Performance Highlights (Consolidated)

Key Financial Indicators(¥ million)
20071

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

2

EBITDA[146,500]

145,200

135,300

133,200

127,100

133,500

145,100

Ordinary income

74,86974,88257,44550,40946,49465,39374,914

Income before income taxes

65,30526,09834,06433,89932,76043,41962,192

Net income attributable toowners of the parent[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)14,21740,73580,23068,732

Cash flows from financing activities

132,289

36,718

7,014(24,200)(39,544)(78,978)(69,195)¥2,366,694¥2,348,476¥2,307,332¥2,337,331¥2,314,669¥2,274,380¥2,281,007

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

¥

¥

¥

¥

¥

¥

¥

Cash flows from operating activities
3

78,981¥

Financial Position:
Total assets

Per Share Data (Yen):
Net income attributable to ownersof the parent

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

4

ROA (%)

3.8

3.2

2.5

2.2

2.0

2.8

3.3

5

ROE (%)

[8.4]

0.1

4.4

2.3

3.8

7.9

7.4

Interest-bearing debt/EBITDA (Times)

8.39

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)6

2.4

2.7

2.8

2.7

2.6

2.3

2.0

Operating income margin (%)

Stock Price Index:
Stock price at the end of fiscal year (Yen)

¥

713

¥

431

¥

447

¥

433

¥

384

¥

361

¥

569

Market capitalisation (¥ billion)

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

Hankyu Railway (Thousand)7

618,877

618,373618,585

605,963

603,233

608,632

615,324

Hanshin Electric Railway (Thousand)7

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:

Average vacancy rates of rental office buildings(Umeda area, Osaka; %)8

1.	From the second quarter of fiscal 2007, consolidated results of Hanshin Electric Railway Co., Ltd., are included as a result of management integration in the scope of consolidationof the Group. Figures in [ ] are calculated assuming the management integration was executed at the beginning of the fiscal year.
2.	EBITDA = operating income + depreciation expenses + amortisation of goodwill. EBITDA figures are rounded to the nearest ¥100 million.
3.	Free cash flow = cash flows from operating activities + cash flows from investing activities
4.	ROA = ordinary income/total assets (average of period-start and period-end totals)
5.	ROE = net income attributable to owners of the parent/equity (average of period-start and period-end totals)
6.	D/E ratio = interest-bearing debt/equity
7.	Annual number of passengers carried
8.	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.”
9. 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)

Revenues from operations: ¥707.4 billion(up 3.1%, or ¥21.5 billion, from the previous fiscal year)
Operating income: ¥110.3 billion(up 17.3%, or ¥16.3 billion, from the previous fiscal year)

2016

2014

2015

¥ 679,157¥   685,906¥  707,359
110,293

91,82894,026

149,200

150,100

166,500

81,191

85,590104,479

83,542

77,62096,08746,352

54,201

69,971

55,941

71,034

63,84280,722

68,11566,63954,474

53,14353,701

Performance in the Urban Transportation Business and the Hotels Business benefited fromthe increase in the number of overseas visitors to Japan, outweighing the decrease inrevenues in the International Transportation Business stemming from the sluggish
Chinese economy. In addition, sales of land for facilities were recorded in the Real EstateBusiness. As a result, revenues from operations increased 3.1%, or ¥21.5 billion, year on
year, to ¥707.4 billion, and operating income rose 17.3%, or ¥16.3 billion, to ¥110.3 billion.

Operating income: Factor analysis (YoY change)(¥ million)

94,026FY2015

Real Estate¥ 146,991¥  131,881+12,678
Urban Transportation¥  124,838(45,517)(52,529)(78,843)

101,474

79,35245,995(105,079)(81,746)(47,278)+2,717
Hotels+2,082+308

Entertainment and Communications–546

TravelInternational Transportation–1,265

Other – 64
Adjustments+356¥2,286,928¥2,279,638¥2,282,180

617,598

679,482

724,237

1,032,307

955,828

916,57036.76¥    42.98¥    55.58

36.75

42.95

55.53

477.69525.56

Net income attributable to owners of the parent: ¥70.0 billion(up 29.1%, or ¥15.8 billion, from the previous fiscal year)

563.196.00

6.00

Net non-operating loss (total non-operating expenses net of total non-operating income)7.00

declined ¥2.6 billion, year on year, to ¥5.8 billion, due to an increase in equity in income

13.5

13.7

15.6

total extraordinary loss was a loss of ¥8.4 billion, up ¥0.4 billion because losses on revalu-

3.6

3.7

4.6

ation of investment securities was recorded, counteracting lower impairment loss.

