3 44.5 43.6 2 39.7 39.6 40.3 40.2 37.2 38.9 39.0 35.9 34.8 36.8 29.8 31.3 31.5 26.4 23.9 26.0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Yr) Source: White Paper on Leisure 2020 (September 2020, Japan Productivity Center) Note: Data used to calculate Oriental Land’s market share is based on gures for the scal year. * The data of market size used to calculate the market share covers the period January-December 2019, while our data covers April 2019-March 2020 and includes the period of temporary closures due to the outbreak of COVID-19 infection.
14 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 15 OLC Group Digest
Guest Profile
Revenues per Guest ¥11,606 About 70% of Guests are adults (18 and older) and about 20% of Guests are 40 and older Revenues per Guest (Yen) Breakdown of Guests by Age (%) i et re eipt er andi e ood and e era e 00 O er 0 to 2 to to 11 0 2 20 20 20 20 2 2 21 0 0 2 0 0 0 0 022 2 2 2 2 0 00 20 2 2 2 0 0 0 1
2 0 0 0 22 77 0 2 2 2 11 2 2 2 2 2 2 2 2 2 2 2 2 2 2 7 0 2 1 0 2 0 2 2 20 2 2 0 0 2 20 0 2 20
Average Length of Visit (Hours) About 60% of Guests are from the Kanto (metropolitan area) 0 2 20 Breakdown of Guests by Region (%)
0 0 – 00 anto etropolitan area u u o inet u in i o o u Ot er apan O er ea Note: The figure for the fiscal year ended March 31, 2020 are not disclosed due to the renovation of the Tokyo Disneyland main entrance.
Breakdown of Guests by Gender (%) 0 2 0 2 2 00 ale e ale
2 2 0 0 0 2 0 0 2 2 0 2 2
0 10 2 0 0 0 0 2 7 0 0 0 0 0 2 0 0 0 0 2 71 0 2 2 0 2 2 0 0 0 2 2 0 0 10 0 0 2 20 0 2 20
Revenues and Operating Income of Hotel Business Segment
Revenues 64.3 billion yen, Operating Income 14.7 billion yen Total of approx. 2,400 rooms at four Disney Hotels
Revenues and Operating Income of Hotel Business Segment Re enue illion o en Operatin n o e illion o en Overview of Hotel Business Facilities
A uired all are o Tokyo DisneySea Hotel Tokyo Disney Disney Ambassador Hotel Tokyo Disneyland Hotel ri ton orporation o o i ne ele ration otel opened MiraCosta Celebration Hotel
2 2 Deluxe type Value type 7 0 504 rooms 502 rooms 706 rooms 702 rooms 2 2 0 00 2 2 0 Impact of the spread of COVID-19 Impact of the New Disney Hotel themed to the Disney and Pixar New Disney Hotel to be opened that is integrated into earthquake disaster Toy Story film series motifs to be opened Tokyo DisneySea 2 2 2 022 00 1 7 0 22 Type unspecified Luxury type/Deluxe type
approx. 600 rooms approx. 475 rooms 0 2 20
16 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 17 Eleven-Year Consolidated Financial Highlights Non-Financial Highlights
Listed monetary amounts were rounded down to the nearest ¥0.1 billion from the fiscal year ended March 31, 2016, but until the fiscal year ended March 31, 2015 were rounded to the nearest ¥0.1 billion. 1 Revenues Operating Income / Operating Margin Ratio of Female in Managerial Positions S Emissions Intensity* E Revenues 11.6% Operating Income 25.1% Operating Margin 3.7points Ratio of Female in Managerial Positions 2.3 points Emissions Intensity 13.0%
2 464.4 billion yen illion o en 96.8 billion yen 20.9% 15.8% 0.141t/m 2 (decreased 61.1 billion yen) (decreased 32.4 billion yen) Operatin n o e illion o en (decreased 0.021 t/m ) Operatin ar in 2 1 2 2 2 2 2 2 2 2 0 0 0 0 20 0 0 0 0 2 2 0 2 0 2 2 20 0 1 1 0 0 2 0
0 2 20 0 2 20 0 2 20 20
Theme Park attendance and revenues per Guest increased on the back of Operating income and operating margin have grown due to control put on fixed Our target for the fiscal year ending March 31, 2021, with respect to women in management positions was to From a structural perspective, we have been working to install a range of energy-efficient enhanced Theme Park value. In the fiscal year ended March 31, 2020, revenues costs and a decline in depreciation and amortization related to Tokyo DisneySea. achieve the goal of 15% or higher, and we achieved this goal in the fiscal year ended March 31, 2020. In facilities and equipment, including the large-scale heat-source facilities installed at the central decreased due to the temporary closure of both Theme Parks as a result of the In the fiscal year ended March 31, 2020, operating income fell in conjunction addition to working to expand our training and education programs, we are developing a system that ensures energy plant*2. From a non-structural perspective, we are promoting a reduction in power COVID-19 pandemic, and other factors. with lower revenues resulting from temporary closures of both Theme Parks. our employees are able to continue along their career path while raising children or caring for family members. consumption by employing an energy management system to visualize energy consumption.
1 3 Net Income Attributable to Owners of Parent Operating Cash Flow* * Number of Part-time Cast Members S Percentage Recycled E Net Income Attributable to Owners of Parent 31.1% Operating Cash Flow 20.9% Number of Part-time Cast Members 1,504 Percentage Recycled 1.0points
62.2 billion yen illion o en 101.6 billion yen illion o en 19,267 74.0% (decreased billion yen) (decreased billion yen) 28.0 0 2 26.8 2 2 20 0 2 0 0 0 20 2 2 101 22 0 0 0 0 1 2 7 0 7 0 2 2 2 2 2 22
0 2 20 0 2 20 20 20 Net income attributable to owners of parent had been growing steadily since the fiscal year ended Operating cash flows had been growing steadily since the fiscal year ended We have been able to retain Cast Members amid an increasingly challenging external In the fiscal year ended March 31, 2003, when Tokyo DisneySea was first opened for March 31, 2011 due primarily to increased operating income and lower interest payments. However, March 31, 2011, but due to the decrease in net income attributable to owners environment. Cast Members play a central role in offering hospitality, which directly affects the entire year, the recycling rate fell short of 50%; by contrast, the rate across the this figure was down in the fiscal year ended March 31, 2020 due to a decrease in operating income of parent resulting from the temporary closures of both Theme Parks, they Guests’ happiness. Their tasks include providing information at the attractions, cleaning the Parks, entire Tokyo Disney Resort has improved 70% as a result of strengthening efforts to and extraordinary losses recorded as a result of temporary closures of both Theme Parks. were down in the fiscal year ended March 31, 2020. preparing food, serving Guests at restaurant facilities, store sales and inventory management. separate waste. We recycle virtually all the kitchen waste generated at our Theme Parks.
2 3 The OLC Group has continued to offer wonderful dreams, moving experiences, delight and contentment, and we have nurtured a corporate culture that inspires and Cash Dividends per Share* Capital Expenditures / Depreciation and Amortization* empowers our employees to continue to create new emotional experiences. Training programs are provided for learning about the Disney philosophy and the Cast Members’ code of conduct, supporting the growth of the 20,000 or so Cast
Cash Dividends per Share 4.8% Capital Expenditures 62.3% Depreciation and Amortization 3.2% Members, who are viewed as important assets of the OLC Group, and helping build foundations for work. In addition, to ensure Cast Members achieve even higher performance, we conduct activities that provide the opportunity to be recognized within the course of daily activities and the opportunity to receive constructive feedback. billion yen billion yen 44.0 yen en 139.6 39.4 Tokyo Disney Resort (increased 2.0 yen) (increased 53.5 billion yen) (increased 1.2 billion yen) 2 0 0 0 0 Five-Star-Program Spirit of Tokyo Disney Resort 0 0 apital penditure illion o en epre iation and A orti ation illion o en S S Number of cards given from Number of Cards Exchanged 0 0 0 0 1 supervisors to Cast Members 2 0 2 0 2 0 2 (the duration of the exchange is one month) 2 2 0 0 11,042 475,497 0 2 2 In this program, when supervisors observe Cast Members providing exemplary service, This program gives Cast Members the opportunity to acknowledge the excellent 2 2 20 they hand them a Five-Star Card on the spot, thus acknowledging them for their specific performance of their colleagues by filling out special cards and exchanging them efforts. with one another. The program promotes individual growth and bonding as 0 2 20 0 2 20 This program enhances Cast Member motivation by recognizing Cast Members Cast Members as well as their superiors recognize each other’s performance. Based on a dividend policy of aiming to pay stable cash dividends while taking Capital expenditures are on the rise due mainly to an increase in new investment. working hard with an awareness of the Cast Members’ code of conduct. Demonstrating Cast Members who receive the greatest amount of praise and are deemed external factors into consideration, OLC Group has made consistent returns to Depreciation and amortization expenses decreased following the completion of that the program also gives supervisors an opportunity to remain mindful of Guest and most exemplary are presented with the Spirit Award at a special ceremony, the shareholders in the form of dividends per share. depreciation relating to investments made at the opening of Tokyo DisneySea. Cast Member happiness. The program has been active since 1995. winners receive a Spirit Award Pin.
*1 Operating cash flow = Net income attributable to owners of parent + Depreciation and amortization Note: S is a value calculated for Oriental Land alone, and E is a value calculated for the area of Tokyo Disney Resort activities. 2 *2 On April 1, 2015, Oriental Land Co., Ltd. conducted a 4-for-1 stock split of common shares. Dividends for the fiscal years up to and including the fiscal year ended March 31, 2015 *1 Emissions intensity = Total CO2 emissions (t) / Site area (m ) have been restated retroactively. *2 An integrated heat-source unit that concentrates heat for the air-conditioning systems at a single location for distribution to various facilities, rather than produce the heat in *3 The figures for depreciation and amortization of the fiscal year ended March 31, 2011, 2012 and 2020 includes depreciation and amortization recorded as extraordinary loss. individual buildings.
