Thank you very much for taking time out of your busy schedules to attend ORIX financial results briefing. Let me begin my presentation on consolidated results for fiscal year March 2018. Please refer to Page 2 of the handout. I'd like to start with the trends in net income and ROE. For fiscal year March 2018, net income was ¥313.1 billion, up 15% year-on-year. This represents a record high net income for 4 years in a row, and year-on-year net income growth for 9 years in a row. ROE was 12.1%, which was the medium-term target of 11%. So we had another strong year for fiscal year March 2018. Next page, please. Segment profits and assets trend. Total segment profits reached ¥429.1 billion. Total segment assets reached ¥9.0173 trillion, which is ¥60.4 billion higher than the previous year. On Page 25 onwards, you can see more details about each segment, but I will add just a brief comment on each segment starting Corporate Financial Services. Segment profit was ¥49.3 billion, up 30% year-on-year. There was an increase in gain on sale of investment securities and the service fee revenue continue to increase. Those are the reasons for the increase in profit. The service fee revenue increased 5% year-on-year. Segment assets, because of the low interest rate situation in Japan, we cannot expect the kind of profitability we want. So there was a decrease in outstanding balance of installment loan, so the segment asset is down 7% year-on-year. For Maintenance Leasing, segment profit, it is up 1% year-on-year to ¥40.2 billion. There was an increase in the assets of automobile business and Rentec. There was an acquisition of Yodogawa Transformer, which is a renter of power receiving and transforming facilities and equipment. And thanks to that, there was an increase by…

Good afternoon. I am Inoue from ORIX. Thank you very much. Deputy President Kojima, has already mentioned some of the things that I was going to say, but I hope you will bear with me. For March 2018, there was a growth of existing business, additional profits from new businesses and large gains on asset sales and also reversal of DTA following U.S. tax reform. Thanks to those factors, we were able to achieve a net income target of ¥300 billion for the medium term. The net income was ¥313.1 billion. The annualized net income growth for the last 3 years was 10% and we achieved a record high net income for four years in a row. ROE at the end of the fiscal year was 12.1%, representing a double-digit ROE for five years in a row. For credit rating, in January 2018, there was an upgrading by S&P of outlook from A- negative to A- stable. Moody's as well on the 16th of April upgraded our credit rating from Baa1 positive to A3 stable. For the first time in six years, we've got the single A rating. For the new investments for fiscal year March 2018, in the U.S., we had invested into Ormat Technologies, which is a geothermal energy company listed in the United States. In the United States, there was senior citizens Lancaster Pollard mortgage lender, loan servicer in the United States. We acquired this company. In the Concession business, we acquired a concession for the operation of the Kobe Airport. Starting in April, we started an integrated operation of three airports. In the aircraft and ships, we increased the size of investments in aircrafts. We also executed an investment in ship mortgage loans. In the area of PE investment, we promoted the FinTech-related investments in China…

Now we would like to open the floor for questions. [Operator Instructions]

From SMBC Nikko Securities, my name is Nakamura. I have two questions. You are aiming at 4% to 8% annual growth. In terms of the base profit and capital gain for the year just ended, excluding the impairment, it is already double digit, and the capital gain is 10% or so reduced. So what is the image for this year and next year in terms of the growth rate? Could you give us some ideas about this? That's the first question. The second question is about market communication regarding the growth of 4% to 8% and 11% in ROE. This is something I'm very aware. But the PBR is still limited to 0.9 times. There seems to be some problem going on in the company, thus the assessment of the company, the market communication in terms of distribution of free cash flow is being changed by the company intentionally, so that you can gain more understanding from market. But looking at market communication of other companies, are you trying to modify or improve the market communication further? That's the second question.

Regarding the proceeds from the sale of assets and the base profits, over and over again, we explained this. We consider the gain from sale of assets as part of the base profit, because sale of assets is a simple business strategy. We buy low and sell high. And now the real estate properties are expensive. So now is the time to sell. So that's how we do business looking at the situations in the market. Unfortunately, we can't tell you what percentage capital gain we're going to achieve and so forth, because it is all dependent on the market situation. We have to always look at the market situation whenever there is a peak, we will sell and otherwise we won't sell. That's the basic principle we are managing -- with which we are managing the business. And the growth of between 4% and 8%, it is okay for us to come with a specific goal. But the range of 4% to 8% is already specific. In the case of the 4% growth, probably next year, we will have 320 billion to 330 billion. If 4% is to be maintained, or if we can only achieve 4% growth, that means ROE will be less than 11%. In that case, we will be thinking about share buyback. If we can maintain 8% growth, ROE will be more than 11%, and in that case, the cash will be devoted to investment. And if the ROE is less than 11%, of course, we will think about share buyback in a flexible manner. In terms of communication, I think that we are doing a good job in market communication already. But if you are not happy with what we have today and this is all my responsibility. But basically, if you compare with…

Yes. Regarding market communication?

