ANNUAL REPORT 2009 for the Year Ended March 31, 2009

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ANNUAL REPORT 2009 for the Year Ended March 31, 2009

Printed in Japan Contents

Business Mission 1 Our Presence 1

Financial Highlights 2

Message from Chairman Toshio Kagami 4 Interview with President Kyoichiro Uenishi 6

Feature 10

An introduction of the factors in the success of Tokyo Disney Resort 25th Anniversary and measures for future growth Success of the 25th Anniversary and Further Expansion of ”New Experience Value” Enhancing the Visible Value of Experience 12 Giving Form to Cast Members’ Ideas Enhancing the Non-Visible Value of Experience 14

Strengths of Tokyo Disney Resort 16 The OLC Group at a Glance 17 Review of Consolidated Operations 18 Theme Park Segment 18 Hotel Business Segment 21 Business Mission Retail Business Segment 22 Other Business Segment 23 Our mission is to create happiness and contentment by offering wonderful dreams and moving Corporate Social Responsibility (CSR) 24 experiences created with original, imaginative ideas. Corporate Governance 26 Board of Directors, Corporate Auditors and Corporate Officers 30 Our Presence Financial Section Oriental Land Co., Ltd. (“Oriental Land”) was established in 1960 to Six-Year Summary 32 reclaim land off the coast of Urayasu, Chiba Prefecture, and to construct a Message from the Officer in Charge of large-scale leisure facility with the objective of contributing to the culture, the Finance/Accounting Department 33 welfare and well-being of the Japanese people. In 1983, we opened Tokyo Management’s Discussion and Analysis of Operations 34 Disneyland® and in 2001, we opened Tokyo DisneySea®, the world’s first Consolidated Financial Statements 40 Disney® theme park based on a maritime concept. To date, the two theme parks have welcomed a cumulative total of more than 400 million guests. Corporate Data 58 The opening of Tokyo DisneySea heralded the full-scale operation of Stock Information 59 Tokyo Disney Resort®, a unique theme resort spanning approximately 2 million square meters of land near Tokyo. We continuously develop the resort Cautionary Remark Regarding Forward-Looking Statements This Annual Report includes statements about Oriental Land’s plans, estimates, strategies and beliefs. The statements made that are not based on to further raise its appeal. historical fact represent the assumptions and expectations of Oriental Land in light of the information available to it as of June 2009, and should be considered as forward-looking. Aspiring to create new value, Oriental Land will continue developing its Oriental Land uses a variety of business measures to constantly strive to increase its revenues and management efficiency. However, Oriental Land recognizes that there are certain risks and uncertainties that should be considered which could cause actual performance results to differ from those dis- “Fill Your Heart with Energy and Happiness” business— a high-value pursuit cussed in the forward-looking statements. Potential risks could include, but are not limited to, weather, general economic conditions, and consumer preferences. Therefore, there is no firm that energizes and enriches people’s lives. assurance that the forward-looking statements in this Annual Report will prove to be accurate. Oriental Land Annual Report 2009 1 Financial Highlights Oriental Land Co., Ltd. and Consolidated Subsidiaries Fiscal Years Ended March 31, 2009, 2008 and 2007

Revenues Annual Attendance (Billions of yen) (Millions of guests) 27.2 25.5 25.8 25.4 ● Revenues rose to a record ¥389.2 billion, supported by the opening of 389.2 Opening of Tokyo DisneySea 24.8 25.0 24.8 22.1 Tokyo Disneyland Hotel and Cirque du Soleil Theatre Tokyo. 331.1 332.9 344.1 342.4 20

● Attendance reached a record 27.2 million guests because of the popularity of Opening of Tokyo Disneyland Tokyo Disney Resort 25th Anniversary.

● Operating income increased to a record ¥40.1 billion. 10 10

(Millions of yen) Percent change (Thousands of U.S. dollars1) 0 2009 2007 2009/2008 2009 2008 20052006 2007 2008 2009 84 02 03 04 05 06 07 08 09 FOR THE YEAR: (Fiscal years ended March 31) (Fiscal years ended March 31) Revenues ¥389,243 ¥342,422 ¥344,083 13.7% $3,962,567 Operating Income & Net Income & Cash Dividends per Share & Operating income 40,096 31,144 34,111 28.7 408,185 Operating Margin Net Income per Share Payout Ratio (Billions of yen) (%) (Billions of yen) (Yen) (Yen) (%) Net income 18,089 14,731 16,309 22.8 184,149 70 Capital expenditures2 40,140 52,691 54,807 (23.8) 408,633 40.1 18.1 60 Depreciation and amortization, aggregate 49,733 43,623 42,951 14.0 506,291 34.6 34.1 17.2 55 16.3 38.7 EBITDA3 89,829 74,767 77,062 20.1 914,476 31.1 15.7 196.84 35.6 30.6 14.7 Free cash flow4 27,682 5,663 4,453 388.8 281,807 45 10.4 10.3 32.1 9.2 9.9 9.1 AT YEAR-END: 171.19 171.46 162.73 154.86 35 27.7 Total assets ¥644,992 ¥757,542 ¥699,772 (14.9)% $6,566,141 373,660 (3.7) 3,803,930 Net assets 388,181 385,001 20.4 Interest-bearing debt 193,019 294,320 235,626 (34.4) 1,964,970 (Yen) Percent change (U.S. dollars1) PER SHARE DATA: Net income (EPS) ¥ 196.84 ¥ 154.86 ¥ 171.46 27.1% $ 2.00 Net assets (BPS) 4,109.59 4,079.44 4,046.03 0.7 41.84 20052006 2007 2008 2009 20052006 2007 2008 2009 20052006 2007 2008 2009 Cash dividends 70.00 60.00 55.00 16.7 0.71 (Fiscal years ended March 31) (Fiscal years ended March 31) (Fiscal years ended March 31) (Percent) Amount of change Operating Income Operating Margin Net Income Net Income per Share Cash Dividends per Share Payout Ratio SELECTED FINANCIAL DATA: Interest-Bearing Debt & Operating margin 10.3% 9.1% 9.9% 1.2 pts Total Assets & Net Assets ROA & ROE Equity Ratio Return on assets (ROA)5 2.6 2.0 2.3 0.6 (Billions of yen) (%) (Billions of yen) (%) Return on equity (ROE)6 4.7 3.8 4.3 0.9 757.5 294.3 718.9 Equity ratio 57.9 51.2 55.0 6.7 699.8 4.7 266.9 660.2 645.0 4.5 Payout ratio 35.6 38.7 32.1 (3.1) 4.3 235.6 4.1 202.4 Annual theme park attendance 3.8 193.0 (thousands of guests) 27,221 25,424 25,816 57.9 Revenues per guest (¥) 9,719 9,370 9,309 389.7 385.0 388.2 59.0 52.3 55.0 51.2 375.9 373.7 2.6 Notes: 1. The U.S. dollar amounts are provided for convenience only and have been converted at the rate of ¥98.23 to $1, the approximate rate of exchange in effect at March 31, 2009. 2.6 2. Capital expenditures includes tangible and intangible assets and long-term prepaid expenses. 2.3 2.3 3. EBITDA = Operating income + Depreciation and amortization, aggregate 2.0 4. Free cash flow = Net income + Depreciation and amortization, aggregate – Capital expenditures 5. Return on assets = Net income / Total assets 6. Return on equity = Net income / Owners’ equity

20052006 2007 2008 2009 20052006 2007 2008 2009 20052006 2007 2008 2009 (As of March 31) (Fiscal years ended March 31) (As of March 31) Total Assets Net Assets ROA ROE Interest-Bearing Debt Equity Ratio

2 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 3 Message from Chairman Toshio Kagami

During the fiscal year ended March 2009, the OLC Group achieved positive results with record high revenues and operating income in an extremely severe economic environment. I would like to express my gratitude to the stakeholders of the OLC Group, whose support made this possible.

Our Assets We have focused our management resources on the development of approximately 2 million square meters of land 10 kilometers (about 6 miles) from central Tokyo. Over 25 years, we have expanded our functions as a resort with hotels and a theatre, in addition to the two theme parks, working to build experience value available nowhere else. As a result, Tokyo Disney Resort enjoys the support of a wide range of guest segments. The OLC Group owes its relatively stable earnings regard- less of economic conditions to the support of this broad segment of fans. Meeting everyone’s expectations is our responsibility.

Our Values The product we provide is our guests’ contentment, or in other words, happiness. These products can vanish in an instant, and because they have no form they cannot be laid aside in inventory. Quality control is extremely difficult. On the other hand, the business of offering contentment to our guests is the greatest joy for us as well. We are grateful to have such enjoyable work, and that joy and appreciation are what drive us. We will continue to create new value by never forgetting our original inten- tions, responding flexibly to change, and evolving as individuals.

The Cornerstone of Our Medium-to-Long-Term Management In 2010, Oriental Land will celebrate its 50th anniversary. Our first 25 years mainly involved the land reclamation business, whereas the second have principally involved the business of Tokyo Disney Resort. This year marks the start of a significant period of transition as we look ahead to the next October 1972: Joined Oriental Land Co., Ltd. June 1981: Director and General Manager, General quarter-century. The negative effects of short-term management have become apparent, but we will Affairs Dept. and Human Resources Dept. conduct management from a medium-to-long-term viewpoint at all times. Moreover, I believe that the June 1983: Managing Director June 1991: Senior Managing Director relationships of trust we have established, not just with our guests but with all our stakeholders, form June 1993: Executive Vice President the cornerstone of our medium-to-long-term management. We aim for stable increases in corporate June 1995: Representative Director and President value that can continue over the long term. June 2005: Representative Director, Chairman and CEO We humbly request the continued understanding and support of our stockholders and investors in taking this medium-to-long-term viewpoint. July 2009 We aim to consistently and stably enhance Toshio Kagami corporate value over the long term. Representative Director, Chairman and CEO

4 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 5 Interview with President Kyoichiro Uenishi

For this reason we must continue to create “new cies of our current medium-term plan “Innovate OLC value.” By preserving what we must not change while pur- 2010.” Based on our long-term vision for the next 10 years, suing a stakeholder orientation and avoiding preconcep- we are currently formulating our next medium-term plan for tions, we will discover “new value” that can only emerge in the period to the fiscal year ending March 2014, which we times of change. plan to announce in May 2010. At that time, I plan to pres- As for my policies, I will continue the fundamental poli- ent concrete policies for our new management structure.

Revenues and operating income reached record highs in the fiscal year ended March 2009, the Q second year of the four-year medium-term plan. What were the reasons behind this strong performance? I believe the reason was steady implementation of the policies of the medium-term A plan. The results of this year were a major achievement that will be linked to increasing the scale of theme park attendance and other benefits in the future. April 1980: Joined Oriental Land Co., Ltd. June 2003: Director and General Manager, General Affairs Dept. The first result was from our efforts to enhance quality ing guest satisfaction and desire to revisit. I believe that vari- May 2005: Executive Director, Officer and General Manager, in both its tangible and intangible aspects as we “further ous measures we carried out in the previous fiscal year are General Affairs Dept. April 2008: Executive Director, Officer and General Manager, strengthen the core business for earnings growth,” a pillar linked to expanding the foundation of Tokyo Disney Resort Corporate Strategy Planning Division of the medium-term plan “Innovate OLC 2010.” fans and increasing the scale of our ability to attract guests. April 2009: Representative Director and President, President Officer, COO On the tangibles side, we held the first of our resort- Also, in addition to reliably attracting guests from the Representative Director and President, President Officer, COO Kyoichiro Uenishi wide anniversary events, which had previously been held large-volume family segment, the ratio of guests aged 40 separately at Tokyo Disneyland and Tokyo DisneySea. In and above is increasing. By broadening our guest segments, Enhance Corporate Value by Continuing to Create addition to conducting a variety of events at the two theme we aim to remain a business that can endure changes in parks, we worked to enhance experience value available business conditions such as economic fluctuations and the “New Value” Linked to Happiness nowhere else by opening Tokyo Disneyland Hotel in July declining birth rate and aging society. and Cirque du Soleil Theatre Tokyo in October. In this way, we will steadily “establish the foundation Q What are your mission and policies since taking office as President in April 2009? On the intangibles side, we implemented various meas- for new growth” while we “further strengthen the core ures for employees to enhance hospitality, including a new business.” In addition to reducing interest-bearing debt and My mission is to ensure stable and continuous long-term growth that maintains a good educational program for all resort employees to “return reinforcing our financial structure, we steadily improved or balance between Tokyo Disney Resort from a perspective 10 and 20 years into the future and the to the basics” and a program to actively incorporate withdrew from businesses in which we have been record- A establishment of new pillars of business to continue on from the resort. We plan to announce our employees’ ideas. ing an operating loss, which we believe will lead to strong next medium-term plan in May 2010, based on our long-term vision for the next 10 years. As a result, our internal survey has shown that we are rais- performance. Greetings to our stockholders and investors. I am leads to the happiness of all officers and employees, and I Kyoichiro Uenishi, the new President and COO of Oriental feel fortunate to be involved with such a company. What are the reasons for your forecast year-on-year decrease of ¥6.0 billion in consolidated Land Co., Ltd. I will carry out my duties with steadfast Times change, but people have a basic, unalterable Q operating income for the fiscal year ending March 2010? determination as I build the foundation for growth 10 and desire to experience happiness. In order to be a company 20 years into the future, upholding the OLC Group and that continues to provide “dreams, moving experiences, We forecast the decrease as a result of decreases in theme park attendance and Tokyo Disney Resort built by my predecessor, Yoshiro enjoyment and contentment,” first and foremost I will aim A revenues per guest because it will be the year following Tokyo Disney Resort 25th Fukushima, while appropriately assessing what we must for the stable and continuous growth of Tokyo Disney Anniversary. On the other hand, free cash flow is forecast to increase ¥11.7 billion and must not change. Resort over the long term. From that rock-solid foundation, compared with the previous fiscal year to ¥39.4 billion. The mission of the OLC Group is to provide “dreams, we will clarify the strengths we have cultivated through our In the fiscal year ending March 2010, we will systemati- parks in the same year for the first time. However, we fore- moving experiences, enjoyment and contentment” through businesses to develop new businesses based on the belief cally enhance experience value available nowhere else, cast a decrease in operating income due to decreases in its business operations. Bringing happiness to our guests that we can fully utilize those strengths. including introducing new attractions at the two theme theme park attendance and revenues per guest because it

6 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 7 will be the year following Tokyo Disney Resort 25th park attendance in the future, leading to a medium-to- What will be the focus of the new medium-term Anniversary. On the other hand, net income is forecast to long-term increase in attendance. Q plan that you are currently preparing? reach a record high due to a decrease in extraordinary loss In addition, capital expenditures will decrease from the compared with the previous fiscal year and other factors. fiscal year ending March 2010 following the end of a period I hope to make us into a corporate group that Theme park attendance tends to decrease in the year of large-scale investment in Tokyo Disneyland Hotel and A continues to create “new value” linked to following an anniversary event. However, the three-year Cirque du Soleil Theatre Tokyo. As a result, free cash flow providing happiness. moving average shows a gradual increase. Despite a tem- is forecast to increase ¥11.7 billion compared with the pre- As I stated earlier, my duty is to consistently and stably seamlessly enhancing experience value available nowhere porary decrease on an annual basis, we believe that our vious fiscal year to ¥39.4 billion. enhance corporate value over the long term. For that rea- else, we plan to increase the scale of our ability to attract (See page 37 for the outlook for the fiscal year ending March 31, 2010.) measures for the 25th Anniversary were a major achieve- son, the ongoing creation of “new value” is indispensable. guests over the medium-to-long term. ment that will be linked to increasing the scale of theme As for specific details, I am afraid you will have to wait On the other hand, regarding business to follow Tokyo until May 2010, but there are some points I can discuss now. Disney Resort, we are carefully considering a return to our Q Will OLC achieve the medium-term plan target of consolidated net income at the ¥27.0 billion At Tokyo Disney Resort, in addition to introducing new origins in light of the worsening economic environment. level in the fiscal year ending March 2011? attractions at each of the theme parks, we plan to hold There are many at the OLC Group who give their all in Tokyo DisneySea 10th Anniversary in the fiscal year ending order to provide happiness. We are currently formulating a We have revised the fiscal year for income target completion due to an increase in depre- A March 2012 and Tokyo Disney Resort 30th Anniversary in the new long-term vision and medium-term plan that will con- ciation expenses. However, free cash flow is forecast to increase more than the plan. fiscal year ending March 2014. We will also continue to centrate that strength in human resources. With all of us We revised the fiscal year for income target completion Although our forecast is to reach the target during our next strengthen intangibles with the aim of improving hospitality faithfully working together to carry them out, we will fulfill due to a forecast increase in depreciation expenses in the medium-term plan, we are currently formulating a new through measures such as employee training programs and our responsibility to all our stakeholders. fiscal years ending March 2010 and March 2011 greater management structure, and therefore will present details in programs to incorporate employee ideas in operations. By than in the plan. This is not the result of an increase in May 2010. capital expenditures greater than in the plan, but rather a On the other hand, free cash flow is forecast to increase In closing, please explain your policies to enhance stockholder value, and say a few words to shorter depreciation period than originally assumed due to greater than the medium-term plan to the ¥30 billion to 40 Q the stockholders and investors. the effect of a tax code revision and changes to investment billion level. Our cash flow plan is progressing smoothly even We will allocate free cash flow to direct stockholder returns. allocation. Although we considered various catch-up meas- though we have revised our earnings plan due to the A ures to achieve the target, the increase in depreciation increase in depreciation expenses. Following the policy of our The OLC Group has set returning profits to its stock- soon as possible through earnings growth and direct return expenses as the underlying cause is in a sense beyond our medium-term plan, we will allocate this increased cash flow holders as an important management policy, with a target of earnings. control. Chasing that target would be too much to take on, to direct stockholder returns and to reducing interest-bearing consolidated payout ratio of 35 percent or higher in the In 2010, Oriental Land will reach the milestone of its so we resolved to extend the fiscal year of completion. debt in order to secure a surplus for investment in the future. current medium-term plan. In the fiscal year ended March fiftieth anniversary. I ask our stockholders and investors for 2009 we paid cash dividends of ¥70 per share, up ¥10 their continued support in looking forward to the growth from the previous fiscal year. As a result, we have steadily of the OLC Group from a medium-to-long-term viewpoint. Status of Progress of Medium-Term Plan Innovate OLC 2010 (Fiscal Year Ended March 2008 ~ Fiscal Year Ending March 2011) Fundamental Policies increased cash dividends for eight consecutive years. In the Earnings Growth Stockholder Returns ■ Further Strengthen the Target: fiscal year ending March 2010 we plan to pay ¥80 per Target: Core Business Net Income ¥27.0 billion level Free Cash Flow* ■ Annual Cash Dividends per Share Consolidated payout ratio ¥30.0 billion level share, a further increase of ¥10. (Tokyo Disney Resort) (Yen) of 35% or higher (Billions of yen) (Billions of yen) [Guideline figure] ■ Establish the Foundation Regarding share repurchases, in May 2009 we retired in 80 Main reasons for decrease Revised fiscal Increase (Planned) for New Growth year for target full the 4.2 million shares of the Company’s stock (4.42 per- completion ¥30.0 billion - ¥40.0 billion level ■ Increase the Value of the Increase in depreciation 70 [Outlook] Consolidated payout ratio: 35.6% OLC Group expenses of approximately cent of total shares outstanding, total cost ¥24.4 billion) that 60 ¥5.0 billion 55 Targets Plan 39.4 we repurchased in June 2008. In the future, we will consider (Forecast) 45 ■ Consolidated net income share repurchases as the situation demands through com- 18.1 Outlook 27.7 35 at ¥27.0 billion level in 20.7 prehensive evaluation of market trends, the economic envi- 29 fiscal year ending March (Forecast) 24 19 2011 14.7 5.7 ronment and other factors. In this way, we will allocate the 14 ■ Aim for a consolidated high level of cash flow we generate to direct stockholder payout ratio of 35% or 2008 2009 2010 2011 2008 2009 2010 2011 higher from the fiscal (Fiscal years to March 31) (Fiscal years to March 31) returns. We will aim for an ROE of 8 percent or higher as 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 year ended March 2008 * Free cash flow = Net income + Depreciation and (Fiscal years to March 31) amortization, aggregate – Capital expenditures 8 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 9 Feature

For this purpose, we will continue to create “new experience value” available nowhere else.

All to Raise the Level of Guest Satisfaction tality and idea-filled services provided by cast members, which are the non-visible value of experience. Total attendance at the two theme parks in the fiscal year ended March 2009 reached a record high of 27.2 mil- Pursuing Quality in Both Tangible and lion guests. This was due mainly to Tokyo Disney Resort 25th Anniversary, which we held from April 15, 2008. Intangible Aspects The reason behind our success in increasing theme park The visible value of experience is the quality of tangi- attendance over the past 25 years since the opening of bles. We have a total commitment to producing and pro- Tokyo Disneyland is the high rate of repeat visits that we viding spaces in which our guests can forget about every- have achieved as a result of providing guests with happiness day life and ways they can enjoy the attractions and special by working to raise the level of “guest satisfaction.” events at all facilities within the theme parks. The level of guest satisfaction is based on an evaluation The non-visible value of experience, on the other hand, of the experience value that comes from a variety of experi- is the quality of intangibles. Guests’ contact with the hos- ences within the theme parks. This experience value is the pitality of cast members gives rise to “bonds” and “con- aggregate of the facilities, attractions and special events that nections” with the theme park and cast members. These in are the visible value of experience for guests, and the hospi- turn become appreciation, understanding and emotional value in guests’ hearts. This pursuit of quality through tangibles and intangi- Value of the Guest Experience bles, or in other words, enhancing experience value available nowhere else, is linked to increasing the level of guest Enhance New Raise the Level of Experience Value Guest Satisfaction satisfaction.