18 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 19 Financial Highlights
Oriental Land Co., Ltd. and Consolidated Subsidiaries Fiscal Years Ended March 31 Millions of yen ’10.3 ’11.3 ’12.3 ’13.3 ’14.3 ’15.3 ’16.3 ’17.3 ’18.3 ’19.3 ’20.3 FOR THE YEAR: Revenues ¥371,415 ¥356,181 ¥360,061 ¥395,527 ¥473,573 ¥466,292 ¥465,353 ¥477,748 ¥479,280 ¥525,622 ¥464,450 Operating income 41,924 53,664 66,923 81,467 114,491 110,605 107,357 113,152 110,285 129,278 96,862 Income before income taxes 37,780 38,086 55,289 80,867 112,672 110,486 109,135 114,611 112,997 129,439 89,133 Total income taxes 12,354 15,188 23,183 29,383 42,100 38,423 35,206 32,237 31,805 39,153 26,916 Net income attributable to owners of parent 25,427 22,908 32,114 51,484 70,572 72,063 73,928 82,374 81,191 90,286 62,217 Capital expenditures*2 19,419 27,904 23,210 28,730 20,367 37,034 39,706 50,993 59,888 86,050 139,626 Depreciation and amortization*3 46,695 42,286 41,944 36,132 36,934 34,637 35,982 38,280 37,339 38,214 39,447 EBITDA*4 88,619 93,649 106,773 117,599 151,426 145,242 143,339 151,433 147,624 167,492 133,623 Operating cash flow*5 72,122 65,194 74,058 87,616 107,506 106,700 109,911 120,654 118,531 128,500 101,665 Free cash flow*6 52,703 37,290 50,848 58,886 87,139 69,666 70,204 69,661 58,642 42,450 (37,960) AT YEAR-END: Total assets*7 ¥615,090 ¥574,635 ¥619,494 ¥655,544 ¥664,539 ¥746,641 ¥810,268 ¥849,798 ¥910,673 ¥1,051,455 ¥1,010,651 Theme Parks, resorts and other property, at cost 487,871 472,152 447,110 456,900 438,788 436,537 439,052 451,973 473,578 514,322 610,586 Total net assets 366,473 357,779 383,085 432,262 493,697 564,129 624,941 669,515 721,976 803,201 820,257 Interest-bearing debt 173,289 142,937 149,580 124,020 58,448 57,842 57,099 60,574 59,585 108,423 87,069
Yen PER SHARE DATA:*8 Net income (EPS) ¥ 70.04 ¥ 66.32 ¥ 96.24 ¥ 154.24 ¥ 211.33 ¥ 215.72 ¥ 221.26 ¥ 248.39 ¥ 246.70 ¥ 274.65 ¥ 189.23 Diluted net income − − 93.22 145.22 203.76 208.60 214.90 239.95 236.50 267.59 183.31 Net assets (BPS) 1,060.15 1,072.25 1,148.01 1,294.67 1,478.13 1,688.53 1,870.10 2,020.58 2,196.56 2,442.97 2,505.55 Cash dividends 25.00 25.00 25.00 30.00 30.00 35.00 35.00 37.50 40.00 42.00 44.00
%
SELECTED FINANCIAL DATA: Operating margin 11.3% 15.1% 18.6% 20.6% 24.2% 23.7% 23.1% 23.7% 23.0% 24.6% 20.9% Return on revenues 6.8 6.4 8.9 13.0 14.9 15.5 15.9 17.2 16.9 17.2 13.4 Return on assets (ROA)*7 4.0 3.9 5.4 8.1 10.7 10.2 9.5 9.9 9.2 9.2 6.0 Return on equity (ROE) 6.9 6.3 8.7 12.6 15.2 13.6 12.4 12.7 11.7 11.8 7.7 Equity ratio*7 59.6 62.3 61.8 65.9 74.3 75.6 77.1 78.8 79.3 76.4 81.2 Payout ratio 35.7 37.7 26.0 19.5 14.2 16.3 15.9 15.1 16.2 15.3 23.2
Annual Theme Parks attendance(Thousands of Guests) 25,818 25,366 25,347 27,503 31,298 31,377 30,191 30,004 30,100 32,558 29,008 Revenues per Guest (Yen) ¥ 9,743 ¥ 10,022 ¥ 10,336 ¥ 10,601 ¥ 11,076 ¥ 10,955 ¥ 11,257 ¥ 11,594 ¥ 11,614 ¥ 11,815 ¥ 11,606 Ratio of female in managerial positions 7.6 8.9 9.6 8.8 9.3 9.9 12.0 11.9 13.9 13.5 15.8 Number of part-time Cast Members*9 − − − − − 18,698 18,729 19,353 19,722 20,771 19,267 Emissions intensity − − − 0.168 0.173 0.170 0.169 0.164 0.160 0.162 0.141 Percentage recycled 71.0 70.0 76.0 74.0 74.0 75.0 75.0 74.0 75.0 75.0 74.0 *1 Listed monetary amounts were rounded down to the nearest ¥1 million from the fiscal year ended March 31, 2016, but until the fiscal year ended March 31, 2015 were rounded to the nearest ¥1 million. *6 Free cash flow = Net income attributable to owners of parent + Depreciation and amortization – Capital expenditures *2 Capital expenditures includes tangible and intangible assets and long-term prepaid expenses. *7 We have applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28) beginning with the figures for the fiscal year ended March 31, 2018. *3 The figures for depreciation and amortization of the fiscal year ended March 31, 2011, 2012 and 2020 includes depreciation and amortization recorded as extraordinary loss. *8 On April 1, 2015, Oriental Land Co., Ltd. conducted a 4-for-1 stock split of common shares. Per share data for the fiscal years up to and including the fiscal year ended March 31, 2015 were restated *4 EBITDA = Operating income + Depreciation and amortization recorded in operating expenses retroactively. *5 Operating cash flow = Net income attributable to owners of parent + Depreciation and amortization *9 The number of part-time Cast Members is calculated by converting the total working hours into Cast Members.
20 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 21 Interview with the President
Can you please review the fiscal year ended March 31, 2020?
Theme Park attendance for the fiscal year ended March 31, 2020 attributed to our work to develop new events and programs that was 29.01 million, with revenues and operating income both will make Guests happy by leveraging the know-how we have decreased year on year owing to the temporary closure of our built up over many years in Theme Park operations. Theme Parks from February 29 due to the spread of the COVID-19. Conditions were favorable until the end of the third quarter, with Theme Park attendance at a high level, almost on par with the previous year, when we held Tokyo Disney Resort 35th Anniversary events. High attendance was primarily due to Soaring: Fantastic Flight, a new attraction that opened at Tokyo DisneySea in July 2019, as well as other events and programs held throughout the year at both Parks. To enhance the "novelty" of the attraction, original new themes and scenes were added to Soaring: Fantastic Flight, which has been a hit at Disney Theme Parks overseas. In a survey after it was first introduced, it was clear that Soaring generated much satisfaction to different generations, far exceeding our expectations, and contributed significantly to bringing in more Guests. In addition, events and programs that were planned with “novelty” primarily in mind attracted more Guests than past events. The novelty events included Disney’s Easter, a special event Kyoichiro Uenishi where Usapiyo, a new character at Tokyo DisneySea, was Representative Director, extremely popular, and Very Very Minnie!, a special program at President and COO Tokyo Disneyland featuring Minnie Mouse. This success can be Soaring : Fantastic Flight
Apr. 4th - June 2nd June 6th - July 7th July 9th - Sept. 1st Sept. 10th - Oct. 31st Nov. 8th - Dec. 25th Jan. 10th - Mar. 19th Disney’s Easter Disney Tanabata Days Donald’s Hot Jungle Summer Disney Halloween Disney Christmas Very Very Minnie
New Kids Dance Program Jan. 1st - 5th "Jamboree Mickey!" started on Oct. 14th New Year’s Festa Nighttime Spectacular “Celebrate! Tokyo Disneyland” Temporary closure of July 10th, 2018 - April 26th, 2019 20th December, 2019 - 19th March, 2020 both Parks from
Tokyo Disneyland ”Star Tours: The Adventures Continue” Special version February 29th 2019 2020
April May June July August September October November December January February March
Apr. 4th - June 2nd June 6th - July 7th July 9th - Sept. 1st Sept. 10th - Oct. 31st Nov. 8th - Dec. 25th Jan. 10th - Mar. 19th Disney’s Easter Disney Tanabata Days Disney Pirates Summer Disney Halloween Disney Christmas Pixar Playtime
June 6th - Aug. 27th Jan. 1st - 5th Duffy’s Sunny Fun New Year’s Festa
New Attraction “Soaring: Fantastic Flight” Opened on July 23rd Jan. 10th - Mar. 19th Duffy’s HEARTWARMING DAYS Tokyo DisneySea New Show "Song of Mirage" Started on July 23rd
Note: We started temporary closure of both Parks on February 29, 2020 in response to the government’s requests, etc., to call off events and other large gatherings
22 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 23 Interview with the President
Strengthening Non-Structural Operations
What sort of progress has been made in the 2020 The OLC Group has begun recruiting Theme Park operations the aspirations of our Theme Park designers and developers. Medium-Term Plan? employees. This is a new employment category for staff who will These measures create opportunities for every Cast Member to be assigned to positions in frontline operations at our Theme take these aspirations to heart and reaffirm the importance of Parks. Employed Theme Park operations employees are 1,479, as delivering the greatest happiness to Guests through the best We made steady progress toward our 2020 Medium-Term Plan goal of “consistently providing a highly satisfying Theme Park experience,” of March 31, 2020. This new employment category creates possible service that we can provide. with Guest satisfaction at a high level before the temporary closure. opportunities for Cast Members to achieve personal growth and to choose from a wider range of workstyle options. It also enables the Company to retain Cast Members with rich experience and to Strengthening Structural Operations have more stable business growth, which ultimately leads to the We introduced new content, used digital technology, improved We both enhanced systems for accepting overseas Guests and happiness of Guests. systems and marketing for overseas Guests, and expanded service strengthened marketing. For overseas Guests, we released English For promoting a tangible sense of personal growth, we facilities. and Chinese versions of booking websites for restaurants, implemented ways to improve Cast Members’ hospitality in As mentioned earlier, our new content, Soaring: Fantastic Flight, vacation packages, and other items in October 2019, and we preparation for the opening of the Tokyo Disneyland Large-Scale A booklet distributed to all employees that shares the aspirations helped attract Guests. This attraction was built on a site that was improved communication tools, including using portable development area. Over the course of about a year, we began of Theme Park designers and previously backstage, in this way increasing the Theme Park’s translation units. For marketing, in the fiscal year ended March training programs, offered video messages, and distributed in- developers with Cast Members Guest capacity. In addition, we were able to evenly balance out 31, 2020, we added online travel agents in China as potential tie- house newsletters and booklets to help Cast Members share in Guest retention rates by placing Toy Story Mania! on the left of ups to take advantage of this huge market. the Theme Park Main Entrance and Tower of Terror to the right The number of overseas Guests during the fiscal year was at a of the entrance. In particular, this move helps to alleviate the record high for the first three quarters (in line with an increase in Withdrawing the Goals of the 2020 Medium-Term Plan sense of congestion immediately after entering the Park. overseas visitors to Japan). This number dropped due to the Originally, the year ending March 31, 2021, was designated as the final year of the 2020 Medium-Term Plan. However, unexpected Looking at digital technology, in July 2019 we started a service COVID-19 pandemic, resulting in 2.9 million overseas Guests per changes have taken place in our management environment due to the COVID-19 pandemic. We will not be able to achieve our on the official Tokyo Disney Resort app enabling Guests to obtain year, down 225,000 from the previous year. quantitative target under the 2020 Medium-term Plan, so we decided to withdraw the quantitative target. Disney FASTPASS, which has further boosted convenience. In regards to the service facilities, a multistory parking structure We will formulate a new plan as soon as the medium- to long-term outlook allows, and then swiftly announce this to the Approximately 80% of FASTPASS users get their pass through the was completed in July 2019, creating more space for cars to park public. app, which means the line to obtain tickets onsite has all but near the Theme Park Main Entrance. Renovation of the Main disappeared. We believe that digital technology, including the Entrance of Tokyo Disneyland was completed in April 2020. app, has significant potential to increase “comfort” and to grow Renovation of the facilities that are most used by Guests have led revenue. For these reasons, we are looking into ways to further to an increase of Guest “comfort,” while also making it possible leverage this technology. for Cast Members to guide Guests more effectively. What sort of impact did COVID-19 have in the year ended March 31, 2020?
Following the Great East Japan Earthquake in 2011, this was the year came to ¥12.0 billion less operating profit, if we compare second time that we were forced to temporarily close our Theme this to the target we announced in October 2019. We posted an Parks for a prolonged period. One key lesson that we learned extraordinary loss of ¥9.2 billlion during the temporary closuring, from that massive earthquake was the importance of risk which included ¥6.9 billion in fixed costs during the temporary preparedness for daily operations. Since we take a safety-first closure and a ¥2.3 billion loss on disposal of goods and raw approach to running our Theme Parks, all employees are keenly materials. As a result, the total financial impact of the COVID-19 aware of the need for safety. In addition, we had already created pandemic on profit before income taxes was approximately ¥26.3 manuals on risk management, including material on infectious billion. We had applied for an Employment Adjustment Subsidy diseases, which meant we were able to make quick decisions from the government to pay compensation to our part-time Cast Disney FASTPASS® Multistory parking structure Upgraded Tokyo Disneyland main entrance even as conditions changed every day. Members during the temporary closure, and posted the amount Looking at the impact on our business performance, the lost as an extraordinary loss, after deduction of the amount expected opportunity from the 32 days we had to close during the fiscal to be received in the subsidy.
