Annual Report 2010

www.olc.co.jp/en ANNUAL REPORT 2010

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Oriental Land Co., Ltd. Annual Report 2010 n a p a J n i d e t n i r P of other companies, other logos, product names, brands, etc., mentioned in this annual report are registered trademarks or trademarks of Oriental Land Co., Ltd. or the applicable companies. 1-1 Maihama, Urayasu, Chiba 279-8511, Japan “Oriental Land,” Oriental Land’sregistered trademarks or trademarks of Oriental Land Co., Ltd. in Japan and overseas. The names equivalent in Japanese, and the Oriental Land logo are Oriental Land Co., Ltd. Business Mission Toward a New Stage of Growth

Our mission is to create happiness and contentment Our ability to open up new and unknown by offering wonderful dreams and moving worlds—that is our driving force experiences created with original, imaginative ideas. The path we have traveled over the past 50 years has had many ups and downs along the way. However, thanks to the help and support we have received from many people along the way, we overcame numerous trials We aim to constantly maintain a perspective at the and tribulations. forefront of each era as we strive for emotion as a company. During this period, the consistent strand that has remained throughout As we move ever closer to our ideal, we have a firm the Company’s history has been our ability to open up new and unknown conviction in its realization. worlds. This is our driving force—it will sustain us for the next 50 or 100 years as we boldly continue our journey. Our greatest asset is our imagination. It may be said that imagination is the Earth’s only By steadfastly upholding this legacy and blazing a trail toward a new era, inexhaustible resource. Utilizing this asset, we pursue we will aim to realize long-term, sustainable growth in corporate value. our business of bringing abundant humanity and happiness.

Flow of Oriental Land Growth In the lives of people today, emotions that we tend to cast 1960 1983 2010 aside, dreams that we harbor deep in our hearts, moving Oriental Land Co., Ltd. established Tokyo Disneyland opened Oriental Land 50th Anniversary

experiences that uplift our souls, joy that makes life worth 50 years living, a true sense of peace that provides us with First Half Second Half Toward a new stage of growth rejuvenation… Reclamation, then the agreement From a theme park to a theme resort with Disney

It is the mission of Oriental Land to bring all of these to Capitalize on the each and every person. full potential of our unique competitive advantages Establishment of unique Accumulating our unique competitive advantages competitive advantages Period of continuous generation of free cash flow We have pursued this mission with pride. Let us introduce Oriental Land (OLC)’s 50 years of constant progress as we have striven to realize this mission.

5 50 Years of Continually Creating New Value First Half Reclamation, then the agreement with Disney 1960 “It was our dream to let the children of Japan Oriental Land Co., Ltd. established see and feel the wonder of Disneyland.”

OLC was established in July 1960 to reclaim land off the coast of Urayasu, Chiba Prefecture, and to construct a commercial area Our dream and leisure facilities with the objective of contributing to the culture, welfare and well-being of the Japanese people. The com- —“Best in the Orient” pany’s vision of developing the Orient’s best leisure facilities, “Oriental Land,” directly became the Company’s name.

Shortly after the company’s establishment, we didn’t even have our own office. Our headquarters comprised a small corner of We didn’t have a building for the third floor of the Keisei Electric Railway Co., Ltd. head office building, in Keisei’s Stock Department. We didn’t even have our our headquarters—if fact, we own telephone. Hence, each time we needed to use the telephone, we had to ask to borrow one from the department next didn’t even have our own office to ours. It is likely that the mental toughness that has developed at OLC was driven by our very modest beginnings. 1979 1982 In May 1964, a commencement ceremony was held for the start of Before we began, this was all reclamation work off the coast of Urayasu. At the time, the expan- Signing of the agreement between OLC and the Walt Disney Productions At that time Tokyo Disneyland® was constructed sive land area that would later become Tokyo Disney Resort® was (currently the Disney Enterprises, Inc.) part of the sea still part of the sea. Establishment of unique competitive advantages Premium Location Proven Partnership Own vast land in the superb location Only Oriental Land operates Disney theme parks in Japan 1. Extensive Land Approx. 2 million square meters of contiguous land 10 kilometers License Agreement for Japan (6 miles) from the city center Scope 2. Immense Market Management and operation of Tokyo Disney Resort in Japan Population of approx. 30 million with substantial disposable Royalties income living within a 50-kilometer (30-mile) radius Proportionate to revenues (yen-denominated)

3. Convenient Access Note: OLC has no capital or personal relationship with the Disney Enterprises, Inc. but 15 minutes by train from Tokyo Station the two companies have enjoyed a highly positive relationship for more than 25 years. 50-60 minutes by shuttle bus from Narita and Haneda airports

Keisei Electric Railway Co.,Ltd. head office building Urayasu area before reclamation Courtesy of Urayasu City meusium (as Oriental Land Co., Ltd. was established)

1 2 Second Half From a theme park to a theme resort “When we create something new here, we must “Our potential is still great—even greater than approach it with an imagination over the sea” what we have achieved until now.”

1983 2001 2008 2010

Tokyo Disneyland® opened Tokyo DisneySea®, Tokyo DisneySea Hotel MiraCosta and Tokyo Disney Resort 25th Anniversary, Tokyo Disneyland Hotel and Oriental Land 50th Anniversary Disney Resort Line opened Cirque du Soleil Theatre Tokyo opened

Accumulating our unique competitive advantages Our Competition in the Market

Traditional Hospitality Sustaining Interest Strong Finances The OLC’s Share of the 44.5% Japanese Leisure Market The source of our strength is human resources; the cast Creating a place of dreams where guests will gain a Implement ongoing additional investment based on members provide magnificent hospitality whole new experience of happiness and wonder at generating stable cash flow every visit Amusement and Leisure Parks: Market Size and the OLC’s Share Intangibles ppeal an n a d c 648 High Guest Loyalty High Employee Loyalty the ap 632 630 643 640 g ac Outstanding Service Quality en i tr ty The source of our strength is human S Raise the level of Guest Satisfaction Demand for Happiness Raise the level of Employee Satisfaction resources; the cast members provide 44.5 magnificent hospitality 39.7 39.6 40.3 40.2 Expand foundation of Tokyo Disney Resort fans Provision of Happiness Secure employees with high motivation Attract Investment more Tangibles guests A wide range of supporters acquired over a period spanning • Joy of working in a business that has an objective of fulfilling guests’ Ongoing Investment more than 25 years. emotional satisfaction. Creating a place of dreams where guests will gain a whole new • Values shared among all employees. In 2004 2005 2006 2007 2008 experience of happiness and wonder cre flow High employee loyalty is linked to the continuation ase cash (CY) High guest loyalty is linked to the stability of earnings at every visit Market Size (Billions of Yen) OLC Group’s Share (%) of high-quality operation Source: White Paper on Leisure 2009. OLC Group’s market share is calculated using data for each fiscal year, not each calendar year. Strengthen appeal and capacity

3 4 Theme of Annual Report 2010

The Art of Happiness —The essential thing we need to continue bringing happiness to guests—

Happiness—a contented heart

We want to bring happiness to guests by providing the dreams, moving experiences, enjoyment and contentment that no one could have imagined.

This has been our hope since OLC was founded 50 years ago, and continues to be our unchanging hope now and in Contents the future. Business Mission 50 Years of Continually Creating New Value 1 The Art of Happiness Eleven-Year Financial Highlights 8 What is the essential thing we need to continue bringing Message from the Chairman and the President 10 happiness to guests? That is our resolve—our will to go on Feature: The Art of Happiness 15 evolving and changing ourselves. President’s Outline of the OLC Growth Strategy 16 Front-line Challenges from a Manager’s Perspective 22 To continue bringing happiness for another 50 or 100 years The OLC Group at a Glance 27 time, we need to make today even better than yesterday. Review of Consolidated Operations 28 Theme Park Segment 28 With the teamwork of 28,000 people working toward this Hotel Business Segment 31 common goal. Other Business Segment 32 OLC Group Corporate Social Responsibility (CSR) 33 Board of Directors, Corporate Auditors and Corporate Officers 44 Financial Section Six-Year Summary 46

FAC T BO O K 2 0 1 0 Message from the Officer in Charge of Corporate 2010年3月期 FACT BOOK 2010 For the Year Ended March 31, 2010 Strategy Planning and Finance / Accounting 47 Fact Book 2010 Management’s Discussion and Analysis OLC’s provides a wide range of long- 目次 ■ Contents 連結指標 ■ Financial Results and Key Indicators (Consolidated) 1 有利子負債の状況 ■ Interest-Bearing Debt 3 of Operations 48 セグメント情報 ■ Segment Information 5

セグメント別主要■ 施 Principal 設デーFacility タ Data Classified by Segment 7

term, historical data, including financial indicators and テーマパークデータ ■ Theme Park Data 9

連結財務諸表 ■ Consolidated Financial Statements 13

単体財務諸表 ■ Nonconsolidated Financial Statements 17 業界動向 ■ Market Data 21 Consolidated Financial Statements 54 quantitative management data. 株式情報 ■ Stock Information 22 Corporate Data 74 www.olc.co.jp/ir/pdf/factbook2010.pdf Stock Information 74

6 7 Eleven-Year Financial Highlights Oriental Land Co., Ltd. and Consolidated Subsidiaries Fiscal Years Ended March 31

Topics Revenues decreased by 4.6% compared with the previous fiscal year to ¥371.4 billion for reasons that included the previous year was Tokyo Disney Resort 25th Anniversary.

Operating income set new record at ¥41.9 billion (up 4.6%), as a result of factors that include a reduction of costs commensurate with the decrease in the number of visitors.

(Thousands of (Millions of yen) Percent change U.S. dollars1) ’10/3 ’09/3 ’08/3 ’07/3 ’06/3 ’05/3 ’04/3 ’03/3 ’02/3 ’01/3 ’00/3 ’10/3 / ’09/3 ’10/3 FOR THE YEAR: Revenues ¥371,415 ¥389,243 ¥342,422 ¥344,083 ¥332,885 ¥331,094 ¥336,517 ¥331,753 ¥281,081 ¥ 200,192 ¥ 174,185 (4.6)% $3,991,993 Operating income 41,924 40,096 31,144 34,111 30,605 34,562 38,765 38,029 33,662 22,130 25,446 4.6 450,602 Net income 25,427 18,089 14,731 16,309 15,704 17,224 18,530 18,932 12,727 4,740 9,911 40.6 273,291 Capital expenditures2 19,419 40,140 52,691 54,807 43,129 46,855 29,277 14,848 109,788 182,226 130,484 (51.6) 208,717 Depreciation and amortization, aggregate 46,695 49,733 43,623 42,951 43,374 44,555 45,982 47,935 37,954 18,422 12,471 (6.1) 501,881 EBITDA3 88,619 89,829 74,767 77,062 73,979 79,117 84,747 85,964 71,616 40,552 37,917 (1.3) 952,483 Free cash flow4 52,703 27,682 5,663 4,453 15,949 14,924 35,235 52,019 (59,107) (159,064) (108,102) 90.4 566,455 AT YEAR-END: Total assets ¥615,090 ¥644,992 ¥757,542 ¥699,772 ¥718,865 ¥660,225 ¥654,425 ¥691,883 ¥694,769 ¥672,484 ¥557,280 (4.6)% $6,611,028 Net assets5 366,473 373,660 388,181 385,001 375,947 389,714 373,866 355,002 338,618 327,672 324,292 (1.9) 3,938,876 Interest-bearing debt 173,289 193,019 294,320 235,626 266,945 202,449 209,286 265,922 296,985 272,572 154,496 (10.2) 1,862,521 (Yen) Percent change (U.S. dollars1) PER SHARE DATA: Net income (EPS) ¥ 280.17 ¥ 196.84 ¥ 154.86 ¥ 171.46 ¥ 162.73 ¥ 171.19 ¥ 184.23 ¥ 188.24 ¥ 127.11 ¥ 47.34 ¥ 98.99 42.3% $3.01 Net assets (BPS) 4,240.59 4,109.59 4,079.44 4,046.03 3,950.49 3,890.51 3,732.22 3,543.92 3,381.21 3,272.28 3,237.83 3.2 45.58 Cash dividends 100.00 70.00 60.00 55.00 45.00 35.00 29.00 24.00 19.00 14.00 14.00 42.9 1.07 (Percent) Amount of change SELECTED FINANCIAL DATA: Operating margin 11.3% 10.3% 9.1% 9.9% 9.2% 10.4% 11.5% 11.5% 12.0% 11.1% 14.6% 1.0 point Return on assets (ROA)6 4.0 2.6 2.0 2.3 2.3 2.6 2.8 2.7 1.9 0.8 1.9 1.4 Return on equity (ROE)7 6.9 4.7 3.8 4.3 4.1 4.5 5.1 5.5 3.8 1.5 3.1 2.2 Equity ratio 59.6 57.9 51.2 55.0 52.3 59.0 57.1 51.3 48.7 48.7 58.2 1.7 Payout ratio 35.7 35.6 38.7 32.1 27.7 20.4 15.7 12.7 14.9 29.6 14.1 0.1 Percent change Annual theme park attendance 25,818 27,221 25,424 25,816 24,766 25,021 25,473 24,820 22,047 17,300 16,507 (5.2)% (thousands of guests) Revenues per guest (¥) 9,743 9,719 9,370 9,309 9,220 9,178 9,247 9,505 9,763 9,236 9,345 0.2 Notes: 1. The U.S. dollar amounts are provided for convenience only and have been converted at the rate of ¥93.04 to U.S.$1, the approximate rate of exchange rate at March 31, 2010. 4. Free cash flow = Net income + Depreciation and amortization, aggregate – Capital expenditures 2. Capital expenditures includes tangible and intangible assets and long-term prepaid expenses. 5. Net assets as of March 31, 2006 and previous fiscal years has been restated in accordance with a change in accounting standards. 3. EBITDA = Operating income + Depreciation and amortization, aggregate 6. Return on assets = Net income / Total assets 7. Return on equity = Net income / Owners’ equity

Revenues & Operating Margin Net Income & Net Income per Share Total Assets & Net Assets ROE Interest-Bearing Debt & Equity Ratio Cash Dividends per Share & Payout Ratio (%) (Billions of yen) (Billions of yen) (Yen) (Billions of yen) (%) 6.9 (Billions of yen) (%) (Yen) (%) 389.2 757.5 294.3 718.9 371.4 25.4 699.8 266.9 100 332.9 344.1 342.4 645.0 615.1 235.6 11.3 4.7 280.17 10.3 18.1 4.1 4.3 193.0 70 9.9 15.7 16.3 3.8 173.3 60 9.2 9.1 14.7 55 375.9 385.0 388.2 373.7 366.5 196.84 59.6 45 57.9 162.73 171.46 154.86 52.3 55.0 51.2 35.7 32.1 38.7 35.6 27.7

’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3

Revenues Operating Margin Net Income Net Income per Share Total Assets Net Assets Interest-Bearing Debt Equity Ratio Cash Dividends per Share Payout Ratio

8 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 9 Message from Feature Review of Consolidated OLC Group Corporate Financial Section Message from the Chairman and the President the Chairman and Operations Social Responsibility (CSR) the President

In your view, what are the unique competitive advantages that OLC has fostered over the Q past 50 years?

Kagami: Representative Director, Chairman and CEO

Our focus on our people

Being able to arrive at this auspicious milestone—the commemoration of the Com- pany’s 50th anniversary—primarily reflects the unwavering support we have received from all our stakeholders over this long period. Without that support I know that we would not be here today, and I wish to express my sincere gratitude. OLC was founded under a plan to reclaim land from Tokyo Bay and develop it into leisure facilities, residential areas and commercial districts. During the first half of our 50-year history, we devoted our efforts to this reclamation project. After forming a business alliance with Walt Disney Productions, we commenced construction of the leisure facilities we had been planning for so long—Tokyo Disney- land. Following the opening of the facilities, we became involved in the operation, development and management of a theme park—which has now evolved into a theme resort—a business sphere that is completely different from the one we had tackled up to that point. It is not an exaggeration to say that OLC was re- born in 1983. After we opened Tokyo Disneyland, the number of guests visiting the park grew even faster than we had imagined. We sum up the reasons driving this growth as “good timing, good location and good people.” In the 1980s, a fundamental shift was occurring in Japanese society—the focal point of people’s lives was changing from work to a more leisure-oriented lifestyle. OLC was well positioned to take advantage of this shift, and the good timing of the opening of Tokyo Disneyland got us off to an excellent start. I truly believe that it was a start blessed by the best possible conditions. Another key factor is our location—we are only 15 minutes by train from Tokyo station on the Keiyo Line. Tokyo and its surrounding areas have significant advantages as a location and market. The third key reason is the very high hospitality ethos of the OLC employees who have been drawn here by their love of Disney. I think it is the alignment of these three factors that has created the foundation for the success of OLC’s business. Of course, it goes without saying that we have never compromised on the devel- Our commitment to continue bringing opment and construction of our facilities—we have constantly striven for the best quality. Since opening, we have aggressively carried out additional investments, and the theme parks have contin- happiness to our guests, ued to grow. Our relationship with Disney Enterprises has also evolved through an array of experiences. In particular, through the Tokyo DisneySea project—in which we set out to create a completely new kind of theme park—right from the concept stage we built a strong collaborative structure between our two companies. As a in 50 or 100 years time in the future result of these efforts, I am proud to say that one of the world’s highest quality theme parks was born. I believe that the OLC’s competitive advantages all come down to people. Our 28,000 employees receive In 2010, Oriental Land Co., Ltd. (OLC), celebrates the 50th anniversary of its found- joy themselves from the happiness that Tokyo Disney Resort brings to its guests, and our employees always ing. Rather than resting on its laurels, OLC has continued to evolve and innovate. approach their work with a high level of commitment. OLC employees do their jobs with pride and with a These efforts have propelled OLC to achieving record operating income for the strong sense of professionalism. They spare no effort to bring real happiness to our guests. What breathes life second consecutive year in the fiscal year ended March 31, 2010. In the fiscal year into these wonderful facilities—created through a partnership between OLC and Disney Enterprises—is the cast. When they move around the resort sprinkling smiles and laughter, we can feel Disney’s magic like the ending March 31, 2011, we anticipate another record operating income. wind. This always fills me with a great sense of pride. Below, in question and answer format, we discuss OLC’s unique competitive advantages—which underpin the Company’s robust operating performance— and future management strategies with Representative Director, Chairman and CEO Toshio Kagami and Representative Director, President and COO Kyoichiro Uenishi. Mr. Kagami has been a key member of OLC’s management team since the Company’s founding. Mr. Uenishi was appointed COO in April 2009.

10 Oriental Land Annual Report 2010 11 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Message from the Chairman and the President the President

It has been a year since you were appointed COO. Please give us a recap of the fiscal year How are you positioning the fiscal year ending March 31, 2011? Q ended March 31, 2010, your first year in office. Q

Uenishi: Representative Director, President and COO Uenishi: Representative Director, President and COO

Focusing on the implementation of the medium-term plan Capping off the 2010 medium-term plan and preparing for the launch of our new 2013 medium-term plan From immediately after my appointment, we have had to deal with a number of adverse factors, including persistently unfavorable weather and the outbreak of a new strain of novel influenza A(H1N1). However, no The fiscal year ending March 31, 2011, is the final year of the 2010 medium-term matter how tough things became in an immediate sense, we resisted shortsighted measures and remained plan. We are committed to implementing the measures necessary to realize the focused on the strategies we have set in the medium-term plan. Hence, I continued to urge the implementa- plan’s goal of generating high levels of free cash flow by further strengthening our tion of essential reforms and improvements. Under the medium-term plan, we prioritized the generation of core business. Specifically, we will undertake such measures as carefully planned stable earnings rather than focusing on fluctuations in theme park attendance. Since we anticipated a decline introductions of new attractions and seasonal events into the theme parks and in theme park attendance in the fiscal year ended March 31, 2010, owing to the previous year having included reinforcement of our sales of Tokyo Disney Resort Vacation Packages, as we strive many events celebrating Tokyo Disney Resort 25th Anniversary, we knew it would be a real test for us as to to create new value that enhances both guest satisfaction and earnings. These whether we could actually achieve stable earnings. In the past, we have had years when we have set a high measures will be designed not only to bolster free cash flow on a single-year basis revenues target and have increased fixed costs in line with meeting the target, but factors such as the weather but also to have a medium- to long-term impact on our free cash flow-generating have caused us to fall short of the target and thus meant we were unable to produce an appropriate level of capabilities. earnings. However, in the fiscal year ended March 31, 2010, the scenario turned out to be the opposite of the With the aim of establishing a robust medium-term outlook for our core busi- type I just mentioned. We set very conservative assumptions for theme park attendance and revenues per ness, we will move toward the practical implementation phase of the 2013 medi- guest and curbed sales promotion expenses and other fixed costs. In a carefully planned manner, we also car- um-term plan, which was formulated soon after my appointment as COO. Details ried out launches for new events and attractions and laterally introduced popular products, while closely mon- of the plan are explained in the next section of this report, however, for example, itoring costs and return on investment. The source of our motivation was that we were bringing people happi- we plan to focus on expanding new earnings opportunities through such strategies as (1) effectively combin- ness through the creation of new value that could only be created at Tokyo Disney Resort. Hence, we were able ing new products and anniversary events, and utilizing a planned approach to value enhancement; and (2) to innovate even when we did not have high targets for revenues and other indicators. As a result, we achieved implementing a pricing strategy in line with value, and creating content that leads to improved profitability of an increase in revenues per guest and improved cost efficiency, which enabled us to set a new record for oper- vacation packages and higher earnings for Tokyo Disney Resort as a whole. We will also work to cultivate growth ating income, surpassing even the new record we had just set in the previous year. In the future too, we will markets, including strategies for attracting overseas guests, increase cost efficiency, and bolster return on in- continue to employ robust numerical plans as part of our management control system as we aim for sustained vestment. After verifying past results and adjusting for changes in the operating environment, we will under- growth through the creation of new value. take preparations with a very firm focus on the medium-to-long term. Furthermore, we made the decision to transfer the retail business Simultaneously, taking a long-term perspective, we will work on R&D of businesses that will provide new ROE segment, which advances the strategy set out in the medium-term plan growth potential. However, our overriding premise is the growth of our core business. Hence, we will not pur- (%) to select and focus on key businesses. We judged that passing the man- sue any new business that jeopardizes that goal. While leveraging OLC’s strengths and focusing on return on 8 agement of the Disney Store business to The Walt Disney Company (Ja- investment, we will consider a broad array of opportunities and means as we steadily pursue preparations for 6 pan) Ltd. would further strengthen the value of the Disney brand in Ja- realizing our long-term vision. 4 pan, and have significant benefits for Tokyo Disney Resort. It is essential that we constantly adapt to changes in our operating environment. By communicating close- 2 With regard to the policy of emphasizing stockholder return, which ly with our employees and managers who are exposed to these changes directly on a daily basis as frontline is set out in the medium-term plan, we have decided to substantially in- 0 staff, we must identify those things that should be changed and those that should not. We must act with strong crease cash dividends. Although we had originally envisaged cash divi- purpose when making decisions and putting them into action. ’00/3 ’01/3 ’02/3 ’03/3 ’04/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 dends equivalent to ¥100 per share applicable to the fiscal year ending March 31, 2011, we have implemented this plan one year ahead of schedule. In addition, we have also carried out a stock repurchase program totaling 4.5 million shares, or 4.95% of the Company’s total shares issued Operating Income & Net Income Cash Dividends per Share & Payout Ratio EPS and outstanding. As earnings have grown, we have been able to steadily (Millions of yen) (Yen) (%)50 (Yen) 50,000 100 40 300 return to stockholders a portion of the greatly increased free cash flow. 80 30 Consequently, return on equity (ROE) and earnings per share (EPS) have 40,000 200 60 20 also risen substantially. 30,000 40 10 20,000 100 These results, of course, are not something that I can produce alone. 20 0 The superb skills and individuality of OLC’s employees along with the 10,000 0 0 teamwork of management in each part of our organization are absolute- 0 ly indispensible to our success. Finally, none of this would be possible if it ’00/3 ’01/3 ’02/3 ’03/3 ’04/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’11/3’10/3 ’00/3 ’01/3 ’02/3 ’03/3 ’04/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3’10/3 ’11/3 ’00/3 ’01/3 ’02/3 ’03/3 ’04/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 [Forecast] [Forecast] were not for the generous support of all our stakeholders, including our guests, stockholders, and investors. Please allow me this opportunity to Operating Income Net Income Cash Dividends per Share (left) ——Payout Ratio (right) express my heartfelt gratitude.

