IX

Thank you for waiting. We're ready to now start. Thank you very much for joining us. This is the financial results briefing for the fiscal year ended March 2026 of ORIX Corporation. I will be the facilitator. I am Uchida, General Manager of Corporate Communications Department. Let me first introduce the speakers. Hidetake Takahashi, Member of the Board of Directors, Representative Executive Officer, President, and Chief Executive Officer. Masataka Yamada, Senior Managing Executive Officer, Chief Financial Officer, and Chief Strategy Officer. Those two gentlemen will be presenting. In addition, there are four attendees.

Mr. Satoru Matsuzaki, Member of the Board of Directors, Deputy President, Executive Officer, Chief Operating Officer of Japan and APAC. Yoshiteru Suzuki, Senior Managing Executive Officer, Chief Operating Officer of USA and Europe. Shuji Irie, Senior Managing Executive Officer, Chief Operating Officer of Infrastructure Business Unit. Kazuki Yamamoto, Operating Officer, Corporate Strategy and Management Unit, Head of Corporate Planning, Investor Relations, and Sustainability. Those four people will be joining. First, I will call upon Mr. Takahashi and Mr. Yamada to present, and then we take questions. We plan to spend about 90-minutes in total. Now over to you, Mr. Takahashi.

Good afternoon ladies and gentlemen? Thank you very much for joining us despite a very busy schedule for our group's financial results briefing. I'm Takahashi, Group Chief Executive Officer. For the fiscal year ended March 2026, the uncertainty has become the norm. That was a macroeconomic environment. For us, it was the first year toward realizing our long-term vision and also an important year of management transition. We spent 12 months so far, and we have made steady steps forward and made progress toward our goals. We did the earnings announcement just now, and thanks for your support. We were able to achieve record highs for both net income and market capitalization. A robust organization and management structure are essential in order to steadily execute our growth strategy going forward.

To this end, we introduced organizational reform from January 1 this year and implemented a six-role system as of April 1. We have recruited Yamada from outside of the company as Chief Financial Officer/Chief Strategy Officer. Additionally, we reviewed guidelines and expanded the investment and financing authority delegated to each business division, enabling faster and accountable decision-making. Furthermore, with the Chief Financial Officer and Chief Risk Officer taking the lead in maintaining strong financial discipline and sophisticated risk management, we aim to take good risks speedily and proactively to achieve growth at a new level. That's just for the opening remarks. I would like to hand over to our Chief Financial Officer, Yamada, who will explain the results for the fiscal year ending March 2026 and guidance for the fiscal year ending March 2027.

Thank you for the introduction. I'm Chief Financial Officer and Chief Strategy Officer, Masataka Yamada. Thank you for this opportunity. Please refer to page two of results presentation or the screen in front of you. These are the points I would like to cover during today's briefing. There are three, as you can see. Number one, FY 2026 March results and FY 2027 March guidelines, and the FY 2026 March in review. The third point is key initiative for FY 2027 March. I would like to discuss the first topic, FY 2026 March results and the 2027 March guidance, and then Chief Executive Officer will follow and explain the second and third points. Please proceed to page three. These are the slides for the fiscal year ended March 26. Please look at the graph on the left. This shows ROE and net income for full year.

Net income for FY 2026 March was JPY 447.3 billion, exceeding the full year forecast of JPY 440 billion. That was revised upward at the first half results that was announced in November last year. This marks the third year in a row that ORIX achieved record profits. This represents an increase of JPY 95.6 billion or 27% in net income compared to the previous year. ROE was 10.4%, up 1.6 percentage points from the prior year. Q4 net income was JPY 57.6 billion.

We recorded a total impairments of an JPY 97.2 billion, primarily at ORIX USA, resulting in a low net income compared to the JPY 118.6 billion posted in the third quarter. At OCP in the ORIX USA segment, OCP is ORIX Capital Partners. We are proceeding with our phased withdrawal from the PE business and capital recycling efforts. As a result, we recorded goodwill impairment in the fourth quarter. That's the major factor. Next, please, proceed to page four. I would like to explain ORIX pre-tax profits for the fiscal year ending March 2026 using three categories: finance, operation, and investments. The upper table compares segment profits, pre-tax profits, and net income for the last two fiscal years.

As shown in the second row, pre-tax profits for the fiscal year ending March 2026 were JPY 691.4 billion, an increase of JPY 211 billion or 44% compared to the prior fiscal year. Next, please look at the graph at the lower left. Dark blue represents finance, light blue represents operation, and the deep pink bar represents investments. The upper bar graph shows segment profits for the fiscal year ended March 2025, and the lower bar graph, fiscal year ended March 2026. All three categories saw profit growth, while the investments category posted profit growth even excluding JPY 95 billion in gains from the Greenko sales and valuation gains. In the finance category, invest income rose sharply in insurance segment and corporate financial services achieved growth in fee income.

This resulted in an increase of JPY 12.9 billion or 7% year-over-year. In operation, while some businesses have recently been affected by geopolitical risks, inbound-related businesses such as hotels, inns, and airport concessions, as well as rental automobiles and ships, performed strongly in the fiscal year ended March 2026. In addition, the sales of some ORIX stake in Canara Robeco following the firm's IPO and gains from the sale of ZGlide Suspension contributed to growth, resulting in an increase of JPY 37 billion or 18% compared to the previous fiscal year. In the investment category, ORIX saw a significant increase in segment profits of JPY 138.1 billion or 82% compared to the previous fiscal year.

This was driven primarily gains from the sale of valuation gains of Greenko, as well as large gains from real estate and earnings of from PE investments, including Toshiba. Breakdown of each of the 10 segments are provided on pages 40 and 41 for your reference later. Please turn to page five. The bar chart on the left shows results for ROE, segment profits, and allocated capital for each of the three categories for the fiscal year ended March 2026, as well as the changes from the prior fiscal year. The dark blue bubble, the finance category, has allocated capital of JPY 1.7 trillion, with ROE holding steadily at the same level of 8.2% from the prior year.

Light blue bubble, operation, has allocated capital of JPY 1.4 trillion, with ROE rising from 13.5% of the prior fiscal year to 13.9%. Dark pink bubble, investment, has allocated capital of JPY 1.6 trillion, with ROE significantly improving from 7.4% to 13.6% due to realized gains from the sales of Greenko stake and hotel sales. On page six, we show historical trends of ROE and ROA of each of the three categories. In the operation category, profitability improvement has outpaced asset expansion with ROA improvement an additional 1.0 percentage point over the past five years. In the investments category, ROE and ROA increased by 6.2 percentage point and 3.6 percentage point, respectively, compared to the prior fiscal year.

We continue to create value and rotate assets while enhancing efficiency, as mentioned before. Next, please proceed to page seven. For the fiscal year ending March 2027, we target net income of JPY 530 billion, an increase of JPY 82.7 billion from the prior year. The target of ROE is 11.7%. ORIX Group specific key initiatives will be explained by our Chief Executive Officer Takahashi later on. We aim to increase profit and also improve ROE by continuing to optimize our portfolio. Regarding shareholder returns, I will touch on this again after presenting breakdown of our earnings guidance. Please turn to page eight. I'll explain the pre-tax profit guidance for the fiscal year ending March 2027 for each of the three categories. First, please look at the upper table.

As shown in the second row, expected pre-tax profit for the fiscal year ending March 2027 will be JPY 760 billion, an increase of JPY 68.6 billion or 10% year-over-year. Please look at the lower left graph. Overall, we expect the finance and operation categories to achieve profit growth. Investments will see a decline. Excluding the JPY 95 billion in gains from the sales of Greenko realizing, FY 2026 March investment segment profits also expected to increase.

Next, I would like to explain the trend for each categories. Finance. As announced in April, we have concluded share transfer agreement with Daiwa Next Bank, a consolidated subsidiary of a Daiwa Securities Group for all shares of ORIX Bank. We plan to record a gain on sale from the transaction of approximately JPY 124.2 billion at the pre-tax level for fiscal year ending March 2027. Profitability from ORIX USA is expected to contribute as well.

As a result, we expect finance category segment profit of JPY 308.3 billion, an increase of JPY 119.1 billion or 63% compared to the prior year. Within operation, we expect the inbound related business to see lower profits due to the impact of geopolitical tensions. Despite this, we expect solid growth in aircraft leasing and the U.S. Based Hilco Global. We are guiding operations category segment profit of JPY 240.7 billion, an increase of JPY 3.6 billion or 2% compared to the fiscal year ending March 2026. Finally, investment category. In addition to the sale of our domestic PE investment, SUGIKO, which was announced in March, we are proceeding with exits from multiple PE deals in the U.S.

We also expect profit contributions from Toshiba, which is performing well. As a result, our guidance for the segment profit is JPY 290 billion. Please turn to page nine. Last point that I would like to explain is about the shareholder returns. For the fiscal 2026 March, the full year dividend per share was the record high of JPY 156.1, up 30% year-on-year. Additionally, we fully executed the entire JPY 150 billion buyback program and canceled all shares exceeding 2% of the total shares outstanding. For the fiscal 2027 March, we will maintain the dividend payout ratio of 39%. Thus, at the full year dividend per share will be JPY 187.36, based on the projected net income of JPY 530 billion. We have set the share buyback program of JPY 250 billion, up JPY 100 billion year-on-year.

This was decided after considering cash inflows and capital release resulting from the sale of ORIX Bank, as well as the future profit levels, ROE, and financial soundness. The projected total return ratio, as you can see here, is 85.9%. That concludes my presentation. I would hand it back to Mr. Takahashi, Group Chief Executive Officer.

Thank you, Mr. Yamada. First, I'd like to summarize the previous fiscal year from the perspective of the three key initiatives for realizing our long-term vision. We explained at last year's financial results briefing. The first strategic initiative is portfolio optimization. We have been reviewing our portfolio considering the growth potential, capital efficiency, and impact on the credit ratings of each business. Major examples are shown on the slide. The sale of our Greenko stake and new investment in AM Green convertible bonds, as well as the sale of the ORIX Asset Management and Loan Services. As mentioned last month, we announced that we would sell ORIX Bank during the fiscal March 2027. The second initiative is sophisticated risk management. We have strengthened our management's decision-making platform by both integrating and visualizing risk information.

Through this, we have established a system that enables quantitative risk assessment and agile reflection of this assessment in our management decisions. Starting this year, we have integrated the individual finance deal screening department with the portfolio management department, establishing a system that enables end-to-end risk management. The third initiative is new business creation. Construction on the Osaka IR project commenced in April last year and is progressing smoothly. In October, there was an application for the MICE, and it's going very smoothly. Through the acquisition of Hilco Global in the U.S., we have entered the professional advisory services businesses, including asset valuation, primarily in the U.S. We'll also build an asset-backed financing platform going forward. Also, using the Hilco Global, we'll be also building the asset-backed financing platform.

Investment in I-NET and conversion of NOZOE INDUSTRY into the subsidiary are part of our efforts to create new businesses in strategic investment areas. Through those priority initiatives, we steadily improved ROE, and I am pleased to report that both net income and market cap reached the record high levels for the first fiscal March 26th. Please turn to next page. For the fiscal 27 March, we will continue to promote the three key initiatives aimed at realizing our long-term vision, including portfolio optimization, sophisticated risk management, and new business creation. In addition, under the new management structure, we would add a new key initiative that is the business model transformation. We will achieve this by deepening and evolving our two core business models as set forth in our group strategy, alternative investment and operations and business solutions. Let me explain the specific details later on.

Now please proceed to the next page. This is ORIX Group's new management structure. In January this year, I myself, Hidetake Takahashi, assumed the position of Chief Executive Officer, and reorganized our firm into five business units and five corporate units. Following this, we introduced a CXO system in April. This organizational reform aims to optimize the allocation of management resources under the Chief Executive Officer and create new businesses through the inter-unit collaboration. By introducing CXO system, we are expanding the delegation of authority to individual BU to help achieve both faster and more accountable decision-making by business division Chief Operating Officers.

Our Chief Financial Officer, Chief Risk Officer will be responsible for the maintenance of the strong financial discipline and risk management respectively. Each CXO will not only be responsible for their respective areas, but will also serve a role as top management overseeing the entire group alongside the Chief Executive Officer.

Today's attendees, Mr. Matsuzaki, Deputy President, and Mr. Suzuki, the Senior Managing Executive Officer, they will be the Chief Operating Officer of Japan & APAC Business Unit, as well as Chief Operating Officer of USA & Europe Business Unit, and a Chief Operating Officer of Infrastructure Business Unit for Mr. Irie. Today, Mr. Otsuka is not present. He is the Managing Executive Officer and he will be in charge of the risk management unit and group Chief Risk Officer. In Japan & APAC Business Unit, we develop wide range of financial businesses from debt to equity in APAC, including Japan. Going forward, we will capture the growth opportunities by expanding the diverse businesses we have cultivated domestically into APAC. USA & Europe is the core of our overseas asset management business.

In addition to the public assets centered on Robeco and private credit at ORIX USA, we will expand asset classes into other alternative assets and pursue AUM growth through strengthening sales collaboration. Infrastructure Business Unit will refine its expertise in the development, management, and operation of real assets such as real estate, energy, and aircraft and ships, while promoting the shift to asset management to expand the business scale through asset rotation. With this new structure, we believe we have established a management system that is more resilient to environmental changes and capable of making sound decision on both offensive and defensive fronts. Please turn to the next page. Let me elaborate on our business model transformation, which has been introduced as a new key initiative.

Until now, our alternative investments and operations have primarily been in our alternative assets on the balance sheet, where we can leverage our hands-on asset operation and management capabilities. Going forward, we will continue to build up assets such as real estate and renewable energy development while efficiently utilizing our balance sheet. We would accelerate the investment in assets suitable for shifting to an asset management, asset manager type model and connect this to medium to long-term AUM expansion. Our business solutions model will continue to value touch points with our customers and will expand the services originating in client needs. Through this, we aim to grow our asset under management and fee income. Please refer to the slide as examples of the initiatives of each business unit. Please go to the next page. I would like to discuss our financial and risk management strategies.

To steadily execute our growth strategy going forward, we will continue to strengthen financial discipline and risk management. The environment surrounding us is changing daily, including the situation in the Middle East, the resulting energy crisis and the highly volatile financial markets, and uncertainty has become the norm. As I said earlier.

In this climate, it is essential to thoroughly enforce financial discipline and risk management and to enhance resilience. We would not only respond to the changes, but also grow amid the changes. By targetedly implementing management focused on the capital efficiency and optimizing capital allocation across the group, we will concentrate management resources in areas where we have a strong competitive edge. We will pursue maximum profitability and sustainable enhancement of the corporate value under any circumstances. Please go to the next page. Finally, let me summarize the core messages today. Additionally, the previous fiscal year was one of the steady progress towards realizing our long-term vision, as I said at the outset. We recently announced the sale of ORIX Bank. Regarding portfolio optimization, we will continue to pursue this strategy without having any sacred areas.

Under the new management structure, we will continue to balance growth investments and shareholder returns while aiming to maximize corporate value over the medium to long term. With a focus on improving capital efficiency and profit growth, we will steadily execute each initiative. Finally, on the July second of this year, we plan to hold our first ever investor day in London. We continue to value dialogue with our stakeholders and apply it to our management. We appreciate your continued support. Thank you very much for your attention.

Now we would like to open the floor for questions. Online participants can also raise your hands, but we would like to take questions from venue first. If you would like to ask a question at the venue, please raise your hand and staff member will bring a microphone to you. If you would like to ask a question online, please press the Raise the Hand button at the bottom of the Zoom screen. When your name is called, please unmute yourself and ask your question. We would also like to ask you to state your affiliation and the name before the question. The first 30-minutes approximately will be allocated for the press. The question-and-answer session will be open to investors and analysts after that. Now the question is accepted.

Thank you. My name is Sugawa, Nikkei Newspaper. I have two questions. Question one, ORIX Bank sale was decided. What are the reasons? What is the background? Can you please remind us of that? The sales of the bank, I know that there's a lot of cash coming in from that and other sales. What is the purpose of this cash? How do you intend to spend this cash in the future? Do you have any plans already?

Thank you very much. I would like to respond to this question. The reason to sell the ORIX Bank, there were multiple reasons behind this. The biggest being, well, Daiwa Next Bank and also we're here at the venue, but, there's a very good affinity with ORIX Bank and also Daiwa Securities Group has been really appreciating the ORIX Bank highly. Business-wise, ORIX Bank doesn't really have ordinary deposits. It's basically CDs, but the interest rate is favorable, and the bank is also providing real estate collateral loans. Actually the deposit to loan ratio is higher than 10% slightly, which is very unique.

The deposit stickiness is a little bit weaker, and therefore, in order to grow the business, the interest rate for the term deposit will have to be higher to be more attractive. We have to basically do the investment with loans. Of course, there is competitiveness as well. It's very difficult to get the margin these days. As far as I know, Daiwa Next Bank is going the opposite way. In other words, they have a relationship with the securities brokers business, and it's relatively easy for them to collect the deposits. Once they get the deposits, they had challenges in terms of how to invest or manage that money. This combination, I understand that the two entities will be integrated.

As a new bank, we believe that they can aim for further growth, bigger growth, and that is the reason why we decided to sell the bank. With regard to your next question, we also do divestments and also investments. When we gain on sale, we're not necessarily thinking about spending money for a specific purpose. We want to focus on where we are competitive when it comes to investments. If you invest against macro environment, it doesn't really work. We need to really consider the macro economic environment and identify good areas for investment. To be more specific, according to the older segment, for example, PE investments within Japan is something that we'll still be actively investing into going forward. Real estate as well as aircrafts. Those real assets, they have a strong resistance against inflation.

This is what we believe. Operational capabilities of ORIX and Wocarats turnaround capacities would really help us to generate business value on our own. Investment into real assets is another area where we could allocate capital. I hope that answers your question.

Thank you. Any other questions? Please raise your hand.

Nakahara from Yomiuri Shimbun. Thank you for your presentations. Related question to the first question. I would like to ask two things. About the numbers on page eight, in the finance section, March 27th, the segment profit JPY 300 billion. ORIX Bank sale is JPY 124 billion upside. JPY 300 billion. In the finance segment, is this going to be the highest record? I'd like to clarify that. That's the first point. Nikkei's question, I think is the other side of her question. The benefits of a sale, you talked about that. At the same time, as a management decision in the finance segment, continue to hold ORIX Bank. I think that was one way of doing business. Could you talk about the balance? Could you explain that once again?

Yes. To your first question about the financing and investment business, we did not have that category in the past 10 or 20 years. I don't have the precise data in my head. About the JPY 300 billion segment profit, it is the record high profit in finance, I believe. That is a forecast. Why don't we maintain it, or why don't we keep it? One thing is that the ORIX Bank, compared to other banks in terms of ROA, relatively speaking, was at the higher level. In the ORIX Group, ROA, relatively speaking, was lower. In finance sector, the ROA comparison, in the ORIX financial, finance sector was relatively low. Therefore, making significant improvement of the ROA based on the banking business is difficult.

In order to improve ROA, we need to increase the leverage. Naturally, it's a regulated business, and also there is a certain limitation to that. When you look at the overall business portfolio, we wanted to focus more on the ROA, ROE. The bank business for us is not a non-core business. That is the major background.

Thank you very much.

Any other questions? If you have a question, please raise your hand. Yes, the person in the fifth row.

The Nikko SMBC. My name is Nawi. I am an anchor. I have three questions. Mr. Takahashi, you said that domestic PE, real estate, and aircrafts and real assets are the areas that you see opportunities in. In terms of macroeconomics, which areas are you more wary of? In other words, you talked about uncertainty becoming the norm. Where are you being more careful? When the interest rate is hiked, what kind of impact will it have on your business? Interest rate hike so far, has it been positive for the management of ORIX Group? If the rate hike accelerates or exceeds a certain threshold, do you need to be more wary of that? The third point is, total payout ratio was 80 some percent in last fiscal year. What is your basic policy for shareholder return? Can you please explain that once again?

With regard to the first question, are there any areas that we have cautions about? For domestic business, in Kansai we are operating three airports. For inbound related business, we have hotels and inns. We also operate those.

It's very unfortunate that since last autumn, relationship between Japan and China has weakened politically. Kansai International Airport receives about the 30% of the flights from China. Out of that 30%, approximately 2/3 have been reduced. The number of flights have been reduced. There is a three-month lag in terms of impact or performance. For the prior fiscal year, we are only accounting for the number of Kansai Airport up to December last year. The impact is minimal. If the flight reduction continues, the impact will be bigger going forward. There's also a positive factor. We are receiving a few visitors from China, but we are receiving more visitors from South Korea and Taiwan.

It is not just a simple reduction of a 2/3 of the 30%, like I said, but a certain amount of impact is expected, so we need to be careful. Similarly for hotels, we don't have many hotels that accept group tourists. Only about 10% of the visitors from China in terms of occupancy, it's fine, but in terms of room rate, maybe it was too high during some period. Generally, the numbers are softening, and therefore, revenue from the hotels can be impacted to some extent as well. With regard to overseas, in the U.S., fundamental measures have been implemented. We believe that we have already entered the phase of recovery. Private credit, especially SaaS company exposure, impact is of concern for many.

If there is money coming in from the individuals, there are redemptions happening. In terms of a private equity exposure and SaaS related lending, that's approximately 7%. 7% of the total. For the industry, the average is about 20%. That means that the impact for us is very much limited. Having said that, inflation and interest rate reduction, compared to expectation from one to two years ago, inflation pace and also the interest change pace is slowing down. We have to pay close attention to how this will impact us in the future. Just one more thing. With regard to portfolio of Chinese business, we need to control the exposure generally. There are some parts of portfolio that will have to be turned around.

We will strengthen our structure and continue to provide monitoring over that business. Those are the three points that we believe that we need to be careful about. Now, interest rate sensitivity. Interest rate is being hiked, and if it is slow, mostly in Japan, of course, the funding cost will increase. We can respond to that, and we believe that it will have an overall positive impact. 1% interest rate change sensitivity is about 1% by segment or at the segment level, it's limited. However, as you asked, if there is a sudden interest hike, a very fast interest hike, it is possible that we will fail to catch up or there will be a time lag which will result in potential impact.

At the current pace, as long as the interest hike is happening slowly, we believe that the impact will be positive for us. The third question was about dividend, I believe. Yes, shareholder return policy. As I mentioned in my presentation, investment for future growth and the maintenance of financial soundness and return to shareholders, we need to strike the right balance between the three elements. We continue to sustain this policy. Over the last three fiscal years or so, we had some gains from temporary sales or divestiture, and the profit was really going up, and dividend per share has been going up as well quite a lot. DPS growth on a continuous basis is something that we're aiming for, and also at the same time, we'll be focusing on the balance of the three elements.

This is how we decide our dividend policy. I hope that answers your question.

Yes.

Another person in the fourth row.

Kawasaki from Jiji Press. Two questions, please. About the ORIX Bank, the gain on sales of it. JPY 370 billion is the price. For this fiscal year, there is JPY 124.2 billion. It's a part of that gain, and the remaining will be reflected in the next fiscal year and onwards. Could you explain that? That's my first question. The second is that about the Middle East situation. Due to the situation, different industries are being affected. Maybe you have not seen the negative impact for yourself. The disruption in Middle East What could be the negative impacts or positive impacts, if there are any? If you can summarize that?

Yes. I'd like to respond. About the bank, I would like to refrain from talking about the details, but roughly speaking, the financial net asset of the bank is about JPY 250 billion. JPY 370 billion, the sale, the price of sale, the difference between the two will be our gains. For this fiscal year, we plan to close this. If unless there is a postponement of the closing, it is not likely that we would book the profit from this transaction across at a different fiscal year. That's my answer to your first question. As about the Middle East, you're right. The subsidiaries or affiliates that we have in Saudi Arabia, we have a leasing company called Yanal.

In Pakistan, the OLP is a leasing and financing company. In terms of exposure, those are the two companies. It's about JPY 15 billion. Exposure is limited. The potential impact on the businesses, aircraft business, we have a high credit level, the company. So far, no major impact is forecasted due to the Middle Eastern situation. The jet fuel, if this current Middle Eastern situation continues, there could be a short shortage of the jet fuel. Including LCC, it's possible that they will reduce the number of the flights. The airline performance will deteriorate.

Spirit is another story that used Chapter 11, and it's possible that there could be some airlines whose credit would deteriorate. We are not too optimistic. We'd like to look at the credit situation and aircraft situation. We are watching that closely. Another thing is, especially in Asia, Southeast Asia, as you all know, their energy reserve is at low level as countries. If it lingers in a different senses, the Southeast Asian macro economy could be impacted. If that happens, then the credit quality goes down. Direct impact, as you correctly said, is limited for us. If it lingers further, then there could be some indirect impact.

In that sense, we have to enhance the risk management, as I said. We'd like to focus on that, and we would like to respond to the situation. Thank you. That's all the questions. The answers, sorry.

Any other questions? Second row on the right-hand side.

Thank you. Nikkei Business. My name is Umekuni. I have two questions. Insurance business positioning within your portfolio. You talked about ROE and also business model transformation. Against that background, how do you position your insurance business? That's my first question. My second question is about the three airports in the Kansai area. What is the significance of this business, and what is your outlook of this business going forward?

With regard to your first question about our insurance business, insurance, as you may know, is balance sheet heavy and also a regulated business. Therefore, we need to build a certain amount of capital. It is also a capital-intensive business, and we need to use the balance sheet in order to grow the business. Therefore, if you just apply the ROE perspective, then insurance business is a little bit different from the rest of the portfolio. However, there are two things we need to consider. One is if you look at other alternative asset managers, they're doing something similar. Through insurance policies, you gain liabilities. Non-insurance business usually cannot really finance this kind of long-term debt. You can do that through insurance.

This is something that we can really use for other assets within the group, including the utilization of the reinsurance. If we can allocate it like that in terms of financing, we believe that there is good synergy. That's one point. The second point is that when we obtain a debt and also sell insurance, well, the third category insurance targeted at individuals were advertised on TV, and we were also focusing on online sales as well. Now we live in a world where we have interest rates. Life insurance, death coverage, and also wealthy individual insurance. We have started this several years ago. Now, corporate financial services in of ORIX is one of the best sales agents in Japan.

We believe that there's synergy in terms of obtaining insurance policies as well. There is actually a third point. If you just look at ROE, it's only about 7%, so you may consider that we should be selling this business. However, as you could see from the performance of the prior year, for pre-tax segment profit, we are generating more than JPY 100 billion from this segment. Considering the nature of the insurance business, this kind of a revenue or profit is very stable. We do not just apply the ROE perspective. This is similar to the bank business. Well, in other words, we don't really consider to sell insurance, like we did with the bank, just looking at ROE.

We have to look at the debt structure of ORIX Group as a whole, and also asset management structure as well, and how to utilize insurance business within that framework. That's what we consider. Now, with regard to the three airports, there are certain factors that are in our control and out of control. Relationship between Japan and China was already explained earlier. We don't just sit by and watch the situation change or improve. As I said before, we are getting more visitors from South Korea and Taiwan, and Indonesia, Thailand, and other southeastern airlines. We are approaching them. Our sales team is approaching them because this is a great opportunity. Traditionally, we were relying on a single market for 30% of our sales or revenue, but this is a great opportunity to change that structure to reduce the dependency.

Now the risks have materialized. We want to make sure that the lesson is learned and same problem will not be repeated so that we can operate this business over the long term. That's all. Thank you.

Yes, the person in the sixth row.

Thank you. Kawase from The Nikkei. About China, I'd like to ask a question. Earlier, Mr. Takahashi, in your presentation, you said that the portfolio in China and exposure needs to be controlled, and maybe turnaround is necessary in part. In the distribution, it is the materials about the Greater China, you are saying that you will be controlling your business. More specifically, the areas that you were not investing or you will withdraw, where are they and how do you control the exposure? When you say you'll be more restrictive, it means that you won't be not really reducing it totally, but what are the areas that you are referring to? The APAC business, Asia Pacific, I mean. In APAC, how do you position China? The excluding China, you want to enhance the APAC. Is that the framework of APAC excluding China? Could you explain that?

