Makoto Inoue - President and Chief Executive Officer Haruyuki Urata - Deputy President and Chief Financial Officer.

Natsumu Tsujino - JP Morgan Securities Futoshi Sasaki - Merrill Lynch Securities Sachiko Okada - Goldman Sachs Masao Muraki - Deutsche Securities Yusuke Yabumoto - Mizuho Securities.

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We will soon start our presentation. Ladies and gentlemen, thank you very much for coming to the ORIX presentation of business results for the fiscal-year ending March 2015. I'll be acting as moderator. My name is Huji [ph] with Corporate Planning. I'd like to ask you to confirm the materials.

Four materials have been provided; the earnings report; the flash report; additional information and then the questionnaire. If you are missing any of the materials, please raise your hand. In the first half, Mr. Urata, Group CFO, will give you the overview of the results, and then the CEO, Mr. Inoue, will talk about the mid-term strategic direction.

After that, we will have time for questions and answers. We plan to end by 4:30. We ask for your cooperation. We would now like to begin..

Thank you very much for coming to ORIX presentation of the business results for the fiscal-year ending March 2015. My name is Urata. I'm the CFO. First, I would like to explain about the results of the fiscal-year ended in March 2015. First the overview. Net income was, as you see, ¥234.9 billion, 25% increase year-on-year.

In the third quarter, we revised upward our full-year outlook to ¥215 billion, but the actual results came in ¥20 billion higher than that, so we achieved record profits and also sixth consecutive year of earnings growth. ROE was 11.5%, improving further from the 10.5% of the previous fiscal-year.

In the fiscal-year just ended, we made new investment for profit growth in Environment and Energy, Investment and Operations segment and Overseas’ segment, and we took advantage of favorable market conditions and divested certain businesses and also sold assets in the real estate, aircraft and shipping.

And in each of these endeavors, we believe we are able to have a success. Also each of the business segments are delivering steady profit growth, so we are making progress towards building a portfolio that can sustain growth. Concerning dividends, we raised the payout ratio to 20%, so the dividend per share is being increased by ¥13 from ¥23 to ¥36.

We want to continue to use retained earnings for growth, and we want to achieve optimum balance between securing capital for investment opportunities and returning profits to shareholders. Next, I’d like to talk about the profit and asset trends by segment.

In terms of segment figures, they are in the material Page 22 and onwards in more detail, so please refer to them as necessary. As you see, in terms of both profits and assets, we saw strong growth in the retail segment and the overseas segment. Those will be the two top.

In retail, in the second quarter, we acquired Hartford Life Insurance, so that led to the large increase in assets and there was the recognition of the bargain purchase gain and so that resulted in large increase in profits. And also existing banking and life insurance businesses have steadily been growing.

Now Hartford Life - excluding Hartford and Monex, we had 25% increase in profits and 7% growth in assets. Concerning overseas, we had proceeds from the sale of STX Energy and other businesses, and also we had strong results from Robeco and the Americas, contributing to profits growth. In terms of assets, more than ¥200 billion increase year-on-year.

Excluding the impact of currency, it was about growth of about ¥45 billion. Corporate Financial Services and Maintenance and Leasing are steadily growing. Corporate Financial Services in terms of profits, Yayoi started to contribute from fourth quarter and fee income is growing.

In terms of assets, Financial Lease grew assets in the fourth quarter, and as a result assets, have been growing steadily. For Maintenance Lease, more than 4% ROE is being maintained. And in terms of assets, in the fourth quarter, not much growth but we issued more than ¥30 billion ABS. So in real terms, it is still continuing to be strong.

Now in Investment and Operations segment and the Real Estate segment, we had profit decline.

For Investment and Operation, with the consolidation of Daikyo, there was the devaluation gain in the previous year, so we see profit decline, but the profit - the Private Equity Investment and Environment and Energy segments showed strong growth, both in profits and assets.

In terms of profits, these two together, compared with the previous year, doubled approximately in terms of assets. In both segments, we saw more than 60% growth. Concerning Real Estate, we capitalized on the favorable market conditions. We aggressively sold assets, at the same time, we recorded impairment for some assets that we hold.

As a result, we see large decline in profit year-on-year, but the quality of the assets has been substantially improved and the downsized balance sheet has been strengthened remarkably. This year we will continue to aggressively sell assets. As you see with the line graph, that is the segment assets ROA.

