If I may, I would like to begin the session. First one, I like to thank you for your presence despite your busy schedule. We're here now to explain the earnings results for the fiscal year March 2016. My name is Haron [ph] of Corporate Planning. I'm happy now to serve as the emcee. .

Let me take a moment to explain what we have distributed to you. You should have 5 set of materials. From the top, you should have the earnings main material and appendix and also earnings [indiscernible] and also the earnings release and lastly, you should have the question-and-answer sheet.

If you're missing some of those materials, please show your hand. Our people are quite happy to help you. .

And that said, in the first half, we like to have Mr. CFO, Mr. Kojima to then explain the actual results for FY March 2016. After that, our Group CEO, Mr. Inoue, is going to share some of the important strategic directions for the company to follow on the mid-term basis.

And after that, we'd like to have some time for question and answers, and we'd like to conclude the session at around 16:30. .

This is Kojima speaking, group CFO. Where am I supposed to make my presentation? Over there? My apologies. Again, my name is Kojima. I also like to thank you for your precious time, attending this ORIX Corporation earnings call despite your busy schedule. And that said, I'd like to take a moment to explain the actual results of the FY March 2016.

Would you please turn to the next page, please?.

As have been already reported, in FY March 2016, our net income was JPY 260.2 billion, up 10.8% year-on-year. Following the previous year, ORIX renewed our record profit and the company had grown its profit 7 years in a row. ROE was 11.7% and up 0.2% from 11.5% previous year.

Following our fiscal year March '15, we achieved our own target on ROE, 11% or higher. Fiscal year ended March 2016 enjoyed the same level of gains on sales, particularly in the first half. Our existing and new businesses drove our growth in a steady fashion. We're so happy as to these results.

We are aiming at JPY 300 billion in the year FY March 2018, and we're able to actually enjoy a good path towards that goal. .

And next page, Page 2, this shows the segment on profit and in assets and the trend for the entire fiscal year. Segment profit, in total, JPY 380.1 billion or up 13% from the previous year. Excluding Retail, all the 5 segments grew their profits.

Segment assets, due to the -- declined about JPY 200 billion, mainly due to the factors, which I'm going to explain to you later. .

Now looking into each segment in the numbers. Please refer to the details on pages after 20, but allow me to give you some highlights here. First, on the Corporate Financial Services, profit was up 66% or JPY 42.4 billion, a big growth in profit year-on-year. We added Yayoi, and this Yayoi made full contributions.

And on top of that, our fee business actually was able to grow in a steady fashion. And also in the first quarter and in the third quarter, we're able to enjoy the capital gains. .

As for the Maintenance Leasing, this segment was up 6% or JPY 42.9 billion. Automotive maintenance and others actually play a very important role. And also, automotive [indiscernible] value-added services has actually made a good contribution. Actually, all in all, 6% growth.

As for the Retail, real -- as for the real estate, rather, the real estate grew 1,131% year-on-year or JPY 42.9 billion. We now level-ish during a good market opportunity and enjoyed the gains on the sales of real estate and also the income from the Japanese inns and hotels and operation also made their contributions to the growth.

And furthermore, compared with the previous year, actually, we had loss on the long-term basis, actually JPY 20 billion. Actually, this was actually calculated and put into the booking. And as for the investment and operations, actually, it was up 35% or JPY 57.2 billion.

The profit grew thanks to the gains on the sales of the investment and exit, and I'm talking about private equities, and also in environment and energy. And also, Daikyo were able to grow smoothly. .

Retail was down 57% Y-o-Y or JPY 51.8 billion. In March FY '15, we had a major gain from the sales. I'm talking about Monex sales as well as in Hartford Life bargain purchase. And also, Hartford performance was rather good. And all in all, we had been negatively impacted and JPY 51.8 billion or down 57%.

And on global, actually, up 37% and JPY 124 billion. In the second quarter, we had fully IPO and gains the valuation gains. Actually, that made good contributions to the improvement. .

Please, let's turn to Page 3. This graph has been used since last time. Actually, we are going through some of the details by elements. The left-hand side shows the pretax and profit. Actually, JPY 344 billion becoming JPY 349 billion [ph], so it grew JPY 47.3 billion or 14% from the previous year.