Well, about China, following U.S., it's the second-largest market. We are not going to withdraw it completely from China. That's not something that we expect. At the same time, including the investment of the listed companies, the minority investment, I think that the horizon of the investment is becoming longer. The capital recycling will be promoted so that the assets will be rotated. That's our investment policy. There are no exceptions. In comparison to others, the minority investment and the investment period will be longer. We would need to rotate our assets there. For example, in Hong Kong market, compared to two years ago, is recovering quite a bit. Pre-IPO investment in the technology companies is the main investment that we make. That is relatively short term.

We have experiences, so we'd like to continue working on those investments. It doesn't mean that we will withdraw or exit our businesses from China. That is not the case. We will look at the individual assets, and if it's longer term, we would rotate the assets. As a whole, we are not going to increase the overall exposure so much. We want to control the level of exposure as much as we can. That's the situation in China. What about APAC? APAC, it's not just one market. It's multiple countries and multiple markets in APAC. In terms of or as a region, it's a APAC region, Matsuzaki here with us is in charge.

If you look at, each country or each market. Different cultures and institutions, there are differences. If we can take advantage of our strength, then we would like to expand the businesses. For example, in Asia Pacific, in the area of the Pacific, Australia, conventionally the auto leasing was the major business. The real estate related financing, there are opportunities there. Already one or two are being executed. We would like to continue to form a team to promote this. Also India, there could be similar opportunities. Rather than thinking about it as one region, we like to look at each country or each market individually and do whatever we can do. Thank you.

Next question is going to be the last one from the press.

My name's Inagaki, Asahi Shimbun newspaper. I have two questions. First of all, about ORIX Bank. Lending competition and getting more difficult to get the margin. BOJ rate hike, for example, is pushing up the deposit interest rate. The ORIX Bank deposit interest rate, you found it difficult to increase the rate to get more money. Maybe the business model wasn't working very well. Was BOJ rate hike one of the factors behind this? That's my first question. Second question is about portfolio optimization. There is no sacred area, you said. Within your view, Mr. Takahashi, what are the specific challenges and what are the specific focuses?

With regard to the first question, I think there are pros and cons, both positive and negative. BOJ's rate hike policy or the monetary policy has changed, and the now interest rate is positive and the stickiness is weak. We are beginning to find that out. It is more difficult to get the arbitrage or the margin. Now, for the finance sector or the bank sector as a whole, it has a positive impact on the sales. Valuation of the banks was lower than one, but now it's beyond 1.0x. There was a question about the gain on sales earlier. Basically, we got a positive gain on sales and found a very good partner for this business as well. If PBR was below 1x, there was no incentive to probably to sell.

Well, maybe not. There was not an incentive to sell by generating a loss. Anyway, we decided the sales, and I think it had both positive and negative factors. What was your second question? Could you please repeat?

About portfolio optimization. You said you will leave no stone unturned. What are the specific challenges you see in doing this?

We say there is no sacred area, no stone unturned, so there is no sense of challenge. We will be implementing the reform steadily, logically. As I said in the summary of the last fiscal year, when we consider capital recycling, it's not just about getting capital gain. We look at ROE and the financial status as a snapshot. Based on the snapshot, some indices are better or worse, and we also look at whether or not they would improve or further grow in following several years. In that sense, we look at growth capacity, growth potential. Thirdly, we want to look at the impact on rating, credit rating, because when we acquire something for portfolio, we have to consider the goodwill as well.

As I said, in the China business, minority investment does have an impact on S&P credit rating, so we have to think about that impact as well. As I said before, we will just not look at the numbers. We will also look at the qualitative aspects, whether there's synergy within the group, whether it's meaningful for the group to have it. We will look at all of these aspects in terms of portfolio optimization.

That's all the questions we take from the press. We would like to take Now, Tomioka-san of IR will be leading. Thank you very much. We would like to take questions from analysts and investors. There are some remote participants, but first of all, we would like to take questions from the people who are present here. Any questions? Anyone here? The person in the front.

Muraki from SMBC Nikko. I have two questions. On page 15, you talked about the ROE, so I would like to ask you a question, 11.7% Is expected for the new fiscal year, so you exceeded your target. ORIX Bank sale gain and also HEXEL gain, I think those are included. In the underlying capability, it's above 11%. Are you feeling that? That's my first question. Second question is on page 14 on the left-hand side. The capital usage, utilization, what is the current investment environment? If the situation continues to be the same, the share price being too high, you cannot make investments. Is it possible that this number goes down further? Is there such possibility happening? Well, thank you.

About the ROE, underlying ROE, as I explained earlier, for this fiscal year, ORIX Bank gains on sale and the major sale of others are included. In the previous fiscal year, the Toshiba was showing strong. There was a gain in relation to KIOXIA which are also included. In terms of our feeling, in real terms, maybe we are very close to 11%, but we have to work a little bit harder.

That's how we feel. That's the very honest feeling that I can share. As for the capital utilization, relatively speaking, divestment under the current environment, the setting I think is, well, I wouldn't say easier, but easy to handle than buying. Divestment is leading, divestment are happening at the relatively high price. Therefore, the collection is proceeding, the capital utilization comes down and the liquidity position goes up. That has been the trend. As you correctly said, in terms of the real assets, the real estate and also the aircrafts and also the PE, the valuations are rising.

Under those circumstances, the projects that we'll interested in working with us, there are many of those examples. How can we increase those projects will be the key. It's not an easy environment to invest in, but unique investment opportunities are the ones that we would like to continue to pursue. Thank you.

I'm Watanabe from Daiwa Securities. Thank you presentation. I have two questions. Page 49, employed capital ratio. Since April, we had exits and the ORIX Bank and SUGIKO. Based on that pipeline, do you have the pro forma employed capital ratio? How much is that right now? On page 49 on the left-hand side, insurance debt, assessment evaluation. Compared to end of December, the amount of debt is actually bigger. Have you changed the evaluation method? What is the background for this?

With regard to employed capital ratio, for 26th March, 86%. ORIX Bank sales was mentioned before, and also SUGIKO. This is PE investment, so this is in and out. Anyway, those are not really reflected in these numbers yet. ORIX Bank sales, if this is included, roughly speaking, 86%, employed capital ratio at the end of the term will be coming down to about 80% according to our pro forma calculations. As I have explained, PE investment and the real asset-focused investments will be accelerated. With regard to your second question, the debt evaluation. Method of evaluation has been changed. That is true. I would like to ask Yamamoto to explain the details of this.

Yes. I would like to provide some additional explanation. For insurance policies acquisition, things are progressing smoothly, this is pushing up the amount of liabilities. Liabilities evaluation, especially for long-term interest. In order to be able to apply this more stably, we did something. Well, our corporate debt market was quite unstable for a while. We combined multiple indices in order to evaluate it more accurately. This is pushing up the number. In terms of net asset, this is basically a negative impact. That's all from me. Thank you.

That's very clear. Thank you very much.

Thank you very much. The person in the third row.

Sakamaki from Mizuho Securities. I have two questions. The first is on page 15. The ROE 15%, FY 2035 March. I think you included your enthusiasm there. A year passed, and I think you have already made a progress. This, the feasibility of achieving 15%, is it becoming better? Could you talk about that? The second question, U.S. business Restructuring is progressing. What is the timeframe that before you see the improvement of the profitability? Thank you.

15%, how confident are we? I think that's your question? Last fiscal year and this fiscal year, if you look at the numbers on page seven, there's a comparison to the FY March 2025. I think it's increasing and getting close to that level. I think that's the reason why you asked this question. Frankly speaking, our feeling is that we really have to work very much harder to get to this level. How can I say this? What should we do to reach that level? With us, that we have our Chief Operating Officers and Chief Strategic Officer. We have a Chief Risk Officer. We have the top management team.

We have a very frequent discussion, and we are updating the content. Going through the PDCA, and as long as we take the steady initiatives, I think we can get close to this level. I strongly believe in that. Of course, there could be some temporal improvement of our ROE, and also there is a decline at some time. There is still nine years to go, so we like to make sure that we make the linear growth. If you look at the three, five years timeframe, we would like to get closer to these targets. We would continue to execute what we need to do one by one.

About the ORIX USA, there are several, in March, April, in the area of the private equity portfolio, we made announcement about the sale. In addition to those, there are core and non-core, and we are rotating the portfolio. Maybe we have reached the bottom, but in order to get to the normal profit level, I think we would probably need a few more years. The size of the business could shrink, but we like to make sure that we recover the profitability. That is our priority. In charge of U.S. and Europe, the Chief Operating Officer, Suzuki, is here with us. Suzuki is usually in New York, but very frequently we have a discussion with him to take necessary initiative. We like to spend a few more years so that we can normalize the profitability level. That's the very frank views that I shared. Thank you very much.

Any other questions? Third row from the front.

Thank you. Takemura, Morgan Stanley, MUFG. I have two questions. My first question is related to the last question. How do you view the future of the U.S.? What is your outlook? Page eight shows that the finance category profit JPY 189.2 billion, and excluding one-time factors, JPY 175.8 billion. This is JPY -13.4 billion. Last fiscal year I'm sorry. Correction. The U.S. are actually included in finance, I think. Anyway, debt recovery gain on sales was about JPY 8 billion or JPY 7 billion last year. I think there's an absence of this. You now have a absence of the profit from the bank. Naturally should be about JPY -20 billion, but actually JPY 13.4 billion.

The difference explains the recovery in the United States. Is that the correct understanding? Can you please also talk about the background? That's my first question.

There are multiple factors, and therefore it is very difficult to do an apple-to-apple comparison, but what you said is largely correct. Gain on sales of the servicer and also for ORIX Bank sales in the first half, that is the assumption. Second half, profit will not be coming in from ORIX Bank. The last fiscal year, we had the profit coming in for the full year, contributing for the full year. Net-net for the finance category, we believe that the profit will increase slightly. As you have mentioned, ORIX USA recovery is accounted for. Credit cost allocation was done for ORIX USA in the prior fiscal year. This was a big allocation, and the absence of this will lead to recovery, big recovery. There are many positive and negative factors. I cannot explain everything today. That is, basically the picture.

Outlook for the United States. This is a very difficult question to answer. In terms of the businesses that we have, downside protection wise, we have done everything we could in the last fiscal year already, basically. It's just a question of how long will it take to recover. Example deal, project sales is now ongoing, and potential buyers are sometimes private equities. Private equity also has private debt business. The private equity, private debt within the current U.S. environment, including the major players, are basically struggling, and the PEPDs that are listed are suffering from much lower share prices as well. When these problems start to materialize to a greater extent, then speed of asset recycling will slow down, and therefore, we don't have a extremely positive outlook for the United States.

Rather than that, we need to take a very close look at what's happening in the U.S. on a day-by-day basis. Just this weekend, Suzuki has come back from the U.S., I think maybe he has a comment about his own assessment.

I'm in charge of Europe and the U.S. My name is Suzuki. Our Chief Executive Officer, Takahashi, has basically given you the overall picture of the U.S. already. Macroeconomic environment-wise, when you look at the non-bank business, including the fund business, private debt impact does slow things down. With regard to ORIX USA, thankfully, the impact is quite small, as was explained before. Our business partners are impacted, affected by this. Again, we are exiting some private equity business, and also there is a non-core portion.

Compared to when we were planning things last year, timing of sales and also the amount that we can get from that is something that we have to pay close attention to, and we need to follow up closely in terms of recovery of the assets. With regard to new projects, new deals, there are three things that we're considering, largely speaking. One is a company, Hilco, and Hilco can do asset-based leasing, asset-based financing based on their asset evaluation capabilities, and we can turn this into an asset management business. This is alternative asset management product structure that can be done for the future. Product mix-wise, we also want to focus on real estate. This is, of course, real assets.

In the United States, agency targeted mortgage in real estate has been our focus, but we want to expand further, including multi-family residential financing and also not just financing, but also equity investments. These are the potential areas that we want to get into, and also other areas where we have real estate related opportunities. Now, asset management and alternative focus asset management, this is something that we will continue to promote. NXT is one of the cores. They do direct lending. The market recognition has improved and the first closing of a new fund launch was also successful. We want to continue to promote this. Will we see the result of this already within six months? The answer would be no. It will take a little bit longer. We will continue to run this business meticulously over the long term.

Thank you very much for a very detailed explanation. I have one more question about dividend. ORIX Bank sales expected in the first half. SUGIKO also first half. First half dividend is 39% against the profit of the first half. Is that the correct understanding? This year you'll be paying out a lot of dividend. Is this going to be the baseline for the next fiscal year's dividend?

With regard to your first question, your understanding is correct. With regard to your second question, at the board of directors, we are debating this quite a lot, and we need some more time to debate this. We thought that this question will be asked. Let me explain about Toshiba. KIOXIA share based on the large shareholding report sold by several percentage point by March. Equity ratio is already 17.6% as far as we know. This is what we found out at the end of the fiscal year. Toshiba uses U.S. accounting standards. Their accounting process, well, they'll be doing the earnings call May 15. We have to wait for that to see how they will do this. Toshiba may reclassify KIOXIA to marketable securities. This is a possibility. According to U.S. accounting standards, it will no longer be equity method. It will be market to market.

Which means that, based on the share price of last fiscal year-end, it's possible that they want to capture the gain on valuation. Whether Toshiba will sell KIOXIA, even if they don't sell KIOXIA, if it's reclassified to marketable securities, then the evaluation will be different based on the share price at the end of the term. Whatever Toshiba captures will be captured by us based on the equity method, based on the stake. I'm sure as analysts you have already did the calculation, but we have to take that into consideration. Last year's prior's dividend, you'd been used as a full may be questionable when you consider sustainable return policy. There is still a potential debate there, and we need some more time, and we would like to deliberate this at the board level and decide on the policy, the direction.

Thank you.

Thank you very much. Next, I'd like to take a question from the remote participants. JPMorgan Securities, Sato-san, go ahead.

Thank you very much for this opportunity. This is Sato speaking. Two questions, please. First, about the U.S., especially the credit business. I'd like to know more about the current situation. I think you referred to it earlier. The credit value creation expenses is included and in the supplementary information. It's about JPY 10 billion, the lending support, and this I think is mostly U.S. You mentioned that the risk is not so big. What is your recognition about this credit loss being included here? Could you explain that? Second is about the capital gain. On page 46, this fiscal year capital gains are mentioned.

Already something which was discussed, bank and SUGIKO, JPY 180 billion, I think. On the now the capital gain in comparison to your plan, the normal level, something that might emerge from now on, I think that the budget for that is quite controlled. Other sales, does that mean that you're not very aggressive about that? This about the capital gain plan. Could you explain the capital gain plan a little bit further? Sato-san, thank you.

About the U.S. credit cost. If you go deeper and calculate, I think you will be able to get the numbers relatively roughly speaking, about the JPY 24 billion credit cost included in the previous fiscal year. The breakdowns include, as we mentioned in the past earnings call, one thing, as it was mentioned earlier, is the mortgage business. For the agencies, we have that business. With the high interest rate, which is continuing, the borrower's credit quality is coming down. Among the numbers that we mentioned, the major credit expense is for the real estate mortgage business. Another is the growth capital for the startups, the financing business. In that portfolio, specific names, the situation is not so great. We have some reserves for that.

Those are the two, that is the mortgage related and the gross capital financing. It's the reserve for a specific name. Those two are the major part of this. Of course, that, we do have a debt business which is very much diversified. Even at the normal level, a certain level of the reserve becomes unnecessary, and that would continue to be the case. When we announce the interim results, we mention this. As much as we can foresee, when we can reserve or have a provision in the first half, we would like to have a conservative approach to have that. For this fiscal year, we expect that we can reach to that normalized level.

As for the capital gain plan, it just happens that it's not really toward the end of the fiscal year, but the beginning of the fiscal year, there are some major gains from the sale. It just happened to be happening at that timing. It doesn't mean that there will be a major time lag. We have to look at the market and we would like to try to maximize our assets when we consider the timing of the sale. I wouldn't mention the specific name or specific number, but in the case of real estate and the renewable projects and the private equities, and we continue to do the asset rotation and the capital recycling. We apply our strategies.

For this fiscal year, only one month and 11 month to go. We would proceed with the sale from now on, and there will be some the proceeds or the gains from those sales booked in eventually. Thank you.

One point of clarification. Earlier, U.S. in the United States, what I wanted to ask was that on page 32, especially the credit business line and for the full year, reserve or provision was mentioned. At the end of the fiscal year, credit line probably was included. That's the growth capital. This is for the startup lending. That is the debt. That is where the reserve provision happened?

Yes, that's correct. Your understanding is correct.

Okay. Thank you very much.

Thank you, Mr. Sato. We see two more hands up. Nomura Securities, Sasaki-san, please ask your question.

This is Sasaki, Nomura Securities. Thank you. Page eight of the presentation material, I would like to understand how to read this slide. For FY 2027 March, profit is high. For 2028 March, considering the following fiscal year, I think you have big names with latent profit. Until March 2028, I expect the profit level to continue to be high or continue to increase. What about FY 2029 March or 2030 March? Is there going to be some ups and downs, or do you think the profit, the growth trend will still continue? What is the management's understanding? That's my question.

Last year, Greenko gain on sales and also ORIX servicer sales are a little bit smaller. For this fiscal year, we have a latent gain for sales for ORIX Bank. These are one-offs. This is not something that we can book year after year, as you can imagine. In order to maintain the growth in profitability, we believe that there are a lot of latent profit in core business as well, we have to materialize that. We don't want to sell things just for that purpose. Real estate, energy, and aircrafts. We will be recycling assets, we buy and sell and buy and sell. We need to continuously do that. Rather than going up and down year after year, we want to grow a recurring capital gain on a continuous basis as much as possible.

It depends on the market situation. Sometimes we can sell at a higher price or lower price against our expectations. Considering the recent environment, we are seeing some deals which are priced higher than our original expectations. Can we continue this trend into the next fiscal year and the following fiscal year? Well, we have to think about the macroeconomic environment impact. We're not talking about 2035, we're not just thinking about next fiscal year, the 4th fiscal year. We're really focused on executing what we can within this current fiscal year. Meaning that we want to capture all the profit opportunities, and also we have the long-term vision into 2035, and there was a question about the feasibility of this. We will be focusing both on ROE and profit growth.

We have the mid to long-term plan, but we, as management, focused on what we execute within this current fiscal year in terms of resource and also time. I know that I'm not answering your question directly. I'm sorry. That is what we're thinking.

I understand. Thank you very much.

Thank you. We are getting close to the end time. I'd like to take one last question. BofA, Tsujino-san.

Thank you. Two questions. This year's forecast. Business investment and equity profit. It's difficult, I'm sure, to try to come up with the expectations, so higher than last year and relatively conservative forecast, I think, is shown. Earlier, you mentioned that there could be investment securities or the, it's possible that the shares are being sold quite a bit. In that sense, you are having the conservative view. That's how you got to JPY 530 billion. That's my first question. Should I go one by one?

Tsujino-san, hello. To your first question, you're referring to Toshiba. This, JPY 550 billion, the assumption that we have is that Toshiba has KIOXIA under the equity method, and ORIX also have that under the equity method. We are the LP. How Toshiba will announce their business results, we don't know. After checking on their business or earnings, if the classification changes, then from the equity method to the investment securities, it could change. I'm talking about the KIOXIA. We need to look at how they announce their business results. Once again, based on that, we would like to make the evaluation. I think that there is a sale on the gain on sale of the KIOXIA.

Based on a certain level of the assumption, you made this forecast number. Well, there's a three-month delay to incorporate the equity profit of innovation to Toshiba. As far as we can confirm, during the last fiscal year, there was a sale and the unit price of the sale is not known, but we base our forecast on the reasonable price and the parts that were sold are incorporated into the forecast.

As for the forecast for this fiscal year, the environment and energy, the impairment, I expected a bigger impairment, but it was smaller than what I expected. That is in Q4, I think, in Q4, it's JPY 6.1 billion. This, March 27th, I think there could be some additional impairment. Is that the case?

As of now, no. Well, I was the head of the energy and environment in the past, so Tsujino-san probably thought that this is low. I was actually my impression was that this was quite high, so this is regrettable. We have no plans to incorporate any additional impairment.

Just one last point. March 28th, the ROE of 11%, it's a long way in the future, and probably it's up to Toshiba. I'm sure that it was difficult for you to come up with this number, those are the very rough numbers. If no changes from Toshiba, then 11% probably is difficult to achieve. Is that right?

Well, earlier, during the press, or Q&A with the mass media, there was a similar question. Of course, it's not an easy number for us to achieve. We need to make further efforts. Naturally, when we made the plan, in the previous fiscal year, we said that our target remains the same. At 11%. We continue to make efforts, and it is an achievable number. Right now we are May 2026. In March 2028, there is still two years to go. I think there are many initiatives that we can take. We are not changing this.

As a management team, who are here today, we will be working hard in coming two years in order to get to this level. Thank you very much.

Thank you very much. That concludes the earnings call. Before closing, we would like to ask our Chief Executive Officer Takahashi to say a few words.

Again, thank you very much for joining us today. As I said in the beginning, last year, we announced our long-term vision and also long-term financial objectives that we want to achieve over time. We're talking about long duration, and there are many things that will need to be executed. 12 months have passed. We have nine years still to go. It's a very long duration, but we just need to focus on execution. We will be implementing action plans one by one steadily in order to achieve our goals. To that end, the whole management team will work closely together. We really appreciate your kind support going forward, and I would like to thank you again for joining us today. Thank you.

Thank you very much. That concludes the earnings call. Thank you very much for your participation.

It's time to begin. Thank you for joining us despite your busy schedule today for ORIX's earnings call for 9 months ended December 31, 2025. My name is Nakane from Investor Relations, Sustainability Department. I'll be the master of ceremony. Thank you for this opportunity. Today, we have Operating Officer responsible for IR, Kazuki Yamamoto. And he will provide you with an explanation for about and it will be followed by Q&A and the whole program is scheduled to be approximately 1 hour. Yamamoto-san, the floor is yours.