Support from Our Broad Fan Segment Non-visible Future value of In the medium-term plan “Innovate OLC 2010,” experience (Dependent on “enhance quality” is a key policy under “further strengthen cast member hospitality, etc.) the core business.” By continuing to create new experience value and to raise the level of guest satisfaction Current throughout Tokyo Disney Resort, we will respond to changes in the environment and aim to earn their undying support. The resulting support from the broad fan segment that seeks this value is the reason why the theme VisibleVisibleva valuelue of experienexperience parks are relatively resilient to changes in the economy. (Dependent on facilities, service, etc.) The following introduces the factors in the success of

Success of the 25th Anniversary and Further Tokyo Disney Resort 25th Anniversary and some specific Expansion of “New Experience Value” P. 12 measures for future growth. We will continue to provide happiness Giving Form to Cast Members’ Ideas P. 14

10 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 11 Feature: Happiness Now and Always

Increasing Scale of Theme Park Attendance over the will open in both Tokyo Disneyland and Tokyo DisneySea in Medium-to-Long Term the same year for the first time. On April 15, 2009 at Tokyo Success of the 25th Anniversary and Further Expansion Disneyland we opened “Monsters, Inc. ’Ride & Go Seek!’”. To date, we have increased the scale of theme park This attraction has been extremely popular, especially of “New Experience Value” – Enhancing the Visible Value of Experience attendance by holding anniversary events at the theme among families with young children. On October 1 at parks every five years and enhancing appeal during that Tokyo DisneySea, we will open “Turtle Talk” as a new the- time with new attractions and other measures. Although ater-type attraction for guests to enjoy conversation with 25th Anniversary Conducted Throughout the Resort theme park attendance drops for the year following an Crush, the playful sea turtle from the Disney/Pixar film anniversary event, looking at the three-year moving average We worked to raise the appeal of the resort as a whole guests at the two theme parks reached a record high. Finding Nemo. shows a gradual increase. by enhancing the visible value of experience through Tokyo Moreover, “Bibbidi Bobbidi Boutique” opened to add a new Looking ahead, we plan to introduce the 3D theater For the 25th Anniversary during the fiscal year ended Disney Resort 25th Anniversary. We held special seasonal kind of fun for young girls, allowing them to don makeup attraction “Mickey’s PhilharMagic” and a new attraction March 2009, we welcomed many guests to the theme park events at both Tokyo Disneyland and Tokyo DisneySea and style their hair in order to transform themselves into inside Cinderella Castle (name undetermined) at Tokyo and increased both the level of guest satisfaction and their based on a shared concept to match the seasons. Disney princesses before going out to enjoy the park. Disneyland in 2011, and the 3D ride attraction “Toy Story desire to visit again by enhancing experience value available In July 2008, we held the grand opening of “Tokyo In October 2008, “Cirque du Soleil Theatre Tokyo” held Mania!” at Tokyo DisneySea in 2012. nowhere else. As a result, although attendance decreases Disneyland Hotel.” Many guests from outside the Tokyo its grand opening. The number of guests aged 40 and Thus while successively introducing new attractions to the year after an anniversary event, the scale of attendance metropolitan region typically visit during anniversary events. above increased, not only at the theme parks but through- enhance our appeal, we are planning for Tokyo DisneySea will increase over the medium-to-long term. However, with the addition of this new option when staying out Tokyo Disney Resort, as a result of the previously 10th Anniversary in the fiscal year ending March 2012 and overnight at Tokyo Disney Resort, attendance by these unavailable new experience value provided by its show. Systematic, Continuous Enhancement in the Future Tokyo Disney Resort 30th anniversary in the fiscal year ending March 2014. We will seamlessly enhance new experi- In the fiscal year ending March 2010, new attractions ence value over the medium-to-long term. Theme Park Guests by Age （%） 100 Plans to Introduce New Facilities 10.7 13.7 15.4 15.6 15.2 15.3 16.2 17.0 17.9 1 Tokyo Disneyland Hotel Opened July 8, 2008 Cirque du Soleil Theatre Tokyo 2 Opened October 1, 2008 57.6 56.0 53.4 53.0 52.0 52.2 52.0 51.8 52.2 3 Monsters, Inc. “Ride & Go Seek!” 1. “Tokyo Disneyland Hotel” Opened April 15, 2009 4 Turtle Talk 12.5 12.2 12.6 13.1 13.0 12.5 11.8 11.3 10.7 Scheduled to open October 1, 2009 Mickey’s PhilharMagic 19.2 18.4 18.7 19.7 19.9 20.0 19.9 19.2 5 18.1 Scheduled to open in 2011 20022001 2003 2004 2005 2006 2007 2008 2009 Tokyo Disney Resort 6 New attraction inside Cinderella Castle (name undetermined) 40 and above 18 to 39 (Fiscal years ended March 31) Tokyo Disneyland Scheduled to open in 2011 2.“Cirque du Soleil Theatre Tokyo” “Tokyo Disneyland Hotel” 12 to 17 4 to 11 Tokyo DisneySea 7 Toy Story Mania! (Fiscal years to March 31) Scheduled to open in 2012 Theme Park Attendance & 3-Year Moving Average 2009 2010 2011 2012 2013 2014 (Thousands of guests) Tokyo Disney Resort 25th Anniversary Tokyo Disney Resort Tokyo DisneySea Tokyo Disney Resort Fiscal year Tokyo DisneySea 5th Anniversary 25th Anniversary 10th Anniversary 30th Anniversary 3-year moving average Tokyo Disneyland 20th Anniversary Tokyo DisneySea opened Medium-Term Plan “Innovate OLC 2010” Next Medium-Term Plan (Scheduled) Tokyo Disneyland Tokyo Disneyland 3.“Monsters, Inc. ‘Ride & Go Seek!’” Tokyo Disneyland 10th Anniversary 15th Anniversary 5th Anniversary Tokyo Disneyland opened 9,933 10,013 10,675 10,665 11,975 13,382 14,752 15,876 16,139 15,815 16,030 15,509 16,986 17,368 16,686 17,459 16,507 17,300 22,047 24,820 25,473 25,021 24,766 25,816 25,424 27,221 25,600 26,000 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08’09’10 ’11 (Outlook) (Fiscal years to March 31) 4.“Turtle Talk” 5.“Mickey’s PhilharMagic” 6. New attraction inside Cinderella Castle 7.“Toy Story Mania!” (name undetermined) 12 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 13 Feature: Happiness Now and Always

motivated from seeing the smiles of guests that come from service full of hospitality. Within the theme parks, cast mem- Giving Form to Cast Members’ Ideas bers are required to constantly feel and think of guests’ – Enhancing the Non-Visible Value of Experience needs, and to act voluntarily with genuine hospitality. Personally providing happiness as a performer is the source of their pride in their work. Measures for cast members include awarding the “Spirit Non-Visible Experience Value Available Nowhere Else People Generate Ideas of Tokyo Disney Resort” to cast members voted for by peers Our employees are called cast members because the We gave full consideration to reflecting the ideas of cast for their high level of service. In the “Five Star Program,” we theme parks are their stage. The role of cast members is members in planning 25th Anniversary events, including the give praise and present a card to those seen practicing excel- extremely important to building the non-visible value of creation of the “Unlock Your Dreams” concept. Some mer- lent service and hospitality. These measures engender enjoy- experience within the “experience value” that supports the chandise and menu items sold at the theme parks came out ment in work through praise, and lead to a rise in hospitality quality of Tokyo Disney Resort. They provide happiness to of ideas solicited from cast members. In addition, numerous toward guests. guests, the lead performers. ideas to please guests, including theme-based greetings and Broadly speaking, cast members play two roles in communication methods when taking guests’ pictures, were People Support the Growth of Tokyo Disney Resort Disney Resort, the program was conducted approximately enhancing the non-visible value of experience. One involves incorporated from the “Area Service Project,” a brainstorm- Cast members are an important asset of the OLC Group, 650 times during the year for some 21,000 participants. “hospitality,” and the other “ideas.” Guests’ contact with ing opportunity for groups of cast members. and through these measures, we create an environment to New measures in addition to the above included over- the hospitality of cast members creates “bonds” and “con- encourage lasting employment while maintaining high moti- seas training at Disney World for selected cast members and nections” with both the cast members and the theme parks. Guests’ Smiles Are Our Source of Motivation vation. The 25th Anniversary has been a year for showing “Cast Family Night,” when we invited families of cast mem- In addition, reflecting the ideas of cast members, who are The pride that cast members feel toward their duties and appreciation of cast members as well as guests. We intro- bers to the theme park. We will continue creating an envi- regularly in contact with guests, in merchandise, menus and their enjoyment of work are important to working with duced the “Reminding Program” as an educational program ronment where cast members can always feel the joy of services increases the level of guest satisfaction. energy and continuing to enhance the non-visible value of for cast members to return to the basics. Targeting not only work, with the goals of developing new ideas and continu- experience. Cast members keep their smiles and stay highly the OLC Group but all employees involved with Tokyo ing to provide a high level of hospitality.

Message from the General Manager of the Theme Park Business Unit

Tokyo Disney Resort 25th Anniversary enhanced the appeal of the resort as a whole with the addition of Tokyo Disneyland Hotel and Cirque du Soleil Theatre Tokyo, as well as parades and shows at the theme parks. Many guests highly evaluated the appeal available nowhere else that we have built over the past 25 years, which enabled us to achieve record high theme park attendance. Thank you all most sincerely. The 25th Anniversary was also a year of reaffirming the strengths of our cast members. These strengths lead to the genuine hospitality of each individual cast member and new ideas for guests’ happiness. Even though we enhanced tangibles, utilizing them to provide happiness to guests depends on the indispensable strengths of our cast members. Our cast members will continue refining their hospitality to welcome our guests. Kiichi Sunayama Representative Director, Executive Vice President Officer General Manager of Theme Park Business Unit

Tokyo Disney Resort 25th Anniversary campaign concept, “Unlock Your Dreams” “Disney Dream Key” merchandise created from the “Unlock Your Dreams” concept

14 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 15 Strengths of Tokyo Disney Resort The OLC Group at a Glance

The OLC Group’s Share of the Japanese Leisure Market Annual Attendance Ranking among Japanese Theme Parks

Approximately 40% More than 25Million Guests, No.1Ranking Tokyo Disneyland Amusement and Leisure Parks: Market Size and the OLC Group’s Share Annual Attendance Ranking among Japanese Theme Parks (Thousands) Tokyo DisneySea Market Size (Billions of Yen) OLC Group’s Share (%) Rank Name of Facility Attendance Disney Resort Line 625 659 657 632 630 648 643 1 Tokyo Disneyland & Tokyo DisneySea 25,424* 40.3 40.2 2 Universal Studios Japan 8,540 39.7 39.6 39.0 3 Huis Ten Bosch 2,190 38.9 Tokyo Disneyland Hotel 4 Namco Namjatown 2,161 Tokyo DisneySea Hotel MiraCosta 37.3 5 Parque España 1,579 Source: Japan Amusement and Recreation Park Data Book 2009 (SOGO UNICOM CO., Ltd. / September 2008) Cirque du Soleil Theatre Tokyo 2001 2002 2003 2004 2005 2006 2007 (CY) *Theme park attendance in the fiscal year ended Bon Voyage Source: White Paper on Leisure 2008. OLC Group’s market share is calculated using data for each fiscal March 31, 2009 was a record high 27,221 thousand. year, not each calendar year.

Disney Ambassador Hotel IKSPIARI

Four Strengths That Support Our Earnings Base Theme Park Segment Percentage of Segment Revenues & Operating Income Total Revenues (Billions of yen) Segment Highlights (Fiscal year ended 302.4 March 31, 2009) 274.5 272.9 34.53 277.6 The popularity of Tokyo Disneyland 25th Business Alliance with 29.1 1 Superb Location 26.4 23.52 Anniversary resulted in increased atten- 2 Disney Enterprises, Inc. dance and revenues per guest. Revenues Extensive Land Tokyo Disney Resort 77.7% and operating income therefore in- Approx. 2 million square meters of License Agreement for Japan creased despite higher theme park contiguous land 10 kilometers (6 miles) from ● Scope 2007 2008 2009 2010 (Forecast) personnel expenses and depreciation the city center (Fiscal years to March 31) Management and operation of Tokyo Disney Resort and “Cinderella Castle” (Tokyo Disneyland) Revenues Operating income expenses. Immense Market Disney Stores in Japan Population of approx. 30 million with Hotel Business Segment Percentage of Segment Revenues & Operating Income substantial disposable income living Central ● Royalties Total Revenues (Billions of yen) Segment Highlights Tokyo 45.9 49.5 within a 50-kilometer (30-mile) radius (Fiscal year ended Proportionate to revenues (yen-denominated) March 31, 2009) Revenues and operating income in- 33.7 33.2 Convenient Access 9.9 creased as the robust performance of 15 minutes by train from Tokyo Station Note: OLC has no capital or personal relationship with Disney Enterprises, Inc. but the two 6.6 6.0 6.2 Tokyo Disneyland Hotel compensated for 50-60 minutes by airport shuttle bus companies have enjoyed a highly positive relationship for more than 25 years. 11.8% preparation expenses before opening. 200720007 2000008 20092000009 201020010 (Forecast) (Fiscal years to March 31) The OLC Group owns extensive land in a The OLC Group is the operator of the “Tokyo Disneyland Hotel” Revenues Operating income superior location Disney theme parks in Japan Retail Business Segment Percentage of Segment Revenues & Operating Income Total Revenues (Billions of yen) Segment Highlights Accumulated Theme Park Management (Fiscal year ended 17.9 3 Expertise 4 Ability to Generate Stable Cash Flow March 31, 2009) 16.9 16.2 16.7 Revenues decreased as the number of customers declined because of worsening economic conditions. The segment Intangibles: High-Quality Service EBITDA 0 0.3 was profitable, however, due to factors The source of OLC’s strength is human resources that provide outstanding hospi- (Billions of yen) 4.2% (1.0) (0.3) including efforts to improve the cost of tality. EBITDA＝ Operating income ＋ Depreciation and amortization, aggregate 2007 2008 2009 2010 (Forecast) merchandise ratio. 89.8 (Fiscal years to March 31) Tangibles: Ongoing Additional Investment 84.7 79.1 77.1 “Ohana Village” (Disney Store) Revenues Operating income (loss) Create spaces of dreams where guests gain a whole new 74.0 74.8 experience of enjoyment and moving 49.7 46.0 44.6 Other Business Segment Percentage of Segment Revenues & Operating Income experiences with each visit Attract more 43.0 43.6 43.4 Total Revenues (Billions of yen) Segment Highlights Increase appeal and capacity guests 24.7 26.3 ▼ (Fiscal year ended Increase appeal March 31, 2009) 18.0 19.5 The strong performance of newly 38.8 40.1 opened Cirque du Soleil Theatre Tokyo and capacity Increase cash flow 34.6 30.6 34.1 31.1 contributed to an increase in revenues, Investment 00.4 2004 2005 2006 2007 2008 2009 6.3% although preparation expenses before (Fiscal years ended March 31) (0.7)( ( (0.7) ((0.9) opening were among the factors result- 2007 2008 2009 2010 (Forecast) Achieve a greater number of guests and high rate of Implement ongoing additional investment based on (Fiscal years to March 31) ing in an increase in operating loss. repeat visits with expertise in intangibles and tangibles generating stable cash flow “Cirque du Soleil Theatre Tokyo” Revenues Operating income (loss) Photos: Red Dog Studio, Julie Aucoin Costumes: Renée April The trademarks ZED and Cirque du Soleil are owned by Cirque du Soleil and used under license. 16 Oriental Land Annual Report 2009 ©2008 Cirque du Soleil Inc. Oriental Land Annual Report 2009 17 Review of Consolidated Operations Theme Park Segment tion, “Harborside Christmas” in the third quarter, and other programs. In the fourth quarter, we held the Grand Finale “The Dream Theme park attendance reached a record high of 27.2 Goes On” at the two theme parks as a finishing touch to the 25th million with the strong performance of Tokyo Disney Anniversary. Resort 25th Anniversary. As a result, total attendance at the two theme parks was 27.2 million (up 7.1 percent from the previous fiscal year), reaching a record high. In addition, revenues per guest at the theme parks ■ Segment Revenues (Fiscal year ended March 31, 2009) totaled ¥9,719 (up 3.7 percent). Ticket receipts were ¥4,222 (down Others 0.1 percent). Merchandise revenues were ¥3,370 (up 8.9 percent) Food and 0.8% Beverages due to strong sales of Christmas merchandise, “Duffy” The Disney “The Dream Goes On” (Tokyo DisneySea)

19.1% Attractions and Bear products sold exclusively at Tokyo DisneySea, and other products 44.7% Shows in addition to items for the 25th Anniversary. Food and beverage rev- following an hourly wage revision OLC implemented in March 2008 ¥302.4 billion enues were ¥2,128 (up 3.9 percent) due to strong sales of popcorn, and an increase in work hours, as well as an increase in depreciation Merchandise 35.4% smoked turkey legs and other one-hand menu items. As a result, rev- expenses due to factors including large-scale renovations at Tokyo enues were ¥302.4 billion (up 10.8 percent). Disneyland, operating income was ¥34.5 billion (up 31.0 percent) due Despite an increase in personnel expenses for part-time employees to the significant increase in revenues.

