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C o n t e n t s
Corporate Philosophy
Based on our Corporate Philosophy, which we have adapted to the latest social trends, and the message of our corporate symbol, the Company considers itself a comprehensive lifestyle provider centered on railway operations. As such, we aim to help build prosperity and contribute to society through broad-based businesses that support every aspect of people’s lifestyles.
Corporate SymbolOur logo symbolizes our striving for the future as a comprehensive lifestyle company. It features two wings, one vivid red and one bright orange. The red, like the sun shining on the southern seas, represents our passion, and the orange the optimism of the human heart.
Message from the Management 2
Business Area 3
Route Map 4
Segment Information 5 Transportation 7 Real Estate 9 Retail 11 Leisure and Services 13 Construction and Other 13
Corporate Social Responsibility 14
The 3-Year Management Plan —“Shinten 133 Plan” 15 Strengthen Semboku-related business 17 Expand the Kansai International Airport and inbound tourism business 19 Increase the drawing power of the Namba area 21 Creating attractive areas along our railway lines 24
Financial Data 25
Investor Information 30
Corporate Philosophy (Drawn up April 1, 1993)
With expertise and dynamism, forging the way to the future
◆ Contribution to the Community Justifying public trust as an all-round lifestyle provider and building a better society
◆ Putting the Customer First Providing excellent services for the customer and bringing living comfort and cultural enrichment
◆ Future Challenges Meeting the needs of coming generations with bold energy and creativity
◆ A Dynamic Workplace Creating a workplace brimming with vitality and harnessing the expertise and personal strengths of every employee
1Nankai Electric Railway Company Profile 2017
President and CEO
Teruhiko Achikita
Message from the Management
Founded in 1885, the Nankai Electric Railway Co., Ltd. was the first railway company in Japan to be established purely by private capital. It currently operates three main lines from its landmark terminal in Namba, Osaka: the Nankai Line to Wakayama, the Koya Line to the Koyasan (Mount Koya) World Heritage Site and a line running to the Kansai International Airport.
While focused mainly on railway, bus and other transpor-tation operations, the Nankai Group is also involved in real estate (rental office space and residential developments), retail (shopping center management), amusement park and golf course management, office building maintenance and other leisure and service businesses, as well as construction and other operations.
The Nankai Group implemented various measures in fiscal 2016 in accordance with the basic policies (priority items) of the “Shinten 133 Plan,” our medium-term manage-ment plan, which completed its second year. First of all, to “strengthen Semboku-related business,” the Nankai Group as a whole has been working to improve the convenience and amenities provided in the Semboku area, beginning with renovations to Izumigaoka Station and the commer-cial district fronting the station. Going forward, we will continue these efforts, which are aimed at revitalizing the entire area. In addition, we will work to increase the capac-ity of the Nankai Group’s logistics business through devel-opment of mixed-use logistics facilities at the Kitaosaka logistics center that organically fuse a truck terminal (trans-port function) with a distribution center (warehousing/logistics processing function), and through other initiatives.
To “expand the Kansai International Airport and inbound tourism business,” we will convert to multilingual signage at stations, on passenger cars and in commercial facilities in order to further enhance systems for accommodating inbound travelers, whose number is steadily rising, and also more actively utilize social media to reinforce communica-tions aimed at people outside Japan. We will continue in this way to draw greater numbers of inbound travelers to areas served by the Nankai Group.
To “increase the drawing power of the Namba area,” a medical clinic actively involved in advanced cancer thera-pies will be on the medical floor, it has been decided, of the New Nankai Kaikan Building (tentative name) that is cur-rently under construction and scheduled for completion in September of next year. The floor is a key part of the build-ing, and to make the building a new center for the Namba area that will be used by people from around the world, as will be typified by the clinic, we plan to leverage its loca-tion, which is highly accessible from points inside and out-side Japan, to further accelerate the process of luring exceptional tenants.
Further, in Wakayama City, one of the Nankai Group’s key business areas, we will steadily move forward on the Wakayamashi Station revitalization project, which is tenta-tively slated for completion in 2020, and also expand the Kurashi Garden experiential farming facility that opened this past spring. In doing so, we will further promote inte-grated development of stations and station districts through collaboration with municipal governments and other bodies, and conduct other activities to “create attrac-tive areas along our railway lines.” In addition, we will fur-ther strengthen collaboration within the Nankai Group, for example by enhancing the Group’s shared point service, and work in all respects to strengthen our business base.
By advancing these and other initiatives, all of us at the Nankai Group will work together to complete the “Shinten 133 Plan,” which is in its final year. We appreciate the contin-ued support and encouragement of all of our shareholders in this effort.
June 2017
Teruhiko AchikitaPresident and CEO
2Nankai Electric Railway Company Profile 2017
9.8million
7.7%
Population127million
¥42,000billion
7.8%
GDP¥537,000
billionJapan
Nankai Business Area(Osaka + Wakayama Prefectures)
Ratio
Osaka
Wakayama
Main Business Area
Tokyo
Source: Population figures were announced by the Statistics Bureau of the Ministry of Internal Affairs and Communications. GDP is the nominal GDP announced by the Cabinet Office. Both are the latest figures as of October 2016.
Business Area
3Nankai Electric Railway Company Profile 2017
Namba
Osaka (Umeda)
Koya-san
Wakayamashi Wakayama
Wakayama Prefecture
The World Heritage Site Koya-san
Osaka Prefecture
Airport Line
SembokuRapid
Railway
Nankai Line
Nankai Shikoku Route
Koya Line
Izumisano
RinkanDen-entoshi
Hashimoto
Izumi-chuo
Tengachaya
Tennoji
Shin Imamiya
Nakamozu
Izumigaoka
SakaihigashiSakai
Misaki Park
KansaiInternationalAirport
Rinku Town
Osaka Bay
Nankai LineKoya LineAirport LineNankai Ferry RouteJRSemboku LineLines Owned by Other Companies
Izumiotsu
TokushimaPrefecture
Awaji Island
Route Map
Kansai International Airport
Wakayama Castle
Courtesy of Kansai International Airport Land Development Co., Ltd.
Nankai Terminal Building
Koya-san
4Nankai Electric Railway Company Profile 2017
Segment Information
The Nankai Group at a Glance
The Nankai Group is one of the major railway operators in Japan, and a commercial developer based in the southern Osaka area. The prosper-ity of this area was formerly based on textile industries. Now, it is being revitalized with the development of advanced distribution facilities. The Nankai Group’s businesses fall into six segments: Transportation, Real Estate, Retail, Leisure and Services, Construction, and Other.
We are developing our business in each of these segments by pursuing greater efficiency and the expansion and growth of business. The main pillars of our operations are the rail-way business and our real estate operations: rental businesses around the Namba terminal area, one of the two major railway terminals in Osaka, and residential development projects in the southern Osaka area.