8.0

8.6

10.3

6.9

6.4

5.5

26.3

29.1

31.0

1.7

1.4

1.3

562

¥      743¥        718

714.5

944.7

912.9

15.3

17.3

12.9

1.2

1.4

1.3

629,125

627,536

644,563

226,004

227,203234,226

9.22

7.84

5.54

¥

FY2016110,293of affiliates and a decrease in interest expense. Further, total extraordinary income net of¥

Due to the above, net income attributable to owners of the parent increased 29.1%,
or ¥15.8 billion, year on year, to ¥70.0 billion.

Net income attributable to owners of the parent: Factor analysis (YoY change)
Increase in revenues from operations+¥21.5 billion

Decrease in total non-operating expenses+¥1.9 billion

Increase in total non-operating income+¥0.7 billion

Increase in selling, general and administrative expenses–¥1.9 billion

Increase in total income taxes–¥2.7 billion

Increase in operating expenses and costs of sales of transportation–¥3.3 billion

Interest-bearing debt: ¥916.6 billion(down 4.1%, or ¥39.3 billion, from the previous fiscal year-end)
The outstanding balance of interest-bearing debt at the end of the fiscal year underreview amounted to ¥916.6 billion, a decrease of 4.1%, or ¥39.3 billion, from the previous
fiscal year-end. This was because net cash provided by operating activities was used to
repay interest-bearing debt.

Note: Figures expressed in units of ¥1 billion are rounded to the nearest one tenth of a billion.

Performance Highlights (Consolidated)

Key Financial Indicators (Graphs)
Revenues from operations(¥ billion)
900[813.6]

752.3

683.7

600

653.3

638.8

649.7

10

11

12

682.4

679.2

685.9

707.4

13

14

15

16(FY)

300

0

07

08

09

Operating income and operating income margin(¥ billion)

(%)

120

21

110.3
[94.8]

80

90.7[11.7]

12.1

77.8
11.4

87.9
70.1

15.6

14

13.7

13.5

12.9

11.4

10.1

10.7

40

73.8

64.7

94.0

91.8

7

0

0

07

08

Operating income

09

10

11

12

13

14

16(FY)

15

Operating income margin (right axis)

EBITDA
166.5[146.5]

145.2

135.3

133.2

09

10

120

127.1

133.5

145.1

149.2

150.1

13

14

15

Operating income was up 17.3%, or ¥16.3 billion, year on year, to ¥110.3 billion, setting a
new record for the third consecutive year
­primarily as a result of the aforementioned
increase in revenues from operations. This
increase offset decreases in income in theInternational Transportation Business, due
to the deceleration of the Chinese economy
and sluggish domestic logistics demand, as
well as in the Travel Business, due to difficulty
attracting customers as a result of international security concerns.

Operating income rose 17.3%, or ¥16.3 billion,
year on year, to ¥110.3 billion; depreciation
and amortisation increased 1.0%, or ¥0.6 billion, to ¥53.7 billion; and amortisation of
goodwill declined 13.7%, to ¥2.5 billion. As aresult, EBITDA reached a new record high of¥166.5 billion.

(¥ billion)
180

In fiscal 2016, revenues from operations increased 3.1%, or ¥21.5 billion, year on year, to¥707.4 billion. This increase was due in part tostrong performance in the Urban Transportation Business, particularly with regard to the
Hankyu and Hanshin lines in railway oper­
ations, driven by a rise in the number of­overseas visitors to Japan. This rise in overseas
visitors also contributed to higher hotel occupancy rates and daily rates in the Hotels­Business. In addition, one-time revenue fromsales of land for facilities in the Real EstateBusiness was recorded.

60

0

07

08

11

12

(FY)

16

Net income attributable to owners of the parent and ROE(¥ billion)

(%)

80

16

70.0
60

12

54.2
[40.5]

40

39.3

[8.4]
20.6

20

0.6
07

08

8

8.6

8.0

7.4

18.1
3.8

4.4
10.8

0

39.7

7.9

10.3

46.4

4

2.3

0.1
09

10

Net income attributable to owners of the parent

0

11

12

13

14

15

16

(FY)

ROE (right axis)

Note: From the second quarter of fiscal 2007, consolidated results of Hanshin Electric Railway Co., Ltd., are included as aresult of management integration in the scope of consolidation of the Group. Figures in [ ] are calculated assuming the management integration was executed at the beginning of the fiscal year.