Thank you for the introduction. Thank you very much for taking the time out of your busy schedule to attend the ORIX Group's earnings presentation. I am Kazuki Yamamoto, responsible for Corporate Planning, Investor Relations and Sustainability. Let me explain the financial results for the third quarter of the fiscal year ending March 2026. Page 2 of the handout contains the key points we want to convey today. The first point is net income. Net income for the 9-month period was JPY 389.7 billion, up by JPY 117.9 billion from the same period last year. This was our highest third quarter cumulative net profit level. We achieved 89% of our revised full year forecast of JPY 440 billion announced at the time of first half results call. The second point is pretax profits. Pretax profits were JPY 567.7 billion, an increase of JPY 184.3 billion, year-over-year, and all 3 categories of finance, operation and investments saw profit growth compared to the same period last year. Growth was particularly strong in investments, and we still achieved an increase in pretax profits year-over-year, even after excluding a large gain on the sale of Greenko shares and valuation gains on the remaining stake. The third point is shareholder returns, along with first half results. We also announced the expansion of the share buyback program from JPY 100 billion to JPY 150 billion. By the end of January, we had completed buybacks equivalent to JPY 128.1 billion with a progress rate of 85%. This is the increased program. We will continue to make steady progress on acquiring shares to complete our full share buyback program. Please turn to Page 3. I will explain pretax profits for each of the 3 categories. This page shows our chart for each of the 3 categories, Finance. Operation and Investments with 9 months cumulative results for the previous and current fiscal year. First, at the top, the dark blue represents Finance. Segment profits increased by 8% year-over-year to JPY 145.5 billion with a progress rate of 81% against the full year forecast. ORIX Life reported growth in investment income, and we were able to increase finance revenues in the Australia and Asia, excluding Greater China. Next, the light blue bar, second from the top represents Operation. Segment profit increased by 17% to JPY 189.5 billion compared to the same period last year with a progress rate of 79% against the full year forecast. In the third quarter, we recorded a gain on the partial sale of shares held in Canara Robeco, an asset management company in India at the time of IPO of the company. Airport concessions and real estate operations also saw improved performance in the third quarter. Moreover, the Auto segment posted strong earnings, thanks to a robust used car market. The Ships business also boosted earnings with high asset efficiency, having leveraged synergies with Santoku Shipbuilding, which joined ORIX Group the fiscal year ending March 2024. Finally, the pink bar from the top represent Investment segment's profit -- segment's profit in this category increased by 100% compared to the same period last year, reaching JPY 261.4 billion, marking a significant increase in earnings. As outlined earlier, we booked a large gain on the sales of Greenko in second quarter and sales of Ormat geothermal power business, which also was a contributor. In real estate, we sold several properties, including Hotel Universal Port VITA as well as office buildings and rental condos. Furthermore, domestic PE investees mostly performed well, resulting in increased profit contributions. As a result, segment profits for the 9-month period increased by 40% year-over-year to a total of JPY 596.4 billion. Further, pretax profits increased by 48% year-over-year to JPY 567.7 billion. The difference of JPY 28.7 billion between the total segment profits and pretax profit is due to business expenses in the administrative departments and other areas. Steady profit growth across our finance, operations and investment segment was a key feature of our performance in the third quarter. For the fiscal year ending March 2026, while building on achievement to date, we aim to drive sustainable growth and further improve capital efficiency. In the fourth quarter, based on the business plan currently being formulated and the medium-term outlook for each segment, we will continue to take timely and appropriate actions as needed. Accordingly, there is no change to our full year net income forecast at this time. Now please turn to Page 4. This page explains ORIX's progress in capital recycling. The upper section with a light orange background shows sales, while the lower section with a light blue background indicates new investments. Also, the blue and pink circles in the central box shows the category for each of the businesses sold or bought. For the 9 months -- so for the 9-month period, we recorded JPY 196.6 billion in capital gains with cash inflow due to divestments amounting to JPY 790 billion and cash outflows from new investments amounting to JPY 700 billion in total. Now new investments are being continuously pursued both domestically and overseas, focusing on operation and investments among the 3 categories. A key investment in operations is the acquisition of our Hilco Global, a world-leading company in asset valuation. Furthermore, we have expanded our investments in aircraft supported by generally strong passenger demand. In Investments, we made a PE investment in LULUARQ, the operator of capsule toy specialty source during the first quarter. In the third quarter, a TOB for I-NET, a company listed on the Tokyo Exchange -- Stock Exchange Prime Market was executed. This initiative is part of Pathways, one of our strategic investment areas, which aims to undertake investment in AI infrastructure businesses and DX-related business fields. Additionally, we invested in AM Green convertible bonds and logistics facilities. Although not shown on this page, we announced the formation of a PE fund with the Qatar Investment Authority, QIA, last November and although this fund specializes in domestic investment, but investment in LULUARQ and I-NET were before the fund launch. So we plan to leverage the fund for use in future deals. Gains on asset sales, cash inflows and new investments are all progressing steadily. However, there is no change to our full year forecast from the revision announced at the second quarter. Now next Page 5 and 6 provide a summary of segment profits and assets. On January 1, 2026, we announced organizational reforms to restructure our 10 segments into 3 business divisions: the APAC business division, Infrastructure Business Division and Europe and America business division as well as new banking and insurance units. However, for FY '26 March end, we continue to manage our business using the existing 10 segment framework. So we will explain our results using these. For detailed information on the performance of each segment, please refer to the slides from Page 10 onwards. First, cumulative segment profit in Corporate Financial Services and Maintenance Leasing for 9 months period increased by JPY 14 billion, up 21% year-over-year, reaching JPY 80.2 billion. The Corporate Financial Services unit in the second quarter posted a profit on the sales of ORIX Asset Management and Loan Services Corporation and Nissay Leasing. The business enjoyed increased fee income from various activities, including operating lease investments. Together, these resulted in increased profits year-over-year. The Automobile unit steadily expanded earnings by successfully passing through higher maintenance and other cost increases through pricing with customers understanding. They also sustained strong used car sales. This helped the unit achieve its highest ever profit for the third quarter. The Rentec unit achieved growth in inventory style rentals of ICT equipment on Windows 11 related replacement demand and saw robust sales of used rental equipment resulting in profit growth. Despite Auto and Rentec posting growth in new auto lease executions and PC rentals, respectively, segment assets decreased by JPY 10.1 billion to JPY 1.8745 trillion compared to the previous period year-end due to the sales of ORIX Asset Management and Loan Services and Corporations. Next, Real Estate segment profit was JPY 56.9 billion for the 9 months. The Investment and Operation unit posted revenue growth of the sales of -- from the sales of Hotel Universal Port VITA as well as from the operation of Inns and Hotels. However, it experienced a year-over-year decline in segment profits, owing to the absence of the large-scale gain from the sales of 100 [indiscernible] in FY '25 March. Details concerning the outlook for the facilities operations business will be explained later. The Daikyo unit was increased profits aided by activities such as the sales of rental condos. Segment assets increased by JPY 44.3 billion compared to the end of the previous period, reaching JPY 1.2025 trillion. The main reason behind this increase was investment in the Osaka Integrated Resort project, progressing as planned. In addition, assets rose owing to the completion of several logistics facilities by the investment and operation unit. And Daikyo also increased its investment in newly built condos. The PE Investment and Concession segment achieved profit growth of JPY 27.8 billion or 42% year-over-year to JPY 94 billion. The PE Investment unit reported higher profits year-over-year due to robust performance at current domestic PE investees such as Toshiba and DHC. On a stand-alone third quarter basis, we did not execute any individual exits from our PE investments. However, equity earnings from our investment in Toshiba made significant contributions. As a result, quarterly profit exceeded both the first quarter of the previous fiscal year, which included gains from the sales of Sasaeah Holdings and the fourth quarter when the exit of Wako Pallet was realized. Regarding the Toshiba investment, while we recognize its earnings as equity method investment income, there is a 3-month lag in reflecting those results in our financial statements. Now the Concession unit continued to perform well as Kansai International Airport saw increased passenger numbers, especially on international flights. We will explain the impact of China later, but please note that earnings at -- the third quarter earnings at Kansai Airports will be reported together with ORIX's fourth quarter results with a 3-month lag. While the impact for FY '26 March is likely to be minimal, we anticipate a certain downside for the next fiscal year. Data on passenger numbers and other details for the 3 Kansai Airports up to December are shown on Page 7 for your information. The Investments and Concession segment assets was up by JPY 127.7 billion from the end of the previous period to JPY 1.1506 trillion. The main reasons include new investment in LULUARQ, the successful TOB of I-NET, making it our subsidiary from this third quarter and increased balances in equity method investments. Environment Energy segment's profit increased by JPY 109.1 billion year-over-year, reaching JPY 102.2 billion, a substantial profit increase is mainly due to gains on the sale of Greenko energy and valuation gains on the remaining stake as well as gains on the sale of Zeeklite and Ormat. We completely divested our stake in Ormat in third quarter. Domestic earnings show that solar power sales revenue decreased in the third quarter due to seasonal factors, but electricity retail sales volumes and prices remain strong. Regarding overseas operations, interest income from convertible bonds of AM Green, which were purchased in second quarter, contributed to positive performance. Additionally, over [indiscernible] sales are in the recovery trend, we continue to remain cautious on development and operation projects at this firm. Segment assets decreased by JPY 11.1 billion to JPY 1.002 trillion compared to the end of the previous term due to capital recycling. Profit of the Insurance segment increased by JPY 12.4 billion, up 20% year-over-year, reaching JPY 74.1 billion. The impact from expansion in investment assets and rotation of portfolio securities has boosted revenue. In terms of product sales, along with a single premium wholesale insurance Moonshot and income protection insurance Keep Up. Launched -- and in the first half of FY '26 March, respectively, sales of whole life insurance, RISE and Yen Can launched in December was also strong. Segment assets increased JPY 193.7 billion to JPY 3.203 trillion compared to the end of the previous term. Profit of the Banking and Credit segment decreased by JPY 2.2 billion year-over-year, reaching JPY 19.9 billion with interest rates rising, while asset management yields have gradually improved, funding costs for deposits are rising ahead of those. The main reason for the year-over-year decrease is the booking of losses from selling long-term bonds through the third quarter aimed at improving the bond portfolio. We are responding flexibly with priority on maintaining financial soundness and enhancing future profitability. Segment assets increased by JPY 115.3 billion to JPY 3.2599 trillion compared to the end of the previous term. New executions of investment real estate loans and lending to strategic areas have grown steadily. Additionally, we explained in the first quarter, a JPY 30 billion dividend was paid out to the parent company, ORIX in July of last year, helping to optimize capitalization. Profit in the Aircraft and Ship segment increased by JPY 4 billion, which is 9% higher year-over-year, reaching JPY 48.6 billion. Aircraft leasing saw increased plant sales in the third quarter, resulting in profit growth during the 9-month period. Lease rates continue to improve and the business environment remains favorable. Of note also advanced aircraft sales and booked profit contributions from the Castlelake portfolio, which was acquired in January last year, resulting in similar profit growth. Ships saw increased ship sales in the third quarter, but experienced a slight profit decrease due to the absence of the sharp rise in charter fees in some contracts seen in Q2 of FY '25 March. Segment assets increased by JPY 46.5 billion to JPY 1.2785 trillion compared to the end of the previous term. Aircraft leasing assets increased on investment of new planes, but assets in the ships unit was lower on sales on owned ships. And overall, it was flat, excluding ForEx. ORIX USA segment reached JPY 14 billion for the 9-month period, showing positive recovery, thanks to valuation gains on investments in PE booking in Q3. However, profits for the 9-month period decreased year-on-year due to the absence of the reversals of the credit costs booked in FY '25 March and the credit loss expenses and impairments booked in the same year. Credit losses and impairments mostly stemmed from real estate lending originated primarily during the post-COVID period of financial easing and legacy assets before those days, higher U.S. dollar interest rates and prolonged inflation and uncertain economic outlook stemming from tariffs and other factors also contributed. To date, we have strengthened our investment and lending standards, applied more rigorous screening to new deals and enhanced risk management to existing assets. And through these efforts, we continue to improve and reshape our portfolio. Please refer to supplementary information, Page 25 and 24 for further details of OCU performance. Segment assets increased JPY 491.6 billion to JPY 2.0856 trillion compared to the end of the previous term. Excluding the impact of the Hilco Global acquisition and exchange rate fluctuations, assets are declining, and we are steadily moving forward with rebuilding our business and portfolio rotation. Profit in ORIX Europe segment increased by JPY 9.2 billion, which is a 24% rise year-over-year, reaching JPY 47.3 billion. In the third quarter, ORIX sold a portion of its holdings in Canara Robeco in conjunction with its IPO. Additionally, Robeco Group increased net cash inflows and expanded AUM to a record JPY 500.5 billion, boosting management fees and underpinning profits. Segment assets increased by JPY 127.6 billion to JPY 796.9 billion compared to the end of the previous term, mainly due to exchange rate effects. Profit in Asia and Australia segment increased by JPY 11.4 billion, which is 41% rise year-on-year, reaching JPY 39.3 billion. Although the increase in profit this quarter was partly driven by one-off factor and valuation gains and unlisted equities, we continue to restrict investment stance in Greater China, while in other APAC regions, we expanded earnings primarily through financial income generated by local operations, resulting in overall profit growth. Segment assets increased by JPY 125.9 billion to JPY 1.851 trillion compared to the end of the previous term. Assets have increased in some regions such as Australia and India, mainly due to exchange rate effects. Please see Page 29 for graph showing a segment asset breakdown by country and region, where China has seen recent increase driven by exchange rate effects. That concludes the explanation by segment. Please turn to Page 7. I would like to add some explanation about inbound tourism. Concession centered on Kansai International Airport is reflected in ORIX's consolidated results with a 3-month lag through the earnings of Kansai Airport. So for this third quarter, we incorporate Kansai Airport's July through September performance, which contributed to higher profits. Since December, the number of Chinese passengers has declined approximately 40% year-on-year, just looking at September. And in addition, late January, major Chinese airlines announced extensions of the deadlines, allowing free cancellations for Japan-bound tickets. As a result, unfortunately, we expect downward pressure on earnings and continue for the time being. However, the number of international passengers and inbound tourists in general, well, you can see the trend after the COVID-19 pandemic and also the impact of Mainland China. You can see that on the right-hand side graph. As for real estate operations in Kansai area, there is an impact of a discount, mainly focusing on group tourists from China. And therefore, currently, it is difficult to increase the unit price. However, real estate operations directly operated by ORIX, we have been working to improve RevPAR focusing on hotels in Kansai region. The share of Mainland Chinese customers to total assets in both hotels and inns is small. And ORIX Hotels and Inns tend to specialize in individual Chinese travelers and earnings have remained steady. Meanwhile, some facilities have seen bookings slow during the Lunar New Year period. So we are carefully monitoring the situation. Real estate operations like hotels and inns are affected by inflation and rising construction costs. And therefore, we will aim for sustainable growth while carefully selecting new investments. There's basically no impact on rental cars because driving licenses issued by [indiscernible] in Mainland China are not valid in Japan. And in Aircraft and Ships segment, we continue to see steady passenger traffic, mainly from Europe and United States and solid supply and demand in aircraft. And therefore, overall ORIX's inbound tourism-related businesses appear to be well balanced. Thanks in part to the success of the Expo held last year, global interest in the Kansai region rose significantly, both in terms of the economy and opportunities. In our integrated report 2025, we highlighted a range of value creation initiatives, including the Expo Kansai International Airport, advanced opening of [ Kita ] district and the launch of globally branded hotels. We would give a broader audience and effortless way to experience the atmosphere and momentum of this region. And to that end, we are planning to introduce a video -- short video on our website. Apologies for taking a moment during this earnings presentation, but we would like to share this video teaser preview over the next 90 seconds or so. [Presentation]

I believe Kansai is now entering a period of significant change. Kansai refers to a region in Western Japan centered around Osaka, Kyoto and Kobe. We know that there is a great expectation. So during the World Expo, many dignitaries are participating from around the world, we were able to show the world that Tokyo isn't the only global city in Japan, Osaka is also a global city. We want to be very active in Asia as a result. And I hope that the people understand that what we're trying to do. Thank you very much for viewing the video. Please turn to the presentation material and turn to Page 8. This is our financial strategy, consolidated balance sheet. Financial breakdown is shown on the left and key indicators on the right. Total assets increased by JPY 1.2594 trillion compared to the end of last year. Excluding the FX effect, there was an increase of JPY 800 billion. And the largest factor was the consolidation of Hilco Global. And then we have a PE investment and also assets increasing in insurance and banking. But for insurance and banking, self-funding is also possible. Long-term debt, short-term debt and deposits increased by JPY 363.4 billion, mainly due to the growth in deposits in ORIX Bank and the new bond issuance. We will continue to diversify funding sources and increase the ratio of long-term borrowings to maintain stable and competitive funding. Insurance contract liabilities and policy reserves decreased by JPY 234.2 billion. This was mainly because of higher discount rate used to measure insurance contract liabilities, resulting in a reduction of liabilities on the balance sheet. And this more than offset an increase of new single premium policy sales. And the total shareholders' equity was increased by JPY 495.2 billion, of which JPY 234.2 billion was attributable to the reduction in insurance contract liabilities. And the remaining increase primarily reflects the accumulation of retained earnings. Shareholders' equity ratio is 25.3%. The ratio, excluding deposit is still at 1.5x. On the right-hand side, the graph shows the employed capital ratio, which remained at around 90% due to capital recycling. By maintaining appropriate employed capital ratio, we aim to maintain an international credit rating at the A level going forward. Please note that the calculation model has been updated since -- from Q3. There are no changes in terms of risk tolerance or risk-taking policy, but the risk ratios are now defined at more precise business and unit levels than before. While uni-funding costs, including bank deposits are gradually rising, foreign currency funding costs, mostly in U.S. dollars continue their downward trend. We strive to reduce capital costs by leveraging our competitive A-level credit ratings and diversified funding capabilities. Please turn to Page 9. Progress in our share buyback program is as indicated in the executive summary. Payout ratio for full year is 39% of our net income per share. We want to maintain this level. Left bottom, JPY 153 or so per share, this is based on the assumption of net income forecast of JPY 440 billion. We will give further details at the end of the fiscal year. That concludes my presentation. Thank you very much for your kind attention.

Thank you. We are now ready for the Q&A session. [Operator Instructions] So we have from JPMorgan [ Sato san].

Yes, I am Sato from JPMorgan. So I'd like to ask a question about ORIX USA, a little details. However, at the time of financial results announcement this time, so the closed ORIX Capital partner, I think you have closed it. So is it related to that, is what I want you to confirm? And Hilco Global, so you have integrated the company under consolidation. And I know that you're going to be revisiting your business plan based on this acquisition. And on Page 24, earnings outlook, for example, as compared to 3 months ago or 6 months ago, it is going to be revised to downside or rather than upside. And also, if there was to be any kind of progress that is made in terms of other businesses.

So first of all, OCP evaluation -- profit within the portfolio, the investees, there was a growth of EBITDA, and that was quite significant. And as a result, that evaluation gain was -- occupies the majority. And also other closed deals, so we are aspiring to exit sooner rather than later. And at the end of the day, we are considering to exit out of those investments. And as for Hilco Global, thank you for your question, has been shown, so we have 100 days plan, which is currently being executed. And so ORIX Group Global and Hilco and also out of the entire group, -- so what -- how can we enjoy the collaboration, in fact, is what we are foreseeing. On Page 25, as you can see, so Hilco Global, where it is heading to, like automotive, like parts and components and also at the same time, advisory businesses. So it is quite speedy. So without losing any kind of strength of Hilco, we would like to acquire new kind of businesses that would work out to be positive. And also OCU as a whole, Hilco Global inclusive, the overall picture of the matter is in the business plan that we are formulating currently, leveraging on our balance sheet, we are, in fact, scrutinizing the details so that the OCU business can be rebuilt, and we hope to be able to explain that at the next earnings call. So I hope this answers your question.

Well, in that case, just so that I'll be able to have a better understanding. So what was closed back in January. In the next quarter, irrespective of the size, I understand that there will be a profit that will be generated.

As to your question just now, towards the closing, so there will be an evaluation that will be conducted. And so additional kind of gains on sales is not to be expected because the valuation gain has already been incorporated.

From Morgan Stanley, MUFG Securities, Takemura-san, please.

This is Takemura, Morgan Stanley. I have a question about the overall progress and your view on the progress. Third quarter was closed. In the second quarter, you upgraded the plan, and even against that plan, the progress was quite fast. So compared against the plan, what was better or worse or was stronger or weaker? Can you please share as much as possible. And also because of the high progress rate, maybe in the fourth quarter, do you expect some downside that will offset this faster progress.

Thank you for your question. In the first 9 months, first of all what is progressing strongly. This is Page 3. I would like to use this page to explain. As I have mentioned, as for investment, this is JPY 261 billion and Greenko JPY 95 billion. And in terms of investment efficiency, this is very good. Toshiba noncore business divestiture and also Kioxia post IPO. So these are all captured with 3 months for LP earnings, and this is progressing faster than expected. But we're talking about the semiconductor share prices. So this is not something that we should be commenting on, but the share price level is quite high in our view. As for the operations, as we have explained, Canara Robeco again, this was very smoothly launched. And with remaining share, this is equity based investment. We will continue to move to a situation. But including the emerging markets, we see this kind of business definitely growing. And the third point I would like to mention is based on the result of the election, we expect the domestic economy to grow stronger. I talked about inbound, but automotive, lease, IT and also funding requirement. We believe all of these are moving very solidly. And until we close the fiscal year, we will continue to build up the deals, and we are really hoping that we can do better than the plan in terms of finance business as well. However, with regard to the first quarter, as I have just explained, for the full year, it seems to be good, but performance for next fiscal year or the next 3 years, we need to verify the outlook and think about the capital efficiency as well as the solidity of the earnings plan. And based on that understanding, we will continue to address the situation. So I'm not talking about specific deals or projects, but we will be evaluating things on a regular basis as appropriate. And right now, I don't have anything specific that I can mention. But we will continue to scrutinize the business plan and share information. And I hope that answers your question.

Yes. Just one point of clarification. USA, gain on valuation, was this part of the plan?

Thank you for your question. Ultimately, company's situation is always looked at in detail. So this is within our expectations, we can say. But invest in ORIX USA and ORIX Capital Partners website, when you look at website, you know who are investing and the telecom network data center service investees impacted by the AI boom in the U.S. performing very strongly. And the EBITDA growth of those companies can be incorporated at fair value, which means that this domain is growing stronger than we had expected. And this is one of the factors that was reflected in the performance in the third quarter.

So next, we have from SMBC Nikko Securities, Muraki-san.

I am Muraki from SMBC Nikko Securities. So I may repeat some questions, but towards the fourth quarter in terms of cost incurrence, is there anything that we need to be mindful of. So in posting some of the losses in the past, such as ORIX Bank, ORIX Life. There was some loss on sales of some fixed income products. And also in the United States, credit cost of JPY 4 billion was generated as well. So there was some credit loss that had incurred as well. So in more precise manner, I wasn't able to hear you. But with regard to Elawan, with the individual kind of project, I think you said taking a cautious and careful step. I suppose there is a goodwill. Can you carry it over the goodwill for Elawan. So I know that there are a lot of technical kind of details, financial technical details, but...

Okay. I would like to answer one by one. First of all, as I have mentioned, in whatever the way the cost that may incur, so it's not that we are being careless, but such as the public AI or data center that has been remaining to be pretty robust, but also tariff related, trade related, in fact, remains to be uncertain. So therefore, it's pretty mix.and real estate although the short-term interest rate is coming down, but long term, especially super long-term interest rate is still rising. So the credit cost may be posting dollar interest rate, while it was almost 0, especially the short-term rate, especially the mortgage loan that is increasing. So some credit loss that may incur has been incorporated and also legacy assets out of the corporate is what I have mentioned is kind of corporate risk. There are certain provisioning that may perhaps prove to be necessary. So this is why every quarter -- so some of the fixed income assets that we will be kind of listing them out for seeing some risk that may generate some losses. So as for the fourth quarter, I think the same kind of procedures will be undertaken. So from that perspective, with regard to the credit cost for this year, so we will not wait until the fourth quarter. And at the regular pace, we would continue to revisit the situation so that we'll be able to in advance incorporate the losses, if there was to be any. So as you have mentioned about Elawan, on an individual project by project basis, we have been taking a very careful and also cautious stance. So Elawan's goodwill and also at the same time, the project that is in progress, for example, work in process, for example, and we have been incorporating some intangible assets as well. So the business progress as compared to our initial plan, especially at the reset of the economy and other factors taken into account, there has been some delay, however, in the project, but we are beginning to see some signs of improvement. So therefore, the plan will be reviewed. And so this is what we need to do, we know. But if there was to be any kind of aggravation in terms of the P&L, then we will not wait until the very end, but rather to review the project itself. So Elawan at the center on a midterm business plan perspective by project by project, we are scrutinizing each and every project and also reflecting the result of the assessment. And in light of all the individual assets, we would like to take necessary measures so that there will be no carryover of any kind of negative legacies onto the next term. So as has been mentioned, this year as well as the last as a result of yen's interest rate rising, if there was any loss incurring from the bond of fixed income assets, we are incorporating some of the foreseeable losses by the third quarter. In terms of the amount, it is not that sizable, to be honest. So we would not have unrealized loss, not a huge amount. And as a result of some impairment that has been conducted, there should be no further impact that we can foresee. On the other hand, life insurance, it is true that the unrealized loss is enlarging. However, basically, -- so we have -- we do kind of match it against the policy kind of asset as well. So in terms of the switchover, order churn has not been happening very much, which means that from an operation perspective, there seems to be no kind of -- the accounting kind of loss that we may have to calculate. We are not prepared to be doing so at this point in time, so I think we still have some leeways. I will not be able to say anything in definitive terms, but that's all I can share at this point in time.

Daiwa Securities, Watanabe-san, please ask your question.

This is Watanabe, Daiwa Securities. I would like this question about Page 8. 92% at the end of September, now 89%. This is improving the employed capital ratio. And you have explained this in your presentation, but what did you change? And did the target level change. And in thinking about how to use the excess capital, do you have any updates on the capital strengthening for the insurance?

Yes, please turn to Page 8 for employed capital ratio. [indiscernible] was updated in the third quarter. So I would like to add some explanation. As was said before, year-end team looks at the risk dashboard. We have been improving the dashboard. Portfolio risk management is now more detailed. We can look at this on a project-by-project basis. We are trying to do that. And the risk volume that we were looking at as a lump sum was broken down to project level and the risk level was actually lower than we expected. So the employed capital ratio is now lower. And maximum loss based on global financial crisis. That was what was used as a parameter, but we also reviewed that. So from 91% to 81%, the ratio has come down. Does it change our risk appetite? Well, this is just a result of calculating in great detail, so it doesn't directly impact our risk appetite. However, 10% investment capacity of buffer is present. And also in terms of PE ratio and the equity ratio, this is quite conservative. But as long as it doesn't negatively impact our rating, it is actually possible for ORIX to make flexible investments. And your second question about liability for Life assessment. Thank you for your question. On the left-hand side, on the table, you can see the insurance contract liabilities, reduction of JPY 234 billion. I was explaining that. And this is mark-to-market based on the long-term bonds. As you may know, toward the end of last year, 20-year or 30-year term bond issuance reduced. So there are fewer bonds that we can refer to. So what can we do now? Now the life insurance company is looking into various parameters. Financial institutions and accounting auditors, they are discussing these details in order to review the references so that we can improve the index to provide more stable evaluation of the assets. And as a result of the improvement, the life insurance company wants to introduce better indices. And if they can do that, we believe that is an improvement. And this is still in discussion. And we're just telling you what kind of initiatives are being done. So bond issuance was smaller, spread was expanding. These factors had impacts, and we wanted to make some adjustments. I hope you understand, I'm sorry that my answer is not very clear, I know.

So after the adjustment, if you can just step evaluation, can you utilize the excess capital for shareholder return, for example, growth investment?

Well, the liability assessment evaluation, we don't need to be overly discounted. So we have to check that first. Utilization of net assets is not really the focus. We're looking at the parameter whether the parameters are accurate. We wanted to evaluate the accurateness of the parameters.

Next, we have from Mizuho Securities, Sakamaki-san.

I am Sakamaki from Mizuho Securities. I have one question. So this time, from the deck, so capital profit and base profit, I think, was not incorporated because I think there is a lot of evaluation gain or evaluation profit. So how -- what was your takeaway in accordance with the previous way you were expressing?

So capital gain -- as to the capital gain versus base profit, we did not incorporate such a page this time, but I think we had some mention of this. So capital gain, in fact, is shown in the capital recycling page. So let me make sure. So JPY 195.6 billion. And if you were to subtract that, you would end up seeing how much was generated as the best profit. So as a result of this JPY 196.6 billion, and so therefore, you see this was not to be kind of replicated. So therefore, some -- from investment community had said that it is quite misleading. So this is why, as a result of escalating this to the Board and we have decided to disclose on a fee category basis and Canara Robeco's gain on sales, for example. So capital gain business of finance could be a possibility as well. So it's not that we have decided to refrain from disclosing what we used to. But as for the base profit, for sure, it is steadily growing. And so therefore, we just wanted to prioritize this closure based on those 3 categories. And so the base profit versus capital gain, so we do, of course, respond. Should you have any questions and should you want the precise numbers by all means. Thank you very much.

Nomura Securities, Sasaki-san, please ask your question.

This is Sasaki, Nomura Securities. Just one point of clarification. Performance up to Q3, pretty strong. Credit cost is posted. And in the fourth quarter, certain things may happen. And as a result, next fiscal year or the next 3 years, how is the plan shared with the management or how is it aligned?

With Takahashi-san as a new CEO, more emphasis were placed on ROE. The biggest point of your question, I believe, is can we invest actively into high-quality deals. And this is a focus of our discussion internally. PE investments generating new profit. As Takahashi-san mentioned, this is one of the important strategic pillars. So wants specifically, which domain do we want to promote this? This is the most imminent discussion. And once we have the results for FY '27 March and '28 March, we should be able to aim for continuous growth in profit. But divesture will also happen and as a turnover will also happen during this time period, and we may have some new capital. So JPY 150 billion of share buyback. So we added JPY 50 billion. JPY 150 billion is not the baseline going forward. But we increased from JPY 50 billion to JPY 100 billion in the beginning of the year. So we want to be flexible in considering the shareholder return as well. So this is something that we're discussing for the short term. For JPY 100 billion of performance as we said when we made the adjustment, this is the highest in accord, and it reflects the major sales like [indiscernible]. And for next fiscal year and beyond, we have to check again. But our own watermark has -- high watermark has also increased. But we will not just look at that. We will also think about high capital efficiency investments. I don't think I'm answering your question very directly, but I hope that's okay.

What you have just said is profit growth will continue to some extent. And we want to increase ROE and meet the 11% target for ROE. Is that the correct understanding. Because first half and second half had slightly different nuance.

Absolute amount of growth in terms of profit, I'm not saying that we are committing to that within this structure. Whatever contributes to capital efficiency, well, in terms of P&L losses, we will not be just focusing on that, we will try to do that. But the ultimate objective is increased capital efficiency. So if we do something financially and the PL profit drops from this year's high level, well, that kind of thing could happen. But business plan for next fiscal year has not been translated into financial plan just yet. But once we have a better idea, we would like to explain that perhaps at the end of the fiscal year presentation.

Bank of America, Tsujino-san.

This time I think you had some evaluation gain and also capital gain in Asia as well as in North America as well. So with regard to PE investee in U.S. as well as in China, up until now, you had -- you, in fact, shared your idea as to being stringent in terms of the scrutinization necessary for those investees. And this is why you did not revise upward your earnings. And so why you thought that you have to remain cautious, you did manage to enjoy gain on -- enjoy capital gain or evaluation kind of gain as well. So was your outlook wrong? Or were you anticipating some loss generation from some kind of investment or investee. So this is why you have not made any kind of changes or the revision to your earnings despite the fact that you have been exceeding your expectations. So that is the first question. And then can I expect the fourth quarter to be even on upward trend. And -- but of course, it may have to be revisited perhaps. So it's just that your outlook was slightly kind of wrong and PE investee in U.S. was pretty strong. But then of course, Elawan is emerging and that is kind of encouraging you to have the heads up.

So I hope that I will be able to answer to your question as you have in accordance with your intent. So in China as well as in United States, so the capital gain as well as evaluation gain as a result of the evaluation that we have conducted on an individual basis. So the risk appetite as well as the direction going forward, which I mentioned earlier, in terms of the P&L of that just as been pointed out by Tsujino. So the nuance may be slightly different from what we have mentioned in the past that is something that I will not be able to deny. So especially USP investee, in the areas of technology, for example, it is expanding on a fair value basis. So therefore, it is really based on the individual P&L. And also in the United States or North America, we were proceeding with reducing down the position. So therefore, we hope that this evaluation gain should lead us in generating the actual gain on sales. So Asia, while we enjoyed some evaluation gain, but from an accounting technicality, so it's not -- but it is recovering from the bottom, in other words, in some cases. So therefore, on an individual name-by-name basis, there were mixed situations. So therefore, in terms of the risk appetite-wise towards investment, we remain to be kind of conservative or we remain to be -- we would contain from making aggressive investment, refrain from making such investment. But at the end of the day, what is proceeding in a strategic manner -- so those, unfortunately, will start to perhaps dilute in other words, going forward. So towards the fourth quarter in each of the business lines, so while we are scrutinizing each and every business line. With regard to Elawan, that is one category and also with regard to real estate as well, we are doing the same, so that we'll be able to take necessary actions earlier rather than later. And so dependent on the business environment changes, external factor changes against such a backdrop, if we cannot foresee an immediate recovery in some of the businesses, we do not wait until the very end, but rather take earlier actions. So in other words, we will prioritize taking actions as opposed to wait and see. So from that perspective, we may have some further evaluation gain or losses. But Elawan, for example, is one. And also with regard to real estate, there will be some kind of preparation in terms of procurement and so on and so forth. So therefore, I mean, so far as we haven't gone as far as being able to explain one by one, to the investment community, but there is some kind of progress that we may be able to make going forward. So I just wanted to indicate the direction going forward. I hope this answers your question in some way or the other.

Well, if I could ask a question about Robeco's AUM on a Q-on-Q basis, it is increasing quite significantly. What is that the backdrop? So it is increasing by 18%. So is there anything that you can explain as an appeal?

So Page 27, yes, we have shown. So the Robeco, the asset management fee is under pressure, but the AUM is what we feel the need to kind of increase on a 2-dimensional basis, but also at the same time, we are trying to enhance the profitability as well. So relatively speaking, we did manage to win the mandate for a quite sizable fund or deal. And that, in fact, was reflected. And also equity market is remaining to be strong, and on the other hand, the fee income competition, especially advisory as well as index, it needs to be tough. And so therefore, we would like to remain to be competitive and centered around Robeco, of course, in proceeding with this business. So AUM, it is true that it is growing significantly, but we hope to be able to generate growing of profit out of this growth of AUM as well as AUA.