12 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 13 Feature Message from the Chairman and the President

Q What are the key management issues you see for OLC in the future? Kagami: Representative Director, Chairman and CEO The Art of Happiness —The essential thing we need to continue bringing happiness to guests— Looking to take on new challenges

It is surely the case for any company that it must deal with both short-term and long-term issues. In dealing with the issues that appear suddenly during the fiscal year, we utilize the fruits of our day-to-day discipline. In the first quarter of the fiscal year ended March 31, 2010, the convergence of a wide range of factors led to a period in which theme park attendance growth fell below the level that we have previously achieved. At times such as these, we need to implement measures that go beyond even the hopes and imagination of our guests. In a sense, we were given the opportunity to put into practice something straightforward that we pursue every day—making Tokyo Disney Resort something that guests will always cherish in their hearts. At the same time, we also need strategies that have a long-term vision. How will we lay the foundations for the next 50 years? We have to create this story and gradually pass the baton over the younger generation. Si- multaneously, we need to clearly distinguish between the things that are unchanging and the things that we should change. In other words, we must strive to realize the dreams of our predecessors in the richest possible way. I believe that it is the role of senior management to create an environment in which the next generation can flourish by freely pursuing their dreams. In other words, by having a strong grasp of both the short and long term, we must act as a bridge between the dreams of our predecessors and the next generation. To ensure a company maintains its vitality, it must constantly look to take on new challenges and improve its metabolism. Evolution must be the natural order. If, as a result, we can bring our guests fresh surprises and joy whenever they visit the parks, I could feel no greater happiness.

Q Please tell us about your resolve for dealing with these management issues.

Uenishi: Representative Director, President and COO

A strong determination to evolve

When I was first approached about being appointed COO, I was asked to think about the Company in the future, but in terms of my own future. At that moment, those words brought to mind the faces of many of OLC’s employees. My first reaction was to say to myself, “Yes! We should do this!” The success for the 25th anniversary of Tokyo Disney Resort was only the first step in the evolution from a theme park to a theme resort. I think that our potential is still great —even greater than what we have achieved until now. From here on, by further realizing the latent potential of Tokyo Disney Resort to the maximum extent possible, I think we can evolve in leaps and bounds. Hence, I plan to vigorously pursue R&D for the future. We are grateful to CEO Kagami and all the many other colleagues who have come before us. They have shown great foresight, demonstrated tremendous effort and set a fine record of achievements. By inheriting their purpose, we must strive to bring happiness for another 50 and 100 years time in the future. As we undertake our duties with a strong sense of determination, we hope that our stockholders and investors will take a long-term view on our efforts to increase stockholder value, and look forward to their understanding and support in these endeavors.

July 2010 Toshio Kagami Representative Director, Chairman and CEO Kyoichiro Uenishi Representative Director, President and COO

14 Oriental Land Annual Report 2010 15 Message from Feature Review of Consolidated OLC Group Corporate Financial Section President’s Outline of the OLC Growth Strategy the Chairman and Operations Social Responsibility (CSR) the President

Through sustained growth in our core ing on from the milestone of the Company’s 50th anniversary, during which we will build the foundations for a business, we will reinforce the platform new era. necessary to realize long-term, sustain- Overall framework of the 2013 medium-term plan able growth in corporate value, thereby The 2013 medium-term management plan has two main pillars—sustained growth of OLC Group’s core busi- building the foundations for the future. ness and strengthening of OLC Group’s platform for long-term, sustainable growth. Through sustained growth of OLC Group’s core business—Tokyo Disney Resort—we will generate a stable, high level of free cash flow. This plan aims to strengthen OLC Group’s platform for long-term, sustainable growth. In working to achieve the sustained growth of OLC Group’s core business, we will pursue two strategies— one focusing on growth potential and the other on efficiency. Specifically, growth potential includes the creation of new value and the cultivation of markets, while efficiency includes costs and improving return on investment. Since the fiscal year ended March 31, 2009, the OLC Group has entered a period of stable free cash flow generation. Compared with the period during which we implemented major investments focused on the future, including Tokyo DisneySea and Disney hotels, we now have lower capital expenditures and higher cash Positioning and overall structure of the flows from these new facilities. Consequently, in the three fiscal years up to and including the fiscal year ending 2013 medium-term plan March 31, 2011, we forecast accumulated free cash flow totaling ¥112.5 billion. Under the 2013 medium-term plan, we are aiming to generate ¥120.0 billion level in free cash flows, a 7% increase compared with the preced- Toward long-term, sustainable growth in corporate value ing three year period. OLC Group’s management objective is to realize long-term, sustainable growth in corporate value through the This cash will be used to fund the strengthening of OLC’s platform for long-term, sustainable growth as we fulfillment of our mission—to create happiness and contentment by offering wonderful dreams and moving pursue stability. With regard to return on equity (ROE), we have until now achieved steady improvements and experiences created with original, imaginative ideas. In working to achieve this goal, we recognize two long- will continue striving for the early realization of our target of ROE 8% or higher. term management challenges. The first challenge is to continually innovate and evolve in order to constantly create new value. The second challenge is to respond in a planned manner to anticipated future changes in our Changes in Free Cash Flow Free Cash Flow Capital Expenditures operating environment, such as demographic changes. +Apporox. 7% Over the 50 years since OLC’s establishment, what we have consistently done is practice management ¥112.5 billion ¥120.0 billion level from a long-term perspective. We have positioned the 2013 medium-term plan, which will run from the fiscal for three years for three years year ending March 31, 2012, through the fiscal year ending March 31, 2014, as a crucial three-year period follow-

’00/3 ’01/3 ’02/3 ’03/3 ’04/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3’11/3 ’12/3 ’13/3 ’14/3 2010 medium-term plan 2013 medium-term plan 2013 Medium-Term Plan (FY ending 3/12 to FY ending 3/14) Priority investment period Period of continuous generation of free cash flow

Management objective Generate corporate value which will enable sustainable growth over the long term Opening of Tokyo DisneySea Period of preparation for new growth Target ¥120.0 billion level of aggregated free cash flow* to be generated during three years

1 Creation of new value Sustainable growth of the Growth Sustained growth of OLC Group’s core business core business 2 Market development 1 (Tokyo Disney Resort) Creation of new value 3 Cost and investment efficiency Efficiency Enhanced value of Tokyo Disney Resort To create new value, at our two theme parks comprising Tokyo Disneyland and Tokyo DisneySea, we plan to Continue to generate a high level of free cash flow* introduce a diverse range of new products and effectively utilize a schedule of anniversary events to increase the value of the theme parks in a carefully planned manner. Simultaneously, we will examine pricing strategies ROE in line with the theme parks’ value. 1 Stockholder returns Reinforcement of the improvement Specifically, from April 2011 we will hold 10th anniversary events for Tokyo DisneySea. In addition, we will foundation for long-term 2 Preparation for new growth 2 Sustainability create attractions that contribute to earnings growth for Tokyo Disney Resort as a whole. Through such mea- sustainable growth 3 Corporate Social Responsibility (CSR) sures bolstering our lineup of Tokyo Disney Resort Vacation Packages, we will strive to maximize the latent potential of Tokyo Disney Resort in the lead-up to the 30th anniversary of Tokyo Disney Resort, which we will cel- * Free cash flow = net income + depreciation and amortization expenses - capital expenditures ebrate during the fiscal year ending March 31, 2014.

16 17 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) President’s Outline of the OLC Growth Strategy the President

Sustainable Growth of the Core Business Changes in Annual Theme Park Attendance By Fiscal Year Three-Year Moving Average Tokyo Disney Resort 25th Anniversary Increase in cash inflows (revenues) Revenues per guest Theme park attendance Tokyo DisneySea 5th Anniversary Tokyo Disneyland 10th Anniversary Tokyo Disneyland 20th Anniversary 1 Enhanced value of Tokyo Disney Resort Opening of Tokyo DisneySea Creation of new value Tokyo Disneyland 1 2 Creation and expansion of earnings opportunities 5th Anniversary Tokyo Disneyland 15th Anniversary Opening of 1 Promotion to attract guests to both theme parks Tokyo Disneyland Continue to Expanding fan base of Enhancing the ability to Cultivating markets Tokyo Disney Resort attract repeat guests generate a 2 high level of 2 Attracting overseas guests free cash flow

’84/3 ’85/3 ’86/3 ’87/3 ’88/3 ’89/3 ’90/3 ’91/3 ’92/3 ’93/3 ’94/3 ’95/3 ’96/3 ’97/3 ’98/3 ’99/3 ’00/3 ’01/3 ’02/3 ’03/3 ’04/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 Decrease in cash outflows (expenses and investments)

Enhancing cost 1 Curbing of running costs Firstly, with regard to the expansion of Tokyo Disney Resort’s fan base, we plan to utilize anniversary events efficiency and return that have extremely strong guest appeal to broaden the range of guest segments attracted to the resort, and 3 on investment 2 Controlling investment thereby increase the base level of theme park attendance. We also intend to introduce new products with high family-entertainment appeal as a means of increasing the resort’s attractiveness to families with young children. To bolster appeal among guests over 40 whose time Creation and expansion of earnings opportunities is less taken up by childrearing as their children grow, we intend to strengthen our lineup of Tokyo Disney We are pursuing strategies to create and expand earnings opportunities over Tokyo Disney Resort as a whole. Resort Vacation Packages. Furthermore, in response to Japan’s growing inbound tourist market, we plan to While working to enhance guest satisfaction by reducing waiting times, we are simultaneously aiming to im- implement strategies aimed at attracting overseas guests. prove earnings. As a specific example, we are particularly focusing our efforts on the development and promo- As a strategy for increasing the rate of repeat visits, in addition to Christmas events, we plan to enhance our tion of Tokyo Disney Resort Vacation Packages. These are product packages offering a high level of value-added calendar of seasonal events, including Halloween and Easter events, as we focus on ways to increase the level by combining hotel accommodation with such park content as a FASTPASS® tickets and reserved tickets to see of guest satisfaction. Mr. Iwase of the Resort Creation Department will explain the details of these anniversary popular shows. Guests that choose these packages have increased satisfaction and are more likely to make re- and seasonal events (Please see page 23). In addition, Ms. Yamada of the Cast Development Department will peat visits to Tokyo Disney Resort. We plan to further reinforce sales of these packages, including through ex- provide an overview of one of Tokyo Disney Resort’s most important strengths for drawing guests back for panded distribution channels and by linking sales with Tokyo DisneySea 10th Anniversary. repeat visits—the role fulfilled by theme park cast (Please see page 25). Furthermore, we plan to reinforce the allocation of resources relating to development and investment One of the key factors in promoting visits to both theme parks is the evolution of Tokyo DisneySea. Since its that will contribute to increased earnings at Tokyo Disney Resort as a whole, such as the creation of new at- opening, we have fostered the development of Tokyo DisneySea’s own distinctive brand that is differentiated tractions and the effective utilization of existing facilities. For example, at Tokyo DisneySea, we have devel- from the Tokyo Disneyland brand. In the future, in addition to this distinctive brand we will also enhance the oped the original character of “Duffy” The Disney Bear. Although details of this project will be explained by Mr. Goto of the Merchandise Products Development Department (Please see page 24), it is worth noting that Major Initiatives to Enhance Value of Tokyo Disney Resort Duffy is not just a single character but has a fully developed story. Through such lateral content development, “Saludos Amigos!” Greeting Dock we aim to create new value and enhance revenues per guest. Opened on May 1, 2010 (character greeting facility) Mickey’s PhilharMagic Scheduled to open on January 24, 2011 (3D theater-type attraction to experience the world of Disney films) Changes in Revenues per Guest Cultivating markets Cinderella’s Fairy Tale Hall (Yen) Scheduled to open in the spring of 2011 (Walk-through attraction inside Cinderella Castle) 9,719 9,743 To date, we have raised the base level of theme park attendance by 9,220 9,309 9,370 (+3.7%) (+0.2%) Fantasmic! (yoy +0.5%) (+1.0%) (+0.7%) achieving increases in guest numbers during years in which we hold 2,128 2,160 Scheduled to start in April 2011 (New nighttime entertainment replacing “BraviSEAmo!”) 2,039 2,014 2,048 anniversary events. Although this leads to fluctuations in theme park at- Jasmine’s Flying Carpets 3,370 tendance when viewed on a single-year basis, looking at the three-year Scheduled to open in the summer of 2011 (Ride attraction based on the Disney filmAladdin ) 3,144 3,096 3,377 3,144 moving average shows a gradual increase. In the future, we plan to cul- Increase due to 25th Anniversary Toy Story Mania! related products Strong sales of “Duffy” New at Scheduled to open in 2012 ts tivate the market through the promotion of visits to both theme parks related produc Tokyo Disneyland (3D ride attraction based on the Disney / Pixar film Toy Story) 4,038 4,151 4,226 4,222 4,206 and by working to attract overseas guests. New at Tokyo DisneySea Tokyo DisneySea Tokyo Disney Resort Increase as a result of ticket price change Promotion to attract guests to both theme parks 10th Anniversary (September 2006) From April 23, 2011 through 30th Anniversary In working toward sustained growth, we are promoting to attract guests March 19, 2012 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 ’14/3 to both theme parks through endeavoring to expand Tokyo Disney 2010 Medium-Term Plan Food and Beverage Revenues Merchandise Revenues Ticket Receipts Resort’s fan base and enhancing the ability to attract repeat guests. 2013 Medium-Term Plan

18 19 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) President’s Outline of the OLC Growth Strategy the President

shared values of Disney theme parks to promote the evolution of Tokyo DisneySea to its next stage of maintaining a consolidated payout ratio of 35% or higher, we have increased cash dividends each year for the growth. Details of this strategy will be explained by Mr. Araya of the Theme Park Business Supervision De- past nine consecutive fiscal years. Under the 2013 medium-term plan, we plan to continue with this policy as partment (Please see page 22). we strive to maintain stable dividends. With regard to share repurchases, since the fiscal year ended March 31, Specifically, by promoting experience of both theme parks at an early stage in life, we aim to foster the 2008, we have carried out repurchases totaling more than ¥50.0 billion. In the future, we will consider further future fan base for Disney theme parks. Market research indicates that childhood experiences of visiting the share repurchases in response to prevailing conditions. With regard to ROE, we will continue working toward theme parks have a positive correlation with repeat visits later in life. Consequently, from a long-term manage- the early realization of ROE of 8% or higher. ment perspective, encouraging childhood visits to the parks is extremely important. In addition, promoting To prepare for a new stage of growth, we plan to develop business policies that have the potential to be- visits that include both parks also stimulates demand for overnight stays, thereby contributing to earnings come OLC Group’s second major earning source after Tokyo Disney Resort. Such businesses must leverage improvements for Tokyo Disney Resort overall. OLC Group’s strengths and offer a forecast internal rate of return (IRR) of 8% or higher. Investments will be carried out based on a policy of selecting and focusing on key businesses and will not depend solely on busi- Attracting overseas guests nesses developed within the Group but may also include business alliances and mergers and acquisitions The overseas market has significant future growth potential. At present, Japanese government agencies are (M&A). Hence, from a long-term perspective we will consider a broad range of investment opportunities and Number of Foreign taking the lead in considering a wide range of policies designed to increase the number of foreign tourists methods. If the situation does not call for the allocation of funds to these types of investments, preparations Visitors to Japan (Sources: Japan National Tourist visiting Japan, and have set high growth targets over the medium term. We see the Japanese government’s relating to the Group’s next stage of growth or stockholder returns, funds will continue to be used for the re- Organization, Japan Tourism Agency) policy of bolstering the number of overseas tourists as an important opportunity. Hence, we are steadily work- duction of interest-bearing debt. This policy aims to ensure that investment capacity is available for new (Millions of people) 30.00 ing to increase the number of overseas guests. growth. Total number of As part of our platform for sustainable, long-term growth, we are placing significant emphasis on the Group’s overseas guests at integrity, which specifically related to corporate governance. To further strengthen the trust placed in OLC the two theme parks:ks: 0.72 million Enhancing cost efficiency and return on investment Group by its stakeholders, we are working to enhance our corporate social responsibility (CSR)-related policies Curbing running costs and programs. (For further details, please refer to “OLC Group Corporate Social Responsibility” on page 33.) 15.00 With regard to running costs, we utilize such methods as reverse auctions to control costs in areas that involve a significant level of cost variability. We also undertake renewals and upgrades as a means of curbing running 7.24 Share Repurchases during the Period of the 2010 Medium-Term Plan [Actual] costs. These efforts are part of a long-term approach to cost reduction. Total value of Timing of acquisition Number of shares acquired shares acquired Controlling investment FY 2013 June 2008 4.20 million shares 2009 In the area of investment, under the 2013 medium-term plan we have set a policy that calls for the investment ¥24.4 billion (CY) (FY ended 3/09) (4.4% of total shares issued and outstanding) of ¥200.0 billion level in the theme park business over the ten year period starting from the fiscal year ending Start of the “program to March 31, 2012. During the first half years of this capital expenditure program, we plan to focus on investment March 2010 4.50 million shares increase the number of ¥26.0 billion overseas visitors to Japan in new products related to the evolution of Tokyo DisneySea and in the second half the focus will shift to re- (FY ended 3/10) (4.9% of total shares issued and outstanding) to 30 million” led by Ministry newals and upgrades of facilities. of Land, Infrastructure, Transport and Tourism Business development policies Strengthening OLC Group’s platform for long-term, sustainable growth Direction of new businesses that can build upon Tokyo Disney Resort We plan to direct free cash flow generated by growth in OLC Group’s core business toward stockholder returns and preparations for the Group’s next stage of growth. We will “select and focus” on the areas where we can capitalize on 1 our strengths Within stockholder returns, in accordance with the policy in the set forth in the 2010 medium-term plan of We will “select and focus” on the investment from which we can Solid guideline figure 2 expect more than a certain level of return (IRR of 8% or higher*) FY ended 3/10 FY ending 3/11 FY ending 3/14 * Current WACC: 4% ( ß value for the past ten years = 0.5) [Actual] [Forecast] [Guideline figure] Consolidated operating income ¥41.9 billion ¥43.7 billion ¥46.0 billion level Achieve the guideline figure of 2010 medium-term plan in the Consolidated net income ¥25.4 billion ¥25.8 billion ¥27.0 billion level 2013 medium-term plan Usage of free cash flow A moderate increase is expected. Theme park attendance 25.82 million 25.80 million 26.50 million level Investment with IRR of 8% or higher Prerequisite: Current level of overaseas guests 1 (Development of new businesses that can build upon Tokyo Disney Resort) Maintain a high level of revenues per guest even in the deflationary Stockholder returns Revenues per guest ¥ 9,743 ¥9,690 ¥9,700 level environment. 2 Prerequisite: Ticket price changes are not taken into account. If none of the above is applicable Depreciation and amortization ¥46.6 billion ¥43.5 billion ¥42.0 billion level Decrease mainly for Tokyo DisneySea expenses (consolidated) Reduction of interest-bearing debt Capital expenditures Reduce capital expenditures through (Repayment according to the contract) ¥19.4 billion ¥37.2 billion ¥30.0 billion level 3 (consolidated) efficiency reforms

20 21 Message from Feature Review of Consolidated OLC Group Corporate Financial Section Front-line Challenges from a Manager’s Perspective the Chairman and Operations Social Responsibility (CSR) the President

The Evolution of Tokyo DisneySea Enhance Value of Theme Park Tomo Araya Daisuke Iwase Manager Manager Product Management Group Event Group Theme Park Business Supervision Department Resort Creation Department

Evolution of Q Please explain the appeal of Tokyo DisneySea. Q What kind of results are generated by anniversary events and Tokyo DisneySea Based on the same basic philosophy as Tokyo Disneyland of family entertainment that can be enjoyed by all seasonal events, such as Christmas and Halloween? Characteristics Characteristics age groups, Tokyo DisneySea provides guests with an experience unique to a Disney theme park that is very Repeat visitors account for over 90% of guests at Tokyo Disney Resort. Seasonal events and anniversary events of Tokyo of Tokyo Disneyland DisneySea different from their everyday lives. The park’s defining features are the stories and legends connected with the are an essential element in maintaining our ability to provide guests with new discoveries and moving experi- innocence of mature atmosphere, sea. These serve as the basis for all kinds of adventure and romance, inspiring and drawing out the sense of ences each time they visit. These events are in fact a significant motivating factor for many guests visiting the childhood, fantasy, romantic, cute sophisticated adventure that is within everyone. Hence, these unique characteristics of Tokyo DisneySea provide guests with parks. moving experiences that are different to those provided at Tokyo Disneyland. Tokyo DisneySea also has many From a management perspective, seasonal and anniversary events are a key pillar for earnings. Providing features that appeal to guests in their 20s or older, including its atmosphere of high quality and the availability moving events that can only be experienced at Tokyo Disney Resort contributes to the enhancement of each Values common Christmas Fantasy to both Disney Expansion theme parks of alcoholic beverages. theme park’s value.

family entertainment, the world of Disney, extraordinariness Q In the fiscal year ending March 31, 2012, Tokyo DisneySea will Q How do you evaluate the success of the Halloween events you have celebrate its 10th anniversary. Please give your assessment of these produced up until now? 10 years and provide an overview of the park’s future direction. Initially, when we commenced the Halloween event at Tokyo Disneyland 13 years ago, it was only a single-day To provide guests with a rich experience that is very different from their everyday lives, we formulate medium- event. However, by extending the length of the event, adding such features as a parade and utilizing advertiz- to long-term strategies by looking at what needs to be sustained and what needs to be strengthened. ing and promotional strategies, we have enhanced both the quality and scale of the event. Halloween is a Since its opening in September 2001, the branding of Tokyo DisneySea has succeeded based not only on popular event with guests and has grown to become Tokyo Disneyland’s major event during the fall. In Fiscal the theme park’s original attributes but also on the effective introduction of new attractions and events. As a year ended March 2010, we began producing a Halloween event at Tokyo DisneySea too, which concluded a result, I believe that many guests have been able to enjoy moving experiences that are completely unique to Disney’s Halloween very successful run. “Fantasmic!” Tokyo DisneySea. In fact, our brand-image market research indicates that Tokyo DisneySea is seen by guests as I believe that three key elements—originality, variation and participation—have contributed to the success Scheduled to start in April, 2011 A new nighttime entertainment features a theme park with a romantic, mature atmosphere and that the images of Tokyo Disneyland and Tokyo Disney- of the Halloween events. First, we focused on originality. Even though Halloween traditionally has many scary Mickey Mouse as the Sorcerer’s Sea are quite distinct. elements, within the Disney world we focused on transforming our Halloween event into a bright, fun-filled Apprentice who creates a breathtaking world of fantasy In the future, while maintaining the unique brand of Tokyo DisneySea, we will also work to strengthen the festival. Next, we were conscious of the risk that guests may lose interest in the event if it remained the same park’s family entertainment attributes, which are a shared value of all Disney theme parks. In doing so, we aim each year, hence we emphasized variation, such as the inclusion of a wide variety of changes in the Halloween to facilitate the evolution of Tokyo DisneySea to its next stage of development. parade and show. Finally, we encouraged guests to dress up in costumes when they come to the park during Halloween season, giving each guest the opportunity to become a “leading character” at the event. I believe Q What measures are you implementing to increase the park’s value? that this participatory aspect has been a significant factor in the event’s ongoing success. At Tokyo DisneySea, from April 2011, as a nighttime entertainment program, we will introduce “Fantasmic!” Disney’s Easter Wonderland featuring many of Disney’s well-known characters, and in the near future we also plan to introduce such new Q Please outline what kinds of new seasonal events you are planning attractions as “Jasmine’s Flying Carpets” and “Toy Story Mania!” We believe that these attractions will increase “Jasmine’s Flying Carpets” for the future. Scheduled to open in the summer, 2011 the enjoyment and appeal of Tokyo DisneaSea for young children. Over three months from April 2010 we produced an Easter event. This new event took its cues from the success Aladdin, Themed to the Disney film a These new attractions and shows are multiyear projects. What begins as a single picture diagram at the of the Halloween event to provide a Disney adaptation of this spring festival. We particularly focused on making ride attraction where guests can soar over Jasmine’s garden on a flying carpet. concept stage absorbs the innumerable ideas and opinions of project members before it is transformed into a Easter as fun as possible by providing many opportunities for guests to participate in the festivities. Experiential reality. This process includes overcoming many constraints on the way to producing the finished attraction or programs included Easter parties where guests could wear a special “Easter bonnet” and hunts to find Easter show. The travails we face while pursuing such long-term projects are turned into pleasure when we imagine eggs, which were hidden in many places all over the park. We are looking forward to nurturing this event into the smiles and happiness of guests enjoying the final product. Every day I experience firsthand involvement in a major draw bringing guests to the park, emulating the success of the Christmas and Halloween events. the process of theme park evolution, which has no permanent endpoint. I want to make sure that Tokyo Dis- From April 2011, we will hold a series of events over a year to celebrate the 10th anniversary of Tokyo Dis- neySea will continue to provide happiness for guests even in 50 or 100 years time. neySea, adopting the theme of “Be Magical!” As the first event to mark this anniversary, we are planning a Tokyo DisneySea spectacular new nighttime entertainment show titled “Fantasmic!.” Although we begin preparing this type of 10th Anniversary “Toy Story Mania!” event more than a year before its opening, seeing the delight on guests’ faces when it finally becomes a reality Tokyo DisneySea will hold the Scheduled to open in 2012 “Be Magical!” special event to celebrate makes all the hard work worthwhile. I hope I can be involved in many more fun events in the future that will let An interactive 3D ride attraction based its 10th anniversary next year for almost on the Disney-Pixar Toy Story film series. me see countless joyful smiles. a whole year from April 23, 2011 through March 19, 2012. 22 23 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Front-line Challenges from a Manager’s Perspective the President