Total income taxes were up from fiscal 2015,
but higher income before income taxes
caused net income attributable to owners of
the parent to increase 29.1%, or ¥15.8 billion,
year on year, breaking the previous record
for the fifth consecutive year. As a result, ROE
increased 1.7 percentage points, to 10.3%,
exceeding 10% for the first time since theCompany’s founding.

Performance Highlights (Consolidated)

Total assets and ROA(¥ trillion)

(%)
6

3

2.37
2

2.35

2.34

2.31

2.31

3.8
3.2

2.28
3.6

3.3

2.8
2.5

2.28
4.6

3.7

4

2.0

2.2

1

2.29

2.28

2.27

2

0

0

07

08

Total assets

09

10

11

12

13

14

16(FY)

15

ROA (right axis)

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

(Times)
15

1.5

1.0

1.25
9.6

9.4

8.8

8.3*

1.28

1.28

1.27

1.21

1.18
9.8

1.13
8.9

1.03
7.8

0.96
6.9

10

0.92
6.4

5

5.5

0.5

2.8

2.7

2.4

2.7

2.6

2.3

2.0

1.7

1.4

1.3

0

07

08

09

10

11

12

13

14

0

16(FY)

15

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 that management
integration was executed at the beginning of the fiscal year.

Cash flows
147.0

150

108.6
79.0

103.3

74.9
14.2

0
–50

–25.2

–150
–200

68.7

40.7

131.9

124.8

79.4
46.0

–6.4
–115.0–120.6

127.7

101.5

80.2

50

–100

124.5

147.0

–100.1

–62.5

–44.3

–58.9

– 45.513

14

The outstanding balance of interest-bearing
debt was down 4.1%, or ¥39.3 billion, from theprevious fiscal year-end, to ¥916.6 billion.
Consequently, the D/E ratio decreased to 1.3
times. Also, the interest-bearing debt/EBITDA
ratio declined to 5.5 times, falling below 6
times for the first time since the Company’s
founding. We will continue to improve ourfinancial position in order to hedge risks offuture interest increases and secure funding
capacity over the medium-to-long term.

Net cash provided by operating activities was¥124.8 billion, reflecting income before
income taxes, depreciation and amortisation,and income taxes paid. Net cash used ininvesting activities was ¥78.8 billion due topurchases of noncurrent assets. Net cashused in financing activities was ¥47.3 billion
as a result of a net decrease in short-termborrowings.

(¥ billion)

100

Total assets rose ¥2.5 billion, from the p­ revious
fiscal year-end, to ¥2,282.1 billion, due to anincrease in land and buildings. ROA edged up
0.9 percentage point, to 4.6%, reflecting ourfourth consecutive year of record-­breaking
ordinary income.

–52.5
–78.8

–132.7–199.6
07

08

09

10

Net cash provided by operating activities
Free cash flow

11

12

16(FY)15

Net cash used in investing activities

Returns to shareholders(Yen)(%)
1,000.0

1,000

10.00

58.5

8.00

60

7.00
6.00

5.00

5.00

5.00

4.00

5.00

34.9

30.7

2.00

6.00

5.00

5.00

6.00

45

5.00
30

16.3

15.9

16.1

15.7

25.0
15

14.0
0

0

07

08

09

10

11

12

13

14

15

16(FY)

Dividend per share
Total payout ratio (right axis)
Notes: The total payout ratio for fiscal 2016 includes purchase of treasury stock (amounting to ¥8.7 billion).
The Company conducted a 1-for-5 reverse stock split with an effective date of 1st August 2016. The figures for
dividend per share above are prior to the reverse stock split.

Based on the move to a new management
stage in pursuit of medium-to-long-term
growth and the progress of financial position
improvements, dividend payments from profits in fiscal 2016 were raised ¥1 per share, to¥7 per share. In addition, the Company conducted treasury stock purchases in fiscal 2016
after setting a target of 25% for the total
payout ratio, which represents the combined
total of purchases of treasury stock and thetotal annual dividend as a percentage of net
income attributable to owners of the parent.