Please refer to P30-31 (Message from the Officer in Charge of the Finance/Accounting Department)
24 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 25 Interview with the President
where The Big Pop, a specialty popcorn shop is located. Toontown attendance at the new facilities. The capacity of the new area, Can you outline your approach to COVID-19, from the decision saw the introduction of Minnie’s Style Studio, the first Disney including introduced attractions and upcoming entertainment to close the Parks to reopening? Character greeting area in Tokyo Disneyland where Guests can facilities, will be more than double the previous area for Grand meet Minnie Mouse. Circuit Raceway and Starjets, once the attendance restrictions are All of the newly developed facilities are unique to Japan. The lifted. The capacity of the restaurants and shops will also increase. area is filled with fascinating attractions and features an attention I am confident that the opening of this area will improve the value To implement COVID-19 countermeasures, we set up the For Guests who were eagerly looking forward to the reopening to detail that helps immerse Guests into the world of Disney films of the Theme Park over the medium to long term. Emergency Control Center (ECC) on February 18, 2020. The of our Parks, we released information through social media, more than ever before. We are currently including limiting purpose of the ECC was to oversee our emergency response. We including a video of Fantasmic!, a nighttime entertainment show then established the Infectious Disease Response Coordination at Tokyo DisneySea, which was scheduled to deliver its final Division on February 26, 2020, to swiftly collect information on performance on March 25, 2020. We also offered Theme Park COVID-19 from inside and outside the Company so that we could merchandise via our online Tokyo Disney Resort Shopping site for make quick decisions on important matters related to running the a limited time, from May 26, 2020. In addition, we began work Parks. In response to a request from the Japanese government to on our parade routes and other parts of our Parks that were suspend events and other large gatherings, we closed Tokyo difficult to do during opening hours so that we could reopen in Disneyland and Tokyo DisneySea on February 29, 2020. an even better state for Guests. Employees are the most important asset for the Group. And In coordination with The Walt Disney Company, we examined since we recognized that the wellbeing of our employees was the best method for operating Parks after reopening, placing top critical to reopening the Parks, we focused on initiatives related to priority on the safety and security of Guests and Cast Members. our employees while we were closed. First, we emphasized safety We reopened our Parks on July 1, 2020, when the government and asked all employees to not come into work, in principle. We lifted the request for closures and when safety and security paid a work cancellation allowance as well as an ad-hoc special measures had been put in place for Guests and Cast Members. leave allowance for part-time Cast Members and show performers Castle of Beauty and the Beast The Happy Ride with Baymax Please refer to P32-34 from March 2020. All employees worked hard to prepare for the (Focus: Theme Park operations under COVID-19 pandemic) reopening of the Parks, thinking of what needed to be done, even though many were forced to stay at home amid a crisis the likes of which nobody had ever experienced. This gave me a strong sense of hope.
Can you tell us about the area that was recently opened on September 28 at Tokyo Disneyland?
Minnie’s Style Studio The Big Pop
New large-scale attractions, restaurants, shops, and other facilities Fantasyland includes an area based on Walt Disney Animation were introduced in the largest ever expansion since the opening Studios’ Beauty and the Beast film. The large-scale Enchanted Tale of Tokyo DisneySea with an investment of ¥75 billion. The of Beauty and the Beast attraction inside the approximately 30m development area included around 47,000 m2 where Grand Circuit high Beauty and the Beast Castle has a ride with vehicles that Raceway and Starjets used to be. The new area goes across “dance” in rhythm to the well-known music from the animated Fantasyland, Tomorrowland, and Toontown, three of the seven film and that goes through several memorable scenes. With themed lands in Tokyo Disneyland. The opening of this new area Village Shoppes and La Taverne de Gaston, a shop and restaurant was originally planned for April 2020, but this had to be inside the village where Belle lives, Guests feel like they have postponed until September in order to prioritize the safety and entered the world of the film. Based on the Disney film Big Hero 6, security of Guests and Cast Members due to COVID-19. The Happy Ride with Baymax attraction opened in Tomorrowland,
26 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 27 Interview with the President
Reference
Please give us an outline of the subsidiary established Forecast for FY Ending 3/21 (as of October 29, 2020) in June 2020: Oriental Land Innovations. (¥billion) Results for FY Ended 3/20 Forecast for FY Ending 3/21 Change Change
Net Sales Oriental Land Innovations Co., Ltd. is a new subsidiary for new business. Going forward, we will collaborate with other 464.4 185.4 (278.9) (60.1)% investing in venture companies. The purpose is to create new companies as well as drive growth as a company needed by Theme Park Segment 384.0 152.4 (231.5) (60.3)% businesses. By combining the innovative technologies and ideas society. Hotel Business Segment 64.3 25.1 (39.2) (61.0)% of venture companies with the resources of OLC Group In addition to establishing the new subsidiary, we will continue companies, the new subsidiary will create businesses that to research and study the business domains that are expected to Other Business Segment 16.0 7.8 (8.1) (50.8)% contribute to the development of society, in line with our grow over the long term, and we will consider a wide range of Operating Profit 96.8 (51.4) (148.2) — corporate philosophy to offer “dreams, moving experiences, options that can contribute to the sustainable growth of the OLC delight and contentment.” Group. Theme Park Segment 79.6 (43.1) (122.7) — Even before the spread of COVID-19, we were looking into Hotel Business Segment 14.7 (5.9) (20.7) — setting up a new company to avoid the risk of having all our operations concentrated in the Maihama area. The intent was to Other Business Segment 2.1 (2.5) (4.7) — create a stand-alone business without having to stop at the Ordinary Profit 98.0 (53.8) (151.9) — Theme Park business. Through this initiative, we are incorporating Profit attributable to owners of parent 62.2 (51.1) (113.3) — the venture spirit into the OLC Group, and as a result, aim to further foster an organizational culture that encourages taking on challenges throughout the Group. Although we have started new businesses in the past, in reality Results for FY Ended 3/20 Forecast for FY Ending 3/21 Change Change we have had limited success. First, it is important to deepen our Attendance (million people) 29.01 9.50 (19.51) (67.3)% knowledge of multiple promising fields through small-scale minority investment, after which we will research fields that we Net Sales per Guest (¥) 11,606 12,710 1,104 9.5 % have confidence in to increase the probability of success of the Ticket Receipts 5,292 6,250 958 18.1 %
Merchandise 3,877 3,620 (257) (6.6)%
Targeted investment domains Food and Beverages 2,437 2,840 403 16.5 %
Domains closely related to the OLC Group’s operations Theme Park attendance and net sales per Guest Domains for social issues that affect the OLC Group’s operations Domains consistent with the OLC Group’s Corporate Philosophy or related to resolving problems within e e ar Attendan e illion o people et ale per ue t en the OLC Group or are related to preparing for the future 2 0 00 0 0 0 2 0
Examples of investment themes 12,710 ( ) 0 9.50 Innovations for human resources, for example, to boost workers’ commitment and performance 2 ( ) 0 Creation of new lifestyles for children through initiatives such as support for both play and learning 19 Smart city initiatives, such as smart planning, and efficiency improvements for commercial distribution and logistics Solving social problems to contribute to sustainable operations through clean energy, climate change 20 2 mitigation, etc.
28 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 29 Message from the Officer in Charge of the Finance/Accounting Department
Creating a Sound Financial Base Enabling Countermeasure Financing Type Term Loan with a Commitment cash dividends as a form of direct return, we increased the annual Period. This has made it possible to raise up to ¥150 billion as dividend per share by ¥2, compared with the previous fiscal year, Business Activities and Growth liquid funds. to ¥44 for the fiscal year ended March 31, 2020. In addition, we Investment Even under Crisis Conditions In another recent initiative, we formed a cost control team in have been repurchasing (buying back) shares as the situation June 2020 to review our cost structure and to reduce fixed costs. demands. Conditions in the year ended March 31, 2020 were extremely favorable until January when The purpose of the team is to scrutinize costs swiftly and rigorously At the same time, given the substantial impact of COVID-19 on the spread of the COVID-19 transformed the environment and the financial situation. to reveal which areas can be minimized, enabling us to generate business performance and the fact that the end of the pandemic We were unable to generate cash for around four months as we were forced to temporarily long-term, sustainable cash. Because of this team’s work, we are is still unclear, securing cash on hand is a vital issue right now. As close our Theme Parks amid the uncertainty. Against this backdrop, we concentrated on steadily strengthening our financial base by reducing fixed costs, a result, we plan to reduce the dividend by ¥18 to ¥26 in the year building safe and secure operations ahead of reopening any facilities. We were able to while making sure we are fully prepared for any emergency. ending March 31, 2021. We will continue striving for further accomplish this goal because of our exceptional cash-generating strengths in ordinary times There is also no change to our financial policy for allocating growth and development of Tokyo Disney Resort in other ways to as well as a sound financial base on the back of strong growth from Tokyo Disney Resort. To cash to make investments in growth. Of course, we recognize increase returns for shareholders and investors through stable continually grow our corporate value going forward, we intend to further strengthen our returns to shareholders and investors are one of management’s dividends. financial base to have long-term, sustainable management, even during periods of extreme most important responsibilities. Based on a policy of paying stable uncertainty. Akiyoshi Yokota Executive Director and Executive Officer In charge of Finance/Accounting Department Maintaining Proactive Dialogues with Shareholders and Investors
Revisions to the Cabinet Office Ordinance on the Disclosure of the situation with the spreading of COVID-19. Corporate Affairs prompted us to make changes to the Considering the circumstances surrounding the pandemic, we Traditional Cash-Generating Capabilities information we disclosed in our securities report issued in June used video and telephone conferencing to reach more investors. 2020. As the years pass, to encourage dialogue, we are making Keeping in mind the importance of being transparent about the Under the OLC Group’s 2020 Medium-Term Plan, our financial Theme Parks of around 30 million since the fiscal year ended solid improvements in the materials that we disclose. Also, due to current conditions at Tokyo Disney Resort, we are holding tours policy is to “allocate operating cash flow to growth investments March 31, 2013—and having yearly growth in operating cash COVID-19 there was some concern that there could be delays of the facilities run by the OLC Group with full consideration for and aim to improve corporate value.” The scale of our operating flow. Based on our experience with the Great East Japan when issuing securities reports and arranging financial results health and safety. cash flow was increasing due to growth of Theme Park operations Earthquake, we sought to increase our cash and deposits to a presentations, but we were able to release materials on time—as Moreover, we continue to hold in-house IR presentations twice and because, prior to the recent temporary closure caused by the level necessary to continue the large-scale investments needed to we have done in the past—by developing a system of cooperation a year to share investors’ feedback with employees. Using an pandemic, we secured a high level of cash and deposits. achieve medium- to long-term growth and to cover labor costs, that forms part of our daily operations. Going forward, I am online system, we have created a framework to ensure that all Looking back, we have continued striving to reinforce both the even if we are forced to again close our Theme Parks. committed to deepening dialogues with shareholders and opinions reach employees and anyone else involved in running structural and non-structural aspects of our business to boost the Initiatives to generate cash and strengthen our financial base investors, regardless of changes in the internal and external our Theme Parks. appeal of the Theme Parks. As a result, we succeeded in have enabled us to move forward despite the unprecedented and environments. Given the need for a flexible approach to IR, we are exploring improving Guest satisfaction—with annual attendance at the two prolonged closure of our Theme Parks. Regarding annual investor relations (IR) activities, we place a new approaches that are suitable for as many shareholders and high value on providing opportunities to meet with shareholders investors as possible, while continuing to create opportunities for and investors to discuss the OLC Group. This includes financial dialogue. Our officers and employees will keep working as one to Initiatives to Strengthen the Financial Base and Future Financial Policies results presentations, the General Meeting of Shareholders, and improve the long-term, sustainable corporate value of the OLC investor meetings following results announcements. We will Group. continue to engage in IR activities as we have done even under We will keep strengthening our financial base in preparation for bonds on August 24, 2020. This move was necessary to establish unforeseen circumstances. With more than 20,000 employees, a framework that allows us flexibility to obtain long-term funding Initiatives to Strengthen the Financial Base we must have liquidity on hand while we plan for the large-scale for capital investments. In addition, we also issued ¥100 billion in Main Purpose of Funding Application of Funds Method of Procurement Set Period/Repayment Deadlines Possible Procurement Amount/Planned investments that are essential to the sustainable growth of the corporate bonds on September 17, 2020, to fund capital Issue Amount/Amount Issued Flexibly raise Set from June 30, 2020 to June Theme Parks. We have also secured other sources of funding in investments aimed at driving long-term growth such as the Tokyo Business funds Commitment line Maximum ¥200 billion short-term funds 30, 2022 (two years) addition to our substantial reserves of cash. First, a commitment DisneySea Large-Scale Expansion Project scheduled for opening in Preparing for the spread of COVID-19 Secure long-term Funds for capital 5-year, 7-year, 10-year from Straight bonds ¥100 billion in total line (credit line) of ¥200 billion was established on May 15, 2020 the fiscal year ending March 31, 2023. funds* investment September 17, 2020 Earthquake Risk Countermeasure in preparation for extended closures of our Theme Parks. Aside from these funding initiatives, we issued corporate bonds Working capital/funds Set from March 13, 2019 to March Financing Type Term Loan with a Maximum ¥150 billion for capital investment 13, 2024 (five years) Establishing a commitment line enables us to flexibly procure the to secure investment funding for emergencies, such as Preparing for earthquakes and other Commitment Period emergencies Funds for capital 5-year, 7-year, 10-year from Straight bonds ¥50 billion in total funds we require and to have liquidity on hand. earthquakes, and have maintained a level of cash and deposits of investment January 25, 2019 Second, we registered the issuance of ¥200 billion in corporate ¥50 billion. In March 2019, we reset the Earthquake Risk *In addition to the above, it is possible to issue up to ¥100 billion corporate bonds as needed between September 1, 2020 and August 31, 2022 by registering the issue.
