Consolidated Financial Statements for the Fiscal Year Ended March 31, 2013 (Japanese accounting standards) April 26, 2013

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1 Consolidated Financial Statements for the Fiscal Year Ended (Japanese accounting standards) April 26, 2013 These financial statements have been prepared for reference only in accordance with accounting principles and practices generally accepted in Japan. Oriental Land Co., Ltd. Code number: 4661, First Section of the Tokyo Stock Exchange URL: Representative: Kyoichiro Uenishi, Representative Director and President Contact: Kenji Yoshida, Director of Finance/Accounting Department Planned Date for Annual General Meeting of Stockholders: June 27, 2013 Planned Date for Submission of Securities Report (Yuka shoken hokokusho): June 27, 2013 Planned Date for Start of Dividend Payment: June 28, 2013 Supplementary materials for the financial statements: Yes Briefing session on financial results: Yes (for institutional investors) 1. Consolidated Results for the Fiscal Year Ended (April 1, 2012 ) Note: All amounts are rounded down to the nearest million yen. (1) Consolidated Operating Results (Percentages represent change compared with the previous fiscal year.) Net sales Year-on-year change (%) Operating income 395, , ,467 66,923 (Note) Comprehensive income: Fiscal year ended : 57,900 million (72.4%) Fiscal year ended : 33,583 million (53.1%) Net income Year-onyear change (%) 51,484 32, (Reference) Equity in earnings of affiliates: Fiscal year ended : 103 million Fiscal year ended : 57 million (2) Consolidated Financial Position Total assets As of 655,544 As of 619,493 (Reference) Equity capital: As of : 432,262 million As of : 383,084 million (3) Consolidated Cash Flows Net cash provided by operating activities 91,982 90,327 Earnings per share ( ) Net assets 432, ,084 Net cash provided by (used in) investing activities (45,377) (73,713) Earnings per share (diluted) ( ) Year-on-year change (%) Return on equity (%) Net worth ratio (%) Net cash provided by (used in) financing activities (34,515) (3,485) Ordinary income 80,867 66,238 Ordinary income/total assets (%) Year-on-year change (%) Operating income/total net sales (%) Net assets per share ( ) 5, , Cash and cash equivalents at end of period 60,582 48,511

2 2. Dividends First quarterend Second quarterend Annual dividends ( ) Third quarterend Yearend Total Total dividends paid (total) Payout ratio (consolidated) (%) ,341 10, Fiscal Year ending March 31, 2014 (Est.) Dividends/ Net assets (consolidated) (%) Projected Consolidated Results for the Fiscal Year Ending March 31, 2014 (April 1, 2013 to March 31, 2014) (Percentages represent change compared with the previous fiscal year or the same quarter of the previous fiscal year, as applicable.) Net sales Operating income Ordinary income Net income Earnings per share (%) (%) (%) (%) ( ) Six months ending September 30, 2013 Fiscal Year ending March 31, , , ,880 82,780 (3.1) ,850 82,350 (3.3) ,540 52,280 (3.9) *Notes (1) Changes in Major Subsidiaries During the Period (Changes in specified subsidiaries due to changes in the scope of consolidation): None New: companies (Company name: ) Eliminated: companies (Company name: ) (2) Changes in Accounting Policies, Changes in Accounting Estimates, or Restatement (a) Changes in accounting policies due to changes in accounting standards: Yes (b) Changes other than (a) above: None (c) Changes in accounting estimates: Yes (d) Restatement: None (3) Number of Shares Issued and Outstanding (Common stock) (a) Number of shares issued at end of period (including treasury stock) Year ended March. 31, 2013: (b) Number of treasury stock at end of period Year ended March. 31, 2013: (c) Average number of shares outstanding (quarterly cumulative period) Year ended March. 31, 2013: 90,922,540 shares 7,452,794 Shares 83,448,973 shares Year ended : Year ended : Year ended : 90,922,540 shares 7,498,674 shares 83,417,277 shares * Statement concerning the Status of Financial Audit Procedures These Consolidated Financial Statements for the Fiscal Year Ended are not subject to audit procedures under the Financial Instruments and Exchange Act. At the time of disclosing these Consolidated Financial Statements, audit procedures specified in the Financial Instruments and Exchange Act have not been completed with respect to the financial statements. * Explanation on the Appropriate Usage of Performance Projections and Other Specific Matters The projections and other statements with respect to the future included in this material are based on currently available information and certain assumptions that are judged reasonable by the Company. Due to various factors, cases may occur where the actual results and other situations differ materially from the projections.