To Our Stakeholders

Fiscal 2016 Business Results In fiscal 2016, revenues from operations were up 3.1%, or ¥21.5
billion, year on year, to ¥707.4 billion. This increase resulted fromrobust performances by the Urban Transportation and Hotels
businesses and the sale of land for facilities by the Real EstateBusiness. Thanks to contributions from these three business segments as well as from the Entertainment and Communications
Business, the Group recorded a significant 17.3%, or ¥16.3 billion,
year-on-year rise in operating income, to ¥110.3 billion. Due toan improvement in net non-operating loss, we realised year-onyear increases of 22.1%, or ¥18.9 billion, in ordinary income, to¥104.5 billion, and 29.1%, or ¥15.8 billion, in net income attributable to owners of the parent, to ¥70.0 billion.

The Real Estate Business benefited from the sale of land forfacilities, which was a one-time factor. However, I believe therailway business performed well as a result of steady efforts toenhance the value of line-side areas. Also, the Hotels Businessachieved solid business results by taking advantage of theincrease in overseas visitors to Japan to capture related demand
effectively. Taking such progress into consideration, I feel wehave gained the strength to generate operating income ataround the ¥90.0 billion level stably. We intend to continue
focusing on sustaining growth and the creation of corporate
value by implementing the current medium-term management plan steadily.

Fiscal 2016 business results overview
(¥ billion)

FY2015 results

FY2016 results

Revenues from operations

685.9

Operating income

YoY(Increase)

(%)

707.4

21.5

3.1

94.0

110.3

16.3

17.3

Ordinary income

85.6

104.5

18.9

22.1

Net income attributable to owners of the parent

54.2

70.0

15.8

29.1

Returns to Shareholders Taking into account improvement in our financial standing, we
increased the dividend by ¥1 per share, to ¥6 per share in fiscal
2014. In fiscal 2016, we made another ¥1 per share increase,giving a dividend of ¥7 per share. We have established continued payment of stable annual dividends as a policy. Moreover,
we have set a total payout ratio of 25% as an indicator. With thisbenchmark in mind, we acquired ¥8.7 billion of treasury stock toprovide further returns to shareholders in fiscal 2016.
In the near term, we will pay stable annual dividends andacquire treasury stock in accordance with the abovementioned
policy and indicator. However, I believe that we should continue examining how we provide returns to shareholders inlight of our management situation and the need to achieve abalance with growth investment.

Note: Billions of yen figures are rounded to one decimal place.

Returns to shareholders(¥ billion)
21

(Yen)
45

35*
14

7

30*
25*
6.3

35

30*

30

8.7
7.6

7.6

8.8

8.8

15

2014

2015

2016

2017 (Est.)

(FY)

0

0

2013
Total dividend

Acquisition of treasury stock

Dividend per share (right axis)* Shares were consolidated at the ratio of 5 shares to 1 share with 1st August
2016 as the effective date.
Annual dividends for fiscal 2016 and earlier are converted based on thisshare consolidation.

To Our Stakeholders（¥ billion）


1,700

Interest-bearing debt/
EBITDA ratio

9.4 times

9.6 times

9.8 times

8.9 times

8.8 times
1,400

145.2

135.3

EBITDA (right axis)

133.5

133.2
127.1

1,275.6

1,271.1
1,100

149.2

145.1

1,282.6

7.8 times

1,251.7

Interest-bearing debt
(left axis)

150.1

6.9 times

1,183.6

6.4 times

1,126.6
1,032.3

955.8

2014

2015

800

2008

2009

2010

2011

2012

2013

Enhancement of cash flow generation
due to payback from major projects

Reduction in interest-bearing debt
through lowering of capital investment

Investment in development
for growth

Steady improvement
in financial standing

Approx. ¥320 billion*
Capital investment

Approx. ¥240 billion*

Approx. ¥130 billion
Investment for growthInvestment in maintenanceand renewal

Approx. ¥60 billion

Approx. ¥190 billion

Approx. ¥180 billion

FY2008 – FY2011

FY2012 – FY2015* Excluding capital investment related to the repurchase of securitised assets and the exchange of the assets with Hankyu REIT Asset Management, Inc.

3/20083/20093/20103/20113/20123/20133/20143/2015

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)
Rebuilding of Umeda Hankyu Building (May 2005 – November 2012)
September 2009: Opening of
Department Store Building (Phase I)

April 2010: Completion of Office Tower

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).

