CONTENTS 1 Hankyu Hanshin Holdings Group at a Glance 6 Financial Highlights (Consolidated) 8 Message from the Management 9 Interview with the President 16 Medium-Term Management Plan Progress 18 Special Feature Hankyu Hanshin Holdings Group Growth Drivers Major Development Projects in and around Umeda 22 Overview of Core Businesses 24 ■ Urban Transportation 29 ■ Real Estate 34 ■ Entertainment and Communications 37 ■ Travel and International Transportation 41 ■ Hotels 44 ■ Retailing 47 Management Organisation 47 Corporate Governance 50 Promotion of Compliance-Focused Management 51 Directors and Corporate Auditors 52 Corporate Social Responsibility 52 Social Contribution Activities 54 Environmental Protection Activities 55 Financial Section 84 Group at a Glance 85 Investor Information Search Index ● Group Overview 2–5, 22–23, 84–85 Forward-looking Statements ● Major Indicators 6–7, 11, 16–17, 56 The reader is advised that this report contains forward-looking state- ments regarding the future plans, strategies, and earnings performance ● Integration Synergies 13, 17 of Hankyu Hanshin Holdings, Inc., which are not statements of histori- ● Medium-Term Management Plan cal fact but constitute estimates or projections based on facts known 11–12, 16–17, 18–21 and Growth Strategies to the Company’s management as of the time of writing. Actual results may therefore diff er substantially from such statements. ● Message from Heads of Businesses 28, 33, 36, 40, 43, 46 ● Shareholder Returns 6, 15 Figures are rounded unless otherwise specifi ed in the notes. Who We Are Hankyu Hanshin Holdings Group at a Glance Hankyu Hanshin Holdings 1 Who We Are Hankyu Hanshin Holdings Group at a Glance The Hankyu Hanshin Holdings Group is a corporate group with some 20,000 employ- ees, created by the October 2006 management integration of two major private railway operators based in the Kansai region, Hankyu Holdings and Hanshin Electric Railway. The Group operates a wide range of businesses such as its core railway opera- tions, the real estate business, including rental of commercial facilities and office buildings and the sale of condominiums, and the entertainment business, centering on the Hanshin Tigers professional baseball team and the Takarazuka Revue. For over Kansai region 100 years the member companies of the Group have provided innovative services, helping create more successful communities served by our railway lines. Tokyo Kobe Kyoto Osaka Hankyu Railway Hanshin Electric Railway Fiscal 2009 (Consolidated Basis) ■ Urban Transportation ■ Real Estate As managing company, Hankyu Hanshin Holdings operates four core companies, Revenues from ■ Entertainment and Operations Hankyu Corporation, Hanshin Electric Railway, Hankyu Hanshin Express Holdings and Communications ■ Travel and International Hankyu Hanshin Hotels. It is active in six core business domains, Urban Transportation, 683.7 Transportation billion ■ Real Estate, Entertainment and Communications, Travel and International Hotels ■ Retailing Transportation, Hotels and Retailing. ■ Other Of our six core businesses, the main drivers are the Urban Transportation and Real Estate segments, accounting for about half of all revenues from operations and 80% of operating income. In the Urban Transportation segment, railways account Operating Income for most earnings, while rental businesses generate most earnings in the Real Estate 77.8 business, ensuring a stable cash fl ow. billion * Revenues from operations refer to such revenues generated Hankyu Hanshin Holdings from external customers, while operating income represents amounts prior to consolidation Urban Real Estate Entertainment and Retailing Travel and Hotels adjustments. Transportation Communications International Transportation Hankyu Hankyu Corporation Hankyu Hanshin Hanshin Express Hotels Hanshin Electric Railway Holdings (As of 31st March 2009) Annual Report 2009 Survey of Preferred Residential Areas a Glance At (Kansai Region) Rank Place (Location) Hankyu Corporation and Hanshin Electric Railway have their terminals in the Umeda 1 Ashiya (Ashiya, Hyogo) district of downtown Osaka, with its high concentration of office and commercial 2 Syukugawa (Nishinomiya, Hyogo) 3 Nishinomiya (Nishinomiya, Hyogo) facilities. The two companies also have as their major catchment areas districts of high 4 Okamoto (Kobe, Hyogo) Financial Highlights Financial population density across the Kansai area, comprising the Osaka-Kobe belt and Kyoto. 5 Kobe (Kobe, Hyogo) 6 Mikage (Kobe, Hyogo) The areas served by the lines operated by the Group are popular residential 7 Umeda (Osaka, Osaka) areas in the Kansai area, and network transportation effi ciency is high. By leveraging 8 Senri-chuo (Toyonaka, Osaka) this advantage, and our real estate developments in these areas, primarily in the 8 Rokko (Kobe, Hyogo) 10 Sannomiya (Kobe, Hyogo) Umeda distinct of downtown Osaka, we are increasing value along Group railway 11 Kyoto (Kyoto, Kyoto) lines and maintaining or sharpening our competitive edge in our various businesses. 