Performance Highlights (Consolidated)

Key Financial Indicators(¥ million)
20072

FY

2008

2009

2010

2011

2012

2013

¥ 682,439

Result of Operations:¥ [813,613]¥ 752,300¥ 683,715¥ 653,287¥ 638,770¥ 649,703

Operating income[94,800]

90,724

77,82370,12664,74373,80987,921

EBITDA3[146,500]

145,200

135,300

133,200

127,100

133,500

145,100

Ordinary income
Income before income taxes andminority interests

74,86974,88257,44550,40946,49465,39374,91465,30526,09834,06433,89932,76043,41962,192

Net income[40,507]627

20,55010,79318,06839,25239,702———

12,541

14,72844,99254,081

Capital expenditure

53,795

134,307

109,688

132,386

68,431

55,26759,512

Depreciation and amortisation

43,88851,57754,79860,41859,66956,96854,540

Revenues from operations

Comprehensive income

Cash Flows:¥

74,902¥ 108,597¥ 146,955¥ 103,252¥ 124,525¥ 127,655

Cash flows from investing activities(199,578)(100,058)(115,047)(132,737)(62,516)(44,295)(58,923)

Free cash flow

(120,596)(25,155)(6,449)14,21740,73580,23068,732132,289

36,718

7,014(24,200)(39,544)(78,978)(69,195)¥2,281,007

Cash flows from operating activities
4

Cash flows from financing activities

78,981¥

Financial Position:¥2,366,694¥2,348,476¥2,307,332¥2,337,331¥2,314,669¥2,274,380

Total net assets

522,286

476,639

473,878

480,633

486,947

524,801

573,154

Interest-bearing debt

1,209,382

1,271,100

1,275,620

1,282,583

1,251,665

1,183,647

1,126,633

¥

¥

¥

¥

¥

¥

¥

Total assets

Per Share Data (yen and U.S. dollars):
Net income

Basic

31.84

0.50

16.28

8.55

14.32

31.13

31.48

—

0.41

16.18

8.51

14.27

31.13

31.47

Net assets

405.35369.25366.96371.70377.17407.01443.63

Dividend

5.00

5.00

5.00

5.00

5.00

5.00

5.00

DilutedRatios:[11.7]

12.1

11.4

10.7

10.1

11.4

12.9

5

3.8

3.2

2.5

2.2

2.0

2.8

3.3

6

7.4

Operating income margin (%)
ROA (%)

[8.4]

0.1

4.4

2.3

3.8

7.9

Interest-bearing debt/EBITDA (times)

8.310

8.8

9.4

9.6

9.8

8.9

7.8

Equity ratio (%)

21.7

19.9

20.1

20.1

20.6

22.6

24.5

Debt/equity (D/E) ratio (times)7

2.4

2.7

2.8

2.7

2.6

2.3

2.0

ROE (%)

Stock Price Index:
Stock price at the end of fiscal year
(yen and U.S. dollars)Market capitalisation(¥ billion, $ million)

¥

713

¥

431

¥

447

¥

433

¥

384

¥

361

¥

569

906.5

548.0

568.3

550.5

488.2

459.0

723.4

PER (times)

22.4

862.0

27.5

50.6

26.8

11.6

18.1

PBR (times)

1.8

1.2

1.2

1.2

1.0

0.9

1.3

618,877

618,373618,585

605,963

603,233

608,632

615,324

179,871

180,906

182,997

193,620

205,202

218,560

221,133

2.95

3.08

5.88

8.90

11.22

7.29

11.50

Business Data:
Hankyu Railway (thousand)8
Hanshin Electric Railway (thousand)Average vacancy rates of rental office buildings(Umeda area, Osaka; %)98