Okay. Well, in that case, in this there is no kind of specific strategy that worked out to be positive. You will not be able to mention that?

Well, we hope to be able to share some further details. But as to Tsujino-san knows, like index related, for example, what was build, what was not, if you were to -- you will be able to perhaps enjoy a better inflow of the fund, but the needs are quite limited. So therefore, if you were to seek for the quantity, for sure, you may be able to benefit from it. But of course, we will have to ensure, as I have said, that leads to our betterment of profitability. So this is what we need to work on. So it is not just the quantitative improvement but also we are trying to achieve qualitative improvement at the same time.

Before we run over the scheduled time, this is going to be the last question. [indiscernible], please ask your question.

This is Niwa speaking. Follow up question to what Tsujino-san asked. My question is management resource allocation and also appetite for Japan. Real estate was covered broadly. And my question is, in Japan, what is better areas that you would like to focus on? And is there a sign for improvement in terms of demand for financing? 17 strategic domains have been identified by the central government. And are there some of them in line with the business that ORIX is trying to do?

More domestic market, as I explained during the real estate mid-market private equity and manufacturing included new economy-related area is seeing increase in the interest rate. So lease and CapEx investments demand strengthening. This is our impression. For example, for auto lease cost increase. Well, we asked people to send that, and it was not really accepted, but recently negotiation is most smooth, retention is going up. So based on the financial capacity, tangible asset-related business is looking very promising in Japan as well. In relation to the strategic focus, ship loading, well, we are not really thinking about going directly into ship loading. So there is nothing within the 17 areas that are committed. But we believe that intermediary business will grow. For example, [indiscernible], which we made a release the other day, we are getting a good sense that this is going to be a good business. And we have adjacent areas surrounding the 17 pillars mentioned by the central government, and we will discern, identify good areas for us to enter. So that's one direction. And in addition, I'm sure that [indiscernible], but the result of the election was very clear. So looking at the governmental budget and financing, we believe that we will be able to see which private sectors will be more active and we will try to capture those. I think the budget is still yet to be discussed in detail. So we will continue to monitor that and listen to the customer needs, our customers' voices and response to their needs for financing, and we have great expectations as we try to build the business plan for next year.

Another related question. Overseas business domestic ratio compared to what you had in the midterm plan, maybe the ratio of domestic business is going to be bigger? Is that true or not?

Well, the domestic market is not expected to improve dramatically. And for overseas, when you look at aircraft, for example, in aircraft, crafts and ships, in Asia, we were controlling risk taking. So we believe that there is a good expectation there. In terms of overseas versus domestic ratio, my impression is that this is not going to change largely, but hopefully, we can provide more information in May.

We would like to close the Q&A session. And lastly, we would like to ask Yamamoto-san to close.

Thank you very much. So the third quarter remains to be strong. Thank you for your support. And just as I had explained, so we will be revisiting the business plan. And from Takahashi-san CEO, we hope to be able to share our plan going forward at the time of the earnings call at the end of the fiscal period. So after working hard at the fourth quarter businesses, so we will then continue to seek for your understanding as well as your support. So with this, would like to bring third quarter earnings call to a close. Thank you very much for your participation.

Now that is time. I would like to begin the ORIX Corporation's second quarter financial results briefing for fiscal year ending in March 2026. Thank you for joining us. I'll be the facilitator. I'm from IR, Sustainability Promotion Department. My name is Nakane. We have 2 speakers today. We have a Director, Representative Executive Officer, President and COO, Hidetake Takahashi as well as our Operating Officer, Head of IR, Kazuki Yamamoto. First half will be presented by Takahashi. Second half by Yamamoto then we'll have a Q&A session. We are planning to have 60 minutes for this briefing session. Takahashi-san?

Thank you very much for taking your time out of your busy schedule to attend the ORIX Group's financial results briefing today. I'm Hidetake Takahashi, ORIX Group's COO. I'll explain the key initiative as the business progress toward achieving the long-term vision announced in May this year, which is making impacts through alternative investments and operation and business solutions as well as management indicators of 15% ROE and JPY 1 trillion in net profit for the fiscal year ending March 2035. And following this, Kazuki Yamamoto, who is in charge of Management Planning and IR, will explain the second quarter financial results for the fiscal year ending March 2026. If you could please refer to the Page 3. There are 5 points that I'd like to convey today. First, I'd like to discuss the revision to our earnings forecast. Our first half, all 3 categories, finance, operation and investment performed well and capital recycling is also progressing smoothly. As a result, we decided to raise net profit forecast from the previous JPY 380 billion to JPY 440 billion. We also revised the full year dividend forecast per share from JPY 132.13 based on a net profit of JPY 380 billion to JPY 153.67. And in addition, as we look forward to proceed with optimizing our portfolio and capital structure and considering the completion of the sale of Greenko announced yesterday, we have decided to increase the amount of our share buyback program from JPY 1 billion to JPY 150 billion, (sic) JPY 100 billion to JPY 150 billion and Kazuki Yamamoto will explain in more details shortly. The second point is the establishment of a PE fund together with the Qatar Investment Authority, which was announced yesterday. ORIX is strengthening our asset management function to help us achieve the long-term vision. As a milestone, we aim to achieve 11% ROE and JPY 100 trillion in AUM by the fiscal year ending in March 2028. Since the establishment of a PE Investment segment in 2012, we have executed over 30 investment in Japan and all utilizing our own balance sheet. We have reached an agreement with Qatar Investment Authority to establish a fund aiming at investing in Japanese companies. For the first time, we will incorporate the third-party funds into this business. Through this fund, which has a total scale of USD 2.5 billion, we will expand our investment, including those in a large-scale project. ORIX will contribute 60% and QIA, Qatar Investment Authority, 40%. The main investment target will be business section type deals, privatization of listed companies and carve-outs with an expected investment size of JPY 30 billion or larger in EV project. We will intend to continue strengthening our asset management function, including our business segments. The third point is our future business expansion with Hilco Global. In September, we acquired a U.S. company, Hilco, a subsidiary. Hilco provides services globally such as evaluation and disposal of mobile assets like inventory and equipment, intangible assets like IP and trademarks and ABL asset-backed lending. ORIX USA will position Hilco as a platform for creation of ABL investment fund, strengthening its origination capability and expand private credit business. Similar to the domestic PE fund mentioned earlier, this is a strategic investment to aid expansion of our asset management business. And further, Hilco's asset evaluation services are a countercyclical business. In an uncertain economic environment, we believe we have acquired a fee-based business at a good time. Hilco's evaluation capability, asset disposal expertise will be utilized in assessing risk as we expand credit globally. The fourth point, Osaka IR project, integrated resort. We aim to open the IR in Osaka City around the fall of 2030 and construction began in April of this year. In September, some changes were made in existing plan. Primarily, these involve higher costs after taking inflation into account from currently JPY 1.27 trillion to approximately JPY 1.51 trillion. After carefully reviewing business income and expenditure plan, we believe that the higher cost will not significantly impact the project profitability. The Osaka-Kansai Expo concluded successfully in October. We were able to confirm growing inbound demand in the Osaka, Kansai area with many foreign tourists visiting -- in Osaka, which is also a birth space of ORIX. In the Kansai area, we are engaged in the development and operation of our sales office with offer financial -- which offer financial services, Kansai 3 airports and Umekita project and [indiscernible]. We also operate the business such as hotels and inns, we will maximize synergies by adding Osaka IR to these resources. Finally, my final point is portfolio optimization. As I discussed in May, the most important measures to achieve our ROE target are disciplined portfolio management and sophisticated risk management and new business creation, those 3 points. We have begun utilizing a dashboard to visualize the status of our business portfolio in finer detail and are progressing with our portfolio optimization. We have sold all of -- all or partial shares in Greenko Energy, ORIX Credit and Ormat and Nissay Leasing, Canara Robeco and other businesses. We will continue to review our portfolio based on our 4 criteria: growth potential, capital efficiency and impact on credit rating and group synergies. We will continue to revisit our portfolio. And furthermore, in July, ORIX Bank paid a dividend of JPY 30 billion to ORIX Group. We will also optimize the capital scale of other group companies, not just the bank. As of the end of September 2025, the AUM became JPY 88 trillion, bringing us one step closer to the medium-term target of JPY 100 trillion. We will also continue to proceed with the transition to an asset-light portfolio. Out of the plan that we disclosed in the mid- to long-term corporate value enhancement is in ROE in order to further improve the efficiency of the capital use. And all the measures that I mentioned that we carried out in the last 6 months is a good sign that we are making the right stride toward achieving a midterm business plan. We will continue to work toward achieving a midterm business plan and to achieve the long-term vision through various tactics and measures. That's all from me. Next, Yamamoto will explain about the most recent financial results.

Please go to the Page 5 of the presentation material. First, I would like to talk about the first half results and an upgrade -- update to our full year forecast. Net income for the first half was JPY 271.1 billion, a record high for the first half year and an increase of JPY 88.2 billion, up 48% compared to the same period last year. At first half, we achieved a healthy 71. -- initial full year net income forecast and ROE reached an annualized figure of 12.7%. This is a result of a contribution from gains of sales and valuation gains from a large exit deals such as Greenko Energy. As explained by our President, our forecast reflects that our efforts to enhance profitability through portfolio optimization and beginning to bear results. And we raised our full year profit forecast upward -- as our COO, Takahashi explained, and full year profit forecast is JPY 440 billion, expanded the share buyback program to JPY 150 billion. Our full year ROE is forecasted at 10.3%, an increase of 1.3 percentage point compared to the same period last year. Second point is the 3 categories: earning and capital recycling. First half, all 3 categories, finance, operation and investment booked profit growth year-on-year and ROE improved. And even excluding a gain on the sales of Greenko, first half ROE was healthy at around 10%, exceeding the previous full fiscal year ending in the March 2025 level that was 8.8%. The third point is shareholder returns. In line with the upward revision of net income forecast, should ORIX achieve a full fiscal year net income target of JPY 440 billion. DPS forecast will increase from JPY 132.13 to JPY 153.67. The share buyback program also expanded from JPY 100 billion to JPY 150 billion. At the end of October, JPY 78 billion has already been repurchased, representing 78 progress rate toward our previous JPY 100 billion. Page 6. Here, I'll explain the details of revision of our earnings forecast and expansion of shareholder returns mentioned earlier. Based on the stellar performance in the first half and the current business environment, we have revised our forecast and second half earnings, especially -- specifically, we raised the pretax profit forecast from JPY 540 billion to JPY 640 billion, net income forecast from JPY 380 billion to JPY 440 billion. This represents an increase of JPY 100 billion and JPY 60 billion, respectively, on increase. As a result, we forecast a full year EPS of JPY 394. ROE will improve to 10.3%. Outlined earlier, we raised our full year dividend forecast accordingly, expanded share buyback program. Total shareholder return should reach JPY 320.7 billion. Total payout ratio expected to rise from 65% to 73%. While improving ROE and maintaining a healthy D/E ratio, ORIX also aims to expand AUM. As our COO, Takahashi mentioned, total group AUM reached JPY 88 trillion at the end of first half. Addition to growth in the traditional asset AUM such as Robeco, which has performed very well, ORIX aims to expand its AUM in an asset-light fashion and that's not overly reliant on our balance sheet. Please go to Page 7. And also, we newly announced a joint PE fund with QIA. The page shows the first half results for the 3 categories and for both previous year and this year and segment profit, pretax profit, net income shown at the bottom. Pretax profit for the first half was JPY 391.5 billion, an increase of JPY 134.5 billion compared to the same period last year. Like the net income, it reached a record high. We implemented capital recycling, not only in the investment category, which achieved a large exit, but also in finance and operation category. All 3 categories achieved a profit growth year-on-year. This page shows the first half results for previous current year, 3 categories: investment on top to bottom. And the dark blue represents finance. Our profit increased 8% year-on-year, JPY 99.6 billion, progress rate of 55% versus full year target. Gross investment income was strong in the Insurance segment. Asia, Australia saw steady increase in financial income from leases and loans. In addition, as a part of portfolio optimization, contribution from the sales of ORIX Asset Management and Loan Services Corporation, Nissay Lease shares also contributed to the profit gain. Next, the light blue part represents operation. Profit increased by 9% year-on-year to JPY 114.9 billion with a progress rate of 48% versus our forecast, which we raised by JPY 10 billion. Business driven by inbound tourism demand such as Kansai Airports and real estate operation at Inns and hotels continue to perform well. Strong used car market helped auto business with Rentec capture the demand for Windows 11 replacement PCs. Both businesses saw growth increased profit. Environment and Energy Segment, the gain on the sales of Zeeklite, which operates the waste and final disposal side also losses profit. The pink represents investment. Profit was up sharply, 117% year-on-year to JPY 194.9 billion. The sales of Hotel Universal Port VITA in the first quarter and Greenko in the second quarter as well as a gain from the sales of shares of NYSE-listed renewable energy company, Ormat contributed to this increase. In addition, performance of domestic PE investments such as Toshiba was strong, leading to higher profit contribution. As a result, segment profit, pretax profit and net income all increased by 42%, 52% and 48%, respectively. Next, please look at Page 8. Now on this page, I explain ROE, shareholders' equity for each of the 3 categories. You see on the right, at the end of previous year, shareholders' equity was JPY 4.1 trillion, while annualized ROE was 8.8%. For first half this year, these figures were JPY 4.4 trillion and JPY 12.7 trillion, respectively. Please look at the graph on the right. The dark blue ROE of finance improved from 8.3% at the end of the previous period to 8.5%. The allocated capital finance is JPY 1.8 trillion. Now light blue ROE in the operation category improved from 13.5% to 14% due to the sale of subsidiaries and other factors. Allocated capital here is JPY 1.3 trillion. And then pink ROE in the investment category rose significantly from 7.4% to 16.6% due to sales of Greenko and hotels, allocated capital is JPY 1.6 trillion. The total allocated capital for 3 categories is JPY 4.7 trillion, which is slightly different from shareholders' equity amount of JPY 4.4 trillion on a consolidated BS. As explained last time, this is because of the allocated capital is a management accounting figure. Next page shows ROA and asset for the 3 categories. With the start of portfolio optimization, total asset ROA improved by 1.03% from the end of previous period to 3.15%. The ROA for the investment category improved significantly for the reason that I just outlined. ROA for the both finance, operation category also improved in first half. This page shows the progress of capital recycling. In the first half, we recorded a capital gains of JPY 157.1 billion. We had cash inflows from sales amounting JPY 500 billion. Major asset sales included Greenko Energy, that was a cash in of JPY 178.9 billion, capital gain JPY 95 billion. And Hotel Universal Port VITA, cash in about JPY 34 billion, capital gain JPY 21.9 billion. We also sold ORIX Asset Management and Loan Services Group and Nissay Lease in the Corporate Finance Business segment too, and Zeeklite in Environment and Energy segment too. In all 3 categories of finance, operation, investment, we flexibly recycled capital to optimize our portfolio while balancing new investment. Cash outflows from new investments amounted to JPY 470 billion. The main new investments made in the first half were Hilco Global, JPY 776 million and convertible bonds for the next-generation energy company, AM Green. Hilco Global is a leading asset appraisal company in the United States and a platform for asset-based lending. Additionally, we made a PE investment in specialty capsule toy retailer, LULUARQ as well as new purchases of aircraft where prices are favorable and new investments in logistics. We also made additional investments in Osaka Integrated Resort project as planned. We continue to have a promising investment pipeline for the future and will carefully select projects. For the year, fiscal year '26, we forecast realization and new investments of between JPY 600 billion to JPY 800 billion. By flexibly recycling capital in all 3 categories in a well-balanced manner, we will, as Mr. Takahashi explained, work to optimize our portfolio. Page 11 is about our financial strategy. This shows the important balance sheet items and the breakdown on the left and the key indicators from the perspective of financial soundness on the right. In the table on the left, you can see the total assets increased by JPY 738 billion compared to the end of FY '25, with half of about JPY 600 billion amount, excluding FX effects due to the U.S.-related factors. The remainder was primarily caused by asset growth in the Insurance segment, which saw strong sales of single premium whole life insurance, JPY 131.4 billion and at ORIX Bank, which increased the new execution of the real estate investment loans, JPY 109 billion. Next, short-term and long-term debt deposit increased by JPY 416.9 billion, mainly due to higher deposit at ORIX Bank and issuance of the corporate bond. We continue to diversify our funding methods and currencies and have realized competitive funding cost levels through this and maintaining a stable ratio of the long-term debt. Insurance contract liabilities and policyholder reserves decreased by JPY 223.2 billion, mainly due to the lower liabilities from the higher discount rate for insurance contract liabilities. This was offset by the increase in single premium insurance policyholder accounts. Of the JPY 351.9 billion increase in shareholder equity in the row below, JPY 223.2 billion is due to the lower insurance contract liabilities and policyholder accounts explained earlier. Other factors contributed to the increase of the shareholders' equity are mainly net income. Debt-to-equity ratio was steady at 1.5x. Looking to the graph at the right, we maintained the capital utilization rate at an appropriate level in the 90% range as a result of the capital recycling in the first half. This has helped us sustain an A-level credit ratings at global agencies. While yen funding rates are gradually increasing, including those for the bank group deposits, our overseas currency-based funding costs, mostly U.S. dollars remain in downtrend. We are working to reduce our cost of capital by keeping competitive A-level credit ratings and by utilized diversified funding source. Pages 12 and 13 are segment summaries. Please refer to the slides from the Pages 16 and onwards for details. Links to supplementary financial materials and the integrated report are included in these slides for your reference. First, segment profits for the Corporate Financial Services and Maintenance Leasing segment increased by JPY 13.1 billion or 29% to JPY 58.6 billion. Corporate Financial Services posted significant growth, thanks to the sale of ORIX Asset Management and Loan Services Corporation and Nissay Lease in Q2. Growth in various fee revenues was also positive. The Auto business continued to enjoy robust used car sales, achieving a record high profit for the first half. Rentec profit grew on higher rentals from ICT equipment inventories fueled by demand for Windows 11 PC replacement. Although asset for Auto and Rentec increased due to new executions in car leasing and PC rentals, the sale of ORIX Asset Management and Loan Services Corporation reduced the total segment assets by JPY 29.2 billion versus the previous year, totaling JPY 1,855.3 billion. Second, the Real Estate segment's profit decreased by JPY 1.3 billion, 3% year-on-year to JPY 49.1 billion. The RE Investment and Facilities Operation units saw significant increase in profits from hotel and inn operations in addition to the sale of the Universal Port VITA. However, profits were down slightly year-on-year due to the previous year's gain from the sale of Hundred Circus. Meanwhile, the profits at Daikyo units increased on the sale of rental apartments, properties and other factors. Real Estate segment assets remained flat compared to the end of previous fiscal year. In addition, in response to the expanding investor demand, we increased asset size of our first equipment -- equity commitment type real estate value-add fund established in January this year from JPY 100 billion to JPY 120 billion. Please refer to Page 18 of the Real Estate. The third is PE Investment and Concession. Segment profit increased by JPY 9.7 billion or 21% year-on-year to JPY 56.7 billion. PE Investment unit enjoyed steady performance of the investees such as Toshiba and DHC, resulting in higher profits even after considering the previous year's gain. Regarding the domestic PE fund information with the Qatar Investment Authority mentioned by Takahashi, you'll find the details on Page 20. The Concession unit saw a significant increase in profits, as Kansai Airports continue to perform well. Please refer to Page 45 for related data, such as passenger numbers. The segment assets for PE Investment and Concession increased by JPY 31.9 billion versus the end of fiscal year '25, totaling JPY 1.548 trillion. The main reason was the new investment in LULUARQ and increased profit contribution from the investees, leading to an increase in equity method. Fourth, Environment and Energy segment profit increased by JPY 117.3 billion year-on-year to JPY 119.7 billion. Profit was bolstered by sale of Greenko Energy, which resulted in gains on sale and valuation gains as well as gains from the sale of shares of Ormat. Additionally, the domestic electricity retail business enjoyed both higher sales volume and unit price. Segment asset decreased by JPY 38.8 billion from the previous year-end to JPY 977.4 billion because of the progress in capital recycling. The fifth is Insurance segment profit increased by JPY 10 billion or 24% to JPY 50.9 billion. Continuing the recent trend, asset income rose sharply on growth in investment assets in effort to diversify portfolio management. In terms of business, both the single premium wholesale life insurance Moonshot and revamped income protection insurance Keep Up launched this June are selling well. Insurance segment assets increased by JPY 131.4 billion versus end of FY '25 to JPY 3,140.6 billion. Sixth, the Banking and Credit segment profit decreased by JPY 600 million or 5% year-on-year to JPY 12.5 billion. Amid rising interest rates, while deposit procurement costs are increasing, the asset management yield is also improving. The main reason for the decrease versus the first half FY '25 is the recording of the losses from the sale of public and corporate bonds in Q2 to improve bond portfolio quality. Banking and Credit segment assets increased by JPY 109 billion versus the end of FY '25 to JPY 3,253.6 billion. Both investment real estate loans and the merchant banking business saw increase in new executions. As explained in Q1, ORIX Bank paid parent group a dividend of JPY 30 billion in July to optimize in capital size. Seventh, the Aircraft and Ships segment profit decreased by JPY 10.1 billion or 31% year-on-year to JPY 22 billion. Aircraft leasing profit for the first half was roughly in line with the previous year. But with lease rates remaining high, the number of owned aircraft increased and the business climate as a whole is positive. Avolon profit rose year-on-year, partly due to the contributions from Castlelake, which was acquired in January this year. Profits in ships unit was lower year-on-year on the absence of higher charter fees from certain contracts last year, reflecting the impact of marine shipping prices. Segment assets increased by JPY 24.1 billion versus the end of FY '25 to JPY 1,256.1 billion, owing to aircraft purchases. Segment number 8, is ORIX USA. ORIX USA segment profit decreased by JPY 18.1 billion year-on-year, resulting in a loss of JPY 1.8 billion. Compared to the same period last year, the main reasons for the substantial profit decline were absence of reversals of the provisions recorded in last year, a decrease in capital gains and the booking of credit cost and impairment in the first half this year. The credit losses and impairments stem from the real estate financing originated during the period of monetary easing during the pandemic and legacy assets from before that. The extended period of the elevated interest rate inflation and uncertain economic conditions in the U.S. negatively impacted these assets. More recently, based on our disciplined investment policy, we have conservatively chosen deals, and thus have no exposure to the First Brands Group or Tricolor Holdings. Please see Pages 30, 31 and 32 in this presentation for more details. Excluding the Hilco Global segment assets in U.S. dollars shrunk from JPY 12.2 billion at the end of March '23 to JPY 11.3 billion at the end of September 2025. With the addition of -- this is a decline of 7.4% in the past 2.5 years. With the addition of Hilco as a subsidiary, we will review the ORIX USA business portfolio and continue to responsibly manage the portfolio while controlling asset risk -- asset size. Uncertainty persists in the operating environment for ORIX USA. And we are conservatively reviewing our full fiscal year forecast for ORIX USA compared to the initial plan. Next is ORIX Europe. Segment profit increased by JPY 1.3 billion or 6% year-on-year to JPY 22.1 billion. Net fund inflows grew, thanks to the favorable global capital markets and AUM rose to a record high of EUR 425 billion. This resulted in higher profits even after adjusting for performance fees booked in the same period last year. ORIX Europe assets were flat year-on-year, excluding the currency impacts. Finally, Asia and Australia. Segment profit increased by JPY 600 million or 3% year-on-year to JPY 19.7 billion. In Greater China, profit contributions from investees decreased versus the same period last year. We maintained a constrained investment stance and reduced our exposure to -- in both leases and investments. Meanwhile, the financial income increased in countries such as Singapore, India and Australia, resulting in higher profits. Segment assets increased by JPY 15.5 billion versus the end of fiscal year '25 to JPY 1,741.1 billion. The main reason was the FX impact, but the breakdown shows a decrease in assets in Greater China region, while there was an increase in Australia and India. And that concludes each segment explanation. Next is Page 14. Finally, regarding the shareholder returns and enhancing corporate value, we added JPY 50 billion to JPY 100 billion share buyback program announced in May for the new total of JPY 150 billion. Regarding the dividends, the full year DPS forecast was raised from the previous JPY 132.13 to JPY 153.67, 39% increase over our full year net income target. Compared to FY '25 a DPS, we expect an increase of JPY 33.66 per share or 28%. Since announcing the 3-year plan and long-term vision in May, CEO, Inoue and COO, Takahashi have been engaged in a direct dialogue with institutional investors, both in Japan and overseas. We also plan to provide access to outside directors. And we are providing opportunities to have a direct dialogue from the outside director and the investors. We continue to enhance the corporate value by increasing opportunities for direct dialogue with the market regarding our most important management KPI, ROE improvement. EPS growth, which is also important and capital cost are also key areas of discussion. This concludes my remarks. Thank you for your attention.

Now we'd like to move on to the Q&A session. [Operator Instructions] First, from SMBC Nikko Securities, Muraki Masao.

Muraki from SMBC Nikko. This is a bit off from results, content briefing material, but I would like to hear more about joint investment with QIA. What led you to this joint PE establishment because in the past, you have been covering everything on your own 100% and the asset was JPY 1 trillion. And do you think for the future, domestic PE, you're going to run off the existing one and balance sheet will reduce? And the 60% holding of this new PE that you're establishing with the QIA, it will be on the addition -- net additions on the BS, right? ROE or -- do you think this will allow you to invest more in a large project. But what kind of impact would this have to the total balance?

This is Takahashi speaking. Masao-san, let me answer, take this one. How we came about to establish a joint PE, as I explained in yesterday's announcement, almost about 2 years, we've been negotiating with QIA. We've always been in contact, having a dialogue with various sovereign fund and QIA was especially interested in investing in Japan. So in which field we can collaborate. We've been discussing that way. And we thought that the domestic PE investments is probably where we can jointly approach. So investment criteria policies, we've discussed quite a bit. And this includes a right fit to -- we have the right chemistry. That is how we came about this agreement to establish the PE. And regarding the running off of existing portfolio and to focus on the fund with QIA, that is not the case. As we mentioned in the press release. Our fundamental approach is enterprise value in the market cap of JPY 30 billion or mid-cap larger items, we will leverage this joint fund with QIA. And this JPY 2.5 billion -- JPY 370 billion, that's unlevered base. So 1x or 2x, we will be financing. In the newspaper, I know it says that with the borrowing, we will be able to have this JPY 1 trillion investment capacity, but we don't know whether we'll get there. But anything that is below JPY 30 billion for market cap in investment, that's something that we will continue to handle within the balance sheet. The balance on the balance sheet is -- we do have JPY 2.5 billion, 60% is what we are committing. So I don't think we will see a significant bloating of the asset balance, but we aim to maintain the balance of the current JPY 1 trillion going forward. So far, we had a majority share. So we had a controlling share so that our target companies, we would try to keep it in consolidated accounting so that we can get benefit from profit. But for this fund, we would apply the fund accounting so then incorporate the fair market value. So the way we would incorporate the profit into our business will be different from the one that we are financing fully on our own.

I understand. Is this part of your ROE enhancement effort?

Yes, that too, plus goodwill and also recognition of intangible asset will be different, too. And also, there will be an impact on the credit rating, too. That will be eased too, I think. In the last 10 years, we've been building up a track record in the private equity area. That's one thing. And reflecting the market trend and the movement, what we are seeing more and more good quality pipeline in front of us that's building up. So incorporating that in all into our balance sheet, adding them up would impact us in various different areas. So at this timing, we wanted to leverage our third-party funds to shift to leverage third parties funds to try to capture larger, better quality deals. It would be a benefit in our long-term growth. That's our strategy.

Next from JPMorgan Securities, Sato-san.

This is Sato speaking from JPMorgan. About ROE target and your commitment to that and also net assets, the balance between the 2, I'd like to confirm one thing. Now the JPY 50 billion increase in buyback, I think there are different reasons. But the net profit increase, most of it will be used for the shareholder return, I understand. But at the same time, there is a big impact of the interest rate. So about this insurance with the change of the discount rate, about JPY 200 billion in the 6 months, I think that the profit has expanded. So in comparison to the medium-term business plan, the JPY 20 billion or higher needs to be enhanced so that you can achieve the ROE target. And depending on the macro environment, noncash or cash in without that, there could be some higher risks. So in that sense, in achieving the ROE in order to maintain the probability of achieving that, what kind of initiatives are you thinking of taking?