3 1. Operating Results (1) Analysis of Operating Results During the fiscal year ended, Japan s economic outlook remained uncertain, reflecting such factors as the European sovereign debt crisis. Owing, however, to anticipation prevalent that economic measures would take effect, signs of recovery were seen, although conditions remained weak in some areas. Regarding the OLC Group, theme park attendance and net sales per guest increased and also reached record highs mainly due to the success of special events and new attractions at the both parks. As a result, net sales, operating income, ordinary income, and net income set new records at 395,526 million (up 9.9% from the previous fiscal year), 81,467 million (up 21.7%), 80,867 million (up 22.1%), and 51,484 million (up 60.3%), respectively. The following is results for each segment. A. Summary of Results by Segment for the Fiscal Year Ended (Millions of yen) Fiscal Year ended Fiscal Year ended Change (decrease) Change (%) Net Sales 360, ,526 35, Theme Park Segment 297, ,814 31, Hotel Business Segment 42,210 48,924 6, Other Business Segment 19,959 16,787 (3,172) (15.9) Operating Income 66,923 81,467 14, Theme Park Segment 56,433 68,484 12, Hotel Business Segment 9,555 12,022 2, Other Business Segment (127) (17.3) Elimination and Corporate Ordinary Income 66,238 80,867 14, Net Income 32,113 51,484 19, [Theme Park Segment] Tokyo Disneyland, Tokyo DisneySea and others Although costs such as personnel expenses and fixed and miscellaneous costs rose due to returning to normal operations, net sales and operating income climbed as a result of an increase in both theme park attendance and net sales per guest. Net Sales 329,814 million (up 10.7% from the previous fiscal year) From April 2012, we held Disney s Easter Wonderland at Tokyo Disneyland and a new special event Mickey & Duffy s Spring Voyage in which Duffy was featured, for the first time, in a lead role with Mickey Mouse at Tokyo DisneySea until June From July to August 2012, a new special event Disney s Natsu Matsuri started at Tokyo Disneyland and a new attraction Toy Story Mania! was launched at Tokyo DisneySea on July 9, At the both parks, Halloween-themed events were held from September to November 2012 and Christmas-themed events were carried out from November to December January through March 2013, the limited period program Tower of Terror: Level 13 was introduced at Tokyo DisneySea. Theme park attendance amounted to 27,503 thousand, up 8.5% from the previous fiscal year, due to favorable weather during mainly summer vacation period and the fourth quarter in addition to the success of special events and new attractions at the both theme parks. Net sales per guest created a new record high of 10,601 (up 2.6%). Ticket receipts per guest increased to 4,483 (up 3.4%) due to ticket price revisions in the previous fiscal year, merchandise sales per guest rose to 3,860 (up 1.7%) due to strong sales of products related to special events and Toy Story Mania!, and food and beverages sales per guest grew to 2,259 (up 2.4%) due to favorable sales of one-hand menu items. Owing to the factors described above, net sales for the theme park segment increased as a whole. 1

4 Operating Income 68,484 million (up 21.4%) Costs such as personnel expenses (including mainly work hours of part-time employees) and fixed and miscellaneous costs (including facility renovation costs and marketing expenses) climbed due to returning to normal operations. However, operating income grew owing to an increase in net sales. [Hotel Business Segment] Tokyo Disneyland Hotel, Tokyo DisneySea Hotel MiraCosta and others Operating income rose as a result of an increase in net sales mainly due to a growth in occupancy rates. Net Sales 48,924 million (up 15.9%) During the fiscal year under review, we offered the Tokyo Disney Resort Multi-day Passport Special at the three Disney hotels as a standard practice for all hotel guests, continuing from the previous fiscal year. We also continued implementing the Tokyo Disneyland Happy 15 Entry program, under which hotel guests are allowed to enter Tokyo Disneyland 15 minutes earlier. In addition, Disney Ambassador Hotel had closed all facilities from January 23 to February 5, 2013 for the main purpose of refurbishing its guest rooms in order to launch, for example, Mickey Mouse Rooms and Minnie Mouse Rooms. Occupancy rates of each hotel increased year on year mainly as a result of a growth in theme park attendance as well as returning to normal operations. The occupancy rates were in the lower-90% for Tokyo Disneyland Hotel, the higher-90% for Tokyo DisneySea Hotel MiraCosta, and approximately 80% for Disney Ambassador Hotel. As a result, overall net sales in this segment increased year on year. Operating Income 12,022 million (up 25.8%) Despite an increase in costs due to the restoration of normal operations and facility renovation for refurbishment of Disney Ambassador Hotel, operating income climbed owing to a rise in net sales. [Other Business Segment] Ikspiari, Disney Resort Line and others Operating income declined mainly because of an increase in facility renovation costs of Ikspiari. Net Sales 16,787 million (down 15.9%) Ikspiari held seasonal events in celebration of Halloween and Christmas while at the same time renovating stores and welcoming new tenants. Regarding Cirque du Soleil Theatre Tokyo where the ZED productions were terminated as of December 31, 2011, we changed the name into the MAIHAMA Amphitheatre and started to operate it as a multipurpose hall which can be used for various purposes such as corporate and school ceremonies and lectures, music concerts for domestic and overseas artists from September 1, However, overall net sales declined mainly due to a termination of the ZED productions. Operating Income 606 million (down 17.3%) Operating income declined owing to an increase in facility renovation costs of Ikspiari, among other factors. 2