As of March 31, 2017
Railways Nankai Electric Railway Semboku Rapid Railway
Tramway Hankai Tramway Buses Nankai Bus
Wakayama BusKANSAI AIRPORT TRANSPORTATION ENTERPRISE Kumano KotsuTokushima Bus
38.8%
0
50,000
FY2015 FY2016
100,000 98,729 99,551
49.0%
0
10,000
FY2015 FY2016
20,000
16,500 16,140
Ferries Nankai Ferry
Freight Transportation Southern Transport ServicesNankai Express
Rolling Stock Maintenance Nankai Vehicles Service Engineering24 Other Companies
Transportation
Sales by Segment Operating Income by Segment
36 Companies
(Millions of yen) (Millions of yen)
As of March 31, 2017
Real Estate
Sales by Segment Operating Income by Segment
5 Companies
(Millions of yen) (Millions of yen)
Rentals Nankai Electric RailwaySemboku Rapid Railway
Sales Nankai Electric RailwayNankai Fudosan
2 Other Companies
13.2%
0
20,000
FY2015 FY2016
40,000
33,744 33,922
26.1%
0
5,000
FY2015 FY2016
10,000 9,379 8,581
5Nankai Electric Railway Company Profile 2017
As of March 31, 2017
Retail
Sales by Segment Operating Income by Segment
11 Companies
(Millions of yen) (Millions of yen)
Management of Shopping Centers
Nankai Electric Railway Panjo
Station Premises Business Nankai Shoji 8 Other Companies
As of March 31, 2017
Leisure and Services
Sales by Segment Operating Income by Segment
23 Companies
(Millions of yen) (Millions of yen)
Amusement Nankai Electric Railway Travel NANKAI TRAVEL INTERNATIONAL Hotels Hotel NakanoshimaRental of Motorboat- Racing Facilities Suminoe Kougyou
Building Maintenance Nankai Building ServiceFuneral Business Nankai Grief Support
17 Other Companies
Construction Nankai Tatsumura ConstructionNichiden Shokai
3 Other Companies
As of March 31, 2017
Construction
Sales by Segment Operating Income by Segment
5 Companies
(Millions of yen) (Millions of yen)
Information System Nankai Management Service 3 Other Companies
As of March 31, 2017
Other
Sales by Segment Operating Income by Segment
4 Companies
(Millions of yen) (Millions of yen)
13.9%
0
20,000
FY2015 FY2016
40,00035,200 35,794
9.7%
0
2,000
FY2015 FY2016
4,000
3,163 3,181
15.4%
0
20,000
FY2015 FY2016
40,000 38,863 39,571
5.6%
0
1,000
FY2015 FY2016
2,000 1,841 1,845
17.7%
0
25,000
FY2015 FY2016
50,00044,830 45,275
9.0%
0
1,500
FY2015 FY2016
3,000
1,946
2,953
1.0%
0
1,500
3,000
1,825
2,619
FY2015 FY2016
0.6%
0
100
FY2015 FY2016
200
123
194
6Nankai Electric Railway Company Profile 2017
FY2016FY2015FY2014FY2013FY2012FY2011
Revenue (Millions of yen)Passengers (Thousands)
4,3015,116
7,2438,402 5,596 9,119
6,272 10,076
7,699 12,085
9,03413,830
Segment Information
The Transportation segment consists of the Group’s core railway business and its tramway, bus and ferry operations, through which we provide convenient and popular public transportation services to the community.
Railways Tramway Buses
Transportation
The railway business is based in Namba, one of the two
major terminal stations in Osaka along with Umeda. From
here, our main line serves Wakayama, the administrative
center of Wakayama Prefecture, while the Koya Line
terminates at the Koya-san World Heritage Site. A branch
line gives direct access from Namba to Kansai International
Airport. This network covers a wide area south of Osaka, and
is used for work and school commuting, as well as leisure
and tourist travel. With a total of eight main and branch lines,
we operate a total track length of 154.8 km. We manage a
total of 100 stations including Namba Station, which has
around 250,000 passengers per day, as well as around 700
items of rolling stock. As a public transportation service
provider, passenger safety is of course our main priority.
Rigorous safety measures are in place for rolling stock,
amenities and facilities, and personnel attend strict training
programs. In further measures to provide high-quality ser-
vices, we are making our entire network barrier-free.
Railway Business
FY2016FY2015FY2014FY2013FY2012FY2011
Revenue (Millions of yen)Passengers (Thousands)
51,596 52,513223,484 225,129
53,532228,862
53,473227,031 55,911
233,301 57,187236,153
Revenue from Railway Passengers and Passengers Carried (Nankai Electric Railway)
Revenue from Airport LinePassengers and Passengers Carried
Ferries Freight Transportation Rolling Stock Maintenance
Operating revenue (FY2016): ¥67,618 million
Segment business operations
7Nankai Electric Railway Company Profile 2017
Semboku Liner
Segment Information
Nankai Bus
Our well-established bus route network covers Osaka
Prefecture (south), Wakayama Prefecture and Tokushima
Prefecture on neighboring Shikoku Island. We also operate
high-speed routes linking our service areas with major cities
throughout Japan, giving us a very broad-based network.
A limousine bus also connects major cities in the Kansai
region with Kansai International Airport.
Bus Operations
Nankai Ferry Nankai Vehicles Service Engineering
Nankai Express
We provide convenient ferry connections between Kansai
and Shikoku, through services linking Wakayama with
Tokushima, the nearest major port on the island.
Other transportation-related service businesses run by
Group companies include tramway operation in populous
Osaka and Sakai, freight transportation, and rolling stock and
vehicle maintenance primarily for the Group.
Ferry Operations and Other
The Nankai Group’s railway network further expanded
with the addition of Semboku Rapid Railway as a con-
solidated subsidiary in July 2014. Semboku Rapid Railway
had previously engaged in mutual direct operation with
the Koya Line and has played a role in linking Osaka’s city
center with Semboku New Town, a suburban housing
area straddling the communities of Sakai and Izumi. These
services play the role of a vitally
important regional transporta-
tion artery. Looking ahead, we
will cooperate with Nankai
Group companies to increase
convenience and revitalize the
areas along our railway lines.
Koya Southern RinkanRapi t
Limited Express
Operating revenue (FY2016): ¥26,475 million
8Nankai Electric Railway Company Profile 2017
PARKS Tower
Higashiosaka logistics center
Segment Information
Our real estate operations help to create a fulfilling living environment for residents along our lines. With two pillars, rentals and sales, this segment constitutes a major component of the Group’s total operations.
Rentals Sales
Real Estate
The Nankai Group’s real estate business goes back to 1932 when the Nankai Building housing Namba Station and its integrated concourse was opened. It remains a much-loved landmark, with key tenants including Takashimaya Co., Ltd., one of Japan’s leading department store operators, and various financial institutions. It is one of the principal termi-nals of Osaka. Our rental business is centered in the Namba area of the city. We also own the Nankai Kaikan Building, which we plan to finish rebuilding in 2018, and the PARKS Tower office annex of the NAMBA PARKS mall. Additionally, at major terminals along our railway lines, we lease out Company-owned land, buildings and rental spaces within the structures sup-porting overhead railways. These operations, com-bined with the department stores and banks forming our key rental tenants, con-tribute to the prosperity of communities along our lines, while leveraging the characteristics of these areas.
Rentals
In addition, Semboku Rapid Railway operates the Higashiosaka and Kitaosaka logistics centers—located within the strategically important transport areas of Higashiosaka and Ibaraki. These logistics centers provide truck terminal facilities and warehouses, which serve as logistic nodes, to logistics ser-vice companies. These centers have become preeminent among logistics facilities in Osaka Prefecture.
Operating revenue (FY2016): ¥25,323 million
Segment business operations
9Nankai Electric Railway Company Profile 2017
Nankai Kumatori Tsubasagaoka Aya No Dai residential project in Nankai Hashimoto Rinkan Den-entoshi
Segment Information
• Major Leasing FacilitiesFacility Name Location Rentable Area (m2) Amenities
Nankai Building Namba, Osaka 49,827 Takashimaya, banks, shops, etc.Nankai Kaikan Building Namba, Osaka 48,585 (plan) Now under reconstruction (planned to open in September 2018)Swissôtel Nankai Osaka Namba, Osaka 61,557 Hotel and shopsWINS Namba Namba, Osaka 20,531 Japan Racing AssociationPARKS Tower Namba, Osaka 36,500 Offices and shopsFraser Residence Nankai Osaka Namba, Osaka 7,332*1 Serviced apartmentsNankai Sakai Station Building Sakai, Osaka 9,474 Banks, offices, shops, station facilities, etc.Nankai Sakai Higashi Building Sakai, Osaka 80,678 Takashimaya, banks, shops, station facilities, etc.Nankai Wakayamashi Station Building Wakayama 4,432 Offices and shopsNankai Tokyo Building Ginza, Tokyo 12,115 Offices and shopsKitaosaka logistics center Ibaraki, Osaka 272,017*2 Logistics leasing facility (Truck terminal, distribution warehouse)Higashiosaka logistics center Higashiosaka, Osaka 187,935*2 Logistics leasing facility (Truck terminal, distribution warehouse)
Note: The rental areas indicated include areas used by the Nankai Group. *1 Total floor area *2 Site area
BRANZ VERITE Sakai Shichido
VERITE Kawachinagano
• Major Large-Scale Residential Development ProjectsResidential Land Name Location Planned Area (ha) Planned Number of Lots Planned Population
Nankai Hashimoto Rinkan Den-entoshi Hashimoto, Wakayama 398.7 6,350 23,400Nankai Kumatori Tsubasagaoka Kumatori, Sennan, Osaka 64.0 1,300 4,800
The main focus of the Group’s real estate sales business is
large-scale residential projects. We are developing large-
scale, line-side residential zones and single-family home
subdivisions in Nankai Hashimoto Rinkan Den-entoshi in
Wakayama Prefecture and Nankai Kumatori Tsubasagaoka
in Osaka Prefecture. Both developments have helped to
increase value along our lines thanks to our careful atten-
tion to creating a rich, natural living environment while
providing the convenience of urban amenities. We have
also recently taken measures to attract business facilities
to our area, including introduction of fully equipped office
zones, in efforts to create balanced, broad-based communi-
ties where people can live and work.