To Our Stakeholders（¥ billion）

166.5

170

further
Towagrrdowth

152.0

140

110

6.1 times

Between 5 and 6 times
over the medium-to-long term

916.6
5.5 times
2016

930.0
80

2017
（Est.）

2019（FY）

Development of foundations
for medium-to-long-term growth
Approx. ¥350 billion
Investment in major­ evelopment projects anddnew market development
Approx. ¥130 billion
Investment in maintenanceand renewal ofexisting infrastructure, etc.
Approx. ¥220 billion
FY2016 – FY2019

3/20163/2017

Completion of phase I
construction (2018)

3/2019

Umeda 1-1 Project
Completion of phase II (around spring 2022)
construction (2022)
Rebuilding and renewal of
Kobe Hankyu Building (2021)
Construction of Nishinomiya Kitaguchi Hankyu
Building (provisional name) (autumn 2018)

Other projects
Ebie 1-Chome Development Plan
Kita-Osaka Kyuko Railway Line Extension Project (around spring 2021)
REMM Roppongi (around spring 2017)
Sale of condominiums in Vietnam (2017 – 2018)
Logistics centre in Singapore (around spring 2017)
Redevelopment Project for Area in Front of JR Yotsuya Station (around autumn 2019)

Progress since Management Integration 
Almost a decade has passed since the management integrationof Hankyu Holdings, Inc., and Hanshin Electric Railway Co., Ltd.,in October 2006, that established Hankyu Hanshin Holdings,
Inc. Broadly speaking, the Hankyu Hanshin Holdings Group has
proceeded through three management stages in the past 10
years. At each stage, we set out clear management themes andtackled issues earnestly. These efforts have enabled the Groupto realise its collective strength and laid the foundations of ourposition today. Therefore, I would like to summarise our initiatives over the past decade.
Directly after management integration, we advanced largescale projects with a view to future growth. While we recognised
the need to improve our financial standing, we felt that advancing development projects was the priority management task.
Accordingly, we continued projects begun before management
integration, such as the rebuilding of Umeda Hankyu Building;the development of a multipurpose commercial facility, Hankyu
Nishinomiya Gardens; and the implementation of plans fora new railway line, the Hanshin Namba Line. Initiatives begun
after management integration included refurbishment of the
Hanshin Koshien Stadium and the Osaka Station North District(Umekita) Phase I Development Area Project, now GRAND FRONTOSAKA. Meanwhile, as a result of investment in the above­development projects interest-bearing debt reached the ¥1,280
billion level for a time. Coinciding with a worsening of businessconditions resulting from the global recession, this period ofdevelopment saw the interest-bearing debt/EBITDA ratio deteriorate to 9.8 times.
In response, around 2011, after the level of investment in thelarge-scale projects had peaked, we made improving our financial standing the first priority and focused on allocating funds to
the reduction of interest-bearing debt. By the end of fiscal 2015,
we had lowered interest-bearing debt to the ¥950 billion level.
During this stage, the abovementioned large-scale projects
began to contribute steadily to cash flow growth, boosting
EBITDA to around ¥150 billion. Consequently, the interestbearing debt/EBITDA ratio improved significantly to 6.4 times.
Given that the above measures had enabled us to repay
debt to some extent, we decided to begin a new management
stage. Thus, under the current medium-term management
plan, we are once again focusing on the development of foundations for medium-to-long-term growth.

Consolidated Six-Year Summary

FY2011FY2012FY2013

FY2014FY2015FY2016FY2016¥  682,439¥  679,157¥  685,906¥  707,359$ 6,259,814

Result of Operations (millions of yen and thousands of U.S. dollars)1:
Revenues from operations¥   638,770¥  649,703

Operating income

64,74373,80987,921

91,82894,026110,293

976,044

EBITDA2

127,100

133,500

145,100

149,200

150,100

166,500

1,473,451

Ordinary income

46,49465,39374,914

81,191

85,590104,479

924,593

Income before income taxes

32,76043,41962,192

83,542

77,62096,087

850,327

Net income attributable to owners of the parent

18,06839,25239,702

46,352

54,201

69,971

619,212Comprehensive income

14,72844,99254,081

55,941

71,034

63,842564,973

Capital expenditure

68,431

55,26759,51280,722

68,11566,639589,726

Depreciation and amortisation

59,66956,96854,54054,474

53,14353,701

475,230

Cash Flows (millions of yen and thousands of U.S. dollars):
Cash flows from operating activities¥   103,252¥  124,525¥  127,655¥  146,991¥  131,881¥  124,838$ 1,104,761