12 Kurakuen (Nishinomiya, Hyogo) 13 Sumiyoshi (Osaka, Osaka) Message 14 Namba (Osaka, Osaka) 15 Takatsuki (Takatsuki, Osaka) 16 Takarazuka (Takarazuka, Hyogo) 16 Ibaraki (Ibaraki, Osaka) represents areas served by Hankyu and Hanshin Lines Source: Survey released 8th September 2008 by Sumitomo Real Estate and 7 other major real estate firms Special Feature The Group delivers inspiration and dreams through the Hanshin Tigers professional baseball team/Hanshin Koshien Stadium and the Takarazuka Revue, both of which are popular and enthusiastically supported not only in Kansai but Overview Businesses of Core throughout Japan, giving them unique brand recognition. These two powerful attractions are strengths that none of our rivals have, and they contribute strongly to brand value. ■ The Hanshin Tigers professional baseball ■ Takarazuka Revue team and Hanshin Koshien Stadium Performances by the Takarazuka Revue take place Management Organisation The Hanshin Tigers have long been one of the most at the Takarazuka Grand Theatre (Hyogo) and Tokyo popular professional baseball teams in Japan. In recent Takarazuka Theatre, supplemented by troupe tours years, they have drawn an annual total of 3 million throughout the country. With its all-female cast, playing spectators to home games each season. both male and female roles, the Takarazuka Revue with Renovation of the main section of Hanshin its scintillating, romantic repertoire and large fan base Koshien Stadium was completed in March 2009. The are a household name in entertainment in Japan. stadium is much-loved throughout Japan as the home Financial Section Financial ground of the Hanshin Tigers, as well as the venue for the National High School Baseball Championship in spring and summer. ©Hanshin Tigers ©Takarazuka Revue Company Hankyu Hanshin Holdings 3 Who We Are Hankyu Hanshin Holdings Group at a Glance Major Group Facilities in the Kansai Area Hankyu Railway Hanshin Electric Railway Lines Company-operated Section Length Lines Company-operated Section Length Kyot Kobe Line Umeda to Sannomiya 32.3km Main Line Umeda to Motomachi 32.1km Imazu Line Imazu to Takarazuka 9.3 Hanshin Namba Line Osaka-Namba to Amagasaki 10.1 Itami Line Tsukaguchi to Itami 3.1 Mukogawa Line Mukogawa to Mukogawadanchi-mae 1.7 Kobe Line Koyo Line Syukugawa to Koyoen 2.2 Total 43.9 Subtotal 46.9 Kobe Rapid Transit Railway Line Motomachi to Nishidai 5.0 Takarazuka Line Umeda to Takarazuka 24.5 Grand Total 48.9 Mino-o Line Ishibashi to Mino-o 4.0 Line Subtotal 28.5 Takarazuka Kyoto Line Umeda to Kawaramachi 47.7 Senri Line Kita-senri to Tenjimbashisuji-rokuchome 13.6 Arashiyama Line Katsura to Arashiyama 4.1 Kyoto Line Myokenguchi Subtotal 65.4 Nissei-chuo Total 140.8 Kobe Rapid Transit Railway Line Sannomiya to Nishidai 5.7 Grand Total 146.5 Hyogo Pref. Osaka P Trackage Right Lines Lines Section Length Nosé Electric Nosé Electric Railway Line Kawanishi-noseguchi to Nissei-chuo 10.8km Railway Line Hankyu Subway Sakaisuji Line Tenjimbashisuji-rokuchome to Tengachaya 8.1 Mino-o Line Sanyo Electric Railway Line Nishidai to Sanyo-Himeji 54.7 Hanshin mino-o Kintetsu Line Osaka-Namba to Kintetsu-Nara 32.8 Kawanishi-noseguchi Senri Line Kita-senri Osaka Senri-chuo Takarazuka International Ishibashi Imazu Line Airport 6 Kita-Osaka Kyuko Itami Railway Line Itami Line Koyo Line Takarazuka Line Tanigami Hokushin Kyuko Koyoen Esaka Railway Line Kobe Line Nishinomiya- 2 Syukugawa kitaguchi Tsukaguchi Shin-Osaka Awaji Imazu Imazu Mukogawa 5 Daimotsu Juso Kobe Rapid Transit Railway Line Tenjimbashis Amagasaki Shin-Kobe Umedaa Mukogawadanchi-mae Sannomiya Main Line Minatogawa Mukogawa Line Subway Sakaisuji Line Shinkaichi Motomachi Nishidai Osaka-Nambas ne Hanshin Namba Line y Li ilwa ic Ra Electr Osaka Bay Sanyo To Himeji ■ Hankyu Railway Network ■ Hanshin Electric Railway Network One of the 16 largest private railway The Hanshin network is one of the 16 operators in Japan, the Hankyu net- largest private railways in Japan. The network work comprises the Kobe Line, the comprises the Hanshin Main Line, the Hanshin Takarazuka Line, the Kyoto Line and Namba Line, and the Mukogawa Line. The multiple branch lines. Usage levels are very high as it serves the Hanshin Namba Line, which extends the former Nishi-Osaka Line as three major urban areas of Osaka, Kobe and Kyoto. far as Kintetsu Osaka-Namba Station, was opened in March 2009. The line links the Namba district, which constitutes the core of the “Minami” district, with Kobe, and thus forms