OLC GROUP > Investor Relations > Annual Report > To Our Stockholders and Friends

In our core Theme Park business in the fiscal year ended March 31, 2006, we introduced a new attraction, "Raging Spirits," at Tokyo DisneySea and aggressively launched special events at the two theme parks. Sales measures implemented at each of our facilities, including the two Disney hotels and IKSPIARI, fully leveraged the respective characteristics of each location and seasonal products to offer the appeals of a theme resort. In addition, the Palm & Fountain Terrace Hotel, which opened in February 2005, began its full-year operation in the fiscal year, contributing to overall performance.

As a result, in the fiscal year ended March 31, 2006, revenues grew slightly compared with the previous fiscal year to ¥332,885 million, while factors including increases in operating expenses due to the full-year operation of the hotel and personnel expenses in the Theme Park business caused income to fall below levels of the previous fiscal year, to ¥30,605 million in operating income and ¥15,704 million in net income.

In terms of our revised earnings targets, announced in November 2005, we fell short of attaining anticipated revenues, as attendance in the Theme Park business fell below projections and revenues from product sales at Disney Stores declined. However, we outperformed our targets for operating income, ordinary income and net income due to decreases in operating expenses, including sales and promotion expenses.

In May 2004, we set our medium-term performance targets for the fiscal year ending March 31, 2007 at more than ¥360,000 million in consolidated revenues and over ¥45,000 million in consolidated operating income. From the perspective of business performance in subsequent years, we began considering a revision after the end of the interim period of the fiscal year ended March 31, 2006. We accordingly revised our initial medium-term performance targets to revenues of ¥347,140 million and operating income of ¥30,930 million as projections for the fiscal year ending March 31, 2007.

The primary factors causing our revised projections to fall short of our initial medium-term performance targets were in the Theme Park and Disney Store businesses.

The Theme Park business was negatively affected by the fact that while we had initially planned on achieving attendance exceeding 26 million for the fiscal year ending March 31, 2007, we were unable to expand the market as a whole due to a slow start in implementing measures for low-frequency guests, which resulted in revising planned attendance downward to 25.5 million. Furthermore, operating income was also expected to fall below our initial projections due to increases in expenses associated with the expanded scope of Tokyo DisneySea's fifth anniversary celebrations, expenses related to facility renovations at Tokyo Disneyland and personnel expenses caused by changes in the personnel system for part-time employees.

With respect to The Disney Store, revenues decreased as a result of declining product sales in an environment of evolving customer needs.
Actual Results for Fiscal 2006 and Performance Targets for Fiscal 2007 We plan to begin implementing new countermeasures in the fiscal year ending March 31, 2007, and based on the current performance of the fiscal year we will follow up with the formulation of a new medium-term plan by May 2007.

We intend to continue targeting further growth for the OLC Group by pursuing management strategies in line with the OLC Group 2010 Vision, and we will strive to create new value in the "Power Your Heart with Happiness" domain, a high-value business for enriching and nourishing people's hearts and appealing to abundant humanity and happiness.

We believe that higher corporate value and stable dividends are important means for returning profits to our stockholders.

We will pay a year-end dividend of ¥25 per share for the year ended March31, 2006, Transition in Dividends per Share which, combined with the interim dividend per share of ¥20, raises annual dividends to ¥45, an increase of ¥10 from the previous fiscal year. For the fiscal year ending March 31, 2007, we plan to raise annual dividends by ¥5 per share from the fiscal year ended March 31, 2006, to annual dividends of ¥50 per share.

We will appropriate cash flows provided by operations, primarily from Tokyo Disney Resort, to new businesses for new growth and additional investments in creating a destination resort. We also intend to invest in new businesses that will significantly enhance performance.

The Oriental Land Group will establish and develop a diversified business to present our guests with dreams, excitement, joy and comfort, and to realize the three pillars of our Vision.

The Three Pillars of the OLC Vision

Tokyo Disney Resort will further enhance its appeal and customer satisfaction to win acclaim as the world's top "destination resort*."
*Destination resort: a place that encourages repeat visits from guests for a variety of reasons.
To ensure the Group's growth and development and alleviate concentration in the Maihama area, we will endeavor to maximize revenues gained in areas outside Maihama.
We will seek to maximize the corporate value of the Oriental Land Group and enhance the satisfaction of all stakeholders by improving long-term business performance in a consistent, stable manner.