Consolidated Financial Highlights

	Millions of yen		Thousands of U.S. dollars (Note)
	2015	2016	2016
Consolidated operating results
Net sales	¥ 133,292	¥ 144,870	$ 1,381,562
Operating income	16,270	15,134	144,328
Ordinary income	16,164	14,405	137,374
Profit attributable to owners of parent	9,557	8,098	77,229
ROE	14.4%	11.1%	11.1%
Dividend payout ratio	13.1%	19.6%	19.6%
Plant and equipment investment	27,639	29,441	280,764
Consolidated financial position
Total assets	202,919	220,836	2,106,010
Net assets	71,998	81,434	776,599
Equity ratio	34.3%	34.7%	34.7%
Consolidated cash flows
Net cash provided by (used in) operating activities	33,509	26,618	253,852
Net cash provided by (used in) investing activities	–4,488	–8,940	(85,260)
Net cash provided by (used in) financing activities	–24,857	–20,726	(197,655)
Cash and cash equivalents at end of period	36,150	33,069	315,366

Information per share of common stock	yen		U.S. dollars (Note)
Net income per share	¥ 266.27	¥ 229.16	$ 2.18
Net assets per share	1,969.16	2,169.93	20.69
Dividends per share	35.00	45.00	0.42

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥104.86=US $1, the approximate exchange rate on October 31, 2016.

Finance and Investment Strategies

A unique financial strategy corresponding to the characteristics of a stock business

Because equipment rental is a stock-based business, Kanamoto’s
debt/equity ratio is higher than in other industries. As a financial strategy to service this debt, the Company is working to increase shareholders’ equity, and reducing interest-bearing debt and streamlining its balance sheet to limit capital asset investment to within the scope of annual cash flow.

A future-oriented investment strategy to secure the source of Kanamoto’s earnings

The Company makes vigorous capital investments annually, which result in an amortization burden corresponding to this volume of assets. Equipment rental, however, is a business characterized by the ability to receive a gain from the sale of used equipment after rental earnings have been ensured. In other words, the depreciation expenses incurred during each fiscal year become the source of future earnings. For this reason, Kanamoto considers its most important management indicators to be EBITDA+ (operating income + depreciation and amortization expense + lease fee payments + installment payment charges + purchase payments for small-scale construction equipment and inexpensive rental assets) and ROI (return on investment), rather than current year operating results, and has always worked to achieve growth in these indicators.