1.	The U.S. dollar amounts have been translated, for convenience only, at ¥120 = $1, the prevailing exchange rate on the Tokyo Foreign Exchange Market at 31st March 2015.
2.	Since the second quarter of fiscal 2007, the results of Hanshin Electric Railway Co., Ltd. have been included in consolidated results due to its inclusion within the scopeof consolidation as a result of management integration. Figures in parentheses have been calculated based on the assumption that management integration was executedat the beginning of the fiscal year.
3.	EBITDA = operating income + depreciation expenses + amortisation of goodwill. EBITDA figures are rounded to the nearest ¥100 million.
4.	Free cash flow = cash flows from operating activities + cash flows from investing activities
5.	ROA = ordinary income/total assets (average of period-start and period-end totals)
6.	ROE = net income/equity (average of period-start and period-end totals)
7.	D/E ratio = interest-bearing debt/equity
8.	Annual number of passengers carried
9.	Average vacancy rate figures are overall rates for the Umeda city centre area at the end of March for major rental office buildings (including properties not owned by the Group)with a total floor area of at least 3,300 m2 and are based on “Latest Trends in the Office-Building Market in Osaka,” Miki Shoji Office Data.
10.	The figure has been calculated using EBITDA, which has been calculated based on the assumption that management integration was executed at the beginning of the fiscal year.

Performance Highlights (Consolidated)($ thousand1)
2015

2014

¥ 679,1572015¥   685,906$ 5,715,883

91,82894,026

783,550

149,200

150,100

1,250,833

81,191

85,590713,250

83,542

77,620646,833

46,352

54,201

451,675

55,941

71,034

591,950

80,722

68,115567,625

54,474

53,143442,858¥ 146,991¥  131,881$ 1,099,008(45,517)(52,529)(437,742)

101,474

79,352

661,266(105,079)(81,746)(681,217)¥2,286,928¥2,279,638$18,996,983

617,598

679,482

5,662,350

1,032,307

955,828

7,965,233

36.76¥    42.98$      0.36

36.75

42.95

0.36

477.69525.56

4.38

6.00

6.00

0.05

13.5

13.7

—

3.6

3.7

—

8.0

8.6

—

6.9

6.4

—

26.3

29.1

—

1.7

1.4

—

562

¥      743$      6.19

714.5

944.7

7,873

15.3

17.3

1.2

1.4

¥

¥

Revenues from operations: ¥685.9 billion(up 1.0%, or ¥6.7 billion, from the previous fiscal year)
Operating income: ¥94.0 billion(up 2.4%, or ¥2.2 billion, from the previous fiscal year)
The International Transportation Business performed well due to special demand and apickup in freight demand, while the Entertainment and Communications Business saw
the Hanshin Tigers professional baseball team and the Takarazuka Revue post favourable
results. Thanks to contributions from these businesses, revenues from operations
increased 1.0%, or ¥6.7 billion, year on year, to ¥685.9 billion, and operating income rose
2.4%, or ¥2.2 billion, to ¥94.0 billion.

Operating income: Factor analysis (YoY change)(¥ million)
FY2014FY201591,828International Transportation+1,002Entertainment and Communications+821
Hotels+406
Urban Transportation +59
Travel +3
Real Estate–835
Other +183
Adjustments+558
94,026

Net income: ¥54.2 billion(up 16.9%, or ¥7.8 billion, from the previous fiscal year)
Net non-operating loss (total non-operating expenses net of total non-operating income)
improved 20.7%, or ¥2.1 billion, year on year, to ¥8.4 billion, due to an increase in equity inincome of affiliates. Further, total extraordinary income net of total extraordinary loss wasa loss of ¥8.0 billion, compared with the previous fiscal year’s income of ¥2.3 billion,
because gain on sales of investment securities did not fully compensate for a decrease ingain on sales of noncurrent assets.
Net income was up 16.9%, or ¥7.8 billion, year on year, to ¥54.2 billion. In addition to
the abovementioned factors, this increase reflected higher operating income and a reversal of deferred tax assets and liabilities that resulted from a revision of the tax system,
which mainly comprised a reduction in total income taxes.