“Jubilation!” (Tokyo Disneyland)

Segment Overview Summary of the Fiscal Year Ended March 2009 ■ Revenues per Guest ■ Guests by Age ■ Guests by Region • The main facilities of the Theme Park Segment are Steady Implementation of “Innovate OLC 2010” (Yen) (%) (%) 9,309 9,370 9,719 100 100 Tokyo Disneyland and Tokyo DisneySea. The OLC Group worked to enhance quality and clarify targets to 16.2 17.0 17.9 “further strengthen the core business (Tokyo Disney Resort),” a key • Tokyo Disneyland opened in April 1983 and Tokyo 4,151 4,226 4,222 policy of its medium-term plan “Innovate OLC 2010.” 67.7 67.1 66.3 DisneySea in September 2001. Total annual atten- 52.0 51.8 52.2 dance at the two theme parks exceeds 25 million, for In order to enhance quality, we further raised the appeal of Tokyo 3,370 a cumulative total to date of over 400 million. Disney Resort in its tangible aspects by introducing new attractions, a 3,144 3,096 11.3 11.4 11.7 hotel and a theatre, and its intangible aspects centered on cast hospi- 11.8 11.3 10.7 7.2 3.5 7.2 3.6 7.9 3.7 • Tokyo Disneyland and Tokyo DisneySea have an 2,014 2,048 2,128 20.0 19.9 19.2 tality. To clarify targets, we responded to the changes associated with 6.7 3.6 6.5 4.2 7.2 3.2 approximately 40 percent* share of the Japanese the declining birth rate and aging society by reliably attracting guests 2007 2008 2009 2007 2008 2009 2007 2008 2009 amusement and leisure park market. (Fiscal years ended March 31) (Fiscal years ended March 31) (Fiscal years ended March 31) from the large-volume family segment while strengthening guest Ticket receipts Merchandise revenues 40 and above 18 to 39 Kanto Chubu/Koshinetsu Kinki • Revenues of the Theme Park Segment are broadly attraction for the 40-and-above segment. The ratio of 40-and-above Food and beverage revenues 12 to 17 4 to 11 Tohoku Others (Japan) Overseas divided into attractions and shows, merchandise, and guests reached a record high of 17.9 percent (an increase of 0.9 per- food and beverages. centage points compared with the previous fiscal year), and has · Attraction and show revenues include ticket receipts and increased steadily since the opening of Tokyo DisneySea. parking receipts. A one-day adult passport is ¥5,800. “Duffy” The Disney Bear · Merchandise revenues include sales of merchandise at Bon Results for the Fiscal Year Ended March 2009 Voyage and commercial facilities within affiliated hotels, in We enhanced the appeal of Tokyo Disney Resort by conducting a “Duffy” The Disney Bear, sold exclusively at Tokyo DisneySea, is extremely popular among addition to commercial facilities within the theme parks. variety of events throughout the fiscal year for Tokyo Disney Resort guests. · Food and beverage revenues include sales of food and bev- 25th Anniversary, which started on April 15, 2008, not only at the Duffy debuted as a Tokyo DisneySea original character in winter 2005, from the story that erages at commercial facilities within the theme parks. two theme parks, but throughout the entire resort at Disney hotels, “Minnie made a teddy bear for Mickey on the night before he was to embark on a long sea voy-

* Source: White Paper on Leisure 2008 (July 2008, Japan Productivity Center for IKSPIARI, Disney Resort Line and Tokyo Disney Resort Official Hotels. age.” To make a beloved character that guests will always carry with them, we developed change- Socio-Economic Development) At Tokyo Disneyland, a new daytime parade “Jubilation!” began able costumes as related products to cherish Duffy even more, focusing on specially selected mate- in conjunction with the start of the 25th Anniversary, and we held the rials conscious of the feel of holding a stuffed animal. In addition, we opened a café for a limited popular annual events “Disney’s Halloween” and “Christmas time for guests to enjoy spending time with Duffy. We will carefully cultivate Duffy as a character Fantasy” in the third quarter. At Tokyo DisneySea, we held the that guests will love for years to come. “Duffy” The Disney Bear Summer Night Entertainment “Bon Fire Dance” during summer vaca-

18 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 19 Review of Consolidated Operations

Revenues and operating income increased due to the Hotel Business Segment strong performance of Tokyo Disneyland Hotel, which Inc., and in October at Tokyo DisneySea, we will open “Turtle Talk,” a opened in July. Outlook theater-type attraction for guests to enjoy conversation with Crush, the ■ Segment Revenues (Fiscal year ended March 31, 2009) sea turtle from the Disney/Pixar film Finding Nemo. Forecast for the Fiscal Year Ending March 2010 Palm & Fountain In addition to opening these new attractions, as always, we will Terrace Hotel Tokyo Disneyland Total attendance at the two theme parks is forecast to be 25.6 mil- 9.5% Hotel also carry out a variety of special events throughout the year at the lion (down 6.0 percent compared with the previous fiscal year), and rev- 26.4% theme parks. ¥ enues per guest are forecast to be ¥9,450 (down 2.8 percent) because it Disney 29.9% 45.9 We will work to come up with new attractions to further raise the billion will be the year following Tokyo Disney Resort 25th Anniversary. Ambassador level of guest satisfaction. To enhance our guests’ experience value, Hotel Ticket receipts are forecast to be basically unchanged from the 34.2% Tokyo DisneySea Hotel we will introduce the 3D theater attraction “Mickey’s PhilharMagic” MiraCosta previous fiscal year at ¥4,220 (down 0.0 percent). Merchandise rev- and a new attraction inside Cinderella Castle (name undetermined) in enues are forecast to be ¥3,110 (down 7.7 percent) as it will be the 「東京ディスニーホィスニーホテル」 2011, and “Toy Story Mania!”, a 3D ride attraction based on the “Tokyo Disneyland Hotel” year following Tokyo Disney Resort 25th Anniversary. Food and bev- Disney/Pixar Toy Story film series, in 2012. the hotel and the non-recurrence of expenses for the full renovation erage revenues are forecast to be ¥2,120 (down 0.4 percent), basical- In addition, although the number of visits by foreign tourists to Segment Overview of Tokyo DisneySea Hotel MiraCosta conducted in the previous fiscal ly the same as the previous fiscal year. As a result, revenues are fore- Japan decreased in the fiscal year ended March 2009 with the worsen- year. Excluding preparation costs before opening, Tokyo Disneyland cast to be ¥277.6 billion (down 8.2 percent). • The facilities included in the Hotel Business Segment ing economy and other factors, this market is expected to expand sig- Hotel has been profitable. Despite decreases in depreciation expenses and personnel expens- are the three Disney hotels of Tokyo Disneyland Hotel nificantly over the medium-to-long term. The Japan Tourism Agency, es, operating income is forecast to be ¥23.5 billion (down 32.1 per- (opened July 2008), Tokyo DisneySea Hotel MiraCosta which was inaugurated in October 2008, is promoting the “Visit Japan Outlook cent) due to the decrease in revenues and other factors. (opened September 2001) and Disney Ambassador Campaign,” which sets a target for foreign tourists visiting Japan at Hotel (opened July 2000), as well as Palm & Fountain In the fiscal year ending March 2010, Tokyo Disneyland Hotel will 10 million by 2010. The expansion of Haneda Airport and Narita Terrace Hotel (opened February 2005), which is locat- Future Initiatives operate for the full fiscal year. International Airport, the easing of restrictions on issuing visas for ed in the Shin-Urayasu region. We will add new attractions at each of the two theme parks. In tourists from China and other factors are expected to promote visits by At the three Disney hotels, we will sell “Tokyo Disney Resort April 2009 at Tokyo Disneyland, we opened “Monsters, Inc. ’Ride & Go Multi-Day Passport Special” as a joint measure for overnight guests in foreign tourists to Japan. We will strengthen activities to attract for- Summary of the Fiscal Year Ended March 2009 Seek!’”, a ride that evokes the world of the Disney/Pixar film Monsters, eign tourists, mainly from Asia. addition to conducting “Early Entry,” which allows guests to enter Tokyo Disneyland or Tokyo DisneySea an hour before they open. We We held the grand opening of Tokyo Disneyland Hotel on July 8, also plan to carry out a variety of programs at each hotel that will 2008. The 705 guest rooms make it the largest in scale of the Disney include events coordinated with special events at the theme parks. hotels, with many four-guest rooms to accommodate families and At Palm & Fountain Terrace Hotel, we plan to implement several groups comfortably. At the Disney hotels, including Tokyo Disneyland measures including aggressive PR activities and sales of original Hotel, we conducted a variety of programs that included holding packages. events and providing special menus associated with Tokyo Disney Revenues are forecast to be ¥49.5 billion (up 7.8 percent com- Resort 25th Anniversary. pared with the previous fiscal year) and operating income is forecast to In addition, at Palm & Fountain Terrace Hotel, we implemented be ¥9.9 billion (up 59.7 percent) due to factors including a decrease in various measures including sales of original packages. preparation expenses before opening Tokyo Disneyland Hotel. As a result, revenues of the Hotel Business Segment were ¥45.9 billion (up 38.4 percent compared with the previous fiscal year). Although preparation expenses before opening Tokyo Disneyland “Monsters, Inc. ’Ride & Go Seek!’”, opened on April 15, 2009 (Tokyo Disneyland) “Turtle Talk,” scheduled to open October 1, 2009 (Tokyo DisneySea) Hotel increased ¥2.8 billion, operating income was ¥6.2 billion (up 4.5 percent) due to the increase in revenues following the opening of Magical Travel Plans to Make Dreams Come True ■ Number of Foreign Visitors to Japan Tokyo Disney Resort Vacation Packages (Millions of people) Annual number of overseas Target:g 20.00 guests at theme parks*: ■ Occupancy Rate & Average Revenues per Guest Room 0.86 million Tokyo Disney Resort is offering “Tokyo Disney Resort Vacation Packages,” Fiscal year ended March 31, 2009 2X which are original accommodation plans to further raise the level of satisfac- Number of Average revenues Occupancy rate Target: 10.00000 guest rooms per guest room tion of guests staying overnight. These plans are very popular. Specifically, 8.35 8.35 6.73 7.33 5.21 6.14 Tokyo Disneyland Hotel 705 about 95% about ¥55,000 sets include stays at Tokyo Disney Resort partnership hotels as well as the Approximately Tokyo DisneySea Hotel MiraCosta 502 about 95% about ¥50,000 three Disney hotels, a special passport that allows guests to move freely 20% increase Disney Ambassador Hotel 504 86-89% about ¥45,000 between the two theme parks from the first day, a FASTPASS ticket (no time 2003 2004 2005 2006 2007 2008 2010 2020 restriction) for shorter waiting times at attractions, reserved tickets to see pop- (Calendar years) Palm & Fountain Terrace Hotel 702 about 85% about ¥20,000 ular shows, and original items including a ticket folder. Note: Average revenues per guest room includes service charges. Sources: Japan National Tourist Organization, Japan Tourism Agency Note: Content varies according to the plan. * Total number of overseas guests at the two theme parks Tokyo Disneyland and Tokyo DisneySea in the fiscal year ended March 2009

20 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 21 Review of Consolidated Operations

Retail Business Segment We achieved profitability Other Business Segment Cirque du Soleil Theatre Tokyo opened and by improving the cost of performed well. merchandise ratio.

■ Disney Store locations in Japan ■ Segment Revenues (Fiscal year ended March 31, 2009) (As of March 31, 2009) Others 19.3% IKSPIARI Group 37.7% Employee 10.0% ¥24.7 Cafeterias billion 14.0% Monorail 19.0% Theatrical

“Disney Store at Koshigaya AEON Lake Town” “ZEDTM” (Cirque du Soleil Theatre Tokyo) Anniversary, in addition to introducing new stores and renovating Segment Overview Segment Overview stores. Fare revenues of Disney Resort Line increased. The Retail Business Segment was profitable, with operating As a result, revenues of the Other Business Segment were ¥24.7 • The facilities of the Retail Business Segment are Disney • The main facilities of the Other Business Segment are income of ¥5 million (an improvement of ¥0.3 billion), due to factors billion (up 26.7 percent compared with the previous fiscal year), but Stores. IKSPIARI (opened July 2000), Cirque du Soleil Theatre including an improvement in the cost of merchandise ratio and con- operating loss increased ¥0.2 billion due to factors including a ¥0.3 Tokyo (opened October 2008) and Disney Resort Line • In April 2002, Retail Networks Co., Ltd., which was tinuing reductions in fixed expenses from the previous year. billion increase in preparation expenses before opening Cirque du (opened July 2001). established by spinning off The Disney Store business Soleil Theatre Tokyo. of Walt Disney International Co., Ltd., became our Outlook • IKSPIARI is a commercial facility based on the concept wholly-owned subsidiary to manage and operate the of “a town full of stories and entertainment.” It Outlook Disney Store business in Japan. At the Disney Store, we will carry out target-specific product includes approximately 140 shops and restaurants and a 16-screen cinema complex. • There are 57 stores throughout Japan (as of March 31, development and seasonal demand approaches that utilize optimal Cirque du Soleil Theatre Tokyo will operate for the full fiscal year. 2009). character content. In addition, we will work to strengthen customer • Cirque du Soleil Theatre Tokyo, with a 2,170 seat We will strengthen group sales for the theater in addition to meas- retention and cultivate prime customers with a renewal of capacity, is the first permanent theatre in Japan for ures coordinated with IKSPIARI, Disney Ambassador Hotel and others, “Fantamiliar,” our loyal customer program conducted in the fiscal Summary of the Fiscal Year Ended March 2009 Cirque du Soleil. and ticket sales through Tokyo Disney Resort Vacation Packages. year ended March 2009. Moreover, in addition to the full-year opera- At IKSPIARI, we will carry out seasonal events unique to the facility • Disney Resort Line is a monorail connecting four At the Disney Store, we worked to create appealing sales outlets that tion of stores opened in the fiscal year ended March 2009, we will while implementing tenant replacement in response to guest needs. stations within Tokyo Disney Resort. express Disney’s world view with displays of Halloween and Christmas work to strengthen store profitability by opening new stores and clos- Revenues are forecast to be ¥26.3 billion (up 6.4 percent com- merchandise as well as “Ohana Village,” a program featuring Stitch. In ing unprofitable stores (for a total of 56 stores as of March 31, pared with the previous fiscal year). Operating income is forecast to addition, we opened a store at the Sano Premium Outlet as the first per- 2010). Revenues are forecast to be ¥16.7 billion (up 2.8 percent com- Summary of the Fiscal Year Ended March 2009 be ¥0.4 billion (an improvement of ¥1.3 billion) due to a decrease in manent outlet store. At the same time, we closed unprofitable stores. pared with the previous fiscal year). We will aim to increase operating preparation expenses before opening Cirque du Soleil Theatre Tokyo, Cirque du Soleil Theatre Tokyo gave tryout performances from However, revenues were ¥16.2 billion (down 4.0 percent com- income by ¥0.3 billion through greater efficiency, including improve- and withdrawal from an intellectual property rights business which August 15, 2008 and held its grand opening on October 1, 2008. pared with the previous fiscal year) due to a decline in the number of ments to the cost of merchandise ratio, and a decrease in amortiza- was recorded as an operating loss. IKSPIARI conducted events linked to Tokyo Disney Resort 25th customers in the worsening economy. tion of goodwill, in addition to the increase in revenues.

Permanent Theatre Shows

Outlet Stores The Worldwide Cirque du Soleil Opened (CY) Mystère Las Vegas 1993 In the fiscal year ended March 2009, we opened outlet stores to pro- Cirque du Soleil Theatre Tokyo opened within Tokyo Disney Resort in October 2008 as the first “O” Las Vegas 1998 TM vide guests with new choices. After opening a store at Gotemba Premium permanent theatre for Cirque du Soleil in Japan, performing its original program “ZED .” La Nouba Florida 1999 Outlet in April 2008 for a two-month trial period, we opened a permanent Cirque du Soleil, which means “circus of the sun,” is a major creative company that is Zumanity Las Vegas 2003 outlet store at Sano Premium Outlet in December 2008 and a store at renowned the world over as a troupe of “the world’s greatest entertainers.” KÀ Las Vegas 2004 Gotemba Premium Outlet in May 2009. Cirque du Soleil performs both permanent and touring shows. Permanent theatres that are The Beatles LOVE Las Vegas 2006 2008 The stores are very popular among guests, who can purchase products designed and constructed to suit a program allow guests to enjoy shows of a larger scale, and ZAIA Macao ZED Japan 2008 at special prices. They also contribute to lowering the cost of merchandise many fans have enjoyed such shows for a long time, including Mystère (Las Vegas) for 16 years CRISS ANGEL Believe Las Vegas 2008 ratio. and “O” (Las Vegas) for 11 years. “Ohana Village” (Disney Store)

22 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 23 Corporate Social Responsibility (CSR)

Theme Park Operations That Put Safety First considers the environment at Tokyo Disney Resort, including installing energy-efficient cogeneration and air conditioning systems and switch- The OLC Group contributes to society from various angles, Enjoying the Theme Parks with Peace of Mind ing to fuels with lower environmental impact, including the use of com- building a positive relationship by utilizing the special attributes To ensure safety and quality management of attractions and other pressed natural gas to power attractions. We have also implemented of its businesses through its business activities and other features, the OLC Group has established the “Basic Policy for Safety energy conservation activities backstage, including introducing power- activities that have a strong affinity with its businesses in order and Quality.” Under this policy, all of the approximately 1,000 techni- saving air conditioning, lighting, elevators and office automation to contribute to achieving a sustainable society cal and specialist staff including OLC Group employees and staff from equipment, and exterior lighting that uses wind and solar power. cooperating companies alternate in conducting daily and regular To reduce waste, we are working to reduce trash by eliminating inspections based on legal requirements and our internal the disposable paper towels that had been used at each facility at “Maintenance Standard.” In addition, we have regular safety educa- Tokyo Disney Resort and installing electrical hand dryers, introducing Basic Policy vides companies and schools with programs in which participants learn tion and training for cast members. non-disposable tableware from the design stage for Tokyo Disney Sea about the spirit of hospitality. Achieving a Sustainable Society and other measures. We achieve an approximately 68 percent recycling rate (excluding industrial waste) as a result of thorough trash separation. The OLC Group has brought “happiness” to people under its busi- Framework for Promoting CSR Activities To reduce water consumption, because the attractions and facili- ness mission to “create happiness and contentment by offering won- The OLC Group has established the CSR Promotion Group as an ties use large volumes of water, we recycle approximately 60 percent derful dreams and moving experiences created with original, imagina- organization devoted exclusively to CSR within the Corporate Strategy of water used at the theme parks for toilet water, plant irrigation and tive ideas.” We will continue to be a company that people love and Planning Division. In addition, each department within the OLC Group other purposes through purification and treatment at our water treat- trust by not simply pursuing profit but also continuing to fulfill our role selects a person responsible for CSR to consider and promote the incor- ment facility. as a corporate citizen that considers both the environment and society, poration of a societal perspective in all business processes. In addition, so that society will endure for generations to come, and by promoting we are progressing with existing committees such as our Environmental our own unique CSR. Protection Committee as well as with creating a coordinated interde- Social Contribution Activities partmental system and enhancing structures and systems. The Foundation for Remaining a Trusted Company Daily inspection of “Western River Railroad” A Heartfelt Bridge to Society Befitting the OLC Group CSR activities of the OLC Group form the foundation of trust from To ensure the safety of parades and stage shows, the “Safety Providing Happiness The OLC Group focuses its efforts on families, which are profoundly its stakeholders. We therefore focus on compliance and adhere to laws, Management Guideline” has been established to strengthen safety in connected with our core business area, and places particular emphasis and are always conscious of social regulations and corporate ethics. As SCSE: The Key to Service and Conduct with design, construction, inspection, and maintenance. In addition, during on activities that support nurturing children, who hold the key to soci- we focus on safety and quality control measures, we are always aware Abundant Hospitality parades more than 100 cast members are stationed along the parade of society, listening to its requests and to our guests’ opinions. ety’s future. In 2008, we established the “OLC Group Basic Policy on The source of the happiness that the OLC Group continues to pro- route, which spans approximately 800 meters, to ensure the safety of Moreover, the OLC Group is working aggressively in areas where it can Social Contribution” to make this position clear. vide is the hospitality of the cast members working in the theme parks. the guests. contribute to society by identifying environmental issues such as the We conduct child nurturing activities focused on the previously The SCSE conduct guidelines are the backbone of the judgment and For shopping and dining, we also aim for safety and high quality in prevention of global warming as key CSR themes. mentioned unique CSR themes of “family values” and “learning oppor- conduct of all cast members in providing abundant hospitality and the product development and safety inspections based on the “Basic Policy tunities.” Examples during the fiscal year ended March 2009 include highest level of service to guests. for Merchandise Safety and Quality” and the “OLC Group Food Safety The Unique CSR Activities of the OLC Group our participation in a forum on “The Bond between Families and SCSE lists the order of priority, with Safety taking precedence over Policy,” along with other various steps to provide safe and secure CSR activities that take advantage of our strengths are those that Regions,” sponsored by the Cabinet Office, and our offering opportuni- all. In addition to making SCSE the backbone of judgment and con- products. reach out to people through the heart. The OLC Group is based on ties for families to spend enjoyable times together through show product, we place importance on guests’ opinions in order to meet their business operations that provide people with “dreams, excitement, joy grams with “family values” as the theme and activities where family expectations. and happiness.” Taking these strengths into consideration, the OLC Environmental Protection Activities members work with each other on crafts. Group focuses its CSR activities on efforts to enhance the two themes Dreams and Moving Experiences for We contribute to the local community by developing a variety of of “family values” and “learning opportunities.” S afety 安全 the Next Generation activities for elementary and junior-high school students in Urayasu For “family values,” we provide activities centered around the City. One of these is cooperating in a career experience study program C ourtesy 礼儀正しさ The OLC Group has placed “Working toward harmony with the theme park business that will strengthen family ties by providing the SCSE for junior-high school students. In this OLC Group program, “We Make how ショー global environment in all our activities in order to continue offering time and place for families to enjoy spending time together, thereby S Happiness,” participants experience various jobs behind the scenes at dreams and moving experiences to the next generation” within its promoting communication between grandparents, parents, and chil- fficiency 効率 Tokyo Disney Resort, learning that all of them are linked to the happi- E Environmental Principles. Various initiatives to lower environmental dren. ness of guests. impact include establishing the OLC Group Environmental Policy and For “learning opportunities,” we offer programs to help people In addition, since 1983 we have continuously implemented welfare the Environmental Protection Committee, which is chaired by the head learn the joys of working, stimulate curiosity, develop creativity, and activities in which the Tokyo Disney Resort Ambassadors and the of the Corporate Strategy Planning Division. nurture kindness toward others. For example, the Disney Academy pro- Disney characters bring Disney dreams to those who are unable to visit To prevent global warming, we have progressed with design that Tokyo Disney Resort.