5 B. Forecast of Results by Segment for the Fiscal Year Ending March 31, 2014 During the fiscal year ending March 31, 2014, we are holding Tokyo Disney Resort 30th: The Happiness Year throughout the year mainly at Disney Hotel and Disney Resort Line as well as the both theme parks. As a result, net sales, operating income, ordinary income and net income are forecast to be 413,730 million (up 4.6%), 82,780 million (up 1.6%), 82,350 million (up 1.8%) and 52,280 million (up 1.5%) and reach record highs, respectively. The following is our forecast by segment. Results for the fiscal year ended Forecast for the fiscal year ending March 31, 2014 Change (decrease) (Millions of yen) Change (%) Net Sales 395, ,730 18, Theme Park Segment 329, ,670 6, Hotel Business Segment 48,924 60,740 11, Other Business Segment 16,787 16,320 (467) (2.8) Operating Income 81,467 82,780 1, Theme Park Segment 68,484 69,550 1, Hotel Business Segment 12,022 12, Other Business Segment (386) (63.7) Elimination and Corporate (263) (74.6) Ordinary Income 80,867 82,350 1, Net Income 51,484 52, [Theme Park Segment] Tokyo Disneyland, Tokyo DisneySea and others Net sales and operating income are expected to increase mainly due to a rise in both theme park attendance and net sales per guest as a result of implementation of Tokyo Disney Resort 30th: The Happiness Year. Net Sales 336,670 million (up 2.1% from the previous fiscal year) At the both parks, we are holding Tokyo Disney Resort 30th: The Happiness Year for 340 days from April 15, 2013 to March 20, The theme of 30th anniversary events which are an important turning point for us is happiness. The 30th anniversary year will be a very special year in which the greatest happiness ever created by Tokyo Disney Resort can be shared among families, friends, Disney friends, and Cast Members through unexpected discoveries, surprises, and heartwarming experiences. At Tokyo Disneyland, a new daytime parade Happiness Is Here will be launched on the same day of beginning the 30th anniversary events. In addition, a new attraction Star Tours: The Adventures Continue will open on May 7, Moreover, a number of special seasonal events will be rolled out in sequence at both theme parks. Therefore, total annual theme park attendance is expected to reach a new record high of 27,700 thousand, up 0.7%. Net sales per guest are expected to be 10,700 (up 0.9%). Ticket receipts per guest are forecast to be 4,500 (up 0.4%). Our forecast for merchandise sales per guest is 3,960 (up 2.6%) owing to sales of Tokyo Disney Resort 30th Anniversary related products. Food and beverages sales per guest are forecast to be 2,240 (down 0.8%). Due to the factors mentioned above, whole net sales in theme park segment are expected to increase. Operating Income 69,550 million (up 1.6%) Despite an increase in Tokyo Disney Resort 30th Anniversary related costs including mainly entertainment show production costs as well as the cost of merchandise ratio and food and beverages ratio, operating income is forecast to increase as a result of a growth in net sales. 3