30 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 31 Focus: Theme Park operations under COVID-19 pandemic
strengthen cross-organizational coordination and cooperation for reopening. We began preparing to reopen with a determination to reconfigure our operations to earn our Guests’ trust in Tokyo Disney Resort. Reconfiguring Theme Park Operations to Prevent
COVID-19 Spreading and to Promote Health, How did you proceed with the commitment to health and Safety and Peace of Mind Q2 safety measures?
All our officers and employees made preparations with a single-minded desire to welcome back, as early as possible, our Guests, who are now enjoying the reopened Theme Parks. At first, the core personnel began setting a target date for reopening, while intensively discussing the processes required to reopen. At the time, like today, the future was unclear, even one month ahead. Nonetheless, we brainstormed on what we should do to reopen, mapped out the steps required, and set the target of reopening in early July, the earliest viable date. While aiming to swiftly reopen, we placed priority on the health and safety of both Guests and Cast Members. We reconfigured our operations with safeguards against the spread of COVID-19 so everyone would feel that Tokyo Disney Resort is a safe place where they can have fun (or work) with peace of mind. We divided the process of preparing to reopen into three phases: (1) simulations, (2) re aration hase hase hase eo ening training and (3) trial operation. Before any simulations could begin, we made sure that the Reopening people in charge of all the departments involved Simulations Training Trial operation plans brie ng in operations were on the “same page” and had the same mindset. Normally, information is Ryotaro Shiiba transmitted down each department’s chain of command without any problems. In this case, however, we thought it was essential Officer Director of Operations Division for people throughout the organization to have a clear picture of the policies for operating the Theme Parks as a whole, given the unprecedented nature of what we were doing. After thorough measures were taken to prevent infectious diseases, such as physical distance, the Theme Park Reopening Preparation Team met with managers from across Tokyo Disney Resort. I briefed them on the three phases of preparations and What role did you play in preparing to reopen the Theme what each phase would include. I also explained our reopening plans, including our approach to physical distancing and new ways of interacting with Guests. People asked questions about not only their own departments but also other departments’ facilities and Q1 Parks and what was your mindset? safeguards against COVID-19. The meeting successfully set the stage for preparations to begin. In phase one, the simulation phase, we started to explore new ways of operating that would protect against COVID-19 based on We closed both Tokyo Disneyland and Tokyo DisneySea government policies and guidelines. The participants were mainly departmental and Theme Park operations employees. One key In ectio s isease es onse oor ination ivision for 123 days from February 29, 2020, to prevent the issue was how to admit Guests at the front entrances, a location where crowding was the biggest concern. We tested ways of spread of COVID-19. While the state of emergency was safely admitting Guests and the capacity of the waiting line with the physical distancing secured. We ultimately decided to divide Decisions on cross-organi ational issues declared, the Infectious Disease Response Coordination this process into timeslots and introduced Fixed Date Time Passport so Guests could enter safely in the limited space available. At Progress management Division has been collecting information and preparing the same time, we conducted wide-ranging simulations of everything from pre-admittance temperature checks to reminders for Director of Operations Corporate upervision for the reopening of operations. On May 25, when the physical distancing both inside and outside the Theme Parks, as well as antiviral shields, sanitizer stations, and new Guest service Division Department government lifted the emergency declaration, we procedures, The goal was to make our operations safe not only for Guests but also Cast Members. Policy finali ation / Coordination of strategies formed the internal Theme Park Reopening Preparation In phase two, the training phase, Cast Members who had been furloughed started reporting to work to learn about the new Operations Merchandise Entertainment Food Division Division Division Division Team. As Director of the Operations Division, I was operating procedures. During the training, we often found that ideas that seemed good on paper had limitations in practice, from appointed by our president to head the team. Having the standpoint of Cast Members and Guests. In these cases, we reassessed our approach and corrected the limitations one by one, previously headed the Merchandise Sales and Food with input from Cast Members. Through this process, we reconfigured Theme Park operations, and issued a press release on June Operations Departments, I could understand every 23 announcing our reopening plans. department’s situation. As a first step, I decided to The results of our preparations were revealed in the final phase, or trial operation, when we did one-day test runs of Tokyo
32 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 33 Focus: Theme Park operations under COVID-19 pandemic Segment Review
Other Business Segment Results by Segment 3.4% Theme Park Segment er enta e % for the Fiscal Year Ended Hotel Business Segment o otal 82.7 Re enue March 31, 2020 13.9% Disneyland and Tokyo DisneySea’s operations under realistic conditions. We did the test runs on separate days to give the Cast Members of both Theme Parks an opportunity to play the role of both Guest and Cast Member. While this phase was Theme Park Segment intended as a final check of whether the Theme Parks were ready to reopen, it also gave the Cast Members valuable Segment Revenues e ent Re enue illion o en The main facilities of the Theme Park Segment are Tokyo Disneyland experience playing the role of Guests. By letting Cast Members see firsthand that the Theme Parks were being operated Operatin n o e illion o en and Tokyo DisneySea. safely, we wanted to enable them to greet Guests with confidence, knowing that their workplace was safe and secure. Tokyo Disneyland opened in April 1983 and Tokyo DisneySea in billion yen 2 0 384.0 September 2001. Total cumulative attendance at the two Theme (down 12.2%) Parks surpassed 700 million. 0 2 Revenues of the Theme Park Segment are broadly divided into Operating Income 1 2 3 7 attractions and shows* , merchandise* and food and beverage* . 79.6 billion yen *1 Attractions and shows revenues include ticket receipts and parking receipts. *2 Merchandise revenues include sales of merchandise at Bon Voyage and commercial (down %) Now that Tokyo Disney Resort has reopened, what is on 25.7 facilities within affiliated hotels, in addition to commercial facilities within the 20 Theme Parks. Q3 your agenda for operations going forward? Segment Revenues *3 Food and beverage revenues include sales of food and beverage at commercial Attra tion and o er andi e ood and e era e facilities within the Theme Parks. Our Theme Parks reopened on July 1. So far, they have been operating with no major problems. I believe the reopening 0 was successful because everyone involved in the preparations was dedicated to the safety and peace of mind of Guests and Ot er Cast Members. Also, we are immensely grateful to all Guests for their cooperation with our requests and for accepting the changes at the Theme Parks. The closure this year was an opportunity to rethink Tokyo Disney Resort’s appeal. I believe that reconfiguring the operations—achieved by all our staff working in unison, despite an unclear future—led to greater Hotel Business Segment resilience against not only infectious diseases but other emergencies as well. Segment Revenues e ent Re enue illion o en The main facilities in the Hotel Business Segment are the Disney Now that the Theme Parks have reopened, we must address two more challenges. The first is how to create an Operatin n o e illion o en Hotels and Brighton Hotels. 2 environment where we can welcome as many Guests as possible while continuing to operate safely and securely. The billion yen The four Disney Hotels are Tokyo Disneyland Hotel (opened in July 64.3 2008), Tokyo DisneySea Hotel MiraCosta (opened in September second challenge is how to ensure the enjoyment and satisfaction of our Guests. We are still experimenting with different (down 11.1%) 2001), Disney Ambassador Hotel (opened in July 2000) and Tokyo approaches to sharing our theme parks with Guests. For example, after Tokyo Disneyland reopened, physical distancing 2 Disney Celebration Hotel* in Shin-Urayasu (opened in June 2016). Operating Income 2 limited the number of Guests able to experience the Western River Railroad attraction because of constraints of space of 1 7 The Brighton Hotels have three locations including those in Shin- the train rides. In response, we improved by installing vinyl shields for each row of seats in the vehicle to reduce the risk of billion yen Urayasu and Kyoto (shares of operator Brighton Corporation were 14.7 acquired in March 2013). droplet infection, so more Guests could experience the ride. (down 23.2%) * In June 2016, Palm & Fountain Terrace Hotel was rebranded and held a grand Although there are currently other restrictions in effect inside our Theme Parks, Cast Members are placing more priority 20 opening as Tokyo Disney Celebration Hotel. on hospitality than ever before. Smiling broadly beneath their face masks, they experiment daily with new ways to make Segment Revenues i ne otel Ot er otel sure that Guests enjoy their visits. Through an approach with continual, iterative experimentation and improvement, we will create a Theme Park environment that is comfortably 2 enjoyed by as many Guests as possible. “We Create Happiness.” That is our goal under any circumstances. We will continue to think about what we Other Business Segment can do for our Guests visiting our Theme Parks. Segment Revenues e ent Re enue illion o en The main facilities of the Other Business Segment are Ikspiari Operatin n o e illion o en (opened in July 2000), Disney Resort Line (opened in July 2001) and billion yen MAIHAMA Amphitheater (opened in September 2012). 16.0 1 0 Ikspiari is a commercial complex based on the concept of “a town (up 2.2%) full of stories and entertainment.” It includes approx. 140 shops and restaurants and a 16-screen cinema complex. Operating Income 2 2 2 1 Disney Resort Line is a monorail connecting four stations within 2 0 2.1billion yen Tokyo Disney Resort. (down 14.5%)
20 A shield on a Western River Railroad ride Segment Revenues piari Ot er
Note: The contents described in Focus are the countermeasures as of December or at the time of reopening. 2 onorail
Note: Listed monetary amounts were rounded to the nearest ¥0.1 billion until the fiscal year ended March 31, 2016, but since then have been rounded down to the nearest ¥0.1 billion.