It rose from 2.7% further to 2.9% this past fiscal year, with new investment and acquisitions segment, assets are increasing, but the overall profitability is also improving. Next, let's look at the income breakdown. Left-hand side shows gross profit calculated by deducting cost and expense items from corresponding revenue items.

The bottom of the graph is the financial revenues or finance revenues. That is steady, but contribution to the overall consolidated profit is declining year-after-year. In terms of gross profits, well in March 2012, it was 43% the finance revenues, but in fiscal-year ending March 2014 it declined to 22%.

Now the non-financial business, based on service income, is leading the profit growth, especially strong is the one on the right-hand side graph, the bottom part, the asset management business. In the second quarter of the fiscal-year March 2014, Robeco was consolidated, and so that led to this strong growth.

So in this past fiscal year, Robeco steadily increased AUM and the fee income exceeded that of the previous year.

The second item from the bottom, the M&A financial advisory service fees in the Americas are increasing profits year-after-year, and also we have fee income from the automobile maintenance service, and also we have the income from Yayoi service fees. And compared with March 2012, it has more than tripled. So overall it has grown substantially.

So we are shifting from simple financial business to non-financial business. Next, I talk about the cash flow. Left-hand side graph, cash flow from operating activities. So after the Lehman shock, after the March 2010 fiscal-year, we have seen steady increase.

And the cash flow from changes in current asset positions, the light blue, that is big negative. That's because we acquired Hartford Life and there were the insurance contract liabilities. And that rapidly decreased, and so that led to cash outflow.

So if you look at the dark blue, operating cash flow excluding those from changes in current asset positions, that is moving from ¥300 billion to ¥400 billion, so that’s stable and steadily growing and reached ¥386.9 billion in the fiscal-year ended March 2015.

Now cash flow does not include the sale of assets, so it moves in tandem with the base profit. So this is a base cash flow, this cash flow from operating activities that is. And the right-hand side is the cash flow from investing activities.

After the Lehman shock, we had opportunity to downsize our assets, and up to March 2013, investment cash flow was positive. But from March 2014 onwards, we acquired Robeco Hartford Life, Yayoi and these new investments exceeded the proceeds from asset sales. In fiscal-year March 2015, we had outflow of ¥467.8 billion.

And as you see, every year we are constantly continuing to sell assets, so you see that there is good turnover of assets. That is all from myself. Next, I’d like to ask CEO, Mr. Inoue, to explain to you the mid-term management objectives. Thank you very much..

This is Inoue of ORIX. I’d like to explain to you in the mid-term strategic directions of the ORIX Group. First, I'd like to have the overview of the fiscal-year ended March 2015. To repeat what Mr. Urata said, we had more than 25% profit growth; sixth consecutive year of profit growth; and two years in a row, we achieved more than 10% ROE.

At the end of the fiscal-year, we realized 11.5% ROE. In terms of our strategy of expanding non-financial business, Robeco, which is the core of our asset management business, steadily increased AUM and contributed throughout the year with stable fee income.

Also they agreed with the Asian Development Bank to establish a private equity fund to invest in environmental projects, so we are starting new initiatives in Asia.

In our mega-solar power business, by the end of March, we have secured projects with a total power generation capacity of 700 megawatts, already approximately 180 megawatts have started operations and the remaining projects will come on line.

And most of them have FIT price of ¥40 or ¥36, so the impact of further reduction of the FIT rate and the control imposed on grid connection will be limited. Also we're cultivating new business areas. From 2009, we started the electricity power retail business.

We provide high-voltage power for business users and we are steadily expanding our marketing area and the size of the business. Also domestically, we have invested in Hartford Life and Yayoi. And overseas, we have made new investment to Hyundai Logistics in Korea.

And on the other hand, we have sold our shares in the Monex Group and the STX Energy of Korea. So we are conducting portfolio turnover, and we have placed orders for new ships for the future. And we are moving ahead with the acquisitions of over a dozen aircraft under lease contracts, which are available for sale over the mid-term.

And next, I'd like to talk about our mid-term strategic directions for the coming three years, starting in fiscal-year ending March 2016. After the Lehman shock in 2009, the company policy has been to focus on rapid recovery and improving financial conditions. Past five, six years, we have been able to continuously demonstrate our capacity to recover.

And then the financial market conditions have changed and there has been the environment of zero interest rates, so we have kept the ratio low and we have shifted funding from short-term to long-term, and we have moved our focus from financial to non-financial business. Now our total assets have exceeded ¥11 trillion.