Duffy: A New Development The Role Fulfilled by Theme Park Cast Tatsumi Goto Hiromi Yamada Manager Manager Cross-Categories Group Cast Development Department Merchandise Products Development Department Merchandise Division

Developing Duffy related Q Please provide background on the launch and subsequent growth in Raising the Level of Q Please explain the role of cast members in helping increase the rate products Guest Satisfaction popularity of Duffy, which has become established as an original of repeat visits. Duffy character closely identified with Tokyo DisneySea. Everything in our parks—the attractions and all the other facilities—make up a “stage set” designed according November, 2004 Experience Debuted as the Disney Bear Duffy’s roots can be traced back to a Disney bear that was sold in the Disney theme parks in the United States. value available to the park’s particular theme. We provide park guests with a diverse array of experiences, but it is the energy Non-visible value nowhere else at Tokyo DisneySea Although the bear first appeared at Tokyo DisneySea in 2004 winter, “Duffy” The Disney Bear made its debut as of experience and dedication of the cast (Tokyo Disney Resort theme park employees)—who make the show exciting by tak- December, 2005 (Dependent on ing on a role matching the park’s theme—that increase the guests’ experience value and are crucial in motivat- a Tokyo DisneySea original character, within a story about a teddy bear that Minnie made for Mickey on the philosophy, Took the stage under the new ing repeat visits. name “Duffy” the Disney Bear night before he was to embark on a long sea voyage in the winter of 2005. hospitality, etc.) As Walt Disney said, “You can design and create, and build the most wonderful place in the world. But it Duffy is an unusual character in that he did not originate from any movies or videos. Hence, it was up to us takes people to make the dream a reality.” I truly believe that it is the role of each and every cast member to ShellieMay to decide how best to foster and develop the character. We set about formulating a medium- to long-term plan January, 2010 breathe life into the facilities of a theme park. The cast members play a crucial role in making each guest’s day Debuted as Duffy’s friend for Duffy and within that we decided to incorporate many features that were unique to Tokyo DisneySea. a wonderful experience. Thanks to these efforts, Duffy has become very popular with the park’s guests, and has grown into a new fran- My Friend Duffy chise that contributes to earnings improvements. Visible value of Q What policies guide cast training at Tokyo Disney Resort to ensure March, 2010 experience Entertainment program showed (Dependent on that the very large cast constantly provides the highest level of Duffy’s story from debut at Tokyo Q Duffy has achieved a spectacular level of popularity. What is your facilities, service, etc.) hospitality? DisneySea to when he sets off on analysis of the reasons driving this phenomenon? First of all, we convey to all cast members who work at Tokyo Disney Resort our goal—bringing happiness to an adventurous journey Firstly, by developing the Duffy character at Tokyo DisneySea from its origins in America, we were able to add guests—and the role of the cast in realizing this goal. The sharing of this goal and understanding of the cast’s improvements that closely matched Japanese tastes. We particularly focused on developing a teddy bear that role unites the cast under a common purpose. It also heightens each cast member’s self-awareness and sense was comfortable to hold and hug, so that guests would want to keep Duffy close by their side. This involved of responsibility. Next, we share with each cast member the standards of behavior necessary to bring happiness very meticulous selection of materials that would be comforting to touch. The color too—a light beige—was to guests, and we let them know that they should approach each day as if it were their first performance, as they chosen to create an air of warmth. interact with all guests who have been looking forward to this special day with great anticipation. Further, it is We also focused on the fact that, unlike most other Disney characters, there were degree of freedom on very important for each cast member to think about what they can do for the guests that are right in front of them at that moment. Since the ideas and expectations of each guest are different, there is no “golden rule” how Duffy could be developed and presented. In 2006, the 5th anniversary of Tokyo DisneySea, we commenced that can be applied universally to achieve satisfaction for every guest. Hence, in each situation, a cast member sales of changeable costumes for Duffy. This has proven very popular with guests since they are given the must gauge the feelings of the individual guest and respond by taking the optimal course of action based on freedom to dress their own Duffy in the clothes they prefer. the cast member’s own judgment. Creating this type of environment in which cast members want to take the Furthermore, we developed a dedicated website for Duffy. In January 2010, “ShellieMay” debuted as Duffy’s initiative—based on our shared Disney philosophy and understanding of our role—is, I believe, the key to friend, with news about ShellieMay being provided in installments through Duffy’s website. We believe that this The Disney philosophy to all cast bringing happiness to guests. Duffy & ShellieMay was an effective way to maximize the sense of anticipation among guests. members that work at Tokyo Disney Resort Q How do you foster cast members’ own initiative? Q Please outline your future development plans for Duffy. A cast member who understands his or her own role is able to take the initiative in communicating with guests. First of all, we plan to expand the changeable costume lineup for ShellieMay, which debuted this year. Our goal This in turn encourages guests to smile and talk to the cast member. For cast members, this kind of interaction is to develop ShellieMay into a character that is loved by guests as much as Duffy. We also want to have Shell- is very gratifying, and they sense firsthand how the guests’ joy is also their own joy. Through this process, cast ieMay join Duffy when he greets guests as they arrive at Tokyo DisneySea. members gain confidence and are able to successfully respond to their next interaction. Such a progression Duffy has grown into the character we see today thanks to the cooperation of many staff members. Hence, surely proves that without the guests there would be no cast. We have also created a system in which the I hope that Duffy will remain as one of Tokyo DisneySea’s signature characters even in 50 years time. We not positive actions of cast members are acknowledged and praised by supervisors and fellow cast members. This system is closely coordinated with park operations-related divisions to support the cast. The smiles of cast only want to maintain guests’ enjoyment of Duffy but also respond to guests’ expectations by always providing members and guests create their own synergy and the theme park constantly overflows with feelings of hap- an element of surprise as we develop the character. We want to nurture Duffy into a character so that guests piness. We want to ensure that this cycle for creating happiness is also passed on as an abiding part of Tokyo will say, “I came to Tokyo DisneySea to meet Duffy.” Disney Resort.

The important key is creating an environment in which cast members My Friend Duffy take the initiative to the fullest extent possible

24 25 Feature The OLC Group at a Glance

Tokyo DisneySea

Tokyo Disneyland

Tokyo Disneyland Hotel

Disney Ambassador Hotel

Ikspiari

Tokyo DisneySea Cirque du Soleil Hotel MiraCosta Theatre Tokyo Disney Resort Line

Percentage of Total Theme Park Segment Revenues Segment Revenues & Operating Income Segment Highlights Fiscal year ended March 31, 2010 (Billions of yen) 302.4 Despite the fact that total attendance for 272.9 287.3 286.4 the fiscal year was the second highest 34.5 33.2 35.2 ever achieved, segment revenues and 26.4 operating income decreased as theme 77.3% park attendance fell below the previous fiscal year’s record high, due to various ’08/3 ’09/3 ’10/3 ’11/3 reasons, including the fact that Tokyo (Forecast) Disney Resort 25th Anniversary was cel- Revenues Operating Income Tokyo Disneyland ebrated in the previous fiscal year.

Percentage of Total Hotel Business Segment Revenues Segment Revenues & Operating Income Segment Highlights Fiscal year ended March 31, 2010 (Billions of yen) While revenues decreased due to the 45.9 45.2 45.7 fact that Tokyo Disney Resort 25th Anni- 33.2 versary was held last fiscal year, operat- 8.4 8.5 6.0 6.2 ing income increased as a result of a de- 12.2% crease in preparation expenses prior to the opening of Tokyo Disneyland Hotel. ’08/3 ’09/3 ’10/3 ’11/3 (Forecast) Revenues Operating Income Tokyo Disneyland Hotel

Percentage of Total Other Business Segment Revenues Segment Revenues & Operating Income Segment Highlights Fiscal year ended March 31, 2010 (Billions of yen) Despite a decrease in revenues, operat- 24.7 24.1 24.4 19.5 ing income increased due to various factors, including a decrease in preparation expenses prior to the opening of Cirque 6.5% du Soleil Theatre Tokyo. Believing that the challenges we take up today (0.7) (0.9) (0.1) (0) ’08/3 ’09/3 ’10/3 ’11/3 (Forecast) Revenues Operating Income will contribute to happiness in 100 years time Cirque du Soleil Theatre Tokyo * The Retail Business Segment has been abolished as a result of the transfer of Retail Networks Co., Ltd. to The Walt Disney Company (Japan) Ltd. as of March 31, 2010. In the fiscal year ended March 31, 2010, the Retail Business Segment accounted for 4.0% of revenues.

26 Oriental Land Annual Report 2010 27 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Review of Consolidated Operations the President

part of our special events program, in addition to “Disney’s Halloween,” which was held at Tokyo Disney- Guests by Age Sea for the first time, we held special Christmas-themed events at the two theme parks starting in No- Theme Park (%) 17.0 100 17.9 vember. 51.8 17.7 Segment 52.2 As a result of the above, total attendance at the two theme parks for the fiscal year stood at the sec- 53.1 ond highest level ever achieved, with 25.82 million guests coming through the gates. This figure was Factors such as Tokyo down 5.2% from the previous fiscal year, however, for reasons that included the previous year’s Tokyo

Disney Resort 25th Anni- 11.3 Disney Resort 25th Anniversary. In addition, revenues per guest at theme parks were ¥9,743 (up 0.2%). 10.7 19.9 19.2 Ticket receipts per guest were ¥4,206 (down 0.4%). Merchandise revenues per guest were ¥3,377 (up versary events held last 11.118.1 year resulted in a 5.2% 0.2%) due to reasons including strong sales of “Duffy” The Disney Bear-related products thanks to the new decrease in attendance, addition of Duffy’s friend “ShellieMay.” Food and beverage revenues per guest were ¥2,160 (up 1.5%) due to 25.82 million, marking to various factors, including strong wagon sales. ’08/3 ’09/3 ’10/3 the second highest atten- As a result, revenues in the Theme Park Segment were ¥287.3 billion (down 5.0%). Despite a decrease 40 and above 12 to 17 of ¥3.4 billion in depreciation and amortization expenses and a reduction of costs commensurate with dance level ever achieved. 18 to 39 4 to 11 the decrease in the number of visitors, the decrease of operating income was smaller than that of revenues. Segment Revenues Segment Overview (Fiscal year ended March 31, 2010) The main facilities of the Theme Park Segment are Tokyo Disneyland and Tokyo DisneySea. Guests by Region Forecast for the Fiscal Year Ending March 31, 2011 Tokyo Disneyland opened in April 1983 and Tokyo DisneySea in September 2001. Total annual (%) 67.1 [ Revenues ] ¥286.4 billion (down 0.3 %) [ Operating Income ] ¥35.2 billion (up 5.8 %) 66.3 attendance at the two theme parks exceeds 25 million, for a cumulative total to date of approxi- 100 67.5 Total attendance at the two theme parks is forecast to be 25.8 million guests (down 0.1%), and revenues ¥287.3 mately 500 million. per guest are forecast to be ¥9,690 (down 0.5%). Our forecasts for ticket receipts per guest are forecast to billion Tokyo Disneyland and Tokyo DisneySea have an approximately 40 percent* share of the Japanese be ¥4,220 (up 0.3%), merchandise revenues per guest and food and beverage revenues per guest are amusement and leisure park market. 11.4 Revenues of the Theme Park Segment are broadly divided into attractions and shows, merchan- 11.7 7.2 44.9% Attractions and Shows dise, and food and beverages. 3.6 7.93.7 3.511.5 6.5 7.2 7.2 34.9% Merchandise • Attraction and show revenues include ticket receipts and parking receipts. 4.2 3.2 2.8 7.5 19.4% Food and Beverages • Merchandise revenues include sales of merchandise at Bon Voyage and commercial facilities within affiliated hotels, in addition to commercial facilities within the theme parks. Others ’08/3 ’09/3 ’10/3 0.8% • Food and beverage revenues include sales of food and beverages at commercial facilities within the theme parks. Kanto * Source: White Paper on Leisure 2009 (July 2009, Japan Productivity Center) Chubu/Koshinetsu Kinki Tohoku Others (Japan) Summary of the Fiscal Year Ended March 31, 2010 Overseas Special Event “Disney’s Halloween” (Tokyo DisneySea) Duffy (Tokyo DisneySea) [ Revenues ] ¥287.3 billion (down 5.0 %) [ Operating Income ] ¥33.2 billion (down 3.8 %) During the period under review, we opened new attractions in each of our two theme parks. “Monsters, “Duffy” The Disney Bear Inc. Ride & Go Seek!” based on the Disney / Pixar film Monsters Inc. was opened in April, 2010 at Tokyo Revenues per9,719 Guest9,743 (Yen)9,370 Disneyland and “Turtle Talk” based on the Disney / Pixar film Finding Nemo was opened in October, 2010 4,226 “Duffy” The Disney Bear, sold exclusively at Tokyo DisneySea, was born in the winter of 4,222 at Tokyo DisneySea, with both proving extremely popular, especially among families. Furthermore, as 4,206 2005, based on the story of him being a precious teddy bear that Minnie made for Mickey on the day before he was to embark on a long sea voyage. Since then, Duffy has proven to be a popular character at Tokyo DisneySea, and has grown up amidst the affection of our 3,096 3,370 3,377 many guests. In January 2010, we introduced Duffy’s friend, ShellieMay whose charm comes from such points as her cute pink fur and large ribbon. Additionally, we are devel- 2,048 2,128 oping a number of accessories that are appealing to young girls, such as costumes and 2,160 pendants. Starting from March 2010, we began a new stage show called “My Friend Duffy” that ’08/3 ’09/3 ’10/3 tells the story from how Duffy came to be, to when he sets off on an adventurous journey through song and dance. This show has been incredibly popular due to the fact that it can Ticket Receipts Merchandise Revenues be viewed while dining. Food and Beverage Revenues “Monsters, Inc. Ride & Go Seek!” (Tokyo Disneyland) “Turtle Talk” (Tokyo DisneySea)

28 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 29 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Review of Consolidated Operations the President

¥3,340 (down 1.1%) and ¥2,130 (down 1.4%), respectively. Segment Overview As a result, revenues are forecast to be ¥286.4 billion (down 0.3%). Operating income is forecast to be Hotel Business ¥35.2 billion (up 5.8%) due to factors that include a decrease in depreciation and amortization expenses The facilities included in the Hotel Business Segment are the three Disney hotels of Tokyo Disney- of approximately ¥1.9 billion. Segment land Hotel (opened July 2008), Tokyo DisneySea Hotel MiraCosta (opened September 2001) and Under the fundamental policy to “further strengthen the core business (Tokyo Disney Resort)” one of Disney Ambassador Hotel (opened July 2000), as well as Palm & Fountain Terrace Hotel (opened February 2005), which is located in the Shin-Urayasu region. the policies outlined in the OLC Group’s 2010 medium-term plan, we are implementing such initiatives Revenues declined due to as enhancing quality and clarifying targets. a number of reasons, Summary of the Fiscal Year Ended March 31, 2010 In order to enhance quality, we are introducing a number of programs with high added-value, such including the fact that as Tokyo Disney Resort Vacation Packages, which take advantage of theme park content. Guests using Tokyo Disney Resort 25th [ Revenues ] ¥45.2 billion (down 1.5 %) [ Operating Income ] ¥8.4 billion (up 35.0 %) As a standard practice for all hotel guests, we offered the “Tokyo Disney Resort Multi-day Passport Special” “Disney Easter Wonderland” these packages have been greatly satisfied, and in the fiscal year under review revenues for these pack- Anniversary was held last (Tokyo Disneyland) at the three Disney hotels, with sales starting on April 1, 2009. In addition, we implemented the “Tokyo ages were ¥8.0 billion level. To clarify targets, we responded to the changes associated with Japan’s de- year. However, operating Disneyland ‘Happy 15’ Entry” program, under which hotel guests are allowed to enter Tokyo Disneyland clining birth rate and aging society by reliably attracting guests from the family segment, which ac- income increased due to counts for a large volume of our customers, while strengthening guest attraction for the 40-and-above 15 minutes earlier during the period from September 1, 2009. various factors, including segment. However, the occupancy rates of each hotel fell below those of the previous fiscal year due to a num- a decrease in preparation As in the past, we will continue to carry out a wide variety of special events at the two theme parks ber of reasons, including external factors such as the outbreak of novel influenza A (H1N1) as well as the expenses prior to the throughout the year. In the spring, we are holding “Disney Easter Wonderland,” our first Easter-themed fact that the previous fiscal year was the 25th Anniversary. opening of Tokyo Disney- special event, at Tokyo Disneyland, as well as the last “Tokyo DisneySea Spring Carnival” at Tokyo Disney- As a result, revenues of the Hotel Business Segment were ¥45.2 billion (down 1.5%). Despite a de- land Hotel. Sea. In both theme parks, we will carry out water-themed programs during the summer and roll out crease in revenues, operating income was ¥8.4 billion (up 35.0%) due to various factors, including a de- special themed events for Halloween and Christmas starting in the fall. In addition, at Tokyo Disneyland crease ¥3.0 billion in preparation expenses prior to the opening of Tokyo Disneyland Hotel. we welcomed the return of “Captain EO” for a limited period from July 1, 2010 and will launch a new at- Occupancy Rate & Average Revenues per Guest Room Fiscal year ended March 31, 2010 traction, “Mickey’s PhilharMagic,” in January 2011. Going forward, we will develop a solid sales plan in Segment Revenues Number of guest Average revenues rooms Occupancy rate per guest room* order to introduce new content while still maintaining limitations on costs and investment, thus maxi- (Fiscal year ended March 31, 2010) “Tokyo DisneySea Spring Carnival” Tokyo Disneyland Hotel 705 about 85% about ¥55,000 (Tokyo DisneySea) mizing free cash flow. Tokyo DisneySea Hotel MiraCosta 502 about 90% about ¥50,000 In the fiscal year under review, due to the effects of such factors as an outbreak of novel influenza A Disney Ambassador Hotel 504 about 70% about ¥45,000 (H1N1) and the recession, the number of foreign visitors was stagnant. However, Japanese government Palm & Fountain Terrace Hotel 702 about 75% about ¥20,000 agencies have taken the lead in considering a wide range of policies designed to increase the number of ¥45.2 billion * Average revenues per guest room includes service charges. foreigners visiting Japan. Accordingly, this market is expected to expand significantly. The Japan Tourism Agency, which Forecast for the Fiscal Year Ending March 31, 2011 was inaugurated in October 2008, is promoting the “Visit Ja- [ Revenues ] ¥45.7 billion (up 1.1 %) [ Operating Income ] ¥8.5 billion (up 1.0 %) pan Campaign,” which sets a target for foreign tourists visit- 31.7% Tokyo Disneyland Hotel As a standard practice for all hotel guests launched this fiscal year, we will continue to offer the “Tokyo ing Japan at 10 million by 2010 and the program to attract 30 33.5% Tokyo DisneySea Disney Resort Multi-day Passport Special” at the three Disney hotels and implement the “Tokyo Disney- million international visitors to Japan sometime in the future. Hotel MiraCosta land ‘Happy 15’ Entry” program. In addition, we plan to carry out a wide range of programs at each hotel The expansion of Haneda Airport and Narita International 26.3% Disney Ambassador Hotel by holding events and offering special menus linked to special events at the theme parks, among others. Airport, the easing of restrictions on issuing visas for tourists 8.5% Palm & Fountain Furthermore, Disney Ambassador Hotel celebrates its 10th anniversary in July, and a number of anniver- “Disney’s Halloween” from China and other factors are expected to promote visits Terrace Hotel sary programs are scheduled to be conducted for one year starting from April 2010. (Tokyo DisneySea) by foreign tourists to Japan. We recognize that these mea- Revenues are forecast to be ¥45.7 billion (up 1.1%). Despite an increase in facility renewal related ex- sure implemented a great opportunity to us, and accordingly penses and other fixed expenses resulting from the refurbishment work for Disney Ambassador Hotel, oper- are working steadily to take advantage of it. “Mickey’s PhilharMagic” ating income is forecast to be ¥8.5 billion (up 1.0%) due to various factors, including an increase in revenues. (Tokyo Disneyland)

Tokyo Disney Resort Vacation Packages Special park ticket Hotel can be chosen FASTPASS ticket その他にもさまざまなお楽しみMany other thrills await

Tokyo Disney Resort is offering Tokyo Disney Resort Vacation Packages in order to further raise the level Caption txt Magical Travel Plans of satisfaction of guests staying overnight. This package is packed full of the joy of the Tokyo Disney Re- to Make Dreams sort, and we have seen a great deal of satisfaction from guests that have used it, as well as a trend toward repeated usage. Going forward, we plan to further strengthen the sale of these packages by expanding Includes the “Tokyo Disney Resort Come True Multi-day Passport Special,” which al- The FASTPASS ticket enables shorter For details, please access our website. distribution channels. lows guest to enjoy either of our two Choose a hotel that has easy access waiting time at attractions and has no *Details may vary between plans. theme parks from the first day. to our theme parks. specified time. *Photograph is an image representation.

30 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 31 Review of Consolidated Operations OLC Group Corporate Social Responsibility (CSR)

Other Business Segment Overview The main facilities of the Other Business Segment are Ikspiari (opened July 2000), Cirque du Soleil As a corporation that provides “dreams, excitement, joy and happiness” through its business Segment Theatre Tokyo (opened October 2008) and Disney Resort Line (opened July 2001). operations, the OLC Group engages in CSR activities with the goal of creating a sound society Ikspiari is a commercial facility based on the concept of “a town full of stories and entertainment.” Revenues decreased due It includes approximately 140 shops and restaurants and a 16-screen cinema complex. and a future where dreams abound. to withdrawal from the Cirque du Soleil Theatre Tokyo, with a 2,170 seat capacity, is the first permanent theatre in Japan intellectual property Cirque du Soleil for . The OLC Group has operated and expanded its business by pro- In February 2010, we established the OLC Group “CSR Poli- rights business in the Disney Resort Line is a monorail connecting four stations within Tokyo Disney Resort. viding people with happiness. We aim to create a strong rela- cies,” a document that sets the long-term direction for future previous fiscal year. tionship with society through our business operations and CSR activities. Included in these policies are five initiatives that However, operating Summary of the Fiscal Year Ended March 31, 2010 through various social contribution activities that are highly we want to protect. These are trust and integrity, dynamic and income improved due to [ Revenues ] ¥24.1 billion (down 2.4 %) compatible with the business that we are in. Accordingly, we inspiring workplace, commitment to our guests, children are various factors, including [ Operating Loss ] ¥0.1 billion (an improvement of ¥0.8 billion) are working to contribute to society through a wide variety of our future, and caring for the environment. Based on these ini- a decrease in preparation Cirque du Soleil Theatre Tokyo, which was opened to the public on October 1, 2008 started full-year activities. tiatives, we are striving to conduct CSR activities that do not just expenses prior to the operation, which contribute to increased revenues. Overall revenues, however, decreased to ¥24.1 billion At the OLC Group, we believe that building a society that is accomplish what is required of us, but rather that also reflect opening of Cirque du (down 2.4%) due to withdrawal from the intellectual property rights business in the previous fiscal year. filled with “dreams, excitement, joy and happiness” in which what we are capable of doing. Soleil Theatre Tokyo. Operating loss decreased ¥0.8 billion due to various factors, including a decrease of ¥0.6 billion in people can enjoy a life that is full of joy—in other words, a spiri- preparation expenses prior to the opening of Cirque du Soleil Theatre Tokyo. tually-rich society and dream-filled future—will lead to the real- Segment Revenues ization of a sustainable society. In order to achieve such a soci- (Fiscal year ended March 31, 2010) Forecast for the Fiscal Year Ending March 31, 2011 ety, all of us here at the OLC Group are coming together and [ Revenues ] ¥24.4 billion (up 1.3 %) engaging actively in CSR activities. [ Operating Loss ] ¥0 billion (an improvement of ¥0 billion) ¥24.1 Celebrating its 10th anniversary in July, Ikspiari will hold various events and fairs throughout the year under the theme “More Fun! Forever Fun!” in order to thank its customers and express appreciation for billion CSR REPORT 2010 their continued support over the past 10 years. At the same time, Ikspiari will renovate stores while wel- coming new tenants. Please see the “OLC Group CSR REPORT Cirque du Soleil Theatre Tokyo has sold a special plan which combines a ticket for “ZED™” and an ad- 2010” about detailed information of our 37.0% Ikspiari mission ticket to Tokyo Disneyland or Tokyo DisneySea in the evening for a limited period of time. In this CSR activities that fulfill a role as a Com- 25.5% Theatrical way, we will implement various plans that allow visitors to fully enjoy the entertainment offered at Tokyo pany. 14.4% Monorail Disney Resort. 9.7% Group Employee Revenues are forecast to be ¥24.4 billion (up 1.3%). Operating loss is forecast to be ¥0 billion (an im- www.olc.co.jp/csr Cafeterias provement of ¥0 billion) due to an increase in revenues, among other reasons. 13.4% Others This report is posted at the website only the Japa- nese edition as of July 2010. The English edition will be available from fall 2010. A special ticket including a ticket to view “ZED™,” and a park ticket

The Cirque du Soleil Theatre Tokyo holds performances of the original program “ZED,” which cannot be seen anywhere else in the world. In July 2010, we began sales of a special ticket set that includes a ticket to view “ZED,” and a park ticket that allows guest to enjoy either Tokyo Disneyland or Tokyo DisneySea in the evening. This set is will only be available for a limited period of time. This set not only allows guests to enjoy both the show and one of our Tokyo Disneyland theme parks, it is also available at a price that is much more acces- sible than the standard ticket prices. Going forward, we will aim to ZED Tokyo DisneySea increase the value of the entire Tokyo Disney Resort, while aggressively promoting such plan.