I suppose you are getting closer and closer. You can ask me any question, I can answer any question you may have. But 90% of our business is insider trading information, so I can't tell you those information. So I can't tell you any information about specific transactions. There are a lot of backlog transactions, but I can't tell you about these. But I can say that we will make further efforts for corporate communication. Thank you.

So I see a hand next to the previous gentleman.

This is Muraki from Deutsche Securities. I do have two questions. The first question on Page 6, a midterm plan related question, if I may. So in three years, you have three KPIs that you have fulfilled, and I do believe that was mentioned in the presentation. So aside from these areas, perhaps if you can mention initiatives that you did want to undertake, but you could not for some given reason or you could not realize a specific activity? So if you can mention them. And the second question is the shareholder payback on Page 11. On the bottom right, you see, I do believe that we have the overall number for the total return ratio and I believe that this is on the rise year-after-year. So why are you showing this, because are you planning to exceed the 40% mark, is that the reason why? So again, the total return ratio, what is the positioning of these numbers for you and your company? Now for currently, I think you've exceeded the 80% or 85% target for the capital employed, and so your ratings are increasing, so I think, this leverage is in good balance. And on Page 7, you invested ¥740 billion last year, I believe it was. So if this is the investment scale, then 60%, for instance, retained earnings and 40% return balance would be optimal. So is that the thinking behind these numbers?

So let me respond to the first question. For year ending March 2018, we have cleared the three KPIs and there were the other initiatives that we did not undertake. One is the asset size, I believe. Our goal was ¥10 trillion or over, but we stopped at ¥9 trillion. So ROA 3%. So 10 trillion, ROA 3%, ¥300 billion was the goal. So we have been very selective with our projects that we undertook. And especially, here in Japan, our finance, leasing, lending are very low in profitability, so we did not intentionally pursue these, and hence we did not reached the ¥10 trillion mark. Having said that, for ROA, 3.5% approximately, so our capital efficiency has enhanced and we were able to exceed ¥300 billion for net income. So excluding cash and cash equivalent, the debt-to-equity ratio is 1.5x for March 2018 ending year. So for us, we would have not damaged our ratings if we extended to two-fold. But this is a major shift from our plan from 3 years ago. There are more individual circumstances. But all in all, this is the state. Now aside from the 3 KPIs, were there any other KPIs that we could not achieve, ERM is one. So we are expanding in new arenas, meaning that risk management is critical. And from the viewpoint of enterprise risk management, we are still vulnerable, we are weak. And if we are weak in ERM activities, then if it is an overseas deal or overseas project that we pursue, we may impede antitrust laws or in the U.S. CIFS, we may violate CIFS, for instance. So we have to be much more proactive and we have yet to establish a strong structure that can be flexible enough to accommodate these changes. Now Japanese companies, obviously, in terms of demand for a global risk management, we lack talents here in Japan. So what we're doing is we inject or we are planning to inject professionals from overseas in this field. Very costly, but this must be done. And again, this is an area that we are still midway. But sometime by the end of the year, we want to finalize the structure, meaning as a result, we can be more proactive in pursuing other projects. So for myself, I believe that aside from the numbers, establishing proper ERM is critical and that would be my personal KPI.

Now for total return ratio, there was no meaning. People often point out that it's low, so just wanted to show that we have exceeded 30%, and I believe that it's the intent of the Secretary when they put this material together. So there is no deep meaning in showing these numbers year-after-year. But the essence here is that we have stably grown our payout ratio and so that is the main message. And as Mr. Inoue, how we employ our capital, if there is no investment in the horizon, it's not that we are going to raise it to 40%, 50% or 60%, we will be proactive in engaging in our investment activities.

From Daiwa Securities, my name is Watanabe. I have 2 questions. The first question is regard the segment growth for the medium term. In the medium-term plan, 4% to 8% profit target for the entire company was announced, but if you break down for each segment, what percentage of growth is expected for each segment for the medium term, and what will be the growth driver for each of the segments? That's the first question. The second question is about FinTech. In the China region, you are investing into FinTech area, but other than equity investment, is there any business that -- where you will be making a direct investment? Those are the two questions.