We also market condominiums, principally in areas
around our stations. Recent condominium construction
and subdivision projects are underway in downtown Osaka,
Sakai, Kobe and Muko in Kyoto Prefecture, where the
Nankai Group is involved in independent projects and a
joint development and subdivision project with a major
condominium building developer.
Sales Operating revenue (FY2016): ¥8,959 million
10Nankai Electric Railway Company Profile 2017
Segment Information
The Retail segment comprises shopping center management and merchandise sales at station premises.
Management of Shopping Centers Station Premises Business Other Retail Operations
Retail
NAMBA CITY PLATPLAT
The principal shopping centers operated by the Company are the NAMBA PARKS and NAMBA CITY malls in the famous Namba commercial area of Osaka, as well as PLATPLAT in Sakai and other upmarket shopping centers. The Shop Nankai chain has outlets in our stations and in the structures supporting overhead railways.
Management of Shopping Centers
NAMBA PARKS Shops&Diners
NAMBA PARKS Shops&Diners, which opened for business in 2007, is a shopping complex comprising some 254 fashion, home appliance and accessory stores and restaurants. On the roof of the building, we have created the 11,500 m2 Parks Garden, surrounded by some 70,000 trees and flowers of some 300 different species. Parks Garden offers a restful space as an urban oasis to shoppers and other visitors. In addition, this development contributes to alleviating the heat island effect, saving energy, and reducing CO2 emissions. It has been well evaluated for its consideration of the environment, and won numerous awards. In 2015, CNN, the U.S. TV network, judged NAMBA PARKS Parks Garden to be one of the 10 most beautiful sky gardens in the world. In 2017, we celebrated the facility’s tenth anniversary by renovating the shopping zone and Parks Garden. This included creating an outdoor barbeque area and taking other steps to make Parks Garden an even more enjoyable destination and further attract new customers.
NAMBA PARKS
Operating revenue (FY2016): ¥14,909 million
Segment business operations
11Nankai Electric Railway Company Profile 2017
Segment Information
NAMBA CITY
NAMBA CITY South Building
NAMBA CITY is one of Osaka’s leading shopping malls, with about 260 famous specialty shops located on the seven floors of the Main and South buildings. The mall has a prime location, directly connected to Nankai Namba Station, and is used by customers drawn from a wide area that includes the Nankai railway lines, Osaka City, and out towards Nara. The second basement level of the Main Building was renewed in March 2016, and the South Building was renewed in April 2016. The South Building’s renewal was the largest such renovation since the opening of the entire building in 1980, and has been very well received by our customers.
SEMBOKU AREA
Panjo
The Ansulee convenience store
The nasco+ station kiosk ekimo Umeda
In 2014, we acquired and now run Panjo and Izumigaoka HIROBA Shops & Restaurants (formerly Shop Town Izumigaoka), two shopping centers in front of Izumigaoka Station, a major station on the Semboku Rapid Railway. In 2016, we carried out a large-scale renovation of the two shopping centers. Going forward, we will leverage know-how fostered in the Group’s real estate and commercial development business to redevelop the area in front of Izumigaoka Station in an integrated manner.
We operate merchandise retailing and food and drink outlets within station premises and around stations, as well as convenience stores at Namba terminal and other stations along our lines. In addition, we have recently developed commercial facilities under the ekimo brand name within three stations on the Osaka Municipal Transportation Bureau’s Midosuji
Station Premises Business
Line—Tennoji, Namba, and Umeda. In April 2013, we opened ekimo Tennoji, followed by ekimo Namba in October 2013 and ekimo Umeda in April 2014. In this way, we will continue to strengthen our operation of commercial facilities inside stations along railway lines other than those operated by the Nankai Group itself.
Operating revenue (FY2016): ¥21,308 million
12Nankai Electric Railway Company Profile 2017
Monitoring at a disaster prevention center
Equipment maintenance inspection
Segment Information
The Leisure and Services segment includes operation of the Misaki Park amusement park, travel agency services, and hotel and Japanese-style guesthouse operations, as well as motorboat-racing stadium rental, building management and maintenance services, funeral services and golf course management. Through these businesses, we provide our customers with a more fulfilling daily lifestyle.
Amusement Travel Hotels
Rental of Motorboat- Racing Facilities Building Maintenance Funeral Business Other Services
The Construction segment comprises the construction and maintenance of apart-ment buildings and residential and other facilities. The Other segment includes the Information System business.
Construction and Other
Leisure and Services
Building Management and Maintenance Business
We have expanded our integrated building management
and maintenance, which covers equipment management,
security and cleaning of various facilities, from Tokyo to
Shikoku, as well as in Osaka.
Operating revenue (FY2016): ¥24,523 million
Segment business operations
13Nankai Electric Railway Company Profile 2017
Corporate Social Responsibi l ity
CSR InitiativesThe perspective of corporate social responsibility is essential to the sustained growth and development of a company in harmony with society. The Nankai Group engages in CSR based on four overarching themes that serve as business guidelines: “Assurance of safety and peace of mind,” “Emphasis on the environment,” “Rigorous compliance” and “Pursuit of customer orientation.” For details on these activities, please refer to our Corporate Social Responsibility Report, which is published separately.
Assurance of safety and peace of mindThe Company regards the rigorous provision of safety and reliability in our Nankai railway and all other businesses as its topmost priority in earning the full trust of the commu-nities we serve and offering cus-tomers the best possible services. In the Nankai railway business, in addition to creating a Safety Policy for all of our business activities and alerting every employee of the Company from the President down to the importance of safety, we are ensuring safe transportation through comprehensive mea-sures covering our railway facilities, rolling stock and employees.
Emphasis on the environmentNankai Group companies work together to conduct initiatives that embody the Nankai Group Environmental Principles. In March 2010, we acquired ISO 14001 certification for the Chiyoda Workshops. Then, in March 2012, we acquired ISO 14001 certification for the Nankai Headquarters. We are also working aggressively to reduce CO2 emissions. From fiscal 2015, we aim to reduce the average CO2 emissions over three years by 3% from the baseline of CO2 emissions of approximately
315,000 tons by 45 Group companies over the period from fiscal 2011 to fiscal 2014. For many years, we have also cultivated forest-land through our Nankai no Mori project, and as part of our carbon offset efforts, in 2013 we obtained certification from the Ministry of the Environment for offset credits (J-VER) based on the amount of CO2 absorbed through that forestland. Through cooperation with municipal governments and others along our railway lines, including the signing of a Green Partner Accord with Osaka Prefecture in 2009, we hold a variety of citizen participation type environmental events, and work together with our communities to carry out local environmental preservation activities.
Rigorous complianceFor the Nankai Group to fulfill its social responsibilities, it must fully justify the trust of its many stakeholders. It goes without saying that this is conditional on observance of laws and social norms. In 2001, the Company compiled its Code of Business Ethics to uphold and promote compliance-based management as a means of entrenching corporate ethics within the organiza-tion. To consolidate our corporate ethics framework, we also compiled a compliance manual, laid down guidelines for conduct by executives and all employees and provided ongo-ing training. Through these measures we foster awareness of compliance issues.
Pursuit of customer orientationFor the Nankai Group, which pro-vides a variety of services centering on rail, the pursuit of services that are satisfactory to customers is a very important issue. We regard opinions and requests received from customers as an invaluable management resource and utilize this feedback in training and guidance for crew members and station staff and to improve services and enhance quality in each of our businesses. In addition, we conduct customer questionnaires and interviews to more broadly grasp the expectations of customers with respect to the Nankai Group. In recent years, with the acquisition of Semboku Rapid Railway, we worked to increase transportation convenience in the Semboku area by revising train schedules and strengthening connections between trains and buses, among other initiatives. In addition, to make the Group’s services more convenient for inbound travelers, who have been increasing each year, we have expanded multilingual signage and announcements at stations and inside trains, and are conducting initiatives such as establish-ing duty-free counters at NAMBA CITY and NAMBA PARKS.