6 [Hotel Business Segment] Tokyo Disneyland Hotel, Tokyo DisneySea Hotel MiraCosta and others Net sales and operating income are forecast to grow due to an increase in occupancy rates as a result of Tokyo Disney Resort 30th Anniversary events, among other factors. Net Sales 60,740 million (up 24.1%) At three Disney Hotels, various programs linking to the implementation period of Tokyo Disney Resort 30th Anniversary will be held. We will continue to offer the Tokyo Disney Resort Multi-day Passport Special and implement the Tokyo Disneyland Happy 15 Entry program for all hotel guests. In addition, new anniversary plans such as the Special Kids Birthday Plan and the My Anniversary Story will be started at Disney Ambassador Hotel. Occupancy rates are expected to be the mid-90% range for Tokyo Disneyland Hotel, the higher-90% for Tokyo DisneySea Hotel MiraCosta, and the mid-80% range for Disney Ambassador Hotel, and forecast to increase compare with the fiscal year under review. Furthermore, net sales in the hotel business segment are projected to increase as a whole due to acquisition of all shares in Brighton Corporation which operates mainly Urayasu Brighton Hotel and Kyoto Brighton Hotel on March 29, Operating Income 12,920 million (up 7.5%) Operating income is forecast to rise due to an increase in mainly net sales. [Other Business Segment] Ikspiari, Disney Resort Line and others Operating income is expected to decrease mainly due to a decline in net sales of Ikspiari. Net Sales 16,320 million (down 2.8%) Whole net sales are projected to decline as a result of a decrease in net sales of Ikspiari due to the effect of the period when some stores closed temporarily to renovate their facilities or to be replaced to new tenants, among other factors. Operating income 220 million (down 63.7%) Operating income is projected to decrease mainly due to a decline in net sales of Ikspiari. 4

7 (2) Analysis of Consolidated Financial Position A. Assets, Liabilities and Net Assets [Assets] Total assets as of were 655,544 million (up 5.8% compared with the end of the previous fiscal year). Current assets rose to 150,844 million (up 12.4%) due to an increase in cash and deposits. Noncurrent assets increased to 504,700 million (up 4.0%) due to an increase in investment securities thanks to a rise of market-value evaluation of shares owned by us and property, plant and equipment as a result of the acquisition of all shares in Brighton Corporation on March 29, [Liabilities] Total liabilities as of were 223,282 million (down 5.6%). Current liabilities increased to 109,845 million (up 16.6%) as a result of various factors, including a rise in current portion of long-term loans payable. Noncurrent liabilities decreased to 113,436 million (down 20.2%) due to a decrease in long-term loans payable, among other factors. [Net Assets] Total net assets as of were 432,262 million (up12.8%) due to various factors, including an increase in retained earnings owing to net income. Net worth ratio stood at 65.9 % (up 4.1 points). B. Cash Flows [Net Cash Provided by Operating Activities] Net cash from operating activities increased to 91,982 million (a growth of 1,655 million compared with the previous fiscal year) due to factors that included a rise in net cash provided by major operating activities. [Net Cash Used in Investing Activities] Net cash used in investing activities rose to 45,377 million (an increase of 28,336 million compared with the previous fiscal year) due to factors that included an increase in proceeds from withdrawal of time deposits. [Net Cash Used in Financing Activities] Net cash used in financing activities was 34,515 million (a decrease of 31,029 million compared with the previous fiscal year) due to factors that included a decline in proceeds from long-term loans payable. C. Indicators of Financial Position Fiscal year Fiscal year Fiscal year Fiscal year Fiscal year ended ended ended ended ended March 31, March 31, March 31, March 31, March 31, Net worth ratio (%) Net worth ratio on market value basis (%) Debt/equity ratio (times) Interest-bearing debt to cash-flow ratio (%) Interest coverage ratio (times) Notes: All indicators are calculated on a consolidated basis. Net worth ratio: Equity capital/total assets Net worth ratio on market value basis: Total market value of stock*/total assets * Total market value of stock is calculated by multiplying the total number of shares outstanding at the end of the period (excluding treasury stock) by the closing stock price at the end of the period. Debt/equity ratio: Interest-bearing debt*/ Equity capital * Interest-bearing debt includes all liabilities stated on the balance sheet on which interest is paid. Interest-bearing debt to cash flow ratio: Interest-bearing debt*/cash flows from operating activities * Interest-bearing debt: Same as above Interest coverage ratio: Cash flows from operating activities/interest paid* * Interest paid is as stated on the consolidated statement of cash flows. 5

8 (3) Basic Policy on Distribution of Profit and Dividends for the Fiscal Years Ended and Ending March 31, 2014 The OLC Group recognizes that returning profits to its stockholders is an important management policy. We will set the year-end dividend for the fiscal year ended at per share and the total cash dividends for the fiscal year increased by to per share. We plan to keep total dividend at per share for the fiscal year ending March 31, 2014, the same amount as the fiscal year under review. We will continue to provide a steady payout of cash dividends while also taking the external environment into consideration. 6