Certain existing business as well as new investments gave us profit of JPY 54.4 billion. And furthermore, the gains on sales, JPY 112 billion, and also JPY 20 billion out of the sales of the Real Estate.

And also, we have the gains on sales in the previous year, JPY 123 billion, and also the Real Estate gains in the sales, JPY 171 billion (sic) [ JPY 17.1 billion ]. So on the sales -- or the gains on sales include in the Real Estate, actually down JPY 7.1 billion.

But thanks to the JPY 54 billion growth out of the existing operations, all in all, JPY 47.3 billion was the growth we enjoyed. .

Right-hand side, looking to the segment assets. As has been explained by me earlier, end of the fiscal year, JPY 197.8 billion, actually down 2%. And going through the details. First, existing business, so the new investments included, JPY 632 billion was the growth we had in terms of asset. At the same time, there are factors, 5 factors in there.

First factor is Hartford run-off in the operations and cancellation JPY 442 billion. And also, Real Estate sales declined JPY 95.8 billion. And also, on PE exit, JPY 43.2 billion. And also the U.S.A. securitizations [ph] and also in Corporate Financial Services and Leasing, depreciation, all in all, JPY 130 billion.

And also due to the stronger yen in this fiscal year, we had an FX impact, JPY 138.4 billion. Actually, we had growth, JPY 632.1 billion, in the existing -- actually, all in all, down factor was JPY 89.7 billion [ph]. Looking into the run-off of Hartford and Life Insurance, that excluded actually, year-on-year basis, actually JPY 134.4 billion.

So that was the growth we have in the existing business and operations. .

Furthermore, in the third quarter on the existing businesses, we had JPY 65 billion up until in the third quarter. Actually, that went down JPY 54.4 billion on the annualized basis.

And one of the reasons for that was having to do the decline on the market and also how former Hartford Life, the insurance actually had a negative performance in the fourth quarter, so they are the major factors. .

Looking at the asset side, the existing side -- operation side. Up until the fourth quarter, JPY 316 billion up until the fourth quarter. But on analysis basis JPY 632.1 billion, actually up JPY 237 billion. And investment, actually, we made a further investment into the Kansai International Airport.

And also, in India, now we had -- we launched the investments into the wind and power generation. And also, we purchased aircraft and in others. So we have these new investment plus in the existing business, Maintenance, Leasing and Retail, Overseas Business, in this, we had growth. .

Finance, the Operation and Investment. These are the 3 categories. And the nature of the business is shown at the top of the graph. With respect to finance, credit risk, credit risk is taken to get interest income for financial gain, like leasing the loan or some of the businesses. .

And the constituting businesses are the lease and loan and fee business are in the Corporate Financial Services business. And also in Japan, ORIX Bank and ORIX Credit is the businesses that belong to this. Overseas, lease centered were in Asia and in the Middle East. And also in the U.S., we have at least the lending.

And with respect to operation, we have 4 subsegments. One is environment and infrastructure and also the Real Estate operation. This is a category, one category, for example, hotel among the Real Estate businesses.

And also, GOOD TIME LIVING, so-called, the facilities, and also the aquarium and other facilities operations and including the solar power generation, the Environment and Energy and also something that is added, the new concession business, that belongs to environmental infrastructure. .

As for financial services, asset management business is done by Robeco. And in the U.S., we've kept Mariner asset management business and the -- in Real Estate. And also, the investment adviser that belonged to Real Estate. And also, ORIX Life, that belongs to the Retail. .

With respect to maintenance services, just like in internal leasing, Auto and Rentec. And others include Yayoi and also some other new businesses that are in this category. .

And last category is Investment. We take market risk here, and exit is in the volatility of the market where we try to get a capital gain while we own it, and the income gain is also expected in this business. .

As for fixed income, the centering around nonperforming loan investment servicer for Japan and also for Overseas. We do this in U.S.A. The CMBS and the municipal bond investment belong to this.

And with respect to the tangible assets, the real estate market and the aircraft market and shipping market, in these markets, we have transactions, the real estate investment. Also aircraft leasing and shipping are some of the businesses that belong to intangible assets category. .

