Thank you. My name is Kojima, and I am CFO of ORIX Corporation. First one, I'd like to thank you for your time for our earnings reporting for the second quarter ending in March 2016. Allow me first to explain our first half results. So will you kindly please turn to Page 1 of the basic materials, please? First, the outline of the performance. Net income for the first half ending March 2016 was, as shown in this graph, JPY 161.3 billion on the year-on-year basis, actually 14% increase. Following the first quarter, we achieved almost JPY 80 billion in the net profit in the second quarter. This shows the annualized ROE of 14.7%, 14.7%. We are aiming at, again, for the March 2018 JPY 300 billion of net income in our midterm plan. We announced this 6 months ago. And in this very first year, particularly in regard to the performance in the first half, I believe it is fair for me to say that we're able to have a good start. And actually, we are able -- we achieved large capital gains in the first and the second quarters. And also we are able to have the steady growth in our core business operations resulted in steady growth and profit in each business segment. Next, would you please turn to Page 2? Segment profit. For the past 2 years and also as well as this first half of this fiscal year, as shown in these 3 bar graphs, segment profit, JPY 244.8 billion, up 21% on the year-on-year basis. The Corporate Financial Services, Real Estate, and investment and Operation, and Overseas Businesses, actually those four segmentations actually enjoy the strong profitability. And also, we were able to enjoy the good growth in the Maintenance Leasing. When it comes…

Thank you. My name is Inoue. Now I'd like to take this moment to express our heartfelt appreciation to each one of you for your support. That said, again, you have just received the report by Mr. Kojima, our CFO. There is going to be overlaps. I hope you bear with me. Net income for the first half full year ending March 2016 actually was JPY 161.3 billion, up 14%. I think it is fair for me to say that we had a good start in -- for first 6 months and of the midterm plan very first year. In line with the macroeconomic outlook, now we assumed ORIX actually exited PE ahead of the time. So we're able to actually generate the profit in the first 6 months. Since August, the market has been somewhat in the confusion. Going through Chinese regulatory market fluctuations and renminbi depreciation and delayed rate and increase in the U.S. yet we successfully listed Houlihan Lokey, overall, I think we have in the 6 months. In regard to Houlihan Lokey listing, actually, we sold about 15% of stocks for the price of $21 per stock. The valuation -- the value was JPY 14 billion. Right now, for your information, the stock price is moving around $22. But according to the equity research and target price, the price is -- stock price is in the range of $25 to $28. So definitely we are going to keep an eye on the things going on, and then we're going to make our own decision. For your further information, actually, we have become equity method affiliate. We used to be a consultant company. So from now on, this is going to be the new role we're going to look into as for the financial accounting. In the…

Thank you for your patience. Let us now have questions-and-answers. And if you have any questions, would you please show your hand while being seated. Before you ask questions, I'd appreciate if you can identify who you are and your affiliation as well. Please show your hands if you have any questions, please.

My name is Watanabe, Daiwa Securities. I have 2 questions. First question actually concerns your dividend payout ratio. Actually 23% and that is going to be the basis actually JPY 45 for the full year. In other words, so the annualized EPS is going to be JPY 196 and first -- JPY 123 subtracted actually then the answer there is going to be JPY 73 is going to be the base. This is the first question I'd like to ask you to double check on this. And second question concerns the exit on the pipeline in second half. Actually hotels and others associations had realized the value. And what's going to happen in terms of the capital gains whether or not you see that capital gains are going to be realized, particularly in this area and moving into the second half? These are the 2 questions, please.