24 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 25 Corporate Governance

The OLC Group aims to enhance corporate governance in order to increase management transparency and fairness and raise the Group’s corporate value Message from the External Corporate Auditor auditing office and the independent auditor also center on the standing Further Reinforcing Corporate Governance corporate auditors. In addition, standing corporate auditors proactively strengthen the management supervisory functions of directors by shift- make statements that incorporate the opinions of the corporate auditors Basic Policy As a lawyer specializing in corporate law, I have seen many corporate as necessary at meetings of the Board of Directors and other meetings. The OLC Group is working to raise corporate value with “Innovate ing the focus of their roles to supervision, and accelerate decision mak- governance situations, and I feel that Oriental Land’s corporate gover- Role of the External Corporate Auditor: As an external corporate auditor OLC 2010,” its medium-term plan for the four years ending March ing by promoting delegation of authority to corporate officers. nance is excellent. and lawyer from whom views as a corporate legal specialist are expected, I 2011. We consider and then act on what we can do for customers and The Board of Directors consists of 12 directors, including one exter- Management Transparency: First, from the point of view of management believe that audits and inspections have an important role in ensuring that society, based on our business mission of providing “dreams, excite- nal director. Board of Directors meetings are held once a month in prin- transparency, I believe the Company’s greatest characteristic is its stock- directors perform their duties, and the Board of Directors makes its deci- ciple. All corporate auditors attend the meetings, whether or not they holders’ meeting. Oriental Land’s stockholders’ meeting is a model for ment, joy and happiness,” which is the origin of the OLC Group. Also, sions, in accordance with laws and the Company’s articles of incorporation other companies. The meetings are highly evaluated for drawing over we will continue working to strengthen corporate governance, based hold standing positions. and that the internal compliance system functions ade- 2,000 stockholders, as well as the meticulous reporting of information on on our understanding of the importance of raising management trans- In addition, we promote swift and accurate decision making quately. Demands on the Company are changing as the Company and careful attention given to the opinions of ordinary parency and fairness, achieving sustainable growth and development, through bodies that decide on important matters concerning business society changes. Under these conditions, I believe we stockholders. In addition, management transparency is secured through and fulfilling our social responsibilities. Specifically, we are primarily execution of authority delegated by the Board of Directors, excluding should work to identify and improve areas that are no such measures as the timely disclosure to stakeholders of both good and items to be resolved by the Board. We established the “Executive longer up to standard, and to further strengthen even engaged in the following activities. bad news concerning the Company’s daily operations. those areas that are fully up to standard. First, the OLC Group is reinforcing internal controls in ways such as Committee” to decide on matters related to overall Company manage- Reinforcing Management Oversight Functions: Next, the Board of I am committed to fulfilling my responsibilities as creating a comprehensive compliance system, strengthening its informa- ment, and the “Theme Park Committee” to make decisions concerning Corporate Auditors has been active from the point of view of reinforcing an external corporate auditor so that the OLC Group the theme park business. tion management system, and establishing a risk management system. management oversight functions. The standing corporate auditors attend can continue to offer its guests “dreams, moving Second, the OLC Group is also promoting reinforcement of manage- key meetings including meetings of the Executive Committee, take ade- 2. Auditing and Supervision experiences, enjoyment and contentment.” ment oversight functions by enhancing the audit system with independ- quate time to check the status and results of audits of subsidiaries and In the Corporate Auditor System adopted by the Company, the two other relevant matters and report them to the Board of Corporate ent accounting audits and internal audits. Akiyasu Nakano standing corporate auditors attend meetings of the Board of Directors, Auditors, and share information for mutual understanding with the part- Third, the OLC Group is conducting active information disclosure to Corporate Auditor (External) time corporate auditors. Furthermore, relations between the internal increase its management transparency. Executive Committee and Theme Park Committee, as well as other Attorney at Law However, even with this governance system in place, ultimately the meetings and committees the corporate auditors deem important, awareness of the people who use the system will decide if it will func- where they state their opinions. Three of the four corporate auditors are Auditing Department to report audit results to the standing corporate violation of law or the Company’s articles of incorporation, it conducts tion or not. The OLC Group is working to spread and provide education external auditors, a structure that brings in opinions from an objective auditors, as well as meetings that provide the opportunity to communi- the necessary investigations and reports its findings to management or about OLC-WAY 2010, a set of shared promises among all officers and and independent standpoint to enable effective audits. To assist the cor- cate and report as needed. to the Executive Committee and the Board of Corporate Auditors. employees. Having all officers and employees fulfill the promises of porate auditors in their duties, we have appointed specialized staff, and To ensure accurate accounting, we receive audits by KPMG AZSA & Co. Moreover, we systematically and continuously conduct internal edu- “Honesty,” “Execution” and “Healthy conflict” contained in OLC-WAY we promote timely reporting of necessary and pertinent information for cation and awareness efforts regarding compliance and monitor the audits with the formulation of the “Policy for Reporting to Auditors,” 2010 will foster a highly compliance-aware corporate culture and cor- Reinforcing the Internal Control System status of compliance in the Company. As part of these efforts, we have porate climate. which stipulates what matters officers and employees must report to set up an Employee Consultation Office as a channel for internal 1. Strengthening Operations to Ensure Compliance By conducting honest management that emphasizes corporate corporate auditors, as well as the timing and method of reporting. reporting within the OLC Group. We have established the “OLC Group Code of Compliance,” which ethics through these measures, we aim to increase our corporate value In accordance with auditing policy and its basic audit plan, corpo- The themes of the OLC Group’s compliance seminars for the three outlines the rules for officers’ and employees’ compliance with ethics and deepen the high evaluation of our stockholders and other stake- rate auditors carry out activities including listening to reports from target groups of officers, managers and regular employees vary. Since and laws, and “Business Guidelines,” which serve as rules of conduct holders. directors and employees and viewing important documents, while the start of the seminars in 2003, they have been held every year with working to ensure the effectiveness of its audits by discussing the sta- for more detailed compliance. full participation. From the fiscal year ended March 2009, the OLC Group OLC-WAY 2010 tus of deliberation at important meetings, audit results and other mat- OLC Group Code of Compliance is developing more practical education with the introduction of original 1. Honesty Do the right thing! ters among the corporate auditors. e-learning for regular employees that was produced by the OLC Group’s 2. Execution Do it yourself! The OLC Group’s officers and employees have a strong ethical commit- The Company has clarified the corporate auditors’ role and work compliance managers and group discussions that use case studies. 3. Healthy conflict Break down barriers! ment to compliance with external laws and regulations and internal rules. responsibilities by setting the “Regulations for the Board of Corporate 1. Prioritize safety above all else. Examples of Group Discussions that Use Case Studies Auditors” and the “Audit Standards for Corporate Auditors” as a 2. Respect human rights and prevent discrimination and harassment. • Protection of Intellectual Property Rights means of establishing and maintaining good corporate governance. Basic System 3. Engage in fair and transparent transactions. • Prevention of Moral Harassment The Company has enhanced internal control with the establishment 4. Strictly control confidential information including personal information. • Disclosure of Negative Information 1. Business Execution 5. Take a firm stance toward anti-social organizations. of an Internal Auditing Department to conduct internal audits on com- Oriental Land (“the Company”) has introduced a Corporate Officer pliance with laws and internal rules and efficient business execution. In addition, we set up the “Compliance Committee,” which is 2. Reinforcing the Information Management System System to strengthen overall control of Group management. The pur- The Internal Auditing Department, the standing corporate auditors chaired by a designee of the president, to ensure the legality of the Information related to directors’ execution of their duties is properly pose of the Corporate Officer System is to more clearly define superviso- and the independent auditors conduct cooperative auditing with regular Company’s management and promote a spirit of compliance. If the stored and managed in accordance with laws and internal regulations ry and executive responsibilities in each of the OLC Group’s businesses, meetings of the three parties and regular opportunities for the Internal committee discovers misconduct by an officer or employee or a serious including the “OLC Group Information Security Policy” and “Document

26 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 27 Corporate Governance

Rules.“ An “Information Security Management Committee” chaired by Board of Directors if they discover any activity by a director that violates Increasing Management Transparency auditors (compensation for services prescribed in Article 2, Paragraph 1 the director in charge of the General Affairs Department has been cre- the law or the articles of incorporation. In addition, we promote timely The OLC Group has established a “disclosure policy” and carries of the Certified Public Accountant Law of Japan and compensation for ated to oversee management of information. reporting of necessary and pertinent information for audits with the out fair, timely and appropriate disclosure of information to investors other services) was as follows. formulation of the “Policy for Reporting to Auditors,” which stipulates and all other stakeholders. In addition to disclosure in compliance with 3. Entrenching the Risk Management System ■ Compensation Paid to Directors and Corporate Auditors what matters officers and employees must report to corporate auditors, the Financial Instruments and Exchange Law, other related regulations (Fiscal year ended March 31, 2009) (Millions of yen) Risk management is implemented in accordance with the “OLC as well as the timing and method of reporting. Additionally, we have and the Tokyo Stock Exchange’s regulations on timely disclosure, the Recipients Amount Group Risk Management Guidelines.” In addition, the “Risk appointed specialized staff in order to assist the corporate auditors in Compensation paid to directors 13 435 OLC Group gathers, analyzes and actively discloses information in [Compensation paid to external directors Assessment Committee,” chaired by the director in charge of the [2] [11] their duties, and we also have an Internal Auditing Department that cases that may have a material effect on investment decisions involving included in above] Corporate Management Planning Division, identifies, evaluates and pri- Compensation paid to corporate auditors 6 65 serves as a department for internal auditing independent from business the Company. [Compensation paid to external corporate oritizes risks that the OLC Group faces, based on which it establishes auditors included in above] [5] [38] execution departments. For example, we disclose and simultaneously distribute major press and manages the overall risk management cycle to formulate individual Total 19 500 releases to registered investors in Japan and overseas concerning mat- Notes: 1. The above figures include two external corporate auditors who retired as of the preventative and response measures. 2. Ensuring the Reliability of Financial Reports ters including financial results and the introduction of new facilities. In end of the 48th General Meeting of Stockholders held on June 27, 2008. Further, we have the “ECC (Emergency Control Center)” to serve as a The Financial Instruments and Exchange Law requires listed compa- 2. Employee wages are not paid to directors who work concurrently as employees of addition, Japanese and English materials are published on our website. the Company. response unit in the event that risks materialize. nies to have internal control reporting systems for results from the Japanese-language presentation materials related to financial results 3. The Company has abolished bonuses to directors, and such bonuses are not reporting period ended March 2009, which consist of producing “evalu- included in compensation paid to directors. meetings are distributed the day of the meeting, and explanatory mate- 4. Reinforcing Decision Making, Authority and ation reports on internal controls for management’s financial reporting ■ Audit Compensation rials included in the presentation are put up on the website as well. (Fiscal year ended March 31, 2009) Responsibilities and audits by external auditors of those evaluations.” Taking the lead in (Millions of yen) Further, summaries of the meetings’ Q&A sessions are published the Amount We have defined the administrative duties of each department and this area, to ensure the reliability of financial reports we established the following day. The Tokyo Stock Exchange’s TDnet carries not only the Company’s ranking system in the “Organizational Rules,” and the “Internal Control Committee,” chaired by the president, in November Compensation based on audit certification 85 financial statements but also supplementary materials. authority of each position and the chain of command in the “Rules of 2006 to promote the building of an internal control system for financial Other compensation This highly transparent disclosure is proof that top management is 4 Administrative Authority,” in order to ensure directors’ efficient execu- reporting as set forth in the Financial Instruments and Exchange Law. taking the initiative in IR activities. This does not stop at financial Total 89 tion of duties. For the fiscal year ended March 2009, the first year of the internal results presentation meetings, but extends to meetings with Japanese Note: The Company’s auditing contract with the independent auditors does not clearly dif- control reporting systems, the OLC Group evaluated and improved the ferentiate compensation for auditing as based on the Company Law or the Financial and overseas investors and as much communication as possible Instruments and Exchange Law. Because the amounts cannot be practically differenti- condition and application of the system. As a result, we judged that our Reinforcing Management Oversight Functions through interview sessions. IR professionals regularly share the opin- ated, compensation, etc. for the period is listed in the total. internal controls for consolidated financial reporting were effective as of 1. Further Upgrading the Supervisory System ions of investors they have gathered with top management. During the March 31, 2009, and submitted an internal control report on the results fiscal year ended March 2009, they shared the opinions of investors in Policy Regarding Control of the Company We have also set “Audit Standards for Corporate Auditors,” which of the evaluation. The contents are being audited by an external audi- Japan gathered through 250 interview sessions and visits, and the The OLC Group’s management policy is to raise corporate value by provides standards and action guidelines for corporate auditors to fol- tor. The OLC Group will continue working to reinforce internal controls opinions of overseas investors gathered through conferences in Japan continuing to be a company that is widely loved and familiar, deepen- low in conducting their audits. The corporate auditors report to the through ongoing evaluations of the system’s condition and application. and four roadshows overseas, one each in Europe and North America ing the trust and understanding of all its stakeholders, and maximizing the resulting cash flow. Corporate Governance Structure (As of June 26, 2009) and two in Asia. In addition, the thousands of opinions, suggestions and evaluations This management policy is aimed at continued long-term growth General Meeting of Stockholders received from our approximately 120,000 individual stockholders and is not meant for pursuing short-term profits. The Company will not Appoint/Dismiss Appoint/Dismiss Appoint/Dismiss Audit Cooperate through questionnaires were sorted by content for regular feedback for categorically reject the reform or vitalization of management through Board of Directors Board of Corporate Auditors Independent Auditors

12 Directors including 1 External Director 4 Auditors including 3 External Auditors Report appropriate managers and departments so we could work to improve the transfer of rights to control the Company, nor obstruct an acquisi-

Appoint/Dismiss Audit our management and business activities. Furthermore, we hold internal tion with the potential to further enhance corporate value or the com- Supervise explanatory meetings for individual departments that use our financial mon benefit of stockholders. The Company currently has no specific results meeting materials dozens of times a year in order to communi- predetermined anti-hostile takeover measures. However, the Company →Consult Recommend Export/Import Control Committee Representative Directors cate our stockholders’ opinions to employees in detail. believes it is inappropriate for an individual or financial entity who may Environment Committee Transfer of authority Through this highly transparent information disclosure and proac- work to the detriment of the Company’s corporate value (including ← Information Security Management Committee tive communication, we work to form mutual understanding and trust individuals or financial entities that attempt to manage without regard Appoint/Dismiss Executive Committee/ Compliance Committee Supervise Instruct Theme Park Committee Internal Control Committee with stakeholders in order to practice the “interactive management” to the Company’s management policies) to control decision making Deliberation on issues [Decide and report on key issues other than matters decided by the Board of Directors] Risk Assessment Committee that is one of the OLC Group’s management positions. regarding the Company’s financial or operational policy. In the event Corporate Officers (16) [Execution of business] such an individual or financial entity should appear, the Board of Cooperate Instruct Internal Audits Compensation Paid to Directors and Directors will consider appropriate measures with outside experts and Instruct /Report Business Departments Internal Auditing Department Cooperate Corporate Auditors and Audit Compensation implement countermeasures in response to conditions. /Administrative Departments [Audits business execution of each division] Internal Audits In the fiscal year ended March 2009, compensation paid to directors and corporate auditors and compensation paid to independent

28 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 29 Board of Directors, Corporate Auditors and Corporate Officers (As of June 26, 2009)

Board of Directors

Toshio Kagami (Left) Norio Irie Yoritoshi Kikuchi Representative Director, Executive Director Executive Director Chairman and CEO 1975 Entered the Company 1980 Entered the Company 1972 Entered the Company 2003 Executive Director 2009 Executive Director 2005 Representative Director, Chairman and CEO

Kyoichiro Uenishi (Right) Representative Director, Yasushi Tamaru Hirofumi Kohnobe President and COO Executive Director Executive Director 1980 Entered the Company 1975 Entered the Company 1981 Entered the Company 2009 Representative Director, President and COO 2009 Executive Director 2009 Executive Director

Kiichi Sunayama Representative Director Shigeru Suzuki Akiyoshi Yokota 1970 Entered the Company 2007 Representative Director Executive Director Executive Director 1980 Entered the Company 1980 Entered the Company 2003 Executive Director 2009 Executive Director

Yojiro Shiba Representative Director Yumiko Takano Tsutomu Hanada 2005 Entered the Company Executive Director Executive Director (External) 2009 Representative Director 1980 Entered the Company Representative Director and President of 2003 Executive Director Keisei Electric Railway Co., Ltd. 1966 Entered Keisei Electric Railway Co., Ltd. 2005 Executive Director of the Company

Corporate Auditors Corporate Officers

Fumio Tsuchiya Hiroshi Otsuka President Officer Executive Officers Kenjiro Mizushima Director of Food Division Standing Corporate Auditor Corporate Auditor (External) Kyoichiro Uenishi Yasushi Tamaru Director of Affiliates Business Unit, Theatrical Business Hirofumi Kohnobe 1979 Entered the Company Chairman of Keisei Electric Railway Co., Ltd. Executive Vice President Officers Division Director of Corporate Strategy Planning Division 2005 Corporate Auditor of the Company 1958 Entered Keisei Electric Railway Co., Ltd. Shigeru Suzuki Etsuko Nagashima 1996 Corporate Auditor of the Company Kiichi Sunayama General Manager of Theme Park Business Unit, General Affairs Department, Publicity Director of Entertainment Division 2008 Advisor of Keisei Electric Railway Co., Ltd. Theme Park Business Supervision Department, Resort Department, Internal Auditing Department Creation Department George Yasuoka Yumiko Takano Director of Theatrical Business Division Isao Iizuka Akiyasu Nakano Yojiro Shiba Representative Director and President Deputy General Manager of Theme Park Business Unit of Milial Resort Hotels Co., Ltd. Akiyoshi Yokota Standing Corporate Auditor (External) Corporate Auditor (External) Director of Marketing Division, Finance/Accounting Department, CS Enhancement Department, Casting Department, Director of Finance/Accounting Department 2008 Corporate Auditor of the Company 1991 Licensed attorney at law Officers Cast Development Department Wataru Takahashi Entered Marunouchi Sogo Law Office Yoritoshi Kikuchi 2008 Corporate Auditor of the Company Representative Director and President of Senior Executive Officer Director of Engineering Division IKSPIARI Co., Ltd. Norio Irie Katsuhisa Udagawa Masufumi Sumimoto Human Resources Department, IT Promotion Department, Director of Operations Division Director of Merchandise Department Food Safety Control Department

30 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 31 Six-Year Summary Message from the Officer in Charge of Oriental Land Co., Ltd. and Consolidated Subsidiaries the Finance / Accounting Department Fiscal years ended March 31

Financial Policy of OLC

1 (Millions of yen) (Thousands of U.S. dollars ) The OLC Group will enhance corporate value 2009 2008 2007 2006 2005 2004 2009 Akiyoshi Yokota FOR THE YEAR: through consistent and steady increases in free cash Executive Director, Officer Finance/Accounting Department Revenues ¥ 389,243 ¥ 342,422 ¥ 344,083 ¥ 332,885 ¥ 331,094 ¥ 336,517 $3,962,567 flow over the long term Director of Finance/Accounting Department Operating income 40,096 31,144 34,111 30,605 34,562 38,765 408,185 Income before income taxes 34,841 25,475 28,863 26,448 30,447 33,458 354,688 The medium-term plan “Innovate OLC 2010” has established financial policies for the OLC Group. Specific policies are to raise the prof- Income taxes 16,878 10,739 12,546 10,738 13,222 14,913 171,821 itability of Tokyo Disney Resort, the core business, and to allocate the increased free cash flow to direct stockholder returns and the Net income 18,089 14,731 16,309 15,704 17,224 18,530 184,149 reduction of interest-bearing debt in order to secure a surplus for investment in new growth. Although we revised the timing for achieving the consolidated net income target for the fiscal year ending March 2011, which had been set in the medium-term plan, due to an Capital expenditures2 40,140 52,691 54,807 43,129 46,855 29,277 408,633 increase in depreciation expenses, free cash flow is forecast to increase greater than the plan. By strengthening our core business, we Depreciation and amortization, aggregate 49,733 43,623 42,951 43,374 44,555 45,982 506,291 will continuously and stably maximize free cash flow over the long term and enhance the corporate value of the OLC Group. EBITDA3 89,829 74,767 77,062 73,979 79,117 84,747 914,476 Free cash flow 4 27,682 5,663 4,453 15,949 14,924 35,235 281,807 Increasing Free Cash Flow by Further at ¥70.00 (up ¥10.00 compared with the previous fiscal year), and plan to AT YEAR-END: Strengthening the Core Business pay ¥80.00 for the fiscal year ending March 2010 (up ¥10.00). In the fiscal Total assets ¥ 644,992 ¥ 757,542 ¥ 699,772 ¥ 718,866 ¥ 660,225 ¥ 654,425 $6,566,141 In the fiscal year ended March 2009 we achieved record high operating year ended March 2009, we used the increased free cash flow to repur- income of ¥40.1 billion due to the effect of Tokyo Disney Resort 25th chase 4.2 million shares of the Company’s stock (4.4 percent of outstand- Theme parks, resorts and Anniversary. Free cash flow increased significantly to ¥27.7 billion (an ing shares, total cost ¥24.4 billion), and retired those 4.2 million shares in other property, at cost 516,040 531,479 526,217 518,936 520,721 518,400 5,253,385 increase of ¥22.0 billion compared with the previous fiscal year) as a result. May 2009. We are aiming for ROE of 8 percent as soon as possible through 5 373,660 3,803,930 Net assets 388,181 385,001 375,947 389,714 373,866 In addition, the OLC Group’s capital expenditures for the future have com- earnings growth and the direct return of earnings to stockholders. Interest-bearing debt 193,019 294,320 235,626 266,945 202,449 209,286 1,964,970 pleted a cycle from the fiscal year ending March 2010 with the opening of Tokyo Disneyland Hotel and Cirque du Soleil Theatre Tokyo. Annual invest- Reduction of Interest-Bearing Debt to Secure a (Yen) (U.S. dollars1) ment in Tokyo Disney Resort for long-term stable growth will remain at the Surplus for Investment in New Growth ¥30.0 billion to ¥40.0 billion level, with the intent of using funds efficiently. In addition, we will allocate free cash flow to reducing interest-bearing PER SHARE DATA: Although operating income is forecast to decrease in the fiscal year ending debt in order to strengthen our financial infrastructure. In the fiscal year Net income (EPS) ¥ 196.84 ¥ 154.86 ¥ 171.46 ¥ 162.73 ¥ 171.19 ¥ 184.23 $ 2.00 March 2010, free cash flow is forecast to be ¥39.4 billion (up ¥11.7 billion) ended March 2009, we redeemed ¥100.0 billion in bonds issued in connec- Net assets (BPS) 4,109.59 4,079.44 4,046.03 3,950.49 3,890.51 3,732.22 41.84 due to a decline in capital expenditures to ¥28.8 billion. In the fiscal year tion with the construction of Tokyo DisneySea. As of March 31, 2009, the Cash dividends 70.00 60.00 55.00 45.00 35.00 29.00 0.71 ending March 2011, free cash flow is forecast to be at the ¥30.0 billion to balance of interest-bearing debt was ¥193.0 billion, our debt-to-equity ¥40.0 billion level, surpassing the ¥30.0 billion guideline figure set in the plan. ratio was 0.52 times, and we received an AA bond rating from Japan Credit Rating Agency, Ltd. and an AA- rating from Rating and Investment (Percent) Allocation to Direct Return of Earnings to Information, Inc. In these ways and others, the OLC Group is steadily SELECTED FINANCIAL DATA: Stockholders strengthening its financial infrastructure. By reducing interest-bearing debt Operating margin 10.3% 9.1% 9.9% 9.2% 10.4% 11.5 % The OLC Group has targeted a consolidated payout ratio of 35 percent during the current medium-term plan, which has been positioned as a Return on revenues 4.6 4.3 4.7 4.7 5.2 5.5 or higher in the medium-term plan, recognizing that returning profits to its preparation period toward new growth, we will secure a surplus for future investment and enable rapid decision making. Return on assets (ROA)6 2.6 2.0 2.3 2.3 2.6 2.8 stockholders is an important management indicator. Based on this policy, we set total cash dividends per share for the fiscal year ended March 2009 Return on equity (ROE)7 4.7 3.8 4.3 4.1 4.5 5.1 Equity ratio 57.9 51.2 55.0 52.3 59.0 57.1 Payout ratio 35.6 38.7 32.1 27.7 20.4 15.7 Annual theme park attendance Interest-Bearing Debt & Capital Expenditures Free Cash Flow Debt-to-Equity Ratio (thousands of guests) 27,221 25,424 25,816 24,766 25,021 25,473 (Billions of yen) (Billions of yen) 27.7 (Billions of yen) (Times) Revenues per guest (¥) 9,719 9,370 9,309 9,220 9,178 9,247 54.8 52.7 15.9 294.3 266.9 Number of shares issued (thousands) 95,123 95,123 100,123 100,123 100,123 100,123 46.9 14.9 43.1 235.6 Number of employees 4,115 3,896 3,750 3,676 3,695 3,715 40.1 202.4 193.0 Notes: 1. The U.S. dollar amounts are provided for convenience only and have been converted at the rate of ¥98.23 to $1, the approximate rate of exchange in effect at March 31, 2009. 0.71 0.61 0.52 0.76 2. Capital expenditures includes tangible and intangible assets and long-term prepaid assets. 0.52 3. EBITDA = Operating income + Depreciation and amortization, aggregate 5.7 4. Free cash flow = Net income + Depreciation and amortization, aggregate - Capital expenditures 4.5 5. Net assets as of March 31, 2006 and previous fiscal years has been restated in accordance with a change in accounting standards. 6. Return on assets = Net income / Total assets 7. Return on equity = Net income / Owners’ equity 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 (Fiscal years ended March 31) (Fiscal years ended March 31) (As of March 31) Interest-Bearing Debt Debt-to-Equity Ratio 32 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 33 Management’s Discussion and Analysis of Operations Management’s Discussion and Analysis of Operations