And the last one is equity. We do PE investment, and Daikyo that belong to investment and operation. And Overseas, particularly in the U.S., we have health care and investment in South America. And also, the Korea office and the China office do China and Korea corporate investment or PE investment. They belong to this category. .

So what do the picture -- does the picture look like according to this category? We have a pretax profit by category and also segment asset by category. It may be rather difficult to see, but within the parenthesis, for example, '15 March, the net income in the businesses is actually -- there's 2, that's 130 business [ph].

And also, in '16 March, it's not JPY 190 billion, but JPY 150 billion rather. This is onetime nature. Hartford Life Insurance bargain purchase gain and also Monex sale of gain. And with respect to '16 March, the Houlihan IPO has generated a gain on sale. So excluding all these big items, the number is shown in the parenthesis.

With respect to segment assets, again, the Hartford asset is excluded, then not JPY 3.6 trillion, but JPY 2.2 trillion and JPY 2.5 trillion in the parenthesis are shown if you exclude the Hartford. .

So as you can see from this page, in March '13, more or less, the profit from operation and also the profit from finance are on par with each other. But in 2016 March period, if you include the onetime major items, the profit from operation is double that from finance.

If you exclude the items of onetime nature, the finance growth of 3 years was 1.3-fold, so as opposed to operation where the growth was 1.9x. On the other hand, if you look at assets, again, the maximum or the greatest share is from the finance, that remains so.

But rapidly, the operation is growing from JPY 1.5 trillion to -- if you include Hartford, JPY 3.4 trillion, twice as much. Or if you exclude that, that's still 2.5x. So 1.7x growth is seen at JPY 2.5 trillion. Particularly, the business is growing, for example, in the -- because of Robeco.

And also, gradually, over the last few years, we have been focusing on Environment and Energy area. The solar energy investment is now coming into operation one [ph] after another. And going forward, concession business will also further drive this growth. .

In 2016 March, in terms of segment assets, investment is JPY 1.6 trillion. The breakdown of this is the bond, JPY 300 billion; and the tangible assets, about JPY 800 billion, of JPY 800 billion, Real Estate, JPY 550 billion; the aircraft and shipping, about JPY 500 billion; and the remaining, the equity investment about JPY 500 billion.

That's the breakdown. .

Over the last few years, in terms of investment, JPY 1.9 trillion to JPY 1.6 trillion or around JPY 1.8 trillion. But when it comes to the breakdown, as you know, the Real Estate share has been coming down, and equity and aircraft is increasing, so the structure or the -- has been changing quite dramatically. .

So that is what I have to say, and I would like to pass the baton to Mr. Inoue, CEO, who will talk about the medium-term traction. .

Hello, this is Inoue. I may repeat the same point, but actually the net income actually up 111%, JPY 260.2 billion. We achieved a continuous growth 7 years in a row. And also ROE 11.7%. We're aiming at JPY 300 billion for FY March 2018. I think we were able to start a rather smooth transition to that goal. .

Actually, in the first half of the fiscal year, operation actually was able to go back to the level of JPY 20,000, for the first time in 15 years. So relatively speaking actually, we got -- we had a rather smooth start, but the movement into the second half and the decline in the oil price actually had a great impact upon us.

And also, on China stock started a global equity decline. And also, the global economic outlook actually became rather darker. And here in Japan, actually, the [indiscernible] actually got downgraded. And also [indiscernible] our Central Bank of Japan decided to go for the negative interest rate. .

All in all, we have major changes and challenges of only 12 months. So that said, in the first half, within that kind of business environment and actually besides the existing business growth, we actually sold 2 PE investments and also on Houlihan Lokey IPO and also we've worked on KIRARITO GINZA and also others. .

In the Environment and Energy and Asia network and asset management, private equity and investments are the new areas. But excluding asset management, actually, we're able to actually grow in a rather steady fashion, and all of this in the PE also.

That said, Robeco and AUM, due to the poor market association, actually we had negative associations in Y-o-Y, but the impact there was somewhat limited, if I'm not wrong.

And with regard to the Environment and Energy business, the mega solar -- actually, the concession and the mega solar, actually, development actually was underway and for all the power generation. And also, we worked on the global activities. We are investing in IL&FS.