Thank you again for your questions. And concerning question one, allow me to make the following response. You're right. In the second half, we do not expect there is going to be big capital gains. In other words, we are going to be based upon the income coming out of the existing lines of business. And that has been the basis. And we're hoping that there could be an upside. At the same time we have to look at into actual movements on the market. So with this point in mind, actually, we have come up with somewhat conservative numbers, so to speak. When you go to hotels and others, I think in the beginning of the fiscal year, in the hotel there was talk about and we announced that we have a plan to launch it. I think that's what you're talking about. But looking at income, expect -- extended income growth on the side of inbound. So probably, it's what [indiscernible] on it on somewhat a longer-term basis. So there's going to -- there could be certain delays in this regard. It all depends upon how you see -- what is going on, on the marketplace. The income out of the hotels -- and maybe we should be able to enjoy the income out of hotels. Maybe we can work on peak out the best case scenario. And so you may say that we have come in a great year. But again, thinking that we are having unrealized net profit substantially, for example, Universal Port, actually there is -- and actually that land called annex, annex [ph] land. So actually development is underway on that annex [ph] land, and it is going to be officially opened up 2 years from now. So with that asset in mind, probably that is going to help us to give us a more stable asset structure. Did I answer your question?

From Merrill Lynch, my name is Sasaki. Page 12, please, I'd like to ask you a question. Payout ratio 23% dividend and annually you have JPY 260 billion. So it means that the JPY 200 billion, it is internal reserve amount you are expecting at this moment. So JPY 200 billion, how much will be the investment amount to secure this reserve? And you may think of some sizable amount of Investment in the future, coming to think of these numbers. So as for new investment, do you have any plan as long as you can tell us? And also payout dividend ratio, the future trend, this is what I'd like to know. Page 12, due to this drawing, 3 to 4-point percent increase per year. So 30% for 2018. Is our understanding correct? So these are 2 questions.

[indiscernible] JPY 200 billion hidden profit. That is book value for profit.

Yes, JPY 200 billion and internal reserve is what you will keep, right? JPY 200 billion internal reserve is what you're thinking about. By using this capital, how much level of investment do you think you will be conducting, yes, please let us know as much as you know.

Well, for the timing, we have pipeline. Internally, we have made an approval investment. First of all, in aircraft, 92 -- JPY 100 billion aircraft. And step-by-step, gradually, we make investment for environmental and mega solar. In total, JPY 100 billion step-by-step. So it means that JPY 260 billion profit means that JPY 60 billion dividend and others is pipeline. So this is what we're expecting. And additionally, perhaps, PE investment will continue. Will never disappear. Therefore, I myself think that some tens of or maybe, yes, billions level of investment will be in place. And also, dividend payout ratio. In the past, we had some stance about ORIX. Step-by-step, we had increased our dividend amount as our payout ratio. It continues. 20% last year, this year 23%. So step-by-step, we would like to increase the payout ratio. But if it were 30% of the payout ratio, it does depend upon what situation we will face. For the time being, 23% is what we would like you to accept.

My name is Muraki, Deutsche Securities. 2 questions. Question number one, actually what kind of [indiscernible]do you have vis-à-vis the market environment? In the second half you told us that you are becoming somewhat conservative actually [indiscernible] actually out of the emerging markets and pushing up the volatility. And also credit in the U.S. has already peaked out. I think that was the kind of story you have in mind. So with that point in mind actually, you actually wanted to hurry up and actually make an exit. So how long this adjustment is going to be lasting? This is my question. And you're going to be really smart if you can make investment and -- when market hits the bottom. But sometimes that is going to be quite difficult, frankly speaking. But again, this adjustment process this time is going to be short in time. Now that's moving into the next fiscal year. You think that you are going to expect to see bottom out quickly and moving into better [indiscernible] to come or would you say the other way around? My second question concerning the rating. And according to the S&P report, A- rating I think, and I think downgrading for that I think and it could be based upon two stories: nonbank anchor [indiscernible] or another case and it could be your capital ratio, equity ratio actually modify the capital ratio and equity ratio and that could be less than 10%. I think these are the two possible drivers for the downgrading of your rate. As for the latter half, of course, you can actually try to apply the stricter management. [indiscernible] M&A, and the large M&A definitely is good to have negative impact in this regard. So you do not believe that you should be able to find good companies to acquire. And the second point of concern, 10% or less, again, without an anchor number in mind, again, having nothing to do with the actual capability and you may become BBB. Moody's actually has already given BBB. But with this point in mind, that turn of rating, what kind of visible -- invisible impact it may have on you?