32 Oriental Land Annual Report 2010 33 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) OLC Group Corporate Social Responsibility (CSR) the President

1 Trust and integrity Corporate Governance Structure Developing More Transparent and Impartial General Meeting of Stockholders

Appoint / Dismiss Appoint / Dismiss Appoint / Dismiss Management to Improve Corporate Value Audit Cooperate Board of Directors Audit Board of Corporate Auditors Report Independent Accounting Auditors Strengthening Corporate Governance 12 Directors including 1 External Director 4 Auditors including 3 External Auditors OLC-WAY The OLC Group is working to raise corporate value. We consider and then act on what we can do for customers Appoint / Dismiss Transfer of authority Supervise 1. Honesty and society, based on our business mission of providing “dreams, excitement, joy and happiness,” which is the

Focus not only on your origin of the OLC Group. Also, we will continue working to strengthen corporate governance, based on our Consult /Recommend Compliance Committee own good and the understanding of the importance of raising management transparency and fairness, achieving sustainable Representative Directors good of the organiza- growth and development, and fulfilling our social responsibilities. Specifically, we are primarily engaged in the tion, but also on the Appoint / Dismiss following activities. Executive Committee / Environment Committee good of everyone else. Supervise First, the OLC Group is reinforcing internal controls in ways such as creating a comprehensive compliance Instruct Deliberation on issues Theme Park Committee [Decide and report on key issues 2. Proactive system, strengthening its information management system, and establishing a risk management system. other than matters decided by the Corporate Officers (16) Board of Directors] Risk Management Committee Execution Second, the OLC Group is also promoting reinforcement of management oversight functions by en- [Execution of business] There is no need for hancing the audit system with audit by corporate auditors and internal audits. excuses or criticism. Instruct Cooperate Internal Audits Third, the OLC Group is increasing its management transparency by conducting active information Instruct / Report Act without fear of Cooperate mistakes. disclosure. Business Departments / Internal Auditing Department However, even with this governance system in place, ultimately the awareness of the people who use the Administrative Departments Internal Audits [Audits business execution of each department] 3. Healthy Conflict system will decide if it will function or not. The OLC Group is working to spread and provide education about The precedent is not OLC-WAY, a set of shared promises among all officers and employees. Having all officers and employees fulfill necessarily the best. the promises of “Honesty,” “Proactive Execution” and “Healthy Conflict” contained in OLC-WAY will foster a Discuss matters starting the effectiveness of its audits by discussing the status of deliberation at important meetings, audit results and for zero and heading highly compliance-aware corporate culture and corporate climate. other matters among the corporate auditors. toward the goal. By conducting honest management that emphasizes corporate ethics through these measures, we aim to The Company has clarified the corporate auditors’ role and work responsibilities by setting the “Regulations increase our corporate value and to deepen the high evaluation of our stockholders and other stakeholders. for the Board of Corporate Auditors” and the “Audit Standards for Corporate Auditors” as a means of establishing and maintaining good corporate governance. Basic System Business Execution The Company has enhanced internal control with the establishment of an Internal Auditing Department to conduct internal audits on compliance with laws and internal rules and efficient business execution. Oriental Land (“the Company”) has introduced a Corporate Officer System to strengthen overall control of The standing corporate auditors, the Internal Auditing Department, and the independent accounting audi- Group management. The purpose of the Corporate Officer System is to more clearly define supervisory and tors conduct cooperative auditing with regular meetings of the three parties and regular opportunities for the executive responsibilities in each of the OLC Group’s businesses, strengthen the management supervisory Internal Auditing Department to report audit results to the standing corporate auditors, as well as meetings functions of directors by shifting the focus of their roles to supervision, and accelerate decision making by pro- that provide the opportunity to communicate and report as needed. moting delegation of authority to corporate officers. To ensure accurate accounting, we receive audits by KPMG AZSA & Co. The Board of Directors consists of 12 directors, including one external director. Board of Directors meetings are held once a month in principle. All corporate auditors attend the meetings, whether or not they hold standing positions. Reinforcing the Internal Control System Strengthening Operations to Ensure Compliance In addition, we promote swift and accurate decision making through bodies that decide on important mat- We have established the “OLC Group Code of Compliance,” which outlines the rules for officers’ and employees’ ters concerning business execution of authority delegated by the Board of Directors, excluding items to be re- compliance with ethics and laws, and “Business Guideline,” which outlines specific standards for the practice of solved by the Board. We established the “Executive Committee” to decide on matters related to overall Com- compliance. pany management, and the “Theme Park Committee” to make decisions concerning the theme park business. BUSINESS GUIDELINE In addition, we set up the “Compliance Com- Auditing and Supervision mittee,” which is chaired by a designee of the president, to ensure the legality of the Company’s man- In the Corporate Auditor System adopted by the Company, the two standing corporate auditors attend meet- OLC Group Code of Compliance agement and to promote a spirit of compliance. If ings of the Board of Directors, Executive Committee and Theme Park Committee, as well as other meetings and The OLC Group’s officers and employees have a strong ethical commitment to the committee discovers misconduct by an officer committees the corporate auditors deem important, where they state their opinions. Three of the four corpo- compliance with external laws and regulations and internal rules. or employee or a serious violation of law or the rate auditors are external auditors, a structure that brings in opinions from an objective and independent stand- 1. Prioritize safety above all else. Company’s articles of incorporation, it conducts the point to enable effective audits. To assist the corporate auditors in their duties, we have developed a specialized 2. Respect human rights and prevent discrimination and harassment. necessary investigations and reports its findings to organization, the “Corporate Auditor Office,” and we promote the timely reporting of necessary and pertinent 3. Engage in fair and transparent transactions. management or to the Executive Committee and information for audits with the formulation of the “Policy for Reporting to Auditors,” which stipulates what mat- 4. Strictly control confidential information including personal information. the Board of Corporate Auditors. Moreover, we have ters officers and employees must report to corporate auditors, as well as the timing and method of reporting. set up an Employee Consultation Office as a chan- In accordance with auditing policy and its basic audit plan, corporate auditors carry out activities including 5. Take a firm stance toward anti-social organizations. nel for internal reporting within the OLC Group. listening to reports from directors and employees and viewing important documents, while working to ensure

34 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 35 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) OLC Group Corporate Social Responsibility (CSR) the President

Furthermore, we institute employee education programs related to compliance once a year. All officers Reinforcing Management Oversight Functions and employees (excluding part-time employees) participate in these programs, which serve as an opportu- Further Upgrading the Supervisory System nity for the sharing of information and awareness related to compliance issues. We also implement strict We have also set “Audit Standards for Corporate Auditors,” which provides standards and action guidelines for monitoring to ensure the effectiveness of measures related to compliance. From the fiscal year ended March corporate auditors to follow in conducting their audits. The corporate auditors report to the Board of Directors 2009, the OLC Group is developing more practical education for regular employees with the introduction of if they discover any activity by a director that violates the law or the articles of incorporation. original e-learning that was produced by the OLC Group’s compliance managers and group discussions that In addition, we promote the timely reporting of necessary and pertinent information for audits with the use case studies. formulation of the “Policy for Reporting to Auditors,” which stipulates what matters officers and employees must report to corporate auditors, as well as the timing and method of reporting. Additionally, we have appointed specialized staff for the “Corporate Auditor Office,” which independent from business execution side, Examples of Group Discussions that Use Case Studies (For fiscal year ended March 31, 2010) • Protection of Personal Information in order to assist the corporate auditors in their duties, and we also have an Internal Auditing Department that • Prevention of Insider Trading serves as a department for internal auditing independent from business execution departments. • Protection of Intellectual Property Rights • Prevention of Harassment • Appropriate Labor Control Message from the Q. In your duties as external corporate auditor, what are some specific • Maintenance Appropriate Relationship with Business Partners External Corporate points that you focus on? Auditor Approximately 130,000 individual stockholders are currently investing in OLC. Many of these are fans of Tokyo Disney Resort, and therefore hold long-term expectations for the Company and its management. Respecting Human Rights Akiyasu Nakano A company must never loss the trust of its stockholder. Particularly, in the case of OLC, this would also Corporate Auditor (External) The OLC Group has established the “OLC Group Policy Regarding Human Rights,” and is spreading awareness Attorney at Law represent a loss of its fan base, and would therefore have a devastating effect on the Company’s business. related to the respecting of human rights through business activities throughout the Group. We have also in- I have been entrusted with supervision of OLC’s management by its stockholders. Additionally, I have been cluded measures relating to human rights in the “Business Guidelines,” which describes more detailed rules of selected as an independent officer. Therefore, I will strive to fulfill the obligations inherit with both of these conduct for daily business activities. Accordingly, each individual employee views the resolution of human responsibilities while working from the viewpoint of OLC’s stockholders, as well as from the viewpoint I rights problems as their own responsibility, and therefore always acts with consideration for those around hold as a lawyer. them. Q. What do you believe is expected of you as a lawyer? Entrenching the Risk Management System The viewpoint of a lawyer is based on a preventive legal perspective that comes from turning your atten- In order to entrench the risk management system the “OLC Group Risk Management Guidelines,” which outline tion on a daily basis to issues that only have a chance of causing problems at one company in a hundred. basic rules of conduct, have been established. In addition, the “Risk Management Committee,” chaired by the As an external corporate auditor, I supervise the Board of Directors to determine whether or not decisions President, promotes risk management by identifying, analyzing, evaluating and prioritizing risks that the OLC are made based on evaluations and discussions that take into account all possible legal risks. In the event Group faces, and manages the overall risk management cycle to formulate individual preventative and re- that I did believe that this decision making process was lacking a preventive legal perspective, I would ac- sponse measures. Furthermore, we are bolstering our responsiveness toward unforeseen risks through the tively bring this point to management’s attention and call for it to be discussed. “ECC (Emergency Control Center),” a response unit consisting of the president and other related personnel that works to manage response systems in the event that risks materialize. Q. What do you believe is necessary in order to ensure effective corporate Reinforcing the Information Security Management System governance? Do you believe that OLC is practicing effective corporate The OLC Group’s fundamental policies regarding information security are outlined in the “OLC Group Funda- governance? mental Information Security Policy,” while specific rules of conduct are defined in the “OLC Group Information In order to ensure effective corporate governance, I believe it is essential that all directors and corporate Security Policy.” Acting in accordance with the “OLC Group Information Security Policy,” we are enhancing our auditors be supplied with sufficient information necessary to make decisions and judgments. Without suf- information security management systems by defining regulations, guidelines, and procedures regarding the ficient information, discussions will prove useless no matter how much time is spent on them. handling of information, documents, and information security systems. Additionally, we have been working to In that respect, I believe that OLC is effectively maintaining management transparency through the improve the level of information security management through the creation of an “Information Security Man- proper provision of information, by providing materials and prior explanations by General Affairs Depart- agement Subcommittee,” in a “Risk Management Committee.” These two organizations oversee the management regarding matters to be discussed at such important meetings as the Board of Directors. In addition ment of information. of explain of the main matters to be discussed at the important meetings except the Board of Directors, the Board of Corporate Auditors engages in a healthy exchange of opinions and other such discussions. A great Reinforcing Decision Making, Authority and Responsibilities deal of information can be gained from the Board of Corporate Auditors, and I believe that corporate audi- We have defined the administrative duties of each department and the Company’s ranking system in the “Or- tors engage in the effective exchange of information and opinions. This plays an important role in strength- ganizational Rules,” and the authority of each position and the chain of command in the “Rules of Administra- ening the functionality of the supervision of management. tive Authority,” in order to ensure directors’ efficient execution of duties. Management transparency is extremely important to a company’s stockholders, as well as all of its other stakeholders. OLC has been highly evaluated on its efforts to ensure the timely and appropriate disclosure of information, both good and bad, throughout its daily business operations. Going forward, I strive to fulfill my obligations as external corporate auditor in order to help OLC increase its inherent corporate value.

36 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 37 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) OLC Group Corporate Social Responsibility (CSR) the President

Ensuring the Reliability of Financial Reports Increasing Management Transparency To ensure the reliability of financial reports we have established the “Internal Control Committee” which pro- The OLC Group has established a “disclosure policy” and carries out fair, timely and appropriate disclo- motes all areas of our internal control system for financial reporting as set forth in the Financial Instruments sure of information to investors and all other stakeholders. In addition to disclosure in compliance with and Exchange Law. Additionally, we have prepared systems in order to allow for mutual cooperation between the Financial Instruments and Exchange Law, other related regulations and the Tokyo Stock Exchange’s departments responsible for constructing and evaluating the OLC Group’s internal control systems. regulations on timely disclosure, the OLC Group provides fair, timely and appropriate disclosure of infor- We have judged that our internal controls for consolidated financial reporting were effective as of March mation that is deems necessary for the understanding and evaluation of the Group through a variety of 31, 2010, and submitted an internal control report on the results of the evaluation. The contents are being means including press releases, its homepage and meetings. audited by an external auditor. The OLC Group will continue working to reinforce internal controls through ongoing evaluations of the system’s condition and application. Compensation Paid to Directors and Corporate Auditors and Audit Compensation In the fiscal year ended March 2010, compensation paid to directors and corporate auditors and compensation paid to independent auditors (compensation for services prescribed in Article 2, Paragraph 1 of the Certi- IR (Invester Relations) Activities of OLC fied Public Accountant Law of Japan and compensation for other services) was as follows. OLC is bolstering its IR activities in order to develop long-term bonds of trust with its stockholders and con- Compensation Paid to Directors and Corporate Auditors tinue to maintain an appropriate stock price. (Fiscal year ended March 31, 2010) (Millions of yen) Recipients Amount Improving Transparency and Speed of the Disclosure of Information Compensation paid to directors 17 445 In 2010, OLC reconstructed all areas of its website. We worked to enhance its usability by increasing [Compensation paid to external directors included in above] (2) (7) the amount of information disclosed on it, and improving the transparency and speed of the disclo- Compensation paid to corporate auditors 4 67 sure of information. [Compensation paid to external corporate auditors included in above] (3) (39) For example, we began transmitting on-demand video presentations of financial results and voice Total 21 512 files of quarterly financial telconference. Additionally, we provide materials with supplementary expla- Notes: 1. The above figures include four executive directors and an executive director (external) who retired as of the end of the 49th nations and question, answer sheets and materials, provided in Japanese and English, that are geared General Meeting of Stockholders held on June 26, 2009. toward investors that are unfamiliar with OLC. In these ways, we are disclosing information that can be 2. Employee wages are not paid to directors who work concurrently as employees of the Company. 3. The Company has abolished bonuses to directors, and such bonuses are not included in compensation paid to directors. easily understood by investors that could not attend financial presentations and those who are unfamiliar with OLC. Audit Compensation (Fiscal year ended March 31, 2010) (Millions of yen) Enriching Communication Opportunities Amount OLC values opportunities for management to communicate directly with stockholders. Needless to Compensation based on audit certification 85 say, we provide financial presentations in which top management and corporate officers give speech- Other compensation — es regarding such issues as financial results and the medium-term plan. Additionally, the Company Total 85

holds discussion forums with its stockholders and investors, participates in conferences throughout Note: The Company’s auditing contract with the independent auditors does not clearly differentiate compensation for auditing as Japan and overseas that are organized by securities companies, and conducts company explanations based on the Company Law or the Financial Instruments and Exchange Law. Because the amounts cannot be practically dif- for private investors and securities companies. ferentiated, compensation, etc. for the period is listed in the total. Further, we are providing enhanced opportunities for our stockholders and investors to witness Policy Regarding Control of the Company (Outline) OLC’s operations first-hand. These include tours of our theme parks and other facilities. The OLC Group’s management policy is to raise corporate value by continuing to be a company that is widely loved and familiar, deepening the trust and understanding of all its stakeholders, and maximizing Providing Feedback to Management and individual department the resulting cash flow. Not only making reports to management, we also hold internal explanatory meetings for individual Investor Relations Group This management policy is aimed at continued long-term growth and is not meant for pursuing departments that use our financial results meeting materials over 50 times a year in order to commu- short-term profits. The Company will not categorically reject the reform or vitalization of management nicate our opinions of stockholders and investors to employees in detail. In addition, the several thou- through the transfer of rights to control the Company, nor obstruct an acquisition with the potential to Contact: sands of opinions, suggestions and evaluations received from our approximately 130,000 individual Investor Relations Group, Finance / further enhance corporate value or the common benefit of stockholders. The Company currently has stockholders through questionnaires were sorted by content for regular feedback for appropriate Accounting Department no specific predetermined anti-hostile takeover measures. However, the Company believes it is inap- managers and departments so we could work to improve our management and business activities. Oriental Land Co., Ltd. propriate for an individual or financial entity who may work to the detriment of the Company’s corpo- 1-1 Maihama, Urayasu, Chiba rate value (including individuals or financial entities that attempt to manage without regard to the 279-8511, Japan IR Activities System Company’s management policies) to control decision making regarding the Company’s financial or TEL: +81 47 305 2038 Top management, corporate officers, and general managers are supported by a specialized IR staff operational policy. In the event such an individual or financial entity should appear, the Board of Direc- IR site: consisting of six members. This IR staff is actively conducting IR activities throughout Japan and tors will consider appropriate measures with outside experts and implement countermeasures in re- www.olc.co.jp/en/ir overseas. sponse to conditions.

38 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 39 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) OLC Group Corporate Social Responsibility (CSR) the President

Theme Park Operation with Safety as its Highest Priority that we can effectively evacuate guests and extinguish the fire. In order to enable a quick response to other emergencies, such as earthquakes, we have developed a manual that details the procedure that employees Enabling Guests to Enjoy Our Theme Parks with Peace of Mind should follow in such cases, and are making sure that all employees are thoroughly aware of its contents. In order to enable all guests to enjoy our theme parks with peace of mind, the OLC Group places safety as the highest priority in the S afety operation of its theme parks. Disney theme parks are operated Dynamic and inspiring workplace based on the SCSE [(safety, courtesy, show, and efficiency)] con- C ourtesy 2 duct guidelines, which lists the order of our theme park operation SCSE Specialist disaster prevention staff Allowing Every Employee to Continue to Create New priorities, placing safety as the highest priority. These guidelines S how are on duty to monitor the parks are the backbone of the judgment and conduct of all cast mem- 24 hours a day. Moving Experiences bers in providing abundant hospitality and the highest level of E fficiency service to guests. Supporting Employees in Achieving Self-Realization and Gaining New Skills One of the OLC Group’s management ideals is “Respect individuals and support their work” We are actively Attractions supporting the growth of our employees with vitality in order to ensure that they have a broad view of society, We have established the “Basic Policy for the Safety of Attractions.” Needless to say, all attractions are designed that they can realize their full potential, and that they are able to continue to create new moving experiences. with safety as the highest priority. Furthermore, all of the approximately 1,000 technical staff alternate in per- To this end, we have introduced a variety of education programs matched to each work area and a career forming inspections on attractions and all other facilities, and thereby confirming and maintaining safety. In advancement program, as well as systems that allow employees to advance themselves within the Company addition to the legal requirements, we also conduct daily and other regular inspections based on our internal in areas that go over the boundaries of their normal work area. Maintenance Standard, which is significantly stricter than the legal requirements. Through these efforts, we are working to bolster the safety of our theme park. Enhancing the Work Environment and Work-Related Systems For the purpose of being a source of vitality and provide our guests with “dreams, excitement, joy and happi- Cast positioned along a parade route Shows and Parades ness,” the OLC Group is striving to develop a corporate culture in which all employees think about how to The “Safety Management Guideline” has been established in order to ensure the thorough management of achieve this goal and working to realize that vision. An example of this is the “I have an idea” system through safety throughout design, construction, inspection, and maintenance. Additionally, to respond to unforeseen which employees can express their ideas with ease. This system has enabled us to improve our facilities and happenings, such as children running onto the parade route during parades, more than 100 cast members are develop various merchandise items for special events and menu. stationed along the parade route, which spans approximately 800 meters. We have also established systems to Additionally, we have been enhancing our child care and nursing support systems along with our work- secure evacuation routes and guide guests to them in case of an emergency. place support systems and our employees are leading more enriched lives outside of work. At the same time, in order for our employees to perform better at work, we have been constructing systems that develop har- Shopping and Dinning mony between work and private lives of employees and a workplace environment that supports these systems. Products and menus that have been As a result of these efforts, in the fiscal year ended March 31, 2010, our employees (general workers and special- Having established the “Basic Policy for Merchandise Safety and Quality” and the “OLC Group Food Safety Poli- developed through the “I have an idea” cy,” we strive to ensure that we provide products that are both safe and high quality through the implementa- Program ists) had taken 80% of their paid vacation days. tion of thorough product development and food safety management measures in cooperation with partner manufacturing plants and suppliers. Furthermore, in order to ensure the safety and peace of mind of our food The cast always follows very thorough products, we conduct food safety education programs that all employees participate in. hand-washing procedures. 3 Commitment to our guests Safety and Disaster Prevention Systems We are promoting thorough security measures including the implementation of patrols within our theme parks Developing Business Operations that Focus on Custom- and baggage checks at the park entrances. We also engage in crime prevention activities in cooperation with er Needs and Reflect a Society-Based Viewpoint surrounding hotels and JR Maihama Station, such as conducting regular patrols along roads around Tokyo Disney Resort and in the surrounding area. Additionally, there is infirmaries located within our theme parks for Providing Happiness to Society use in cases such as a guest falling ill. In the case of an emergency, cast members from the infirmary can rush to The OLC Group has always provided happiness that cannot be experienced elsewhere. The source of this hap- the aid of an injured or ill guest, and transport them to a nearby hospital. Even those cast members who do not piness lies in our spirit of providing the highest-possible level of hospitality. Accordingly, we strive to fully un- work in the infirmary have received training on the usage of AEDs, which are located throughout our theme derstand the expectations of each and every guest that visits our theme parks. Through this, we hope to pro- parks, as well as first aid techniques, such as CPR. vide them with service that does not only meet their expectations, but exceeds them. For these reason, we Our disaster prevention system consists of a variety of measures including promoting fire prevention by share feedback received from guests directly through cast members throughout the Company, and quickly having specialists monitor the inside of Tokyo Disney Resort 24 hours a day through a three-shift rotation sys- respond as necessary.

tem. These specialists handle all areas of fire prevention, such as the inspection and maintenance of fire safety The hospitality of the cast is a major We carry out baggage inspections to source of the happiness that our theme ensure that no dangerous or suspicious equipment. Furthermore, we conduct regular education and training programs in the event of a fire to ensure parks provide. articles are brought into the parks.