34 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 35 OLC Group ESG Information
E S G Seeking to Provide Happiness Continually
The OLC Group aims to contribute to the realization of a society in which people can live spiritually fulfilling lives and a future filled with dreams based on our business mission to provide people with wonderful dreams, moving experiences, delight and Contribution to SDGs through contentment. Oriental Land was founded to contribute to Japan’s culture, health and welfare and has continued to create happiness business through Tokyo Disney Resort, its core business. We focus on environmental, social and governance (ESG) criteria and build strong ties with stakeholders to ensure long-term, sustainable growth so that we can continue providing value for decades to come. The 17 Sustainable Development Goals (SDGs) were established at a United Nations Summit in September 2015 as goals to be shared and pursued worldwide in order to drive sustainable development. Relationship between ESG and CSR Heeding the call from the global community, the OLC Group aims to OLC’s mission is to create happiness and contentment by offering wonderful Business mission contribute through our business activities. dreams and moving experiences created with original, imaginative ideas.
OLC Group CSR Policy: Five Main Areas of Corporate Social Responsibility Stakeholders Key initiatives Relevant SDGs
Climate change countermeasures • Reduce CO • Increase efficiency of energy consumption Caring for the Environment 2 Waste reduction The OLC Group is working earnestly on environmental initiatives that will allow us to continue bringing happiness to generations to come, E Environment • Curb waste generation • Implement recycling initiatives while preserving and passing on an environmentally sound planet. We work on climate change mitigation and adaptation by reducing Purification and recycling of water resources Environment greenhouse gas emissions and seeking to adapt to environmental conditions to minimize the impact on our customers. Appropriate management of chemical substance Due consideration to biodiversity
Dynamic and Inspiring Workplaces Training and support systems Our personnel are the source of the wonderful dreams, moving experiences, delight and contentment offered by the OLC Group. Since Corporate culture and employee satisfaction the hospitality each employee demonstrates is key to continue bringing happiness to our customers and society at large, we engage in a Employees Health and safety range of initiatives to enhance employee satisfaction, and make sure that all of our employees can achieve their full potential, feel safe at Promoting workplace diversity work, experience personal growth, and find their jobs rewarding.
Commitment to Our Customers and Society Customers Provision of happiness to customers and the community Focusing on our customers’ increasingly diverse needs, including the different types of families and overseas visitors, at the OLC Group we S Corporate sponsors Commitment to full and equal access constantly strive to evolve. We also aim to continue offering greater happiness to our customers and society at large through business Social Licensors, business partners Learning from Guest feedback activities that embody a broader social perspective, taking into account the needs of children, the elderly and persons with disabilities.
Children Are Our Future Customers Activities to nurture and support children At the OLC Group, we are leveraging our corporate features as a provider of happiness for customers and society at large to engage in a Local community Hands-on workplace learning and visiting lessons for wide array of community action programs. In particular, we are aiming to help nurture the next generation and develop communities Partners for collaboration local children through initiatives that focus on child support and development. We are also providing continued support to those affected by large-scale (NPO, NGO, etc.) Cooperation with local events earthquakes.
Corporate governance Trust and Integrity Customers Compliance Ensuring that our customers are safe and able to enjoy themselves free of care is our most important responsibility, serving as the foundation Initiatives for human rights G Shareholders and investors of the happiness we offer. Likewise, maintaining our compliance and integrity as a company will help us develop relationships of mutual Risk management and information security Governance Administration trust with our stakeholders, in turn leading to our sustainable growth and development. We will continue to bolster our corporate Partnerships with suppliers Suppliers Safety- and quality-related initiatives governance so that we can fulfill our business mission to create wonderful dreams, moving experiences, delight and contentment. Security, first aid, emergency response
36 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 37 ESG Topics: Environmental Initiatives
OLC’s CSR website: Environmental Commitments http://www.olc.co.jp/en/csr/environment.html E S G
For details, please see the website. OLC Group Environmental Policy Our initiatives to address global warming are divided into two: “mitigating,” or stopping the progression of warming by reducing greenhouse gas emissions and “adaptive,” or anticipating climate change, including more droughts, higher temperatures, and more The OLC Group has established Our Environmental Policy that sets forth guidelines for action and our philosophy governing the OLC Group’s environmental typhoons as a result of global warming, and reducing their impact.
activities. Our Environmental Philosophy affirms our commitment to working in harmony with the environment throughout our business, so that we may Tokyo Disney Resort continue to offer wonderful dreams and moving experiences to future generations. Our Environmental Action Policy represents our responsibility to adopt environmentally conscious business practices, to observe environmental laws and regulations and hold to the voluntary standards developed by the OLC Mitigation of Global Warming Group. Our intent is also to make improvements in this area, and to provide training and development opportunities to our employees. Switching to LED lighting Use of Biomass Wrapping Materials We are converting to LED the incandescent bulbs used for We are also promoting environmental conservation with The OLC Group Environmental Management lighting and decorating facilities, attractions, and hotels. regard to the shopping bags provided for purchase at our OLC Group Environmental Policy (Established in November 2005) Structure To date, we have introduced LED lighting for outdoor stores in Theme Park and hotels, and since fiscal 2015 we The OLC Group has a committee in place to promote environmental spotlights, other outdoor lighting, and indoor lights as well as have been introducing biomass wrapping materials that are Environmental Philosophy initiatives. —To bring wonderful dreams and moving experiences to future those for Cinderella Castle and Mount Prometheus. We also partly made of plant-derived materials. This initiative has
generations— OLC Management Meeting converted to LED all the lighting within it's a small world, an reduced CO2 emissions by about 40% per year compared to We seek to work in harmony with the environment in all our business attraction that re-opened on April 15, 2018. We increased the conventional products, which are mainly made of petroleum- so that we may continue to offer wonderful dreams, moving number of lighting fixtures by more than 60% to present the based materials. We have done this. The plants used as experiences, delight and contentment into the future. Environmental Strategy Committee world of the attraction more clearly, while still reducing power materials are cultivated in a way that does not damage the Environmental Action Policy consumption by more than 50%. Going forward, we will ecosystem by destroying tropical forests. 1. We will make every effort to fight global warming, conserve energy, Strategy Subcommittee execution Office located in department indicated in continue introducing LED lighting in various places. Translation of the image one the right: prevent pollution, engage in green purchasing, consider biodiversity, parentheses and reduce and recycle waste in all aspects of its business "Partially, bio-polyethylene derived On Global Warming Prevention from sugar cane is used" operations. Departments/ (Social Activity Promotion Dept.) Companies 2. We will comply with all statutory regulations and internal standards On Energy Management (Building System & Utility Dept.) related to the environment. On Waste Management 3. We will establish, implement and review environmental objectives (Operation Management Dept.) and targets on a regular basis. On Chemical Substance Management 4. We will offer education and training to all our employees so that they (Facilities Engineering Dept.) understand and can act independently on our environmental policies.
It’s a Small World attraction with new Soft LED lights that preserve the Theme Biomass wrapping material made from plant-derived materials is used for some of LED lighting Park atmosphere developed jointly with the materials an LED manufacturer Climate Change Countermeasures
Our proprietary Energy Management System (EMS) visualizes electricity consumption within our two Theme Parks and those back offices. Adoption for Climate Change due to Global Warming The EMS has enabled us to identify inconsistent or wasteful electricity use Currently, initiatives with “adaptive” elements are those that by monitoring the operation hours of air conditioners, among other factors, address thunderstorms, typhoons, and other natural disasters, and to implement measures to make improvements based on collaborations as well as rising temperatures (preventing heatstroke both across organizations, contributing to the establishment of a Plan-Do-Check- indoors and outdoors). We will continue considering other Act (PDCA) cycle for CO2 emissions reduction. adaptive techniques that anticipate climate change from To reduce CO2, in addition to utilizing EMS, the OLC Group has made global warming. tangible efforts since the construction planning stages of the Theme Parks Additional parasols in the waiting area for Scuttle’s Scooters For example, we are working on ways to reduce heat for with the introduction of energy-efficient facilities and equipment, including the people waiting in line at outdoor attractions. In fiscal the large-scale heat-source facilities installed in the central energy plant*. 2019, we installed additional parasols for guests to escape the Furthermore, we have been working to reduce CO2 emissions for example heat outside Jungle Carnival and while waiting in line for by cutting power consumption through LED lighting and by creating Scuttle’s Scooters. We also extended the roof and installed electricity through solar power generation. We have also in place our own fans for the outdoor waiting area at Turtle Talk. power generators with a total output of 17,500 kW to cut peak-demand grid energy use in summer. Roof extended over the waiting area Fans over the waiting line *An integrated heat-source unit that concentrates heat for the air-conditioning systems at a single for Turtle Talk location for distribution to various facilities, rather than produce the heat in individual buildings.
38 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 39 ESG Topics: Human Resource Initiatives ESG Topics: Initiatives for Safety and Security
OLC’s CSR website: OLC’s CSR website: Our Employees Safety First and Providing a Sense of Security http://www.olc.co.jp/en/csr/relation.html http://www.olc.co.jp/en/csr/safety.html E S G
For details, please see the website. For details, please see the website. Our Basic Approach to Human Resources Initiatives for Safety and Security
Tokyo Disney Resort For the OLC Group, human resources are as essential as structural investments for creating value in Theme Parks. In particular, at Tokyo Disney Resort, personal interactions are vital, so human resources themselves are a source of strength. Priority Code of Conduct: Safety For more than 35 years, the OLC Group has looked after the social asset of human resources in Maihama and we have continued to Ensuring that our Guests are safe and able to enjoy themselves carefree is our most important responsibility in executing business. create value in society. By employing around 20,000 Cast Members in our Theme Parks, we are assuming a major responsibility for society. Based on the Four Keys, our shared code of conduct at Disney Theme Parks, the OLC Group works to maintain and enhance safety We believe that having every employee continue to create value—while producing results and achieving personal growth through our on both structural and non-structural fronts and through our operations within our Theme Parks in such areas as attractions, human resources strategy—and to take action will lead to happiness for Guests and higher value for the OLC Group and, by extension, shopping and dining. This includes employee training and initiatives for security, first aid and emergency response. make a contribution to society.
Human Resources Development
For our employees, we provide opportunities for self-actualization and offer programs that support skills development with the aim of Code of Conduct—The Four Keys respecting individuals and supporting their work, as set out in our management credo. All Cast Members make decisions and act based on the Four Keys, our shared code of conduct at Disney Theme Parks, to Further, we provide career support inside and outside the Company. This includes a system of promotion for part-time Cast Members to provide the highest level of hospitality to Guests. The Four Keys S C S E are presented in order of priority. become full-time employees as a way to facilitate career development within the Company, regardless of employment category, and to provide opportunities for Cast Members to consider their own career paths. S afety Through employee training, we aim not only to improve the value of our business but also to contribute to Japan’s service and tourism Attractions / Shopping / Dining Experiences / Emergency Response / Cast Members / etc. industries. Moreover, we intend to achieve long-term growth of our core businesses (set out in our long-term management strategy) by To create a safe and relaxing environment, the safety of Guests and Cast Members improving the abilities of our employees. S comes before anything else. C ourtesy Employees C Based on the belief that Guests should be treated like VIPs, we also aspire to offer With the aim of increasing self-reliance and willingness to take on challenges, our approach identifies individual goals and skills and links friendly, genuine hospitality; not just being polite but providing service from the standpoint of the Guests. them with expected work roles so as to systematically promote personal growth for each employee. The Four Keys We have also established the Vision for OLC Human Resources. For all employees, this vision defines the awareness of challenges by S how continuing to make things better, a human resources strength we have cultivated up to now. The vision also fosters the attitude of getting Cast Members are part of the show and should treat every day as the opening day, the job done and seeing things through to the end, as well as acting together as an organization, or coming together as one with every S approaching every task as part of a themed show, even when they are inspecting or cleaning the facilities. individual fulfilling their responsibilities. We have established various training programs according to the individual role and career stage. Meanwhile, so that these initiatives do not remain as isolated points, we link them together to form a continuous training cycle with the E E fficiency help of career development interviews and performance evaluation interviews. Focusing on safety, courtesy and the show will, along with teamwork, help us achieve greater efficiency. Vision for OLC Human Resources Training Cycle
a in up t e allen e o e er ee in etter a o doin t in n erstan ing Attraction Safety Safe Shopping Safe Dining Experience not ettin tu t in in or a tin a i t ere i no need to oing things On the structural front, a team of We have developed our own quality Restaurant facilities at our Theme Parks oin our e t a an i pro e t e a t in a e al a etter val ation sta lishing approximately 1,000 maintenance inspection standards that incorporate the follow the HACCP system—an or ani ation o in een done an training to et er a one it revie lans technicians conducts inspections and legal and regulatory safety requirements internationally recognized food safety an a arene o maintenance, while efforts on the non- of Japan, Europe and the United States, management tool—and implement olla oration structural front include confirming safety and merchandise is subject to testing by thorough hygiene management. All Cast o ing etting during operation as a way to maintain independent inspection agencies as part Members engaged in food service receive together the as one o one raining and enhance attraction safety. of efforts for merchandise safety and training on food safety that includes ssigning ettin t e o done and an quality control. methods for proper food handling. ties eein t in t rou s ort to t e end Emergency Response Cast Members Safety
Part-time Cast Members We have developed an emergency response manual outlining the steps for Cast Members In addition to Guest safety, we conduct a to take in case of an earthquake or other emergency. To ensure that Cast Members gain a variety of initiatives that place great We are fostering an organizational climate that supports working enthusiastically from the standpoint of self-effectiveness, with each Cast thorough understanding of the procedures contained in the manual, emergency exercises importance on the safety of our Cast Member feeling that they are being useful to Guests, with a sense of personal growth on their part. We believe that this will lead to are held at all 197 facilities at Tokyo Disneyland and Tokyo DisneySea, and comprehensive Members, who handle operations at our personal growth for Cast Members, and we are working to develop a training program and an environment that includes a system of emergency drills are held four times a year. Theme Parks. support for supervisors.