9 2. Outline of the Oriental Land Group ( OLC Group ) The OLC Group includes Oriental Land Co., Ltd, (the Company ), 17 consolidated subsidiaries, 3 affiliated companies and 1 other affiliated company, with the main businesses being the management and operation of theme parks and hotels. The main operations of each business segment and the main affiliates and other companies of the Company conducting each business during the period under the review were as follows: Segments Theme Park Hotel Main Operations Management and operation of theme parks Management and operation of hotels Main Companies (Note) Oriental Land Co., Ltd. (listed company) and 7 other companies Milial Resort Hotels Co., Ltd. and 3 other companies Ikspiari Co., Ltd. Management and operation of Ikspiari Other Management and operation of monorail, Maihama Resort Line Co., Ltd. and others and 5 other companies Note: Company names and numbers of companies listed in the Main Companies column all refer to consolidated subsidiaries except Oriental Land Co., Ltd. The following diagram shows an overview of our major business operations. Legends The Company Consolidated subsidiaries Keisei Electric Railway Co., Ltd. Equity method affiliates Other affiliated company Theme Park Photo Works Co., Ltd. Design Factory Co., Ltd. and 5 other companies Hotel Milial Resort Hotels Co., Ltd. and 3 other companies Other Ikspiari Co., Ltd. Maihama Resort Line Co., Ltd. and 4 other companies Business outsourcing and others Real estate leasing Real estate leasing and others Oriental Land Co., Ltd. Offering of services, and sales of merchandise and food and beverages Customers * Ikspiari Co., Ltd. sublets its properties to Milial Resort Hotels Co., Ltd. Tokyo Bay City Kotsu Co., Ltd. and 2 other companies Offering of services 7

10 3. Management Policies (1) Corporate Mission and Policies With a corporate mission to create happiness and contentment by offering wonderful dreams and moving experiences created with original, imaginative ideas, the OLC Group continues to be an organization that is widely loved and popular among people from Japan, Asia and the wider world. We aim to increase its corporate value over the long term by maximizing the cash flow that is generated as a result of its ability to earn the trust and understanding of all stakeholders. Tokyo Disney Resort is our core business. In addition to its role as a key element within the Tokyo Bay area, the resort aims to continue bringing happiness for another 50 or 100 years time. (2) Medium- and Long- Term Strategies, Management Indicators and Issues The fiscal year ended, we have launched the 2013 Medium-Term Plan, which covers the period between the fiscal year ended and the fiscal year ending March 31, We will continue to innovate and reinvent ourselves in order to consistently create new value while at the same time dealing with expected future changes in the surrounding environment, such as shifting demographics. We have formulated the following two fundamental policies for the medium-term plan: Sustainable Growth of the Core Business (Tokyo Disney Resort) and Reinforcement of the Foundation for Long-Term Sustainable Growth. Of the free cash flow consistently generated from the sustainable growth of the core business, we will allocate a high level to stockholder returns and preparations for new growth, among other areas. Under the 2013 Medium-Term Plan, we have set a numerical target for total free cash flow over a period of three years with a view to generating corporate value that will enable sustainable growth over the long term, and we have revised the numerical target upwards from the initial target figure the billion level to the billion level in April, Free cash flow for the fiscal year ended reached 48.7 billion, that for the fiscal year ended amounted to 58.8 billion and that for the fiscal year ending March 31, 2014 is forecast to reach 64.3 billion, and total free cash flow for three years will achieve billion and accomplish our target figure. i. Sustainable Growth of the Core Business (Tokyo Disney Resort) We steadily increased our base level of profitability by strengthening our core business under the 2010 Medium-Term Plan (covering the fiscal year ended March 31, 2008 to the fiscal year ended March 31, 2011) and have achieved record operating income for the last five consecutive years since the fiscal year ended March 31, We will continue striving to achieve the sustainable growth of our core business under the 2013 Medium-Term Plan. (i) Creation of New Value [Enhanced Value of Tokyo Disney Resort] As a means of enhancing the value of Tokyo Disney Resort, we will add new products to the two theme parks in a well-balanced manner. In addition, we will capitalize on the full potential of Tokyo Disney Resort by creating content which will enhance the profitability of the resort on the whole in preparation for the Tokyo Disney Resort 30th Anniversary, which will take place during the fiscal year ending March 31, 2014, the last year of the new medium-term plan. In the fiscal year under review, we opened a new attraction Toy Story Mania! at Tokyo DisneySea in July Moreover, during the fiscal year ending March 31, 2014, we are holding Tokyo Disney Resort 30th: The Happiness Year, and a new daytime parade Happiness Is Here will start from April 15, 2013 at Tokyo Disneyland. In addition, a new attraction Star Tours: The Adventures Continue will be launched on May 7, By effectively combining various new products and anniversary events in this way, we will systematically enhance the value of our theme parks. [Creation and Expansion of Earnings Opportunities] We will continue to create and expand earnings opportunities for Tokyo Disney Resort as a whole. By reducing the waiting time for our guests, we will enhance guest satisfaction and further increase profitability. Specifically, we will focus on the rollout of Tokyo Disney Resort Vacation Packages, high-value added packaged products which combine hotel accommodations with theme park contents such as FastPass tickets, show tickets, etc. These packages have contributed to the improvement of guest satisfaction and motivated those guests who purchased the packages to again visit the theme parks at a later date. In addition, we are strengthening efforts to allocate our resources to the development and investments that will enhance the profitability of Tokyo Disney Resort as a whole such as creation of new content and efficient utilization of existing facilities. By creating new value as described above, we aim to enhance guest satisfaction and further increase profitability. 8