Total Amount Invested in Safety in the Nankai Railway Business
FY2016FY2015FY2014FY2013FY2012FY2011
(Millions of yen)
6,8666,688 6,4976,091
7,0267,942
14Nankai Electric Railway Company Profile 2017
The 3-Year Management Plan — “Shinten 133 Plan”
To further solidify the business foundation built thus far in terms of both quantitative
growth (revenue growth) and qualitative improvement (improved financial soundness),
we are pushing forward with the “Shinten 133 Plan,” our medium-term management plan
covering the three-year period from fiscal 2015 through fiscal 2017.
1Strengthen Semboku-related business
◆ Basic PoliciesHaving welcomed Semboku Rapid Railway and the Izumigaoka Station’s commercial facilities into the Nankai Group, we will actively work to revitalize the entire Semboku area. Moreover, we will quickly bring about syner-gies throughout the entire Group including the Nankai railway business while aiming to expand business opportunities and increase revenue. Further, with the newly acquired logistics center business as our core, we will expand the logistics business within the Group.
◆ Major Initiatives1. Increase the convenience and amenities of our freight transportation service2. Make our core area (area in front of Izumigaoka Station) more attractive and able to draw more customers3. Encourage more people to reside in or visit the Semboku area4. Expand the revenue base of the logistics business5. Reinforce efficiency and competitiveness
2Expand the Kansai International Airport and inbound tourism business
◆ Basic PoliciesThe Nankai Group will steadily capture the increasing inbound tourism demand for the 2020 Tokyo Olympics and Paralympic Games. First, we will promptly develop a barrier-free infrastructure in hard and soft ways, including by providing information and signs in multiple languages. In the future, we will not only provide airport access, but accelerate the expansion of other income-generating opportunities. To that end, we will make the entire Kansai area more attractive and disseminate information by cooperating externally with municipal governments and other entities. We will take the initiative to establish Osaka as an inbound tourism gateway city and encourage an increase in visitors engaging in the Nankai Group’s business areas. In response to the changing environment surrounding Kansai International Airport, we will strive to maintain and expand the Group’s Kansai International Airport-related revenue base.
◆ Major Initiatives1. Enhance information dissemination and business infrastructure and develop a comfortable operating environment2. Encourage tourism in the Namba area and expand revenue opportunities3. Expand Kansai International Airport access4. Expand services at Kansai International Airport
• 3 Basic Policies in the “Shinten 133 Plan”
• The “Shinten 133 Plan” Concept Taking the opportunity of our 130th anniversary, we will further strengthen the business foundation we have built thus far. * The expression “shinten” in our Shinten 133 Plan denotes the activity of “deeply exploring our business foundation and developing it further.”* ”133” refers to the fact that fiscal 2017, the final year of the medium-term management plan, is the 133rd year of the founding of the Nankai Electric Railway
Co., Ltd.
15Nankai Electric Railway Company Profile 2017
The 3-Year Management Plan—“Shinten 133 Plan”
EBITDA = Operating Income + Depreciation and Amortization
2Strengthen the Group business foundation
◆ Basic PoliciesAs we invest money and personnel in future growth fields, such as inbound tourism and logistics businesses, to develop them as the next-generation pillars of our business, we will take drastic countermeasures as regards unprofitable businesses in light of current financial conditions and future changes in the business environment. Specifically, while maintaining an awareness of cash flow, we will ensure that investments and budget plan-ning are carried out so that the balance of interest-bearing debt to EBITDA is improved. We will aggressively develop and utilize core personnel to drive Group growth and diverse personnel to be responsible for new value creation.
◆ Major Initiatives1. Focus on growth fields2. Drastic countermeasures as regards unprofitable businesses3. Priority allocation of business resources4. Rigorous cash flow management5. Establish system for implementation
1Creating attractive areas along our railway lines
◆ Basic PoliciesTaking the opportunity of our 130th anniversary, we will launch a variety of promotions aimed at raising the brand image of the Nankai area and the Nankai Group. We will also create the means for our many customers to travel around the area along our railway lines, enhance our lifestyle-related services, and make the area along the Nankai Line attractive by improving the functioning of our major stations.
◆ Major Initiatives1. Launch a variety of promotions aimed at developing a new brand image2. Centralize and unify information dissemination along our transport lines3. Develop content and create tour programs4. Push forward with our plan to enhance lifestyle-related services5. Promote development projects around stations and improve station functioning
3Increase the drawing power of the Namba area
◆ Basic PoliciesThe Nankai Group is pushing forward with the reconstruction plan for the New Nankai Kaikan Building (tentative name), the culmination of the Nankai Building restoration, as the core project to meet the needs of customers and contribute to increasing the area’s potential. We will strive to raise the value and enhance the lineup of our real estate, retail and other businesses, and preserve and enhance the vigor of the Namba area to differentiate it from other areas.
◆ Major Initiatives1. Push forward with the New Nankai Kaikan Building Reconstruction Plan2. Enhance the value and lineup of our facilities and content3. Promote urban development activities through area collaboration
• Numerical targets for the “Shinten 133 Plan”
Targets for the final year (FY2017; consolidated)
• 2 priority items that we will continue to work on
16Nankai Electric Railway Company Profile 2017
Initial Target
❶ Operating Income: ¥30.0 billion ❷ Balance of Interest-Bearing Debt/EBITDA Ratio: 8–9 times
Revised Oct. 2016
¥33.0 billion7–8 times
The 3-Year Management Plan—“Shinten 133 Plan”
Acquisition of Shares of Semboku Rapid Railway Co., Ltd.On July 1, 2014, the Nankai Group acquired the shares of Semboku Rapid Railway Co., Ltd. The Semboku Rapid Railway is a mutual through-train service that operates with the Koya Line. This railway provides commuter train services that directly link Osaka’s city center with Semboku New Town, a large suburban housing area straddling the communities of Sakai and Izumi, and these services play the role of a vitally impor-tant regional transportation artery. In making the com-pany a subsidiary, we will work to achieve more integral timetables and greater cost efficiencies, improving con-venience for our customers and aiding in the further development of areas along our railway lines. In addition, the Semboku Rapid Railway operates the Higashiosaka and Kitaosaka logistics centers, located in one of Osaka Prefecture’s key strategic transport areas, from which we offer truck terminal facilities and ware-houses for use by logistics service companies. These centers have become pre-eminent among logistics facili-ties in Osaka Prefecture. We will work to promote efficient utilization of the distribution facilities at these two logis-tics centers, thereby further increasing their profitability.
• Overview of Semboku New Town
Semboku New Town Senri New Town*
Population Semboku New Town 136,444Tri-vert Izumi 18,022
98,282
Time DistanceNamba ~ Izumigaoka 23 minutes
Umeda ~ Senri-chuo 20 minutes
• Overview of the Semboku Rapid Railway (railway business)
Semboku Rapid Railway Nankai Electric RailwayPassengers (A)
(thousand)48,497 236,153
Business- kilometers (B)
14.3 km 154.8 km
A/B (thousand)
3,391/km 1,526/km
• Kitaosaka Logistics CenterSite area 272,017 m2
Operations rate 97.0%
Strengthen Semboku-related
business
Osaka Bay
Airport Line
HanwaExpressway
HanshinExpresswayRoute 5Bayshore Line
Nankai Line Koya Line
SembokuRapid Railway
HigashiosakaLogistics Center
Nakamozu
Namba
Hanshin ExpresswayRoute 13 Higashiosaka Line
Meishin Expressway
Kinki Expressway
SecondKeihan Highway
Chugoku Expressway
Kitaosaka Logistics Center
• Higashiosaka Logistics CenterSite area 187,935 m2
Operations rate 100%
*Located in the northern part of Osaka Prefecture, this was the first of Japan’s “new towns” to be developed.