So more than ever, we need to focus on the three basic pillars; profit growth, capital efficiency and financial soundness. And to have robust and steady management, that has become more important than ever. Focusing on yearly figures is of course important, but short-term-ism can sometimes hinder the company’s mid-to-long term growth potentials.

So this time, I will not announce our outlook for this fiscal year, but I'd like to provide you explanation based on our mid-term horizon. March 2015 fiscal-year net income ¥234.9 billion.

But in three years, in the fiscal-year ending March 2018, we want to be able to generate ¥300 billion, so we want to become a business entity that can have ¥300 billion net income. In terms of the capital efficiency, ROE target currently is 11%. That should be maintained or further improved.

And as a precondition in terms of financial soundness, we shall maintain the single-A credit rating. At the same time, we will continue on the asset turnover maybe to continue with sales of assets as well as new investments.

But it is another that we can give you preview of what we intend to do ahead of time, and also communication in the context of credit rating is very important. And please note that there is no segment whatsoever in the spectrum of our business segments, no way the growth has stopped.

So on top of the organic growth, the existing business, the areas we are weak and look to further growth in the income and on the profitability, and that we will accelerate the expansion of non-financing business organic growth. We will expand the auto services in and outside of Japan, which currently is conducted in Japan and Asia.

The ORIX auto operating in Japan is ready to provide further range of services relating to automobiles, and the fleet owned is 1,170,000 vehicles as of the end of March 2015, number one in the auto leasing industry.

When it comes to the variety of services and know-how in this entity leasing to Japanese industry, whatever is necessary in the rest of the Asia, it can be deployed outside, so that Asia as a whole on the platform for us to expand ORIX Group on the automobile operations. Domestic corporate business.

Please do understand that as we have taken mainstay and the clientele, the small to medium-sized enterprises with the coming into the group of Yayoi, we now have the group of smaller enterprises and proprietors. So ORIX original finance and retailers services were blending together Yayoi and the originated services.

We will be able to strengthen further our capabilities and to respond to the needs of the small enterprise and proprietary, contributing to within their respective growth and further reach efficiency to solidify our base. Overseas.

The diversification diversity is the key road, aside from the auto that I just mentioned in the Asian local - the group company operations and by deploying know-how available and therefore here in Japan, I believe that we will have abundant opportunities to grow further. Life insurance. Number of insurance policies in-force has been growing.

So that through March of this year for nine years in the row, two-digit year-over-year growth in the number of insurance policies.

Going forward, on top of the third sector, insurance and the expansion of the primary auto prices sector insurance, diversification of distribution channels to grow the number of policies in-force and they make the growth from being a mid-sized entity to a major player. Speaking of new investments in key areas.

First of all, we will continue to sell down low-profitability low-growth assets, while making investments in new business areas. The key areas would include the Environment and Energy, Asia Asset Management and PE Investment.

When saying Environment and Energy, 759 megawatts were also from mega-solar power business projects that have been secured, which would become fully operational within this three-year period. Ultimately, by the end of March 2018, up to 930 megawatts rise.

And aside from the mega-solar power projects and geothermal, wind power, not to mention biomass, so a full variety of the power sources that will be explored. And so that within the next five years, we will aim at becoming the largest scaled renewable energy power generator in Japan.

Now anticipating further liberalization on the power market in Japan, we will carry out our business expansion at the Adco-related [ph] services, the two corporates and retail customers by mobilizing domestic and the sales network and to increase the number of contracts.

Also for the purpose of securing kind of further power sources, the mixed coal and biomass fire power plant thermal project will be preceded with. In Asia, investments which would lead into the augmentation of network. In the various countries around Asia, since the 1970s, the targeting at local customers leasing operations have been conducted.

In order to further develop and expand, we will continue to make investments, so that our name, value, product and services can be amplified in Asia. In particular in Cambodia back in 2013, that we made a capital participation into the major city bank, the commercial bank, the Acleda Bank.

Acleda in Cambodia has a very strong franchise and a business base. And that we believe that by leveraging that, we will be able to aim at a further business domain expansion and we expect it will grow income into China region. Asset management. Robeco’s asset under management and sort of normalization of M&A techniques, that will expand dramatically.

And therefore PE investments, and as before the selective investments outside of Japan. But I’d say that although the prices have fallen a little bit and that we are yet to find an attractive deal - the candidate.

After all, the evaluation of each and every investment on a deal by deal basis is very important, making sure that we do not miss out on any opportunities for us. So relying on the reliable partner and that we will be watchful.