40 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 41 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) OLC Group Corporate Social Responsibility (CSR) the President

Going forward, in the same manner as we have focused on the expectations our guests have of our theme We also offer children in local communities the opportunity to learn the importance and joy of working by parks, we will be consider the society in which our customers live throughout our business operations. We holding workplace experience programs and conducting classes on performing as required. hope that this will allow us to further provide our customers and society with happiness. Bringing Dreams to the Community Pursuing Normalization The OLC Group established the “Music Festival Program” at its theme parks. This program allows children and At Tokyo Disney Resort, we are continuing our efforts to establish facilities that are barrier-free and other sup- amateur groups to perform as a member of the Tokyo Disney Resort cast. Participants experience how spec- port systems for guests with disabilities. We are also conducting employee education and training programs to tacular theme park entertainment is, the joy of fulfilling dreams, and the OLC Group’s spirit of hospitality. bolster our ability to offer disabled guests service that better meets their individual needs. Furthermore, a num- Scale models are used to convey the features of attractions and characters to ber of employees have voluntarily learned sign language, and we have accordingly established a certification visually impaired guests. system within the Company to support such activities. (Currently approximately 100 employees have received certification) 5 Caring for the environment In Order to Pass the Global Environment onto the 4 Children are our future Next Generation Measures against Global Warming Nurturing Children, and Supporting Families, The OLC Group is working to prevent global warming by promoting measures to reduce CO2 emissions and Communities, and a Society filled with Vitality energy consumption. We have been working to reduce CO2 emissions through such initiatives as reducing energy consumption by installing a new large-scale heat pump in our central energy plant*. Furthermore, in Providing a Place Where Children Can Enjoy Learning order to reduce energy consumption, we have established the Energy Management System, and have been The OLC Group has held its “Imagination Storybook” program at over 100 different facilities, most of which were combining a diverse range of measures including promoting the visibility of energy-related issues, as well as kindergartens and nursery schools. This program promotes learning while helping children nurture their imag- changing several lights in buildings and used in night parades to LED. ination and creativity through rhythmic beat and body movement activities based on a storybook. The central monitoring system of our The Company also participated in the forum “the Bonds between Families and Communities” sponsored by central energy plant Initiatives to Reduce Waste the Cabinet Office of the Government of Japan. We held shows based on the theme of family bonds and craft We have been working to reduce waste by installing hand dryers in restrooms and using tableware made workshops in which family members worked together to make crafts. Through such efforts, we are working in of porcelain, ceramic, and metal in dining facilities. Additionally, we are aggressively promoting recycling We undertake career education cooperation with the central government and other public institutions in order to nurture children. through such initiatives as the appropriate disposal of waste and separating garbage based on highly detailed programs that foster a positive attitude specifications. As a result of these measures, we have raised the recycling rate for Tokyo Disney Resort as a to work among junior high school whole from less than 50% in the fiscal year ended March 31, 2003—the first full year of operation of Tokyo Dis- students in Urayasu City. neySea—to approximately 70% in the fiscal year ended March 31, 2010. Among the various recycling categories, the recycling rate for kitchen garbage at the theme parks is now almost 100%.

InterviewIntervie with the Tokyo Disney Resort Ambassadors are representatives for all cast mem- Water Treatment Some parts of our cast costumes are bers at Tokyo Disney Resort. These Ambassadors have engaged in a The precious water used at Tokyo Disney Resort is collected and purified at the Company’s own water treat- AmbassadorAmbassa sourced from recycled materials. wide range of activities including public relations and friendship activi- ment facilities. Furthermore, approximately 60% of used water is subsequently recycled and used in toilets. ties as well as social welfare and community contribution activities since Additionally, through the establishment of the “OLC Group Water Supply and Disposal Guidelines,” we are Yuna Omiya Tokyo Disneyland opened in 1983. constructing systems to enable optimal plumbing management and operation, as well as developing an emer- 2010 Tokyo Disney Resort As part of these social welfare activities, I visit people who would gency procedure flow-chart for issues relating to water usage. Ambassador not otherwise be able to come to our theme parks due to severe dis- * Rather than building heat pumps for each of the facilities in our theme parks, such as attractions, restaurants, and shops, we built this ability or illness as a Tokyo Disney Resort Ambassador. Together with central heat pump, which distributes the heat used in the air-conditioners in all of these facilities. Disney friends, I visit child welfare facilities and hospitals to bring the joy of Disney. Seeing the faces of the people we meet on these visits light up with excitement fills us with joy. While the time we spend with these people

may be brief, we have been told by many of them that we have made a Water is collected and purified at OLC’s long-held dream come true. We are honored to have been able to be own water treatment facilities. part of one page in their memories. Going forward, we will continue to strive to bring a spirit of fun to these facilities, which creates the vitality of tomorrow, to as many people as possible.

42 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 43 Message from Feature Review of Consolidated OLC Group Corporate Financial Section Board of Directors, Corporate Auditors and Corporate Officers the Chairman and Operations Social Responsibility (CSR) the President (As of July 1, 2010)

Board of Directors Corporate Officers

President Officer Officers Kyoichiro Uenishi Yoritoshi Kikuchi

Director of Engineering Division

Katsuhisa Udagawa Executive Vice President Officers Director of Operations Division Kiichi Sunayama Representative Director Executive Director Executive Director Kenjiro Mizushima Kiichi Sunayama Norio Irie Yasushi Tamaru General Manager of Theme Park Business Unit, IT Promotion Department, Food Safety 1970 Entered the Company 1975 Entered the Company 1975 Entered the Company Theme Park Business Supervision Control Department 2007 Representative Director 2003 Executive Director 2009 Executive Director Department, Resort Creation Department Hirofumi Kohnobe

Yojiro Shiba Director of Food Division Deputy General Manager of Theme Etsuko Nagashima Park Business Unit, Director of Marketing Division, Director of Entertainment Division CS Enhancement Department, Casting Department, George Yasuoka Cast Development Department Director of Theatrical Business Division Executive Director Executive Director Representative Director Shigeru Suzuki Yumiko Takano Akiyoshi Yokota Yojiro Shiba Senior Executive Officer 1980 Entered the Company 1980 Entered the Company Director of Corporate Strategy 2005 Entered the Company 2003 Executive Director 2003 Executive Director Norio Irie Planning Division, 2009 Representative Director Finance / Accounting Department < Concurrent office> Director of Human Resources Division, Representative Director and President of Milial Resort Hotels Co., Ltd. IT Promotion Department, Food Safety Wataru Takahashi Control Department Representative Director and President Representative Director, Chairman and CEO Representative Director, President and COO of IKSPIARI Co., Ltd. Toshio Kagami Kyoichiro Uenishi Executive Officers Masufumi Sumimoto 1972 Entered the Company 1980 Entered the Company 2005 Representative Director, Chairman and CEO 2009 Representative Director, President and COO Yasushi Tamaru Director of Merchandise Division and < Concurrent office> < Concurrent office> Merchandise Products Development Representative Director and Chairman of Corporate Auditor of Keisei Electric Railway Co., Ltd. Director of Affiliates Business Unit, Department Milial Resort Hotels Co., Ltd. Business Promotion Department, Corporate Auditor (External) of Keiyo Gas Co., Ltd. Business Solution Department, Theatrical Business Division Corporate Auditors Executive Director Executive Director Yoritoshi Kikuchi Hirofumi Kohnobe Shigeru Suzuki

1980 Entered the Company 1981 Entered the Company General Affairs Department, Publicity 2009 Executive Director 2009 Executive Director Department, Internal Auditing Department

Yumiko Takano

Representative Director and President of Milial Resort Hotels Co., Ltd.

Standing Corporate Auditor Standing Corporate Auditor (External) Corporate Auditor (External) Corporate Auditor (External) Fumio Tsuchiya Isao Iizuka Hiroshi Otsuka Akiyasu Nakano Note: Executive Director (External) Tsutomu Hanada and Corporate Auditor (External) Akiyasu Nakano satisfy the requirements for independent officers as specified in 1979 Entered the Company 2008 Corporate Auditor of the 1958 Entered Keisei Electric Railway 1991 Licensed attorney at law Executive Director Executive Director (External) Article 436-2 of the Securities Listing Regulations of Tokyo Stock Exchange, Inc. 2005 Corporate Auditor of the Company Co., Ltd. Entered Marunouchi Sogo Law Akiyoshi Yokota Tsutomu Hanada Company 1996 Corporate Auditor of the Company Office 2008 Advisor of Keisei Electric Railway 2008 Corporate Auditor of the 1980 Entered the Company 1966 Entered Keisei Electric Railway Co., Ltd. Co., Ltd. Company 2009 Executive Director 2005 Executive Director of the Company < Concurrent office> < Concurrent office> < Concurrent office> Advisor of Keisei Electric Railway Co., Ltd. Partnership Lawyer of Representative Director and President of Keisei Marunouchi Sogo Law Office Electric Railway Co., Ltd. Executive Director (External) of Shin-Keisei Electric 44 Oriental Land Annual Report 2010 Railway Co., Ltd. Oriental Land Annual Report 2010 45 Six-Year Summary Message from the Officer in Charge of Corporate Strategy Planning Oriental Land Co., Ltd. and Consolidated Subsidiaries and Finance / Accounting Fiscal Years Ended March 31

(Thousands of Financial Policy of OLC (Millions of yen) U.S. dollars1) The OLC Group will aim for further growth in corporate value by ’10/3 ’09/3 ’08/3 ’07/3 ’06/3 ’05/3 ’10/3 generating a consistently high level of free cash flow. FOR THE YEAR: The OLC Group has set out its financial policies in the 2010 medium-term plan. Specifically, these poli- Revenues ¥371,415 ¥389,243 ¥342,422 ¥344,083 ¥332,885 ¥331,094 $3,991,993 cies call for an increase in the profitability of Tokyo Disney Resort, the Group’s core business. The plan Operating income 41,924 40,096 31,144 34,111 30,605 34,562 450,602 also specifies that the resulting increased free cash flow will be allocated to stockholder returns, and to Income before income taxes 37,780 34,841 25,475 28,863 26,448 30,447 406,062 the reduction of interest-bearing debt to ensure the Group has capacity available for investment in new Income taxes 12,354 16,878 10,739 12,546 10,738 13,222 132,782 growth. The OLC Group has steadily implemented these policies while maintaining a long-term man- Net income 25,427 18,089 14,731 16,309 15,704 17,224 273,291 agement perspective. This year, the Group has formulated the 2013 medium-term plan, which focuses on long-term, sus- Capital expenditures2 19,419 40,140 52,691 54,807 43,129 46,855 208,717 tained growth in corporate value. While maintaining the policies of our previous medium-term plan, Depreciation and amortization, Executive Director, Officer and Director of 46,695 49,733 43,623 42,951 43,374 44,555 501,881 this plan aims to realize further growth in corporate value by generating a consistently high level of free Corporate Strategy Planning Division and aggregate Finance / Accounting Department cash flow. EBITDA3 88,619 89,829 74,767 77,062 73,979 79,117 952,483 Akiyoshi Yokota Free cash flow4 52,703 27,682 5,663 4,453 15,949 14,924 566,455 In the fiscal year ended March 31, 2010, we substantially allocated the Increase in Free Cash Flow Surpasses Plan increased free cash flow generated to the repurchase 4.5 million shares of the In the fiscal year ended March 31, 2010, despite it being the year following the Company’s stock, or 4.9% of outstanding shares. The total cost of this share AT YEAR-END: 25th Anniversary of Tokyo Disney Resort, OLC achieved a new record for net repurchase program was ¥26.0 billion. Return on equity (ROE) increased 2.2 Total assets ¥615,090 ¥644,992 ¥757,542 ¥699,772 ¥718,866 ¥660,225 $6,611,028 income of ¥25.4 billion (up 40.6%). This performance reflected cost reductions percentage points, to 6.9%, driven not only by earnings growth but also the Theme parks, resorts and other property, at theme parks and other measures. In addition to higher income, free cash 487,871 516,040 531,479 526,217 518,936 520,721 5,243,669 implementation of this large-scale share repurchase program. Net income at cost flow also increased substantially to reach a record-high level of ¥52.7 billion. per share (EPS) amounted to ¥280.17, an increase 42.3 percentage points Net assets5 366,473 373,660 388,181 385,001 375,947 389,714 3,938,876 This increase was mainly attributable to a decrease in capital expenditures compared with the previous fiscal year. owing to such factors as slippage of certain capital expenditure items into the Interest-bearing debt 173,289 193,019 294,320 235,626 266,945 202,449 1,862,521 next fiscal year. In the fiscal year ending March 31, 2011, driven by such factors as higher Formulation of the 2013 Medium-term 1 (Yen) (U.S. dollars ) operating income generated by the Theme Park Segment, we forecast a 1.6% Management Plan to Pave the Way for PER SHARE DATA: increase in net income, to ¥25.8 billion, which would make it the second Long-term, Sustainable Growth This year, as the Company celebrates its 50th anniversary, we have formu- Net income (EPS) ¥ 280.17 ¥ 196.84 ¥ 154.86 ¥ 171.46 ¥ 162.73 ¥ 171.19 $ 3.01 successive year of record net income. We expect free cash flow to reach ¥32.1 lated the 2013 medium-term plan. Under this plan, through sustained growth billion, surpassing the level stipulated in the medium-term plan. As a result, Net assets (BPS) 4,240.59 4,109.59 4,079.44 4,046.03 3,950.49 3,890.51 45.58 in the Group’s core business—Tokyo Disney Resort—we aim to generate cumulative free cash flow over the three fiscal years up to an including the 100.00 70.00 60.00 55.00 45.00 35.00 1.07 consistently high levels of free cash flow, which will be allocated to stock- Cash dividends fiscal year ending March 31, 2011, is expected to total ¥112.5 billion, achieving holder returns and “strengthening the Group’s platform for long-term, a greater increase than the amount forecast in the 2010 medium-term plan. (%) sustainable growth” as we pave the way for new growth. One of our specific targets is to realize accumulated free cash flow during SELECTED FINANCIAL DATA: Focusing on Stockholder Returns the three-year period of the 2013 medium-term plan (the fiscal years ending The OLC Group recognizes the return of profits to stockholders as a key Operating margin 11.3% 10.3% 9.1% 9.9% 9.2% 10.4% March 31, 2012, 2013 and 2014) totaling approximately ¥120.0 billion. management policy, and has set a dividend target in its medium-term plan Return on revenues 6.8 4.6 4.3 4.7 4.7 5.2 Compared with the preceding three-year period, this target represents an of 35% or higher for the consolidated payout ratio. Based on this policy, we increase of approximately 7%. Furthermore, with regard to stockholder Return on assets (ROA)6 4.0 2.6 2.0 2.3 2.3 2.6 set total cash dividends per share applicable to the fiscal year ended March returns, we plan to maintain our target of achieving a consolidated payout Return on equity (ROE)7 6.9 4.7 3.8 4.3 4.1 4.5 31, 2010, at ¥100, an increase of ¥30 per share compared with the previous ratio of 35% or higher, as we strive to realize stable cash dividends. In addition, fiscal year. This marks the ninth consecutive increase in cash dividends per Equity ratio 59.6 57.9 51.2 55.0 52.3 59.0 as we work to achieve our target of 8% or higher ROE, we will consider such share. For cash dividends per share applicable to the fiscal year ending March measures as the implementation of further share repurchase programs as the Payout ratio 35.7 35.6 38.7 32.1 27.7 20.4 31, 2011, we forecast an increase of ¥5 per share, to ¥105. Annual theme park attendance situation requires. Hence, we will carry out measures to enhance both 25,818 27,221 25,424 25,816 24,766 25,021 (thousands of guests) earnings growth and stockholder returns. Revenues per guest (¥) 9,743 9,719 9,370 9,309 9,220 9,178 Number of shares issued (thousands) 90,923 95,123 95,123 100,123 100,123 100,123 Return on Equity (ROE) Free Cash Flow Cash Dividends per Share & Number of employees 3,954 4,115 3,896 3,750 3,676 3,695 (%) (Billions of yen) Payout Ratio (Yen) (%) Notes: 1. The U.S. dollar amounts are provided for convenience only and have been converted at the rate of ¥93.04 to $1, the approximate rate of exchange in effect at March 31, 2010. 52.7 100 2. Capital expenditures includes tangible and intangible assets and long-term prepaid assets. 6.9 3. EBITDA = Operating income + Depreciation and amortization, aggregate 70 4. Free cash flow = Net income + Depreciation and amortization, aggregate - Capital expenditures 4.7 60 4.1 4.3 27.7 55 5. Net assets as of March 31, 2006 and previous fiscal years has been restated in accordance with a change in accounting standards. 3.8 45 38.7 35.7 6. Return on assets = Net income / Total assets 15.9 32.1 35.6 7. Return on equity = Net income / Owners’ equity 27.7 4.5 5.7

’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3

■■Cash Dividends per Share Payout Ratio 46 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 47 Message from Feature Review of Consolidated OLC Group Corporate Financial Section Management’s Discussion and Analysis of Operations the Chairman and Operations Social Responsibility (CSR) the President

1 Overview of Consolidated Results (Fiscal Year Ended March 31, 2010) Operating Income Other Income (Expenses) and Income before Operating income sets new record at ¥41.9 billion (up 4.6%), as a result of Income Taxes (1) Revenues and Income Revenues factors that include a reduction of costs commensurate with the decrease in Other expenses totaled ¥4.1 billion, compared with other expenses of ¥5.3 Revenues for the OLC Group decreased by 4.6% compared with the previous the number of visitors and a decrease in pre-opening expenses. The operating billion for the previous fiscal year. Interest expenses decreased ¥0.6 billion The challenging operating environment remained in force during the fiscal fiscal year to ¥371.4 billion. Analysis of revenues by segment is as follows. margin rose 1.0 percentage points to 11.3%. compared with the previous fiscal year because of factors including redemp- year ended March 31, 2010, as the Japanese government made an official Theme Park Segment revenues were ¥287.3 billion (down 5.0%). Factors Analysis of operating income by segment is as follows. tion of bonds. Loss on sales of stocks of subsidiaries and affiliates has recog- “declaration of deflation,” reflecting slack consumer spending due to the such as Tokyo Disney Resort 25th Anniversary held last year resulted in a 5.2% In the Theme Park Segment, although operating income decreased due to nized due to the transfer of the Retail Business Segment during the fiscal year deterioration of employment conditions and decreased income. In addition, decrease in attendance, to 25.82 million, marking the second highest atten- a decline in revenues, the decrease was ¥33.2 billion (down 3.8%) and was ended March 31, 2010. the numbers of domestic travelers and overseas visitors to Japan decreased dance level ever achieved. While the 25th Anniversary held last year was smaller than that of revenues as a result of various factors, including a reduc- As a result of the above, income before income taxes increased 8.4% as a result, in large part, of an outbreak of novel influenza A (H1N1). anticipated to result in a year-on-year decrease in revenues per guest during tion of costs commensurate with the decrease in the number of visitors. compared with the previous fiscal year, to ¥37.8 billion. Under these circumstances, revenues for the OLC Group decreased by 4.6% the year under review, the actual result was increase of 0.2% year on year, to Specific reductions to costs include reducing the cost merchandise cost ratio, compared with the previous fiscal year to ¥371.4 billion. This was the result ¥9,743. This was due to the products related to “Duffy” The Disney Bear as well as fixed expenses and overhead expenses. The reduction of the cost Income Taxes of a number of reasons, including the fact that the previous year marked continuing to see strong sales to which the addition of Duffy’s new friend of merchandise ratio was due to percentage of total revenues accounted for Income taxes were ¥12.4 billion (down 26.8%). This was due to a ¥4.5 billion Tokyo Disney Resort 25th Anniversary. On the other hand, operating income “ShellieMay” contributed. by merchandise items with low cost ratios increasing, which resulted in cost reduction in income taxes resulting from the transference of the Retail and net income set new records at ¥41.9 billion (up 4.6%) and ¥25.4 billion Revenues in the Hotel Business Segment declined 1.5% year on year, to reductions of ¥2.2 billion. The reductions of the sales promotion expenses Business Segment. The effective tax rate, calculated as the ratio of income (up 40.6%), respectively, as a result of factors that include a reduction of costs ¥45.2 billion. This was due occupancy rates of hotels that fell below those of incurred last year as a result of the anniversary event resulted in lower fixed taxes to income before income taxes, fell 15.7 percentage points, to 32.7%. commensurate with the decrease in the number of visitors and a decrease in the previous fiscal year due to a number of reasons, including external factors expenses. We were able to reduce overhead expenses by revaluating pre-opening expenses. such as an outbreak of novel influenza A (H1N1) as well as the fact that the expenses relating to the hiring of part-time employees and other costs in the Net Income previous year was the 25th Anniversary Event. year under review. These two factors combined resulted in a ¥2.1 billion Net income was ¥25.4 billion (up 40.6%). Net income per share increased to (Billions of yen) Change The occupancy rate was about 85% for Tokyo Disneyland Hotel, about 90% reduction of costs. Additionally, the depreciation of the initial investment in ¥280.17 from ¥196.84 for the previous fiscal year. Return on equity (ROE) Fiscal year ended Fiscal year ended Increase from Tokyo DisneySea resulted in a ¥3.4 billion decrease in depreciation and improved to 6.9% from 4.7% for the previous fiscal year. March 31, 2010 March 31, 2009 (decrease) previous for Tokyo DisneySea Hotel MiraCosta, about 70% for Disney Ambassador period (%) Hotel, and about 75% for Palm & Fountain Terrace Hotel. amortization, aggregate. In our medium-term plan, we stated our policy of Revenues 371.4 389.2 (17.8) (4.6) Retail Business Segment revenues were ¥14.8 billion (down 9.0 %) as a creating stable income regardless of changes in park attendance. In accor- (2) Assets, Liabilities and Net Assets Theme Park Segment 287.3 302.4 (15.1) (5.0) result of a further decline in the economic environment. dance with this policy, we worked to control costs in relation to the level of Hotel Business Segment 45.2 45.9 (0.7) (1.5) Revenues in the Other Business Segment decreased 2.4% year on year, to park attendance and were subsequently able to reduce the lose of income. Assets ¥24.1 billion. While the full-year operation of Cirque du Soleil Theatre Tokyo Despite a decrease in occupancy rates, operating income in the Hotel Total assets as of March 31, 2010, were ¥615.1 billion (down 4.6%). Retail Business Segment 14.8 16.2 (1.5) (9.0) resulted in increased sales, overall revenues decreased due to withdrawal Business Segment increased 35.0% year on year, to ¥8.4 billion. This was due Current assets rose to ¥88.6 billion (up 0.5%) due to various factors Other Business Segment 24.1 24.7 (0.6) (2.4) from the intellectual property business in the previous fiscal year. to various factors, including a ¥3.0 billion decrease in preparation expenses including an increase in cash and deposits, despite a decrease in short-term Operating Income 41.9 40.1 1.8 4.6 prior to the opening of Tokyo Disneyland Hotel. investment securities. Theme Park Segment 33.2 34.5 (1.3) (3.8) Theme Park Information The Retail Business Segment saw increased operating income due reduc- Noncurrent assets dropped to ¥526.5 billion (down 5.4%) due to various Hotel Business Segment 8.4 6.2 2.2 35.0 Fiscal year ended Fiscal year ended Change from tions in fixed expenses, including store personnel expenses, that have factors, including a decrease in property, plant and equipment as a result of March 31, 2010 March 31, 2009 previous period (%) Theme Park Attendance continued on from the fiscal year ended March 31, 2009. Additionally, control the continued depreciation and amortization of facilities at Tokyo Disney Retail Business Segment 0 0 0 356.0 25.82 27.22 (5.2) (Millions of guests) of the Retail Business Segment was transferred to The Walt Disney Company Resort. Other Business Segment (0.1) (0.9) 0.8 — Revenues per Guest ¥9,743 ¥9,719 0.2 (Japan) Ltd. as of March 31, 2010. Net Income 25.4 18.1 7.3 40.6 Ticket Receipts ¥4,206 ¥4,222 (0.4) Operating income in the Other Business Segment improved ¥0.8 billion Merchandise Revenues ¥3,377 ¥3,370 0.2 year on year due to a ¥0.6 billion decrease in preparation expenses prior to the opening of Cirque du Soleil Theatre Tokyo. Food and Beverages Revenues ¥2,160 ¥2,128 1.5 Please see the review of consolidated operations on pages 27 through 32 for detailed segment information.