■ ■ 1. Overview of Consolidated Results (Fiscal Year Ended March 31, 2009) Operating Income Other Income (Expenses) and Income before Operating income reached a record high of ¥40.1 billion (up 28.7 per- Income Taxes cent compared with the previous fiscal year) despite the increase in costs Other expenses totaled ¥5.3 billion, compared with other expenses of ■ Revenues (1) Revenues and Income due to factors such as preparation expenses before opening new facilities ¥5.7 billion for the previous fiscal year. Interest expenses decreased ¥1.9 Revenues reached a record high of ¥389.2 billion (up 13.7 percent compared In the Japanese economy during the fiscal year ended March 2009, the due to the substantial increase in revenues. The operating margin rose 1.2 billion compared with the previous fiscal year because of factors including with the previous fiscal year). Analysis of revenues by segment is as follows. severe operating environment continued, as the economy made a clear percentage points to 10.3 percent. redemption of bonds. In addition, despite steady improvement in the per- Theme Park Segment revenues were ¥302.4 billion (up 10.8 percent) downturn, with a decline in corporate profits and private capital investment Analysis of operating income by segment is as follows. formance of the Retail Business Segment, the OLC Group amortized good- because of the popularity of Tokyo Disney Resort 25th Anniversary and amid the strengthening sense of a drastically slowing global economy as In the Theme Park Segment, operating income was ¥34.5 billion (up will as a one-time charge and recognized impairment loss on the Disney increases in theme park attendance and revenues per guest. Theme park the financial crisis in the United States affected the real economy. 31.0 percent) despite an increase in expenses because of the significant Store in the Retail Business Segment based on a forecast that assumes fur- attendance was a record 27.2 million guests (up 7.1 percent). Increases in In these conditions, revenues of the OLC Group totaled a record ¥389.2 growth in revenues. Personnel expenses increased ¥5.2 billion compared ther worsening of economic conditions. guests from regional areas as well as from the Tokyo metropolitan area billion (up 13.7 percent compared with the previous fiscal year) with the with the previous fiscal year because of an increase in personnel expenses As a result of the above, income before income taxes increased 36.8 drove strong growth in attendance. strong performance of Tokyo Disney Resort 25th Anniversary, in addition to for part-time employees following an hourly wage revision implemented in percent compared with the previous fiscal year to ¥34.8 billion. Revenues per guest were ¥9,719 (up 3.7 percent). 25th Anniversary the opening of Tokyo Disneyland Hotel and Cirque du Soleil Theatre Tokyo. March 2008 and an increase in work hours as a result of the gain in theme merchandise, food and beverages were extremely popular, as were other In addition, operating income was ¥40.1 billion (up 28.7 percent), a park attendance. In addition, depreciation expenses increased ¥2.6 billion ■ Income Taxes products such as “Duffy” The Disney Bear products sold exclusively at record high. Net income was ¥18.1 billion (up 22.8 percent) despite factors due to factors including large scale renovations at Tokyo Disneyland includ- Income taxes were ¥16.9 billion (up 57.2 percent) due to the increase Tokyo DisneySea. including an extraordinary loss and an associated reversal of deferred tax ing an energy plant and other large-scale infrastructural facilities. Fixed in income before income taxes and the reversal of deferred tax assets total- assets. This was primarily the result of recording amortization of goodwill Fiscal year ended Fiscal year ended Change from expenses at the theme parks increased ¥0.6 billion due to ¥0.5 billion for ing ¥2.3 billion. The effective tax rate, calculated as the ratio of income March 31, 2009 March 31, 2008 previous period (%) and impairment loss on stores in the Retail Business Segment. Although the the additional advance marketing expenses of commercials prior to the taxes to income before income taxes, rose 6.2 percentage points to 48.4 Theme Park Attendance Retail Business Segment is steadily improving, these were recorded based (Millions of guests) 27.2 25.4 7.1 opening of a new attraction and other factors. The OLC Group successfully percent. on the OLC Group's forecast that assumes further worsening of economic Revenues per Guest ¥9,719 ¥9,370 3.7 controlled the increase in fixed expenses despite holding 25th Anniversary ■ conditions. Ticket Receipts ¥4,222 ¥4,226 (0.1) events throughout the year. Net Income Merchandise ¥3,370 ¥3,096 8.9 In the Hotel Business Segment, operating income was ¥6.2 billion (up Net income was ¥18.1 billion (up 22.8 percent). Net income per share (Billions of yen) Food and Beverages ¥2,128 ¥2,048 3.9 4.5 percent). Although preparation expenses before opening Tokyo increased to ¥196.84 from ¥154.86 for the previous fiscal year. Return on Fiscal year ended Fiscal year ended Increase Change from Disneyland Hotel increased ¥2.8 billion compared with the previous fiscal equity (ROE) improved to 4.7 percent from 3.8 percent for the previous fis- March 31, 2009 March 31, 2008 (decrease) previous period (%) Hotel Business Segment revenues were ¥45.9 billion (up 38.4 percent) year, the hotel performed strongly. Excluding preparation expenses before cal year. Revenues 389.2 342.4 46.8 13.7 due to factors including the strong performance of Tokyo Disneyland Hotel, opening, Tokyo Disneyland Hotel was profitable in the fiscal year ended Theme Park Segment 302.4 272.9 29.6 10.8 which opened during the fiscal year ended March 2009. The occupancy March 2009. Hotel Business Segment 45.9 33.2 12.7 38.4 rate was about 95 percent for Tokyo Disneyland Hotel, about 95 percent The Retail Business Segment was profitable for the fiscal year ended Retail Business Segment 16.2 16.9 (0.7) (4.0) for Tokyo DisneySea Hotel MiraCosta, 86 to 89 percent for Disney March 2009 due to factors including an improvement in the cost of mer- (2) Assets, Liabilities and Net Assets Other Business Segment 24.7 19.5 5.2 26.7 Ambassador Hotel, and about 80 percent for Palm & Fountain Terrace Hotel. chandise ratio and continuing reductions in fixed expenses from the previ- ■ Assets Operating Income 40.1 31.1 9.0 28.7 Retail Business Segment revenues were ¥16.2 billion (down 4.0 per- ous year. Total assets as of March 31, 2009 were ¥645.0 billion (down 14.9 per- Theme Park Segment 34.5 26.4 8.2 31.0 cent) due to factors including a decrease in customers as a result of wors- In the Other Business Segment, operating loss increased ¥0.2 billion. cent compared with the end of the previous fiscal year). Hotel Business Segment 6.2 6.0 0.3 4.5 ening economic conditions. Factors included a ¥0.3 billion increase in preparation expenses before Current assets were ¥88.2 billion (down 51.2 percent), mainly due to Retail Business Segment 0.0 (0.3) 0.3 — Revenues in the Other Business Segment totaled ¥24.7 billion (up 26.7 decreases in marketable securities and cash and cash equivalents to Other Business Segment (0.9) (0.7) (0.2) — opening Cirque du Soleil Theatre Tokyo. percent) due to strong results at the newly opened Cirque du Soleil Theatre Net Income 18.1 14.7 3.4 22.8 Please see the review of consolidated operations on pages 17 through redeem the first series of 2.60 percent unsecured straight bonds. Tokyo, among other factors. 23 for detailed segment information. Non-current assets were ¥556.8 billion (down 3.5 percent) due to factors including a 2.9 percent decrease in theme parks, resorts and other

Revenues Operating Income & Net Income & Total Assets & Capital Expenditures & Operating Margin Return on Equity (ROE) Return on Assets (ROA) Net Assets & Equity Ratio Depreciation and Amortization (Billions of yen) (Billions of yen) (%) (Billions of yen) (%) (Billions of yen) (%) (Billions of yen) (%) (Billions of yen) 389.2 40.1 344.1 342.4 757.5 389.7 388.2 54.8 331.1 332.9 18.1 718.9 699.8 375.9 385.0 373.7 52.7 34.6 34.1 17.2 660.2 49.7 15.7 16.3 645.0 46.9 30.6 31.1 14.7 57.9 44.6 43.1 43.4 43.0 43.6 10.4 10.3 4.7 2.6 59.0 40.1 9.9 9.1 52.3 55.0 51.2 9.2 4.5 2.6 4.1 4.3 2.3 3.8 2.3 2.0

2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 (Fiscal years ended March 31) (Fiscal years ended March 31) (Fiscal years ended March 31) (As of / Fiscal years ended March 31) (As of March 31) (Fiscal years ended March 31) Operating Income Net Income Total Assets Net Assets Capital Expenditures Operating Margin Return on Equity (ROE) Return on Assets (ROA) Equity Ratio Depreciation and Amortization

34 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 35 Management’s Discussion and Analysis of Operations

property, at cost to ¥516.0 billion with the progress of depreciation of • Net Cash Provided by Investing Activities 2. Outlook for Consolidated Results (Fiscal Year Ending March 31, 2010) Tokyo Disney Resort facilities. Net cash provided by investing activities totaled ¥5.8 billion. In the previous fiscal year, investing activities used net cash totaling ¥59.6 billion. ■ ■ Operating Income Liabilities This was due to factors including a decrease in addition to marketable (1) Outlook for Revenues and Income Operating income is forecast to be to ¥34.1 billion (down 14.9 percent Total liabilities as of March 31, 2009 were ¥271.3 billion (down 26.5 securities in preparation for the April 2008 redemption of the first series of (Billions of yen) compared with the previous fiscal year). percent compared with the previous fiscal year). 2.60 percent unsecured straight bonds totaling ¥100.0 billion. Fiscal year ending Fiscal year ended Increase Change from March 31, 2010 March 31, 2009 (decrease) previous period (%) Current liabilities were ¥111.2 billion (down 34.5 percent) due to fac- The operating income forecast by segment is as follows. Revenues 370.1 389.2 (19.2) (4.9) Theme Park Segment operating income is forecast to be ¥23.5 billion tors including the redemption of the first series of 2.60 percent unsecured • Net Cash Used in Financing Activities Theme Park Segment 277.6 302.4 (24.8) (8.2) (down 32.1 percent). Despite decreases of approximately ¥3.0 billion in straight bonds totaling ¥100.0 billion. Net cash used in financing activities totaled ¥130.9 billion. In the previ- Hotel Business Segment 49.5 45.9 3.6 7.8 depreciation expenses and approximately ¥2.0 billion in personnel expens- Non-current liabilities were ¥160.1 billion (down 19.7 percent) due to ous fiscal year, financing activities provided net cash totaling ¥52.9 billion. Retail Business Segment 16.7 16.2 0.5 2.8 es, operating income is forecast to decrease due to the decrease in rev- factors including the transfer of the sixth series of 0.73 percent unsecured The primary uses of cash were the redemption of the first series of 2.60 Other Business Segment 26.3 24.7 1.6 6.4 enues and other factors. Fixed costs at the theme parks are forecast to be straight bonds due May 2009 totaling ¥20.0 billion to current liabilities. percent unsecured straight bonds totaling ¥100.0 billion in April 2008 and Operating Income 34.1 40.1 (6.0) (14.9) at the same level as in the fiscal year ended March 2009. While costs to As of March 31, 2009, interest-bearing debt totaled ¥193.0 billion, purchase of treasury stock totaling ¥24.4 billion. Theme Park Segment 23.5 34.5 (11.1) (32.1) remove facilities related to the 25th Anniversary, maintenance fees and which was 34.4 percent lower than a year earlier. The debt-to-equity ratio Hotel Business Segment 9.9 6.2 3.7 59.7 fixed asset taxes in connection with the introduction of new attractions, improved to 0.52 times from 0.76 times a year earlier. ■ Capital Expenditures and Retail Business Segment 0.3 0 0.3 — and other fixed costs are forecast to increase approximately ¥1.5 billion Depreciation and Amortization Other Business Segment 0.4 (0.9) 1.3 — ■ year on year, the OLC Group will keep fixed costs in line with the previous Net Assets Capital expenditures were ¥40.1 billion (down 23.8 percent). The Net Income 20.7 18.1 2.6 14.4 fiscal year through measures to enhance cost efficiency such as raising the Total net assets as of March 31, 2009 were ¥373.7 billion (down 3.7 decrease was primarily the result of reduced investment in Tokyo ■ efficiency of the reservations center and cleaning operations. percent) due to factors including the purchase of 4.2 million shares of Disneyland Hotel and Cirque du Soleil Theatre Tokyo, both of which opened Revenues Hotel Business Segment operating income is forecast to be ¥9.9 billion treasury stock (4.42 percent of outstanding shares). The resulting reduction during the fiscal year ended March 2009. Revenues are forecast to be ¥370.1 billion (down 4.9 percent compared (up 59.7 percent) due to factors including a decrease of ¥3.0 billion in in net assets was partially offset by the increase in retained earnings from Depreciation and amortization totaled ¥49.7 billion (up 14.0 percent). with the previous fiscal year). preparation expenses before opening Tokyo Disneyland Hotel, in addition net income for the fiscal year. The equity ratio improved 6.7 percentage Factors included the opening of Tokyo Disneyland Hotel and Cirque du The forecast for revenues by segment is as follows. to the increase in revenues. points to 57.9 percent. Soleil Theatre Tokyo. Revenues of the Theme Park Segment are forecast to be ¥277.6 billion (down 8.2 percent). Because it will be the year following Tokyo Disney Retail Business Segment operating income is forecast to be ¥0.3 billion (up ¥0.3 billion). Factors include greater efficiency, with improvements to ■ Free Cash Flow Resort 25th Anniversary, total attendance at the two theme parks is fore- the cost of merchandise ratio, in addition to the increase in revenues. Free cash flow totaled ¥27.7 billion (up 388.8 percent). This was prima- cast to be 25.6 million guests (down 6.0 percent). While the theme parks (3) Cash Flows Other Business Segment operating income is forecast to be ¥0.4 billion (an rily the result of increased net income and reduced capital expenditures. are not greatly affected by the state of the economy, the OLC Group is mak- ■ Cash Flows ing a conservative forecast that assumes worsening economic conditions. improvement of ¥1.3 billion compared with the previous fiscal year), due to a decrease of ¥0.6 billion in preparation expenses before opening Cirque du Cash and cash equivalents as of March 31, 2009 totaled ¥50.9 billion, ■ Funding and Bond Ratings Fiscal year ending Fiscal year ended Change from Soleil Theatre Tokyo, and withdrawal from an intellectual property rights busi- compared with ¥47.0 billion a year earlier. The OLC Group’s primary source of liquidity is cash generated in day-to- March 31, 2010 March 31, 2009 previous period ness which was recorded as an operating loss, in addition to the increase in day operating activities. In addition, the OLC Group is working to increase (Forecast) (Actual) (%) revenues. • Net Cash Provided by Operating Activities free cash flow under its medium-term plan, “Innovate OLC 2010.” The OLC Theme Park Attendance (Millions of guests) 25.6 27.2 (6.0) Net cash provided by operating activities increased ¥20.4 billion com- Group’s policy is to allocate free cash flow to direct stockholder returns Revenues per Guest ¥9,450 ¥9,719 (2.8) ■ Net Income pared with the previous fiscal year to ¥78.1 billion. Factors included increas- while reducing interest-bearing debt and enhancing business development Ticket Receipts ¥4,220 ¥4,222 (0.0) Net income is forecast to be ¥20.7 billion (up 14.4 percent compared es in income before income taxes and depreciation and amortization, in order to secure surplus capital to fund future growth. Merchandise ¥3,110 ¥3,370 (7.7) with the previous fiscal year), a record high. Extraordinary losses totaling aggregate, and decreases in income taxes paid and other items. As of March 31, 2009, the OLC Group’s long-term debt was rated AA Food and Beverages ¥2,120 ¥2,128 (0.4) ¥4.1 billion in the fiscal year ended March 2009 will not recur. by Japan Credit Rating Agency, Ltd. (JCR) and AA- by Rating and Investment Information Inc. (R&I). Revenues of the Hotel Business Segment are forecast to be ¥49.5 bil- In addition, the OLC Group also manages liquidity by maintaining com- lion (up 7.8 percent). An increase is projected from the first full year of mitment lines with strong financial institutions in Japan and overseas to operation of Tokyo Disneyland Hotel. The occupancy rates of the hotels are (2) Cash Flow Outlook Cash Flows obtain access to low-cost liquidity to respond to risks that may arise. expected to be about 95 percent for Tokyo Disneyland Hotel, 91 to 94 per- ■ (Billions of yen) Capital Expenditures and 78.1 Cash flows from cent for Tokyo DisneySea Hotel MiraCosta, about 85 percent for Disney Depreciation and Amortization 66.5 operating activitie Ambassador Hotel and about 80 percent for Palm & Fountain Terrace Hotel. 59.9 59.2 57.7 In the fiscal year ending March 2010, we project capital expenditures to 52.9 Cash flows from Revenues of the Retail Business Segment are forecast to be ¥16.7 bil- investing activities decrease 28.3 percent compared with the previous fiscal year to ¥28.8 bil- 30.2 lion (up 2.8 percent). In addition to the full-year operation of stores opened Cash flows from lion. In the fiscal year ending March 2011, the OLC Group expects to hold in the fiscal year ended March 2009, the Retail Business Segment will work 5.8 financing activities down capital expenditures below the guideline figure in its medium-term to strengthen store profitability by opening new stores and closing unprof- plan, with an outlook for total capital expenditures at the ¥30.0 billion to itable stores. The planned total number of stores as of March 31, 2010 is 56. (9.8) ¥40.0 billion level. As for the details of these capital expenditures, the OLC Revenues of the Other Business Segment are forecast to be ¥26.3 billion (21.1) Group plans to invest approximately ¥20.0 billion each year in renovations (36.0) (up 6.4 percent). The full-year operation of Cirque du Soleil Theatre Tokyo is and improvements to enhance the appeal of Tokyo Disney Resort, which is expected to contribute to higher revenues. (59.6) (130.9) consistent with past investment levels. The OLC Group also plans new (63.6) (67.9) investment, including in new attractions, at the ¥10.0 billion to ¥20.0 bil- 2005 2006 2007 2008 2009 (Fiscal years ended March 31) lion level each year.