Longer term investments in Japan, the deregulation or the changes in the business environment anticipated for medical, agriculture, the venture business arenas, such as IT and robotics, we will try to make entries there. And those, as before, that will continue always business rehabilitation or turnaround activities.

And then to explore on the investment opportunities here in Japan, to utilize the strengths in the domestic and the sales network by strengthening the information gathering capabilities group-wide and that we will capture business opportunities.

So in and outside, we will make in these investments, so that we can identify the opportunities for us to establish get into core of the next phase of the ORIX business operations and to nurture them. Here, please take a look at the employed capital ratio. As I said, the preservation of the singe-A grade of credit rating is the key theme for us.

Employed capital ratio of about 80% is earmarked. So for the sake of the preservation of financial soundness and then capital flexibility and then 20% buffer hasn’t been allowed for. As I said before, as of the end of March this year, the employed capital ratio exceeded 80%.

As a mid-term, since direction in order to preserve the single-A grade from the credit rating, mindful of the employed on the capital ratio that we need to control our capital properly, meaning that capturing today’s favorable business environment by selling down less yielding and less grow income assets and to replace them with the portfolio asset ultimately stronger growth prospect.

Finally on governance. As we announced in the press release issued on April 9, two employees of ORIX Australia Corporation Limited, a subsidiary of ORIX Corporation, were arrested by the state police in New South Wales of charges of making illicit payments to a client in connection with vehicle leasing transactions.

The employees are a Managing Director and a Sales Director in charge of fleet leasing business. The two suspects were immediately put on leave from the jobs and we are fully cooperating with the police and the investigation. We are also conducting our own internal investigation through a special committee.

At our request, a former judge of the Federal Court of Australia and the Supreme Court of New South Wales is serving as the Chairman of our internal investigation committee. Outside advisors including law firms, audit companies and forensic investigation, the company have been retained.

And they are currently conducting a thorough investigation on records of past transactions and communications in our computers and network to-date. We have confirmed that improper transactions occur at always only one client. Regarding the illicit payments, these payments were processed as expenses.

We have also confirming that any impact on the financial results of the ORIX Group should be minor. Further news releases on the matter, including any potential impact on ORIX financial results, will be issued after our committee concludes its internal investigations.

The ORIX Group regards compliance as one of its most important managerial responsibilities. Proper compliance forms the basis of our operations. We have extensive measures and policies in place to ensure a high level of corporate compliance. And therefore, we sincerely regret that an incident like this has risen. We take this incident very seriously.

In addition to our ongoing investigation, we are making changes in our internal systems within the ORIX Group to ensure best practices are always maintained. Changes will be carried out in three basic areas. Number one, we will strengthen our system of checking balance in overseas basis to ensure proper business conduct.

The checking balance will be implement in line with each market or business which is necessary. Up until now, for example, balance and check functions including compliance and audit income that have been centralized here in ORIX, Tokyo. From now on however, internal control division will be established at each region that we operate in.

The division will thoroughly supervise its operations and will report directly to the CEO and CFO in our ORIX Tokyo global headquarters. Second, we will strengthen our auditing functions. These changes will be developed with the assistance of outside global advisors, and experts will be retained from outside.

Number three, we will adopt a new rotation and succession plan for senior personnel. We will implement internal policies that these senior personnel will be reviewed, and thereby internal audit and outside auditing firms to determine whether the employment contract will be the renewed or discontinued in every one or three years.

The ORIX Group is determined to continued evolving and progressing as a global company, and we will do whatever is required, no matter how drastic, to strengthen our internal systems and structure. We will also update you - update our progress through follow-up releases on our website. This is the summary of my presentation today.

In March 2015 period, we were able to renew the record-high net profits. For the six consecutive year, we were able to increase profits. ROE exceeded 10%, marked at 11.5%. Investments for future growth as well as the asset sales to execute asset turnover latching onto the market momentum, we were able to generate good results.

To repeat once again mid-term strategic direction is that further expansion of non-finance.

In business March 2018, we would aim at net income of ¥300 billion, assuming the preservation of the credit ratings will go A grade; ROE aiming at more than 11% ROE, and is going to be not only the growth of profits but also financial soundness and the capital efficiency as well. Stably and sustainably generate ¥300 billion order and profits.

That is the sort of portfolio that we would aim at. The use of capital, therefore the contract of such portfolio - investments that will continue, but at the same time, we will be quite mindful of shareholders return. March end 2015 dividend payout has been decided to be ¥36 per share.