Net income: Factor analysis (YoY change)
Increase in revenues from operations+¥6.7 billion

Decrease in selling, general and administrative expenses+¥1.9 billion—

Decrease in total non-operating expenses+¥1.6 billion—

Increase in total non-operating income+¥0.6 billion

Increase in minority interests in income+¥0 billion

629,125

627,536—

Decrease in total income taxes+¥13.8 billion

226,004

227,203—

Increase in operating expenses and costs of sales of transportation–¥6.4 billion

Decrease in total extraordinary income–¥2.5 billion

Increase in total extraordinary loss–¥7.9 billion

9.22

7.84

—

Interest-bearing debt: ¥955.8 billion(down 7.4%, or ¥76.5 billion, from the previous fiscal year-end)
The outstanding balance of interest-bearing debt at the end of the fiscal year underreview amounted to ¥955.8 billion, a decrease of 7.4%, or ¥76.5 billion, from the previous
fiscal year-end. This was because proceeds from sales of investment securities and net
cash provided by operating activities were used to repay interest-bearing debt.

Performance Highlights (Consolidated)

Key Financial Indicators (Graphs)
Revenues from operations(¥ billion)

900[813.6]

752.3

683.7

653.3

638.8

649.7

682.4

679.2

685.9

09

10

11

12

13

14

15

600

300

0

07

08

(FY)

Operating income and operating income margin(¥ billion)

100[94.8]

90.7

87.9

80
60

77.8
[11.7]

12.1

70.1

64.7
10.1
10.7

11.4

91.8

(%)
20

94.0

16

73.8

13.5

12.9

11.4

13.7

12

40

8

20

4
0

0

07

08

Operating income

09

10

11

12

13

14

15

(FY)

Operating income margin (right axis)

EBITDA[146.5]

145.2

135.3

133.2

127.1

133.5

09

10

11

12

120

145.1

149.2

150.1

13

14

15

Operating income was ¥94.0 billion, reachinga new record for the second consecutive
fiscal year. This resulted from a 48.8% year-onyear rise in the operating income of theInternational Transportation Business—due
to currency rate fluctuations and special
demand for air transportation—and steady
railway operation revenue. These positive
factors as well as the abovementioned factors contributing to the increase in revenues
from operations more than offset a decreasein earnings accompanying the sale by theReal Estate Business of land for facilities in theprevious fiscal year.

Operating income rose 2.4% year on year, to¥94.0 billion; depreciation and amortisation
decreased 2.4%, to ¥53.1 billion; and amortisation of goodwill edged up 0.4%, to ¥2.9
billion. As a result, EBITDA reached ¥150.1
billion, surpassing ¥150.0 billion for the firsttime since the Group’s establishment in 2007.

(¥ billion)

160

In fiscal 2015, revenues from operations
increased 1.0%, or ¥6.7 billion, year on year,to ¥685.9 billion. This reflected a favour­
able performance by the Entertainment andCom­munications Business due to the Hanshin
Tigers professional baseball team reaching
the Japan Series and the popularity of theperformances of the Takarazuka Revue, whichcelebrated its 100th anniversary, and higher
revenues from construction and other businesses of the Other segment.

80

40

0

07

08

(FY)

Net income and ROE(¥ billion)

(%)

60

18

54.2

50
40
30

7.9
20.6

20

4.4

10

0.6
07

Net income

39.7

39.3

[8.4]

0

15

46.4

[40.5]08

0.1

ROE (right axis)

12

8.6

8.0

7.4

6

18.1
10.8

3.8

3

2.3
09

10

9

0

11

12

13

14

15

(FY)

Net income rose 16.9%, or ¥7.8 billion, year on
year, to a new record of ¥54.2 billion, due to adecrease in income taxes—deferred accompanying a reduction in total income taxes anda reversal of deferred tax assets and liabilities.
As a result, ROE increased 0.6 percentage
points, to 8.6%.
Note: F rom the second quarter of fiscal 2007,
consolidated results of Hanshin Electric
Railway Co., Ltd. are included as a result ofmanagement integration in the scope of
consolidation of the Group. Figures in [ ] arecalculated assuming the management
integration had entered effect from the
beginning of the term.

Performance Highlights (Consolidated)

Total assets and ROA(¥ trillion)
2.5

2.37

2.0

2.35

2.34

2.31

2.31

2.28

2.27

3.8
3.2

1.5

4

3.7
3

2.0

2.2

1.0

2.28

3.6

3.3

2.8
2.5

2.29

(%)
5

2

0.5

1

0

0

07
Total assets

Total assets edged down 0.3%, or ¥7.3 billion,
from the previous fiscal year-end, to ¥2,279.6
billion, due to a decrease in land and buildings.
ROA edged up 0.1 percentage points, to 3.7%,
reflecting the record ordinary income that
resulted from higher revenues from operations.