Thank you for your questions. Yamamoto will respond to your question.

As you pointed out correctly, for this fiscal year, the interest rate higher and the discount rate, discount and also the insurance account, the net asset increase was a little more than JPY 200 billion. And achieving the 11% ROE, of course, that the numerator will not naturally increase. So we have to take some measures or initiatives that will be necessary. So U.S. accounting and Japanese accounting, there is some gap. So with the shareholders and ORIX, we are trying to consider the various initiatives to be taken. So in achieving the targets of the medium term in the final year, we will be taking initiatives. As for the interest rate, I think we have come to an end of the cycle and this would stabilize. So this increase is not going to continue from now on. So in other words, if the interest rate comes down, the denominator will be less. So that is something that will be possible to -- make it possible to reach the ROE that we want to achieve. So we would like to monitor that closely and communicate to you. But that's something that we will be doing in the future, but the impact of this in achieving the ROE, yes, we do understand that possibilities.

Next Daiwa Securities, Watanabe-san.

This is Watanabe from Daiwa. This year's lending forecast and next year's profit forecast. You said that there will be a reduction -- reduced provision for the Bank and the U.S. business. If you have any trend outlook for the second half. For this fiscal year, you will be generating quite a significant profit. What's your outlook for the next year? Is it going to be challenging? Are you going to go with your current cruising speed? What's your thought on the next year?

Regarding ORIX Bank, regarding our debt portfolio, liability portfolio. And this is a reversal of what I mentioned about liability insurance. And various portfolio that we are maintaining for the better liquidity together with the interest rate hike, there will be more and more incurred losses. And as much as we can within the profit because we have a profit momentum, we will actively reshuffle the portfolio and recorded some losses from the sale. And this year's credit loss burden in ORIX USA, as I before mentioned, so far, in the fourth quarter, we usually check -- do the checkup of all our assets. But we are doing more flexible risk management. So we have decided to book the loss to some extent in the second quarter, too. If you could go to Page 32, ORIX USA pretax profit, additional information there as well. For portfolio, as I mentioned, because of the interest rate in the dollar would be plateaued and inflation and equity real estate business-related impact, we are recording capital gain. We are losing opportunity to record capital gain, sorry. And before COVID, we had a real estate legacy asset of the credit loss. That is now materialized. So going forward, what would happen is real estate for multifamily condominium performance. Interest rate hike and insurance premium increase will impact the rent. And I believe that we will need to closely monitor property management and appropriate asset monitoring, too. So those potential risk, we are quite clear at ORIX USA side. So we don't foresee this kind of situation will continue. So at least by the end of this second half or at the latest in the beginning -- within the first half of next year, we will resolve. We will conclude our countermeasures. And going forward, I'd like to have Takahashi to explain.

And the second question about the next year's forecast, let me give some brief thinking about the next year. Usually, the income gains, for example, on the real estate or private equities exit, those gain from sales, we have been recording pretty much on every fiscal year, it's a recurring gain from sales. But the kind of gains from sales like divestments as Greenko that is almost like a one-off profit. So this proceeds that we received is a reason that we were able to do a share buyback in addition -- additional share buyback. And another reason is we averaged out the EPS, and we are intending to continue to increase EPS in a linear fashion. If there is some surplus in capital, and we would use it for that. And going forward, in the next year, we'll continue to aim to realize sustainable profit growth. So the sales from a gain, especially something in this scale of almost like a one-off would be volatile. And sometimes we do, sometimes we don't. And when we have surplus, we will leverage a buyback to continue to increase our EPS linearly. I'm not sure I'm answering your questions, but it's not that we are aiming to generate a certain amount of profit every single year. That's a bit different far from our actual business practices in reality.

Next Mizuho Securities, Sakamaki-san.

Sakamaki speaking from Mizuho. I'd like to ask some questions on the forecast for the second half. On Page 10, capital recycling forecast. So for this fiscal year, JPY 200 billion or higher for capital gain. So compared with the past range, there could be some upside. So in the second half, the segment profit is only JPY 200 billion. So how should we understand this balance between the 2? If you can explain it?

Yes. Thank you. On Page 10, this JPY 200 billion. If I may talk about this further. As you know, usually, our capital gain is about JPY 100 billion. That's the normalized level. So Greenko part, JPY 995 billion is added. So it's JPY 200 billion. So that is on track. And the real estate market is very solid and private equity portfolio, the performance, as we mentioned, is good. So if there is good opportunities, we will invest and also realize in a very flexible manner. In the second half, if you deduct that, the pretax income or revenue level, I think that's what you are referring to. We did not specify the first half and second half, but some of them were already realized in the first half. So there could be some differences. So capital gain -- about the capital gain, this is -- this can be considered as the income or the profit in other areas. I hope that answers your question.

From Nomura Securities, Sasaki-san.

This is Sasaki from Nomura Securities. I have a question about your performance. This year's second half pretax profit forecast, the level is quite a bit declining versus the first half. So it looks like a JPY 250 billion pretax profit. This is along the line of your base profit, but you also are going to record some capital gain as well, right? I was wondering, perhaps you have some significant impairment loss or some kind of a negative factor that you're forecasting for the first half. Is my understanding correct? And regarding next year's business plan, I'm sure you're in the midst of discussion right now. If you can share as much as you can about the next year's plan, please.

So the first question will be answered by Yamamoto.

Regarding the first point, you're right, the base profit first half, I mentioned was quite brisk. Within our base profit, we have the profit from the company that we have invested. So that is contributing like Toshiba is performing quite well, that we have invested. And for the second half, we have set that to the regular cruising speed, not buoyant. So for the second half, we are expecting certain base profit plus some capital gain. It is not that we are expecting some one-off significant loss.

Let me add to that. This is a bit of details, but as Yamamoto mentioned, Toshiba's performance is quite good now. And divestment of Toshiba material is recorded in Toshiba's performance. And KIOXIA's share price is quite well. So they sold a part of KIOXIA shares. So base profit -- our size base profit and our gain from sales -- and also the income from equity method affiliate are all recorded under base profit. So what I mentioned is that there are various onetime gains that we experienced from the equity method affiliate. And those happen in the first half, and that's not necessarily a recurring income that we can continue to expect in the second half. So that's the reason. And you asked me about the second -- next year plans. Actually, we will start this discussion from next -- beginning of next year. What we are sharing right now to the market is ROE of 11%. And by [ FY '20 ] ending in March, -- but of course, we are creating bottom-up plans up to 3 years into the future. What we'll be discussing going forward is what went well, what didn't go well for the past year and make a rolling update to what we have established in the last March and this year's March too our MTP. We are not expecting any downward change to our initial plan. I'm sure next year will be quite positive, but the detail will be discussed from the segment leaders of each divisions. That's all.

May I add one more thing, please?

Yes.

You mentioned that next year's profit can be volatile. I got the nuance in your wording. This year, 10% ROE, you need to grow the profit at a certain level. Otherwise, I don't think ROE can go up to the 10% levels. Is that okay to say that it can be volatile?

You have a point. Needless to say, we need to continuously grow. Otherwise, we will never get to 11% ROE. We're not there yet. So of course, we need a profit growth to get there. And with the current portfolio, what can be sold at what price is something that -- some of it where we have a higher probability where we are already in the negotiation process, then we can factor in, but others are just pie in the sky. So of course, we need to make a right decision at the right timing being considered appropriate capital recycling to maximize our gains from sales. As I mentioned, this fiscal year, the proceeds from Greenko is, I would say, a bit extraordinary. So what we've been discussing going forward internally is compared to this year, how much base profit that we can increase. And on top, how much gains from sales of asset we can expect. Ultimately, we would like to achieve the ROE target by 2025 that we have. That's our grand plan.

Next from BofA Securities, Tsujino-san.

Some detailed question about Environment and Energy. If you look at the quarterly number, JPY 117 billion segment profit. The Greenko sales, gain on sales is JPY 95 billion. So the gain on securities, Ormat sales gain on sales is included, I think. But we don't know how much that is. So that means it is said that for JPY 15 billion, but the equity method, this is JPY 83 billion. So Ormat gains on sales and also if you deduct the JPY 95 billion, you are in red in terms of segment profit. So in Environment and Energy segment, excluding the gains of sales of those 2, what is happening? Was there any kind of impairment? And if so, what was it? And what about the impairment risk of others in coming months and years?

Takahashi-san will respond.

Sorry, this is Takahashi responding. If I may talk about the details, the renewable energy in Japan, especially the mega solar that is already operating, and we operate that. So we are getting a stable profit. And also, we are in the Energy Business in the previous year, Hibikinada and Soma, there was our impairment loss, and that led to the lower depreciation and amortization and maintaining the sales volume included and this part was profitable. And in Environment and Energy, the major one is Elawan, and Elawan concerning that, it is breakeven or just slightly in red. So a lower interest rate and also the ones that we are developing projects and also the program has started. So in terms of business, we are in the recovery phase. Also on the Environment side, the ORIX Environment is a circular economy company, and they are generating stable profit. So ORIX [indiscernible] or resource recycling, which is engaged in the interim processing, and they are going through the rebuilding or replacement phase. So we expect some red deficit. And in actual performance, they are in red. So it's a mixed performance, but we are not seeing the signs of the major impairment loss. I do not recognize that.

Okay. So a way of thinking, if you calculate this, you are in red, as I said. So is that correct understanding?

Yes. We do not recognize this as a major deficit. It's really close to the breakeven level. It's a very small deficit.

I see. But if you calculate the [ JPY 117 billion ] minus JPY 98 billion, sorry, the loss of JPY 8.2 billion or so, you're talking about Q2?

Okay. So Q2, as you said, yes, that's a correct calculation. But Ormat, it depends on what kind of number that you would include in Ormat. But we did not recognize that in Q2 only. But I think if you look at the bigger picture, it will be almost breakeven.

Now we are reaching the closing time. So we would like to take one last question from Morgan Stanley, MUFG Securities, Takemura-san.

I'm Takemura from Morgan Stanley, MUFG. I have a question about some numbers. You have made a revision to the lending forecast. Page 7, bottom right, in financial, it's remaining 180.0 so no change. Were there any changes under -- regarding the business profit, an increase of JPY 10 billion. What's the reason for investment, GreenKo of JPY 95 billion addition plus JPY 80 billion. So I would like to know why you are postponing some of it, the reason for that, which is the best way you can, please share. Regarding ORIX USA, I understand that you have a revised performance forecast. So how that impacts this overall segment, please?

What you explained toward the end is very much a reason for that for finance and life insurance included, we did quite well in asset management. We have management income in the bank, we also recorded a loss of our debt liabilities. And in order to improve the portfolio quality and the credit-related business, we have conservatively recorded some new losses too. And those are what's impacting this finance business. For business, many of the operating units are quite brisk. But in ORIX USA real estate origination, the fee environment, competitors -- competitive landscape, we are having quite a difficult situation. So that's impacting our profit. Regarding investment, the third point, you are right regarding JPY 95 billion addition from Greenko's divestment, doesn't mean that we put some of the sales plan for the sales to the later date at all. We did have certain uncertainty in the fair value part about the future gain from the sales that ORIX USA is doing in the PE business. As Takahashi-san pointed out, regarding ORIX USA, we have more conservative outlook because of intransparency.

Thank you very much. We would like to conclude the Q&A session. Now we'd like to have our last remarks from Takahashi.

As I said at the outset, there are a mixture in terms of the business performance between the segment. The businesses are diversified. And also in May, we announced the strategy. We are executing that steadily in the first half. Relatively speaking, I think we kept good results. But we would like to stay focused, and we took notes of what you pointed out, and we will continue to take initiatives. And we consider those target numbers are not easy numbers and also in the medium-term plan and the long-term vision, the numbers that we are committed to, we would like to make sure to try to achieve those targets. And I hope you would continue to support us. Thank you very much.

With that, we'd like to conclude today's conference, the briefing on the second quarter results. And thank you very much for your participation. [Statements in English on this transcript were spoken by an interpreter present on the live call.]

So we now would like to get started. Thank you for joining this telephone conference of ORIX Corporation for first quarter financial results for the 3-month period ended June 30, 2025. I am Nakane from IR. We have today as an attendee Kazuki Yamamoto, Operating Officer in charge of Investor Relations. Yamamoto-san will explain, and this will be followed by Q&A. We plan to have a 1-hour session. So over to you, Yamamoto-san.

Thank you very much for taking the time to attend the ORIX Group's earnings call today. I'm Operating Officer in charge of Corporate Planning and IR. I am Kazuki Yamamoto. Let me quickly explain the financial results for the first quarter of fiscal year ending March 2026. On Page 2, you can see this page contains the key points I want to cover today. The first point is net income and ROE. Net income for the first quarter was JPY 107.3 billion, an increase of JPY 20.6 billion year-on-year with an annualized ROE of 10.4%, against the annual forecast, JPY 380 billion progress rate was 28.2%. As was announced in July, we plan to record gains from the sale of Greenko and ORIX Asset Management and Loan Services Corporation in the second quarter and earnings are favorable. Meanwhile, considering the increasing macroeconomic uncertainty, it is necessary to carefully review our planned H2 exits and second half performance in line with the market. While we expect earnings to be more heavily skewed to H2, we are currently undertaking a thorough review of full year net income target. Second is pretax profit and capital recycling. Pretax profit was JPY 455.5 billion, an increase of JPY 35.3 billion from last year. Finance, operation and investments in all three categories saw profit increases year-on-year. Investments, including the Hotel Universal Park Vida, and other valuation gains are from listed stocks recorded a total capital gain of JPY 45.1 billion from multiple gains on exits. Number three, shareholder returns. As of the end of July, we have completed the acquisition of JPY 40.9 billion out of total JPY 100 billion share buyback program announced in May this year. We will continue to repurchase shares based on the existing program and aim to flexibly implement our shareholder return policy based on both our full year outlook and progress with new investments. As in the previous fiscal year, our current policy is to set the interim DPS at a payout ratio of 39% in first half net income. Please go to the next page. As outlined earlier, for Q1, ORIX reported net income of JPY 107.3 billion, up 24%, ROE was 10.4% annualized. In light of the investment gains we expect to book in Q2, the outlook for first half is very strong. Please go to Page 4. I'll explain pretax profits for each of the categories. Three categories: finance, operation and investments. You can see first quarter results of the previous and current fiscal year. First, at the top, the dark blue bar is finance. Profit increased by 5% year-on-year to JPY 49 billion with a progress rate of 27% against full year forecast. Corporate Financial Services and Banking were generally solid. ORIX Life increased its investment income and finance revenues grew in Australia and Singapore. Next slide, second, from the top, light blue shows operation. Profit increased by 5% year-on-year to JPY 55.8 billion with a progress rate of 24% against the full year forecast. In the Environment and Energy segment, we closed the sale of ZiekLight, which operates waste disposal plans and recorded a gain. increased its electricity sales revenue and the Kinokawa energy stores plant, one of the largest in Japan began commercial operations last December, which also was a contribution. Furthermore, Rentec saw higher equipment rental income on Windows PC placement demand and airport concessions continue to see growth in international passenger numbers. Finally, red bar in the third row from the top shows investment. Profit increased significantly by 61% year-on-year to JPY 60.1 billion. In addition to the gain from the sale of Hotel Universal Port Vita, valuation gains on our remaining stake in NICE listed renewable energy company, Ormat contributed to this result. Performance at domestic PE investees was solid, resulting in growth in profit contributions. As a result, segment profit for Q1 increased by 20% year-on-year to a total of JPY 164.9 billion. Pretax profit increased by 29% year-on-year to JPY 155.5 billion. The difference of JPY 9.4 billion between total segment profit and pretax profit is administrative expenses. Please go to Page 5. On this page, I will explain ROE and shareholders' equity for each of the three categories. Towards the right, please look at the graph. In dark blue is finance, ROE. This improved from 8.2% at the end of the previous fiscal year to 8.7% plus 0.5%. We are disclosing the amount of allocated capital by category beginning this fiscal year. And for finance, it is JPY 1.7 trillion. The light blue circle towards the left. With the sale of Zeeklite, ROE for operation improved from 13.5% to 14%, likewise, up 0.5%. Allocated capital was JPY 1.2 trillion. The red category investment rose from 7.4% to 10.3%, significant increase due to sale of hotels. The allocated capital is JPY 1.7 trillion. The total allocated capital, if you add all them up is JPY 4.5 trillion, which is slightly different from shareholder equity amount of JPY 4.1 trillion on this consolidated PS. This is because allocated capital is based on management accounting. So that is why it's higher. Next, on Page 6, regarding the ROA and asset size of the three categories. You can see that finance and operation remained stable and investment improved its ROA in the first quarter. Page 7, this is the matrix chart of 3 categories and 10 segments as a change. We have added in business verticals, the transportation equipment for row from the bottom in the operation column, we have added ship brokerage company, Sojitz. Page 8 shows progress in capital recycling in first quarter we recorded capital gain of JPY 45.1 billion, as you can see in the center, with cash flows from sales amounting to JPY 130 billion below that. And cash flows -- outflows from new investment executions amounting to JPY 150 billion. Major new investments in the first quarter include PE investment in the capsule toy specialty store operator, LULUARQ as well as aircraft and We also have announced the sale of our partial stake in Greenko, a new investment in AM Green and the sale of ORIX Asset Management and Loan Services Corporation, you can see towards the right. We aim to close the Hilco Global transaction by the end of September 25. So -- regarding Greenko AM Green transaction and Hilco, I will provide some additional information in the following slides. Please go to Page 9. This is about the Greenko share transfer agreement and our new investment in AM Green. We held 20% of the shares in Greenko, a major Indian renewable energy company and sold 17.5% to AM Green Power, a company-owned by the founders of Greenko, or you can see the structure in the chart. The sale proceeds were USD 1.282 billion with a gain on sale of JPY 93.4 billion. This amount are unchanged from previous announcement and will be finalized at the time of Q2 financial closing. We plan to continue to hold our remaining 2.5% stake in Greenko for the time being. Meanwhile, AMG, the parent company of AM Green Power plans to produce 5 million tonnes of green ammonia annually as a group and is advancing green hydrogen and green ammonia production projects. AMG has also agreed on basic terms with Germany's energy company, Uniper SE and Belgium's ammonia trading and sales company, [ Yara ] Green ammonia to supply green ammonia to Europe. We have invested in convertible notes issued by AM Green Luxembourg, the 100% owned parent company of AMG. The amount is $331 million. The transfer of Greenko shares and the investment in convertible notes of AMG parent company are part of our portfolio optimization strategy achieved through capital recycling in the globally evolving renewable energy industry. Next, moving on to Page 10. Our investment in Hilco Global. ORIX has agreed with stakeholders to acquire 71.4% stake in Hilco Global, a world-leading company in asset valuation we signed in July. We are moving forward in accordance with the transfer agreement and aim to complete the acquisition by the end of September. Since its establishment in 1987, as you can see towards the right, Hilco Global has gradually expanded its businesses to include asset valuation services, asset-based lending and inventory sales and asset liquidation within the group. The first asset valuation service provides to banks and others, appraisal services for collateral assets. The second asset-based lending refers to the provision of loans collateralized by various assets. And third, inventory sales and asset liquidation involves the purchase and resale of inventory assets among other things. Hilco -- with Hilco Global joining the ORIX Group, ORIX USA will acquire a platform or ABL, Hilco origination capability and value increase model can be utilized to ORIX USA. By utilizing third-party investor funds, we hope to further expand the ABL business and promote the asset management business centered on private assets and real assets. Next -- please turn to the next page. The investment pipeline outlined on this page is ample at JPY 2 trillion, and heavily focused on operational investments. We are aiming for sustainable growth by investing both in projects and contribute to revenue immediately after investment and those requiring longer development periods. Please turn to Page 12. Now this is about inbound and tourism. The concession business centered around Kansai International Airport experienced growth in international passenger numbers due to inbound tourist demand, and performance is steady. The performance of Kansai Airport is reflected in ORIX consolidated results with a 3-month lag. So Q1 results reflect Kansai Airport performance from January to March of this year. However, with the start of EXPO 2025 Osaka in April and the launch of international charter flights at Kobe Airport in April, we expect earnings growth to continue. In facility operations, RevPAR at hotels has been improving, primarily in the Kansai area. In this January, Suginoi Hotel opened a new building, Kushin. And in April, Hilton's top luxury brand, World of Astoria or Osaka also opened at the Umekita area. We anticipate steady demand for facility operations such as hotels and inns in the future. But due to the impact of inflation and rising construction costs, we will carefully select new investments while aiming for sustainable growth. For the aircraft and ship segment, including aircraft leasing, is performing well and increase in passenger traffic, mainly in -- the -- we expect these three tourism-related business, including those impacted by inland tourism to continue to drive performance this fiscal year. Page 13 and 14 are the summary of segment information. For details, please refer to the slides from Page 18 and onwards. But first, let me give you the report about the corporate financial services and maintenance leasing. Segment profit increased by JPY 3.8 billion or 19% year-on-year to JPY 23.6 billion. The Corporate Financial Services unit saw growth in fee revenues, resulting in higher profits. The auto unit continued to benefit from a strong used car market, achieving record profits for the first quarter. Rentec expanded its inventory based rental of ICT equipment, thanks to Windows PC replacement demand and increased its profit. Segment assets amounted to JPY 1.87 trillion, a decrease of JPY 14.6 billion from the end of the previous fiscal year, reflecting the sale of ORIX Asset Management and ORIX Services Corporation. Next, segment profit for the real estate was up by JPY 21.9 billion, an increase of 157% year-over-year to JPY 35.9 billion. So this is due to the sales of the Hotel Universal Port Vita and a sharp increase in facility operation earnings in hotels and inns has contributed. Assets in the Real Estate segment was flat versus the end of last fiscal year. For the PE Investment & Concession segment, recorded a decrease of JPY 8 billion year-over-year or minus 25% is segment profits, reaching JPY 24 billion, out of which investment unit reported lower profits owing to the absence of a gain on the sale of Sasai Holdings recorded in the previous year. On the other hand, the performance of existing FSTs such as DHC and Toshiba was strong, resulting in profit growth when the impact from the aforementioned reason is excluded. In the concession unit, as mentioned earlier, included impressive performance at Kansai International Airport, a slight decrease in profit compared to the previous year is due to seasonal factors. The segment assets for PE investment concession increased by JPY 31.6 billion from last fiscal year to JPY 1.545 billion. The main reason for the increase was a new investment in increased equity method investment income from investees. Segment profit for the Environment and Energy segment increased by JPY 18.4 billion year-over-year to JPY 17.9 billion. In addition to the gain on sales of shares of Zeeklite, both sales volume and unit sales price in the electricity retailing business increased. As I have mentioned, the start of operation at the Kinokawa Energy storage plant had a positive impact. Additionally, recovery in electricity sales revenue from and valuation gain in Ormat shares also contributed to the increase. Segment assets were slightly lower, owing to capital recycling and the ForEx impact. Segment profits in the Insurance segment was up JPY 2.1 billion or 10% year-over- year to JPY 24 billion. Profits were higher on the growth in investment income and performance improved sharply quarter-on-quarter. So because we have booked the losses on the sales of branch associated portfolio reallocation, you can see the performance improved based on this reason. On the business side, this June, we have started the sales of revised insurance income protection insurance keep up. This has been strong. Segment assets were up JPY 38.8 billion to JPY 3.177 trillion -- JPY 47.7 billion, excuse me. For the segment profits in banking and credit were up JPY 3.5 billion or 51% year-over-year to JPY 9.9 billion. So in terms of the environment, what the interest rates were rising and the funding cost for deposits are becoming higher, the yield on total investments is improving. For the first quarter, due to one-off factors, the profit has grown. Segment assets were up JPY 71.9 billion to JPY 3.2165 trillion. In July, ORIX paid the parent company a JPY 30 billion dividend with the aim to improve the segment ROE. In the Aircraft and Ships segment, segment profit decreased by JPY 1.9 billion, a 16% decline to reach JPY 9.9 billion. Although there was a slight decrease in profits for aircraft, the business outlook remains positive as the number of owned aircraft increased amid high lease rate levels. Avolon saw an increase in profits compared to the previous fiscal year, partly due to profit contribution from Castlelake, which was acquired in January this year. In terms of the credit rating, in May of this year, Moody's and Fitch upgraded the rating. Standard & Poor's has revised its outlook to positive. In terms of the critical situation, they enhance their health. The ship segment experienced a decrease in profits due to the reduced financial income from ship financing and the market factors but the impact from tariffs is limited. Segment profit for the ORIX USA segment decreased by JPY 11.2 billion year-over-year, amounting to JPY 600 million. The budget for ORIX USA forecast earnings to be more heavily concentrated to the first half. And earnings are generally in line with the forecast. The private credit business experienced a decrease in profit due to the absence of reversal of credit costs booked in March fiscal 2025. Real estate profits were down on the absence of gain on the sales of a fund equity stake that was booked the previous year. The main reason for the decline in profits in the private equity business was the impairment of our investment in an equity method affiliate owing to the tariff impacts coming between United States and China. Segment assets decreased by JPY 5.7 billion to JPY 1.52 trillion. ForEx had a negative JPY 51.7 billion impact, but assets increased slightly in U.S. dollar terms as we made a bolt-on investment aiming to enhance the value of an existing investee in this business. The segment profit of ORIX Europe was JPY 1.2 billion lower year-over-year. This is 11% decrease to reach JPY 9.9 billion. The decrease in profit is due to the presence of performance fees recorded in the same period of the previous year. On the other hand, ORIX Europe continues to see net net inflows, expanding AUM to a record high of JPY 401.9 billion, mainly coming from Robeco and management fees are on the rise. Lastly, in the Asia, Australia segment, profit increased by JPY 100 million year-on-year, reaching JPY 9 billion. Although income from investees in the Greater China region was lower, financial revenues from leasing in Australia and Singapore increased resulting in profit growth. Segment assets decreased by JPY 13 billion from the end of the previous fiscal year to JPY 1.7126 trillion. This decline is mainly due to the maintaining a conservative investment and financing stance in the Greater China region. This concludes the explanation of each segment. Please turn to Page 15. This slide is about the shareholder returns. Regarding the acquisition of treasury stock at the end of July, we have acquired JPY 40.9 billion of the total JPY 100 billion buyback program we announced in May. Regarding the interim dividend, as mentioned at the beginning, the current dividend policy is set at a payout ratio of 39% versus the first half net profit. As I have explained in the second quarter, we anticipate gains from the sales of Greenko and new investments. And for our full year earnings forecast is currently under review. We will inform you any updates if there is progress in this area. Please turn to Page 16. This slide is about the ROE and EPS growth and enhancing corporate value. Since announcing the 3-year medium-term plan and long-term vision in May, our CEO, and COO Takahashi, have been actively engaging in direct dialogue with institutional investors, both domestically and internationally. In this context, we will strive to enhance the corporate value by increasing opportunities for direct dialogue with the market and focusing on probing ROE, which is our most important management goal as well as EPS growth and capital costs, which we also consider as critical. So this is the end of remarks for the first quarter results. Thank you for your attention.

[Operator Instructions] This is Sato-san from JPMorgan Securities,

This is Sato from JPMorgan. I have one question, mainly in the US-related business, what are your views as to the risk arising from those businesses? The tariff was agreed with U.S. and there was evolution of incentives for renewable energy. So your existing assets or any of your renewable energy businesses, will it impact your strategy? And apart from that, regarding exposure in the U.S., what is your view? And how do you see it?