Starting in March 2016 period, the interim or the mid-year dividend payout will begin with a per share mid-year dividend payout will be ¥22 per share. ORIX has changed quite vastly in the past 50 years. We’re still continuing and I’d say that ORIX is quite unique in the global business community.

With our size, we will be focused on the finance services and its core, but at the same time they have a variety of diversified businesses. So as an unparalleled business entity and enterprise, we have unique business, the motto on the region [ph] itself is ever evolving and never ending to change. It is becoming constantly [ph] established.

I believe that therefore any business [indiscernible] is in the provision of value which is needed by the customers and evaluated by customers. Through such business activities, we will be able to make contributions to the society and economy at large, and in turn we will be able to generate net profits for that.

Going forward, I am sure the business environment and customer needs will continue to evolve, but the capture income and the changes effectively, we will aim at provision and the value, which is needed and appreciated by the society and economy at large.

And I will make sure that we can respond well to the expectations to my shareholders and the investors, so that we can represent the whole of the business Japan and to lead the global economic social economy. Thank you very much..

We will now take your questions. If you have a question, please raise your hand. We will bring a microphone to you. When you ask a question, please identify yourself, your name and affiliation, please. If you have a question please raise your hand..

Tsujino from JP Morgan Securities. First question. Well, in terms of dividends for the first half, you indicated interim dividend payout.

So what about the dividend for the second half? What's your policy about making the interim in the final dividend? Do you look at the full-year results, and do you make the final adjustment at the second half, or interim dividend and final dividend, are you going to have stable dividend payout? Is that going to be the emphasis? What is your intent there? That's the first question.

Second question. Page 9, you talk about the use of capital. You say it’s more than 80%. But in terms of Real Estate segment, you have ¥100 billion asset decline expected, and in terms of net profit, ¥200 billion is to be accumulated. And so I think there could be more aggressive investment. So you say the employed capital ratio is more than 80%.

So on one hand in the news, it's reported that in the U.S., you are trying to acquire large asset management company, and if that's the case, you have some goodwill generated.

So in that context, what is going to be the impact on the employed capital ratio? Can you explain?.

I'd like to respond. In terms of the interim dividend, we will be paying interim dividend, and at the same time, we don't show the annual figures and we show target for the three years into the future. It's a little difficult to explain, to be quite honest with you. Now ¥22 interim dividend.

Well, we had 20% payout ratio in the previous fiscal year, and our intention is that we were aiming for ¥300 billion-plus in three years time in terms of net profit. And this year, of course we are not aiming for zero growth.

When you think about it, this year we had ¥235 billion at the end of March and we are aiming for ¥300 billion, so there is still 60-some billion - ¥65 billion increase. So how to achieve that in three years? And we have no idea of achieving lower revenue and profits, so we put out ¥22.

So when you probably multiply that by two, and you probably expect ¥44 to be the full-year dividend payout, we understand that expectation. Now maybe you don't think so, but maybe there will be some phase of adjustment or correction and there could be some issues. So we say that we need to maintain ¥22 at a minimum.

So if the - well based on the interim results, we will announce the payout ratio for the full-year. That's what we’d like to do. And we have absolutely no intention of making a downward revision, because if we had any such idea, we cannot say that there is a target of ¥300 billion. So that is our policy. And in terms of capital.

Hartford and Yayoi, we have made these acquisitions with large goodwill. Hartford, it's a negative goodwill. Our issue is - what we always have to think about is what we invest in, they will be accompanying with some goodwill. So we have to have a good dialog with the rating agencies and make decisions.

Certainly of course there will be rumors before the fact - asset management company acquisition rumor, that's been floated in the U.S. while the Americas. That's true, but we need to do the analysis and we will make investments, so that we can maintain the A rating.

So in terms of all acquisitions, we say that we have to be able to maintain the A rating. That is our basic stance. So we earn ¥200 billion so we use ¥200 billion. That's not how it works, or we sell ¥200 billion so we buy ¥200 million. That's not how it works. We sell ¥200 billion and we have increased for some acquisition much larger than that.

So how do we maintain - A, how do we maintain ROA of 3% and ROE of 11% or over 11%? So we take in all those factors and then we decide whether to invest or not. So it's not that we’re going to use other money that we take in. So that is the difficulty that we have - that I have. I hope you understand..

Thank you very much. Let's move onto the next person..

Thank you very much. Sasaki with Merrill Lynch Securities. I have three points to seek your clarifications. Number one, about mega-solar projects. Within the next three years, you said that those projects will become fully operational.