08

09

10

11

12

13

14

15

(FY)

ROA (right axis)

Interest-bearing debt, D/E ratio, and interest-bearing debt/EBITDA(¥ trillion)
1.5(Times)
15

1.27

1.21
1.0

1.28

1.25

9.6

9.4

8.8

8.3*

1.28

1.18

9.8

1.13

8.9

1.03

7.8

6.9

6.4

0.5

2.7

2.4

2.8

2.6

2.7

2.3

2.0

1.7

08

09

10

11

12

13

14

5

1.4

0

07

10

0.96

15

The outstanding balance of interest-bearing
debt was down 7.4%, or ¥76.5 billion, fromthe previous fiscal year-end, to ¥955.8 billion,
due to the use of net cash provided by operating activities to repay interest-bearing debt.
Consequently, the D/E ratio decreased to 1.4
times. Also, the interest-bearing debt/EBITDA
ratio declined from 6.9 times to 6.4 times,
reflecting steady improvement in the
Company’s financial position.

0

(FY)

Interest-bearing debt
D/E ratio (right axis)
Interest-bearing debt/EBITDA (right axis)
* The figure has been calculated using EBITDA, which has been calculated based on the assumption thatmanagement integration was executed at the beginning of the fiscal year.

Cash flows(¥ billion)
150

100

147.0
108.6

79.0

103.3

74.9

50

–50

–150

－115.0－100.1－120.6–200

07－199.6

08

80.2

68.7

101.5

Net cash provided by operating activities was¥131.9 billion, reflecting a decrease in income
before income taxes and minority interestsand loss on impairment of fixed assets. Net
cash used in investing activities was ¥52.5 billion, reflecting lower proceeds from sales of
noncurrent assets. Net cash used in financing
activities was ¥81.7 billion due to repaymentof long-term debt.

131.9
79.4

－6.4

－25.2

–100

127.7

40.7

14.2

0

124.5

147.0

－62.5

－44.3

－58.9

－45.5

－52.5

14

15

－132.709

10

Net cash provided by operating activities
Free cash flow

11

12

13

(FY)

Net cash used in investing activities

Returns to shareholders(Yen)
10.00

(%)
1,000

1,000.0
58.5

8.00
6.00

5.00

5.00

5.00

4.00

5.00

30.7

2.00

60

5.00
5.00
34.9
16.1

15.7

6.00

6.00

45

5.00
30

15.9

16.3

14.0

0

15
0

07
Dividend per share

08

09

10

11

Dividend payout ratio (right axis)

12

13

14

15

(FY)

In accordance with its policy of stable dividend payments, the Company has paid dividends based on a minimum level set at ¥6
per share since the appropriation of profits
for fiscal 2014. In fiscal 2016, the Company
will further enhance returns to shareholders
by raising the dividend to ¥7 per share andpurchasing treasury stock with a view to realizing a total payout ratio of 25%, a newly
established indicator.



To Our Stakeholders

Fiscal 2015 Business Results 
Before giving an overview of initiatives to date and explaining
those going forward, I will report on business results in fiscal 2015.
In fiscal 2015, yen depreciation and concerns about security
overseas weakened the performance of the Travel Business. In
the Entertainment and Communications Business, however, theHanshin Tigers reached the Japan Series, and the performancesof the Takarazuka Revue, which celebrated its centenary, were
well received. Other business segments achieved favourable
business results overall. In the Urban Transportation Business, theHankyu and Hanshin lines performed steadily. As for the Real
Estate Business, office occupancy rates in the Umeda area rose,
while the International Transportation Business and the Hotels
Business realised solid business results. Consequently, the Group

recorded year-on-year increases of 1.0%, or ¥6.7 billion, in revenues from operations, to ¥685.9 billion, and 2.4%, or ¥2.2 billion,
in operating income, to ¥94.0 billion. Further, thanks to an
improvement in the financial account balance resulting from thereduction of interest-bearing debt, ordinary income rose 5.4%, or¥4.4 billion, year on year, to ¥85.6 billion, while net income grew
16.9%, or ¥7.8 billion, year on year, to ¥54.2 billion.
Net income was up significantly year on year. This improvement was primarily attributable to a reversal of deferred tax
assets and liabilities that arose from revision of the tax system
and which was a one-time factor limited to fiscal 2015.
Nevertheless, even excluding this one-time factor, net income
rose year on year.