Thank you for your question. First of all, ORIX US. Let me talk about the business outlook. If you could refer to Page 33, I would like to make additional remarks. ORIX USA, focusing on middle market, it provides finance solution and mortgage business for the real estate and also PE investments. And right now, with inflation and Trump's tariff, the interest is now high. So especially when it comes to real estate mortgage finance and investment in operations -- businesses, the environment is against wind segment, profit is JPY 14 million per operation. So we have been rather conservative. So we're in red. And as was mentioned in a minority investment due to tariff we have been recognizing impairment for some of them. So we will be conservative and try to reduce the level of our assets and for the real estate the high interest rate is continuing more so than we had expected. So we have been struggling in origination for investing in properties. So we are focusing on asset management. So for the segment profit, we are now more or less breakeven. So given this environment, whether it will improve or not, it continues to be opaque. The fundamentals in the U.S., we don't consider this to be bad, but for ORIX USA business, to a certain extent, we need to take into consideration the possible capital recycling. Meanwhile, the credit business has been quite solid. Average loan structured finance and infrastructure finance in these areas. In these debt services, we have achieved a solid result. Having said that, using balance sheet for some of the businesses, we will have to minimize the risk as much as possible. Also, we would like to drive our asset management. So we will pursue a hybrid model between our own equity and third-party fund. And for Hilco Global, this is rather countercyclical. It's very strong against the economic cycle in overall the U.S. So we will continue to invest in Hilco Global and shift to a better profitable assets. We need to recycle. And as to your question about the tariff by Trump, about we renewable energy. The direct exposure in the U.S. is quite limited. However, for renewable energy as an infrastructure, one is price competitiveness and second is the power business itself. Whether it has a strong connectivity with it will be critical Also, of course, there may be tax system changes. But globally, the winning path in renewable energy, how to be in a better position, we need to be very flexible in working on our assets. So that is why we decided to sell Greenko and reinvest in AM Green. And also for Avolon, we have been driving forward. So for the policy of renewable energy business overall, we will not change because of the Trump's tariff. That was all.

Next, SMBC Nikko Securities.

I'm from Nikko. This is Page 8, capital recycling and capital profit and loss outlook. I would like to ask a question about that. First quarter of JPY 45 billion profit and Greenko will be reflected. So you've been putting on that, so JPY 140 billion seems to be the number. It seems that you'll be able to reach the full year plan, since that you will consider observations. In terms of the capital loss, what is your outlook? So in the fourth quarter -- so for instance, a long-term impairment or the goodwill impairment or the credit loss, CCL losses will be accumulated and ORIX Life. In terms of the unrealized loss is over JPY 600 billion for the bond portfolio. So teasing is one profit and to be able to improve the profit for the next fiscal year. How are your discussions going forward in terms of the portfolio realignment?

So as I mentioned on the right-hand side on Page 8, against the full year forecast. So basically, this is the same as we have announced our budget. So currently, it's under review. That's the reason we are saying this is under review. As you have pointed out, this JPY 41.5 billion in the first quarter, the Greenko gains are about JPY 93 billion. If you'd add that, the full year capital gain budget, including exit strategy, by project by project, we are reviewing the outcome. In terms of the -- if we are going to change the financial outlook, it is not only what we have conducted in the past, but in terms of our planning is truly for this fiscal year, correct for this fiscal year, should we consider next fiscal year as opportunity. In terms of the capital gain, the optimal timing, we are taking stock, trying and reviewing about the timing. In terms of the capital loss in the last fiscal year in the fourth quarter, so in terms of the Somahibiki plant, there has been some partial impairment. And in the U.S., individual impairment and the credit loss impairment has occurred. As you have made a question for CCL, until the previous year, there has been some reversals, but they have stopped. Well, from this fiscal year and onwards currently, we are trying to review what will be the right level of reserves. But basically we think that the outlook is more or less conservative. So this will be some of the things that we want to reflect for the full year outlook. In terms of the ORIX Life bond portfolio impaired under unrealized loss, it has improved compared to last fiscal year, but this is linked to the liabilities. In terms of the actual performance against the real business as long as the large surrenders and cancellations, that is the standard, like a portfolio management conducted by life insurances. But ORIX Life, the long-term lump sum payment type of insurance, the surrender risk having that type of risk is limited because basically to offer medical protection type of insurance. So in terms of the nature of the insurance, I think they can absorb the risk. However, that said, in terms of the asset value and going forward, our valuation, if there is something that will have the negative in for the next fiscal year and onwards, they will address that. But currently, in terms of the capital loss, there is no major considerations. They are considering conducted right now. Has this answered your question?

So if that is the case, in terms of the direction on a net basis, the Greenko JPY 93.4 billion of the Greenko shares will come in. So for the delaying some of the sales or even if there's some capital as well, will come up. But in terms of the direction, you are looking in kind of upward trajectory.

As you have mentioned, in terms of each of the exit deals of projects, more than we have assumed more high-quality investors at the interest rate environment, we have to individually, we view with the top management of each of the segments are considering these type of factors. And we are waiting for the review and then we want to communicate that as quickly as possible. .

Moving on from Daiwa Securities, Watanabe-san.

This is Watanabe from Daiwa Securities. Regarding capital recycling, I would like to ask you regarding Acentic-TOB period did not extend and Panasonic projector business was gained in a short period of time. What's the investment discipline? Were there any changes in your approach? And also JPY 30 billion dividend you will be carrying out. So why at this timing are you going to carry out the dividend payout?

Well, thank you very much for your question. Regarding Panasonic Connect projector business, I would like to explain why the agreement was released. So we were supposed to sign an agreement with Panasonic Group, and we had prepared accordingly. As was announced both parties had worked together, and that's a fact. Meanwhile, due to tariff impact and economic situation, the outlook of this business was revisited. And given the strategy on our end, and between ourselves, there were a gap between the two companies regarding the expectation on the future business. And we quickly consulted with each other. So based on agreement, we decided to release the agreement. We decided to terminate the discussion. So it's not that we were not able to reach an agreement, rather based on the rationale discussion, we discussed and agreed that we will not be making investment. So within a certain risk tolerance, the initial business plan did we -- were they feasible or not? In light of that, we made a decision. And for Sentec TOB, it did not achieve the number that we had expected. And thereafter, the price compared to our TOB price, it has been faring higher. It seems like meanwhile, Acentyx management team, we had a discussion many times. So we discussed about whether there's a business synergy? Or is there a room for collaboration to improve corporate value? We have a relationship to continue to hold these discussions going forward as well. So this has been -- the period has been not been extended and the price were not revisited. And as you said, based on investment discipline in light of the business value that we estimated, of course, we will not change our investment discipline just because we want to purchase. So because of the decision by the business side, we did not -- we decided not to extend and not revisit the price. In terms of timing, Sentec, there was an announcement this morning and also the market situation. These are impacting factors every time there's TOB. So I'm sure certain accommodation will be necessary going forward. But every time we take time to make a final investment decision. So every time we will consider within the defined ratio of investment. And also the dividend payout, this was announced. We have been stacking up the profit. And also, the revenue has been growing, but in three categories. The finance segment, in terms of profitability, ORIX Bank compared to the peers, of course, they are not behind, it has maintained its decent profitability and asset has grown to a certain level, and it is being distributed. So in order to grow profitability higher, we decided to return the capital to a certain extent. So in a stand-alone basis, at this point in time, the financial soundness of ORIX Bank has no issue whatsoever. And upon that, we decided to carry out the dividend. And going forward, for each group companies and the business segments, in order to contribute to a higher ROE of a group, we need to go into one by one and be mindful of ROE. So the dividend of ORIX Bank was based on the business strategy going forward. I hope this answered your question. .

Mizuho Securities, Sakamaki-san, please, .

This is Sakamaki from Mizuho Securities. So I have one question. In terms of the shareholder return -- so in terms of the flexibility of share buybacks in the year's plan, you have been talking about that you have been good in your profit process in terms of the sales of Greenko, the -- in terms of the capital you have more room. So what type of internal discussions have been conducted in terms of the shareholder return policy?

Thank you very much for your question. So in this Board of Directors has conducted today in the Q1 financial results based on that results, in terms of the discussions has been conducted. I think basically, the discussions will of course on the forecast going forward or the outlook going forward. I think in terms of the market environment that is solid in Japan, how much will the impact of the Trump tariff. And I think each of the corporations are trying to discern about that. The second point is that in the United States and China, we -- at ORIX as a group, what type of business outlook should be established. In terms of the shareholder policy to be able to make a decision to these materials, we will have to look more deeply and then decide about our policy. So that is the reason why we are saying that it is under review. But this fiscal year in May, we have said that we have said that we have of JPY 100 billion in the program. This will be quite flexible. In terms of the investment pipeline, for the Panasonic company, we have terminated that agreement. And with the Greenko sales, we have invested in green. And in terms of Hilco M&A, we have reached an agreement. So for the major projects, I think, basically, we have some visibility. So in terms of the -- looking at the investment and the payback, if we consider that we have the capacity. And as the market condition shows that if there is a -- Capital Market shows that it's a good timing to conduct share buybacks, if we make that type of decision, we will make a decision under -- after conducting discussions. So maybe not an answer that but thank you very much.

Next, BofA Securities, Tsujino-san, please.

About the return to shareholders, I have a question. First of all, in the first half dividend, how are you going to decide, 39% is the annual, but the profit seems to be skewing towards first half. So what are you're thinking about? And also the additional buyback, and you talked about two major deals as well, but on 70% have completed the sale or it was agreed to. So maybe you will think about what to do with Avalon. Maybe you were thinking about it from about 2 years ago, and this discussion may progress or maybe you will look for a good third-party and whether you will be able to demonstrate your leadership, but the investment size will be quite significant. So taking all this into consideration and also thinking about the future, perhaps you will have to think about the buyback. So the next round of big investment, there may be several options. So I was wondering if this will turn out to be one of them.

So about the interim dividend to start with, know very well last year against the first half result, payout ratio was 39%, and that was our return. And as I mentioned earlier, for this fiscal year, Greenko importer. Looking at this, we will be skewed towards first half, nevertheless, will it be 39%. So when we announce interim financial closings, BOD will decide eventually. But our idea towards this dividend is what is fair. It would be a commitment towards the commitment of 39% against the result. And as long as we don't have any negative factors in the second half, it will be across the board of 39% annually. So that is how we've updated. And for additional buyback, as you mentioned, Avolon's 70%, the Hohai shareholder of 70% and CECO was 70% and CECO. Among our overall capital policy, of course, these are important factors. And also, apart from the current pipeline, we have some other potentials. So we are looking into this very deep. And on the market, of course, being mindful of capital cost, this is quite important as we manage our business. So with and Takahashi-san, we have been holding discussions with the investors in EU and U.S. instead of stacking up the capital based on uncertainties, rather, we should be solid. And looking at the financial state of ORIX, the capacity is sufficiently maintained. So if the return becomes a bottleneck in investment, we will definitely avoid that to happen. So that is how we decided the size of buyback. And as of May, it was JPY 100 billion, and come interim financial results, there may be a certain appropriate amount. So there are moving parts and taking into consideration the Avolon, we will decide if there is an opportunity, we want to make an investment go ahead. Although this was rather vague, I hope this answered your question. Thank you very much.

Next one Nomura Securities, Sasaki-san, please.

So this is Sasaki from Nomura Securities. So I want to ask about the base profit. So I think it's the latter half of the presentation material, the first quarter base profit increased. Where was it coming? As much as possible, can you talk about that, if possible, so from the second quarter onwards, so more than JPY 120 billion, is it sustainable? Or is it going to further increase? Can you please talk about that? Thank you.

So that will be Page 42, I think you're looking at Page 42. As I said at the beginning of the presentation, in terms of talking about the segment profit, in terms of the level of base profit, this is a very solid level for the first quarter. but partially in this, the so-called -- aside of the recurring base profit, some technical reasons -- technical reasons, some has been booked in the first quarter. There is some of that type of has been booked. So if you compare it year-over-year, shown that before tax more than JPY 100 billion level. I think basically, we have been able to reach that level. But it's our first quarter, I will not be able to tell you the exact number. For the bank business, there has been some one-off profits that has been included or in terms of the environment and energy, the capital -- besides some capital gains, there are some technical numbers that has been included. However, that said, up to now, in terms of the momentum, from 2 years ago -- from second quarter onwards, more than JPY 100 billion of this profit has been achieved. In terms of maintaining this momentum, yes, we will continue to maintain this momentum. So in terms of other impacts, in terms of the performance of the PE investees, so it's quite dispersed and distributed. I do not think that one specific investee will have a negative impact. But each of our investees are conducting very unique businesses. So we would like to manage these companies very steadily. But they may lead to some fluctuations in the future.

In Yamamoto-san, may I ask? So maybe I didn't understand what you have explained. So let me ask again. For this fiscal year's guidance, you said that it's under review. What is the meaning of under review? So simply thinking, so last year, you were not able to sell Greenko, you are not able able to achieve your targets. And then this year, it has been decided. So it maybe go up. So that's kind of a simple thinking that I have. So have used the word under review. Is it that implication that the outlook has become negative? Or it's just technically literally, you're just thinking, so it's under review. So can you please help me understand your thoughts.

I think what you said lately is what I was thinking. So when we disclose our buses in terms of the gains come from the sales of Greenko, so in terms of the buyer was reliant on the market conditions, it was a bit difficult to receive, but we have to compile about it. So for each of the segments, we have been expecting that each of the segments will be able to do the business And we disclosed the budget outlook of JPY 380 billion. From my point of view, the review of our forecast, including the Greenko sales. So it's not just adding or subtracting what has changed against what is our forecasted performance for this fiscal year, we do want to answer that correctly and solidly. So as far as time allows, compared to initial budgeting, how are things are going to transpire from July and onwards from the top management for each of the heads of the business segments, we have closely communicated about that. So I do hope that we will allow us more time to think about this. So it's not that got better or worse. We are thinking that we are really looking into the budget, so that we can say that this is the revised forecast backed by solid reasons. So we do want to spend some time to be able to reach that conclusion.

So we're closing in, but this will be a final question. SBI Securities, Otsuka-san, please. .

This is Otsuka from SBI. Can you hear me?

Yes.

Towards the back of the presentation on Page 46, Asset Management disclosure is given JPY 81 trillion at the end of June. And it doesn't say here, but in the previous document, March 2025 towards the left, AM was JPY 74 trillion. I believe it was the number. So simply within 3 months, plus JPY 7 trillion, that's disclosure. So I would like to know the background of this increase. So third-party asset management, I think you've talked about enhancing those areas. So I am now interested.

Takahashi-san mentioned this as well. So in mid- to long-term strategy, we would like to grow AUM through asset management that is the direction within mid- to long-term strategy. And on Page 45, 1 page before, that's included on this page. And also, as you recall, at the end of March, AUM outstanding amount. It's now JPY 81 trillion. So it has grown. And the major reason behind this increase, there are two. One is Noverco and other companies, the inflow of cash relatively speaking, towards this quarter. Well, although this was within our expectation, we were able to take them in. And prior to that, over the past 1 year, AUM was rather flat. But from previous quarter, the momentum of recovery started to be very clear. Perhaps this is mainly due to product lineup and the investors understood that, and this led to the inflow. And also, U.S. stocks, equities, the market was good. So there was inflow and AUM outstanding. There has been a higher valuation. And for first and second quarter, it has been on the rise. So that was what we call related. And apart from that, in the U.S. CLO and securitization product arrangement business is underway. So this is a bit credit- related product, which has been quite successful. So in the past, as a hybrid model, balance sheet was being used, but once sold to investors, it will shift to AUM. So for CLOs, the outstanding amount is quite significant. So this was another contribution. Especially in case of U.S., because of the U.S. dollar, in terms of value terms compared to yen-based, the impact appears to be much bigger. So there are other fluctuating factors, but there were valuation loss, but we're able to absorb and tariff impact. So both in U.S. and Europe. I hope that I was able to explain the factors behind these numbers. So mark-to-market is another thing. So there's a JPY 21.4 billion inflow. But I think market value is not that high. Stock base, as you say, there's an impact on the market -- of the market. So with Takahashi-san, just showing the numbers on the balance, it's difficult to understand. So in individual IR meetings, he has received a lot of questions about the product profitability, and this is a home for myself as well. I hope that we will be able to sort this out and better explain to you in our disclosures going forward.

Well, thank you very much. I am looking forward to the detailed explanation going forward.

So the time has come to end this meeting, we would like to end the Q&A session. So Yamamoto will say some last words.

So thank you very much. In the first quarter, I think physically, we have seen come in terms of Greenko from that on last fiscal year, I think people were concerned about the situation, but we have been able to close the deal, and I think that was quite a favorable situation. On the other hand, and other investors has asked for the second half, we cannot be too optimistic. And for this fiscal year, the capital gain is concentrated in the first half. But for the full year business in itself, I would like to carry out a business steadily. In terms of the review and looking into the business environment, we will focus on these activities. And through communicating with you, I would like to clarify any issues. So I hope that you will be able to support the going forward. So this like to end the first quarter presentation results. So thank you very much.

So for the March 2026 first quarter, a briefing, I would like to end this meeting. Thank you very much for participating until the end.

Thank you for joining ORIX Corporation for Annual Results for the course of the fiscal year ended March 31, 2025, despite your very busy schedule. I'll be the master of ceremony. My name Nakane from IR and Sustainability Department. Thank you for this opportunity. The attendee at today's conference is Member of the Board, Represent Executive Officer, President and CEO, Hidetake Takahashi and also Kazuki Yamamoto, operator and responsible for Investor Relations. Inoue, Takahashi and Yamamoto will present followed by Q&A session. The briefing session is scheduled to last approximately 1-hour. I would like to hand over to Mr. Yamamoto.

I am Yamamoto from ORIX. So I would like to now report on the consolidated net income for ORIX for '25 March end. So please refer to Page 3 to begin with. So consolidated net income for the fiscal year ending March 2025 was JPY 351.6 billion, which was announced at 3:30. Although it was -- it fell short by 9.8% compared to the forecast of JPY 390 billion, but the net income was up 2% from the previous year's result of JPY 346.1 billion. ORIX once again achieved record high profit. The full year ROE was 8.8%. At the end of FY '25 March end, the market had changed significantly with increased uncertainty due to the disruptions in the global supply chain and fluctuations in resource prices. As a result, we reviewed future prospects for our businesses. And after considering these uncertainties, we recorded total impairments of JPY 53.1 billion on a pretax basis for some assets and investments. On the other hand, many segments, including PE and Concession, Aircraft and Ships and Corporate Financial Services improved their performance, leading to another record high profit for the full year. On the next page, we will explain pretax profit and segment profit based on the 3 categories. Now Slide 4. If you could refer to the bottom row of the table below compared to the net income of JPY 351.6 billion mentioned earlier, pretax profit was JPY 480.5 billion, which is JPY 10.5 billion more than the same period last year. The profit from the 10 segments, excluding headquarters costs, came at JPY 544.7 billion. Now I will explain the breakdown using the 3 categories. First, profit from the finance category was JPY 176.3 billion. Last year, we booked a gain from the sales of ORIX Credit. So excluding that impact, profits were higher. The main factors behind the profit increase was strong investment income from ORIX Life Insurance and the U.S. private credit businesses. The profit from the operation category was JPY 200.2 billion. Profit declined year-over-year, mainly due to our conservative revision of plans more than the conservative plan of FY '22 March end for the coal and biomass coal-fired power plants that resulted in an impairment of approximately JPY 20 billion. On the other hand, contributions from Kansai Airports, ROBECO and Santoku shipping resulted in higher profits, excluding impairments. Regarding the investment category, segment profits were JPY 168.2 billion, a significant increase of JPY 56.2 billion compared to the same period last year. 2 exits were realized in the domestic PE business, thanks to contributions from significant improvements in profits at investees and investment gains in the U.S. and Real Estate segment and increased profits from equity method investees like Avolon. Next, we will explain segment profit in terms of base profit and investment gains. So please proceed to the next page. Out of total segment profits of JPY 544.7 billion, the so-called base profit was JPY 457.1 billion, a 5% increase from the previous year. Investment gains net of impairments were JPY 87.6 billion -- JPY 87.6 billion. Base profits exceeded JPY 100 billion in all 4 quarters for the first time in FY '25 March end. The overall operations and investment portfolio contributed solidly to profits, supported by the recovery from the pandemic, inbound demand and the steady recovery of domestic economic activities. Through value creation in our strong domestic PE investment ships, aircraft leasing and European asset management businesses and in businesses expected to grow further, we will continue to drive sustainable base profit growth for the ORIX Group. Additionally, investment gains through capital recycling are one of the pillars for realizing profits in a diversified operating and investment portfolio. In the fourth quarter, investment gains were a net loss of about JPY 2 billion due to impairments exceeding JPY 50 billion. However, we were able to record gross investment gains exceeding JPY 50 billion through PE investment exits in Japan and the U.S., making full year gross investment gains larger than the same period last year, and second only to the first -- fiscal year FY '22 March end when we booked the investment gains on the Yayoi sales. Finally, we will discuss the progress of capital recycling. Please refer to Slide 6. In the fiscal year ending March 2025, we recorded capital gains of JPY 140.7 billion for the full year. The cash inflow from the sales for the full year was about JPY 645 billion, while new executions amounted to about JPY 600 billion in total. So therefore, there was a difference has been indicated. The assets sold were primarily those with strong performance, such as the 2 domestic PE investees listed here, where optimal buyers were selected for the firms from both domestic and international bidders. In Corporate Financial Services, the selection of business succession targets progressed in the micro business succession M&A project faster than the past several years, resulting in 3 exits. Additionally, there was a significant cash inflow from the sales of a large multipurpose facility in Tokyo, which had been a long-term holding, while its value was being enhanced. These cash inflows were used for new investments focused on the domestic real estate, domestic PE and aircraft following the [indiscernible] IRR focused selection process. Now among these, we proactively invested in aircraft based on the assumption that the supply and demand for aircraft will remain tight in the future. For the fiscal year -- for this fiscal year, we will continue to execute new investment, while striking the right balance between recouping investment through capital recycling. We will remain flexible in making a decision if we think the deal will contribute to ORIX's future growth. So you can see the pipeline on the following page. Now the vertical axis representing investment amount and the horizontal axis representing the time required from investment execution to earnings contribution. So at ORIX, from the time of investment, we would try to -- swiftly try to generate the profit from like ships and aircraft. And also in addition to private equity investment on a long-term perspective, we would try to make an investment that would allow us to enjoy a capital gain for many years to come. So we would try to identify investment that benefits from inflationary environment and also proceed with execution if we can enjoy better terms and conditions for the deal. Now -- so we would -- we had roughly about, as you can see, more than JPY 2 trillion of investment, and that will remain to be unchanged. And this concludes my presentation. And I would like to hand over to President, Takahashi, who will present on our forecast for the new year.

So good afternoon. So I have been appointed to be the President and CEO from January of this year. My name is Takahashi, and allow me to present from -- starting from Slide #8. So we regret that we were unable to achieve the sales of Greenko announced in January. And thus, we were not -- we were unable to meet the full year forecast net income of JPY 390 billion for the fiscal year ending March 2025. However, we achieved a record net income of JPY 351.6 billion and steady increased base profit, despite recording significant impairment due to our conservative forecast. So we would like to continue to grow the base profit in a steady manner going forward. And I think we do perceive this to be a great achievement this year -- the last year. ORIX's full year dividend will be JPY 120.01 per share, following our dividend policy of a payout ratio of 39% of the previous year's dividend, whichever is higher. Next, for FY '26 March end, we forecast a third consecutive year of record net income of JPY 380 billion. So we will maintain our current dividend policy and assuming net income JPY 380 billion, FY '26 March and DPS will be JPY 132. We will also increase the scale of share buybacks to JPY 100 billion, double the usual amount of JPY 50 billion. This is aimed at helping to steadily improve ROE, our most important management indicator, and this has been resolved at the time of BOD today. So as a result, total shareholder return ratio, including dividend and share buyback will be 65%. Please see the next page. Next, I will discuss our view of the impact of recent macroeconomic developments on our businesses. We believe the direct impact of so-called tariff is limited, but we need to keep in mind the indirect net effects such as possible recession and exchange rate fluctuations. Regarding the possibility of a recession, for example, some existing investments and loan targets in the U.S. and Japan are expected to face rising procurement costs posting -- posing a risk of deteriorating performance. However, such clients account for a limited -- accounts for a limited portion of our portfolio. Additionally, due to deterioration in the investment climate, there is a risk that new investments and exits may be delayed as compared to our plans, and the realization of investment gains overseas may be postponed to the next fiscal year or later. But on the other hand, domestic real estate and PE are maintaining solid momentum at the present, and we expect to achieve a good amount of investment gains from these areas in the fiscal year ending March 2026. Given the mainly uncertainties, including geopolitical risks, we believe a cautious approach is necessary for the time being. Meanwhile, during these uncertain times, it is important to conduct the business activities with a focus on enhancing mid- to long-term corporate value and to have disciplined portfolio management. Now this means replacing assets with low capital efficiency to improve ROE. At any rate, ROE would have to be improved, and we would exert much of the effort in that regard. Now despite this business climate, which remains to be uncertain, we believe our FY '26 March end net income target, which represents a new record high is still achievable. Now please move on to the next slide. Regarding this fiscal year's forecast, we will briefly explain it by breaking it down into 3 categories. We expect double-digit growth in profits in the operation and investment category and continued stable growth in finance as well. As to the finance, we are focusing on high premium first sector products, targeting corporations and affluent individuals for the insurance businesses. This should allow us to grow premium income at a pace significantly exceeding that of Japanese competition. This customer segment is an area where synergies with the corporate financial services can be expected, and we anticipate profit growth through expanded premium income from FY '26 March. And also, we should benefit from a diversification of our investment management as well. In operations, tourism-related areas such as airport concessions and aircraft leasing are likely to be the drivers of profit growth. The airport concessions business has completed a major renovation of Terminal 1 at Kansai International Airport in March, expanding international passenger intake capacity by 1.7x. So and preparing for increased passenger traffic due to the Osaka Expo. In investments, we anticipate profit growth through continuous capital recycling in real estate and PE segments by leveraging our extensive network and being capable of real estate development from sourcing properties and projects to exits. Please turn to the next page. Finally, with regards to shareholder returns, previous full year dividend of JPY 120.1 per share was a record high and a CAGR of 21% in dividends per share since the fiscal year ending March 2011. And we will continue the dividend policy of having a payout ratio of 39% or the previous year's dividend, which is higher. And based on the forecast net income of JPY 380 billion, the dividend forecast for this fiscal year will be JPY 132 per share. We intend to continue implementing share buybacks. I already mentioned JPY 100 billion, but we will do this flexibly to achieve sustainable EPS growth and optimize capital at the same time. Moving on to long-term vision and the 3-year plan. Please skip to Page 13. In formulating the new 3-year plan, we started with the premise of the ORIX Group's purpose, which was established last year. And based on this, we drew up our goal and targets. And 10 years from now, ORIX vision for 2035 is to make impact through alternative investments, operations and business solutions. We will work to achieve an ROE of 15% and a net profit of JPY 1 trillion in the fiscal year ending March 2035, 10 years from now. And we also recognize that ROE improvement is ORIX top's management priority for our new 3-year plan, which starts this fiscal year. We aim to achieve an ROE of 11% in fiscal year ending March 2028, final year of a 3-year plan. Please turn to the next page. To realize this long-term vision, we have 3 focus areas. I would like to explain about the growth strategy. So we have pathways, growth and impact. These are the 3 focus investment areas. And we want to evolve our strength in our 2 business models, alternative investments and operations and business solutions to achieve a sustainable growth cycle. Business solutions are there in order to solve or address our customers' problems. With regard to pathways, the focus is on technological evolution, aiming to achieve new areas of impact in the future economy. Growth focuses on global population growth and demographic changes, supporting sustainable growth in a changing world. Impact addresses global warming and limited resources. We are aiming to make a positive impact on these issues. While we already have businesses in these key areas, we intend to further strengthen cross-segment collaboration, combining the strength of each segment expanded over the past decades to develop business at scale in each area. While these 2 business models are the ones that we have traditionally possessed. The asset value creation model will evolve into an asset management business, incorporating third-party capital in each business, transforming into an asset-light business structure. This is our plan. In a model for solving clients' issues, we provide solutions to global clients' challenges, such as M&A brokerage, focused on business succession opportunities within the Japanese market, which has actually grown to a considerable scale. We aim to strengthen our revenue base with asset-light fee-based models. Please turn to the next page. Now I would like to explain about specific measures to achieve our long-term vision. We will implement 3 key measures. The first is disciplined portfolio management. Second, sophisticated risk management; and third, new business creation. These are the essence of management for ORIX Group in my own opinion as well. So we want to execute all 3 without fail, and the details can be found on the bottom of the slide. We also believe that disciplined portfolio management is particularly important for improving ROE. As before, we will realize business value through capital recycling moving forward, but we will also visualize the growth potential, capital efficiency, impact on credit ratings of each business and asset at a much finer granularity. This will enable us to optimize and reconfigure the portfolio and improve ROE, which is the most important theme for the management of the group. In relation to enhancing our existing businesses, as you saw in the previous page. We aim for sustainable growth of the bottom line through new businesses centered on the strategic focus areas, which was outlined in the previous page. We will invest management resources to maximize growth in the numerator part of the ROE formula. Please on to the next page. I would like to explain the ROE targets and initiatives for ROE improvement in our new 3-year plan in the 3 categories of finance operations and investments. In Finance, we aim for a double-digit ROE growth through accumulation of alternative investments and syndication, including addition of third-party funds, selection and concentration within Asia and the expansion of nonfinancial revenue through the model of solving clients' issues. In operations, we aim to improve ROE through horizontal rollout of asset management business in real estate, renewable energy, aircraft and ships and enhancing services and inbound businesses. We want to improve it to 15%. The -- in the investment category ROE may fluctuate depending on exits, but we aim to improve ROE to 11% on a multiyear average basis by accelerating capital recycling and forming PE funds. Recently, we announced the sale of ORIX Asset Management and Loan Services Corporation. And we intend to continue optimizing the business portfolio across the 3 categories without setting aside any area as a sacred cow. Our strength has been able to approach sectors and regions from 3 different angles: finance operations and investments and our ability to undertake hands-on investment and operations utilizing expertise in finance, which is a founding business. Over the mid- to long term, our portfolio will shift more towards operation and investments. But it is important to maintain abilities in all 3, not just categories but methodologies. Please turn to the next page. Finally, I'd like to explain the policy regarding capital allocation and shareholder returns in our new 3-year plan. While continuing to maintain an A credit rating, we will persist with the policy of distributing 39% of net profit as dividends. And for March '26 fiscal year, we have JPY 100 billion share buyback. Looking at the capital recycling, we will be flexibly conducting share buyback to optimize capital and also, at the same time, grow EPS sustainably. We believe that credit mission for me is to enhance long-term enterprise value and the stock value. Since EPS growth and improvement ROE have a correlation with rising stock prices, I want to reiterate that we will thoroughly focus on capital allocation and portfolio management that emphasizes the growth potential and capital efficiency. And the impact on credit ratings of each business, while optimizing capital to achieve sustainable EPS growth and ROE improvement. This concludes the brief overview of our long-term vision and a new 3-year plan. Please turn to Page 18. And I would like to recap the key objectives once again. We aim for an ROE of 15% and net profit of JPY 1 trillion for the fiscal year ending March 2035 as a management KPI. And there's an interim milestone of ROE 11% for the fiscal year ending March 2028. This is the most important goal for that new 3-year plan. And regarding the JPY 100 trillion AUM target in asset management, we aim to achieve this within these 3 years, and we plan to further expand AUM. That was a quick view on our long-term vision and our new 3-year plan. Thank you very much for your kind attention.