Cash flows from investing activities(62,516)(44,295)(58,923)(45,517)(52,529)(78,843)(697,726)

Cash flows from financing activities(39,544)(78,978)(69,195)(105,079)(81,746)(47,278)(418,389)

474

767

817

(1,840)(1,125)(1,978)(17,504)

22,592

23,57225,581

24,49723,49722,363

197,903¥2,314,669¥2,274,380¥2,281,007¥2,286,928¥2,279,638¥2,282,180$20,196,283

Total net assets

486,947

524,801

573,154

617,598

679,482

724,237

6,409,177

Interest-bearing debt

1,251,665

1,183,647

1,126,633

1,032,307

955,828

916,570

8,111,239

Net income attributable to ownersof the parent—Basic¥    14.32¥    31.13¥    31.48¥    36.76¥    42.98¥    55.58$      0.49

Net income attributable to ownersof the parent—Diluted

14.27

31.13

31.47

36.75

42.95

55.53

0.49

Net assets

377.17407.01443.63477.69525.56563.19

4.98

Dividend

5.00

5.00

5.00

6.00

6.00

7.00

0.06

Operating income margin (%)

10.1

11.4

12.9

13.5

13.7

15.6

—

ROA (%)

3

2.0

2.8

3.3

3.6

3.7

4.6

—

ROE (%)4

3.8

7.9

7.4

8.0

8.6

10.3

—

Interest-bearing debt/EBITDA (Times)

9.8

8.9

7.8

6.9

6.4

5.5

—

Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at end of year

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

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

Ratios:Equity ratio (%)

20.6

22.6

24.5

26.3

29.1

31.0

—

Debt/equity (D/E) ratio (Times)5

2.6

2.3

2.0

1.7

1.4

1.3

—

Interest coverage ratio (Times)

4.6

6.0

6.7

8.8

9.2

9.9

—

1,271,406

1,271,406

1,271,406

1,271,406

1,271,406

1,271,406—

21,302

20,811

20,751

20,913

21,037

21,607—

6

Others:Number of outstanding shares (Thousands)
Number of employees

1. The U.S. dollar amounts have been translated, for convenience only, at ¥113 = $1, the prevailing exchange rate on the Tokyo Foreign Exchange Market as of 31st March 2016.
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 attributable to owners of the parent/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 activities/interest expense

Consolidated Financial Review

Analysis of Operating Results for Fiscal 2016 (year ended 31st March 2016)
Revenues from operations increased 3.1%, or ¥21,452 million, year
on year, to ¥707,359 million. This rise reflected favourable performances by the Urban Transportation Business and the Hotels
Business and the sale of land for facilities by the Real Estate Business.
Operating income rose 17.3%, or ¥16,266 million, year on year, to¥110,293 million, thanks to the abovementioned increase in revenues from operations and the curbing of expenses in each businesssegment.

Further, ordinary income was up 22.1%, or ¥18,889 million, year
on year, to ¥104,479 million, because of higher equity in income ofaffiliates and a decrease in interest expense accompanying lower
interest-bearing debt.
Net income attributable to owners of the parent grew 29.1%, or¥15,769 million, year on year, to ¥69,971 million, due to a revision of
the tax system and other factors.
Note: For a summary of consolidated business results, please also see To Our Stakeholders
on pages 16 to 17.

Analysis of operating income(¥ million)

94,026FY2015

Increase in revenues from operations+21,452

Increase in operating expenses and cost of sales*–3,317

Increase in personnel expenses–562

Increase in expenses–1,036

Increase in taxes–280

Increase in depreciation and amortisation–451

Decrease in amortisation of goodwill+458

Increase in selling,
general andadministrative
expenses*–1,871

110,293

FY2016

YoY difference +16,266* Retirement benefit expenses are included in cost of revenues from operations, with the change being –377.