40 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 41 ESG Topics: BCP Initiatives Corporate Governance
News Release (February 25, 2019) Announcement of the Re-Establishment of an Earthquake Risk Countermeasure Type Financial Method (reference) E S G E S G http://www.olc.co.jp/en/news/news_olc/20190329_02e/main/0/link/20190329_02e.pdf For details, please see the website. BCP (Business Continuity Plan) Initiatives Basic Thoughts on Corporate Governance
OLC Group has set up the Emergency Control Center (ECC) as the organization that supervises response in an emergency such We will continue working to strengthen corporate governance, based on our understanding of the importance of raising management as an earthquake, fire or typhoon. This is to ensure a structure that minimizes damage to people and property and enable the transparency and fairness, achieving sustainable growth and development and fulfilling our social responsibilities. Specifically, we aim swift resumption of operations. We have been working to ensure that operations can continue when a large-scale disaster to strengthen corporate governance by reinforcing the internal control system, increasing management transparency and promoting strikes since before the Great East Japan Earthquake in March 2011. the reinforcement of management oversight functions. By conducting honest management that emphasizes corporate ethics through In February 2019, we shifted to a method of financing that sets a loan drawdown of between ¥5 billion and ¥150 billion, these measures, we aim to increase our corporate value. with the amount to be determined by OLC Group when earthquake materializes. Corporate Governance Overview of the Basic Systems (As of October 1, 2020)
Business Execution System Audit and Supervisory System
Earthquake Risk Countermeasure Financing Type Term Loan with a Commitment Period
Appoint i i Appoint i i Main Flow When an Earthquake Occurs Point Board of Directors Audit Board of Corporate Auditors oordinate Financing based on OLC Group orporate auditor in ludin Appoint i i 1 OLC Group decides on the amount required for working capital 0 dire tor in ludin 2 e ternal dire tor e ternal orporate auditor determination oordinate on ult ele ation o Appoint i i Re o end aut orit uper i e Corporate Auditor Office Occurs at intervals of 200 to 300 years Areas in the time of the plan (Similar strength earthquakes in the past) Nomination / 75 kilometers (45 In the event of an earthquake of 1923 Great Kanto Earthquake miles) from Remuneration Repo rt M 7.9 or greater with an epicenter 1703 Genroku Kanto Earthquake Maihama in radius Committee Audit 2 Representative Directors Independent Accounting Auditors located within Probability of earthquake occurring n tru t the area circled in Red About 1% in the next five years n tru t Report oordinate Note: Calculated by OYO RMS Corporation, a specialist in risk analysis Appoint i i Executive Committee Consult / Recommend Internal Auditing uper i e Compliance Committee Reasons for exercising a request for early repayment e ide and report on e i ue Department ot er t an atter de ided Audit u ine e e ution t e oard o ire tor o ea depart ent Decision by banks to request Banks can only request premature repayment when the majority of banks need to do so in Environment Committee 3 and o ittee early repayment consideration of OLC Group's outstanding loan eli eration on i ue Risk Management Committee Corporate Officers nternal audit nternal audit In the event repayment is requested by the banks e ution o u ine Information Security Management Subcommittee Decision on method Cash, etc. OLC Group selects repayment methods utilizing cash or other assets n tru t 4 of repayment is made by OLC Group Stock acquisition The exercise of stock acquisition rights is extremely limited, and only done after careful rights decision-making by management in light of the internal and external environment
Corporate Governance Structure (As of October 1, 2020) Following the Great Hanshin-Awaji Earthquake in January Features Corporate governance system Company with Board of Corporate Auditors 1995, we introduced an Earthquake Risk Countermeasure Management system Corporate Officer System Ability to engage in long-term borrowing while flexibly securing liquidity 1 Financing Type Term Loan with the aim of securing liquidity at hand Number of directors 10* on hand to continue business. This financial preparedness Lowers impact on the balance sheet by setting a borrowing limit Directors Term of directors defined in Articles of Incorporation 2 years *1 The maximum number of directors Chairman of Board of Directors Chairman*2 defined in the Articles of played a part in enabling us to continue business and achieve OLC Group can choose cash, other assets or stock acquisition rights as the Incorporation is 15. method of repayment Board of Corporate Auditors established Yes *2 Except when the chairman serves a rapid recovery in performance when the Great East Japan Auditors 3 concurrently as president. The drawdown period is set at five years from March 13, 2019 Number of corporate auditors 4* Earthquake struck. We also appropriately review the content *3 The maximum number of The maturity date may be extended to March 2079 External directors and Number of external directors (independent officers) 2 (2) of our finances in light of management strategy and the Period corporate auditors defined in the However, early repayment in cash may be made on or after external corporate auditors Number of external corporate auditors (independent officers) 3 (2) Articles of Incorporation is 6. business environment. In addition to being able to increase March 13, 2024, as determined by OLC Group the financing amount, the new plan allows us to minimize ¥5 billion to ¥150 billion costs by not having to execute the financing until the capital Financing amount Procure funds for working capital as determined by OLC Even with our thorough governance systems in place, ultimately the awareness of the people who use Group when earthquake risk materializes is actually needed. If an earthquake measuring M7.9 or these systems will decide if they will function or not. In recognition of this fact, the OLC Group is working Repayment Repayment hierarchy shall be the same as a senior debt to spread and raise awareness of OLC-WAY, a set of shared promises among all officers and employees. greater occurs, although the banks can decide whether to hierarchy obligations since there is no subordinate clause OLC-WAY By having all officers and employees fulfill the promises of “Honesty,” “Proactive Execution” and request early repayment, OLC Group can choose to make the Commitment fee 0.20% of the ¥150 billion loan facility “Healthy Conflict” contained in OLC-WAY, we will better position ourselves to fully implement our loan repayment with cash or other assets, which means the Ability to hedge risks with sufficient funding at a low cost medium-term plan and strategies. exercise of stock acquisition rights will be extremely limited.
42 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 43 Corporate Governance
E S G
Directors and Board of Directors Nomination / Remuneration Committee achievement of those targets. sustainable growth and advances in the core Theme Park Board of Directors Comprised of Ten Directors, including A voluntary Nomination / Remuneration Committee, which The upper limit for cash remuneration was set at ¥80 million business. We maintain cross-shareholdings only in companies Two External Directors includes 50% of independent external directors and is chaired by (not including the employee portion) for 25 directors approved deemed to contribute to the deepening of mutual ties and To enhance the transparency of the Board of Directors and further the CEO, has been established as an advisory body to the Board at the General Meeting of Shareholders held on June 29, 1999, enhancement of our corporate value. We will reduce such cross- strengthen management structure, the Board of Directors is of Directors. The goal is to enhance the independence and and the upper limit for stock remuneration was set at ¥100 shareholdings when said objectives cannot be met over the comprised of 10 directors, including two external directors, and objectivity of the functions of the Board of Directors related to million or 10,000 shares per year for eight directors excluding medium- to long-term. discusses and makes decisions on important items. director nomination, remuneration, and other such matters. The external directors approved at the General Meeting of Every year at the Board of Directors meeting, we carefully Board of Directors meetings are attended by all corporate committee deliberates on director nominations and remuneration, Shareholders held on June 28, 2018. The decision on the examine individual cross-shareholdings in terms of the auditors, who have different duties and monitor management and then reports to the Board of Directors. Decisions on individual amount of remuneration for directors in the fiscal year under appropriateness of the purpose for retention, the benefit associated from their own unique perspectives. remuneration amounts for directors are entrusted to the review was entrusted to the Representative Director and with the holding (asset value, dividends, transactions, etc.), and committee by the Board of Directors. Chairman by resolution of the Board of Directors and has been whether or not the risk is commensurate with the capital cost, to Corporate Officers and the Executive Committee made in light of the above considerations. Decisions in the determine the viability of the cross-shareholding. Accelerating Decision Making through Delegation of Remuneration Paid to Directors and Corporate Auditors and Audit Remuneration future on individual remuneration amounts for directors will be Authority In the fiscal year ended March 31, 2020, remuneration paid to made by the Nomination / Remuneration Committee. Standards for Exercising Voting Rights Pertaining to Cross- According to changing around the business environment, OLC directors and corporate auditors and remuneration paid to Additionally, remuneration for corporate auditors is determined shareholdings Group has introduced the Corporate Officer System to accelerate independent accounting auditors (remuneration for services in cooperation with the Board of Corporate Auditors within the When exercising voting rights on listed shares held, the Company decision making by promoting the delegation of authority to prescribed in Article 2, Paragraph 1 of the Certified Public limits decided at the General Meeting of Shareholders. The upper shall make judgments on each agenda item from the following corporate officers. Accountants Law of Japan and remuneration for other services) limit for corporate auditor remuneration was set at ¥8 million yen perspectives. The Board of Directors delegates authority to the Executive was as follows: for four corporate auditors approved at the General Meeting of (1) Will the holding enhance the corporate value of the investment Committee comprised of standing directors, which discusses, Shareholders held on June 29, 2005. Remuneration for corporate target over the medium- to long-term and lead to greater decides and reports on important items (excluding items requiring Remuneration Paid to Directors and Corporate Auditors auditors in the fiscal year under review has been determined with shareholder return? a Board of Directors resolution). (Fiscal year ended March 31, 2020) (Millions of yen) the cooperation of the Board of Corporate Auditors. (2) Is there a risk that the holding will significantly damage share Recipients Amount Note: The number of directors and corporate auditors stated is the number at the time prices due to a major violation of laws or regulations, antisocial Remuneration paid to directors 12 461 of the resolution at the General Meeting of Shareholders. Corporate Auditors and the Board of Corporate Auditors Remuneration paid to corporate auditors 4 93 acts, scandals, or other inappropriate activities committed by Four Corporate Auditors, including Three External the investment target? Remuneration paid to external directors Corporate Auditors and corporate auditors 5 85 Cross-shareholdings (3) Has there been significant and prolonged stagnation in The Board of Corporate Auditors is comprised of four corporate Note 1: The above includes two directors who completed their terms as of the end of Basic Policy and Method of Verification performance by the investment target? the 59th General Meeting of Shareholders held on June 27, 2019. The Company believes in the need for long-term and amicable auditors, of whom three are external corporate auditors, and Note 2: Employee wages are not paid to directors who work concurrently as employees (4) Is there a possibility that the holding will harm the common activities include listening to reports from directors, officers and of the Company. relationships with companies related to its business to drive interests of shareholders? Note 3: The Company has abolished bonuses and such bonuses are not included in employees and viewing important documents, while discussing remuneration paid to directors. the status of deliberation at important meetings, audit results and Note 4: Of the above, the amounts of expenses for restricted stock remuneration plan during the reporting period (10 Directors excluded external directors; total ¥20 other matters among the corporate auditors. The two standing million) is included. Cross-shareholding Status