Fiscal 2015 business results overview(¥ billion)

FY2014 results

FY2015 results

Revenues from operations

679.2

Operating income

YoY(Increase)

(%)

685.9

6.7

1.0

91.8

94.0

2.2

2.4

Ordinary income

81.2

85.6

4.4

5.4

Net income

46.4

54.2

7.8

16.9

Overview of Initiatives to Date Established through the management integration of Hankyu
Holdings, Inc. and Hanshin Electric Railway Co., Ltd. in October
2006, Hankyu Hanshin Holdings, Inc. announced its inaugural
medium-term management plan, Hankyu Hanshin HoldingsGroup 2007 Medium-Term Management Plan, in March 2007.
When the plan began, the Group was advancing several large
projects simultaneously, including the rebuilding of Umeda
Hankyu Building and the extension of the Hanshin Namba Line.
Consequently, interest-bearing debt rose temporarily, reaching
more than ¥1,280 billion, while the interest-bearing debt/EBITDA
ratio increased to more than nine times. Given this level of debt,
improving our financial position became an urgent managementtask. In particular, we viewed lowering the interest-bearing

debt/EBITDA ratio to around seven times as our most important
target and worked towards its achievement.
Specifically, we curbed capital investment with depreciation
and amortisation levels as a benchmark. Furthermore, based on
the stronger cash flow generation capabilities that accompanied
the completion of such major projects as Umeda Hankyu
Building, we gave priority to using surplus funds to improve ourfinancial position through the reduction of interest-bearing
debt. As a result, in fiscal 2014, we were able to reach themedium-term management plan’s management target of
an interest-bearing debt/EBITDA ratio of around seven times.
In fiscal 2015, EBITDA grew further, increasing ¥0.9 billion year on
year, to ¥150.1 billion, and surpassing ¥150 billion for the firstTo Our Stakeholders

time since management integration in 2006. Meanwhile,interest-bearing debt moved below ¥1 trillion, to ¥955.8 billion,
because we allocated proceeds from the sale of investment
securities and net cash provided by operating activities torepayment. As a result, the interest-bearing debt/EBITDA ratio

decreased to 6.4 times, one of the lowest levels among major
private (non-JR) railway operators in Japan.

The Group reaches an interest-bearing debt/EBITDA ratio ofaround seven times, meeting the target set by the mediumterm management plan announced in 2007.

Improve cash flow generation through earnings from major
projects such as Hankyu Nishinomiya Gardens development,
the extension of the Hanshin Namba Line, the Hanshin Koshien
Stadium refurbishment, and the rebuilding of the Umeda
Hankyu Building.

Leveraging cash flow generation boosted through completion oflarge-scale projects, reduce total interest-bearing debt and steadily
improve our financial position by maintaining a certain level of strategic
capital outlays but at the same time keeping total capital investment
to roughly the equivalent to depreciation and amortisation costs.

(¥ billion)(¥ billion)

1,700

170

9.8 times
Interest-bearing
debt/EBITDA ratio

9.4 times

9.6 times

8.9 times

8.8 times

149.2

150.1

145.1

1,400

145.2

135.3

EBITDA (right axis)

1,271.1

1,100

140
133.5

133.2

7.8 times

127.1
1,275.6

1,282.6

1,251.7

Interest-bearing debt
(left axis)

6.9 times

1,183.6

6.4 times

110

1,126.6
1,032.3

Investment in developments for growth

Payback from major projects

955.8

Reconciling growth and financial soundness

800

80
2008

2009

2010

2011

2012

2013

2014

2015

3/20083/20093/20103/20113/20123/20133/20143/2015(FY)

Hankyu Nishinomiya Gardens Development (September 2004 – November 2008)
Extension of Hanshin Namba Line (Opening of new extension) (October 2003 – March 2009)
Renovation of Hanshin Koshien Stadium* (October 2007 – March 2010)

September 2009: Opening of
Department Store Building (Phase I)

April 2010: Completion of Office Tower

Rebuilding of Umeda Hankyu Building (May 2005 – November 2012)
November 2012: Grand opening of the Umeda Flagship Store ofHankyu Department Store

Osaka Station North District (Umekita)
Phase I Development Area Project (GRAND FRONT OSAKA)(March 2010 – March 2013)* Renovation work conducted during three off-seasons.