[Operator Instructions] But please do understand that we would prioritize those people who are attending the meeting in-person. [Operator Instructions] So to the person at the farthest right on the first row in the venue.

I am Watanabe from Daiwa Securities. I'd like to ask a question with regard to capital policy. So the buyback is now being doubled to JPY 100 billion. And on Page 17 in the orange box. So maybe JPY 150 billion or more is expected to be repurchased. So if you could be so kind to share the idea to the shareholders' return as well as the shares repurchased program.

So we have been targeting at achieving double-digit ROE and -- but now we have positioned ROE to be the first and foremost important management target, which means that we need to address both the denominator as well as the numerator in order to improve our ROE. And as for the denominator, we would have to continue to carry out the shares repurchase program in order to achieve capital efficiency. So -- and also capital recycling, the timing of the investment. We have to strike the right balance in addressing the numerator. So therefore, we would have to carry that out in a very flexible manner. In a short time period, if there was to be, of course, a better opportunity, attractive opportunity for us to gain on the investment that has to be made, but the investment and divestment, there could be some discrepancies. We will not be able to perhaps achieve a good enough balance. So divestment amount may perhaps be in excess of the possible investment, then we will be able to allocate such amount to shares repurchased. So in any case, we would like to continue to focus on ROE, so far as the management indicator is concerned.

And also, you have mentioned about focusing on EPS, and which means that you are incorporating the double-digit growth. Is there any kind of changes in the idea behind that?

No, no changes. But basically, I said that we would turn more proactive in terms of shares repurchase program because 70% of the profit is base profit, and the others are consisted of capital gain basically that is. But the capital gain in a linear manner to grow this -- in a linear manner, I think will be difficult. So this is why from the perspective of cash in and cash out, as we have said. So there could be a possibility of more cash in than the cash out, then in such a circumstance by carrying out the shares repurchase program, we'll be able to enhance EPS -- I'm sorry, my voices are becoming a little croky. And -- but at any rate, at EPS, we would like to continue to grow EPS steadily in a linear manner, and then that is our idea.

Second row in the front.

SMBC, Nikko Securities. My name is Muraki. I have a question about your capital allocation. Page 48 on the right-hand side, I can see a diagram. And ROE improvement, in order to improve ROE, investments must be shifted from light red to the darker red in the center and potentially push to the upper side of this slide. I think that's what you're trying to do. Now with regard to investments, Capital allocation, which part do you intend to shrink? That's my question. And also, in terms of the share buyback for this fiscal year and the next fiscal year, page 17 shows about JPY 300 billion -- I think, more than JPY 300 billion. Is this the number for the upside -- at the time of upside? Or is this based on the standard scenario in terms of investment? What is the scenario for the share buyback on Page 17.

In order to improve ROE, there are several things that can be done. One is revisiting capital allocation and low capital efficiency will be released. That's one thing. And another thing is we want to maintain A rating and also conduct share buyback in a flexible manner. As I said before, and we need to set aside some amount. Well, 2 days ago, there was an article about me in the newspaper, JPY 4.1 trillion equity, and out of that ratio between the goodwill and intangibles. This is about just over JPY 1 trillion. And in terms of rating, excluding -- this will have to be excluded for the purpose of rating. So in terms of asset or capital, goodwill and intangibles. The ratio of these 2 pieces. If the ratio is higher, then we will be less likely to be able to do a share buyback. So my point is there are multiple factors involved and there are pros and cons. And we want to look at them at a high level of granularity so asset investment or divestment. What is the impact on our financial statement? We want to look at this, monitor this at a higher level of granularity. And we want to visualize it high level of granularity. And based on quantitative data, we want to execute capital recycling. So this is what I meant by ROE improvement. The most important management measure is rigorous portfolio management. This is why I said that earlier. And with regard to the numbers, I would like to refer this to Yamamoto-san.

Yes. You have a question about Page 48. I would like to explain about the numbers, 11% 3 years. Upside for the investment category, this is not really reflected directly. But based on the current portfolio, the horizontal axis, in fact is a percentage of capital allocated. And this is out of the consolidated capital. How much each category receives in terms of percentage breakdown. So investment will be repeated and accumulated. So divestiture and the investment will be repeated over and over. And this is how we enable this. So ROE will be pushed up through this process. And this is already taken into account, and we want to achieve 11%. For the first year of this plan, share buyback will be now changed from JPY 50 billion to JPY 100 billion because of this background. And as we move forward with future capital recycling, as I said -- as we said, there is no sacred cow, no stone will be left unturned. So we will continue to make these efforts in order to achieve 11%. This is what we are trying to show with the bubble chart on the right-hand side of Page 48.

So withdraw from low profitability business and also share buyback. How do you incentivize these measures? Because the remuneration for the directors traditionally, sees net income as a key KPI, and ROE was not really taken into account.

There are 2 things. I assume this position of the presidency in January and the Head of Segment and Head of Administrative Department, all of them, I have repeatedly delivered the message that we have to be focused on ROE. So I’m trying to change people’s mindset. And secondly, having said all that, reflecting this into the executive remuneration, of course, is important. Well, we didn’t have enough time this time around. Starting from January with the AGM, we could have introduced a new remuneration system, but there are different potential designs, so we would like to spend some more time discussing different possibilities. And by next year, ROE linked incentive structure, hopefully will be introduced. So 11% as much achievement in 2028 and going down to 10% or single digit in the following year, that is not really what we want. We want to see rolling recurring mid- to long-term ROE improvement. And therefore, incentive system has to be in line with that idea. So we’ll be carefully designing the system. So starting from next year, hopefully, we can introduce the new incentive system.

So the second person on the second row.

Sato from JPMorgan. So for this year, the profit plan. So in what way will you -- did you apply your conservative estimate. So for the year that had ended, the gross capital gain and net capital gain, if we were to refer to those numbers. So impairment of JPY 50-plus billion also can be observed. But this time, the segment profit, the increase is roughly about JPY 55 billion. So if impairment is going to go away or you are just expecting the increase in profit by the same magnitude of the possible impairment. So what is your expectations and especially for the like base profit? And also, is there any kind of conservatism that is reflected, if you could be so kind enough to respond.

There are some conservatism. But also, we are, on the other hand, aggressive or proactive. And at the end of the day, we think that this profit is achievable, and this is why we made the announcement. But for example, unfortunately, the Greenko sales was not executed in the last year. So according to the SPA, it was a long stop date. But after April 2, we had -- unfortunately, we were not able to reach to the full amount as a result of the procurement of the fund. So the market has been quite volatile every single day. So this is why, but our intent remains to be unchanged. Once the market kind of quietens down and if the fund is available, then we should be able to start this program. And -- so from that perspective, it is true that we have not incorporated such an amount into the plan. And as to the ForEx JPY 100 -- or mid JPY 140 was expected. But according to the forward, it is about JPY 144. So the forward, if that becomes the spot rate, then there could be a possible downside slightly, that is. So be it upside, downside, putting that all together, JPY 380 billion of net income. Whether this is enough or not, I'm sure you may have different opinions about this. But we think that this is achievable, and this is why we have made such announcement today.

Well, if possible, for this fiscal period, the base profit starting from last year. So I know if you could be so kind enough to explain whether you are expecting growth.

Well, not growth by 10% to 20%. You mean by pretax profit? Yes, we are expecting the growth to be enjoyed. So if I may give the breakdown. So in coming up with this plan, and we have taken into account all that needs to and real estate related because of inflation. And for other reasons, the uncertainty is rising, we think, because last year’s result was had being pretty smooth. And from that aspect, you may perhaps like to regard this to be conservative. But the condominium sales and also hotels and inns in the inbound tourism related, we had made the fine-tuning, taking into account this robustness of the market. But other investment, for example, we may have turned a little invest – kind of conservative and also ships. There may be an impact from Trump tariff, but the ownership of the ships. In fact, the long – the distance of sail, in fact – the cruise, in fact, has been extending. So therefore, that remained to be pretty strong in the last year. So there will be no negative this year. And then like a concession, for example, airport. And as for momentum, there seems to be a recovery being experienced. And so therefore, on a year-over-year basis, we have come up with such a plan that you see. Thank you.

Thank you very much for waiting. Moving on to the next person.

This is Sakamaki, Mizuho Securities. Profit for the last year of midterm plan. I don't think you have disclosed that. I know that the ratings can be restriction. And share buyback is not unlimited, and you have to consider ROE. So in terms of Plan A, what would be the profit level. I know for this fiscal year, there's uncertainty but 2, 3 years down the line, the situation will be different. So what level of profit do you think would be achievable or acceptable?

We have not announced any numbers today. So I would refrain from talking about any specific numbers, but you can maybe back calculate, reverse engineer the number. ROE is important for us, as I said before. Gross profit contribution may be there, but if the capital efficiency is low, ROE can be low or weak. And turnaround or sustainable growth cannot be expected if there is such an asset, then even if we end up losing the bottom profit or short term, we may want to prioritize ROE improvement. That is our intention. And in 2035, JPY 1 trillion of net profit is now being targeted for. This is very challenging. This is not an objective that is easy to achieve. And it goes without saying, in order to improve ROE, we need to shrink the denominator, but also grow the numerator at the same time. We want to be rigorous with our portfolio management and also create new businesses. And we want to allocate maximum management resources for these areas. This is the intention behind that. So rather than being fixated on a single year bottom line, we want to improve the profitability of the midterm, long-term in a sustainable manner, so that we can flexibly do the share buyback and achieve a linear growth in EPS. So bottom gross profit level is not something that we would like to share with you today. I hope you understand.

Any other questions from the floor? We would like to move on to entertaining questions online from SBI Securities, Otsuka-san, would you mind unmuting and start asking questions.

This is Otsuka from SBI Securities. I hope you can hear my voice okay.

Yes, we can.

So Page 16, referring to the slide so for the new year, the ROE plan. So in these businesses, you have ROE plan that has been shown but for the first time, you have taken such an approach, right? So with regard to the achievement of ROE for each of these categories, the responsibility or commitment? How -- who is going to be to hold accountable for this or responsible for this? So like the person, the Group Officer, I don't think there's anyone who is in charge of Group Officer for finance, for example. Or you mean the segment like head of the segment may be finally responsible? Or if that is going to be the case, then the capital would have to be allocated to each of these categories or -- how does it work?

Well, if I may respond to your question. As of now, these 3 categories, the commitment to these numbers, the management who would account the responsible is Inoue, CEO and myself COO, Takahashi, two of us. But on the other hand, on other pages. As we had disclosed, the finance business, the investment and the operation, dependent on the segment. The businesses could be categorized differently. So I'm sorry to perhaps go away from your question. But in particular sector or any market, the 2, 3 approaches of finance, operation and investment, so I think this is the strength of ORIX that we can approach from these 3 different perspectives or 3 aspects of the businesses. So rather than appointing the head of each of these categories, under each of the head of segments, we think that the best thing that could happen is to carry out these category activities. So -- but we should not make it kind of ambiguous. So as we have said at the time of the portfolio management presentation. As of now, this finance business, so in the 3 categories, there is a capital allocation. And also in 10 segments, the capital allocation, we do have managerial accounting perspective. So in other words, the distribution is made. But in a more granular manner, we would like to kind of approach is in particular segment. So we may have 3 different categories. We may have different businesses or different risk return profile. So therefore, finer granularity. With finer granularity, asset and operations are separated so that the capital allocations are made accordingly. And so that we'll be setting the ROE target for each of those businesses. So -- and in -- we kind of balancing the portfolio. But we are still in the middle of the way, but we do not intend to take much time in completing this task of ours in the next 2 years. In the 3 years midterm plan, we would like to, of course, enhance the sophistication of the portfolio discipline, the management, but how far are we going to kind of disclose to you, the numbers is yet to be decided though. So I hope this answers to your question.

Well, if I may just confirm then, in that case, operation-wise, to the head of segments, so there will be -- there is a quasi-kind of capital that has been allocated to them, and that is already up and running. But incentivized, you are going to be designing this incentive program?

Yes, exactly. So by segment, although it is up and running already, but that is on a segment-by-segment basis. So there will be different asset classes in each of the segments. So we may have to break it down with much more finer kind of granularity so that we’ll be able to manage our portfolio in a much better way. So that will be our approach.

BOA, Tsujino-san.

Yes, this is Tsujino-san, BOA. Can you hear me.

Yes. We can hear you.

In fourth quarter, equity-based investment of about JPY 10 billion in Asia and also in Europe, some amount. And I'm just imagining that Greenko sales may have been possible until the last minute, and you wanted to revisit this, and you were considering impairment. That is my read on the situation. Greenko didn't work out, but still, you did an impairment process. But the size of the impairment is quite large. Why were you able to do this at this time? And why did you want to do this at this time around and not before? That's my first question. And actually, the mixed firing impairment -- the environment business impairment is also related to this. Considering the current environment, I think [Hibikinada] in Japan. Well, this timing, I just want to know where the timing of this can be justified. That's my first question. And considering the size of the impairment, if we can exclude the impact of impairment. You could have done JPY 380 billion and you gained from exit to a great extent last year. I understand that. And this may not be present in the coming fiscal year. I understand that as well. But also at the same time, this JPY 380 billion reflects various types of risks. Now in what kind of situation, would you not be able to achieve JPY 380 billion, what would be the conditions or parameters that will realize that kind of scenario?

Thank you for your question. Impairment, because without saying, has to be implemented according to accounting rules. It's not something that we can control the timing of. So please understand that point to start with. I'm sure that you can imagine various scenarios, but there are specific reasons. And of course, no impairment is the best possible scenario. But in the prior fiscal year, we had to process necessary impairment. As we posted impairment, we had to relook at the assumptions that become more conservative. And if you believe that the assumptions are too conservative, maybe the impairment was too big from your perspective? Or if it's the other way around, maybe it's the other way around. But impairment and gain on sales matching both of them in order to control the profit? Well, I wouldn't say that we never do it, but in terms of divestiture, of course, CEO, Inoue, says that we have to buy low and sell high. And of course, we should sell high at the maximum profit level, if possible. So we do not arbitrarily control the timing of divestiture. And if the outlook for the business is poor and we have to post impairment, that will affect our capital as well, and that will improve ROA as well. So rather than doing buyback, flowing the money out of the organization, if we do that instead and post impairment, we can optimize. The capital, which will improve the ROA in the future and improve the quality of capital and quality of asset. So that's another management approach. So as necessary, at the right time according to the accounting rules, we will be posting impairment, and we want to be flexible with the share buyback. So this is a policy that's been long-standing. It has not changed. Now with regard to JPY 380 billion, I believe you're talking about the forecast for this fiscal year. Under which scenario we will not be able to achieve this. Well, every morning, we wake up to a new set of news. For example, Trump tariff are causing recession in the United States and that may cause global economic downturn, if that becomes a reality, of course, our base profit will be affected by that. And as I said before, if the sales or the divestiture is faced or if the investment that is planned cannot be executed at that time, things will shift or change. So those are the big factors that I can think of. Inoue-san, do you have anything to add?

With regard to how we formulate the plan, I would like to respond to your question, Tsujino-san JPY 380 billion forecast. In the prior fiscal year, we applied some conservative measures. So I think the plan is more credible this time around. And in the fiscal year, JPY 140 billion or more gain on sales was achieved. Well, that was a plan and we could achieve that based on various assets. But of course, when it comes to sales divestiture, we have to think about the buyer situation. We try to distribute that over the 4 quarters, and some of them are already underway. And in the end, we want to realize all of these in a satisfactory manner. But maybe INR 10 billion or so fluctuation may occur because we don’t necessarily want to push the sales. Now JPY 380 billion, Greenko does not include – does not – is not included in this number. In other words, this base number is quite conservative, but still 0% increase on net profit for this fiscal year. So overall, the plan itself is a little bit more aggressive rather than just conservative. And hopefully, we can give you more information going forward.

So this is going to be the last question. So from online Sasaki-san from Nomura Securities.

I am Sasaki from Nomura Securities. I hope you can hear my voice, okay. Would you mind speaking up a little more? I am Sasaki from Nomura Securities. I hope you can hear my voice okay. So I would like to ask a question about the Slide #6. So this time, so non-efficient businesses may be divested in a much more kind of proactive manner than before. But in the new investment, JPY 500 billion to JPY 700 billion is the idea that you may have. And if you're going to be asset portfolio and the size of the sales of assets, would that match against this JPY 500 billion to JPY 700 billion? Or do you have any other size in mind? And also time line-wise, whether it would happen in the first half of this year or the second half? Do you have any idea as to the timing as well? And if at all possible, the risk is heightening in different parts of the world, you had explained. But on the other hand, as to your businesses, as we enter into recession, you do have the strength of being able to enjoy such situation. So in this time of uncertainty, is there any kind of new business opportunities that you foresee?

Well, as the first part of the question, Yamamoto is going to respond later. So let me respond to the second part of your question. To begin with, as you had rightly pointed out, you see we have diversified a really diverse area of businesses and countercyclical in the past as well, such as the timing of global financial crisis, IT bubble burst and so on and so forth. So we did manage to post a positive result on our P&L. So -- and I think that is the reason why you had asked the question. As for the future, it just happens today in the morning, we have made a press release. So Hilco Global, Hilco Trading, the acquisition, nonbinding MOU has been exchanged and concluded. So what they do is they would carry out the appraisal of real estate asset and also the carry through what is recognized to be liquidation process in United States such as the inventory, for example, they'll be purchasing the remaining inventory and also to liquidate them as well. So therefore, they are truly countercyclical businesses that we are now just about to acquire. So from an organic perspective, at the time when the cycle -- the economic cycle is on the downturn, we would be able to make profit, although it's -- it sounds a little kind of weird, but still, we would very much like to make the most out of our strength. So if we can move on to the first part of the question?

So this is going to be Yamamoto. And allow me to add to what has been said by Takahashi so far. So JPY 500 billion to JPY 700 billion, so recouping of the investment. So we have not taken into account that part. So in terms of the cash in, that would work out to be an upside. And in other words, from a P&L perspective, even if it was to be flat, this capital release will be proceeded. So therefore, as ROE management, I think we would have more options. And I hope this answers to your question.

If at all possible, do you have any size in mind as well as the timing or how kind of firm the plan is?

Well, in the 3 years, the execution is to be done during the 3 years period. So it is very different from the usual PE investment, like – execution, exit in the first half and then exit in the second half. This is not going to be such a case. So we should not refer to it in a snapshot manner. But just I had explained whether there is any room for improvement of the businesses or improvement in the financials. So in the – during the 3 years, we will be scrutinizing all the businesses in the pipeline. And so that hopefully, there will be no much of a decline from the current level. But of course, there will be some little fluctuations for the up or down, but even if we have JPY 20 billion of a deal, we would not be able to reach to that extent. So please do understand that there will be a kind of an imaginable kind of size. So I think it will be in the range of JPY 500 billion, JPY 700 billion just as you have asked the question for. Thank you very much.

So we have just gone over the time that was scheduled to conclude this session. I'd like to hand over to Takahashi to give us the closing remarks.

Thank you very much for joining us today. I’m sure that there are still some questions left, but we have introduced a strategy and the measures today. And by implementing them on a quarterly basis, we would be looking forward to providing you with the progress, so that you can monitor the progress, and we appreciate your kind support – continued support. Thank you very much.

That concludes the earnings call for the fiscal year ending March 2025. Thank you very much for staying until the end of this program. Thank you, and goodbye.

It's time to begin the meeting. Thank you very much for taking time over your busy schedule to join us for the ORIX Corporation Third Quarter Earnings Call for Fiscal Year Ending March 2025. I'm the master of ceremony today, my name Nakane from IR Sustainability Department. Thank you for this opportunity. And today, we have operating officer in charge of IR, Kazuki Yamamoto, participating in this meeting. And before we begin, we would like to ask the participants to make sure to turn off any communication devices such as mobile phone nearby in order to prevent feedback or keep it away from the phone. Mr. Yamamoto's presentation will be followed by Q&A. Yamamoto-san, please start.