Regarding the segment-by-segment growth strategy, simply put, solar power energy or renewable energy business in Japan, this is almost over, it is coming to a maturity. That means new items, even if you invest in the solar energy, the FIT is poor, probably it's difficult to maintain ROE of 3% -- ROA of 3%. Therefore, the renewable energy, although, we are still investing into the geothermal and wind power generation, since there are so many restrictions in Japan, the regulated business -- there are some transactions, but we are not a making positive proactive investment. Other than that, we will make investment in Europe, India, the wind power and solar energy. Investment will be made in these areas, India and Europe. So 10%, 20% may be difficult, but we expect 5% to 10% return. Wherever there is 5% to 10%, we want to invest. Another is Life Insurance business, that is we are expecting more than 10% growth. Banking is not working so well anymore. They are working hard, but in terms of ROA, that is out of question. But compared with other banks, our ROA is still higher, therefore, maybe we can maintain. And in order to increase ROA even by 1%, we will take many initiatives. For Corporate Financial Services in Japan, this is not working, at most ROA of 2%, that's how much they can go. Probably, however, because of the maturity or saturated loan market or lending market in Japan, I suppose there's a great difficulty. For example, if you look at loans to Takeda Pharmaceutical of ¥3 trillion, there will be secondary opportunities. If there is a such opportunity, we might accept it. But we can't expect so much from this business. But in terms of the cross-selling, in terms of the fee business, it…

My name is Niwa from Citi Global Markets, Japan. So for mid -- for short-term and long-term growth, I'm looking at Page 7, so for March 2018, 23% increase in new investments, but what is the level that you envisage? And in terms of investment, 3 versus 7 was the past ratio, but for this term, if you could give us a flavor of what do you expect or anticipate? The second question. This is quite a lengthy theme, but do you have enough to stimulate growth? So for -- starting from May 2017, you have overlooked the open innovation initiative and then you are also overlooking the group strategy division as well recently. So when you look at these new divisions, do you see a momentum gathering in terms of new innovations, and do you feel that there will be something stemming from these activities?

So how do we establish a source for growth is the question. And if we look at our pipeline only ¥1 trillion worth of projects are in the pipeline. However, depending on the project, the price tag might be extremely costly and expensive. So we will be selective and we have a ratings as well. So S&P, the RAC ratio, we are keeping a close eye on RAC. And in terms of investments, investment immediately generated 3% to 4% profit increase for us, but nowadays such projects of this nature are very limited. So after we make the purchase, we intervene and we involve ourselves to enhance the value as well as ROE. So there will be a certain amount of time needed to generate the value of the investee. So that is why we are coming up with the 4% to 8% growth strategy. We do have other source for growth. And again, as I mentioned, if it's peak, we sell; and if not, then we will inject our endless efforts. And when it peaks, we sell. And that repetition is our business model. So the fact that we do not have a core business is our core business. I know this is contradicting, but that is the nature of our business approach. Now open innovation, yes. And I also overlook IoT business as well as AI business. So I directly overlook these functions. It has been 18 months since we launched these initiatives. There are projects in the works, however, it is not at a level that we boast to the outside public. So it is like agriculture. We actually do agriculture business as well, but it has yet to contribute to our profit line, one point X billion yen barely. But my viewpoint is very simple, 10 billion or more in one segment, it has to earn on its own standalone to become a standalone segment. So IoT, open innovation, it will take maybe two, three years to fully grow. Again, the company ORIX, projects involving IoT or intelligence, most of our talent and employees are not all that good. We are more strong in making sure that we cover all grounds. And we have also established a president's office as well. And for investments in equity, we had a specific division that overlook this, but it turned out that we lack speed as a result, and we had to go through a lot of bureaucratic-like approval procedures. So that is why it is directly beneath the president. In other words, the president office handles these equities and that is why we have established the president's office and I directly overlook this division. Have I responded to all of your questions?

We like to entertain one more question.

From Merrill Lynch, I am Sasaki. I have just one question regarding the Concession business. In Osaka, the IR program is going to be starting. It is highly likely that in Osaka, this program will start and is there any opportunity for ORIX? What do you think?

For IR, we are very much interested in this, negotiation with the operator, we have to have them. But we don't know whether the bill will pass the day or not. So we don't have any concrete discussions at the moment yet. But for IR, project themselves, we want to be involved. And also, when IR becomes materialized, what we are thinking about right now is first of all, from Kansai Airport, we can have a connection by high-speed ferry boat. And from Kobe Airport, we can fly a private jet with the hub in the Kobe Airport to go to IR site. So this is something we have already started discussions on. But the IR project is not starting yet. So these are still idea-based stages. So for the 3 airports in Kansai, with the existence of IR, we can get the positive profit contributions. My concern is that 50% of the profits of Kansai Airport is based on the in-bound tourism from China. If Xi Jinping hates Abe-san and he closes the door to Japan, that will be a problem for us. But for IR, anyways, in the Kansai Airport, we are getting good profits there. Therefore, for the meantime, we can enjoy the high profit at Kansai Airport.

There is one question. By having an equity in IR, is it possible for your company to do so?

It is possible. However, on newspapers, there are some negative campaigns going on regarding the gamblers. So that's one factor. And also 30% commission or admission fee of ¥6,000 or admission control and practices and so forth. There are many different aspects we have to think about. Among all the 8 companies or operators, so far, many of -- they are saying that they want to do it because there is no impact. Probably, Osaka will go first. And if that's the case, ORIX has to decide which operator to work with in participating in the bidding process. So we won't want to make a decision from now.