Together with IL&FS, actually, we started 1,000 megawatts scale on the wind and power activities. We started to go for it. And also, in Robeco and together with Asian Development Bank, jointly, we established energy-related events, actually very first investment actually took place, particularly in Asian NGLs.

And also, we believe that we're able have good growth in Environment and Energy. .

Talking about the mega solar. By the way, 8.9 million megawatts have been secured. And also 410 megawatts have been secured. And actually, construction is well underway, and we're aiming at 2018 and onward for full operation going forward. .

Private equity investment, next, and Asia networking. And we have the automotive finance and company acquired in Indonesia. And also, in Cambodia, ACLEDA, a bank, additional capital investment was done. And also, in the United States, the hedge funds, the Mariner Investment Group vehicle was used for our execution on the very first private equity deal.

.

Here in Japan, on the natural spring water producer and distributor, Cosmolife. And also, Japan is one of the biggest operator [indiscernible] who is quite well-known in the vaccine business for animals. And actually, we're actually successfully working on deals out of these investments.

And also, actually, we are working on the concession as of April 1 on the Kansai International Airport. .

As for the existing business, the ORIX Auto, first. The number of the vehicle under management under ORIX Auto, actually, end of March 2015 are 1,117,000. That grew to up to 1,213,000. And we're able to maintain a number on the position in this industry. .

And next, the life insurance business. The individual [indiscernible] actually has passed 0.5 million for 3 years in a row. Those are the number of the existing policies. Actually, for the past 19 years, we're able to grow in 2 digit. So this is still growing and expanding. .

Next our Yayoi operations. This is cloud-based invoice management service. And actually, we acquired Misoca, who's going to do the development and also operation for the Yayoi cloud-based activities. And we acquired a concession for the Kansai International Airport.

And also, we'd like to make further effort to further grow the existing business, and we're aiming JPY 300 billion in March 2018. So all of these principal activities are going to be launched one after the other. .

Finance and Operation and Investment. And out of these 3 categories, the operation and investments are going to be very important areas for us until further work comes in terms of the money, in terms of the resources we have.

We are now in a low-interest era, and because of this, it's rather difficult for us to make a good return in loan and finance leasing. And also, we should not move into the excessive interest condition, rather, we should put emphasis on operation and investment. This is what we believe. .

When it comes to Corporate Financial Services, of course, it is not a simple and long list of business, rather we need to work on further efforts moving into the electronic settlement and services as well as in the transmission services because we do believe that, out of this, the activity should be able to increase in service and income, getting away from the finance revenue model.

And also, we believe that we need to take some of the long-term perspectives in terms of the profit, but we are thinking moving into further actively in the new businesses, including the agricultural business..

As for the operation, Environmental Infrastructure business and also financial services and also maintenance services and in others, our new business, are going to be the categories that we're now looking at. In Environment and Infrastructure, of course, mega solar, actually, we have power and the capacity and the plan are well underway.

And we intend to make further efforts to accelerate opportunities in this space. .

Globally, in India, we launched the wind power generation. And that will be the endpoint we'd like to have further activities in other Asian geos as well as in the United States, particularly on the side of the renewable energy opportunities. .

As for the concession business, we have an experience of acquiring concession for the Kansai International Airport, and we have now receiving inquiries for other concession businesses as well. For the future, we believe that we can turn our concession business into one of the core businesses. .

In the Real Estate operation business, this has been performing well with the tailwind of wind bound. With respect to new investments, the selective investment stance will remain unchanged.

As for inns and hotels, we fix our eyes on the increasing inbound needs in the future, and we are now -- we would like to consider investment by selectively looking at properties, including the ones that are under construction. .

For ORIX Life, not just in terms of product competitiveness, the price competitiveness is also expected to be more stringent in terms of the insurance premiums.

So we would like to differentiate ourselves with product proposal capabilities, and we will further expand the direct distribution channel where our own sales reps will sell insurance products directly. ORIX Auto and ORIX Rentec have secured #1 position in the industry. Their ROA, ROE and cash flow are robust.

We would like to actively increase assets on a continuous basis. And we'll also expand the related services such as telematics services and rental businesses of the AI-related equipment. Also, our Auto business has a know-how that we have developed in Japan.