Revenues Operating Income & Net Income & Total Assets & Net Assets & Equity Ratio Capital Expenditures & Operating Margin Return on Equity (ROE) Return on Assets (ROA) Depreciation and Amortization (Billions of yen) (Billions of yen) (%) (Billions of yen) (%) (Billions of yen) (%) (Billions of yen) (%) (Billions of yen) 54.8 389.2 25.4 757.5 375.9 385.0 388.2 373.7 52.7 371.4 40.1 41.9 718.9 699.8 366.5 49.7 332.9 344.1 342.4 46.7 645.0 43.4 43.0 43.6 34.1 615.1 52.3 55.0 59.6 43.1 40.1 30.6 31.1 18.1 6.9 16.3 57.9 10.3 15.7 4.0 51.2 9.2 9.9 9.1 11.3 14.7 4.1 4.3 3.8 4.7 2.3 2.3 2.0 2.6 19.4

■■Operating Income Operating Margin ■■Net Income Return on Equity (ROE) ■■Total Assets Return on Assets (ROA) ■■Net Assets Equity Ratio ■■Capital Expenditures ■■Depreciation and Amortization

48 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 49 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Management’s Discussion and Analysis of Operations the President

Net Cash Provided by Investing Activities Liabilities Outlook for Consolidated Results (Fiscal Year Ending March 31, 2011) Net cash used in investing activities decreased ¥28.5 billion compared with 2 Total liabilities as of March 31, 2010 were ¥248.6 billion (down 8.4%). the previous fiscal year, to ¥22.7 billion. This was due to factors including a Current liabilities rose to ¥122.3 billion (up 9.9%) due to various factors, (1) Outlook for Revenues and Income Operating Income decrease in proceeds from the redemption of securities and an increase in including a transfer of the current portion of long-term loans payable and the Operating income is forecast to be to ¥43.7 billion (up 4.3%), setting a new payments into time deposits, despite a decrease in purchases of property, (Billions of yen) Unsecured Straight Bonds 8th series (¥20.0 billion) from noncurrent liabilities Change record high. Fiscal year ending Fiscal year ended plant and equipment. Increase from to current liabilities, despite the redemption of the Unsecured Straight Bonds March 31, 2011 March 31, 2010 (decrease) previous The operating income forecast by segment is as follows. (Forecast) (Actual) 6th series (¥20.0 billion) in May 2009. period (%) Theme Park Segment operating income is forecast to be ¥35.2 billion Net Cash Used in Financing Activities Noncurrent liabilities dropped to ¥126.4 billion (down 21.1%) as a result of Revenues 356.6 371.4 (14.9) (4.0) (up 5.8%) due to a decrease approximately ¥1.9 billion in depreciation and Net cash used in financing activities increased ¥77.8 billion compared with various factors, including the transfer of the current portion of long-term Theme Park Segment 286.4 287.3 (0.9) (0.3) amortization expenses. Fixed costs at the theme parks are forecast to be at the previous fiscal year, to ¥53.1 billion due to factors that included a decrease loans payable and the Unsecured Straight Bonds 8th series from noncurrent Hotel Business Segment the same level as in the fiscal year ended March 2010. in the redemption of bonds. 45.7 45.2 0.5 1.1 liabilities to current liabilities. Hotel Business Segment operating income is forecast to be ¥8.5 billion Retail Business Segment — 14.8 (14.8) − As of March 31, 2010, interest-bearing debt totaled ¥173.3 billion, which (up 1.0 %). While depreciation and amortization is slated to decrease approx- Capital Expenditures and Depreciation and Other Business Segment 24.4 24.1 0.3 1.3 was 10.2% lower than a year earlier. The debt-to-equity ratio improved to 0.47 imately ¥0.7 billion, an increase in facility renewal related expenses and other Amortization times from 0.52 times a year earlier. Operating Income 43.7 41.9 1.8 4.3 fixed expenses resulting from the refurbishment work for Disney Ambas- Capital expenditures were ¥19.4 billion (down 51.6%). The decrease was Theme Park Segment 35.2 33.2 1.9 5.8 sador Hotel will result in operating income that is relatively unchanged from primarily the result of reduced investment in Tokyo Disneyland Hotel and Net Assets Hotel Business Segment 8.5 8.4 0.1 1.0 the year under review. Cirque du Soleil Theatre Tokyo completed in the previous fiscal year. Total net assets as of March 31, 2010 dropped to ¥366.5 billion (down 1.9%) The Other Business Segment is anticipated to see operating income of Depreciation and amortization totaled ¥46.7 billion (down 6.1%). This is Retail Business Segment — 0 (0) − due to various factors, including a new repurchase of 4.5 million shares of ¥0 billion, which is in line with the year under review. primarily due to the reductions in depreciation and amortization related to Other Business Segment (0) (0.1) 0 − treasury stock (4.9% of the total number of shares issued and outstanding) in the initial investment in Tokyo DisneySea. Net Income 25.8 25.4 0.4 1.6 March 2010, despite an increase in net income. Equity ratio stood at 59.6 % Net Income (up 1.7 points). In addition, the Company retired 4.2 million shares of treasury * The Retail Business Segment has been abolished as a result of the transfer of Retail Networks Co., Ltd. Net income is forecast to be ¥25.8billion (up 1.6%), a record high. Free Cash Flow stock (4.4% of the total number of shares issued and outstanding before to The Walt Disney Company (Japan) Ltd. as of March 31, 2010. Free cash flow totaled ¥52.7 billion (up 90.4%). This was primarily the result of retirement) using retained earnings in May 2009. increased net income and reduced capital expenditures. Revenues (2) Cash Flow Outlook Revenues are forecast to be ¥356.6 billion (down 4.0%) due to the transfer of Capital Expenditures and Depreciation and (3) Cash Flows Funding and Bond Ratings the Retail Business Segment. Amortization The OLC Group’s primary source of liquidity is cash generated in day-today The forecast for revenues by segment is as follows. Cash Flows Capital Expenditures in the fiscal year ending March 31, 2011 are projected at operating activities. In addition, the OLC Group has worked to increase free Revenues of the Theme Park Segment are forecast to be ¥286.4 billion Cash and cash equivalents as of March 31, 2010 totaled to ¥47.2 billion, ¥37.2 billion, a 91.8% year on year increase. This will be due to effects of the cash flow under its 2010 medium-term plan, and will continue these efforts (down 0.3%). This is due to our efforts to maximize free cash flows through decreased ¥3.7 billion compared with a year earlier. delayed recording of some investments , as well as the introduction of new under the 2013 medium-term plan. The OLC Group’s policy is to allocate free the implementation of solid sales plans to reduce expenses and investments. attractions. However, we intend to limit capital expenditures to a degree cash flow to direct stockholder returns while reducing interest-bearing debt Net Cash Provided by Operating Activities greater than was defined in the medium-term plan. and enhancing business development in order to secure surplus capital to Theme Park Information Net cash provided by operating activities decreased ¥6.0 billion compared While depreciation and amortization is expected to increase to a level Fiscal year ending Fiscal year ended fund future growth. Change from with the previous fiscal year to ¥72.1 billion. Factors included decreases in March 31, 2011 March 31, 2010 above that projected in the medium-term plan due to the shortening of the previous period (%) As of March 31, 2010, the OLC Group’s long-term debt was rated AA by (Forecast) (Actual) depreciation and amortization expenses and increases in income taxes paid depreciation period resulting from a change in the tax code, the decrease in Japan Credit Rating Agency, Ltd. (JCR) and AA- by Rating and Investment Theme Park Attendance and other items, despite an increase in income before income taxes and (Millions of guests) 25.80 25.82 (0.1) depreciation and amortization relating to the initial investment in Tokyo Information Inc. (R&I). minority interests. Revenues per Guest ¥9,690 ¥9,743 (0.5) DisneySea will result in an overall decrease. Accordingly, we anticipate depre- In addition, the OLC Group also manages liquidity by maintaining commit- ciation and amortization in the fiscal year ending March 31, 2011 to stand at ment lines with strong financial institutions in Japan and overseas to obtain Ticket Receipts ¥4,220 ¥4,206 0.3 ¥43.5 billion, a 6.7% year on year decrease. access to low-cost liquidity to respond to risks that may arise. Merchandise ¥3,340 ¥3,377 (1.1) Food and Beverages ¥2,130 ¥2,160 (1.4) Free Cash Flow Cash Flows Interest-Bearing Debt & Debt-to-Equity Ratio In the fiscal year ending March 31, 2011, we anticipate that free cash flows (Billions of yen) (Billions of yen) (Time) Revenues of the Hotel Business Segment are forecast to be ¥45.7 billion will rise above the level projected in the medium-term plan, to ¥32.1 billion. 294.3 (up 1.1%) due to an expected increase in the occupancy rate of each hotel. As a result of this, the free cash flows generated over the most recent three 266.9 78.1 72.1 59.2 66.5 235.6 The occupancy rates of the hotels are expected to be 91 to 94 % for Tokyo years total ¥112.5 billion. 57.7 52.9 0.76 30.2 193.0 Disneyland Hotel, 91 to 94 % for Tokyo DisneySea Hotel MiraCosta, about 75 5.8 0.71 0.61 173.3 % for Disney Ambassador Hotel and 75 to 79% for Palm & Fountain Terrace 0.52 0.47 Hotel. (36.0) (22.7) (59.6) (53.1) (63.6) (67.9) Revenues of the Other Business Segment are forecast to be ¥24.4 billion (up 1.3%). (130.9) ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3

■■Cash Flows from Operating Activities ■■Cash Flows from Investing Activities ■■Interest-Bearing Debt Debt-to-Equity Ratio ■■Cash Flows from Financing Activities

50 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 51 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Management’s Discussion and Analysis of Operations the President

3 Status of Progress of the Medium-Term Plan 5 Business Risks (1) 2010 Medium-Term Plan (2) 2013 Medium-Term Plan Issues that could exert a material effect on the results, financial position, stock reduced trust in the OLC Group, damage to the Group brand or other price and other aspects of the OLC Group include, but are not limited to, the negative consequences including lawsuits involving large expenses that (fiscal year ended March 2008 to the fiscal year ending March 2011) (fiscal year ending March 2012 to the fiscal year ending March 2014) following. Management believes that these are among the issues that could could affect the performance of the OLC Group. 2010 Medium-Term Plan has been progressing smoothly. We have seen great OLC celebrates its 50th anniversary this year. Looking back, the first half or so significantly affect the decisions of investors. Information Security improvements in the Group’s profitability, allowing us to achieve record were dedicated to, among other things, land reclamation in the Urayasu area Please note that forward-looking statements are based on judgments The OLC Group takes full precautions in its business activities to prevent operating income in both the fiscal year ended March 2009 and the fiscal and negotiation of license agreements to build and operate a Disney theme made by the OLC Group as of June 29, 2010. avoidable leaks of the personal information it maintains on guests and the year ended March 2010. We anticipate our third consecutive year of record park. Roughly the second half were spent on the expansion of Tokyo Disney These precautionary measures include strengthening surveillance systems proprietary information it maintains concerning business operations. operating income in the fiscal year ending March 31, 2011. Resort. As we enter the next chapter of our history, the first three years are for internal networks and limiting access to information. However, However, due to an increase in depreciation and amortization of positioned as a crucial period, and we have newly formulated the new 2013 unforeseeable or unexpected instances such as hacking of internal (3) Risks Related to the External Environment approximately ¥5.0 billion resulted from a change in the tax code, we have Medium-term Plan. We will continue to innovate and reinvent ourselves in information, misuse of internal databases, leaks or falsification could lead to a Weather revised the year in which we aim to achieve the goal of net income in the order to consistently create new value while at the same time responding to decrease in trust in the OLC Group, damage to the Group brand or other In the OLC Group’s principal business, Tokyo Disney Resort, the number of ¥27.0 billion level on a consolidated basis. expected future changes in the surrounding environment, such as shifting negative consequences including lawsuits involving large expenses that guests that visit the theme parks is easily influenced by weather conditions Additionally, in order to establish the foundation for new growth, we have demographics. could affect the performance of the OLC Group. such as climate and temperature. Consequently, an extended period of steadily implemented measures geared toward reducing interest-bearing OLC has formulated the following two fundamental policies for the new inclement weather could affect the performance of the OLC Group by debt in order to secure a surplus for investment in the future and carefully medium-term plan: “Sustainable Growth of the Core Business (Tokyo Disney (1) Risks Related to Weakening of the Tokyo Disney causing the number of guests to decrease. selecting and concentrating business operations. We also view developing Resort)” and “Reinforcement of the Foundation for Long-Term Sustainable Resort Brand Natural Disasters businesses other than Tokyo Disney Resort as a continuing issue of concern. Growth.” Of the free cash flow consistently generated from the sustainable Quality of Tangibles (Facilities, Services, etc.) The OLC Group’s business infrastructure is concentrated in the Maihama area, As a result of these efforts, through 2010 Medium-term Plan, we have growth of the core business, we will allocate a high level to stockholder The OLC Group’s principal business, Tokyo Disney Resort, maintains guest and a major earthquake, fire, flood or other disaster there could lead to worked steadfastly to strengthen the operating foundation of Tokyo Disney returns and preparations for new growth, among other areas. satisfaction at a high level by constantly creating new experience value for adverse effects. Although the Group has given sufficient consideration to Resort. The management objective in the medium-term plan is to “generate guests through means such as introducing new facilities. The OLC Group will disaster resistance at all Tokyo Disney Resort facilities, there is a possibility corporate value that will enable sustainable growth over the long term” and work to raise the overall appeal of Tokyo Disney Resort by raising the quality that in the event of a disaster the damage caused to facilities and public a numerical target has been set at “around the ¥120.0 billion level of of its facilities and services. However, lower quality due to factors including an transportation and the likely drop in consumer confidence would lead to a aggregated free cash flow to be generated over three years.” Having come inability to properly time investments as a result of unforeseen circumstances temporary decrease in the number of guests, which would affect the through a period of priority investment that included large-scale investment could affect the performance of the OLC Group. performance of the OLC Group. projects such as Tokyo DisneySea and Disney hotels, in the fiscal year ended Quality of Intangibles (Cast Hospitality, etc.) Terrorism, Infectious Diseases or Similar Incidents March 31, 2009, OLC entered a period in which free cash flow has been The OLC Group’s principal business, Tokyo Disney Resort, is supported by The OLC Group has numerous facilities where guests are present, and places generated in a steady stream. The target for free cash flow set in the new numerous cast members. The hospitality of cast members creates strong the highest priority on ensuring safety at each of them. However, in the event medium-term plan is approximately 7% higher than the amount achieved feelings of satisfaction among guests. Going forward, the OLC Group will of a terrorist attack or similar incident at a large-scale consumeroriented during the three-year period between the fiscal year ended March 31, 2009 educate cast members and create a work environment that gives cast facility in Japan or overseas, or in the event of an outbreak of an infectious and the fiscal year ending March 31, 2011. (For details refer to page 17) members a sense of pride and joy in their work. However, lower quality due disease for which no treatment is available, consumer confidence would to factors including a shortage of workers as a result of unforeseen presumably decline. This would likely result in a temporary decrease in the circumstances could have consequences such as reduced theme park number of guests, which could affect the performance of the OLC Group. 4 Basic Policy on Distribution of Profit and Dividends attendance, which could affect the performance of the OLC Group. Changes in the Economy The results of the OLC Group’s principal business, Tokyo Disney Resort, have (1) Dividends acquired a total of ¥50.0 billion worth of treasury stock. Going forward, we (2) Risks Related to Operations been stable in the past even when economic conditions were unfavorable in will continue to consider repurchases of treasury stock as necessary. Product Deficiencies and Problems Japan. We therefore believe that Tokyo Disney resort is not greatly affected by We have steadily increased cash dividends for nine consecutive years. ROE has been steadily improving and in the year under review it was 6.9%. Incidents, including attraction incidents, sale of defective merchandise or the state of the economy. However, factors such as an unprecedented Based on the policy of aiming for a consolidated payout ratio of 35% or Moreover, the Company aims to increase ROE to 8.0% or higher. product tampering, involving the products and services of Tokyo Disney recession could result in a temporary decrease in the number of guests, higher outlined in 2010 Medium-term Plan, we increased dividends by ¥30 resort, including attractions, products and foods, could entail serious harm to which could affect the performance of the OLC Group. Dividends per Share year on year, to a total of ¥100 per share. 2010 Medium-term Plan called for the guests who are customers, and could result in material costs from factors Regulatory Issues dividend reaching the ¥100 level in the fiscal year ending March 2011. This (Yen) including decreased trust in the Group’s priority on safety, damage to the The OLC Group is subject to various regulatory systems including safety was a goal that we were able to achieve one year in advance. Group brand and lawsuits, which could affect the performance of the OLC standards for attractions, quality standards for products and other items 105 In the fiscal year ending March 2011, we intend to raise dividend by an 100 Group. provided to guests, environmental standards, accounting standards and tax additional ¥5, to ¥105 per share. This dividend policy will be continued in the Regulatory Violations laws. Of note, the OLC Group maintains its own standards for safety and 70 55 2013 Medium-term Plan, and we will continue to strive to provide stable 60 The OLC Group emphasizes compliance in operating its businesses and quality that exceed those mandated by law. In the other areas, the OLC Group 55 60 dividend payments. 40 conducting related transactions including the procurement of products and promotes full compliance. However, the OLC Group would necessarily have 30 30 50 materials. We maintain systems that promote compliance and provide to comply with newly introduced or revised laws and regulations, which 40 (2) Share Repurchases 25 30 30 ongoing education to managers. These efforts notwithstanding, failure could temporarily constrain some or all operations and thus affect the ’07/3 ’08/3 ’09/3 ’10/3 ’11/3(Planned) among managers to prevent major regulatory violations or incidents could performance of the OLC Group. In the year under review, we acquired repurchased ¥26.0 billion worth of result in the cessation of part or all operations due to government actions, treasury stock. Through the term of the 2010 Medium-term Plan, we have ■■Interim ■■Year-end

52 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 53 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Consolidated Financial Statements the President

Consolidated Balance Sheets As of March 31, 2010 and 2009

Thousands of Thousands of Millions of yen Millions of yen U.S. dollars U.S. dollars ’10/3 ’09/3 ’10/3 ’10/3 ’09/3 ’10/3 ASSETS LIABILITIES CURRENT ASSETS: CURRENT LIABILITIES: Cash and cash equivalents(Note 9) ¥ 47,233 ¥ 50,920 $ 507,663 Trade payables(Note 9) ¥ 14,059 ¥ 16,358 $ 151,107 Marketable securities (Notes 2 , 5,and 9) − 21 − Current portion of long-term debt (Notes 4, 5, and 9) 55,354 42,104 594,948 Trade receivables(Note 9) 16,943 15,697 182,105 Accrued income taxes (Note 7) 8,273 11,221 88,919 Inventories (Note 3) 11,240 10,681 120,808 Other current liabilities(Note 5) 44,573 41,524 479,074 Deferred tax assets (Note 7) 6,915 6,678 74,323 Total current liabilities 122,259 111,207 1,314,048 Other current assets (Notes 5 and 9) 6,285 4,202 67,552 NON-CURRENT LIABILITIES: Total current assets 88,616 88,199 952,451 Long-term debt (Notes 4, 5, and 9) 117,935 150,915 1,267,573 Employees’ estimated severance and retirement benefits(Note 6): 3,423 2,871 36,791 Deferred tax liabilities (Note 7) − 13 − Other non-current liabilities 5,000 6,326 53,740 Total non-current liabilities 126,358 160,125 1,358,104 Total liabilities 248,617 271,332 2,672,152 THEME PARKS, RESORTS AND OTHER PROPERTY, AT COST: COMMITMENTS AND CONTINGENT LIABILITIES (Note 10) Attractions, buildings and equipment (Note 5) 866,925 877,560 9,432,072 NET ASSETS Land (Note 5) 93,302 93,302 1,002,816 OWNERS’ EQUITY: (Note 8) Construction in progress 5,430 12,606 58,362 Common stock: 976,292 972,833 10,493,250 Authorized—330,000,000 shares; Less accumulated depreciation (488,421) (456,793) (5,249,581) Issued—90,922,540 shares in 2010 95,122,540 shares in 2009 63,201 63,201 679,288 Total theme parks, resorts and other property, at cost 487,871 516,040 5,243,669 Additional paid-in capital 111,403 111,403 1,197,367 Retained earnings 218,921 225,212 2,352,977 Less cost of common stock in treasury, 4,506,474 shares in 2010 and 4,203,176 shares in 2009 (26,094) (24,464) (280,460) Total owners’ equity 367,431 375,352 3,949,172 ACCUMULATED GAINS FROM VALUATION AND INVESTMENTS AND OTHER ASSETS: TRANSLATION ADJUSTMENTS: Investment securities (Notes 2, 5, and 9) 14,789 16,632 178,762 Net unrealized holding gains (losses) on securities (502) (1,404) (5,395) Other intangible assets 11,212 9,202 98,904 Net unrealized losses on hedging derivatives (474) (307) (5,095) Deferred tax assets (Note 7) 2,452 3,116 26,354 Total accumulated gains (losses) from valuation and translation adjustments (1,711) Other assets(Note 9) 10,317 11,636 110,888 (976) (10,490) MINORITY INTERESTS: 18 19 194 Total investments and other assets 38,603 40,753 414,908 Total net assets 366,473 373,660 3,938,876 Total non-current assets 526,474 556,793 5,658,577 Total liabilities and net assets ¥615,090 ¥644,992 $6,611,028 Total assets ¥615,090 ¥ 644,992 $ 6,611,028 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

54 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 55 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Consolidated Financial Statements the President

Consolidated Statements of Income Consolidated Statements of Changes in Net Assets Years Ended March 31, 2010, 2009 and 2008 Years Ended March 31, 2010, 2009 and 2008

Thousands of Million of yen Millions of yen U.S. dollars Number Owners’ equity ’10/3 ’09/3 ’08/3 ’10/3 of shares Additional paid-in Less cost of common Common stock Retained earnings Total owners’ equity ’10/3 (Thousands) capital stock in treasury REVENUES ¥371,415 ¥389,243 ¥342,422 $3,991,993 Balance at March 31, 2009 95,123 ¥63,201 ¥111,403 ¥225,212 ¥(24,464) ¥375,352 COST OF REVENUES 272,530 286,151 259,356 2,929,171 Changes during the period Gross profit 98,885 103,092 83,066 1,062,822 Dividends from retained earnings (7,273) (7,273) Net income SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 56,961 62,996 51,922 612,220 25,427 25,427 Acquisition of treasury stock (26,075) (26,075) Operating income 41,924 40,096 31,144 450,602 Retirement of treasury stock (4,200) (24,445) 24,445 − OTHER INCOME (EXPENSES): Net change of items other than owners’ equity during the period Interest and dividend income 330 521 1,022 3,547 Total changes during the period (4,200) ¥ − ¥ − ¥ (6,291) ¥ (1,630) ¥ (7,921) Gain on sales of investment securities(Note 2) 93 21 − − Balance at March 31, 2010 90,923 ¥63,201 ¥111,403 ¥218,921 ¥(26,094) ¥367,431 Loss on sales of stocks of subsidiaries and affiliates (2,135) −−(22,947) Interest expenses (2,202) (2,809) (4,736) (23,667) Millions of yen Valuation and translation adjustment Loss on disposal of property −− Minority (375) (4,031) Total net assets Net unrealized holding Net unrealized gains on Total valuation and interests Loss on business restructuring − (706) − − ’10/3 gains on securities hedging derivatives translation adjustment Impairment loss on investment securities (Note 2) − (604) (80) − Balance at March 31, 2009 ¥(1,404) ¥(307) ¥(1,711) ¥19 ¥373,660 Changes during the period Impairment loss of fixed assets(Note11) (238) (988) (1,546) (2,558) Dividends from retained earnings (7,273) Equity in earnings of affiliates 52 35 33 559 Net income 25,427 Other, net 424 (797) (383) 4,557 Acquisition of treasury stock (26,075) Retirement of treasury stock (4,144) (5,255) (5,669) (44,540) − Net change of items other than owners’ Income before income taxes 37,780 34,841 25,475 406,062 equity during the period 902 (167) 735 (1) 734 INCOME TAXES: (Note 7) Total changes during the period ¥ 902 ¥(167) ¥ 735 ¥ (1) ¥ (7,187) Balance at March 31, 2010 ¥(502) ¥(474) ¥ (976) ¥18 ¥366,473 Current 12,437 15,341 10,492 133,674 Deferred (83) 1,537 247 (892) Millions of yen 16,878 10,739 12,354 132,782 Number Owners’ equity of shares Additional paid-in Less cost of common MINORITY INTERESTS (1) (126) 5 (11) Common stock Retained earnings Total owners’ equity ’09/3 (Thousands) capital stock in treasury Net income ¥ 25,427 ¥ 18,089 ¥ 14,731 $ 273,291 Balance at March 31, 2008 95,123 ¥63,201 ¥111,403 ¥212,704 ¥ (15) ¥387,293 Changes during the period Yen U.S. dollars Dividends from retained earnings (5,581) (5,581) Net income 18,089 18,089 AMOUNTS PER SHARE: Acquisition of treasury stock (24,449) (24,449) Net income ¥280.17 ¥196.84 ¥154.86 $3.01 Net change of items other than owners’ Cash dividends 100.00 70.00 60.00 1.07 equity during the period Total changes during the period − ¥ − ¥ − ¥ 12,508 ¥(24,449) ¥ (11,941) The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. Balance at March 31, 2009 95,123 ¥63,201 ¥111,403 ¥225,212 ¥(24,464) ¥375,352