11 (ii) Market Development [Promoting Attraction for Guests to Both Theme Parks] We will continue to promote efforts to attract guests to both theme parks, seeking to maintain a good balance between increasing the number of Tokyo Disney Resort fans and enhancing our ability to attract repeat guests. Due to the extremely strong appeal of anniversary events, we will position them as a key part of efforts for large-scale expansion of our fan base. In addition, we aim to attain stronger guest loyalty by targeting families with the introduction of new products with high family entertainment value and strengthening sales of vacation packages targeting post family (primarily guests in their 40s and over). With the aim of enhancing our ability to encourage repeat visits, we will continue to enhance guest satisfaction while expanding events under seasonal themes such as Halloween and Easter in addition to Christmas-themed events. [Attracting Overseas Guests] After the earthquake disaster, the number of overseas visitors to Japan declined. However, various initiatives are being considered primarily by the Japanese government in order to increase the number of overseas visitors to Japan and the target numbers indicate a significant increase in the future. We regard such a policy as an opportunity and are poised to capitalize on it by responding appropriately. (iii) Investment and Cost Efficiency [Control of Investment Amount] In order to generate free cash flow steadily, we will control its consolidated capital expenditures at an annual average of around the 30.0 billion level. We will strengthen our control based on a long-term perspective, ensuring a balanced allocation of investment resources to new products and to renovations and improvements with the aim of enhancing the attractiveness of Tokyo Disney Resort. Meanwhile, depreciation and amortization expenses are expected to decrease slightly, reflecting investment efficiency. [Reduction of Running Costs] To further improve cost efficiency, we will strive to control cost in accordance with net sales and reduce running costs through measures that will not affect the guests experience value. Since the fiscal year ended March 31, 2010, we have been able to control costs within the initially projected ranges despite higher-than-expected growth in net sales. We will continue to enhance cost efficiency while retaining a high level of guest satisfaction. ii. Reinforcement of the Foundation for Long-Term Sustainable Growth We will allocate the steady stream of high free cash flow, generated by the sustainable growth of our core business, to reinforcing the foundation for long-term sustainable growth. (i) Preparation for New Growth [Business Development Policies] We will continue our efforts into the research and development of new business in order to generate additional growth. With the aim of growing new businesses that can build upon Tokyo Disney Resort, we will consider various opportunities and methods from a long-term perspective based on a policy of selection and focus on investment from which we can expect more than a certain level of return in areas in which we can capitalize on our strengths. [Reduction of Interest-Bearing Debt] We are reducing interest-bearing debt in order to secure funds for investment in new growth opportunities. (ii) Stockholder Returns As in the past, we will remain focused on stockholder returns when allocating the steady stream of free cash flow. We aim to pay stable dividend while taking external factors into consideration. Regarding our target of achieving an ROE of 8% or more, ROE for the fiscal year ended was 8.7% and for the fiscal year under review was 12.6%. We successfully reached our target figure. We will continue to aim at an ROE of 8% or more through earnings growth and direct stockholder returns. 9