Thank you for the introduction. Thank you very much for taking time out of your busy schedule today to join us in the ORIX Group's financial briefing. My name is Kazuki Yamamoto, and I'm in charge of Corporate Planning & Investor Relations. Without further ado, I would now like to explain our financial results for the third quarter of the fiscal year ending March 31, 2025, announced back at 3:00 today. Please turn to Page 2 of the presentation material. First, let me explain the main points I would like to convey today. First, I will discuss net income. Net income for the third quarter was JPY88.8 billion while the cumulative total for the nine months ending in December 2024 was JPY271.8 billion, which is up 24% year-over-year, and this is an annualized ROE of 9%. And this is a progress of 70% toward the full year FY '25 March end and net income target of JPY390 billion. This is also a record high for the nine months year-to-date period. The second point is regarding progress in the three portfolio categories. The Finance category continued to be a stable source of earnings. The increase in Insurance investment income and other factors offset the decrease in profit caused by the transition of ORIX Credit into an equity method affiliate. In the Operations category, in addition to the recovery in the performance of asset management and airport operations, some Santoku shipping contributed to profit. In Investment, ORIX recorded investment gains in each quarter in multiple segments, including domestic PE, real estate and overseas renewable energy. So as a result, we have managed to achieve the results that I have announced earlier, which is a 24% increase year-over-year. The third topic is shareholder return. As of December 2024, we completed JPY50 billion in share repurchases, the upper limit of the buyback program announced in May of last year. Our policy has been to limit total holdings of treasury stock to 5% of total shares outstanding and that any holdings exceeding 5% will be canceled. While this policy remains unchanged, we have decided to cancel treasury stocks exceeding 2% of total shares outstanding in order to refrain ourselves from holding in excess of what we need to hold on to. Full year dividend will remain unchanged from the higher of either the previous year's actual DPS or a payout ratio of 39% of net income. Please turn to the next page. As I mentioned earlier, net income for the nine months period ended December 2024 increased by 24% year-by-year to JPY271.8 billion. Annualized ROE was 9%. Our performance through the third quarter has been solid, and we are aiming to achieve record high net income for the full year. Now please see Page 4. On this page, we explain the progress for each of the three categories versus our annual target. The bar chart on the left shows nine months results for FY '24 March end and FY '25 March end. And the bar chart on the right shows the full year results for the FY '24 margin and our FY '25 margin forecast. Now today, I will use the chart on the left, which shows the cumulative third quarter results. First, the top dark blue color is Finance. Segment profit decreased by 3% year-over-year to JPY137.1 billion and the progress rate versus the full year forecast was 69%. ORIX Credit profit was included in the Finance category until FY '24 March end, as I had shared earlier. But from this period, the Credit business has been included in the Investment category. Taking this into account, higher investment income in Life Insurance segment contributed to profit growth. Next, the pale-blue bar chart, which is second from the top, is Operations. Segment income increased by 2% year-over-year to JPY161.4 billion and progress versus the full year forecast was 67%. In addition to strong performance in airport concessions, thanks to inbound travel, profits from the asset management business expanded. Moreover, Santoku shipping, which joined ORIX Group in the previous fiscal year, also continued to year-over-year growth in this category, so did Rentec as well as Auto. Finally, the dark pink part, which is third from the top, is Investments. Segment income increased by 86% year-over-year to JPY129 billion with Investments showing a significant increase due to exits in several projects. The progress rate was 69%. As a result, in the fourth quarter, as to the Renewable Energy, Greenko, in fact, is expected to be divested and that is to be incorporated. So as a result, total segment profit increased by 16% year-over-year to JPY427.5 billion. Now please turn to Page 5. This page updates ROA and asset size for each of the three categories. In the Finance category, we expect stable earnings supported by changes in the macroeconomic environment, although there are some differences in policies in each region. In the Operations category, airport concessions, as we have shared earlier, and real estate facilities operations in Japan are healthy and the asset management business in Europe is driving growth. In the Investment category, we will continue to improve profitability by promoting capital recycling. Now please to Page 6. This page shows the three categories and 10 segments in matrix format. There is no change from the previous version. Now on Page 7, the slide, in fact, explains the progress in capital recycling. Capital gains was JPY95.5 billion for the nine months ended December 2024. Cash in first from sales was approximately JPY370 billion for Q1 to Q3, while new transactions amounted to approximately JPY430 billion. In the third quarter, in addition to the partial sales of shares of Ormat, New York Stock Exchange-listed geothermal energy company, we announced the signing of a share transfer agreement for Greenko and a new investment in AM Green. As announced in our press release of January 20, 2025, the share transfer agreement for Greenko and the new investment in AM Green are subject to the conditions of obtaining a license under the Indian competition law and matters related to the financing for the transferee, and thereby, it is not incorporated in the third quarter results. The amount of impact on business performance has not yet been determined as the gain on the sales will fluctuate depending on ForEx and other factors. However, based on the exchange rate as of January 16, 2025, which is JPY156.4 to $1, we expect a gain on the sale before deducting various expenses to be approximately JPY96.5 billion. And in addition, the amount of AM Green's convertible bonds that is to be underwritten will be USD 731 million. Now as for capital recycling, we will continue to execute new investments while maintaining a balance between divestments and acquisitions, primarily in the Investments category. Page 8 and 9 are summaries of segment information. While details for each segment, the 10 segments, are available on Page 12 and beyond, I will use Page 8 and 9 to explain the summary. First is the Corporate Financial Services and Maintenance Leasing segment. Segment income increased JPY5.6 billion or 9% from the same period last year to JPY66.2 billion. In addition to gain on the sales of an investee in the Corporate Financial Services unit, ORIX Auto continued to post strong performance in used car sales, while car rentals were also strong on expansion in inbound travel and a recovery in domestic travel. Rentec also reported an increase in profit driven by Windows PC replacement demand and also the divestment of some of the facilities. These also had proven to be the tailwind for the business. Segment assets were JPY1.8402 trillion, which is up JPY62.9 billion from the end of the previous period. The Real Estate segment profit increased by JPY7.4 billion or 14% to JPY59.7 billion compared to the same period last year. The real estate investment and facilities operations unit posted higher profits, thanks to the sales of a large multipurpose property, Hundred Circus and investment condominiums as well as strong performance at hotels and in facilities operations. In the facilities operations business, the large-scale renovation of Suginoi-Hotel that started in 2019 has been completed. And the third new guest room building, more than 300 guest rooms, Hoshi Kan, opened on January 23, 2025. On February 3, ORIX Real Estate Investment Advisors announced the launch of ORIVA, the Company's first capital commitment-based real estate fund with an asset size of JPY100 billion. ORIVA invests in real estate in Japan, primarily focusing on office, logistics and residential properties. It is a diversified fund that seeks to secure earnings and investment returns by actively improving profitability and enhancing property value. Several domestic institutional investors, including financial and business corporations, participated in the plan. Although profit of DAIKYO decreased year-over-year for the nine months ended December 2024, but we expect an increase in the number of units delivered in the fourth quarter. Segment -- so for the condominium business, just like the others, it is trending well. As for the segment assets of Real Estate, it rose to JPY1.1521 trillion, up JPY42 billion from the end of the previous period. Now the next is profit in the PE and Concession segment, which increased by JPY42.8 billion or by 184% year-over-year to JPY66.2 billion. In the PE investment unit, in addition to the gain from the sales of Sasaeah Holdings, higher earnings from PE investees contributed to the increase in segment profit. In the Concession unit, Kansai International Airport continued to perform well. The ground reopening of the Terminal 1 building, which has been under renovation since May 2019, is now scheduled for March 27, 2025. This is expected to increase the overall international passenger capacity of Kansai international Airport to about 40 million or so. And in addition, Kansai International Airport should be able to respond to the needs as a result of the expo that is to be held this year. Segment assets in the PE and Concessions segment were JPY981.8 billion, down JPY84.8 billion from the end of the previous period, mainly due to the sales of Sasaeah Holdings. Profit in the Environment and Energy segment decreased by JPY12.7 billion from the same period last year to JPY17.2 billion. In Japan, the business was impacted by lower profitability in the electric power retail business and increased reconstruction costs of existing facilities. Although the overseas renewable energy business posted losses in the first half, gains on the sale of Ormat shares and valuation gains on the remaining stake pushed it up back to profitability. As mentioned earlier, we have decided to sell our shares of Greenko, the renewable company in India, which invested in March '21 and to reinvest in AM Green as part of our capital recycling efforts. By investing in this next-generation energy business, which has high growth potential in areas such as green ammonia and green hydrogen, we aim to contribute to a sustainable society through our business activities. Segment assets fell to JPY955 billion, down slightly from the end of the previous year mainly due to the partial sale of Ormat shares. Profit in the Insurance segment increased by JPY7.7 billion or by 14% to JPY61.7 billion, compared to the same period last year. There's a Diversification in asset management led to higher profits, which allowed ORIX Life to outperform the previous year's results, which were strong. Sales of Moonshot, a single-payment whole life insurance policy launched in November, were robust as well. Segment assets increased JPY83.4 billion from the end of the previous period to JPY3.0053 trillion because of asset management growth. Moving on to Banking and Credit segment. Profit in segment decreased by JPY5.3 billion to JPY22.1 billion compared to the same period last year due to lower contributions from ORIX Credit. Segment assets increased by JPY126.6 billion from the end of previous year to JPY3.0608 trillion as a result of asset growth in the merchant banking business, while ORIX Bank continued its policy of increasing profitability through efficient asset turnover. Both ORIX [indiscernible] and ORIX Bank do not possess large fixed cost burden such as branch network. We aim to grow corporate value in these businesses together with our customers, aided by both product diversification and new client acquisition. Profit in the Aircraft and Ships segment increased by JPY15.6 billion or by 54% to JPY44.6 billion compared to the same period last year. Aircraft and Avolon both saw year-on-year gains capturing growth in global air passenger demand. The Ship unit also reported significant increase in profit due in part to contributions from Santoku Senpaku, which joined the group during the previous fiscal year. Segment assets as a result increased JPY156 billion from the end of previous period to JPY1.3256 trillion. Of this amount, JPY44.6 billion was attributable to changes in ForEx. Profit in the ORIX USA segment decreased by 22% to JPY27.8 billion compared to the same period last year. Of the three business lines, private credit showed solid profitability when last year's investment gain is excluded. Private credit is generally robust. Real estate mortgage profits were lower owing to prolonged higher interest rates, but origination volumes are recovering. It has already hit bottom according to the signs. We believe that origination will be of higher profitability moving forward. PE in U.S. increased due to the gain on sale recorded in Q3. We are seeing signs of improvement slowly, but surely in the whole business environment. ORIX USA profits and assets by business line are shown on Page 27 for your reference. Segment assets were mostly flat compared to the end of the previous period at JPY1.694 trillion. Change in FX amounted to JPY72.5 billion. And assets on US dollar-denominated basis decreased. Moving on to ORIX Europe's segment profit. The profit was an increase of JPY7.7 billion, up 25% from the same period last year to, excuse me, JPY38.1 billion. AUM benefited from favorable market conditions to reach a record of JPY379 billion, and profits rose on an increase in fee income. Robeco's trend recorded performance fees, which also contributed. And net inflows for Robeco Group were strong and trended positive for the second consecutive quarter. The operating environment is positive. Segment assets increased by JPY53.5 billion from the end of the previous period to JPY715.6 billion. Last but not least, Asia and Australia segment. The profit in this segment decreased by 7% year-on-year to JPY27.9 billion. Although leasing income increased in South Korea, India and Australia, business confidence remained weak in Greater China. And the segment recorded a decrease in profits mainly due to higher credit costs. Mainland China and Hong Kong remained weak. And in Taiwan, we still see geopolitical risks, and therefore, we are still remaining cautious. Segment assets increased by JPY38.7 billion from the end of previous period to JPY1.7479 trillion, of which FX accounted for JPY27.4 billion. In Asia, South Korea and Australia, we increased these assets. Finally, please turn to Page 10. This slide summarizes our view on the current operating climate and direction. As shown on the left, at the announcement of our first half results in November, before the new U.S. administration came in, our CEO, Mr. Inoue, commented that in Japan he expected a scenario where there was a gradual rising in interest rates and weakening of the yen. Regarding the situation overseas, he commented that the result of the presidential election may accelerate geopolitical instability due to extreme foreign policies and there is also possibility of resurgence of inflation, interest rates staying at high levels and weakening of the yen. Our views currently remain unchanged from those statements. Impact of transformation measures to our businesses remain uncertain, but we do have certain scenarios that can be used to make judgment in each of the businesses. For Japan, the policy rate is now at a new level for the first time in 17 years. There is a gradual increase in the interest rate and the prices are rising, costs are rising and there is a concern about the excessive weak yen. So we will remain cautious as well for investment judgment. In Asia, we also have some uncertainties with regard to the economic outlook. Now as for Operations, we aim to continue to enjoy the benefits of being an asset owner and promote the shift to asset manager model. And we expect the inbound business to continue to increase. We will accelerate some efforts and the global asset management business will be promoted. For Renewable Energy, interest rate, ForEx inflation, construction cost, energy prices, there are certain uncertainties that we need to take -- look out for. But for clean energy, the general demand over the mid- to long term will remain strong. This is our view. And therefore, we will be selective, but also be promoting existing projects in order to leverage the strength as an asset owner. And as for Finance, for each of the area, there are different trends. We will look out for these differences and continue to build assets and invest based on the risk/return profile. Last but not least, for investments, up until the third quarter, domestic private equity, real estate and overseas energy in multiple segments, we will be posting a gain on sales so that we will continue to do capital -- effective capital recycling. And ROA, ROE should be pushed up because of these efforts. Finance investments. Japan, U.S., Europe and emerging markets, we will be looking at these factors in a matrix manner. We know that there are a lot of uncertainties, but we will take advantage of the diverse portfolio to take the best option at any given time. And from '25 and onwards, we will continue to leverage our diversified business portfolio and identify the right risks and promote new investments and promote exits as well even despite the uncertainty originating in the United States. Now on January 1, our new COO, Take Takahashi, took office and delivered a new message, which was basically three key points. First of all, ORIX will provide essential solutions to major issues facing society as a part of achieving our group purpose. And secondly, we will maximize the business opportunities between multiple and diversified segments. And thirdly, Mr. Takahashi will endeavor to create an environment at ORIX where everyone can work with excitement and purpose and fulfill their own individual goals. We are striving to achieve record profits this fiscal year. And I believe that further growth over the midterm to long term is possible if all ORIX employees work to realize this message. Capital recycling and asset management. This is something that ORIX will be promoting globally to strengthen balance sheet as well as capital and use them effectively so that we can generate effective profitability-generating structure. This is Mr. Inoue's message as well. We have slightly less than two months left in this fiscal year, and we are considering achieving our net income target of JPY390 billion while discussing how to realize the growth from next year and beyond. That is all from me. Thank you very much for your kind attention.

Thank you. We are now ready for the Q&A session. [Operator Instructions] First, we have from JPMorgan, Sato-san.

I am Sato from JPMorgan. I have one question. So in various different area or on different occasions, I know you have been sharing your view about the U.S. economy, especially ORIX USA. The subsegment of ORIX USA, do you have any kind of vision or the expectation for the future? And how long would it take before you think that you can normalize the business so that you can turn profitable again? And in addition to that, on Page 27, as you always share, so for the third quarter, the stand-alone third quarter, Credit profit seems to be weak. So if you could be so kind enough to share with us the reason why for that as well, that would be helpful.

Thank you for your support all this, and I'd like to then explain by making use of Page 27 of our slide deck. As we have said, with regard to the Credit-related businesses, as we have announced, as for our business line, so loan fund generation, NXT Capital, CLO generation origination, Signal Peak capital. So as to the product, leveraged loans, structured finance, those are the businesses of those business lines for the Credit businesses. So CRE-related businesses, so they are only -- we do make a pure investment only for those that are investable. So as compared to the prior year, so there is nothing that is to be noted because it doesn't differ from the last year. But as to the origination, Signal Peak, the new CLO, although it was back in January of this year, we did manage to issue a new CLO. So the business impact is improving. As to -- not just basing on our own balance sheet, we are trying our best to equip ourselves with the capabilities of our sales and marketing so that we'll be able to get the mandate for those funds so that we have been proceeding with the enhancement of the quality or sophistication of these businesses. So we do not, in an outright manner, just simply expand the size of the business. So this has been the result of those efforts. And as to the Real Estate in the middle, as I have mentioned earlier, as to the origination environment, each of the agencies, Freddie Mac, Fannie Mae, for example, so because interest rate remains to be high for longer and so therefore we are recovering from that environment, especially with regard to the origination. But anything that meets our criteria and especially from the perspective of the spread of origination fee, we would -- towards the end of the year in the trend of acquiring businesses that are more profitable, in the second quarter, in the third quarter, the slow start, in fact, is being -- kind of bringing about the negative impact. But some of -- so we are now revisiting some of the asset management. And there may be some cases of provisioning that is proving to be necessary, but we are working on the improvement of the assets on hand. So it may take a little while, but we are beginning to -- we think that we'll be able to see the signs of recovery from the next year onwards. So we would not miss out on those opportunities. And for that purpose, so Constructions and other business opportunities, while, of course, containing the risk, we'd like to expand the scope of our business opportunities. So in terms of the business direction, I think it is on the road or the track of improvement. Especially the middle market private equity on a continued basis, CPI as well as employment costs and other cost increase, that remains to be uncertain. So the top line as well as the profitability-wise, it is beginning to show some signs of improvement. But we need to absorb all this cost increase. And before we can enjoy higher activities, I think we would have to wait for some time, which means that we would have to continue to maintain what we do right now and we would have to just watch about the development of the policies of the new administration and wait for the M&A market to improve so that we'll be able to come up with the next round of strategy. Sorry, that it was a slightly extended kind of response to your question, but I hope this answers your question.

Now with regard to the Credit, the segment profit that you have mentioned, so the base profit and capital gain, you have not broken down the two from this time. So for this third quarter stand-alone basis, [$337 million], I think, profit, I think. So while you were disclosing the base profit, this is a capital gain. It looks as if the level, the size seems to be smaller. So CCS buildup was nonexistent, may I take it?

So it was not a kind of a specific individual kind of provisioning, but the flow of deals, for example, the environment itself has started to show some signs of an improvement. But on a P&L, there was a slowdown for sure. However, originations and also the flow of the deal, there has not been any major concern as such. So the portfolio -- as to the portfolio quality, the monitoring impact remains to be intact.

SMBC Nikko Securities, Muraki-san.

This is Muraki, SMBC Securities. My question is about midterm plan ROE target and the growth rate target. What is the current discussion? Can you please update us on that? And the financial institutions both in Japan and outside of Japan, they often have EPS growth targets. And one of the growth drivers behind that is very often share buyback. They position share buyback very clearly in that way. So more aggressive or positive stance on share buyback -- or positioning share buyback as some things that is even more important than before. Do you have any ideas of doing this within ORIX?

At the Board meeting today for the Q3 earnings, next midterm plan and business plan was actively discussed. Update is looking at the progress of the discussion of the midterm plan so far. Since we made announcement in May 2022, well, that was actually immediately after COVID-19 pandemic, there were a lot of uncertainties. But we had the Russia-Ukraine issue and also inflation, high interest rate, all of these different factors happened together more than we had expected. Now going forward, technological advancements and market changes will have to be looked at over the longer term. And then we have to back cast and figure out organic and inorganic growth strategies. So these are the things that we're discussing. In terms of numerical targets discussion, I believe that this will require some more time before we get there. And under the new COO, we would like to continue our internal discussion. We also have a capital policy. Now share buyback, as you may know, other companies following the TSE guidance and they are now aware of that, but ORIX has embarked on this much earlier than them. And as you may know, as you can see on Page 37 on the right-hand side, this is a track record of our share buyback so far. About JPY50 billion share buyback has been done over the last six terms or so – six periods. So in terms of the EPS growth, you can see the information on Page 38, the next page. As you can see, we have been keenly aware of this from very early on. So this is one of the things that we are discussing currently is ROE. So higher end of the 9%, unfortunately, we are still not double digit. And the 11% is the target that we've been communicating to the market for a while and we still have some way to go. Interest rates going up and financing cost is changing. And A rating, cheap debt strength should be leveraged for the future growth as well. So we have to discuss the patterns. 11% target achievement or going beyond that, well, we want to show the path to achieve that in our midterm plan as well as the business plan going forward. We believe that this is an important thing for us to show in our plan. So this is already within our sight. I hope you understand. Last but not least, I think you have asked a question about the profitability growth as well. Leveraging the assets and segments, this is the conventional way. We are also turning a focus on asset management and more diversified financing approaches. So we want to achieve this on as many fronts as possible in order to sustain the growth of profitability. Profitability growth could slow down because of the changes at least for the short term, so we need to look at the transformation and also the ultimate corporate value enhancement. And the balance between the two, we will have to discuss for each of the businesses, and that's exactly what we're doing. So each of these steps actually take time. So as soon as we have something that we can share with you, we would like to share that information with you. I hope this answers your question.

So we have Sakamaki-san from Mizuho Securities.

I am Sakamaki from Mizuho Securities. I have a question. So this is going to be slightly shortsighted, but with regard to the achievement of your plan for this year, Greenko divestment will be towards the end of the month. If this would not be executed by the deadline, do we have to think about the second plan? Would you remain to be flexible in order to achieve the plan for the year? And what would happen to the dividend payout should this be not being reflected to the earnings of the full year?

First of all, with regard to Greenko, it goes without saying it is dependent on the buyer of the shares, but we think that there's a high probability of the sales being executed within the end of the -- by the end of the year. So this, we would give priority to this action and we think that there is a high likelihood. But of course, if this cannot be executed by the end of the year, so JPY96 billion and also pretax profit, there will be a certain impact should this not be achieved. So would we be able to fill the gap? Is there any kind of plan B? Of course, it is very much dependent on the counter-party. And also the -- it is based on the assumption of the best practice execution. So therefore, it is, of course, dependent on how things will trend dependent on Greenko sales. So we have no plan B or plan C by filling the gap, in other words. So JPY390 billion of our profit achievement unfortunately cannot be achieved if this is not to be executed. However, having said that, so it was for every year there is a base profit and other profits that we generate. And it looks as if there is going to be an overshoot as compared to the initial plan for other profit expectations. I know I'm being a little optimistic, but even if there was to be the full execution of this Greenko sales, we would be able to fill some gap, but we will not be able to fill the entire gap by end of March. Of course, it is dependent on the reasons why we were not able to execute the Greenko sales and I think we would have to just continue to discuss over this topic with the executive officers and also the Board members.

Daiwa Securities, Watanabe-san.

Yes. This is Watanabe, Daiwa Securities. Page 10, on the right-hand side, this is the current status. Domestic Financial Services and inbound business, asset management seems to be the focus. Based on the macro environment, Finance business in Japan do you have a different view now on its profitability? And the base profit is in the attachment and have you made any changes to the way you think about the quality of the base profit?

Thank you for your question. I will start with the right-hand side of Page 10, Finance business in Japan. Our view has not changed very much. But the interest rate is definitely climbing and the yield for asset management for life insurance and others are now working positively for us. So this will underpin stable profit for us. Inbound and domestic demand, and looking at the economy, I believe even at the global level, it is maybe on par. But the construction cost for new projects -- new development projects, well, usually, it takes three to five years or sometimes longer for development and MICE-IR large projects are in our portfolio. And therefore, we have to manage the total risk and need to have foresight. Now focus on asset management. Sometimes this can be misleading, but we want to leverage third-party asset or capital to grow our business and we can provide our business expertise to scale the business. So focus on asset management, this is one of the ways of diversifying our financing and the finance and investment hybrid model will be promoted. And this is where we can expand profitability and grow as a corporation or corporate value.

Is it going to be base profit or gain on sales or fee income?

It will be more and more diversified going forward. I didn't skip this page because I neglected it, we just said I didn't have enough time. But the base profit growth is something that the Board is very much interesting and we received a lot of instructions and comments from the Board about this. So we will continue to focus on that and combine it with capital recycling. That is the policy that remains unchanged. So please feel reassured.

Thank you very much. The next, we have Tsujino-san from Bank of America Securities.

So this is going to be a short question. However, with regard to the sales of Greenko, so it is a business in India, but they do have entities in Europe as well. So I don't know how you have been responding to our questions in the past. But however, as for this year as well as last year, we thought -- I recall you sharing with us that there was a possibility of some sales that was to be executed, but it did not happen. But then this year, you had announced the sales of Greenko. So what was in your mind when you shared this idea of selling some of your businesses in the past? Was it Greenko or the power generation, for example, the facilities that you own under Elawan in Europe? Was it in your mind? So as we look back, so you were perhaps assuming maybe for about 1.5 years selling something from Elawan, some of the assets. Why was it not executed, if that was in your mind. But in addition to that, if you could, so this time, in the investment business, Toshiba's contribution from the perspective of the profit Q-on-Q basis, I thought that you were able to generate about JPY4 billion worth of profit from Toshiba in the -- not the concession, but the investment. But the reason why you were not able to generate that much, is there any reason why?

So first of all, with regard to Greenko and the positioning within the Investment business, as has been said by Tsujino-san, so it is located in emerging country and also minority position and the development is, in fact, sizable. And other than ORIX, there are other shareholders, sovereign wealth fund, mostly, they are -- so therefore, we were, in fact, thinking about this -- or positioning this business to be target for capital recycling in the future. So after '21, we have been making an investment at the renewable energy facility. The development progress, dependent on the progress that we were making, we were always putting this on the table for consideration as to when are we to sell the project. So whereas Elawan, in fact, is exposed to industrialized nations or advanced nations. So we wanted to, of course, enhance the capability as a developer. And as to the ones that are completed, so it will be perceived as development model. In other words, long-term PPA was to be acquired, so that we'll be able to generate a long-term kind of liquidity flow. So on the other hand, as to the energy prices in Europe, with Ukraine -- in nation of Ukraine and also, at the same time, the pricing trend, in fact, has been fluctuating and also the subsidy that has been provided by different, of course, government has been affecting the spot prices. So therefore, the development project at Elawan, some of the major capital gains that we were expecting, unfortunately, was not to be gained. But the basic policy remains to be unchanged. And one other thing, you asked the question with regard to Toshiba. We are not disclosing the profit that we generate from this Toshiba deal. And also the other day, KIOXIA, which was listed just the other day, went public, so there is going to be some time lag before we can pick up the income on the equity that we invested. But as to the direction, as you had shared, is what we expect as well, whereas with the business partner heading the initiative, as for the EPA, Toshiba's portfolio, in fact, has been changing over time as well. So from an accounting perspective, we need to adjust ourselves as well. So what you may have simulated may not match against the reality for that reason. So maybe the after kind of process, related to us being LP, the LP holding of ours, but the business environment itself is trending for the better, for sure. So this may not be matching with your numbers.

So this is why the LP kind of gain, so rather than -- I think there should be some technical ups and downs. I was imagining that is affecting your earnings, right?

Yes.

I see, I see.

But having said that though, if you were to look into the details of the investment, as you have said, there is an accounting treatment. And that, of course, incorporates the financial structure and also the engineering of the fund itself. So this is why there are some technical challenges that we are facing. But as to the business itself, we -- the business structure-wise, it is following a trajectory towards improvement for sure.

Nomura Securities, Sasaki-san.

Yes. This is Sasaki, Nomura Securities. My question is about the new midterm plan. You have already explained to some extent. But I'm sorry, I couldn't quite understand, so let me clarify some points with you. In reviewing the current midterm plan, you identified more new risks, so you want to apply a more conservative approach. Is that what you said? Was that your message? And also with regard to financial KPIs, you have not really discussed those yet. That's what you said. But we are already in the middle of February, and considering when ORIX usually formulates a business plan, maybe it is getting late. So does that mean that you're struggling with the discussion? And last but not least, 11% or more ROE, I think you said that this is within sight. That was my interpretation of your comment earlier. Now how can you say that 11% or higher ROE is already in sight? What is the justification, rationale behind that according to the management's perspective. Can you please elaborate?

I have to apologize. I maybe misunderstand that we're talking about a conservative point of view. So we looked at the previous plan, inflation, wages, also interest rates based on these different circumstances. In January '22, we formed the plan and made some announcements in May and then things changed after that. If we try to project what happens down the line, three years, it doesn't really work, that's what we realized. So what am I going to do? Well, rather than basing our scenario on these indices, the time frame differs from one business to another, but five years, seven years or 10 years down the line. For MICE, we have something opening in 2030 and we have a stable operation from that point onward. So within these different time frames, where do we want to be? This is what we are discussing and we're trying to back cast from that and then figure out what to do in the next coming three years in terms of internal control and the budget management. So these are the two phases -- two-phased approach, time frame for each business and where we want to be in the future. And with regard to this aspect, we are trying to aggressively grow the businesses. So this mindset has not really changed. And based on that, we try to back cast. And this way of plan is different from the cadence of every three years for each midterm plan, excluding for the pandemic period. So the cadence will be different -- or the approach will be different. So we don't just extend on the current situation in terms of midterm plan. Over the mid- to long term, one of the important focuses is to increase the ROE. Capital efficiency, we don't want to worsen the capital efficiency. So capital recycling and asset management business model should be leveraged or they will become essential. And without that, we will not be able to achieve the ROE of 11% or higher, or at the very least, it's not going to be easy. So this is something that we're discussing for different businesses. So we're not trying to aim for something just for the short term. But in order to achieve the long-term goal, we are going to change. So we have a sense of urgency and we are focusing on these big challenges, including outside independent directors, we are discussing this time and again at the BOD, so that we can figure out when is the best time for us to communicate this with you going forward. So this is how we are sharing this information with you. I know that I'm not giving a very clear answer, I'm sorry, but the discussion is still underway. I hope you understand.

So you need to do the capital recycling and you have to focus on asset management type business, otherwise, you cannot achieve 11% or higher. So this is the same discussion as before, I understand. My question is when it comes to specific measures, do you have now deeper discussions taking place because looking at what's happening around the world, there is maybe major reorganization or restructuring going on. So I don't think you can spend a lot of time just discussing. So do you already have specific plans being discussed at the BOD level?

As you have rightly mentioned, whether we are accelerating or not, buy low, sell high, capital recycling, capital gain realization, maybe that's not the only aspect. Within the existing investees, maybe the growth rate of return is not as high as it could be. So we should apply a more stringent view and going one step further in terms of discussing the capital recycling. Because without doing that, ROE resilience could weaken slowly over time. So in order to avoid that situation, with regard to existing investees or existing projects, we need to shed more stringent light and this is something that we're discussing at a very detailed -- broken down level. Without that discussion, we would find it difficult to improve ROE going forward. So it's not only for the new projects, but also existing items in the portfolio and the existing business lines, we are reviewing them at a greater granularity.

When to communicate with the market, is that when you close the financial year? Or is it going to be before that? That's my last question.

So the closing, of course, discussion will deepen and COO, Takahashi-san, assumed position in January and ORIX management strategy that's going to be applied working together with the CEO, Inoue-san. We want to increase the number of opportunities where we can communicate about this with you. And we don't know if there's going to be a midterm announcement or not, we still have to discuss this, to figure it out. But we want to do as much as we can and also share information as early as possible about strengthening of our management of the Company.

Thank you very much. So we have gone over the scheduled time. So we'd like to entertain the next question as the last question. So Otsuka-san from SBI Securities.

This is Otsuka from SBU Securities. I hope you can hear my voice okay.

Yes, we can. Thank you.

So on Page 4, So I am referring to Page 4. And in the investment, so Greenko's profit was reincorporated, I understand, in this investment. And according to the number that you have shared, so this will be in excess of 100%. But this finance and also operation, the profit -- the probability of achieving this profit forecast, if you could share with us your expectations in the fourth quarter. Can you expect -- is there any other deals that would allow you to build up more profit in order for you to achieve 100% by end of the year or would it be behind? If you could just give us a color whether you'll be behind your plan or not?

But just as you have shared. As to Greenko, the sales related, the profit based on the asset, so it will allow us to overshoot the initial budget of ours so far as the profit of investment is concerned. So we would, of course, continue to do our best in achieving 100% for each of these categories. But within Finance, China and also the recovery being slow in the United States, for example, would we need to be the factors of uncertainty, especially in Greater China. So we don't try to build the asset just for the sake of achieving these numbers. That would not be the case. So just as been asked by Tsujino-san earlier, especially with regard to renewable energy, we are affected by the spot market pricing. So therefore, we would be making the optimal and appropriate decision whenever proves to be necessary. So we may be affected in a negative way as a result. But if I may repeat myself, so we, of course, continue to do our best in achieving what we have aspired to for the full year. But the investment, of course, the largest contribution would come from Greenko sales. I'm sorry, but I may not be answering to your question in a straight-forward manner, but still.

So from your responsibility and your title, so this achievement, Greenko sales is incorporated. So the likelihood of this achievement is heightening?

Well, it's kind of difficult to answer directly to your question. So Finance, Operation, there are some aspects of the strength that is enjoyed, but there are some variance. In other words, there are some businesses that are not performing just as well with that as compared to others. So this is why we need to proceed with the sales of Greenko. And for sure, that would allow us to achieve what we have intended to.

Thank you. So with this, we'd like to conclude the Q&A session. And I would like to ask Yamamoto to share his closing remarks.

Thank you very much for spending a long time with us, and sorry that we have a short schedule. Midterm plan and the new management, we have received many questions about those as well. So I would like to make sure that this message will be relayed back to the executive management and the Board meeting. And we want to make sure that our disclosures and the message will not suffer because of these changes. Now management is being strengthened within the organization, which means that we don't want to do just what we have done in the past. With regard to the concept about the new management, we want to include Inoue-san and Takahashi-san, maybe separately or together, and increase the number of opportunities to communicate to you. So when such opportunity arises, we hope that you can give us your valuable time to listen to our stories. Thank you very much for your kind participation.

That concludes the third quarter earnings call for ORIX Corporation. We really appreciate you staying until the end of the program. Thank you.