Millions of yen Valuation and translation adjustment Minority Total net assets Net unrealized holding Net unrealized gains on Total valuation and interests ’09/3 gains on securities hedging derivatives translation adjustment Balance at March 31, 2008 ¥1,059 ¥(315) ¥ 744 ¥144 ¥388,181 Changes during the period Dividends from retained earnings (5,581) Net income 18,089 Acquisition of treasury stock (24,449) Net change of items other than owners’ (2,463) 8 (2,455) (125) (2,580) equity during the period Total changes during the period ¥(2,463) ¥ 8 ¥(2,455) ¥(125) ¥ (14,521) Balance at March 31, 2009 ¥(1,404) ¥(307) ¥(1,711) ¥ 19 ¥373,660 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

56 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 57 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Consolidated Financial Statements the President

Consolidated Statements of Cash Flows Years Ended March 31, 2010, 2009 and 2008

Thousands of Millions of yen Millions of yen U.S. dollars Number Owners’ equity of shares Additional paid-in Less cost of common ’10/3 ’09/3 ’08/3 ’10/3 (Thousands) Common stock Retained earnings Total owners’ equity ’08/3 capital stock in treasury CASH FLOWS FROM OPERATING ACTIVITIES: 100,123 ¥63,201 ¥111,403 ¥233,932 ¥(30,265) ¥378,271 Balance at March 31, 2007 Income before income taxes ¥ 37,780 ¥ 34,841 ¥ 25,475 $ 406,062 Changes during the period Adjustments to reconcile income before income taxes Dividends from retained earnings (5,707) (5,707) to net cash provided by operating activities: Net income 14,731 14,731 Depreciation and amortization, aggregate 46,695 49,733 43,623 501,881 Acquisition of treasury stock (2) (2) Impairment loss of fixed assets 238 988 1,546 2,558 Retirement of treasury stock (5,000) (30,252) 30,252 − Amortization of goodwill − 1,909 155 − Net change of items other than owners’ Increase in estimated termination and retirement 316 10 equity during the period and other allowances 538 5,782 Total changes during the period (5,000) ¥ − ¥ − ¥ (21,228) ¥30,250 ¥ 9,022 Interest and dividends income (330) (521) (1,022) (3,547) Balance at March 31, 2008 95,123 ¥63,201 ¥111,403 ¥212,704 ¥ (15) ¥387,293 Interest expenses 2,202 2,809 4,736 23,667 Exchange gain (26) (0) (6) (279) Millions of yen Gain on sales of investment securities − (93) (21) − Valuation and translation adjustment Minority Total net assets Loss on sales of stocks of subsidiaries and affiliates 2,135 −−22,947 Net unrealized holding Net unrealized gains on Total valuation and interests ’08/3 gains on securities hedging derivatives translation adjustment Impairment loss on investment securities − 604 80 − Balance at March 31, 2007 ¥6,348 ¥ 241 ¥6,589 ¥141 ¥385,001 Equity in earning of affiliates (52) (35) (33) (559) Changes during the period Increase in trade receivables (720) (2,641) (464) (7,739) Dividends from retained earnings (5,707) Increase in inventories (1,506) (117) (1,598) (16,187) Net income 14,731 Increase (decrease) in trade payables (1,768) (923) 682 (19,002) Acquisition of treasury stock (2) Increase (decrease) in accrued consumption taxes 1,577 344 (153) 16,950 Retirement of treasury stock − Other, net 2,709 4,533 2,177 29,117 Net change of items other than owners’ (5,289) (556) (5,845) 3 (5,842) Sub-total 89,472 91,747 75,187 961,651 equity during the period Interest and dividends received 344 735 798 3,697 Total changes during the period ¥(5,289) ¥(556) ¥(5,845) ¥ 3 ¥ 3,180 Interest paid (2,345) (4,075) (4,617) (25,204) Balance at March 31, 2008 ¥ 1,059 ¥(315) ¥ 744 ¥144 ¥388,181 Income taxes paid (15,377) (10,285) (13,650) (165,273) Net cash provided by operating activities 78,122 57,718 Millions of yen 72,094 774,871 Number Owners’ equity CASH FLOWS FROM INVESTING ACTIVITIES: of shares Additional paid-in Less cost of common Addition to marketable securities − − (72,927) − Common stock Retained earnings Total owners’ equity ’10/3 (Thousands) capital stock in treasury Proceeds from maturity of marketable securities 726 41,979 61,472 7,803 Balance at March 31, 2009 95,123 $679,288 $1,197,367 $2,420,594 $(262,941) $4,034,308 Acquisition of property (17,055) (40,924) (49,084) (183,308) Changes during the period Addition to investment securities (303) (1,206) (1,158) (3,257) Dividends from retained earnings (78,172) (78,172) Proceeds from sales of investment securities 10 357 5,239 108 Net income 273,291 273,291 Proceeds from maturity of investment securities − − 3,000 − Acquisition of treasury stock (280,255) (280,255) Addition of time deposits included in other current assets (19,000) − (11,000) (204,213) Retirement of treasury stock (4,200) (262,736) 262,736 − Proceeds from maturity of time deposits included 4,000 8,000 Net change of items other than owners’ in other current assets 15,000 161,221 equity during the period Payments for sales of investments in subsidiaries resulting −− Total changes during the period (4,200) $ − $ − $ (67,617) $ (17,519) $ (85,136) in change in scope of consolidation (1,268) (13,629) Balance at March 31, 2010 90,923 $679,288 $1,197,367 $2,352,977 $(280,460) $3,949,172 Other, net (836) 1,546 (3,117) (8,985) Net cash provided by (used in) investing activities (22,726) 5,752 (59,575) (244,260) Thousands of U.S. dollars CASH FLOWS FROM FINANCING ACTIVITIES: Valuation and translation adjustment Minority Total net assets Proceeds from long-term debt 12,370 − 59,874 132,954 Net unrealized holding Net unrealized gains on Total valuation and interests ’10/3 gains on securities hedging derivatives translation adjustment Repayments of long-term debt (32,104) (101,304) (1,304) (345,056) Balance at March 31, 2009 $(15,090) $(3,300) $(18,390) $204 $4,016,122 Dividends paid (7,258) (5,596) (5,694) (78,009) Changes during the period Purchase of treasury stock (26,076) (24,448) (2) (280,267) Dividends from retained earnings (78,172) Other, net (13) 489 0 (140) Net income 273,291 Net cash used in (provided by) financing activities (53,081) (130,859) 52,874 (570,518) Acquisition of treasury stock Eff ect of exchange rate changes on cash and cash (280,255) 26 3 7 279 Retirement of treasury stock − equivalents Net change of items other than owners’ Net decrease (increase) in cash and cash equivalents (3,687) (46,982) 51,024 (39,628) 9,695 (1,795) 7,900 (10) 7,890 equity during the period Cash and cash equivalents at beginning of period 50,920 97,902 46,878 547,291 Total changes during the period $ 9,695 $(1,795) $ 7,900 $ (10) $ (77,246) Cash and cash equivalents at end of period ¥47,233 ¥50,920 ¥97,902 $ 507,663 Balance at March 31, 2010 $ (5,395) $(5,095) $(10,490) $194 $3,938,876 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

58 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 59 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Notes to Consolidated Financial Statements the President

1. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Change in accounting policy) I DEVELOPMENT EXPENSES Effective from the year ended March 31, 2009, the Companies ad- Expenses relating to development activities are charged to income A BASIS OF PRESENTING CONSOLIDATED C FOREIGN CURRENCY TRANSLATION opted the new accounting standard for Measurement of Inventories as incurred. FINANCIAL STATEMENTS Receivables and payables denominated in foreign currencies are (Statement No.9 issued by the Accounting Standards Board of Japan The accompanying consolidated financial statements have been translated into Japanese yen at the exchange rates prevailing on the on July 5, 2006).This standard requires that inventories held for sale J PENSION PLAN AND RETIREMENT BENEFITS prepared in accordance with the provisions set forth in the Japanese balance sheet date. Gains and losses resulting from the translation in the ordinary course of business be measured at the lower of cost The Companies provide allowances for employees’ severance and Financial Instruments and Exchange Law and its related accounting are charged to income. or net selling value, which is defined as the selling price less addi- retirement benefits at the balance sheet date based on the estimat- regulations, and in conformity with accounting principles generally tional estimated manufacturing costs and estimated direct selling ed amounts of projected benefit obligation and the fair value of the accepted in Japan (“Japanese GAAP”), which are different in certain D CASH AND CASH EQUIVALENTS expenses. The replacement cost may be used in place of the net sell- plan assets at that date. respects as to application and disclosure requirements from the In- In preparing the consolidated statements of cash flows, cash on ing value, if appropriate. The net transition obligation incurred effective April 1, 2000 due ternational Financial Reporting Standards. hand, readily available deposits and short-term highly liquid invest- As a result, inventories as of March 31, 2009 decreased by ¥53 mil- to the adoption of new accounting standards (¥4,573 million) has The accompanying consolidated financial statements have been ments with negligible risk of changes in value and maturities not lion and operating income and income before income taxes de- been recognized in expenses in equal amounts over 15 years. Unrec- restructured and translated into English (with some expanded de- exceeding three months at the time of purchase are considered to creased by the same amount, respectively. ognized actuarial net gains or losses are amortized mainly over 15 scriptions) from the consolidated financial statements of Oriental be cash and cash equivalents. Effective from the fiscal year ended March 31, 2009, the Compa- years on a straight-line basis commencing from the succeeding pe- Land Co., Ltd. (“the Company”) prepared in accordance with Japa- nies changed the main accounting policy for determining cost of riod, and unrecognized prior service cost is amortized mainly over 15 nese GAAP and filed with the appropriate Local Finance Bureau of E MARKETABLE SECURITIES AND INVESTMENT inventory valuation of consumer products at stores, from the retail years on a straight-line basis. the Ministry of Finance as required by the Financial Instruments and SECURITIES method to the moving-average method. The purpose is to have The Company and certain consolidated subsidiaries have defined Exchange Law. Some supplementary information included in the Marketable securities and investment securities are classified as (a) more accurate cost of inventory and calculation of profits and losses the cash-balance type of defined benefit pension plans. statutory Japanese language consolidated financial statements, but securities held for trading purposes (hereafter, “trading securities”), for each financial period. As a result, operating income and income not required for fair presentation, is not presented in the accompa- (b) debt securities intended to be held to maturity (hereafter, “held- before income taxes increased by ¥12 million, respectively. (Additional information) nying consolidated financial statements. to-maturity-debt securities”), (c) equity securities issued by subsid- Effective from the year ended March 31, 2010, the Companies ad- The translation of the Japanese yen amounts into U.S. dollars is iaries and affiliate companies, or (d) all other securities that are not G THEME PARKS, RESORTS AND OTHER PROPERTY opted the “Partial Amendments to Accounting Standard for Retire- included solely for the convenience of readers outside Japan, using classified in any of the above categories (hereafter, “available-for-sale Depreciation on property of Tokyo Disneyland and others are com- ment Benefits (Part 3)” (Statement No. 19 issued by the Accounting the prevailing exchange rate at March 31, 2010, which was ¥93.04 to securities”). The Companies do not have trading securities and held- puted primarily using the declining-balance method. Depreciation Standards Board of Japan on July 31, 2008). U.S. $1. The convenience translations should not be construed as to-maturity-debt securities. on property of Tokyo DisneySea and others and buildings acquired However this had no impact on operating income and income representations that the Japanese yen amounts have been, could Available-for-sale securities with available fair market value are after April 1, 1998 is computed using the straight-line method. before income taxes after the adoption of this standard. have been, or could in the future be, converted into U.S. dollars at stated at fair market value as of the balance sheet date. Unrealized Ordinary maintenance and repairs are charged to income as in- this or any other rate of exchange. gains or losses on these securities are reported, net of applicable incurred. Major replacements and betterments are capitalized. When K INCOME TAXES Certain reclassifications have been made to the 2008 consolidated come taxes, as a separate component of net assets. Realized gains property is retired or otherwise disposed of, the property and accu- The provision for income taxes is computed based on the pretax in- financial statements to conform to the classifications used in 2009. and losses on sales of such securities are computed using the mov- mulated depreciation accounts related to it are relieved of the ap- come included in the Consolidated Statements of Income. The asset ing-average method. Available-for-sale securities without fair market plicable amounts and any differences are included in maintenance and liability approach is used to recognize deferred tax assets and B PRINCIPLES OF CONSOLIDATION value are stated at the moving-average cost. costs for theme parks, resorts and other property, except for the ex- liabilities for the expected future tax consequences of temporary dif- The consolidated financial statements include the accounts of the If the market value of available-for-sale securities declines signifi- traordinary nature of disposal of property which is included in other ferences between the carrying amounts of assets and liabilities for Company and all of its subsidiaries (“the Companies”). cantly, such securities are restated at fair market value and the differ- expenses. financial reporting purposes and the amounts used for income tax Material inter-company balances, transactions and profits have ence between fair market value and the carrying amount is recog- purposes. been eliminated in consolidation. In the elimination of investments nized as loss in the period of the decline. For the available-for-sale (Additional information) in subsidiaries, the assets and liabilities of the subsidiaries, including securities without fair market value, if the net asset value declines Following the revisions to the corporation tax law in fiscal 2009, the L PER SHARE DATA the portion attributable to minority stockholders, are evaluated us- significantly, such securities are restated to net asset value with the Companies changed the useful life of machinery by the revised cor- Dividends per share shown in the Consolidated Statements of In- ing the fair value at the time the Company acquired control of the corresponding losses recognized in the period of decline. In these poration tax law from this consolidated accounting period. come have been presented on an accrual basis and include, in each respective subsidiaries. cases, such fair market value or the net asset value will be the carry- As a result, for the year ended March 31, 2009, operating income fiscal period, dividends approved after each balance sheet date, but Consolidation goodwill, the excess of acquisition cost over net assets, ing amount of the securities at the beginning of the next year. and income before income taxes decreased by ¥49 million, respec- applicable to the fiscal period then ended. Net income per share is is amortized mainly over a period of 20 years on a straight-line basis. tively. based on the weighted average number of shares of common The number of consolidated subsidiaries was 14, 18 and 20 in F INVENTORIES stock. 2010, 2009 and 2008, respectively. Consumer products, materials for food, beverages and supplies are H SOFTWARE Investments in 20-50%-owned affiliates are accounted for by the primarily stated at the lower of cost or market using the moving-av- Amortization of the software for internal use included in other intan- equity method and are included in investment securities in the ac- erage method. gible assets is computed by the straight-line method over the esti- companying consolidated balance sheets. The number of compa- mated useful lives (five years). nies accounted for under the equity method was 3, 4 and 4 in 2010, 2009 and 2008, respectively.

60 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 61 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Notes to Consolidated Financial Statements the President

M USE OF ESTIMATES March 30, 2007), which revised the accounting standard for lease Total sales amounts of available-for-sales securities sold in the years ended March 31, 2010 and 2009, are indicated below. In preparing financial statements, generally accepted accounting transactions issued on June 17, 1993. Thousands of Millions of yen principles require management to make estimates and assumptions Prior to April 1, 2008, finance leases that deem to transfer owner- U.S. dollarss that affect the reported amounts of assets and liabilities and disclo- ship of the leased property to the lessee are to be capitalized, how- Type ’10/3 ’09/3 ’10/3 Total sales amount ¥357 sures of contingent liabilities at the date of the financial statements ever, other finance leases are permitted to be accounted for as oper- ¥− $− and the reported amounts of revenue and expenses during the re- ating lease transactions if certain “as if capitalized” information is Total gains on sales − 153 − porting period. Actual results could differ from those estimates. disclosed in the note to the lessee’s financial statements. Total losses on sales − 59 − The revised accounting standard requires that all finance lease transactions should be capitalized. N LEASES The following table summarizes book values of available-for-sale securities with no available fair values as of March 31, 2010 and 2009: Effective from the year ended March 31, 2009, the Companies ad- The effect on this change of accounting standard was immaterial. Thousands of Millions of yen opted the new accounting standard for Lease Transactions (State- U.S. dollarss

ment No.13 issued by the Accounting Standards Board of Japan on Type ’10/3 ’09/3 ’10/3 Non-listed equity securities ¥507 507 $5,449 2. MARKETABLE SECURITIES AND INVESTMENT SECURITIES Investment 260 260 2,795 Total ¥767 ¥767 $8,244 The following tables summarize acquisition costs and book values of available-for-sale securities with available fair values as of March 31, 2010 Investments in affiliated companies accounted for by the equity method amounted to ¥1,728 million (US$18,573 thousand) and ¥1,699 and 2009: million at March 31, 2010 and 2009 respectively. Securities with available fair values exceeding book values Millions of yen Thousands of U.S. dollars Maturities of available-for-sale securities with maturity are as follows ’10/3 ’09/3 ’10/3 Millions of yen Type Book value Acquisition Cost Difference Book value Acquisition Cost Difference Book value Acquisition Cost Difference ’09/3 Equity securities ¥3,334 ¥2,472 ¥862 ¥4,728 ¥3,459 ¥1,269 $50,817 $37,178 $13,639 Over one year but Over five years Within one year Over Ten years Total Bonds 737 713 24 744 725 19 7,921 7,663 258 Type within five years but within ten years Others −−− −−− −−− 1) Bonds: Total ¥5,465 ¥4,172 ¥1,293 ¥4,078 ¥3,197 ¥881 $58,738 $44,841 $13,897 Government bonds ¥ 21 ¥723 ¥ − ¥− ¥ 744 Corporate bonds − − − − − Other − − − − − Securities with available fair values not exceeding book values 2) Other 32,000 − 260 − 32,260 Millions of yen Thousands of U.S. dollars Total ¥32,021 ¥723 ¥260 ¥− ¥33,004 ’10/3 ’09/3 ’10/3 For expected maturity values for the year ended March 31, 2010, see “financial instruments” in Note 9. Type Book value Acquisition Cost Difference Book value Acquisition Cost Difference Book value Acquisition Cost Difference An impairment loss of ¥604 million was recognized on investment securities for the year ended March 31, 2009. Equity securities ¥8,266 ¥11,503 ¥(3,237) ¥ 8,672 ¥10,809 ¥(2,137) $93,207 $116,176 $(22,969) No such loss was recorded for the year ended March 31, 2010. Bonds −−− −−− −−− Others 17,000 17,000 − 32,000 32,000 − 182,717 182,717 − Total ¥25,672 ¥27,809 ¥(2,137) ¥40,266 ¥43,503 ¥(3,237) $275,924 $298,893 $(22,969) 3. INVENTORIES Non-listed equity securities (total amount of ¥767 (US$8,244 thousand) and ¥767million at March 31, 2010 and 2009 respectively.) are not in- Inventories at March 31, 2010 and 2009 are summarized as follows: cluded in the above table, as they have no market value and their fair value is not readily determinable. Thousands of Millions of yen U.S. dollars ’10/3 ’09/3 ’10/3 Merchandise and Finished Goods ¥7,378 ¥6,307 $79,299 Work in Process 143 628 1,537 Raw materials and supplies 3,719 3,746 39,972 Total ¥11,240 ¥10,681 $120,808

62 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 63 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Notes to Consolidated Financial Statements the President

4. LONG-TERM DEBT 5. PLEDGED ASSET Long-term debt as of March 31, 2010 and 2009 consist of the following: The net carrying value of pledged assets at March 31, 2010 and 2009 is as follows: Thousands of Thousands of Millions of yen Millions of yen U.S. dollars U.S. dollars ’10/3 ’09/3 ’10/3 ’10/3 ’09/3 ’10/3 Bonds Buildings ¥33,029 ¥34,807 $354,998 0.73%, unsecured straight bonds, payable in yen, due May 2009 ¥ − ¥ 20,000 $ − Land 2,655 2,655 28,536 1.86%, unsecured straight bonds, payable in yen, due March 2016 29,995 29,993 322,388 Marketable securities − 10 − 1.29%, unsecured straight bonds, payable in yen, due March 2011 19,998 19,997 214,941 Investment securities 736 723 7,911 1.32%, unsecured straight bonds, payable in yen, due January 2015 9,996 9,997 107,448 Others 10 15 107 1.70%, unsecured straight bonds, payable in yen, due January 2018 20,000 20,000 214,961 Total ¥36,430 ¥38,210 $391,552 79,990 99,986 859,738 Buildings and land are pledged to secure other long-term payable (¥11,687 million (US$ 125,613 thousand) and ¥12,986 million at March Loans 31, 2010 and 2009, respectively). Marketable securities, and investment and others are pledged to advances received of gift certificates (¥359 Unsecured bank loans due 2010 through 2030 at the average interest rate of 1.16% 25,370 23,800 272,678 Unsecured loans from life insurance companies due 2012 at the average interest rate of million (US$ 3,859 thousand) and ¥390 million at March 31, 2010 and 2009, respectively). 5,200 1.07% 5,200 55,890 Unsecured syndicate loans due 2010 through 2013 at the average interest rate of 0.47% 51,000 51,000 548,151 81,570 80,000 876,719 6. EMPLOYEES’ SEVERANCE AND RETIREMENT BENEFITS Payable The liabilities for severance and retirement benefits included in the liability section of the consolidated balance sheets as of March 31, 2010 Secured other long-term payable 2.15%, due 2019 11,687 12,986 125,613 and 2009 consist of the following: Unsecured other long-term payable 4.18%, due 2018 42 47 451 Thousands of Millions of yen 11,729 13,033 126,064 U.S. dollars ’10/3 ’09/3 ’10/3 Total 173,289 193,019 1,862,521 Projected benefit obligation ¥ 24,923 ¥ 24,204 $ 267,874 Less current portion included in current liabilities (55,354) (42,104) (594,948) Less fair value of pension assets (17,889) (16,507) (192,272) ¥150,915 ¥117,935 $1,267,573 Funded status 7,034 7,697 75,602 The average interest rates shown above are weighted according to the loan balances at the end of the year ended March 31, 2010. Unrecognized net transition obligation (1,524) (1,829) (16,380) Unrecognized actuarial diff erences (1,785) (2,665) (19,185) The aggregate annual maturities of long-term debt subsequent to March 31, 2010, are summarized below. Unrecognized prior service cost (302) (332) (3,246) Thousands of Millions of yen Liability for severance and retirement benefi ts, net 3,423 2,871 36,791 U.S. dollars Prepaid pension cost − − − Year ending March 31, Liability for severance and retirement benefits ¥ 3,423 ¥ 2,871 $ 36,791 2011 ¥ 55,354 $ 594,948 Included in the consolidated statement of income for the years ended March 31, 2010, 2009 and 2008 are severance and retirement 2012 31,603 339,671 benefit expenses comprised of the following: 2013 16,405 176,322 Thousands of 2014 Millions of yen 1,407 15,123 U.S. dollars 2015 11,406 122,592 ’10/3 ’09/3 ’08/3 ’10/3 Thereafter 57,114 613,865 Service costs-benefits earned during the year ¥1,387 ¥1,397 ¥1,323 $14,908 ¥173,289 $1,862,521 Interest cost on projected benefit obligation 463 451 428 4,976 Expected return on plan assets (413) (488) (485) (4,439) Amortization of prior service costs 31 31 30 333 Amortization of actuarial differences 235 146 49 2,526 Amortization net transition obligation 305 305 305 3,278 Special termination benefit 95 20 115 1,021 Severance and retirement benefit expenses ¥2,103 ¥1,862 ¥1,765 $22,603

’10/3 ’09/3 Discount rate mainly 2.0% mainly 2.0% Rate of expected return on plan assets 2.6% 3.0% The estimated amount of all retirement benefits to be paid at the future retirement date is allocated equally to each service year using the estimated number of total service years.