12 4. Consolidated Financial Statements (1) Consolidated Balance Sheets At the end of the previous fiscal year () (Millions of yen) At the end of the fiscal year () ASSETS Current assets Cash and deposits 66,512 88,585 Notes and accounts receivable trade 17,753 19,461 Short-term investment securities 30,998 20,699 Merchandise and finished goods 7,538 9,583 Work in process Raw materials and supplies 3,884 4,530 Deferred tax assets 5,027 5,516 Other 2,379 2,347 Allowance for doubtful accounts (2) (1) Total current assets 134, ,844 Noncurrent assets Property, plant and equipment Buildings and structures 584, ,539 Accumulated depreciation (284,511) (324,012) Buildings and structures, net 299, ,527 Machinery, equipment and vehicles 242, ,336 Accumulated depreciation (205,989) (211,050) Machinery, equipment and vehicles, net 36,260 34,285 Land 93, ,681 Construction in progress 10,471 9,492 Other 71,122 75,402 Accumulated depreciation (63,956) (67,489) Other, net 7,166 7,912 Total property, plant and equipment 447, ,900 Intangible assets Goodwill 1,239 Other 6,062 7,269 Total intangible assets 6,062 8,509 Investments and other assets Investment securities 21,808 32,637 Long-term loans receivable Deferred tax assets 4, Other 5,739 5,466 Allowance for doubtful accounts (99) (102) Total investments and other assets 32,121 39,290 Total noncurrent assets 485, ,700 Total assets 619, ,544 10

13 Current liabilities LIABILITIES At the end of the previous fiscal year () (Millions of yen) At the end of the fiscal year () Notes and accounts payable trade 15,935 19,641 Current portion of long-term loans payable 15,600 19,343 Income taxes payable 18,548 20,277 Reserve for loss on disaster Other 43,618 50,376 Total current liabilities 94, ,845 Noncurrent liabilities Bonds payable 59,994 49,997 Long-term loans payable 73,954 54,654 Provision for retirement benefits 4,114 4,919 Other 4,153 3,865 Total noncurrent liabilities 142, ,436 Total liabilities 236, ,282 Shareholders equity NET ASSETS Capital stock 63,201 63,201 Capital surplus 111, ,584 Retained earnings 256, ,400 Treasury stock (47,165) (46,876) Total shareholders equity 383, ,309 Accumulated other comprehensive income Valuation difference on available-for-sale securities 210 5,952 Deferred gains or losses on hedges (673) Total accumulated other comprehensive income (463) 5,952 Total net assets 383, ,262 Total liabilities and net assets 619, ,544 11

14 (2) Consolidated Statements of Income (April 1, 2011 to ) (Millions of yen) (April 1, 2012 to ) Net sales 360, ,526 Cost of sales 248, ,946 Gross profit 111, ,580 Selling, general and administrative expenses 44,680 48,113 Operating income 66,923 81,467 Non-operating income Interest income Dividends income Equity in earnings of affiliates Insurance and dividends income Other Total non-operating income 1,603 1,848 Non-operating expenses Interest expenses 1,857 1,673 Loss on bond retirement Commission fee Other Total non-operating expenses 2,288 2,449 Ordinary income 66,238 80,867 Extraordinary loss Impairment loss 6,331 - Loss on disaster 3,617 - Other Total extraordinary losses 10,948 - Income before income taxes and minority interests 55,289 80,867 Income taxes current 23,218 30,050 Income taxes deferred (34) (667) Total income taxes 23,183 29,382 Income before minority interests 32,105 51,484 Minority interests in loss (8) - Net income 32,113 51,484 12

15 (Consolidated Statements of Comprehensive Income) (April 1, 2011 to ) (Millions of yen) (April 1, 2012 to ) Income before minority interests 32,105 51,484 Other comprehensive income Valuation difference on available-for-sale securities 1,388 5,742 Deferred gains or losses on hedges Total other comprehensive income 1,477 6,415 Comprehensive income 33,583 57,900 Comprehensive income attributable to Comprehensive income attributable to owners of the parent 33,591 57,900 Comprehensive income attributable to minority interests (8) 13