Note:	Project start times are as of works commencement. Also,
finish times are project completion dates (completion of A
and B blocks for Osaka Station North District (Umekita)
Phase I Development Area Project).

Consolidated Six-Year Summary

FY2010FY2011FY2012FY2013

FY2014FY2015FY2015¥  649,703¥  682,439¥  679,157¥  685,906$ 5,715,883

Result of Operations (millions of yen and thousands of U.S. dollars): *1
Revenues from operations¥  653,287¥   638,770

Operating income

70,12664,74373,80987,921

91,82894,026

783,550

EBITDA*2

133,200

127,100

133,500

145,100

149,200

150,100

1,250,833

Ordinary income

50,40946,49465,39374,914

81,191

85,590713,250

Income before income taxes and minority interests

33,89932,76043,41962,192

83,542

77,620646,833

Net income

10,79318,06839,25239,702

46,352

54,201

451,675

Comprehensive income

12,541

14,72844,99254,081

55,941

71,034

591,950

Capital expenditure

132,386

68,431

55,26759,51280,722

68,115567,625

Depreciation and amortisation

60,41859,66956,96854,54054,474

53,143442,858

Cash Flows (millions of yen and thousands of U.S. dollars):
Cash flows from operating activities¥  146,955¥   103,252¥  124,525¥  127,655¥  146,991¥  131,881$ 1,099,008

Cash flows from investing activities(132,737)(62,516)(44,295)(58,923)(45,517)(52,529)(437,742)

Cash flows from financing activities(24,200)(39,544)(78,978)(69,195)(105,079)(81,746)(681,217)

Increase (decrease) in cash and cash equivalents(9,680)

474

767

817

(1,840)(1,125)(9,375)

Cash and cash equivalents at end of year

21,44022,592

23,57225,581

24,49723,497

195,808¥2,337,331¥2,314,669¥2,274,380¥2,281,007¥2,286,928¥2,279,638$18,996,983

Total net assets

480,633

486,947

524,801

573,154

617,598

679,482

5,662,350

Interest-bearing debt

1,282,583

1,251,665

1,183,647

1,126,633

1,032,307

955,828

7,965,233¥     8.55

¥    14.32¥    31.13¥    31.48¥    36.76¥    42.98$      0.36

8.51

14.27

31.13

31.47

36.75

42.95

0.36

Net assets

371.70377.17407.01443.63477.69525.56

4.38

Dividend

5.00

5.00

5.00

5.00

6.00

6.00

0.05

Operating income margin (%)

10.7

10.1

11.4

12.9

13.5

13.7

—

ROA (%)*3

2.2

2.0

2.8

3.3

3.6

3.7

—

ROE (%)*4

2.3

3.8

7.9

7.4

8.0

8.6

—

Interest-bearing debt/EBITDA (times)

9.6

9.8

8.9

7.8

6.9

6.4

—

Equity ratio (%)

20.1

20.6

22.6

24.5

26.3

29.1

—

2.7

2.6

2.3

2.0

1.7

1.4

—

6.3

4.6

6.0

6.7

8.8

9.2

—

1,271,406

1,271,406

1,271,406

1,271,406

1,271,406

1,271,406—

20,93821,302

20,811

20,751

20,913

21,037—

Financial Position (millions of yen and thousands of U.S. dollars):
Total assets

Per Share Data (yen and U.S. dollars):
Net income—Basic
Net income—Diluted

Ratios:Debt/equity (D/E) ratio (times)*

5

Interest coverage ratio (times)*6
Others:Number of outstanding shares (thousands)
Number of employees*1. The U.S. dollar amounts have been translated, for convenience only, at ¥120 = $1, the prevailing exchange rate on the Tokyo Foreign Exchange Market as of 31st March 2015.
*2. EBITDA = operating income + depreciation expenses + amortisation of goodwill
EBITDA figures are rounded to the nearest ¥100 million.
*3. ROA = ordinary income/total assets (average of period-start and period-end totals)*4. ROE = net income/equity (average of period-start and period-end totals)*5. D/E ratio = interest-bearing debt/equity*6. Interest coverage ratio = cash flows from operating income / interest expense