corporate auditors attend meetings of the Board of Directors, the Audit Remuneration (Fiscal year ended March 31, 2020) Equity holdings other than those held solely for the purpose of investment and amount shown on the balance sheet Executive Committee and other committees to monitor and (Millions of yen) Shareholdings…Unlisted shares: 11 companies Listed shares: 15 companies Amount gather information. Sum of amount shown on balance sheet…Unlisted shares: ¥1,009 million Listed shares: ¥22,244 million Remuneration based on audit certification 77 Furthermore, to assist the corporate auditors in their duties, a Equity holding for specified purposes Note: The Company’s auditing contract with the independent accounting auditors does specialized team has been assembled. The effectiveness of not clearly differentiate remuneration for auditing as based on the Companies Act Of equity holdings other than those held solely for the purpose of investment, we hold listed shares in the following companies as of corporate auditing is also enhanced through cooperation between or the Financial Instruments and Exchange Law. Because the amounts cannot be practically differentiated, remuneration for the period is included in the total. the fiscal year ended March 31, 2020. the standing corporate auditors, Internal Auditing Department and independent accounting auditors. Policy Concerning Decisions on Amounts of Remuneration Balance sheet amount (millions of yen) Shareholdings Purpose of holding, the quantified effect of holding for the Paid to Directors and Corporate Auditors Companies (Number of shares) Number of Committee Meetings in the Fiscal Year Ended and the reason for increasing of the number of shareholdings Company’s Decisions on compensation of the Company’s directors are Current fiscal period Previous fiscal period share*1 March 31, 2020 entrusted to the Nomination / Remuneration Committee by the The main purpose of this shareholding is to strengthen ties with the sponsor Board of Directors meetings 10 *Held monthly in principle 6,997 10,386 company and increase customers in the Theme Park business. Although it is Board of Directors and are made within the limits determined by Central Japan Railway Company difficult to quantify the effect of the shareholding, the Board of Directors Board of Corporate Auditors meetings 12 *Held monthly in principle (404,000) (404,000) ✓ resolution at the General Meeting of Shareholders. Cash and examines its viability, particularly the appropriateness of the purpose, its benefit Executive Committee meetings 22 *Held twice monthly in and whether the risk is commensurate with capital cost. principle stock remuneration, as an incentive to drive sustainable growth, 5,786 7,559 are provided after assessing the achievement of management East Japan Railway Company Same to above (707,800) (707,800) ✓ targets and individual contributions to the Company and the
44 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 45 Corporate Governance
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Balance sheet amount (millions of yen) Shareholdings Purpose of holding, the quantified effect of holding for the Reinforcing the Internal Control System Companies (Number of shares) and the reason for increasing of the number of shareholdings Company’s Current fiscal period Previous fiscal period share*1 The main purpose of this shareholding is to strengthen ties with the sponsor Enhancing internal controls through rigorously maintaining the compliance system, entrenching company and increase customers in the Theme Park business. Although it is the risk management system and strengthening the information management system 2,347 1,563 difficult to quantify the effect of the shareholding, the Board of Directors ANA HOLDINGS INC. (889,700) (385,100) examines its viability, particularly the appropriateness of the purpose, its benefit ✓ and whether the risk is commensurate with capital cost. We are purchasing Building a Compliance System additional shares to further deepen our ties. The purpose of this shareholding is to deepen ties with a company operating in Established the Compliance Committee and Employee Building Partnerships with Vendors 1,179 1,206 the same business domain. Although it is difficult to quantify the effect of the Consultation Office The OLC Group Compliance Code states that we engage in fair and Shochiku Co., Ltd. shareholding, the Board of Directors examines its viability, particularly the transparent transactions and we employ a fair process of vendor selection that (97,300) (97,300) ✓ We set up the Compliance Committee, which is chaired by a appropriateness of the purpose, its benefit and whether the risk is gives due consideration to quality, price, technology, delivery lead times and commensurate with capital cost. designee of the president, to ensure the legality of the Company’s financial conditions. Once vendors have been selected, we pursue dealings The purpose of this shareholding is to help facilitate the financial activities of management and to promote a spirit of compliance. If the committee that take into account compliance with laws and regulations as well as to Sumitomo Mitsui Trust 1,089 2,317 the Company. Although it is difficult to quantify the effect of the shareholding, fulfill our responsibility to society in a wide range of issues. These include discovers misconduct by an officer or employee or a serious violation Holdings, Inc (348,859) (582,859) the Board of Directors examines its viability, particularly the appropriateness of ✓ product safety, worker safety, respect for human rights and environmental the purpose, its benefit and whether the risk is commensurate with capital cost. of the law or the Company’s Articles of Incorporation, it conducts conservation based on the “OLC Group Vendors Code of Conduct.”
The main purposes of this shareholding are to strengthen ties with the sponsor the necessary investigations and reports its findings to the OLC Group Vendors Code of Conduct company and the Theme Park business and increase customers. Although it is 1,049 2,057 Compliance Committee Chairman, Company President and Japan Airlines Co., Ltd. difficult to quantify the effect of the shareholding, the Board of Directors 1. Compliance with the Law 4. Fair Business Practices (527,600) (527,600) ✓ examines its viability, particularly the appropriateness of the purpose, its benefit Corporate Auditor promptly each time. All matters are periodically 2. Safety of Merchandise 5. Information Management and whether the risk is commensurate with capital cost. reported to the Compliance Committee, the Company President, the 3. Worker Safety and Respect for 6. Anti-Social Elements The purpose of this shareholding is to help facilitate the financial activities of Human Rights 7. Environmental Issues 1,042 2,531 the Company. Although it is difficult to quantify the effect of the shareholding, Executive Committee and the Board of Directors. Moreover, an Mizuho Financial Group, Inc. Tokyo Disney Resort (8,436,334) (14,780,334) the Board of Directors examines its viability, particularly the appropriateness of ✓ Employee Consultation Office has been set up as a channel for the purpose, its benefit and whether the risk is commensurate with capital cost. Supply chain management internal reporting within the OLC Group, and we have established an The main purpose of this shareholding is to strengthen ties with the sponsor The factories commissioned to manufacture Disney-brand products sold external consultation desk inside the advising law office. 950 756 company and the Theme Park business. Although it is difficult to quantify the at the Theme Parks are required to comply with Disney’s International YAMAZAKI BAKING CO.,LTD. effect of the shareholding, the Board of Directors examines its viability, ✓ Labor Standards program (ILS program). (421,000) (421,000) particularly the appropriateness of the purpose, its benefit and whether the risk OLC Group Compliance Code is commensurate with capital cost. The OLC Group’s officers and employees have a strong ethical commitment to comply with external 782 923 Risk Management System Kikkoman Corporation Same to above ✓ laws and regulations and internal rules. (170,000) (170,000) 1. Prioritize safety above all else. Establish and Operate a Risk Management Cycle The purpose of this shareholding is to help facilitate the financial activities of 2. Respect human rights and prevent discrimination OLC’s Risk Management Committee, chaired by the president, 439 558 the Company. Although it is difficult to quantify the effect of the shareholding, and harassment. The ChibaBank, Ltd. extracts, analyzes, assesses and prioritizes risks facing the (929,000) (929,000) the Board of Directors examines its viability, particularly the appropriateness of ✓ 3. Engage in fair and transparent transactions. the purpose, its benefit and whether the risk is commensurate with capital cost. 4. Strictly control confidential information, including Company. Based on this, the Company establishes and operates a personal information. The main purpose of this shareholding is to strengthen ties in the Theme Park Business Guideline risk management cycle with formulated preventative measures or 231 289 business. Although it is difficult to quantify the effect of the shareholding, the 5. Take a firm stance toward antisocial organizations. USHIO INC. countermeasures for individual risks. (224,200) (224,200) Board of Directors examines its viability, particularly the appropriateness of the ✓ purpose, its benefit and whether the risk is commensurate with capital cost. Ensuring Compliance through Employee Training OLC has also set up the Emergency Control Center (ECC) as the The purpose of this shareholding is to help facilitate the financial activities of We have established the OLC Group Compliance Code, which organization which responds when a risk materializes. 137 166 the Company. Although it is difficult to quantify the effect of the shareholding, The Keiyo Bank, Ltd. outlines the rules for officers’ and employees’ compliance with (258,000) (258,000) the Board of Directors examines its viability, particularly the appropriateness of ✓ the purpose, its benefit and whether the risk is commensurate with capital cost. ethics and laws, and the Business Guideline, which outlines Raising the Management Level through the Information
Sumitomo Mitsui Financial 99 295 specific standards for the practice of compliance. Security Management Subcommittee Same to above Group, Inc. (37,840) (76,240) ✓ Furthermore, to share information and awareness, we conduct OLC’s fundamental policies regarding information security are
The purposes of this shareholding are to help facilitate the financial activities of educational programs related to compliance, from stratified training on outlined in the OLC Group Information Security Policy. the Company and to strengthen ties with the sponsor company mainly in the designated subjects such as workplace harassment to e-learning Additionally, we have been working to improve the level of 84 100 Theme Park business. Although it is difficult to quantify the effect of the Dai-ichi Life Holdings, Inc. (65,500) (65,500) shareholding, the Board of Directors examines its viability, particularly the ✓ courses. information security management through the creation of an appropriateness of the purpose, its benefit and whether the risk is We also implement strict monitoring to ensure the effectiveness Information Security Management Subcommittee in the Risk commensurate with capital cost. of measures related to compliance. Management Committee. These two organizations oversee The purpose of this shareholding is to help facilitate the financial activities of 24 29 the Company. Although it is difficult to quantify the effect of the shareholding, the management of information. The Chiba Kogyo Bank, Ltd. (97,300) (97,300) the Board of Directors examines its viability, particularly the appropriateness of ✓ Examples of training content the purpose, its benefit and whether the risk is commensurate with capital cost. Specific Risks Handled by the ECC The main purpose of this cross-shareholding was to help facilitate the Appropriate labor control Mitsubishi UFJ Financial Group, 28 —*2 financial activities of the Company, but our shares were sold during — Earthquakes, fires, typhoons, snow, lightning, power outages, Inc. (51,620) Prevention of harassment the fiscal year under review. accidents, food poisoning, infectious diseases and terrorism, among Management of information *1 “Shareholdings for the Company’s share” provides the status of both the parent company and subsidiaries, if the shares in the subsidiary are also considered to be real ownership. other risks *2 “-” indicates that the relevant stock is not held.