Well, first on the market environment, maybe we shouldn't be worried so much. But the rate raise in the U.S.A. may have impact on the stock prices in the Southeast Asian countries, particularly Indonesian stock market and has been in that [ph] situation. So with that point in my mind, probably bottomed out. And so it is going to be quite difficult for us to have full hedge vis-à-vis the South Asian countries. So I have to be extremely careful in this regard. And 2 years ago now we talked about investments in Brazil, but we decided not to go for that investment. I think we were successful to not make any investment. Actually, all these prices actually have started coming down. So we are given a lot better negotiation power. So if I want to make an action in a hurried manner, I think we're going to -- we are doomed to fail. I am hoping that they will raise interest rate as soon as possible and they decided not to raise interest rate this month and how come you're still delaying the raise in increase. So that's the kind of feeling I am having when it comes to the U.S. interest rate. So what is going to be a good place for investment? Probably Japan. Well, Japan versus U.S.A., actually, we're not showing good numbers in regard to the U.S.A., but actually disclosure is there solid and also governance compliance actually they are good companies, who have no governance and compliance issues. So definitely I need to look into Japanese candidates as well as American candidates. And also FX situations will make me somewhat less than active talking about M&A in South Asian possibilities. And also China, same, I have to be careful. As for the rating, even…

Goldman Sachs, Noda. There are 2 questions I'd like to raise. First one, retail business ROA. So first off 1.2%. And CEO was talking about some number, and [indiscernible] ROA 3%, and these numbers were not reached. However, when it comes to Corporate Financing, you have made a pretty good jump. Is there any countermeasure you're going to take or nonorganic development to progress may be planned already in your mind, let me know. And next one is asset arrangement or sorting changes. At the beginning of the term, you are talking about investment and also sort out of your asset PE existing Houlihan and the Real Estate, these are what you have talked about. So these are what you have been talking about as rearrangement or maybe some multiple level of rearrangement or resorting of asset kinds? I'd like to know of them.

As for Retail, fundamentally ROA below because of the bank situation. CFO -- former CFO, Mr. Urata, he was talking about to, yes, ROA improvement. He has been a bank president. ROA cannot be improved right away. But in ORIX Bank, employees came from other banks more and more increasingly. So ORIX Bank is getting just like an ordinary bank. Therefore, what you'd like to rethink again what ORIX Bank could do, we would like to review what we can do as ORIX Bank. It may take some time. ROA may not go jump right away, but plus Alpha [ph] means service business so that we have our own business ongoing. So we make an all out effort to make an improvement. Please wait for some time. And also rearrangement of asset or reassortment. Ordinarily, when it comes to Real Estate business, we made a mistake before Lehman shock. We have sold some property and reassortment was done. Right away capital gain was achieved and we bought at high price and it has become a legacy. De-assortment means that you have to sell at most appropriate moment, but before markets decline, you keep and maintain or you sold the property, for instance. So reinvestment in property is not our plan, truly. Well, capital gain -- actual capital gain is JPY 10 billion. We needed to see the fluctuation of the stock prices in the future; what to do and how to do. Naturally, we see the marketplace and Houlihan and post-Houlihan, it's not going to be the same type of purchase. It could be assets simply or tangible asset purchase in the future. This is a decision to be made. We have variety of businesses. Well, Real Estate maybe bad or aircraft or warships and vessels might be another choices. Well, reassortment within the same industry will cause our mistake. This is our fundamental understanding. I hope I answered your question.