As you start to sell power, the generated power, the business conditions how it is lucrative or not, and you can check [ph]. And also three years from now, how much of profits do you think that you can expect as projects become fully operational? Number two about Robeco. You impound that it’s duly expanding I understand.

What after all is the strategy which has been kind of the key to the successful fundraising? And also any prospect for the mandates in the future? So that’s question number two. And question number three, your communication on the western market.

We understand that you are [indiscernible] income the prospect on the single year basis, on the western market. We understand that. The other companies may instead of on the core tier income that you have full year and the prospect would have forecast, that would give us further clues on the monthly basis.

There are on the various ideas and ways to communicate in the western market.

So I wonder what sort of ideas that you have in order to set that?.

About mega-solar projects. Within three years, about 930 megawatts prospect for income, 180 megawatts operational already as of now. And on top of the capacity utilization, about 10% over-performance is against our initial anticipation. Of course our business in that case has never was ever so conservative.

And based on the base and the power generation, that we understand that we have been able to generate 10% over and above the business case. So that has been pushing up the income that we enjoy. About ¥250 billion, that will be the outstanding balance investments three years from now in this area. Pre-tax, after-tax.

I don’t think I am ready to show that. But ¥25 billion to ¥27 billion EBITDA and that is what we expect three years from now. This is assuming that the stable operations can be expected and then we will have that size opportunity and then we’ll go from there.

Now your second question regarding Robeco in United States and also Transtrend, which is trend-follower fund management firm has been operating quite favorably and there is downtrend of the oil market. The return has been generated quite nicely which has been supporting the increase of the asset under management.

However, right now the 57th is the ranking as of right now. These funds that we expect that there is going to be reorganization in these investment firm and the communities. If the 57th in size and that’s not enough, then we’ll have to make sure that it becomes much stronger and bigger, so that it can survive into the future.

That’s what we are discussing and thinking. But there is a positive trend after all. According to the Morningstar rating, Robeco is one of the top five, meaning that through comparisons in Asia, in particular the Middle East, national funds from the Middle East, they had been topping - they are top-up and topping up their investments into Robeco.

IR approach. Quite tricky, because if you have [indiscernible] ORIX, therefore any sort of reasons such as Orecom [ph] it’s very tricky because many of you - some of you would probably think that we should look at the situations. The shorter term and that also say no it is more from long-term perspective, so mixed views in the market.

Indeed however, every day we are - we have to recognize ourselves as and one being that one of those internal - the insider trading sort of an entity. So what size the deal and what size prospects. Every day we have to be mindful of fact that we would very soon be unleashed, therefore insider - how they trading activities.

So how they phrase in media and their coverage and whenever the community becomes severe, then that’s when for the first time feel comfortable and communicating with you. So if we say that we have to make investments, that if we make asset sales and then you would say that you have stopped growing with those assets.

If we do not sell, then you would say - that you would criticize us otherwise.

So what we are doing is that it is the three year prospect that we are sharing with you, not to say that we have any single year prospect or any kind of noise that we can give you, but really our sense is that we are not going to be bounded by whatever the number or the size in the single year operation, and that we will always keep in mind that that ¥300 billion within the three year and the time period.

We understand that there is a variety of investments in operations and that we are involved in, and we will get involved in. So all of those areas have different characteristics and that always - which quickly generate return and others which would take more time. And we do not have time.

And I don’t think it is proper for us to try to have to give you details about each and everyone from a business portfolio. That’s the reason why we feel that the current way of communicating with you that three year prospect and expectation of ¥300 billion in three years.

We just feel that that is the most effective means of communicating western market. So I’m not saying that we don’t have any prospect there or anything or any ideas in between during those three year period..

Thank you. A supplementary question about management targets. You keep saying the preservation of the single-A credit rating.

Is that internal or external?.

It’s external..

External.

What do you mean to say is that right now?.

The single A minus from S&P, BBB plus and therefore Moody’s. So S&P single-A minus and that’s the level that we would like to surely have stayed..

Thank you very much. I understand. Thank you..

Thank you very much. Next question please..

Okada from Goldman Sachs Securities. I have three questions. First, you commented to the ROE of 11% to 12%, so what's the thinking behind that? The ¥300 billion profit is what you what to achieve in three years.

When you achieve that? What would be the ROE or did you start from ¥300 billion and came up with the ROE figure, or did you have the ROE figure first? So what’s your idea about the capital efficiency, and also capital cost, or do you compare vis-à-vis capital cost. What is the thinking about that? Second question.