16 (3) Consolidated Statements of Changes in Net Assets Shareholders equity Capital stock (April 1, 2011 to ) (Millions of yen) (April 1, 2012 to ) Balance at the beginning of current period 63,201 63,201 Total changes of items during the period Balance at the end of current period 63,201 63,201 Capital surplus Balance at the beginning of current period 111, ,417 Disposal of treasury stock Total changes of items during the period Balance at the end of current period 111, ,584 Retained earnings Balance at the beginning of current period 232, ,094 Dividends from surplus (8,341) (9,178) Net income 32,113 51,484 Total changes of items during the period 23,772 42,306 Balance at the end of current period 256, ,400 Treasury stock Balance at the beginning of current period (47,215) (47,165) Purchase of treasury stock (0) Disposal of treasury stock Total changes of items during the period Balance at the end of current period (47,165) (46,876) Total shareholders equity Balance at the beginning of current period 359, ,548 Dividends from surplus (8,341) (9,178) Net income 32,113 51,484 Purchase of treasury stock (0) Disposal of treasury stock Total changes of items during the period 23,836 42,761 Balance at the end of current period 383, ,309 14

17 Accumulated other comprehensive income Valuation difference on available-for-sale securities (April 1, 2011 to ) (Millions of yen) (April 1, 2012 to ) Balance at the beginning of current period (1,178) 210 Net changes of items other than shareholders equity 1,388 5,742 Total changes of items during the period 1,388 5,742 Balance at the end of current period 210 5,952 Deferred gains or losses on hedges Balance at the beginning of current period (763) (673) Net changes of items other than shareholders equity Total changes of items during the period Balance at the end of current period (673) Total accumulated other comprehensive income Balance at the beginning of current period (1,941) (463) Net changes of items other than shareholders equity 1,477 6,415 Total changes of items during the period 1,477 6,415 Balance at the end of current period (463) 5,952 Minority interests Balance at the beginning of current period 8 Net changes of items other than shareholders equity (8) Total changes of items during the period (8) Balance at the end of current period Total net assets Balance at the beginning of current period 357, ,084 Dividends from surplus (8,341) (9,178) Net income 32,113 51,484 Purchase of treasury stock (0) Disposal of treasury stock Net changes of items other than shareholders equity 1,469 6,415 Total changes of items during the period 25,306 49,177 Balance at the end of current period 383, ,262 15

18 (4) Consolidated Statements of Cash Flows (April 1, 2011 to ) (Millions of yen) (April 1, 2012 to ) Net cash provided by (used in) operating activities Income before income taxes 55,289 80,867 Depreciation and amortization 41,944 36,131 Impairment loss 6,331 - Increase (decrease) in provision (2,685) (166) Interest and dividend income (577) (753) Interest expenses 1,857 1,673 Foreign exchange losses (gains) 4 19 Equity in (earnings) losses of affiliates (57) (103) Loss on redemption of bonds Decrease (increase) in notes and accounts receivable trade (8,363) (1,270) Decrease (increase) in inventories 769 (2,652) Increase (decrease) in notes and accounts payable trade 5,044 3,136 Increase (decrease) in accrued consumption taxes 1,560 (198) Other, net 4,701 4,439 Subtotal 105, ,372 Interest and dividends income received Interest expenses paid (1,941) (1,761) Income taxes paid (14,034) (28,383) Net cash provided by (used in) operating activities 90,327 91,982 Net cash provided by (used in) investing activities Payments into time deposits (60,500) (94,500) Proceeds from withdrawal of time deposits 11,500 95,500 Purchase of securities (1,999) (3,499) Proceeds from redemption of securities 1,999 3,499 Purchases of property, plant and equipment (23,463) (23,310) Proceeds from sale of property, plant and equipment 1,577 8 Purchases of investment securities (1,999) (2,751) Purchase of investments in subsidiaries resulting in change in scope of consolidation - (366) Payments of loans receivable (0) (17,502) Collection of loans receivable Other, net (1,246) (2,651) Net cash provided by (used in) investing activities (73,713) (45,377) Net cash provided by (used in) financing activities Increase in short-term loans payable 20,000 - Decrease in short-term loans payable (30,000) - Proceeds from long-term loans payable 56,137 - Repayment of long-term loans payable (30,363) (15,556) Redemption of bonds - (10,249) Cash dividends paid (8,338) (9,150) Purchases of treasury stock - (0) Payments for long-term accounts payable other (10,388) (5) Other, net (532) 446 Net cash provided by (used in) financing activities (3,485) (34,515) Effect of exchange rate change on cash and cash equivalents (3) (18) Net increase (decrease) in cash and cash equivalents 13,124 12,071 Cash and cash equivalents at beginning of period 35,386 48,511 Cash and cash equivalents at end of period 48,511 60,582 16