17Nankai Electric Railway Company Profile 2017
The 3-Year Management Plan—“Shinten 133 Plan”
Urban Development Facing Izumigaoka StationSimultaneous to our acquisition of the shares of Semboku Rapid Railway on July 1, 2014, the Nankai Group also purchased land adjacent to Izumigaoka Station, a major stop on the Semboku Rapid Railway line, for use in the construction of large-scale commercial facilities. The property in question is situated in an area with a heavy concentration of urban facilities, including Panjo, a shop-ping center operated by the Semboku Rapid Railway Group, as well as large-scale public facilities. Following renovations, in 2016 the property was re-opened as the Izumigaoka HIROBA Shops & Restaurants. We also carried out a large-scale renovation of Panjo for the first time in 21 years. In 2023, the Kindai University Faculty of Medicine, along with Kindai University Hospital, plan to relocate to Izumigaoka, a move which is expected to increase the area’s nonresident population. Utilizing the expertise accumulated through our real estate and commercial development businesses, and working with government and other related institutions, the Nankai Group will work to revitalize Izumigaoka and the rest of the Semboku area.
Izumigaoka Station
Izumigaoka HIROBAShops & Restaurants
Potential relocation site forKindai University Faculty of Medicine, etc. (Approx. 10 ha)
Parking Building No.4
Parking Building No.3
Panjo
Specialty Shop Building (South)Central Building
Parking Building No.5
Property Overview• Izumigaoka HIROBA Shops & Restaurants
Specialty Shop Building (South) (Commercial facilities)
Site area: 12,000 m2
Total floor area: 9,000 m2
Central Building(Commercial facilities, partially
used as business offices)
Site area: 8,000 m2
Total floor area: 10,000 m2
Parking Building(Part of the premises is included in
the Central Building)
Site area: 34,000 m2
Total floor area: 34,000 m2
Capacity: 1,785 parking spaces
Panjo
• PanjoShop/Restaurant area Approx. 4,000 m2
Key tenant Semboku Takashimaya
Izumigaoka HIROBA Shops & Restaurants
18Nankai Electric Railway Company Profile 2017
The 3-Year Management Plan—“Shinten 133 Plan”
Limousine bus stop
Expand the Kansai International
Airport and inbound tourism business
• Targets for arrivals and number of passengers at Kansai International Airport
2014 results Fiscal 2059 targets
Number of arrivals (thousand)
142 255
Number of passengers (million people)
20.46 41.53
Source: ORIX Corporation website
• Change in number of foreign visitors to Japan and Osaka and government targets
2030(target)
2020(target)
2016201520142013201220112010
8,611 6,2192,349 1,583
8,3582,028
10,364
2,625
13,41319,737
24,039
3,7587,164 9,408
40,000
13,000
60,000
(Unit: thousand)
Produced by Nankai using materials published by the Japan Tourism Agency, Japan National Tourism Organization, Osaka Prefecture, and Osaka Convention & Tourism Bureau
Transportation Services Accommodating an Increasing Number of Foreign TravelersThe Nankai Group operates both railway and limousine bus services, and these act as valuable transportation options linking Osaka and other Kansai regions with Kansai International Airport. The Limited Express Rapi:t connects Namba with Kansai International Airport in as short a time as 34 minutes, and offers an enhanced on-board experience with reserved seats to meet the needs of travelers wanting both speed and comfort. This is the least expensive option for getting into Osaka and is often chosen by travelers looking for reasonably priced transportation. Our limousine bus service runs between Kansai International Airport and points in the Kansai region, including Umeda, Kyoto, Kobe, Nara and Universal Studios Japan. Since around 2013 there has been a large increase in the number of foreign visitors to Japan and people using Kansai International Airport against a backdrop of yen depreciation, relaxed visa requirements for people from Southeast Asian countries, and an increase in LCC airlines using the airport. In conjunction with this there has also been a major increase in users of the Nankai Group’s transportation services. To take advantage of this opportunity, in the railway business, we revised train schedules in 2014 and 2017 and increased Limited Express Rapi:t and Airport Express trains. In the limousine bus business, we began operating buses between the airport and Osaka on a 24-hour basis in 2015 to accommodate travelers arriving or departing in the early morning hours or late at night. Going forward, inbound trav-elers are expected to continue to steadily increase as Asian economies develop further, so we will continue conducting initiatives to meet the needs of these customers.
Expanding Sales Routes for Tickets for Foreign TravelersThe Nankai Group is focusing on efforts to enable visitors to purchase our tickets prior to their arrival in Japan. These efforts have been highly effective, and include working with travel agen-cies outside Japan to have them offer discounted tickets exclusively for foreign visitors to Japan; partnering with low-cost carriers worldwide, including Peach Aviation Limited and the Jetstar Group, for in-flight sales of discounted railway tickets; and introducing a system for purchasing discounted railway tickets in advance over the Internet. We are also able to counter JR, with its wide-ranging railway network, by partnering with Osaka’s subway system and other private railways to sell discounted tickets for travel between Kansai International Airport and various Kansai destinations, including Osaka, Kyoto, Nara and Kobe.
Namba Access Rapi:t Ticket
Yokoso! Osaka Ticket
19Nankai Electric Railway Company Profile 2017
The 3-Year Management Plan—“Shinten 133 Plan”
Nankai Ticket Information
Tourist ServicesThe Nankai Group is also working to make our services easier for foreign visitors to use. On our railway facilities, these steps include multilingual signage and announcements at stations and on our trains, tourist information interpretation services using iPads, and offering free WiFi access at major stations. In our retail facilities, we have set up service counters to provide one-stop reimbursement of taxes on duty free purchases, introduced separate prayer rooms for Muslim visitors, and are working to provide halal menus and other accommodations. In 2016, we opened a Nankai Ticket Information booth exclusively for inbound passengers at our Kansai International Airport Station. Multilingual staff offer information on tourist sites, help visitors with transportation options and the purchasing of railway tickets to their destinations, and sell tickets tailored to the needs of each visitor.
Kansai International Airport
Kansai International Airport originally commenced operations in 1994 as an offshore airport located in Osaka Bay, 5 km from shore. In August 2007, the airport opened a second runway and became the first airport in Japan to boast two long runways and operate fully 24 hours a day. The annual total of arrivals and departures (international and domestic) has risen to over 170,000, and the number of passengers passing through annually stands at 25 million. Serving 82 destination cities in 24 countries and connecting Kansai with Asia and rest of the world, Kansai International Airport has a nearly 26% share of the market for international passengers in Japan, and is second only to Narita International Airport in size. With the increase in LCC flights in recent years, passenger numbers have grown significantly, and a second terminal dedicated to LCC use opened in 2017. Moreover, in 2016 the Nankai Group also invested in establishing Kansai Airports, which has taken over the right to operate Kansai International Airport, together with ORIX Corporation, VINCI Airports S.A.S. of France, and others in the Kansai business community. Expectations are for even greater growth as these stakeholders bring their expertise to the airport operations.
0
100
200
300
400
’17’16’15’14’13’12’11’10’09’08
(Flights/week) (%)
7.4
0
5
10
15
20
25
30
35
12
2.0 2.8
7.1
14.5
17.1
21.9
29.8
33.633.3
17 42 43
104119
170
308
371378
Signi�can
t incre
ase
Change in number of international LCC �ights at Kansai International Airport(Plan for September as of the release of the summer schedule)
Ratio of LCC �ights as a percentage of all planned passenger �ights
Plan
Source: Kansai Airports press release
Public Relations Targeting Foreign TouristsIn March 2013, we completely redesigned and updated our global website (http://www.howto-osaka.com/). The website is now available in English, Chinese (traditional and simplified characters), and Korean, providing tourist information to foreign visitors. By publicizing the tourism resources of the Nankai Group, we will strive to encourage even more customers to use the Nankai Group’s products and services. In February 2015, we created the promotional character “rapi:tldier,” who actively participates in events held in Japan and overseas and exhorts everyone to use the Limited Express Rapi:t for travel to Osaka.