36 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 37 Management’s Discussion and Analysis of Operations

5. Business Risks Although depreciation expenses have exceeded the guidelines of the ■ Free Cash Flow Issues that could exert a material effect on the results, financial posi- These precautionary measures include strengthening surveillance systems medium-term plan, depreciation associated with Tokyo DisneySea will For the fiscal year ending March 2010 the OLC Group forecasts that tion, stock price and other aspects of the OLC Group include, but are not for internal networks and limiting access to information. However, unfore- decrease in the fiscal years ending March 2010 and March 2011 according free cash flow will increase to ¥39.4 billion despite the forecast decrease in limited to, the following. Management believes that these are among the seeable or unexpected instances such as hacking of internal information, to plan. As a result, the OLC Group projects that depreciation expenses will operating income. In a challenging business environment, the OLC Group issues that could significantly affect the decisions of investors. misuse of internal databases, leaks or falsification could lead to a decrease decrease 4.3 percent compared with the previous fiscal year to ¥47.6 bil- will work to restrain the use of cash and generate high levels of free cash Please note that forward-looking statements are based on judgments in trust in the OLC Group, damage to the Group brand or other negative lion in the fiscal year ending March 2010, and will be at the ¥45.0 billion flow. The OLC Group will deploy increased free cash flow to reduce the made by the OLC Group as of June 26, 2009. consequences including lawsuits involving large expenses that could affect level for the fiscal year ending March 2011. interest-bearing debt taken on as a reserve for future investment and to the performance of the OLC Group. provide direct stockholder returns. (1) Risks Related to Weakening of the Tokyo Disney Resort Brand (3) Risks Related to the External Environment 3. Status of Progress of the Medium-Term Plan “Innovate OLC 2010” ■ ■ Quality of Tangibles (Facilities, Services, etc.) Weather Since April 2007, the OLC Group has been implementing its medium- A. Further Strengthen the Core Business (Tokyo Disney Resort) for The OLC Group’s principal business, Tokyo Disney Resort, maintains In the OLC Group’s principal business, Tokyo Disney Resort, the number term plan, “Innovate OLC 2010,” for the period from the fiscal year ended Earnings Growth guest satisfaction at a high level by constantly creating new experience of guests that visit the theme parks is easily influenced by weather condi- March 2008 to the fiscal year ending March 2011. B. Establish the Foundation for New Growth value for guests through means such as introducing new facilities. The OLC tions such as climate and temperature. Consequently, an extended period Basically, the four years of this plan are positioned as “a period for pro- C. Increase the Value of the OLC Group Group will work to raise the overall appeal of Tokyo Disney Resort by rais- of inclement weather could affect the performance of the OLC Group by moting efforts to generate new growth in the OLC Group.” Through earn- The medium-term plan set a target of consolidated net income at the ing the quality of its facilities and services. However, lower quality due to causing the number of guests to decrease. ings growth and appropriate allocation of resources that emphasizes direct ¥27.0 billion level in the fiscal year ending March 2011. However, the fiscal factors including an inability to properly time investments as a result of ■ Natural Disasters stockholder returns, reduction of interest-bearing debt, and formulation of year of target completion has been revised due to a forecast increase in unforeseen circumstances could affect the performance of the OLC Group. The OLC Group’s business infrastructure is concentrated in the business development policies, the OLC Group will build a management depreciation expenses (at the ¥45.0 billion level) greater than in the plan ■ Quality of Intangibles (Cast Hospitality, etc.) Maihama area, and a major earthquake, fire, flood or other disaster there base that enables stable long-term growth while continuing to create mov- (at the ¥40.0 billion level). This is due to a shorter depreciation period than The OLC Group’s principal business, Tokyo Disney Resort, is supported could lead to adverse effects. Although the Group has given sufficient con- ing experiences that “bring tears to guests’ eyes.” assumed in the plan, and is not the result of an increase in capital expendi- by numerous cast members. The hospitality of cast members creates strong sideration to disaster resistance at all Tokyo Disney Resort facilities, there is The service industry is facing further diversification in customer values tures above the planned level. Specifically, the OLC Group has invested an feelings of satisfaction among guests. Going forward, the OLC Group will a possibility that in the event of a disaster the damage caused to facilities and Japan’s structural problems of changes in customer segmentation and increased amount in assets with shorter useful lives that are depreciated educate cast members and create a work environment that gives cast mem- and public transportation and the likely drop in consumer confidence would the employment environment resulting from the low birth rate and aging using the declining-balance method. In addition, changes to the tax code bers a sense of pride and joy in their work. However, lower quality due to lead to a temporary decrease in the number of guests, which would affect society. Consequently, the OLC Group’s operating environment is forecast after we had formulated the guidelines in our medium-term plan have factors including a shortage of workers as a result of unforeseen circum- the performance of the OLC Group. to change more substantially than it ever has before. affected depreciation. On the other hand, free cash flow is forecast to be at stances could have consequences such as reduced theme park attendance, ■ Based on its perceptions of this environment, the OLC Group formulat- the ¥30.0 billion to ¥40.0 billion level, an increase compared with the plan Terrorism, Infectious Diseases or Similar Incidents which could affect the performance of the OLC Group. ed the following three fundamental policies of “Innovate OLC 2010.” because capital expenditures are expected to be less than the plan. The OLC Group has numerous facilities where guests are present, and The next medium-term plan (covering the period to the fiscal year ending places the highest priority on ensuring safety at each of them. However, in the event of a terrorist attack or similar incident at a large-scale consumer- March 2014) is scheduled for announcement in May 2010. (2) Risks Related to Operations oriented facility in Japan or overseas, or in the event of an outbreak of an ■ Product Deficiencies and Problems infectious disease for which no treatment is available, consumer confidence 4. Basic Policy on Distribution of Profit and Dividends Incidents, including attraction incidents, sale of defective merchandise would presumably decline. This would likely result in a temporary decrease or product tampering, involving the products and services of Tokyo Disney in the number of guests, which could affect the performance of the OLC (1) Dividends (2) Share Repurchases resort, including attractions, products and foods, could entail serious harm Group. to the guests who are customers, and could result in material costs from The OLC Group recognizes that returning profits to its stockholders is an In addition, the Company provides stockholder returns through share ■ Changes in the Economy factors including decreased trust in the Group’s priority on safety, damage important management policy. The four-year duration of “Innovate OLC repurchases when appropriate. The Company repurchased 4.2 million The results of the OLC Group’s principal business, Tokyo Disney Resort, to the Group brand and lawsuits, which could affect the performance of the 2010” is positioned as “a period for promoting efforts to generate new shares of its own stock (4.42 percent of outstanding shares) in June 2008 have been stable in the past even when economic conditions were unfavor- OLC Group. growth in the OLC Group.” Currently, the OLC Group has no plans to make and retired them in May 2009. Going forward, the Company will compre- able in Japan. We therefore believe that Tokyo Disney resort is not greatly large-scale investments in business development to generate new growth. As hensively take market trends, economic conditions and other factors into ■ Regulatory Violations affected by the state of the economy. However, factors such as an unprece- a result, its policy is to raise the ratio of cash flow allocated to direct stock- account in considering share repurchases. The OLC Group emphasizes compliance in operating its businesses and dented recession could result in a temporary decrease in the number of holder returns. The medium-term plan states a policy of working for continu- Moreover, the Company aims to increase ROE to 8.0 percent or higher conducting related transactions including the procurement of products and guests, which could affect the performance of the OLC Group. ous stockholder returns, with a target payout ratio of 35 percent of consoli- as early as possible through earnings growth and direct stockholder materials. We maintain systems that promote compliance and provide ■ Regulatory Issues dated net income or higher starting in the fiscal year ended March 2008. returns. ongoing education to managers. These efforts notwithstanding, failure The OLC Group is subject to various regulatory systems including safety Based on this policy, the Company declared a year-end dividend for the among managers to prevent major regulatory violations or incidents could Dividends per Share 80 standards for attractions, quality standards for products and other items fiscal year ended March 2009 of ¥40.00 per share. Total cash dividends for (Yen) Interim 70 result in the cessation of part or all operations due to government actions, provided to guests, environmental standards, accounting standards and tax the fiscal year therefore increased ¥10.00 from the fiscal year ended March Year-end 60 40 reduced trust in the OLC Group, damage to the Group brand or other nega- 55 laws. Of note, the OLC Group maintains its own standards for safety and 2008 to ¥70.00 per share. In line with its objective of steadily increasing 45 tive consequences including lawsuits involving large expenses that could 30 40 quality that exceed those mandated by law. In the other areas, the OLC dividends, for the fiscal year ending March 2010 the Company plans to 35 30 affect the performance of the OLC Group. increase total dividends by ¥10.00 per share compared with the fiscal year 25 Group promotes full compliance. However, the OLC Group would necessar- 20 ■ Information Security ended March 2009 to ¥80.00 per share. 40 ily have to comply with newly introduced or revised laws and regulations, 30 30 The OLC Group takes full precautions in its business activities to pre- 15 20 25 which could temporarily constrain some or all operations and thus affect vent avoidable leaks of the personal information it maintains on guests and the performance of the OLC Group. 2005 2006 2007 2008 2009 2010 the proprietary information it maintains concerning business operations. (Fiscal years to March 31) (Planned)

38 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 39 Consolidated Balance Sheets As of March 31, 2009 and 2008

Thousands of Thousands of Millions of yen U.S. dollars Millions of yen U.S. dollars 2009 2008 2009 2009 2008 2009 ASSETS LIABILITIES CURRENT ASSETS: CURRENT LIABILITIES: Cash and cash equivalents ¥ 50,920 ¥ 97,902 $ 518,375 Trade payables ¥ 16,358 ¥ 15,377 $ 166,528 Marketable securities (Notes 2 and 5) 21 42,711 214 Current portion of long-term debt (Notes 4 and 5) 42,104 101,304 428,627 Trade receivables 15,697 13,362 159,799 Accrued income taxes (Note 7) 11,221 6,165 114,232 Inventories (Note 3) 10,681 10,563 108,735 Other current liabilities (Note 5) 41,524 47,061 422,722 Deferred tax assets (Note 7) 6,678 5,796 67,983 Total current liabilities 111,207 169,907 1,132,109 Other current assets (Note 5) 4,202 10,220 42,777 NON-CURRENT LIABILITIES: Total current assets 88,199 180,554 897,883 Long-term debt (Notes 4 and 5) 150,915 193,016 1,536,343 Employees’ estimated severance and retirement benefits (Note 6) 2,871 2,502 29,227 Deferred tax liabilities (Note 7) 13 — 132 Other non-current liabilities 6,326 3,936 64,400 Total non-current liabilities 160,125 199,454 1,630,102 THEME PARKS, RESORTS AND OTHER PROPERTY, AT COST: Total liabilities 271,332 369,361 2,762,211 Attractions, buildings and equipment (Note 5) 866,925 807,513 8,825,461 COMMITMENTS AND CONTINGENT LIABILITIES (Note 10) Land (Note 5) 93,302 93,302 949,832 NET ASSETS Construction in progress 12,606 47,261 128,331 OWNERS’ EQUITY: (Note 8) 972,833 948,076 9,903,624 Common stock: Less accumulated depreciation (456,793) (416,597) (4,650,239) Authorized – 330,000,000 shares; Total theme parks, resorts and other property, at cost 516,040 531,479 5,253,385 Issued – 95,122,540 shares in 2009 and 2008 63,201 63,201 643,398 Additional paid-in capital 111,403 111,403 1,134,104 Retained earnings 225,212 212,704 2,292,701 Less cost of common stock in treasury, 4,203,176 shares in 2009 and 2,558 shares in 2008 (24,464) (15) (249,048) Total owners’ equity 375,352 387,293 3,821,155 ACCUMULATED GAINS FROM VALUATION AND INVESTMENTS AND OTHER ASSETS: 14,789 19,398 150,555 TRANSLATION ADJUSTMENTS: Investment securities (Notes 2 and 5) — 1,830 — Net unrealized holding gains (losses) on securities (1,404) 1,059 (14,293) Goodwill 11,212 11,712 114,140 Net unrealized losses on hedging derivatives (307) (315) (3,125) Other intangible assets 3,116 3,694 31,721 Total accumulated gains (losses) from valuation and Deferred tax assets (Note 7) 11,636 8,875 118,457 translation adjustments (1,711) 744 (17,418) Other assets 40,753 45,509 414,873 MINORITY INTERESTS: 19 144 193 Total non-current assets 556,793 576,988 5,668,258 Total net assets 373,660 388,181 3,803,930 Total assets ¥ 644,992 ¥ 757,542 $ 6,566,141 Total liabilities and net assets ¥644,992 ¥757,542 $6,566,141

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

40 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 41 Consolidated Statements of Income Consolidated Statements of Changes in Net Assets Years Ended March 31, 2009, 2008 and 2007 Years Ended March 31, 2009, 2008 and 2007

Thousands of Millions of yen Millions of yen U.S. dollars Owners’ equity Number 2009 2008 2007 2009 of shares Common stock Additional Retained Less cost of common Total owners’ 2009 (Thousands) paid-in capital earnings stock in treasury equity REVENUES ¥389,243 ¥342,422 ¥344,083 $3,962,567 Balance at March 31, 2008 95,123 ¥63,201 ¥111,403 ¥212,704 ¥ (15) ¥387,293 COST OF REVENUES 286,151 259,356 259,416 2,913,071 Changes during the period Gross profit 103,092 83,066 84,667 1,049,496 Dividends from retained earnings (5,581) (5,581) Net income SELLING, GENERAL AND 18,089 18,089 Acquisition of treasury stock (24,449) (24,449) ADMINISTRATIVE EXPENSES 62,996 51,922 50,556 641,311 Net change of items other than Operating income 40,096 31,144 34,111 408,185 owners’ equity during the period Total changes during the period — ¥— ¥—¥ 12,508 ¥(24,449) ¥ (11,941) OTHER INCOME (EXPENSES): Balance at March 31, 2009 95,123 ¥63,201 ¥111,403 ¥225,212 ¥(24,464) ¥375,352 Interest and dividend income 521 1,022 491 5,304 Gain on sales of investment securities 93 21 — 947 Millions of yen Valuation and translation adjustment Interest expenses (2,809) (4,736) (4,302) (28,596) Net unrealized Net unrealized Total valuation Loss on business restructuring (706) — (736) (7,187) holding gains gains on hedging and translation Minority interests Total net assets 2009 on securities derivatives adjustment Impairment loss on investment securities (Note 2) (604) (80) (770) (6,149) Balance at March 31, 2008 ¥ 1,059 ¥(315) ¥ 744 ¥ 144 ¥388,181 Impairment loss of fixed assets (Note 11) (988) (1,546) — (10,058) Changes during the period Equity in earnings (losses) of affiliates 35 33 (1) 356 Dividends from retained earnings (5,581) Net income Other, net 18,089 (797) (383) 70 (8,114) Acquisition of treasury stock (24,449) (5,255) (5,669) (5,248) (53,497) Net change of items other than owners’ equity during the period Income before income taxes 34,841 25,475 28,863 354,688 (2,463) 8 (2,455) (125) (2,580) Total changes during the period ¥ (2,463) ¥8 ¥(2,455) ¥(125) ¥ (14,521) INCOME TAXES: (Note 7) Balance at March 31, 2009 ¥ (1,404) ¥(307) ¥(1,711) ¥ 19 ¥373,660 Current 15,341 10,492 14,284 156,174 Deferred 1,537 247 (1,738) 15,647 Millions of yen 16,878 10,739 12,546 171,821 Owners’ equity MINORITY INTERESTS (126) 5 8 (1,282) Number of shares Common stock Additional Retained Less cost of common Total owners’ Net income ¥ 18,089 ¥ 14,731 ¥ 16,309 $ 184,149 2008 (Thousands) paid-in capital earnings stock in treasury equity Balance at March 31, 2007 100,123 ¥63,201 ¥111,403 ¥233,932 ¥(30,265) ¥378,271 Changes during the period Yen U.S. dollars Dividends from retained earnings (5,707) (5,707) AMOUNTS PER SHARE: Net income 14,731 14,731 Acquisition of treasury stock Net income ¥ 196.84 ¥ 154.86 ¥ 171.46 $ 2.00 (2) (2) Retirement of treasury stock (5,000) (30,252) 30,252 — Cash dividends 70.00 60.00 55.00 0.71 Net change of items other than owners’ equity during the period The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. Total changes during the period (5,000) ¥— ¥—¥ (21,228) ¥30,250 ¥ 9,022 Balance at March 31, 2008 95,123 ¥63,201 ¥111,403 ¥212,704 ¥ (15) ¥387,293

Millions of yen Valuation and translation adjustment Net unrealized Net unrealized Total valuation holding gains gains on hedging and translation Minority interests Total net assets 2008 on securities derivatives adjustment Balance at March 31, 2007 ¥ 6,348 ¥ 241 ¥ 6,589 ¥141 ¥385,001 Changes during the period Dividends from retained earnings (5,707) Net income 14,731 Acquisition of treasury stock (2) Retirement of treasury stock — Net change of items other than owners’ equity during the period (5,289) (556) (5,845) 3 (5,842) Total changes during the period ¥(5,289) ¥(556) ¥(5,845) ¥ 3 ¥ 3,180 Balance at March 31, 2008 ¥ 1,059 ¥(315) ¥ 744 ¥144 ¥388,181 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

42 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 43 Consolidated Statements of Changes in Net Assets Consolidated Statements of Cash Flows Years Ended March 31, 2009, 2008 and 2007

Millions of yen Thousands of Millions of yen Number Owners’ equity U.S. dollars of shares Additional Retained Less cost of common Total owners’ 2009 2008 2007 2009 2007 (Thousands) Common stock paid-in capital earnings stock in treasury equity Balance at March 31, 2006 100,123 ¥63,201 ¥111,403 ¥222,439 ¥(30,263) ¥366,780 CASH FLOWS FROM OPERATING ACTIVITIES: Changes during the period Income before income taxes ¥ 34,841 ¥ 25,475 ¥ 28,863 $ 354,688 Dividends from retained earnings (4,756) (4,756) Adjustments to reconcile income before income taxes Bonuses to directors and corporate auditors (60) (60) to net cash provided by operating activities: Net income 16,309 16,309 Depreciation and amortization, aggregate 49,733 43,623 42,951 506,291 Acquisition of treasury stock (2) (2) Impairment loss of fixed assets 988 1,546 — 10,058 Net change of items other than Amortization of goodwill 1,909 155 178 19,434 owners’ equity during the period Total changes during the period — ¥— ¥ — ¥ 11,493 ¥ (2) ¥ 11,491 Increase in estimated termination and Balance at March 31, 2007 100,123 ¥63,201 ¥111,403 ¥233,932 ¥(30,265) ¥378,271 retirement and other allowances 316 10 247 3,217 Interest and dividends income (521) (1,022) (491) (5,304) Millions of yen Interest expenses 2,809 4,736 4,302 28,596 Valuation and translation adjustment Exchange gain (0) (6) (2) (0) Net unrealized Net unrealized Total valuation Gain on sales of property — — (181) — holding gains gains on hedging and translation Minority interests Total net assets 2007 on securities derivatives adjustment Gain on sales of investment securities (93) (21) — (947) Impairment loss on investment securities 604 80 770 6,149 Balance at March 31, 2006 ¥ 9,053 ¥ — ¥ 9,053 ¥114 ¥375,947 Changes during the period Equity in (earning) loss of affiliates (35) (33) 1 (356) Dividends from retained earnings (4,756) Increase in trade receivables (2,641) (464) (858) (26,886) Bonuses to directors and corporate auditors (60) (Increase) decrease in inventories (117) (1,598) 71 (1,191) Net income 16,309 Increase (decrease) in trade payables (923) 682 1,350 (9,396) Acquisition of treasury stock (2) Increase (decrease) in accrued consumption taxes 344 (153) 637 3,502 Net change of items other than Other, net 4,533 2,177 4,242 46,147 owners’ equity during the period (2,705) 241 (2,464) 27 (2,437) 91,747 75,187 82,080 934,002 Total changes during the period ¥(2,705) ¥241 ¥(2,464) ¥ 27 ¥ 9,054 Sub-total Balance at March 31, 2007 ¥ 6,348 ¥241 ¥ 6,589 ¥141 ¥385,001 Interest and dividends received 735 798 449 7,482 Interest paid (4,075) (4,617) (4,360) (41,484) Income taxes paid (10,285) (13,650) (11,665) (104,703) Net cash provided by operating activities 78,122 57,718 66,504 795,297 Thousands of U.S. dollars CASH FLOWS FROM INVESTING ACTIVITIES: Owners’ equity Number Addition to marketable securities — (72,927) (41,869) — of shares Common stock Additional Retained Less cost of common Total owners’ 2009 (Thousands) paid-in capital earnings stock in treasury equity Proceeds from maturity of marketable securities 41,979 61,472 39,191 427,354 Acquisition of property (40,924) (49,084) (50,843) (416,614) Balance at March 31, 2008 95,123 $643,398 $1,134,104 $2,165,367 $ (153) $3,942,716 Changes during the period Addition to investment securities (1,206) (1,158) (10,488) (12,277) Dividends from retained earnings (56,815) (56,815) Proceeds from sales of investment securities 357 5,239 — 3,634 Net income 184,149 184,149 Proceeds from maturity of investment securities — 3,000 — — Acquisition of treasury stock (248,895) (248,895) Addition of time deposits included in other current assets — (11,000) (1,000) — Net change of items other than Proceeds from maturity of time deposits included owners’ equity during the period in other current assets 4,000 8,000 — 40,721 Total changes during the period — $ — $—$ 127,334 $(248,895) $ (121,561) Balance at March 31, 2009 95,123 $643,398 $1,134,104 $2,292,701 $(249,048) $3,821,155 Other, net 1,546 (3,117) (2,910) 15,738 Net cash provided by (used in) investing activities 5,752 (59,575) (67,919) 58,556 Thousands of U.S. dollars CASH FLOWS FROM FINANCING ACTIVITIES: Valuation and translation adjustment Proceeds from long-term debt — 59,874 — — Net unrealized Net unrealized Total valuation Repayments of long-term debt (101,304) (1,304) (31,304) (1,031,294) holding gains gains on hedging and translation Minority interests Total net assets 2009 on securities derivatives adjustment Dividends paid (5,596) (5,694) (4,733) (56,968) Purchase of treasury stock (24,448) (2) (2) (248,885) Balance at March 31, 2008 $10,781 $(3,207) $ 7,574 $ 1,466 $3,951,756 Changes during the period Other, net 489 0 0 4,978 Dividends from retained earnings (56,815) Net cash used in (provided by) financing activities (130,859) 52,874 (36,039) (1,332,169) Net income 184,149 Effect of exchange rate changes on cash and cash equivalents 3 7 4 30 Acquisition of treasury stock (248,895) Net decrease (increase) in cash and cash equivalents (46,982) 51,024 (37,450) (478,286) Net change of items other than Cash and cash equivalents at beginning of period 97,902 46,878 84,328 996,661 owners’ equity during the period (25,074) 82 (24,992) (1,273) (26,265) Cash and cash equivalents at end of period ¥ 50,920 ¥ 97,902 ¥ 46,878 $ 518,375 Total changes during the period $(25,074) $ 82 $(24,992) $(1,273) $ (147,826) Balance at March 31, 2009 $(14,293) $(3,125) $(17,418) $ 193 $3,803,930 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.