64 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 65 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Notes to Consolidated Financial Statements the President

7. INCOME TAXES dividends is calculated based on the non-consolidated financial million (US$ 55,729 thousand). Such appropriations have not been statements of the Company in accordance with Japanese laws and accrued in the consolidated financial statements as of March 31, The Companies are subject to corporation, enterprise and inhabitants’ taxes, which resulted in an aggregate normal effective tax rates of regulations. 2010. Such appropriations will be recognized in the period when approximately 40.4% for the years ended March 31, 2010, 2009 and 2008. At the annual shareholders’ meeting held on June 29, 2010, the they are resolved. The following table summarizes the significant differences between the statutory tax rate and the Companies’ effective tax rate for financial shareholders resolved to pay cash dividends amounting to ¥5,185 statement purposes for the years ended March 31, 2010 and 2009. The differences for the year ended March 31, 2008 are not shown because they were not significant. 9. FINANCIAL INSTRUMENTS (Additional information) ’10/3 ’09/3 Statutory tax rate 40.4 % Statutory tax rate 40.4 % Effective from the year ended March 31, 2010, the Companies ad- As the Companies’ transaction partners on derivative financial in- opted the revised Accounting Standard “Accounting Standards for struments are limited to prominent international financial institu- Decrease in valuation allowance (8.2) Increase in valuation allowance 7.0 Financial Instruments” (Statement No. 10 revised by the Accounting tions, credit risk related to breach of contract is judged to be im- Non-deductible expenses 0.5 Amortization of goodwill 2.2 Standards Board of Japan on March 10, 2008) and the Implementa- material. Others 0.0 Others (1.2) tion Guidance on Disclosures about Fair Value of Financial Instru- (b) Management of market risk (the risk of foreign exchange and Effective tax rate Effective tax rate 48.4 % 32.7 % ments (Statement No. 19 revised by the Accounting Standards interest rate fluctuations) Significant components of the Companies’ deferred tax assets and liabilities as of March 31, 2010 and 2009 are as follows: Board of Japan on March 10, 2008) The Companies have entered into currency swap contracts in order Thousands of to hedge resulting from fluctuations in foreign currency exchange Millions of yen U.S. dollars A POLICIES ON THE USE OF FINANCIAL rates on transactions denominated in foreign currencies. The Com- ’10/3 ’09/3 ’10/3 INSTRUMENTS panies have also entered into interest rate swap contracts in order Deferred tax assets: The Companies raise the funds needed to implement capital invest- to mitigate exposures resulting from interest rate fluctuations on Excess bonuses accrued ¥ 2,983 ¥ 2,958 $ 32,061 ment plans through loans from banks and other institutions and by interest payments related to loans and bonds. Revenue of advanced sold admission tickets on a cash basis 2,746 2,886 31,019 issuing corporate bonds. The Companies limit their investment of The fair value of investment securities in listed companies is de- Retirement benefits for employees 1,158 1,367 14,693 temporary surpluses to deposits and highly liquid financial assets termined on a quarterly basis. Loss from impairment of investment securities 1,283 1,283 13,790 such as bank deposits. The Companies have formulated operational handling proce- Tax loss carry-forwards of subsidiaries 3,650 1,092 11,737 The Companies employ derivative financial instruments only as dures pertaining to the execution and management of derivative Impairment loss of fixed assets 969 801 8,609 needed to limit the scope of actual settlement and does not under- financial transactions. Departments handling such transactions are Others 3,496 2,336 25,107 take speculative transactions for the purpose of generating trading managed closely, and a system is in place to ensure an effective in- Total deferred tax assets 16,260 12,748 137,016 profits. ternal control function. Valuation allowance (3,339) (6,427) (35,887) Net deferred tax assets 9,409 9,833 101,129 Deferred tax liabilities: B FINANCIAL INSTRUMENT CONTENT AND RISKS D SUPPLEMENTARY EXPLANATION REGARDING Trade-notes and accounts receivable, involve credit risk on the part THE FAIR VALUE OF FINANCIAL INSTRUMENTS Net unrecognized holding gains on securities (42) − (452) of customers and business partners. With regard to the fair value of financial instruments, in addition to Others − (52) − Investment securities, which are mainly equity securities, involve basing fair value on market value, the fair value of financial instru- Net deferred tax assets ¥ 9,367 ¥ 9,781 $100,677 market risk. ments that have no available market value is determined by using a Currency swap contracts and interest rate swap contracts are rational method of calculation. However, as variables are inherent in 8. OWNERS’ EQUITY used to mitigate risks arising from foreign currency rate fluctuations these value calculations, the resulting values may differ if different on transactions denominated in foreign currencies and from inter- assumptions are used. Also, in the note entitled “matters related to Net assets comprise three subsections, which are owners’ equity, ac- and legal reserve must be set aside as additional paid-in capital or est rate fluctuations on interest payment related to loans and ponds, the fair value of financial instruments,” market risk related to deriva- cumulated gains (loss) from valuation and translation adjustments, legal reserve. Legal reserve is included in retained earnings in the respectively. tive financial instruments is not included within the contract and minority interests. accompanying consolidated balance sheets. The Companies evaluate hedge effectiveness by comparing the amounts of derivative financial instruments. Under Japanese laws and regulations, the entire amount paid for Both appropriations of legal reserve and additional paid-in capital cumulative changes in cash flows from or the changes in fair value new shares is required to be designated as common stock. However, used to eliminate or reduce a deficit generally require a resolution of hedged items to the corresponding changes in the hedging de- E MATTERS RELATED TO THE FAIR VALUE OF a company may, by a resolution of the board of directors, designate of the shareholders’ meeting. rivative instruments. FINANCIAL INSTRUMENTS an amount not exceeding one-half of the price of the new shares as Additional paid-in capital and legal reserve may not be distribut- The following table summarizes book value and fair value on finan- additional paid-in capital which is included in capital surplus. ed as dividends .All additional paid-in capital and legal reserve may C FINANCIAL INSTRUMENT RISK MANAGEMENT cial instruments excluding financial instruments without fair value, In cases where dividend distribution of surplus is made, the lesser be transferred to other capital surplus and retained earnings, (a) Management of credit risk (the risk that a business partner will as of March 31, 2010: of an amount equal to 10% of the dividend or the excess, if any, of respectively, which are potentially available for dividends. default on its transactional obligations) 25% of common stock over the total of additional paid-in capital The maximum amount that the Company can distribute as The Companies employ accounts receivable management regulations to reduce the risks related to trade-notes and accounts receivable, which are collected within one year.

66 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 67 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Notes to Consolidated Financial Statements the President

Millions of yen Thousands of U.S. dollars

’10/3 ’10/3 Book value Fair value Difference Book value Fair value Difference Cash and cash equivalents Millions of yen Thousands of U.S. dollars (1) Cash and deposits Main items ¥ 30,233 ¥ 30,233 ¥ − $ 324,946 $ 324,946 $ − Transaction type Contract amounts Over 1 year Fair value Contract amounts Over 1 year Fair value (maturing within 3 months) Hedge accounting method hedged (2) Marketable securities 17,000 17,000 − 182,717 182,717 − Exchange forward Currency swap Accounts (maturing within 3 months) contracts and other contracts, payable, other Trade receivables deferral hedge accounting U.S. dollars payables, ¥11,596 ¥9,738 ¥(815) $124,635 $104,665 $(8,760) (3) Notes and accounts receivable long-term 16,943 16,943 − 182,105 182,105 − accounts Other current assets payable (4) Cash and deposits Total ¥11,596 ¥9,738 ¥(815) $124,635 $104,665 $(8,760) (maturing after 3 months) 4,000 4,000 − 42,992 42,992 − Investment securities Note: Fair value calculation method Fair value is calculated at the rates indicated by the financial institutions handling these transactions for the Companies. (5) Investment securities 14,137 14,137 − 151,945 151,945 − Other assets Financial instruments of which fair value is not readily determinable (6) Long-term loans receivable 1,570 1,570 − 16,875 16,875 − Thousands of Millions of yen U.S. dollars Total assets ¥ 83,883 ¥ 83,883 ¥ − $ 901,580 $ 901,580 $ − Non-listed equity securities Trade payables ¥2,235 $24,022 Investment (1) Notes and accounts payable-trade ¥ 14,059 ¥ 14,059 ¥ − $ 151,107 $ 151,107 $ − 260 2,794 Current portion of long-term debt These instruments are not included within investment securities, as they have no market value, and their fair value is not readily (2) Current portion of bonds 19,999 19,999 − 214,951 214,951 − determinable. (3) Current portion of long-term loans payable 34,051 34,051 − 365,982 365,982 − Long-term debt Monetary assets and liabilities and the expected maturity values of marketable securities with maturities after the balance sheet date (4) Bonds payables 59,991 62,438 2,447 644,787 671,088 26,301 Millions of yen (5) Long-term loans payable 47,519 47,764 245 510,737 513,370 2,633 ’10/3 Total liabilities ¥175,619 ¥178,311 ¥2,692 $1,887,564 $1,916,498 $28,934 Over one year Over five years Within one year Over Ten years Financial derivative transaction* ¥ (815) ¥ (815) ¥ − $ (8,760) $ (8,760) $ − Type but within five years but within ten years Cash and deposits ¥34,233 ¥ − ¥ − ¥− * Stated values are the net amounts of receivables and payables arising from derivative financial transactions. Figures in parentheses are negative. Notes and accounts receivable 16,943 − − − Method of calculating the fair value of financial instruments and matters related to marketable securities and derivatives Marketable securities and investment securities Assets Maturities of available-for-sale securities (1) Cash and deposits, (2) marketable securities, (3) notes and accounts receivable, and (4) Cash and deposits Government bonds − 736 − − As these instruments are settled within a short term and their fair values and book values are nearly identical, their book values are assumed as their fair values. (5) Investment securities Corporate bonds − − − − The fair values of equity securities are determined by their prices on stock exchanges. Other 17,000 − 260 − (6) Long-term loans receivable Long-term loans receivable 520 859 190 1 For long-term loans receivable, fair value is determined by discounting the total amount of principal and interest with the assumed interest rate on new borrowings of the same Total ¥68,696 ¥1,595 ¥450 ¥1 type. Liabilities (1) Notes and accounts payable–trade, (2) current portion of bonds and (3) current portion of long-term loans payable As these instruments are settled within a short term and their fair values and book values are nearly identical, their book values are assumed as their fair values. Thousands of U.S. dollars (4) Bonds payables ’10/3 The fair value of corporate bonds is determined based on market prices. Over one year Over five years Within one year Over Ten years (5) Long-term loans payable Type but within five years but within ten years For long-term loans payable, fair value is determined by discounting the total amount of principal and interest with the assumed interest rate on new loans of the same type. Cash and deposits $367,939 $ − $ − $ − However, for loans with floating interest rates that do not employ interest rate swaps, as interest rates are revised in set increments as conditions dictate and their fair values and Notes and accounts receivable 182,105 − − − book values are nearly identical, the book values are assumed as their fair values. Financial derivative transaction Marketable securities and investment securities (1) Transactions on which hedge accounting is not employed Maturities of available-for-sale securities None applicable Government bonds − 7,910 − − (2) Derivative financial instruments employing hedge accounting. Corporate bonds − − − − Currency related Other 182,717 − 2,794 − Long-term loans receivable 5,589 9,233 2,043 10 Total $738,350 $17,143 $4,837 $10

For information on the expected maturity values after the balance sheet date of corporate bonds and long-term loans payable, see “long- term debt” in Note 4.

68 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 69 Message from Feature Review of Consolidated OLC Group Corporate Financial Section the Chairman and Operations Social Responsibility (CSR) Notes to Consolidated Financial Statements the President

10. COMMITMENTS AND CONTINGENT LIABILITIES 12. SEGMENT INFORMATION The Companies have non-cancelable lease agreements, principally for vehicles and computer equipment. The Companies are primarily engaged in the business areas of Theme parks, Hotel, Retail and Other businesses in Japan. Business segments are classified based on type and nature of products and similarity of market. Main businesses by segment are as follows: 11. IMPAIRMENT LOSS OF FIXED ASSETS Segments Main business During the fiscal year ended March 31, 2010 and 2009, respectively, ¥238 million (US$2,558 thousand) and¥988 million in impairment loss Theme park Management and operation of theme parks which are recognized as other expense for the Companies are broken down as follows: Hotel Management and operation of Tokyo Disneyland Hotel, Tokyo DisneySea Hotel MiraCosta, Tokyo Disney Ambassador Hotel and Palm & Fountain Terrace Hotel ’10/3 Thousands of Retail business Management and operation of Disney Store Japan Use Classification Millions of yen Location U.S. dollars In addition, Owing to the transfer of shares in Retail Networks Co., Ltd., the Retail Business Segment is exclud- Shops Buildings and kitchen Restaurant ed, as of March 31, 2010 (Setasgaya-district, Tokyo, and others) facilities ¥100 $1,075 Shops Other business Management and operation of IKSPIARI, Cirque du Soleil Theatre Tokyo and Disney Resort Line Retail store Buildings and equipment 138 1,483 (Gotenba, Shizuoka, and others) Operation of employee cafeterias, Management and operation of theme restaurants, and others Total ¥238 $2,558 Certain consolidated subsidiaries recognized impairment loss to match the carrying amount to the recoverable amount for buildings and others in connection with grouping assets of restaurants and retail stores which had consecutive losses from operating activities. The estimate Business segment information for the year ended March 31, 2010, 2009 and 2008 are as follows: of the recoverable amount of the property was determined based on value in use calculated under the 4-percent discounted cash flow. Millions of yen

’09/3 ’10/3 Elimination Use Classification Theme Parks Hotel Retail Business Other Businesses Total Consolidated Location Millions of yen and Corporate Shops Buildings and kitchen Restaurant ¥245 Revenues: (Kawaguchi-shi, Saitama, and others) facilities Revenues from customers Shops ¥287,321 ¥45,231 ¥14,760 ¥24,103 ¥371,415 ¥ − ¥371,415 Retail store Buildings and equipment 439 (Shinsaibashi, Osaka, and others) Inter-segment revenues 4,667 622 960 6,041 12,290 (12,290) − Hydroponics plant Total Idle asset Construction in progress 304 291,988 45,853 15,720 30,144 383,705 (12,290) 371,415 (Sodegaura-shi, Chiba) Operating expenses 258,752 37,450 15,699 30,230 342,131 (12,640) 329,491 Total ¥988 Operating income(loss) ¥ 33,236 ¥ 8,403 ¥ 21 ¥ (86) ¥ 41,574 ¥ 350 ¥ 41,924 Total assets Certain consolidated subsidiaries recognized impairment loss to match the carrying amount to the recoverable amount for buildings and ¥402,897 ¥90,744 ¥ − ¥69,197 ¥562,838 ¥52,252 ¥615,090 Depreciation and amortization, aggregate ¥ 36,253 ¥ 6,030 ¥ 292 ¥ 4,243 ¥ 46,818 ¥ (123) ¥ 46,695 others in connection with grouping assets of restaurants and retail stores which had consecutive losses from operating activities. The estimate Impairment loss on fixed assets ¥ − ¥ − ¥ 126 ¥ 112 ¥ 238 ¥ − ¥ 238 of the recoverable amount of the property was determined based on value in use calculated under the 4-percent discounted cash flow, and Capital expenditures ¥ 17,645 ¥ 271 ¥ 336 ¥ 1,169 ¥ 19,421 ¥ (2) ¥ 19,419 consolidated subsidiary recognized impairment loss fully against on the construction in progress, etc. due to the determination that hydroponics plant suspended in construction would be not used for its purpose. Thousands of U.S. dollars

’10/3 Elimination Theme Parks Hotel Retail Business Other Businesses Total Consolidated and Corporate Revenues: Revenues from customers $3,088,145 $486,146 $158,641 $259,061 $3,991,993 $ − $3,991,993 Inter-segment revenues 50,161 6,685 10,318 64,929 132,093 (132,093) − Total 3,138,306 492,831 168,959 323,990 4,124,086 (132,093) 3,991,993 Operating expenses 2,781,083 402,515 168,734 324,914 3,677,246 (135,855) 3,541,391 Operating income(loss) $ 357,223 $ 90,316 $ 225 $ (924) $ 446,840 $ 3,762 $ 450,602 Total assets $4,330,363 $975,322 $ − $743,734 $6,049,419 $561,609 $6,611,028 Depreciation and amortization, aggregate $ 389,650 $ 64,811 $ 3,138 $ 45,604 $ 503,203 $ (1,322) $ 501,881 Impairment loss on fixed assets $ − $ − $ 1,354 $ 1,204 $ 2,558 $ − $ 2,558 Capital expenditures $ 189,650 $ 2,913 $ 3,611 $ 12,564 $ 208,738 $ (21) $ 208,717

(Business segments reclassification) Effective from the year ended March 31, 2009, the Companies changed the business segments, in which Hotel segment was newly established while Commercial Facilities segment is discontinued and others are reconciled among segments considering the current group business structure, so that the management can evaluate their business segments better than before.

70 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 71 Notes to Consolidated Financial Statements INDEPENDENT AUDITORS’ REPORT

Millions of yen To the Owners and Board of Directors of Oriental Land Co., Ltd.: ’09/3 Elimination Theme Parks Hotel Retail Business Other Businesses Total Consolidated and Corporate Revenues: We have audited the accompanying consolidated balance sheets of Oriental Land Co., Ltd. and consolidated subsidiaries as of March 31, 2010 Revenues from customers ¥302,412 ¥45,917 ¥16,226 ¥24,688 ¥389,243 ¥ − ¥389,243 and 2009, and the related consolidated statements of income, changes in net assets and cash flows for each of the three years in the period Inter-segment revenues 4,928 599 1,201 7,713 14,441 (14,441) − ended March 31, 2010, expressed in Japanese yen. These consolidated financial statements are the responsibility of the Company’s manage- Total 307,340 46,516 17,427 32,401 403,684 (14,441) 389,243 ment. Our responsibility is to independently express an opinion on these consolidated financial statements based on our audits. Operating expenses 272,795 40,292 17,422 33,282 363,791 (14,644) 349,147 Operating income(loss) ¥ 34,545 ¥ 6,224 ¥ 5 ¥ (881) ¥ 39,893 ¥ 203 ¥ 40,096 We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and per- Total assets ¥424,178 ¥95,985 ¥ 8,279 ¥72,690 ¥601,132 ¥ 43,860 ¥644,992 form the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes Depreciation and amortization, aggregate ¥ 39,639 ¥ 5,818 ¥ 293 ¥ 4,132 ¥ 49,882 ¥ (149) ¥ 49,733 Impairment loss on fixed assets ¥ 304 ¥ − ¥ 439 ¥ 245 ¥ 988 ¥ − ¥ 988 examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the Capital expendituress ¥ 20,440 ¥11,398 ¥ 802 ¥ 7,650 ¥ 40,290 ¥ (150) ¥ 40,140 accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Millions of yen In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial posi- ’08/3 Elimination tion of Oriental Land Co., Ltd. and subsidiaries as of March 31, 2010 and 2009, and the consolidated results of their operations and their cash Theme Parks Hotel Retail Business Other Businesses Total Consolidated and Corporate flows for each of the three years in the period ended March 31, 2010, in conformity with accounting principles generally accepted in Japan. Revenues: Revenues from customers ¥272,854 ¥33,182 ¥16,904 ¥19,482 ¥342,422 ¥ − ¥342,422 Inter-segment revenues 3,731 387 1,005 6,655 11,778 (11,778) − The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2010 are presented Total 276,585 33,569 17,909 26,137 354,200 (11,778) 342,422 solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation Operating expenses 250,217 27,613 18,210 26,822 322,862 (11,584) 311,278 has been made on the basis described in Note1 to the consolidated financial statements. Operating income(loss) ¥ 26,368 ¥ 5,956 ¥ (301) ¥ (685) ¥ 31,338 ¥ (194) ¥ 31,144 Total assets ¥444,593 ¥88,166 ¥ 9,711 ¥71,983 ¥614,453 ¥143,089 ¥757,542 Depreciation and amortization, aggregate ¥ 37,063 ¥ 3,206 ¥ 235 ¥ 3,216 ¥ 43,720 ¥ (97) ¥ 43,623 Impairment loss on fixed assets ¥ 308 ¥ − ¥ − ¥ 1,238 ¥ 1,546 ¥ − ¥ 1,546 Capital expendituress ¥ 30,615 ¥15,255 ¥ 396 ¥ 6,479 ¥ 52,745 ¥ (54) ¥ 52,691

Note : Business segment Information for the year ended 31 March, 2008 is modified in the new business segment for comparison purpose.

(a) There are no unallocated operating expenses. (b) Unallocated assets amounted to ¥52,568million (US$ 565,004 thousand), ¥52,828 million and ¥150,098 million as of March 31, 2010, 2009 and 2008, respectively, and include primarily cash, marketable securities, investment securities and so on. Tokyo, Japan (c) Depreciation and capital expenditures included amortization and addition of long-term prepaid expenses. June 29, 2010 (d) Revenues outside Japan and revenues by sales to foreign customers are less than 10% of the Companies’s consolidated net revenues for the year ended 31 March, 2010, 2009 and 2008.

13. SUBSEQUENT EVENT

A UNSECURED BANK LOANS The Company concluded and executed the following loan agreement for repayments of syndicated loan. Borrowing amount ¥15,000 million (US$ 161,221 thousand) Arranger Mizuho Corporate Bank, Ltd Lender The Chiba Bank, Ltd. and others Borrowing date June 14, 2010 Repayment method Lump-sum Repayment date June 14, 2013 Collateral None

72 Oriental Land Annual Report 2010 Oriental Land Annual Report 2010 73 Corporate Data / Stock Information As of March 31, 2010

Corporate Data Primary Subsidiaries Company Name: Oriental Land Co., Ltd. Milial Resort Hotels Co., Ltd. Photo Works Co., Ltd. Address: 1-1 Maihama, Urayasu, Maihama Resort Line Co., Ltd. Design Factory Co., Ltd. Chiba 279-8511, Japan IKSPIARI Co., Ltd. Bay Food Services Co., Ltd. Established: July 11, 1960 Retail Networks Co., Ltd.* Resort Costuming Service Co., Ltd. Capital Stock: ¥63,201 million RC Japan Co., Ltd. Maihama Building Maintenance Co., Ltd. Number of Employees: 3,954 (Consolidated) Maihama Corporation Co., Ltd. M TECH Co., Ltd. (OLC Group) Green and Arts Co., Ltd. 2,248 (Nonconsolidated) (Oriental Land Co., Ltd.) * Retail Networks Co., Ltd., was transferred to The Walt Disney Company (Japan) Ltd. as of March 31, 2010.

Shares of Common Stock Principal Stockholders (Top Ten) Number of Shares Percentage Common Stock Stockholders (Thousands) Held (%) Outstanding: 90,922,540 shares Keisei Electric Railway Co., Ltd. 18,157 19.97 Stock Listing: Tokyo Stock Exchange, Mitsui Fudosan Co., Ltd. 10,689 11.76 First Section Chiba Prefecture 3,300 3.63 Code No: 4661 Japan Trustee Services Bank, Ltd. (Trust accounts) 1,932 2.13 Investment Unit: 100 shares The Master Trust Bank of Japan, Ltd. (Trust account) 1,891 2.08 Number of Stockholders: 128,980 The Dai-ichi Mutual Life Insurance Company 1,640 1.80 Mizuho Trust & Banking Co., Ltd.*2 1,480 1.63 Bond Ratings: JCR...... AA R&I...... AA- Japan Trustee Services Bank, Ltd. (Trust accounts 4) 1,038 1.14 Nippon Life Insurance Company 917 1.01 Share Registrar: The Chuo Mitsui Trust & The Chuo Mitsui Trust and Banking Company, Limited 832 0.92 Banking Co., Ltd. 33-1, Shiba 3-chome, Minato-ku, Tokyo *1. In addition to the above, 4,506 thousand shares are held in treasury. *2. Shares held in a pension trust account with Mizuho Trust & Banking Co., Ltd., for the benefit of retirement 105-8574, Japan plans of Mizuho Corporate Bank, Ltd. Transfer Agent: Stock Transfer Agent Department, The Chuo Mitsui Trust & Banking Co., Ltd. Distribution of Stockholders 8-4, Izumi 2-chome, 4.36% National government and Suginami-ku, Tokyo 168-0063 local public organizations Japan 17.76% Financial institutions 0.43% Securities companies 36.45% Other corporations 6.34% Foreign corporations and individuals 29.70% Individuals and others 4.96% Treasury stock

Stock price Range and Trading Volume Stock Price Trading Volume (Yen) (Thousand Shares) 8,000

7,000

6,000

5,000

4,000 80,000

3,000 60,000

2,000 40,000

1,000 20,000

0 0 2006/1 2007/1 2008/1 2009/1 2010/1

The copyrights to the Disney characters and scenes from Tokyo Disneyland, Tokyo DisneySea, Disney Ambassador Hotel, Tokyo DisneySea Hotel MiraCosta, Tokyo Disneyland Hotel and Disney Resort Line are owned by Disney Enterprises, Inc. © Disney Enterprises, Inc. Photos: Kishin Shinoyama Costumes: Rene´e April The trademarks ZED and Cirque du Soleil are owned by Cirque du Soleil and used under license. © 2008 Cirque du Soleil Inc. 74 Oriental Land Annual Report 2010 75