Tsujino is my name, JPMorgan. Concerning dividend, payout ratio actually is planned to go up piece by piece and bit by bit and JPY 23 this year and last year JPY 20. I think that's what I was hearing from you. Well, this year, first half, you had profit, this much. And also moving into the second half probably JPY 110 billion is what you have in mind. That is why you have come up with a JPY 45. In case you're not having big capital gains this fiscal year JPY 230 billion or the one higher in that range, the number actually was in the lower side. May be dividend is not going to be lowered. Again, what's going to happen to payout ratio? And probably it's not going to be traditional payout ratio tactics and probably payout ratio may jump up once you have -- once you could have achieved such range of numbers. Next question, actually, I have to go into details, sorry about this. In data book and actually I'm looking at Page 11 in this data book. Overseas Business, for example, [indiscernible] that's the number I see. And out of that JPY 40 billion, actually comes from Houlihan, and the remaining JPY 7 billion is quite large. In other words, again, this is a mixture of the subsidiaries and reorganization. I think that was the kind of explanation I had received at one point. I wonder if you could clarify that point whether or not this kind of thing, it is going to be sustainable. Appreciate if you can expand on those questions.

In regard to the question on the dividend, let's assume that in the second half, we had really bad performance and still going to change in the JPY 23. In other words, the payout ratio is going to go up automatically. And also minimum 23% for the next fiscal year and probably our profit is going to much better. And so shareholders are not going to be satisfied with JPY 23 , so this is going to be the baseline, bottom line, and we are hoping that we can actually go up beyond the JPY 23. And talking about the next fiscal year, and actually 3 years from now, we are going to aim at JPY 300 billion. And actually, we are not considering a dip scenario, but in case seeing a dip has taken place. Of course, you're right thinking that we have through [indiscernible] procedures. Again, still, we have to return -- we have to give returns to shareholders. I think in the core is going to be the growth. I think my important job mission is going to make sure that people are going to look at ORIX as still a growing company. And CFO is going to program -- going to ask the CFO now to go through the numbers. But before that, in China, we have a security, the prevention security on our company, and of course, we had Shanghai shock actually that on a company business actually has gained JPY 2 billion in capital gain.

Well, I may go into details. Actually, I will not give you any specific detail numbers. Again, on this and Chinese case our COO was talking about. Actually Handy Terminal [ph] is the name of the company. That was good case in point. And also in the United States, actually, we are making the investments in the funds. Actually, on a profit that was as much as several millions of yen. So we have many pieces in this genre, so to speak. Therefore, crime prevention security, I think minimum JPY 2 billion-plus. But other than this and actually it is going to be a collection of JPY 1 billion or less. So it is the collection of all these small ones put together. Did I answer your question now?

Well, even under those circumstances, well, whether or not you can maintain all this on small cases and going forward. And extra question, if I may. Some time ago, what is the valuation in terms of loss on the side of Real Estate. I think you shared the ballpark numbers there. Actually the investment -- the profit seems to going up even though you have not realized them yet. I wondered if you could share your thoughts in this regard.

Hidden profit is what you would like to know? When it comes to JPY 55 billion in the securities report, this is what we have, yes, described. Selling and buying, it was already materialized as selling gain. And naturally, when management for result is getting better. When it comes to investment in leasing business, your profit is materialized out of JPY 50 billion in existing part, rental and also rotation has become better. Including all of these valuation, valuation gain will be different. It does not change so often. However, in our front line, there are many cycles. But once a year we evaluate this business to sell properties first and materialize profit is one thing and also profit will be increasing. So therefore, it is a little bit of gain. And as for U.S., it's not that great. However, as for the investment profile, it is not great, but however, it is still gaining. Management. Some hundreds of billions of yen in management of assets. Yes, we have risk and hidden profit is JPY 200 billion according to some report, but we do not reach that level of hidden profit. I hope you are -- I would like to have you understanding. So I hope we answered your question.

Now we'd like to close today's second quarter consolidated financial results report. Thank you very much for your participation.