Consolidated Financial Review

Analysis of Operating Results for fiscal 2015 (fiscal year ended March 2015)
Revenues from operations increased 1.0%, or ¥6,748 million, year on
year, to ¥685,906 million. This reflected a favourable performance by
the Entertainment and Communications Business due to the
Hanshin Tigers professional baseball team reaching the Japan Series
and the popularity of the performances of the Takarazuka Revue,
which celebrated its 100th anniversary, and higher revenues fromconstruction and other businesses of the Other segment.
Operating income rose 2.4%, or ¥2,198 million, year on year, to¥94,026 million, thanks to the abovementioned increase in revenues
from operations and the curbing of expenses in each business segment.
Further, ordinary income was up 5.4%, or ¥4,398 million, year on
year, to ¥85,590 million, because of higher equity in income of affiliates and a decrease in interest expenses accompanying lower
interest-bearing debt.

Net income grew 16.9%, or ¥7,849 million, year on year, to¥54,201 million, thanks to a reversal of deferred tax assets and liabilities that resulted from revision of the tax system (a reduction in total
income taxes). This positive factor counteracted lower gain on sale ofproperty and equipment—due to sale of part of the equity held inHankyu Nishinomiya Gardens in the previous fiscal year—and adeterioration in total extraordinary income net of total extraordinary
loss, which arose from the recognition of loss on impairment of fixed
assets that was incurred as a result of the relocation and reconstruction of Takarazuka Hotel.
Note: Summary of consolidated business results: please also see To Our Stakeholders on
pages 18 to 20.

Analysis of operating income(¥ million)

91,828FY2014

Increase in revenues from operations+6,748

Increase in operating expenses and cost of sales of transportation*–6,416

Decrease in personnel expenses+176

Decrease in expenses

Decrease in selling,
general andadministrative
expenses*+1,867+1,291

Decrease in taxes+87

Decrease in depreciation and amortisation+326

Increase in amortisation of goodwill–13

94,026FY2015

YoY difference +2,198* Retirement benefit expenses are included in cost of revenues from operations, with the change being –321.

Segment Information
The following table shows business performance for each core segment. For a review of these results, please refer to the page indicated at thefoot of the table.
(¥ million)
Urban
Transportation

Real EstateEntertainment andCommunications

International
Transportation

FY2015

233,419

206,444

112,632

31,965FY2014

234,555

208,610

110,350

YoY difference–1,135–2,166FY201538,553

TravelHotelsOther

Adjustments

Consolidated

39,41963,031

41,678–42,684

685,906

33,006

37,696

63,69534,713–43,469

679,157+2,282–1,041+1,723–663+6,965+785+6,74837,173

14,993

1,227

3,053

1,216

1,032

–3,22394,026

Revenues fromoperations

Operating income

FY201438,49438,00814,172

1,224

2,051

809

849

–3,781

91,828YoY difference

+59

–835

+821

+3

+1,002

+406

+183

+558

+2,198Reference page

P.41

P.45

P.49

P.51

P.53

P.55

—

—

—

Consolidated Financial Review

Review of Financial Position
1. Assets, Liabilities, and Net Assets
Total assets at the end of the fiscal year under review stood at¥2,279,638 million, a decrease of ¥7,290 million from the previous
fiscal year-end. This mainly stemmed from the decrease in landand buildings.
Total liabilities decreased ¥69,174 million from the previous fiscal
year-end, to ¥1,600,155 million, due partly to the reduction in interestbearing debt.
Net assets increased ¥61,883 million from the previous fiscal yearend, to ¥679,482 million, due mainly to an increase in retained earnings.
As a result, the equity ratio stood at 29.1%, and ROE was 8.6%.