In terms of the asset size, March 2018, Hartford Life asset will have declined. At that time, compared with the current asset size, what will be the change? There will be change in regulation of non-banks. And also the operating cash flow.

This you're using instead of the base profit, and so will you continue to disclose this? I think that’s your intent but how is that going to increase, if you can explain please?.

So this is just an image, ¥300 billion. We conducted simulation based on ¥300 billion and ROE three years from now. That will be a little lower than 12%. That is our target. If possible, we want to exceed 12%, but it depends on the condition at that time.

So if things move at the current pace when we achieve ¥300 billion, we should be able to achieve ROE a little lower than 12%. In terms of our size, ¥11.4 trillion is what we have. That's too big is what I think. ¥10 trillion plus or minus is the right level. So if we suppress ¥10 trillion, then ¥300 billion would be the 3% ROA.

That is what we like to target, but I think that will be quite difficult, but that is my target..

How about the cash flow?.

Well, about your third question, operating cash, Page 4. So in our securities report every term we disclosed that, and that is just translated into this graph. So if you look cash flow from operating activities it’s divided into two parts into different colors. And if you analyze the past figures, you can see that it has been steadily growing.

And so that part we think that trend will continue and show stable growth. That is what we think..

Next person, yes..

Muraki with Deutsche Securities. Two points. Page 13 of your presentation materials, the historical trend of profits. Three years from now of ¥300 billion as you say. If you add that, then it means that long-term the profit expansion in the period isn't going to be what you're going to have.

If for the three year period going to come, what are your assumptions in terms of external conditions? As you were talking about dividend and the payout, you said something about uncertainty mounting and the externalities in dividend and the decrease yes or no.

I was wondering that ambiguity, that weakness are you hinting at your anticipation that that uncertainty in your externalities may grow or not necessary that? So that's question number one.

The question number two on the retail investors, sort of long-term investors and remembering yesterday's press announcement, Toyota’s [ph] type-A shares, how the interesting something I liked that approach instrument. I think there is comment that made in that regard. And also Mr.

Miyauchi said that one has to wait for three years investor before divested and we support that right. So that’s what your new chairman said. So what about the particulars from whatever type-A shares, or how the divesting period therefore voting rights.

Are there any particular ideas or hints that you can give us?.

Number one, shareholder policy. Our senior Chairman Mr. Miyauchi - I’m sorry I didn’t catch that. Maybe I was not listening, but anyway, basically we have no plans to issue that sort of shares type-A equity issuance and we are not thinking of.

There is certain preferred and the distinctions, but we are not thinking from any type-A sort of instruments to be issued per se. Yesterday, the media announcement of our financial results that was made and I took to the podium and Mr. Miyauchi made comments.

And I think what he meant to say is that the secretariat is continuing learn and investigate various [indiscernible] options, but we have not focused on any type in particular. And also on that external conditions in the three year period to come, simply put don’t know.

Assuming that the current conditions will have to stay for the next three years then ¥300 billion, but you never know. One can never be sure that there is never going to be any other disruption such as the failure.

So basically provided that everything will be as we see today in that ¥300, but one would couple of rounds of corrections in the marketplace that probably can give internal experiences from the past, but we should be able to weather that. So whatever sort of events or the European situation getting and anticipated whether U.S.

rate hikes and the causing unanticipated realization of the downside, those the possibilities. Nothing is in our expectation.

However having lived through the post-Lehman crisis period of natural conditions and how it has become much stronger, so even if there is some disruption to the markets such as the Lehman failure should occur again, we should be able extend it. We are stronger than we used to be.

If you keep on expecting then coming up with whatever possibilities, then we will never be able to finish the planning process. So what we say today is that we assume that the conditions would stay as it is in ¥300 billion. I hope I am answering adequately. Thank you very much..

Next person please, over there in the middle..

Yabumoto from Mizuho Securities. Two questions. First, in terms of the mid-term strategic direction, what's your emphasis? So what are going to be the deals that will emerge will depend on that, so it might be difficult to say at this time, but towards the ¥300 billion in three years.

What will be the segment profitability direction? I know you said - you mentioned several focus areas. So what do you think is has the most potential, most promising, which segments do you think is more problematic? That's my first question.

Second question, concerning the current business environment, so the March 2015 term that just ended, compared with one year ago, domestically or globally, which are - is it the situation that you can step on the gas and accelerate your activities.

Is that what your view of the current situation?.

In terms of promising areas, we have existing segments and without making any effort there is profit that will come from these existing segments. That's about ¥200 million. And then we have some additional profit from new business. And then there is the ¥20 billion to ¥25 billion EBITDA from the mega-solar, that's part of that.