44 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 45 Notes to Consolidated Financial Statements

1. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES selling value, which is defined as the selling price less additional esti- H SOFTWARE mated manufacturing costs and estimated direct selling expenses. The Amortization of the software for internal use included in other A BASIS OF PRESENTING CONSOLIDATED sheet date. Gains and losses resulting from the translation are charged to replacement cost may be used in place of the net selling value, if intangible assets is computed by the straight-line method over the esti- FINANCIAL STATEMENTS income. appropriate. mated useful lives (five years). The accompanying consolidated financial statements have been prepared As a result, inventories as of March 31, 2009 decreased by ¥53 in accordance with the provisions set forth in the Japanese Financial D CASH AND CASH EQUIVALENTS million (US$540 thousand) and operating income and income before I DEVELOPMENT EXPENSES income taxes decreased by the same amount, respectively. Instruments and Exchange Law and its related accounting regulations, and in In preparing the consolidated statements of cash flows, cash on Expenses relating to development activities are charged to income Effective from the year ended March 31, 2009, the Companies conformity with accounting principles generally accepted in Japan (“Japanese hand, readily available deposits and short-term highly liquid investments as incurred. GAAP”), which are different in certain respects as to application and disclo- with negligible risk of changes in value and maturities not exceeding changed the main accounting policy for determining cost of inventory of consumer products at stores, from the retail method to the moving-aver- sure requirements from the International Financial Reporting Standards. three months at the time of purchase are considered to be cash and cash J PENSION PLAN AND RETIREMENT BENEFITS The accompanying consolidated financial statements have been equivalents. age method. The purpose is to have more accurate cost of inventory and The Companies provide allowances for employees’ severance and restructured and translated into English (with some expanded descrip- calculation of profits and losses for each financial period. As a result, retirement benefits at the balance sheet date based on the estimated tions) from the consolidated financial statements of Oriental Land Co., E MARKETABLE SECURITIES AND operating income and income before income taxes increased by ¥12 amounts of projected benefit obligation and the fair value of the plan Ltd. (“the Company”) prepared in accordance with Japanese GAAP and INVESTMENT SECURITIES million (US$122 thousand), respectively. assets at that date. filed with the appropriate Local Finance Bureau of the Ministry of Finance Marketable securities and investment securities are classified as (a) The net transition obligation incurred effective April 1, 2000 due to as required by the Financial Instruments and Exchange Law. Some sup- G THEME PARKS, RESORTS AND securities held for trading purposes (hereafter, “trading securities”), (b) the adoption of new accounting standards (¥4,573 million) has been plementary information included in the statutory Japanese language con- OTHER PROPERTY debt securities intended to be held to maturity (hereafter, “held-to-matu- recognized in expenses in equal amounts over 15 years. Unrecognized solidated financial statements, but not required for fair presentation, is Depreciation on property of Tokyo Disneyland and others is comput- rity-debt securities”), (c) equity securities issued by subsidiaries and affili- actuarial net gains or losses are amortized mainly over 15 years on a not presented in the accompanying consolidated financial statements. ed primarily using the declining-balance method. Depreciation on proper- ate companies, or (d) all other securities that are not classified in any of straight-line basis commencing from the succeeding period, and unrec- The translation of the Japanese yen amounts into U.S. dollars is included ty of Tokyo DisneySea and others and buildings acquired after April 1, the above categories (hereafter, “available-for-sale securities”). The ognized prior service cost is amortized mainly over 15 years on a solely for the convenience of readers outside Japan, using the prevailing 1998 is computed using the straight-line method. Companies do not have trading securities and held-to-maturity-debt straight-line basis. exchange rate at March 31, 2009, which was ¥98.23 to U.S.$1. The con- Ordinary maintenance and repairs are charged to income as securities. The Company and certain consolidated subsidiaries have employed venience translations should not be construed as representations that the incurred. Major replacements and betterments are capitalized. When Available-for-sale securities with available fair market value are stated the cash-balance type of defined benefit pension plans. Japanese yen amounts have been, could have been, or could in the future at fair market value as of the balance sheet date. Unrealized gains or losses property is retired or otherwise disposed of, the property and accumu- be, converted into U.S. dollars at this or any other rate of exchange. lated depreciation accounts related to it are relieved of the applicable on these securities are reported, net of applicable income taxes, as a sepa- K INCOME TAXES Certain reclassifications have been made to the 2008 and 2007 consoli- rate component of net assets. Realized gains and losses on sales of such amounts and any differences are included in maintenance costs for The provision for income taxes is computed based on the pretax dated financial statements to conform to the classifications used in 2009. securities are computed using the moving-average method. Available-for- theme parks, resorts and other property, except for the extraordinary income included in the Consolidated Statements of Income. The asset sale securities without fair market value are stated at the moving-average nature of disposal of property which is included in other expenses. and liability approach is used to recognize deferred tax assets and lia- B PRINCIPLES OF CONSOLIDATION cost. (Change in accounting policy) bilities for the expected future tax consequences of temporary differ- The consolidated financial statements include the accounts of the If the market value of available-for-sale securities declines signifi- The Companies have changed the depreciation method following the ences between the carrying amounts of assets and liabilities for finan- Company and all of its subsidiaries (“the Companies”). cantly, such securities are restated at fair market value and the differ- revised corporation tax law in fiscal 2008 regarding property, attractions, cial reporting purposes and the amounts used for income tax purposes. Material inter-company balances, transactions and profits have been ence between fair market value and the carrying amount is recognized buildings and equipment acquired after April 1, 2007. eliminated in consolidation. In the elimination of investments in sub- as loss in the period of the decline. For the available-for-sale securities As a result, for the year ended March 31, 2008, operating income and L PER SHARE DATA sidiaries, the assets and liabilities of the subsidiaries, including the portion without fair market value, if the net asset value declines significantly, income before income taxes decreased by ¥527 million, respectively. attributable to minority shareholders, are evaluated using the fair value at such securities are restated to net asset value with the corresponding Dividends per share shown in the Consolidated Statements of (Additional information) the time the Company acquired control of the respective subsidiaries. losses recognized in the period of decline. In these cases, such fair mar- Income have been presented on an accrual basis and include, in each The revised corporation tax law enacted in fiscal 2008 allows the Consolidation goodwill, the excess of acquisition cost over net assets, ket value or the net asset value will be the carrying amount of the fiscal period, dividends approved after each balance sheet date, but Companies to depreciate the residual value equally over 5 years of is amortized mainly over a period of 20 years on a straight-line basis. securities at the beginning of the next year. applicable to the fiscal period then ended. Net income per share is period which is 5% of the acquisition cost under the tax law. The number of consolidated subsidiaries was 18, 20 and 20 in 2009, based on the weighted average number of shares of common stock. As a result, for the year ended March 31, 2008, operating income and 2008 and 2007, respectively. F INVENTORIES income before income taxes decreased by ¥1,291 million , respectively. M USE OF ESTIMATES Investments in 20-50%-owned affiliates are accounted for by the Consumer products, materials for food, beverages and supplies are equity method and are included in investment securities in the accompa- In preparing financial statements, generally accepted accounting primarily stated at the lower of cost or market using the moving-aver- Following the revisions to the corporation tax law in fiscal 2009, nying consolidated balance sheets. The number of companies accounted principles require management to make estimates and assumptions that age method. the Companies changed the useful life of machinery by the revised cor- for under the equity method was 4, 4 and 5 in 2009, 2008 and 2007, affect the reported amounts of assets and liabilities and disclosures of (Change in accounting policy) poration tax law from this consolidated accounting period. respectively. contingent liabilities at the date of the financial statements and the Effective from the year ended March 31, 2009, the Companies As a result, for the year ended March 31, 2009, operating income reported amounts of revenue and expenses during the reporting period. adopted the new accounting standard for Measurement of Inventories and income before income taxes decreased by ¥49 million (US$499 C FOREIGN CURRENCY TRANSLATION Actual results could differ from those estimates. (Statement No. 9 issued by the Accounting Standards Board of Japan thousand), respectively. Receivables and payables denominated in foreign currencies are trans- on July 5, 2006). This standard requires that inventories held for sale in lated into Japanese yen at the exchange rates prevailing on the balance the ordinary course of business be measured at the lower of cost or net

46 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 47 Notes to Consolidated Financial Statements

N LEASES ship of the leased property to the lessee are to be capitalized, however, Maturities of available-for-sale securities with maturity are as follows: other finance leases are permitted to be accounted for as operating Effective from the year ended March 31, 2009, the Companies Millions of yen lease transactions if certain “as if capitalized” information is disclosed adopted the new accounting standard for Lease Transactions Over one year Over five years (Statement No. 13 issued by the Accounting Standards Board of Japan in the note to the lessee’s financial statements. Within but within but within Over Type one year five years ten years ten years Total on March 30, 2007), which revised the accounting standard for lease The revised accounting standard requires that all finance lease 2009 transactions issued on June 17, 1993. transactions should be capitalized. Prior to April 1, 2008, finance leases that deem to transfer owner- The effect on this change of accounting standard was immaterial. 1) Bonds: Government bonds ¥21 ¥723 ¥ — ¥— ¥ 744 Corporate bonds — — — — — 2. MARKETABLE SECURITIES AND INVESTMENT SECURITIES Other — — — — — 2) Other — — 260 — 260 The following tables summarize acquisition costs and book values of available-for-sale securities with available fair values as of March 31, 2009 Total ¥21 ¥723 ¥260 ¥— ¥1,004 and 2008: Securities with available fair values exceeding book values Millions of yen Thousands of Millions of yen U.S. dollars Over one year Over five years Within but within but within Over 2009 2008 2009 Type one year five years ten years ten years Total Acquisition Book Difference Acquisition Book Difference Acquisition Book Difference Type cost value cost value cost value 2008 Equity securities ¥2,472 ¥3,334 ¥862 ¥2,756 ¥ 6,557 ¥3,801 $25,165 $33,941 $8,776 1) Bonds: Bonds 725 744 19 6,699 6,700 1 7,381 7,574 193 Government bonds ¥ 715 ¥21 ¥ — ¥— ¥ 736 Others — — — — — — — — — Corporate bonds 24,996 — — — 24,996 Total ¥3,197 ¥4,078 ¥881 ¥9,455 ¥13,257 ¥3,802 $32,546 $41,515 $8,969 Other — — — — — 2) Other 17,000 — 260 — 17,260 Securities with available fair values not exceeding book values Total ¥42,711 ¥21 ¥260 ¥— ¥42,992

Thousands of Millions of yen U.S. dollars 2009 2008 2009 Thousands of U.S. dollars Over one year Over five years Acquisition Book Difference Acquisition Book Difference Acquisition Book Difference Type cost value cost value cost value Within but within but within Over Type one year five years ten years ten years Total Equity securities ¥11,503 ¥8,266 ¥(3,237) ¥ 8,953 ¥ 7,098 ¥(1,855) $117,103 $84,149 $(32,954) 2009 Bonds — — — 14,035 14,033 (2) — — — Others — — — — — — — — — 1) Bonds: Government bonds Total ¥11,503 ¥8,266 ¥(3,237) ¥22,988 ¥21,131 ¥(1,857) $117,103 $84,149 $(32,954) $214 $7,360 $ — $— $ 7,574 Corporate bonds — — — — — Total sales amounts of available-for-sale securities sold in the years ended March 31, 2009 and 2008 amounted to ¥357 million (US$3,634 thousand) Other — — — — — and ¥5,043 million, respectively. 2) Other — — 2,647 — 2,647 Total $214 $7,360 $2,647 $— $10,221 The following table summarizes book values of available-for-sale securities with no available fair values as of March 31, 2009 and 2008: Impairment loss of ¥604 million (US$6,149 thousand) and ¥80 million were recognized for available-for-sale securities in the years ended March Thousands of 31, 2009 and 2008, respectively. Millions of yen U.S. dollars Type 2009 2008 2009 Certificate of deposit ¥— ¥17,000 $ — Non-listed equity securities 507 3,628 5,161 Bond — 5,000 — Investment 260 422 2,647 Total ¥767 ¥26,050 $7,808 Investments in affiliated companies accounted for by the equity method amounted to ¥1,699 million (US$17,297 thousand) and ¥1,671 million at March 31, 2009 and 2008, respectively.

48 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 49 Notes to Consolidated Financial Statements

3. INVENTORIES 5. PLEDGED ASSETS Inventories at March 31, 2009 and 2008 are summarized as follows: The net carrying value of pledged assets at March 31, 2009 and 2008 is as follows:

Thousands of Thousands of Millions of yen Millions of yen U.S. dollars U.S. dollars 2009 2008 2009 2009 2008 2009 Merchandise and finished goods ¥ 6,307 ¥ 6,272 $ 64,207 Buildings ¥34,807 ¥36,720 $354,342 Work in process 628 771 6,393 Land 2,655 2,655 27,028 Raw materials and supplies 3,746 3,520 38,135 Investment securities 723 21 7,360 Total ¥10,681 ¥10,563 $108,735 Marketable securities 10 715 102 Others 15 — 153 4. LONG-TERM DEBT Total ¥38,210 ¥40,111 $388,985 Buildings and land are pledged to secure other long-term payable (¥12,986 million (US$132,200 thousand) and ¥14,285 million at March 31, Long-term debt as of March 31, 2009 and 2008 consist of the following: 2009 and 2008, respectively). Marketable securities, and investment securities and others are pledged to advances received of gift certificates Thousands of Millions of yen U.S. dollars (¥390 million (US$3,970 thousand) and ¥404 million at March 31, 2009 and 2008, respectively). 2009 2008 2009 Bonds 6. EMPLOYEES’ SEVERANCE AND RETIREMENT BENEFITS 2.60%, unsecured straight bonds, payable in yen, due April 2008 ¥ — ¥ 100,000 $ — The liabilities for severance and retirement benefits included in the liability section of the consolidated balance sheets as of March 31, 2009 and 0.73%, unsecured straight bonds, payable in yen, due May 2009 20,000 20,000 203,604 1.86%, unsecured straight bonds, payable in yen, due March 2016 29,993 29,993 305,334 2008 consist of the following: 1.29%, unsecured straight bonds, payable in yen, due March 2011 19,997 19,995 203,573 Thousands of Millions of yen 1.32%, unsecured straight bonds, payable in yen, due January 2015 9,996 9,995 101,761 U.S. dollars 1.70%, unsecured straight bonds, payable in yen, due January 2018 20,000 20,000 203,604 2009 2008 2009 99,986 199,983 1,017,876 Loans Projected benefit obligation ¥ 24,204 ¥ 23,527 $ 246,401 Unsecured bank loans due 2009 through 2011 Less fair value of pension assets (16,507) (16,871) (168,044) at the average interest rate of 1.25% 23,800 23,800 242,289 Funded status 7,697 6,656 78,357 Unsecured loans from life insurance companies due 2012 Unrecognized net transition obligation (1,829) (2,134) (18,620) at the average interest rate of 1.07% 5,200 5,200 52,937 Unrecognized actuarial differences (2,665) (1,657) (27,130) Unsecured syndicate loans due 2010 through 2013 Unrecognized prior service cost (332) (363) (3,380) at the average interest rate of 0.77% 51,000 51,000 519,190 Liability for severance and retirement benefits, net 2,871 2,502 29,227 80,000 80,000 814,416 Prepaid pension cost — — — Payable Liability for severance and retirement benefits ¥ 2,871 ¥ 2,502 $ 29,227 Secured other long-term payable 2.15%, due 2019 12,986 14,285 132,200 Unsecured other long-term payable 4.18%, due 2018 47 52 478 Included in the consolidated statement of income for the years ended March 31, 2009, 2008 and 2007 are severance and retirement benefit expenses 13,033 14,337 132,678 comprised of the following: Total 193,019 294,320 1,964,970 Thousands of Less current portion included in current liabilities (42,104) (101,304) (428,627) Millions of yen ¥150,915 ¥ 193,016 $1,536,343 U.S. dollars 2009 2008 2007 2009 The average interest rates shown below are weighted according to the loan balances at the end of the years ended March 31, 2009. Service costs-benefits earned during the year ¥1,397 ¥1,323 ¥1,341 $14,222 Interest cost on projected benefit obligation 451 428 407 4,591 The aggregate annual maturities of long-term debt subsequent to March 31, 2009, are summarized below. Expected return on plan assets (488) (485) (448) (4,968) Thousands of Millions of yen Amortization of prior service costs 31 30 28 316 U.S. dollars Amortization of actuarial differences 146 49 51 1,486 Year ending March 31, Amortization net transition obligation 305 305 305 3,105 2010 ¥ 42,104 $ 428,627 Special termination benefit 20 115 394 204 2011 55,301 562,974 Severance and retirement benefit expenses ¥1,862 ¥1,765 ¥2,078 $18,956 2012 11,504 117,113 2013 16,304 165,978 2009 2008 2014 1,304 13,275 Discount rate mainly 2.0% mainly 2.0% Thereafter 66,502 677,003 Rate of expected return on plan assets 3.0% 3.0% ¥193,019 $1,964,970 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.