The promotional character “rapi:tldier”
20Nankai Electric Railway Company Profile 2017
The 3-Year Management Plan—“Shinten 133 Plan”
Nankai Building
Namba Station
Nanba EKIKAN Project Fraser Residence Nankai Osaka
Osaka’s Landmark Terminal, NambaEight railway lines feed into the Namba area, carrying approximately 800,000 passengers a day. Namba is one of the leading railway terminals in western Japan, and is the counterpart to Umeda terminal in central Osaka. For the Nankai Group, Namba is the birthplace of our business. Furthermore, it has always been our largest business base, with facilities that extend over 550,000 m2. We regard it as our mission to develop the Namba area, which is linked with the outside world through Kansai International Airport, into an even more attractive city-center space. In the pursuit of this objective, the Nankai Group owns and operates assets such as Namba Station, NAMBA CITY and NAMBA PARKS, and has sought to enhance the functions of the Namba area by attracting major tenants, such as the Takashimaya Osaka Department Store and the Swissôtel Nankai Osaka, to its properties. As of fiscal 2016, about 30% of foreign visitors to Japan visit Namba and the adjacent Shinsaibashi area, resulting in the area experiencing the largest influx of foreign tourists of any major tourist destination in Kansai.* In both name and real-ity, Namba has established itself as a gateway city for Osaka.* According to a survey by the Mitsubishi Research Institute.
The Group will continue working to further increase value in the Namba area by coordinating urban planning projects that will develop the competitive edge Namba has over its neighboring rivals.
The Namba Area Expands SouthwardBy shifting the heart of activity in Namba southwards, where many of our proper-ties are congregated, the Nankai Group aims to create a ripple effect for NAMBA PARKS and NAMBA CITY and create an urban environment in the surrounding area that is much easier to get around. In 2010, we opened Fraser Residence Nankai Osaka (114 rooms), the first international serviced apartments to be supported by Osaka Prefecture. In April 2012, the live performance hall Zepp Namba (OSAKA)
opened, and in April 2013, Osaka Prefecture University opened its new “I-site” branch. Since April 2014, we have been moving forward with our Namba EKIKAN Project, through which we are developing a series of unique, highly intriguing stores in spaces under our railway overpasses with the goal of establishing the area as a popular gather-ing spot for people of refined tastes.
Increase the drawing power of
the Namba area
21Nankai Electric Railway Company Profile 2017
The 3-Year Management Plan—“Shinten 133 Plan”
To Tokyo
To Wakayama
To Nara
To Kyoto
To Fukuoka
To Kobe
Keihan Line
Subway (Sennichimae Line)
Kintetsu Line
Nankai Line
JR Line
Hankyu Line
Shinkansen
Subway (Midosuji Line)
ShinOsaka
Osaka(Umeda)
NambaJR
Namba
Tennoji
Yodoya-bashi
Hom-machi
Shinsai-bashi
Hanshin Line
Osaka Loop Line
Subway(Yotsubashi Line)
To Osaka (Umeda)
Midosuji
Nankai Building (Takashimaya)
Nankai KaikanBuilding
NAMBA CITY
PARKSTower
Nankai Namba Station
NAMBA PARKS
Fraser Residence Nankai Osaka
Sakaisuji
Swissôtel Nankai Osaka
Yotsubashisuji
The Namba Tower
Yamada-Denki
Osaka PrefecturalGymnasium
NambaMarui
Namba GrandMasters Tower
Namba EKIKAN Project
Zepp Namba (OSAKA)
Nankai Namba Bldg. No. 1
Midosuji LineNamba Station
Yotsubashi LineNamba Station
JR Namba Station
Osaka Namba Station(Hanshin Line/Kintetsu Line/
Sennichimae Line)
Nipponbashi Station(Kintetsu Line/
Sennichimae Line/ Sakaisuji Line)
N
Major Railway Map of Osaka
Namba Area Map
22Nankai Electric Railway Company Profile 2017
The 3-Year Management Plan—“Shinten 133 Plan”
Overall view of Namba Terminal
Artist’s impression of the completed New Nankai Kaikan building (Viewed from Midosuji)
7th floor: Hall10th floor: Sky Lobby
• Floor configuration (Cross-sectional view)
Nankai Kaikan Building Reconstruction PlanWe are reconstructing the Nankai Kaikan Building, which has been used as the building for the Head Office of Nankai Electric Railway, with the aim of promoting the sustained growth of Namba, which is the most important site of the Nankai Group. The New Nankai Kaikan Building (tentative name) will link directly to the Namba terminal, and is expected to be completed in September 2018. It will serve as a “Landmark Tower” facing the south side of Midosuji, an iconic street in Osaka. The building has a favorable central location offering access to the Kansai International Airport, Osaka International Airport, and Shin-Osaka Station by train or limousine bus without having to transfer. It also provides office functions that accommodate diverse needs with the highest standard of earthquake countermeasures as well as BCP functions. Moreover, Namba is acquiring a host of new city functions as a result of the building’s facilities such as a medical center providing advanced and preventive medical treatment, a central, urban con-vention center, and a variety of salons for tourists from both Japan and overseas. This building project is the cornerstone for the further stimulation of the Namba area, and will continue to serve to maximize the area’s potential.
• Building overview
Building applications
Offices, stores,hall, conferences rooms, medical facilities
Total floor area Approx. 84,125 m2
No. of floors31 floors above ground; 2 floors below ground; 1 rooftop structure
Scheduled completion Sept. 2018
Total project costs Approx. ¥44.0 billion
Assumed balance of paymentsRevenues: Approx. ¥3.6 billionEBITDA: Approx. ¥2.8 billion
23Nankai Electric Railway Company Profile 2017
The 3-Year Management Plan—“Shinten 133 Plan”
Danjo Garan
Kongobuji
Tenku tourist train One View seating
N.KLASS Izumiotsu
The planned revitalization of Wakayamashi Station
Attracting Tourists to Visit Koya-sanThe Nankai Group is working to attract tourists to visit the Koya-san (Mount Koya) World Heritage Site, which is the most important tourist attraction located near our railway lines. Some 1,200 years ago, Koya-san was a spiritual and physical training ground for the followers of Kukai, better known as Kobo Daishi of the Shingon sect of esoteric Buddhism in Japan. Koya-san rises 900 m above sea level. There are as many as 117 temples in the mountains, of which a notable example is Kongobuji, the main temple of the Shingon sect on Koya-san. The plateau at the top, Danjo Garan, is regarded as a sacred area. Visitors will find a variety of religious halls and towers and Buddhist and mandala images. In 2004, Koya-san was registered as a World Heritage Site and included in the “Sacred sites and pilgrimage routes in the Kii mountain range.” Koya-san was awarded three stars by the Michelin Green Guide for Japan, and attracts the atten-tion of visitors from Japan and all over the world. In 2015, for 50 days from April through May, the “Koya-san 1,200-Year Commemoration Ceremony” was held to celebrate the twelve-hundredth anniversary of the first building of a temple on the Koya-san site. During this period, the Commemoration Ceremony attracted around 600,000 visitors from all over Japan and overseas, and the Koya-san temple grounds had an extremely festive atmosphere.
The Tenku Tourist TrainsIn addition to promoting Koya-san as a destination, we are partnering with local residents to make the journey itself part of the experience, a pleasurable ride visitors will look forward to, through a project to reinvent the line as the Koya-san Hana (Flower) Railway. In July 2009, we launched our operation of the Tenku tourist trains with observation decks, running along the stretch of railway line between Hashimoto and Gokurakubashi stations, and it has been well received by our customers. Offering a “change of
mode” concept, the cars are equipped with large win-dows along the sides, and evoke the forests with their deep green hue. Our passengers can enjoy a 180-degree view of one of the country’s finest examples of mountain scenery from the “One View” seating in the observation deck car, the only such vehicle of its kind operated by a major private railway company in Japan.
Development Around Core StationsThe Nankai Group is promoting development in areas along our lines, principally around our core stations, and we are working to increase the resident population in those areas. In-station stores originally targeted train passengers, but the “N. KLASS” brand was launched with the aim of transforming the stores into appealing commercial facilities that would also be frequented by people living in the area. Since 2014 we have renovated existing stores and worked to develop new commercial facilities in spaces under railway overpasses that have been created as a part of continuous grade separation projects. At Wakayamashi Station, we have begun working with the city of Wakayama on joint redevelopment of the terminal building there, creating a trigger for revitalization of the surrounding community. By carrying out a large-scale renovation of the station, our goal is not only to improve transportation convenience, but to create a vibrant urban area by developing additional offices, commercial facilities, hotels, municipal libraries and other facilities.