And so if we don't have new business, we will not be able to achieve ¥300 billion. So ¥200 billion or ¥220 billion, ¥230 billion from existing business. So the reminder we have to increase with new business. And I think it's the mission of the of the management to try to find that additional income. In terms of environment, it's mixed.

China, we are wait-and-see attitude there. And it's interesting that China has worsened, but in areas other than a real estate. Well, money for real estate is now flowing into the stock market and stock market is now very strong. So PE that we're doing in China, we are doing exit-phase. So the environment overall, it's not unitary.

It's not the same everywhere. For the U.S. real estate, there is a very big boom, especially for condominiums in Manhattan. Condominiums are selling at not hundreds of millions but the penthouse selling at tens of billions and being traded with cash and the Middle East and Russian buyers are buying that. And shale gas not so strong.

So you have to look industry by industry or else you make the wrong judgment. So in terms of the environment, you have to look at the and analyze the industry environment and decide where to put your money in, which industry to invest in. So it's more difficult to make a macro decision. You have to look at it at an industry level.

So for China, real estate may not be so good, but stock market is a very strong. Hong Kong, non-China business, IT-related industries strong, but the China real estate related business not so good. But then in terms of real estate companies stock prices are much higher than a year ago. So that's time to exit or sell. So that's how we look at it.

So overall, the environment is not so bad. But there is a zero interest rate, that's been continuing, and there is a lot of short-term assets, current assets. And so based on the U.S. monetary policy, there is going to be a very big impact. And so we really have to carefully make decisions about investing and exiting. Thank you very much.

Gentlemen, now we're approaching to closing time, so the next one is going to serve as the final question. Yes..

SMBC Nikko. My name is Niwa. I have two points. Sorry to be a bit redundant, but number one having to do with your mid-term business plans. I'm interested in further details, to accumulate ¥65 billion additional profits.

Those will be basically from new investments - through new investments, right? And is it possible for you to go deeper from whichever particular project or the segment, is it possible? And question number two. Short-term the conditions [indiscernible] and that’s also very useful.

So what will be the range view that you have from the current fiscal year?.

Mid-term strategic directions and plans. What I did say was that given our business model, we have finance, non-finance, retail, wholesale, overseas, domestic. So it covers a widely spend. And so accentuations depend on the nuances in each and every. So knowing that how to show more clearly and effectively, which has been a big challenge.

So we always have been thinking ourselves as to the better means of communicating with you. But I did say was that the organic growth will 10%, 20% maybe it’s in that sort of [indiscernible] prospect which can be maintained by some but not by others. Life insurance, yes, more than 10% growth.

With mega-solar or environment and energy, it’s not 10%, more than 20% in growth. Overseas, more than 20% as you’d expect. Automobile related, as you probably know there are the various asset sellers who are the M&A, so that rumors. Just by having our hands on the - a handful few, then that will mean sizable investment.

If we are able to have one of that, then IRR 20% in five years and that has been the criteria that we have been applying over the years. If we do the ¥165 billion in three years time, it’s certainly feasible. There is no reason for us to think that it is not. So ¥234.9 billion, about ¥11.

billion or ¥11.5 billion effect on the corporate tax and the payable. So it came towards all at once abruptly. So basically I think our thinking is that we preserve and to certain gross we aim at ¥300 billion.

However as I keep in saying different chapters and different stages ups and downs, so when I say that constant double-digit growth, that’s something that once quoted, we would have to, meaning that in order to adhere to that, we may have to sell the assets that we would otherwise not sell.

Rather than having that sort of an approach, the three year time span and we should be able to do that 30% and that might refer to corporate and the tax rate effect of 28%, but we would like to have a little bit of time allowance on our part. That’s our message to you. Short-term view, you say that it’s useful.

Therefore each and every segment, for instance corporate domestic sales, as long as usual sort of leasing operations only that cannot be accomplished. However today’s leasing operations the net fee income and also sales of the solar power and the panels, the profits have been generated, but that phase is over and so now they are onto another stage.

That you have to identify next reliable and promising means. So that sort of the process is repeated throughout our business portfolio. There is no tone here of the decline of profitability. All segments and sectors were continued to increase the profits.

Needless to say that there is a typical quarterly adjustments and the realignments that we would have to, and we would be able to make as we move forward..

Thank you. And with this, we close today’s presentation. Thank you very much for your attendance. The meeting is finished now. Thank you..