We'd like to take advantage of that in the overseas subsidiaries, particularly in Asia, as we promote this business. However, we have to be cautious. But we are aware that the nature of risks in operation category is very different from that of finance category. The risk of a loan is mainly the credit risk of borrowers.

But in the case of mega solar business, the operational risk, whether we can appropriately manage mega-solar or not, that is the main risk. The nature of these 2 are very different.

So as we try to expand these businesses, there will be, increasingly, risks that we have not experienced in the past, so we have to put in place a system that would allow us to do risk management appropriately in these fields as well. .

the fixed income investment or investment intangible asset and equity investment. And we would like to particularly increase accumulation of assets in tangible asset investment and equity investment. .

With respect to investment in tangible assets, the real estate market, we believe, is picking out, so there should not be a major increase in the new investments in real estate or set around the development of land that we have already owned.

With respect to aircraft portfolio, we will expanded this business, particularly focusing on narrow-body type aircraft..

Regarding Investment and Operation business in Japan. The high-price levers have been maintained, so we will continue with our sales. And we will avert the price competition and will try to increase investment in health care, IT, food and lifestyle-supporting businesses, which are core businesses.

With respect to investment business outside of Japan, we will move ahead with investment using the investment management company where fund accounting can be applied that is established by Mariner Investment Group. In Asia, as we try to tie up with major partners, we will identify the -- excellent and new investment opportunities..

Lastly, I'd like to talk about shareholder return. The concept of using the capital for investment toward sustainable growth will remain unchanged. We will continue to strive for a stable return to shareholders. The dividend for 2016 March period is JPY 45.75 per share. Also, the interim dividend forecast for 2017 March period is JPY 23..

To -- with respect to the payout ratio of this period, at the time of the announcement of interim, the financial results, we'll announce the policy. We will also, of course, look at the investment growth. We will change the assets by seizing the opportunities in the market, and the -- we will go beyond the business or country boundaries.

We will continue to actively enter into new fields. This possibly will be maintained the -- toward a JPY 300 billion target of income by 2018. We would like to focus on investment continuously.

As for the existing assets, we will take opportunities to have a gain on sales; and centering around operation, the stable revenue increase to achieve a JPY 300 billion income target. And we'll also establish a foundation for further growth..

With that, I would like to conclude my remarks. Thank you very much for your attention. .

Now we'd like to have question-and-answers. If you have any questions, please show your hand while being seated, and the microphone will be delivered to you. And I'd appreciate if you could limit yourself in 2 and -- to 2 questions per person. Please identify in full who you are and which organization you belong to before you ask questions, please. .

Yes, I see a hand here. .

Daiwa Securities. My name is Watanabe. I have 2 major questions, if I may. Now first question, concerning the investment and an exit. For FY '15, you had exit in the first half. And also, now in the second half, I think that you're accumulating assets.

What's going to happen to in FY '16? And could you share your thoughts? And I'm looking at Page 7 and bottom right and actually mid-term directions by segmentation. Is segmentation included on finance? Actually, there seems to be any growth factors.

Could you please explain on that exit on new investments? And are going to be further evaluated in further details, if you can explain on those aspects. I appreciate that. My major second question is your return to the shareholders.

Interim dividend, JPY 23, what's the discretion behind that? And according to the press release, I'm looking at Page 4, Page 4 in the press release, and forecast for the next dividend and year-end actually shown in the dotted line, whether or not that line has any specific meaning. These are the 2 questions, please. .

Yes, the -- if I'm wrong actually, we have received dissatisfaction, the opinions concerning this number. FY 2018, we are going to aim at JPY 300 billion. May I remind you of that? And we're still sticking to it. The market is rather poor. And also, many actually corporations actually predicting the profit decline.

But are still aiming at JPY 300 billion. Actually, we achieved JPY 260 billion. I think it is kind of a simple calculation what kind of numbers we have to drive at and to reach the point of the JPY 300 billion.

But again, JPY 24, JPY 25, after the announcement was done, what's going to happen if we lost our -- the speed in the second half? And actually, interim dividend, the JPY 25; and the final adjustment actually will give JPY 23. I think that kind of association will give our investors more dissatisfaction, some sad feelings.