2. Cash Flows
Cash and cash equivalents decreased ¥1,000 million from the previous fiscal year-end, to ¥23,497 million.
(1) Cash Flows from Operating Activities
Net cash provided by operating activities was ¥131,881 million(down 10.3% year on year). The main factors were income before
income taxes and minority interests of ¥77,620 million, depreciation
and amortisation of ¥53,143 million, and income taxes paid of¥10,836 million.
(2) Cash Flows from Investing Activities
Net cash used in investing activities was ¥52,529 million (up 15.4%
year on year). This primarily reflected purchases of noncurrent assetsof ¥86,970 million, which counteracted receipt of contributions forconstruction of ¥21,098 million and proceeds from sale of investment securities of ¥19,747 million.
(3) Cash Flows from Financing Activities
Net cash used in financing activities was ¥81,746 million (down
22.2% year on year). This was due partly to a net decrease in borrowings of ¥6,077 million and dividends paid of ¥8,229 million.

Trends in cash flow indicators
FY2011FY2012FY2013

FY2014FY2015Equity ratio (%)

20.6

22.6

24.5

26.3

29.1

Equity ratio (%) (market value basis)

20.9

20.0

31.5

31.0

41.1

Cash flows/interest-bearing debt ratio (times)

12.1

9.5

8.8

7.0

7.2

Interest coverage ratio (times)

4.6

6.0

6.7

8.8

9.2

Notes: Equity ratio = equity/total assets
Equity ratio (market value basis) = market capitalisation/total assets
Cash flows/interest-bearing debt ratio = interest-bearing debt/operating cash flows
Interest coverage ratio = Net cash provided by operating activities/interest expense* Each index has been calculated in accordance with financial indicators on a consolidated basis.
* Market capitalisation has been calculated as follows: year-end closing stock price × total shares issued at year-end (after deduction of treasury stock).

3. Fund Procurement
The outstanding balance of consolidated interest-bearing debt at
the end of the fiscal year under review amounted to ¥955,828 million, a decrease of ¥76,479 million from the previous fiscal year-end.
This was because net cash provided by operating activities morethan compensated for acquisition of land for the Ebie 1-Chomedevelopment plan and capital expenditure for the building of new
rolling stock.

The ratio of consolidated interest-bearing debt/EBITDA (operating
income before amortisation), which is the benchmark the Company
uses for assessing the soundness of its financial position, stood at 6.4
times (compared with 6.9 times in the previous fiscal year).

Consolidated Financial Review

Consolidated Capital Expenditure and Depreciation and Amortisation
Capital expenditure in the fiscal year under review (consolidated basis; including intangible assets) decreased ¥12,607 million (15.6%) year on
year, to ¥68,115 million.
The following is a breakdown for each business segment.

FY2015YoY

Urban Transportation

32,072 millions of yen

16.5%

Real Estate

25,828–40.6

Entertainment and Communications

6,092

9.5

660

–44.0

Travel476–17.6

Hotels

1,497

–17.6

Other

960

88.2

Total

67,587–16.2

International Transportation

Adjustments

527

411.7

Consolidated

68,115–15.6

Urban Transportation
The railway business carried out capital investment with a focus onsafety and service improvement, built new rolling stock, and improved
existing rolling stock.
Real Estate
The Real Estate Business acquired land for the Ebie 1-Chome development plan and implemented the Umeda 1-1 Project.
Entertainment and Communications
The Entertainment and Communications Business relocated theSumire Dormitory to a newly constructed building.
TravelIn the Travel Business, Hankyu Travel International Co., Ltd. invested
in systems to strengthen Internet sales.

International Transportation
In the International Transportation Business, Hankyu Hanshin Express
Co., Ltd. invested in systems to establish global IT-enabled alliances.
HotelsIn the Hotels Business, Hankyu Hanshin Hotels Co., Ltd. refurbishedthe guest rooms of its hotels.
Depreciation and amortisation decreased ¥1,331 million (2.4%)
from the previous year (consolidated basis), to ¥53,143 million.