Creating attractive areas
along our railway lines
24Nankai Electric Railway Company Profile 2017
Financial Data
Millions of yenThousands of
U.S. dollars
March 31, 2017 and 2016 2017 2016 2017
ASSETSCurrent assets:
Cash and deposits ¥ 19,335 ¥ 18,768 $ 172,345Notes and accounts receivable-trade 22,314 21,421 198,896Merchandise and finished goods 25,369 24,563 226,130Work in process 704 447 6,276Raw materials and supplies 2,825 2,627 25,189Deferred tax assets 2,078 2,450 18,524Other 10,924 9,380 97,376Allowance for doubtful accounts (81) (84) (728)
Total current assets 83,470 79,575 744,010
Non-current assets:Property, plant and equipment:
Buildings and structures, net 343,149 343,299 3,058,644Machinery, equipment and vehicles, net 23,754 22,100 211,736Land 354,354 353,214 3,158,517Construction in progress 32,204 47,357 287,053Other, net 6,429 5,858 57,305
Total property, plant and equipment 759,891 771,830 6,773,257
Intangible assets 9,812 9,109 87,465
Investments and other assets:Investment securities 27,877 24,180 248,485Long-term loans receivable 246 153 2,194Net defined benefit asset 63 53 565Deferred tax assets 2,218 2,243 19,773Other 9,239 9,527 82,357Allowance for doubtful accounts (2,022) (2,053) (18,024)
Total investments and other assets 37,623 34,105 335,352Total non-current assets 807,327 815,045 7,196,075Total assets ¥890,798 ¥894,621 $7,940,085
Notes: 1. Amounts of less than one million yen have been rounded down. 2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥112.19 per $1, the rate prevailing at March 31, 2017.
Consolidated Balance Sheets
25Nankai Electric Railway Company Profile 2017
Financial Data
Consolidated Balance SheetsMillions of yen
Thousands of U.S. dollars
March 31, 2017 and 2016 2017 2016 2017
LIABILITIESCurrent liabilities:
Notes and accounts payable-trade ¥ 20,364 ¥ 22,827 $ 181,518Short-term loans payable 92,823 82,364 827,380Current portion of bonds 20,000 20,000 178,269Income taxes payable 5,113 4,204 45,581Provision for bonuses 2,520 2,424 22,470Provision for loss on reconstruction — 29 —Other 49,668 61,188 442,718
Total current liabilities 190,491 193,038 1,697,938
Non-current liabilities:Bonds payable 70,000 70,000 623,941Long-term loans payable 295,374 311,796 2,632,809Deferred tax liabilities 47,191 46,688 420,640Deferred tax liabilities for land revaluation 19,125 19,165 170,475
336 — 2,994Net defined benefit liability 16,353 16,183 145,765Other 32,636 33,809 290,901
Total non-current liabilities 481,017 497,643 4,287,529Total liabilities 671,509 690,681 5,985,467
NET ASSETSShareholders’ equity:
Capital stock 72,983 72,983 650,536Capital surplus 28,089 28,089 250,375Retained earnings 69,559 58,128 620,011Treasury shares (104) (76) (935)
Total shareholders’ equity 170,527 159,125 1,519,986
Accumulated other comprehensive income:Valuation difference on available-for-sale securities 8,266 5,602 73,681Deferred gains or losses on hedges — 0 —Revaluation reserve for land 31,752 31,830 283,026Remeasurements of defined benefit plans (1,306) (1,860) (11,645)
Total accumulated other comprehensive income 38,712 35,572 345,063
Non-controlling interests 10,048 9,241 89,568Total net assets 219,288 203,939 1,954,618Total liabilities and net assets ¥890,798 ¥894,621 $7,940,085
Notes: 1. Amounts of less than one million yen have been rounded down. 2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥112.19 per $1, the rate prevailing at March 31, 2017.
26Nankai Electric Railway Company Profile 2017
Financial Data
Consolidated Statements of IncomeMillions of yen
Thousands of U.S. dollars
Years ended March 31, 2017 and 2016 2017 2016 2017Operating revenue ¥221,690 ¥219,065 $1,976,023Operating expenses:
Operating expenses and cost of sales of transportation 181,962 179,680 1,621,910Selling, general and administrative expenses 7,887 7,065 70,301
Total operating expenses 189,849 186,746 1,692,212Operating income 31,840 32,318 283,811
Non-operating income:Interest income 28 22 257Dividend income 656 670 5,852Gain on sales of non-current assets 265 109 2,366Miscellaneous income 399 467 3,565
Total non-operating income 1,351 1,269 12,042
Non-operating expenses:Interest expenses 5,427 6,081 48,381Miscellaneous expenses 652 395 5,812
Total non-operating expenses 6,080 6,477 54,194Ordinary income 27,111 27,110 241,659
Extraordinary income:Contribution for construction 22,415 4,434 199,795Other 2,187 519 19,501
Total extraordinary income 24,602 4,953 219,296
Extraordinary losses:Reduction entry of land contribution for construction 22,327 4,392 199,012Loss on retirement of non-current assets 2,120 1,116 18,903Impairment loss 224 9,074 2,000Other 2,357 109 21,011
Total extraordinary losses 27,029 14,691 240,928Profit before income taxes 24,684 17,372 220,027
Income taxes:Income taxes-current 7,953 7,265 70,894Income taxes-deferred (423) (3,085) (3,775)
Total income taxes 7,530 4,179 67,118Profit 17,154 13,192 152,908
Profit attributable to non-controlling interests 702 579 6,260Profit attributable to owners of parent ¥ 16,452 ¥ 12,612 $ 146,648
Consolidated Statements of Comprehensive IncomeMillions of yen
Thousands of U.S. dollars
Years ended March 31, 2017 and 2016 2017 2016 2017Profit ¥17,154 ¥13,192 $152,908Other comprehensive income:
Valuation difference on available-for-sale securities 2,767 (2,862) 24,671Deferred gains or losses on hedges (0) 0 (0)Revaluation reserve for land (0) 1,000 (8)Remeasurements of defined benefit plans, net of tax 557 (3,935) 4,965
Total other comprehensive income 3,323 (5,797) 29,627Comprehensive income ¥20,478 ¥ 7,394 $182,536
Comprehensive income attributable toComprehensive income attributable to owners of parent ¥19,669 ¥ 6,901 $175,322Comprehensive income attributable to non-controlling interests 809 492 7,214
Notes: 1. Amounts of less than one million yen have been rounded down. 2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥112.19 per $1, the rate prevailing at March 31, 2017.