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

Real EstateEntertainment andCommunications

FY2016

239,544

220,923

112,490

30,502FY2015

233,419

206,444

112,632

YoY difference+6,124+14,479

FY2016

41,270FY2015

TravelInternational
Transportation

HotelsOther

Adjustment

Consolidated

36,65868,04238,859(39,660)

707,359

31,96539,41963,031

41,678(42,684)

685,906–142–1,462–2,760+5,010–2,819+3,024+21,452

49,851

15,301

680

1,788

3,298

967

(2,866)110,293

38,55337,173

14,993

1,227

3,053

1,216

1,032

(3,223)94,026

YoY difference+2,717+12,678

+308

–546

–1,265+2,082–64+356+16,266

Reference page

P.41

P.45

P.49

P.51

P.53

P.55

—

—

—

Revenues fromoperations

Operating income

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¥2,282,180 million, a rise of ¥2,542 million from the previous fiscal
year-end. This mainly stemmed from increases in land and buildings for sale and investment securities, which counteracted adecrease in trade receivables.
Total liabilities decreased ¥42,213 million from the previous
fiscal year-end, to ¥1,557,942 million, due partly to a reduction ininterest-bearing debt.
Net assets increased ¥44,755 million from the previous fiscal yearend, to ¥724,237 million, due mainly to higher retained earnings.
As a result, the equity ratio stood at 31.0%, and ROE was 10.3%.

2. Cash Flows
Cash and cash equivalents decreased ¥1,134 million from theprevious fiscal year-end, to ¥22,363 million.
(1) Cash Flows from Operating Activities
Net cash provided by operating activities was ¥124,838 million(down 5.3% year on year). The main factors were income before
income taxes of ¥96,087 million, depreciation and amortisation of¥53,701 million, and income taxes paid of ¥29,656 million.
(2) Cash Flows from Investing Activities
Net cash used in investing activities was ¥78,843 million (up50.1% year on year). This primarily reflected purchases of non­current assets of ¥92,686 million, purchases of investment­securities of ¥14,228 million, and receipt of contributions for construction of ¥20,623 million.
(3) Cash Flows from Financing Activities
Net cash used in financing activities was ¥47,278 million (down
42.2% year on year). This was due partly to a net decrease in borrowings of ¥32,368 million, dividends paid of ¥8,227 million, andpurchase of treasury stock of ¥3,779 million.

Trends in cash flow indicators
FY2012FY2013

FY2014FY2015FY2016Equity ratio (%)

22.6

24.5

26.3

29.1

31.0

Equity ratio (%) (Market value basis)

20.0

31.5

31.0

41.1

39.5

Cash flows/interest-bearing debt ratio (Times)

9.5

8.8

7.0

7.2

7.3

Interest coverage ratio (Times)

6.0

6.7

8.8

9.2

9.9

Notes: Equity ratio = equity/total assets
Equity ratio (market value basis) = market capitalisation/total assets
Cash flows/interest-bearing debt ratio = interest-bearing debt/cash flows from operating activities
Interest coverage ratio = cash flows from 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 ¥916,570 million, a decrease of ¥39,258 million from the previous fiscal year-end.
This was because net cash provided by operating activities morethan compensated for capital expenditure for the Umeda 1-1 Project
and the building of new rolling stock.

The ratio of consolidated interest-bearing debt/EBITDA (­operating
income + depreciation expenses + amortisation of goodwill), whichis the benchmark the Company uses for assessing the soundness of
its financial position, stood at 5.5 times (compared with 6.4 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 ¥1,476 million (2.2%) year on year,to ¥66,639 million.

The following is a breakdown for each business segment.
FY2016YoY

Urban Transportation

27,977 millions of yen–12.8%

Real Estate

28,287

9.5

Entertainment and Communications

5,919

–2.8

507

–23.1

International Transportation

1,049

120.4

Hotels

2,233

49.2

Other

717

–25.3

Total

66,691–1.3

Adjustment(52)–109.9Consolidated

66,639–2.2

TravelUrban Transportation
The railway business carried out capital investment with a focus onsafety and service improvement, built new rolling stock, andimproved existing rolling stock.
Real Estate
The Real Estate Business implemented the Umeda 1-1 Project.
Entertainment and Communications
The Entertainment and Communications Business renewed thetransmission lines of main lines.
TravelIn the Travel Business, Hankyu Travel International stepped-up
Internet sales and invested in systems for in-house operations.

International Transportation
In the International Transportation Business, Hankyu Hanshin Express
invested in systems to establish global IT-enabled alliances.
HotelsIn the Hotels Business, Hankyu Hanshin Hotels refurbished the guest
rooms of its hotels.
Depreciation and amortisation increased ¥558 million (1.0%)
from the previous year (consolidated basis), to ¥53,701 million.