50 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 51 Notes to Consolidated Financial Statements

7. INCOME TAXES 8. OWNERS’ EQUITY exchange rates on transactions denominated in foreign currencies. The Companies have also entered into interest rate swap contracts in order The Companies are subject to corporation, enterprise and inhabitants’ taxes, which resulted in an aggregate normal effective tax rates of approxi- Net assets comprises three subsections, which are the owners’ equity, to reduce interest expenses on bonds issued. mately 40.4% for the years ended March 31, 2009, 2008 and 2007. accumulated gains (losses) from valuation and translation adjustments Derivative financial instruments are stated at fair value. The The following table summarizes the significant differences between the statutory tax rate and the Companies’ effective tax rate for financial state- and minority interests. Companies recognize changes in the fair value as gain or loss unless ment purposes for the year ended March 31, 2009 and 2007. The differences for the year ended March 31, 2008 are not shown because they were The Japanese Corporate Law (“the Law”) became effective on May 1, derivative financial instruments are used for hedging purposes. not significant. 2006, replacing the Japanese Commercial Code (“the Code”). If derivative financial instruments are used as hedges and meet cer- 2009 2007 Under the Japanese laws and regulations, the entire amount paid for tain hedging criteria, the Companies defer recognition of gain or losses Statutory tax rate 40.4% Statutory tax rate 40.4% new shares is required to be designated as common stock. However, a resulting from changes in fair value of derivative financial instruments Increase in valuation allowance 7.0 Tax loss carry-forwards of subsidiaries 2.4 company may, by a resolution of the Board of Directors, designate an until the related loss or gain on the hedged items are recognized. Also, Amortization of goodwill 2.2 Non-deductible expenses 0.5 amount not exceeding one-half of the price of the new shares as additional if interest rate swap contracts are used as hedge and meet certain Others (1.2) Others 0.2 paid-in capital, which is included in capital surplus. hedging criteria, the net amount to be paid or received under the inter- Effective tax rate 48.4% Effective tax rate 43.5% Under the Law, in cases where a dividend distribution of surplus is est rate swap contract is added to or deducted from interest on the made, the smaller of an amount equal to 10% of the dividend or the assets or liabilities for which the swap contract was executed. Significant components of the Companies’ deferred tax assets and liabilities as of March 31, 2009 and 2008 are as follows: excess, if any, of 25% of common stock over the total of additional paid- Thousands of in capital and legal earnings reserve must be set aside as additional paid- B HEDGING INSTRUMENTS AND Millions of yen U.S. dollars in capital or legal earnings reserve. Legal earnings reserve is included in HEDGED ITEMS 2009 2008 2009 retained earnings in the accompanying consolidated balance sheets. The following summarizes hedging derivative financial instruments Deferred tax assets: Under the Code, companies were required to set aside an amount used by the Companies and items hedged: Tax loss carry-forwards of subsidiaries ¥ 3,650 ¥ 3,706 $ 37,158 equal to at least 10% of the aggregate amount of cash dividends and other Excess bonuses accrued 2,958 2,139 30,113 cash appropriations as legal earnings reserve until the total of legal earn- Hedging instruments: Hedged Items: Revenue of advanced sold admission tickets on a cash basis 2,746 2,783 27,955 Currency swap contracts Foreign currency accounts payable Loss from impairment of investment securities 1,283 2,267 13,061 ings reserve and additional paid-in capital equaled 25% of common stock. Retirement benefits for employees 1,158 1,009 11,789 Under the Code, legal earnings reserve and additional paid-in capital Interest rate swap contracts Interest on bonds Impairment loss of fixed assets 969 578 9,865 could be used to eliminate or reduce a deficit by a resolution of the share- The Companies evaluate hedge effectiveness by comparing the Others 3,496 1,976 35,589 holders’ meeting or could be capitalized by a resolution of the Board of Total deferred tax assets 16,260 14,458 165,530 cumulative changes in cash flows from or the changes in fair value of Directors. Under the Law, both of these appropriations generally require a Valuation allowance (6,427) (3,995) (65,428) hedged items to the corresponding changes in the hedging derivative resolution of the shareholders’ meeting. Net deferred tax assets 9,833 10,463 100,102 instruments. Deferred tax liabilities: Additional paid-in capital and legal earnings reserve may not be Net unrecognized holding gains on securities — (973) — distributed as dividends. Under the Code, however, on condition that C CREDIT RISK Others (52) (0) (530) the total amount of legal earnings reserve and additional paid-in capi- Net deferred tax assets ¥ 9,781 ¥ (9,490) $ 99,572 tal remained equal to or exceeded 25% of common stock, they were The Companies are exposed to credit risk in the event of default by available for distribution by resolution of the shareholders’ meeting. counter-parties to the currency swap agreements and the interest rate Under the Law, all additional paid-in capital and all legal earnings swap agreements, however, the Companies don’t anticipate the realization reserve may be transferred to other capital surplus and retained earn- of such risk because the counter-parties are major international financial ings, respectively, which are potentially available for dividends. institutions which have high credit ratings. The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial statements of the D RISK MANAGEMENT Company in accordance with the Japanese Laws and regulations. The Companies have a policy not to perform any derivative transactions At the annual shareholders’ meeting held on June 26, 2009, the for speculation, but to cover the future foreign currency settlements and the shareholders resolved to issue cash dividends amounting to ¥3,637 mil- future interest payments and interest received which will incur in the normal lion (US$37,025 thousand). Such appropriations have not been accrued in course of the Companies’ business. Also, risk control procedures are well the consolidated financial statements as of March 31, 2009. Such appro- established to operate internal controls effectively for execution of the priations will be recognized in the period when they are resolved. transactions.

9. FINANCIAL DERIVATIVES 10. COMMITMENTS AND A PURPOSE AND NATURE OF TRANSACTIONS CONTINGENT LIABILITIES The Companies have entered into currency swap contracts in order The Companies have non-cancelable lease agreements, principally to hedge exposures resulting from fluctuations in foreign currency for vehicles and computer equipment.

52 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 53 Notes to Consolidated Financial Statements

11. IMPAIRMENT LOSS OF FIXED ASSETS (Business segments reclassification) Effective from the year ended March 31, 2009, the Companies changed the business segments, in which Hotel segment was newly established During the fiscal years ended March 31, 2009 and 2008, respectively, ¥988 million (US$10,058 thousand) and ¥1,546 million in impairment loss while Commercial Facilities segment is discontinued and others are reconciled among segments considering the current group business structure, so which are recognized as other expense for the Companies are broken down as follows: that the management can evaluate their business segments better than before. Thousands of Business segment information for the years ended March 31, 2009, 2008 and 2007 is as follows: Millions of yen U.S. dollars Location Use Classification 2009 Millions of yen Shops (Kawaguchi-shi, Saitama, and others) Restaurant Buildings and kitchen facilities ¥245 $ 2,494 Retail Other Elimination Shops (Shinsaibashi, Osaka, and others) Retail store Buildings and equipment 439 4,469 Year Ended March 31, 2009 Theme Parks Hotel Business Businesses Total and Corporate Consolidated Hydroponics plant (Sodegaura-shi, Chiba) Idle asset Construction in progress 304 3,095 Revenues: Total ¥988 $10,058 Revenues from customers ¥302,412 ¥45,917 ¥16,226 ¥24,688 ¥389,243 ¥—¥389,243 Certain consolidated subsidiaries recognized impairment loss to match the carrying amount to the recoverable amount for buildings and others in Inter-segment revenues 4,928 599 1,201 7,713 14,441 (14,441) — connection with grouping assets of restaurants and retail stores which had consecutive losses from operating activities. The estimate of the recoverable Total 307,340 46,516 17,427 32,401 403,684 (14,441) 389,243 Operating expenses 272,795 40,292 17,422 33,282 363,791 (14,644) 349,147 amount of the property was determined based on value in use calculated under the 4-percent discounted cash flow, and recognized impairment loss Operating income (loss) ¥ 34,545 ¥ 6,224 ¥5¥ (881) ¥ 39,893 ¥ 203 ¥ 40,096 fully against on the construction in progress, etc. due to the determination that hydroponics plant suspended in construction would be not used for its Total assets ¥424,178 ¥95,985 ¥ 8,279 ¥72,690 ¥601,132 ¥ 43,860 ¥644,992 purpose. 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 Capital expenditures ¥ 20,440 ¥11,398 ¥ 802 ¥ 7,650 ¥ 40,290 ¥ (150) ¥ 40,140 Millions of yen

Location Use Classification 2008 CINEMA IKSPIARI (Urayasu-shi, Chiba) Movie theater Goodwill ¥ 119 Thousands of U.S. dollars CAMP NEPOS (Urayasu-shi, Chiba) Children’s play & care Buildings and equipment 1,119 Retail Other Elimination Theme Parks Hotel Business Businesses Total and Corporate Consolidated Hydroponics plant (Sodegaura-shi, Chiba) Idle asset Construction in progress 308 Year Ended March 31, 2009 Total ¥1,546 Revenues: Revenues from customers $3,078,611 $467,444 $165,184 $251,328 $3,962,567 $—$3,962,567 The Company recognized impairment loss for goodwill in connection with the movie theater due to a changing market environment and decreased Inter-segment revenues 50,168 6,098 12,226 78,520 147,012 (147,012) — profitability. The Company believed that the estimate of the recoverable amount of such goodwill was nil. Total 3,128,779 473,542 177,410 329,848 4,109,579 (147,012) 3,962,567 Furthermore, the Company has decided to discontinue the operation of CAMP NEPOS, which is recreation facility for kids and recognized the Operating expenses 2,777,104 410,181 177,359 338,817 3,703,461 (149,079) 3,554,382 impairment loss fully against on the net book value of the facility due to the plan for disposal in the coming years. Operating income (loss) $ 351,675 $ 63,361 $51$ (8,969) $ 406,118 $ 2,067 $ 408,185 Maihama Business Service Co., Ltd. recognized impairment loss on the construction in progress due to the suspension of the construction of hydro- Total assets $4,318,212 $977,146 $ 84,282 $739,998 $6,119,638 $ 446,503 $6,566,141 ponics plant. The estimate of the recoverable amount of the property was determined based on appraisal by the public appraiser. Depreciation and amortization, aggregate $ 403,532 $ 59,228 $ 2,983 $ 42,065 $ 507,808 $ (1,517) $ 506,291 Impairment loss on fixed assets $ 3,095 $ — $ 4,469 $ 2,494 $ 10,058 $ — $ 10,058 Capital expenditures $ 208,083 $116,034 $ 8,165 $ 77,878 $ 410,160 $ (1,527) $ 408,633 12. SEGMENT INFORMATION

The Companies are primarily engaged in the business areas of Theme parks, Hotel, Retail and Other businesses in Japan. Business segments are Millions of yen classified based on type and nature of products and similarity of market. Retail Other Elimination Main businesses by segment are as follows: Year Ended March 31, 2008 Theme Parks Hotel Business Businesses Total and Corporate Consolidated Segments Main business Revenues: Revenues from customers ¥272,854 ¥33,182 ¥16,904 ¥19,482 ¥342,422 ¥ — ¥342,422 Theme park Management and operation of theme parks Inter-segment revenues 3,731 387 1,005 6,655 11,778 (11,778) — Hotel Management and operation of Tokyo Disneyland Hotel, Tokyo DisneySea Hotel MiraCosta, Tokyo Total 276,585 33,569 17,909 26,137 354,200 (11,778) 342,422 Disney Ambassador Hotel and Palm & Fountain Terrace Hotel Operating expenses 250,217 27,613 18,210 26,822 322,862 (11,584) 311,278 Operating income (loss) ¥ 26,368 ¥ 5,956 ¥ (301) ¥ (685) ¥ 31,338 ¥ (194) ¥ 31,144 Retail business Management and operation of Disney Store Japan Total assets ¥444,593 ¥88,166 ¥ 9,711 ¥71,983 ¥614,453 ¥143,089 ¥757,542 Other business Management and operation of IKSPIARI, Cirque du Soleil Theatre Tokyo and Disney Resort Line Depreciation and amortization, aggregate ¥ 37,063 ¥ 3,206 ¥ 235 ¥ 3,216 ¥ 43,720 ¥ (97) ¥ 43,623 Operation of employee cafeterias, Management and operation of theme restaurants, and others Impairment loss on fixed assets ¥ 308 ¥ — ¥ — ¥ 1,238 ¥ 1,546 ¥ — ¥ 1,546 Capital expenditures ¥ 30,615 ¥15,255 ¥ 396 ¥ 6,479 ¥ 52,745 ¥ (54) ¥ 52,691 Note: Business segment information for the year ended March 31, 2008 is modified in the new business segment for comparison purpose.

54 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 55 Notes to Consolidated Financial Statements Independent Auditors’ Report

To the Owners and Board of Directors of Oriental Land Co., Ltd.: Millions of yen

Commercial Retail Other Elimination Year Ended March 31, 2007 Theme Parks Facilities Business Businesses Total and Corporate Consolidated Revenues: We have audited the accompanying consolidated balance sheets of Oriental Land Co., Ltd. and con- Revenues from customers ¥289,149 ¥23,177 ¥17,858 ¥13,899 ¥344,083 ¥—¥344,083 solidated subsidiaries as of March 31, 2009 and 2008, and the related consolidated statements of Inter-segment revenues 779 748 769 27,033 29,329 (29,329) — income, changes in net assets and cash flows for each of the three years in the period ended March Total 289,928 23,925 18,627 40,932 373,412 (29,329) 344,083 Operating expenses 258,431 22,889 19,646 38,609 339,575 (29,603) 309,972 31, 2009, expressed in Japanese yen. These consolidated financial statements are the responsibility Operating income (loss) ¥ 31,497 ¥ 1,036 ¥ (1,019) ¥ 2,323 ¥ 33,837 ¥ 274 ¥ 34,111 of the Company’s management. Our responsibility is to independently express an opinion on these Total assets ¥475,734 ¥54,872 ¥10,086 ¥64,378 ¥605,070 ¥ 94,702 ¥699,772 consolidated financial statements based on our audits. Depreciation and amortization, aggregate ¥ 37,291 ¥ 2,968 ¥ 517 ¥ 2,274 ¥ 43,050 ¥ (99) ¥ 42,951 Capital expenditures ¥ 40,342 ¥ 1,056 ¥ 438 ¥13,076 ¥ 54,912 ¥ (105) ¥ 54,807 (a) There are no unallocated operating expenses. We conducted our audits in accordance with auditing standards generally accepted in Japan. Those (b) Unallocated assets amounted to ¥52,828 million (US$537,799 thousand), ¥150,098 million and ¥100,178 million as of March 31, 2009, 2008 and standards require that we plan and perform the audit to obtain reasonable assurance about whether 2007, respectively, and include primarily cash, marketable securities, investment securities and so on. the financial statements are free of material misstatement. An audit includes examining, on a test (c) Depreciation and capital expenditures included amortization and addition of long-term prepaid expenses. basis, evidence supporting the amounts and disclosures in the financial statements. An audit also (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 includes assessing the accounting principles used and significant estimates made by management, as ended March 31, 2009, 2008 and 2007. well as evaluating the overall financial statement presentation. We believe that our audits provide a 13. SUBSEQUENT EVENT reasonable basis for our opinion.

A UNSECURED BANK LOANS In our opinion, the consolidated financial statements referred to above present fairly, in all material The Company concluded and executed the following unsecured loan agreement for the purpose of raising funds to redeem a corporate bond. respects, the consolidated financial position of Oriental Land Co., Ltd. and subsidiaries as of March 31, 2009 and 2008, and the consolidated results of their operations and their cash flows for each of Borrowing amount ¥10,000 million (US$101,802 thousand) the three years in the period ended March 31, 2009, in conformity with accounting principles gener- Lender Mizuho Corporate Bank, Ltd. and others ally accepted in Japan. Borrowing date April 27, 2009 Repayment Bullet Without qualifying our opinion, we draw attention to the following: Repayment date September 30, 2009 As described in Note 12 to the consolidated financial statements, effective from the fiscal year ended Collateral None March 31, 2009, the Company changed the business segment. B RETIREMENT OF TREASURY STOCK On April 28, 2009, the Board of Directors of the Company made a resolution to retire treasury stocks. The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2009 are presented solely for convenience. Our audit also included the transla- Class of shares to be retired Common stock Number of shares to be retired 4,200,000 shares (4.42% of issued shares before the retirement) tion of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on Date of retirement May 12, 2009 the basis described in Note 1 to the consolidated financial statements.

Tokyo, Japan June 26, 2009

56 Oriental Land Annual Report 2009 Oriental Land Annual Report 2009 57 Corporate Data Stock Information As of March 31, 2009 As of March 31, 2009

Company Name: Oriental Land Co., Ltd. Shares of Common Stock: Distribution of Stockholders: Common Stock National government Address: 1-1 Maihama, Urayasu, Chiba 279-8511, Japan Outstanding: 95,122,540 shares Treasury stock and local public Note: The Company retired 4.2 million shares of treasury stock in May 2009. 4.42% organizations Established: July 11, 1960 4.16% Stock Listing: Tokyo Stock Exchange, First Section Individuals Financial institutions Capital Stock: ¥63,201 million Code No: 4661 and others 18.71% 26.00% Investment Unit: 100 shares Securities companies Number of Employees: 2,196 (Nonconsolidated) Number of Stockholders: 118,063 Foreign 0.52% corporations Other corporations Bond Ratings: JCR...... AA and individuals 39.58% Primary Subsidiaries: R&I...... AA- 6.61% Company Name Established Business Description Share Registrar: The Chuo Mitsui Trust & Banking Co., Ltd. 33-1, Shiba 3-chome, Minato-ku, Tokyo 105-8574, Japan Maihama Corporation Co., Ltd. February 14, 1994 Management and operation of shopping centers Transfer Agent: Stock Transfer Agent Department, The Chuo Mitsui Trust & Banking Co., Ltd. Milial Resort Hotels Co., Ltd. June 12, 1996 Management and operation of hotels 8-4, Izumi 2-chome, Suginami-ku, Tokyo 168-0063 Japan Maihama Resort Line Co., Ltd. April 9, 1997 Management and operation of monorail Principal Stockholders (Top Ten): Green and Arts Co., Ltd. December 8, 1997 Landscaping and groundskeeping Photo Works Co., Ltd. June 15, 1998 Photofinishing Stockholders Number of Shares Percentage Held (Thousands) （%） Design Factory Co., Ltd. June 15, 1998 Production of publications Keisei Electric Railway Co., Ltd. 18,157 19.08 Bay Food Services Co., Ltd. June 15, 1998 Operation of employee cafeterias Mitsui Fudosan Co., Ltd. 15,180 15.95 Maihama Business Service Co., Ltd. February 4, 1999 Business services for Oriental Land Group Chiba Prefecture 3,300 3.46 IKSPIARI Co., Ltd. March 4, 1999 Management and operation of IKSPIARI Japan Trustee Services Bank, Ltd. (Trust accounts 4G) 3,135 3.29 RC Japan Co., Ltd. October 20, 1999 Management and operation of themed restaurants The Master Trust Bank of Japan, Ltd. (Trust account) 2,333 2.45 Resort Cleaning Services Co., Ltd. October 6, 2000 Costume laundry services Japan Trustee Services Bank, Ltd. (Trust accounts) 2,314 2.43 The Dai-ichi Mutual Life Insurance Company 1,640 1.72 Maihama Building Maintenance Co., Ltd. June 8, 2001 Cleaning and security services Mizuho Trust & Banking Co., Ltd.* 1,480 1.55 OLC Kitchen Techno Co., Ltd. June 8, 2001 Sales and maintenance of kitchen equipment Japan Trustee Services Bank, Ltd. (Trust accounts 4) 1,141 1.20 Retail Networks Co., Ltd. April 1, 2002 Management and operation of Disney Store Japan The Chuo Mitsui Trust & Banking Co., Ltd. 832 0.87 E Production Co., Ltd. December 10, 2002 Entertainment production * Shares held in a pension trust account with Mizuho Trust & Banking Co., Ltd., for the benefit of retirement plans of Mizuho Corporate Bank, Ltd. OLC/Rights Entertainment (Japan) Inc. May 26, 2003 Management of intellectual property rights Note: In addition to the above, the Company held 4,203 thousand shares of treasury stock, 4,200 thousand shares of which were retired in May 2009. M TECH Co., Ltd. July 29, 2005 Theme park maintenance Stock Price Range and Trading Volume Notes: 1. E Production Co., Ltd. was merged into Oriental Land Co., Ltd. on April 1, 2009. Stock Price Trading Volume 2. OLC/Rights Entertainment (Japan) Inc. was liquidated on March 31, 2009. (Yen) (Thousand Shares) 8,000 Chronology: 7,000

1960 Oriental Land Co., Ltd. (Oriental Land) was 1996 Oriental Land listed its shares on the First 6,000 established (Capital: ¥250 million) Section of the Tokyo Stock Exchange 5,000 10,000 1962 Oriental Land and Chiba Prefecture concluded 2000 IKSPIARI and Disney Ambassador Hotel opened 4,000 8,000 the Urayasu District Land Reclamation Agreement 2001 Disney Resort Line, Tokyo DisneySea and Tokyo 3,000 6,000 DisneySea Hotel MiraCosta opened 2,000 4,000 1964 Reclamation work began off the coast of Urayasu (completed in 1975) 2002 Oriental Land acquired Disney Stores in Japan 1,000 2,000 2005 Palm & Fountain Terrace Hotel opened 0 0 1979 Oriental Land and Walt Disney Productions 2005/1 2006/1 2007/1 2008/1 2009/1 (currently, Disney Enterprises, Inc.) concluded an agreement concerning the licensing, design, 2008 Tokyo Disneyland Hotel opened For Further Information, Contact: construction and operation of Tokyo Disneyland Cirque du Soleil Theatre Tokyo opened Investor Relations Group, Finance/Accounting Division Oriental Land Co., Ltd. 1983 Tokyo Disneyland opened 1-1 Maihama, Urayasu, Chiba 279-8511, Japan TEL: +81 47 305 2038

The copyrights to the Disney characters and scenes from Tokyo Disneyland, Tokyo DisneySea, Disney Ambassador Hotel, Tokyo DisneySea Hotel MiraCosta, Disney Resort Line and The Disney Store Japan are owned by Disney Enterprises, Inc. 58 Oriental Land Annual Report 2009 © Disney Enterprises, Inc. Oriental Land Annual Report 2009 59