46 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 47 Corporate Governance
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Increasing Management Transparency Reinforcing Management Oversight Functions
Increasing management transparency and justness through proactive disclosure of information Ensuring the health of management by maintaining an external and internal oversight system
Investor Relations (IR) Activities of OLC, Conducting Active with its shareholders and other investors, participates in Utilizing External Directors and External Corporate Auditors of Directors on the execution of duties and the state of important Information Disclosure and Transmitting Feedback conferences throughout Japan and overseas that are organized by Strengthening Management Fairness through Appointment meetings, such as the Executive Committee meeting, at the Board throughout the Company securities companies and conducts Company explanations for of External Officers of Corporate Auditors, as well as on the state of auditing of Top management, corporate officers, and directors are supported private investors. OLC maintains an oversight system through the appointment of subsidiaries and on the auditing plans and auditing results of the by a specialized IR staff consisting of ten members (As of October We not only make reports to management, we also hold external officers to strengthen supervisory functions. Internal Auditing Department, and strive to enrich audits through 1, 2020). This staff constantly strives to improve the transparency regular briefings for employees, which we share investors’ The external directors give advice and make suggestions to the mutual understanding on a daily basis. The external corporate and speed of information disclosure. feedback with employees. In fiscal year ended March 31, 2020, Board of Directors as necessary to ensure the validity and auditors receive reports on the results of the independent We aim to disclose information in an easy-to-understand 105 briefings were held for individual departments and groups appropriateness of the decisions made by the Board of Directors. accounting auditor’s year-end reviews and audits of the manner through such means as transmitting on-demand video that use our financial results meeting materials in order to They also offer prudent advice based on their wealth of Company’s financial statements for the first to third quarters. presentations of financial results and voice files of quarterly communicate the opinions of shareholders and other investors to experience, wide-ranging insights and outside perspectives, They also exchange opinions regarding the Company’s operations financial teleconferences as well as by providing materials in employees in detail. In addition, the opinions, suggestions and further enhancing management’s ability to maintain fairness. as necessary throughout the fiscal year while remaining well Japanese and English that are geared toward investors who are evaluations received from our shareholders through The external corporate auditors receive reports from the Board versed in a variety of Company-related information. unfamiliar with OLC. questionnaires are sorted by content for regular feedback to OLC values opportunities for management to communicate appropriate managers and departments so we can work to Major Activities of the External Directors and External Corporate Auditors (Fiscal year ended March 31, 2020) directly with shareholders. The Company holds discussion forums improve our management and business activities. Board of Directors Board of Corporate meetings Auditors meetings Reason for appointment (Held 10 times) (Held 12 times) Mr. Hanada provides advice and recommendations at the Board of Directors’ meetings, as required, IR-Related Activities Tsutomu Hanada 10 — to ensure the validity and appropriateness of decision-making by the Board of Directors. This Executive includes offering opinion from the perspective of a manager with extensive experience. Explanation by Directors Supplementary Explanation the Representatives (External) Mr. Mogi provides advice and recommendations at the Board of Directors’ meetings, as required, to Formulate and publish a Disclosure Policy A Disclosure Policy has been formulated and published on the OLC website. Yuzaburo Mogi 9*1 — ensure the validity and appropriateness of decision-making by the Board of Directors. This includes offering opinion from the perspective of a manager with extensive experience. Briefings have been held at places such as securities companies where overviews of the company Hold briefings and its financial results, progress regarding the medium-term plan and other explanations were No Mr. Suda provides advice and recommendations at the Board of Directors’ meetings, as required, from the for individual investors Tetsuo Suda*2 perspective of a manager with extensive experience to ensure the validity and appropriateness of decision- provided. 10 12 (Standing) making by the Board of Directors. Mr. Suda also actively addresses the Board of Corporate Auditors upon Hold regular briefings Briefings for the year-end financial results and telephone conferences for the first, second and examination of the opinions offered by Corporate Auditors and the basis for those opinions. for analysts and third quarter results have been held where overviews of the financial results, progress regarding Yes institutional investors the medium-term plan and other explanations were provided. Corporate Mr. Otsuka provides advice and recommendations at the Board of Directors’ meetings, as required, from the perspective of a manager with extensive experience to ensure the validity and appropriateness of Auditors Hiroshi Otsuka*2 10 12 The Company visited investors mainly in North America, Europe and Asia and participated in Hold regular briefings decision-making by the Board of Directors. Mr. Otsuka also actively addresses the Board of Corporate conferences held in Japan and overseas where overviews of the company and its financial results, Yes (External) Auditors upon examination of the opinions offered by Corporate Auditors and the basis for those opinions. for overseas investors progress regarding the medium-term plan and other explanations were provided. Mr. Kainaka provides advice and recommendations at the Board of Directors’ meetings, as required, from Published materials such as financial statements, securities reports (in Japanese), quarterly financial the perspective of a manager with extensive experience to ensure the validity and appropriateness of Publish IR materials Tatsuo Kainaka 10 12 statements (in Japanese), results presentation materials, shareholder newsletters (in Japanese), decision-making by the Board of Directors. Mr. Kainaka also actively addresses the Board of Corporate on the company website annual reports and fact books (http://www.olc.co.jp/en/ir/library.html) Auditors upon examination of the opinions offered by Corporate Auditors and the basis for those opinions.
*1 When an outside director is unable to attend a Board of Directors meeting, that director receives management reports, as required, on the content of Board discussions and the director’s opinions/advice on the Company’s management is asked for. *2 Tetsuo Suda and Hiroshi Otsuka retired as of June 26, 2020. Briefings for individual investors Regular briefings for employees: 105 times a year Internal Audits internal regulations, and appropriately and efficiently with the The Internal Auditing Department Continuously Improves goals of promoting management efficiency and contributing to and Enriches Internal Controls enhanced profitability. OLC has enhanced and continuously improves internal controls with the establishment of an Internal Auditing Department to Independent Accounting Audit ensure compliance with laws and internal rules as well as efficient Undergo an External Audit to Ensure Appropriateness of Accounting business execution. This department is independent of the other To ensure accurate accounting, the OLC Group receives audits executive departments of the Company. In conducting internal from KPMG AZSA LLC. Our designated unlimited liability and Note: These images show events held prior to December 2019. audits, the Internal Auditing Department works with corporate engagement partners from KPMG AZSA LLC are certified public auditors and accounting auditors to examine, assess and advise accountants Yoshitaka Kuwamoto and Daika Azuma. Additionally, on whether Company operations are being conducted in a total of 16 accountants and assistants engage in other compliance with management policies and plans as well as accounting and auditing activities.
48 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 49 Board of Directors, Corporate Auditors and Corporate Officers (As of October 1, 2020)
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Board of Directors Board of Directors Corporate Officers
President Officer Kyoichiro Uenishi
Toshio Kagami Kyoichiro Uenishi Executive Vice President Officer Representative Director, Representative Director, Yumiko Takano Chairman and CEO President and COO Supervisor of Hotel Business Segment and Theme Port No.8 Enhancement Division, 1972 Joined the Company 1980 Joined the Company In charge of Corporate Strategy Planning Department, 2005 Representative Director, 2009 Representative Director, Representative Director and Chairman of Milial Resort Hotels Chairman and CEO President and COO Tsutomu Hanada* Yuzaburo Mogi* Co., Ltd.
Officer Masufumi Sumimoto In charge of Theatrical Business Division, Representative Director, Chairman and President of IKSPIARI Co., Ltd. Yumiko Takano Yuichi Katayama Akiyoshi Yokota Shigeru Suzuki Kousei Yonekawa* Executive Director Executive Director Executive Director Standing Corporate Auditor Standing Corporate Auditor (External) Kiyotaka Hayakawa In charge of and Director of Publicity Department 1980 Joined the Company 2013 Joined the Company 1980 Joined the Company 1980 Joined the Company 1974 Joined Keisei Electric Railway Co., Ltd. 2003 Executive Director 2013 Executive Director 2009 Executive Director 2003 Executive Director 2020 Corporate Auditor of the Company Junichi Onosato
50 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 51 Corporate Data/Stock Information (As of March 31, 2020)
Corporate Data The Aerial Photography of Tokyo Disney Resort
Company Name Oriental Land Co., Ltd. Primary Subsidiaries Milial Resort Hotels Co., Ltd. Bay Food Services Co., Ltd. Address 1-1 Maihama, Urayasu, Chiba 279-8511, Japan Maihama Resort Line Co., Ltd. Resort Costuming Service Co., Ltd. Established July 11, 1960 IKSPIARI Co., Ltd. MBM Co., Ltd. Capital Stock ¥63,201 million Maihama Corporation Co., Ltd. M TECH Co., Ltd. Green and Arts Co., Ltd. Brighton Corporation Co., Ltd. Number of 8,034 (Consolidated, OLC Group) Photo Works Co., Ltd. Oriental Land Innovations Co., Employees 4,845 (Non-consolidated, Oriental Land Co., Ltd.) Design Factory Co., Ltd. Ltd.* * Established on June 5, 2020 Stock Information
1 Common Stock Principal Shareholders* (Top Ten) 363,690,160 shares Outstanding Number of shares Percentage held*2 Shareholders (Thousands) (%) Stock Listing Tokyo Stock Exchange, First Section Keisei Electric Railway Co., Ltd. 72,628 22.16 Code No. 4661 Mitsui Fudosan Co., Ltd. 29,797 9.09 Investment Unit 100 shares Number of Shareholders 199,736 Chiba Prefecture 13,200 4.03 Bond Ratings JCR…AA R&I…AA– The Master Trust Bank of Japan, Ltd. 11,299 3.45 (Trust accounts) Sumitomo Mitsui Trust Bank, Limited Share Registrar 4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo Mizuho Trust & Banking Co., Ltd.*3 7,495 2.29 100-0005, Japan Japan Trustee Services Bank, Ltd.*4 6,909 2.11 Transfer Agent Sumitomo Mitsui Trust Bank, Limited (Trust accounts) Stock Transfer 8-4, Izumi 2-chome, Suginami-ku, Tokyo 168- Agent Department 0063, Japan The Dai-ichi Life Insurance Company, 6,560 2.00 Limited
Distribution of Shareholders Japan Trustee Services Bank, Ltd.*4 ational o ern ent and 5,986 1.83 rea ur to lo al pu li or ani ation (Trust accounts 7) Japan Trustee Services Bank, Ltd.*4 4,360 1.33 ndi idual and ot er inan ial in titution (Trust accounts 4) Japan Trustee Services Bank, Ltd.*4 4,141 1.26 e uritie o panie (Trust accounts 5) *1 In addition to the above, 36,003 thousand shares are held in treasury. orei n orporation and Treasury stock does not include 310 thousand shares of the Company’s stock that indi idual Ot er orporation are held by the trust. *2 Figures for shareholding percentage held exclude treasury stock and have been (As of March 31, 2020) rounded off to two decimal places. *3 Trust & Custody Services Bank, Ltd. as trustee for Mizuho Bank, Ltd. Retirement Benefit Trust Account re-entrusted by Mizuho Trust and Banking Co., Ltd. *4 Japan Trustee Services Bank has changed its name to Japan Custody Bank of Japan, Stock Price and Trading Volume Ltd. as of July 27, 2020. to ri e en radin olu e ou and o are Total Shareholder Returns 000 0 000 ‘16/3 ‘17/3 ‘18/3 ‘19/3 ‘20/3 000 0 000 Total shareholder returns (%) 88.0 71.0 120.7 139.9 154.1 2 000 20 000 Market capitalization (Millions of yen) 2,898,611 2,321,434 3,951,494 4,571,585 5,026,198 000 0 000 Total dividends (Millions of yen) 11,666 11,611 13,173 13,134 14,444 000 0 000
000 0 000 Record high stock price* (yen) 9,540 8,049 11,330 12,735 16,980
0 0 Record low stock price* (yen) 5,880 5,823 6,303 9,976 11,250 20 * Highest and lowest stock prices are based on prices quoted on the First Section of the Tokyo Stock Exchange. The copyrights to the Disney characters and scenes from Tokyo Disneyland, Tokyo DisneySea, Disney Ambassador Hotel, Tokyo DisneySea Hotel MiraCosta, Tokyo Disneyland Hotel, Tokyo Disney Celebration Hotel and Disney Resort Line are owned by or licensed to Disney Enterprises, Inc. © Disney Enterprises, Inc.
52 Oriental Land Annual Report 2020 Oriental Land Annual Report 2020 53