27Nankai Electric Railway Company Profile 2017
Millions of yenShareholders’ equity Accumulated other comprehensive income
Years ended March 31, 2017 and 2016Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’
equity
Valuation difference
on available- for-sale
securities
Deferred gains or
losses on hedges
Revaluation reserve for land
Remeasure-ments of defined
benefit plans
Total accumulated
other comprehensive
income
Non-controlling
interestsTotal
net assetsBalance at March 31, 2015 ¥ 72,983 ¥ 28,087 ¥ 46,053 ¥ (34) ¥ 147,090 ¥ 8,395 ¥— ¥ 33,694 ¥ 2,058 ¥ 44,147 ¥ 8,752 ¥ 199,991Changes of items during period:
Dividends of surplus (3,401) (3,401) (3,401)Profit attributable to
owners of parent 12,612 12,612 12,612Reversal of revaluation reserve
for land 2,863 2,863 2,863Purchase of treasury shares (43) (43) (43)Disposal of treasury shares 0 1 1 1Change in treasury shares of
parent arising from transactions with non-controlling shareholders 1 1 1
Net changes of items other than shareholders’ equity (2,792) 0 (1,863) (3,918) (8,574) 488 (8,085)
Total changes of items during period — 1 12,074 (42) 12,034 (2,792) 0 (1,863) (3,918) (8,574) 488 3,948
Balance at March 31, 2016 72,983 28,089 58,128 (76) 159,125 5,602 0 31,830 (1,860) 35,572 9,241 203,939Changes of items during period:
Dividends of surplus (5,101) (5,101) (5,101)Profit attributable to
owners of parent 16,452 16,452 16,452Reversal of revaluation reserve
for land 77 77 77The amount of change by merger
of a consolidated subsidiary 2 2 2Purchase of treasury shares (30) (30) (30)Disposal of treasury shares 0 2 2 2Change in treasury shares of
parent arising from transactions with non-controlling shareholders (0) (0) (0)
Net changes of items other than shareholders’ equity 2,663 (0) (78) 554 3,139 806 3,946
Total changes of items during period — 0 11,430 (28) 11,402 2,663 (0) (78) 554 3,139 806 15,348
Balance at March 31, 2017 ¥72,983 ¥28,089 ¥69,559 ¥(104) ¥170,527 ¥8,266 ¥— ¥31,752 ¥(1,306) ¥38,712 ¥10,048 ¥219,288
Thousands of U.S. dollarsShareholders’ equity Accumulated other comprehensive income
Years ended March 31, 2017 and 2016Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’
equity
Valuation difference
on available- for-sale
securities
Deferred gains or
losses on hedges
Revaluation reserve for land
Remeasure-ments of defined
benefit plans
Total accumulated
other comprehensive
income
Non-controlling
interestsTotal
net assetsBalance at April 1, 2016 $ 650,536 $ 250,374 $ 518,125 $ (680) $ 1,418,355 $ 49,937 $ 0 $ 283,723 $ (16,585) $ 317,077 $ 82,375 $ 1,817,807Changes of items during period:
Dividends of surplus (45,473) (45,473) (45,473)Profit attributable to
owners of parent 146,648 146,648 146,648Reversal of revaluation reserve
for land 688 688 688The amount of change by merger
of a consolidated subsidiary 22 22 22Purchase of treasury shares (273) (273) (273)Disposal of treasury shares 0 18 19 19Change in treasury shares of
parent arising from transactions with non-controlling shareholders (0) (0) (0)
Net changes of items other than shareholders’ equity 23,744 (0) (697) 4,939 27,985 7,192 35,178
Total changes of items during period — 0 101,885 (255) 101,631 23,744 (0) (697) 4,939 27,985 7,192 136,810
Balance at March 31, 2017 $650,536 $250,375 $620,011 $(935) $1,519,986 $73,681 $— $283,026 $(11,645) $345,063 $89,568 $1,954,618
Notes: 1. Amounts of less than one million yen have been rounded down. 2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥112.19 per $1, the rate prevailing at March 31, 2017.
Financial Data
Consolidated Statements of Changes in Equity
28Nankai Electric Railway Company Profile 2017
Financial Data
Consolidated Statements of Cash FlowsMillions of yen
Thousands of U.S. dollars
Years ended March 31, 2017 and 2016 2017 2016 2017
Cash flows from operating activities:Profit before income taxes ¥ 24,684 ¥ 17,372 $ 220,027Depreciation 26,032 25,519 232,037Impairment loss 224 9,074 2,000Amortization of goodwill 484 436 4,315Increase (decrease) in provision for bonuses 94 97 841Increase (decrease) in provision for loss on reconstruction 306 (1,122) 2,734Increase (decrease) in net defined benefit liability 942 (1,004) 8,401Increase (decrease) in allowance for doubtful accounts (34) (34) (305)Interest and dividend income (685) (692) (6,109)Interest expenses 5,427 6,081 48,381Loss on retirement of non-current assets 1,748 1,099 15,583Reduction entry of land contribution for construction 22,327 4,392 199,012Proceeds from contribution for construction (22,415) (4,434) (199,795)Decrease (increase) in notes and accounts receivable-trade (1,886) 655 (16,812)Decrease (increase) in inventories (3,448) 1,314 (30,733)Increase (decrease) in notes and accounts payable-trade (631) (430) (5,631)Loss on valuation of inventories 2,018 617 17,996Increase (decrease) in accrued consumption taxes 299 (1,737) 2,674Other, net (483) (1,364) (4,309)
Subtotal 55,007 55,839 490,308Interest and dividend income received 685 705 6,107Interest expenses paid (5,489) (6,130) (48,934)Income taxes paid (7,448) (7,202) (66,395)
Net cash provided by (used in) operating activities 42,753 43,212 381,084
Cash flows from investing activities:Decrease (increase) in short-term investment securities — 600 —Purchase of non-current assets (36,946) (34,413) (329,316)Proceeds from sales of non-current assets 599 382 5,347Proceeds from contribution received for construction 4,836 7,139 43,105Purchase of investment securities (26) (828) (237)Proceeds from sales and redemption of investment securities 442 877 3,940Purchase of shares of subsidiaries resulting in change in
scope of consolidation (260) (2,554) (2,318)Decrease (increase) in short-term loans receivable (0) 1 (6)Payments of long-term loans receivable (100) (11) (893)Collection of long-term loans receivable 14 19 128Other, net 579 (244) 5,169
Net cash provided by (used in) investing activities (30,861) (29,030) (275,080)
Cash flows from financing activities:Net increase (decrease) in short-term loans payable 925 (17,330) 8,244Proceeds from long-term loans payable 29,304 46,770 261,199Repayments of long-term loans payable (36,223) (52,550) (322,873)Proceeds from issuance of bonds 19,843 9,931 176,874Redemption of bonds (20,000) — (178,269)Cash dividends paid (5,074) (3,390) (45,228)Other, net (682) (478) (6,080)
Net cash provided by (used in) financing activities (11,906) (17,047) (106,131)
Net increase (decrease) in cash and cash equivalents (14) (2,865) (127)Cash and cash equivalents at beginning of period 18,294 21,160 163,068Increase (decrease) in cash and cash equivalents resulting from
merger of subsidiaries 61 — 550Cash and cash equivalents at end of period ¥ 18,342 ¥ 18,294 $ 163,491
Notes: 1. Amounts of less than one million yen have been rounded down. 2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥112.19 per $1, the rate prevailing at March 31, 2017.
29Nankai Electric Railway Company Profile 2017
Investor Information
Company Name Nankai Electric Railway Co., Ltd.Founded December 27, 1885Registered Head Office 5-1-60, Namba, Chuo-ku, Osaka 542-8503, JapanHead Office 2-1-41, Shikitsuhigashi, Naniwa-ku, Osaka 556-8503, JapanTokyo Office Nankai Tokyo Bldg. 8F 5-15-1, Ginza, Chuo-ku, Tokyo 104-0061, JapanWakayama Office Nankai Wakayama Bldg. 4F 3-6, Higashikuramae-cho, Wakayama 640-8203, JapanPaid-In Capital ¥72,983 millionIssued Shares 567,012,232Number of Shareholders 51,776Stock Exchange Listing Tokyo
Major Shareholders (as of March 31, 2017)
Name Number of Shares Held (Thousands) Voting Rights (%)Japan Trustee Services Bank, Ltd. (Trust account) 37,275 6.6The Master Trust Bank of Japan, Ltd. (Trust account) 14,958 2.6Nippon Life Insurance Company 13,803 2.4The Senshu Ikeda Bank, Ltd. 7,945 1.4Japan Trustee Services Bank, Ltd. (Trust account 5) 7,765 1.4The Sumitomo Mitsui Trust & Banking Co., Ltd. 7,580 1.3The Bank of Tokyo-Mitsubishi UFJ, Ltd. 7,368 1.3Sumitomo Mitsui Banking Corporation 7,147 1.3JP MORGAN CHASE BANK 385151 6,599 1.2Japan Trustee Services Bank, Ltd. (Trust account 2) 5,850 1.0
Note: Voting rights exclude treasury stock of 150,886 shares.
Directors and Corporate AuditorsPresident and CEO (Representative Director)Teruhiko AchikitaSenior Managing Director (Representative Director)Tetsuro KanamoriSenior Managing Director (Representative Director)Toshiyuki Takagi
Director and Senior AdviserMakoto YamanakaManaging DirectorKeiichi IwaiManaging DirectorNaoto AshibeManaging DirectorKoyo Uraji
DirectorHiroyuki SumitaDirectorYoshio TsukudaDirectorSatoshi Kajitani
Outside DirectorIchiro MasukuraOutside DirectorHitoshi MurakamiOutside DirectorKiyoshi SonoStanding Corporate AuditorTakaichi Fujita
Standing Corporate AuditorMasafumi KatsuyamaCorporate AuditorMasayuki OkuCorporate AuditorKozo AraoCorporate AuditorKoji Aiba
2014 2015 2016 2017
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30Nankai Electric Railway Company Profile 2017