And so we're not pleased and accept the JPY 23. And it all depends upon [indiscernible]. And it all depends upon then actual activities. And as time goes on, we should be able to come up with better, clear forecast. Then I think we should be able to talk about more specific numbers.

So what you see in this chart, actually, there is not much message and meaning. And compared with March 2016, definitely we are going to aim at better associations compared with March FY 2016. .

Thank you. We would like to invite our next question.

Anyone?.

Muraki with Deutsche Securities. Question one, the negative interest rate of BOJ. With respect to impact, this may be a technical question, but Page 22 of the material, at the very end, the interest-related yield is shown. I would like to have your outlook. Last year, throughout the -- in the full year, yen-denominated funding cost was 0.6%.

The asset side yield was 4.5%. So the spread, simply put, is 4% on a net basis. The funding cost is already come -- has come down to 0.6%. And so with respect to further reduction, well, on the surface, it's only 0.6%, but the yield on the asset side is still quite high.

So going forward, as banks compete with each other more stringently, the yield reduction on the asset and also the funding cost reduction, do they go in parallel? Or perhaps the -- it might -- there might be a further shrinkage. So this is my question about -- the first question about ALM.

The second is also related with that, but on Page 4 of the presentation material, the -- you are showing 3 categories of the portfolio. The unusual monetary easing has been continuing for long, long years; and it is likely that it will continue on for some time to come.

Now you explain some points, but with respect to finance, or to some extent, if you want to focus on profit, it's very difficult for you to increase the assets. With respect to investment, the valuation is going up because of the monetary easing, so the sale of will increase.

Just like the last 2 years, the asset for investment is very difficult to increase. If that is the case, then based on the business, based on the assets, the negative interest rate policy would bring about a negative impact. I think that would be fair to say.

Am I correct? Or the operation, if you conduct a major M&A, then the profit itself can grow technically perhaps. So the monetary easing, the shift to nonfinance business, that is just stray selling.

So how does the monetary policy affect that?.

I'll answer the technical question based upon numbers.

Well, unless you do it, no one knows to some extent, but as far as numbers are concerned, first, the funding side, the variable interest rate and fixed-interest-rate funding -- and ORIX Bank, it has a term deposit but also short-term deposit, but within a year, well, the funding, so the -- that if you do a funding, that can be shifted within a year.

Then JPY 2 trillion, perhaps the yen-denominated loan, JPY 3 trillion plus; if you include variable, at JPY 2 trillion. And 10 to 15 basis point, that might decline that by 10 to 15 basis points. In fact, ORIX Bank's deposit, 0.35. It's now 0.2. So that's the case.

So on one hand, with respect to the revenue side, the deposit for investment and the lending based on the variable interest rate, like the short-term maturity one, so I think there is a match between them, but it's like JPY 1.7 trillion.

And so in light of this, the variable rate, variable interest rate, this is a matter of negotiations with our customers. And so because of a very difficult competition, how far should we reduce it? Well, it has just begun, as a matter of fact, but overall, 10 to 15 basis points, JPY 2 trillion, so that's about JPY 3 billion or JPY 2 billion.

So JPY 1 billion, well, it's won't bring about a major impact on our earnings result. If the negative interest rate spreads, then the gap will increase, but right now as we speak, that's the way we look at it. So I have answered the question.

And also, with respect to the impact of negative interest rate on investment, of course, for investment, 100% equity investment, that didn't happen. We always take a leverage. So on leveraged, well, nonrecourse loan, the condition for that is, roughly speaking, so far historically better than corporate loan, the condition.

And the term is usually 5 years, or we can take 5 or 10 years. And interest rate is very low in nonrecourse. And so the negative impact on investment, no. We actually take it very positively, but the issue is, if you have a lot of money, then there would be more competitors.

So because of competition, there might be a potential that we may buy something at a high price. But our stance is, well, the enterprise is the name of the game, so we won't budge or compromise that. That's our concept. So the impact on -- of the negative interest rate on investment is 0. .

Thank you for the question and answer. Let us now move on to the next question, please. .

SMBC Nikko Securities. My name is Niwa. If -- I'd like to ask a question -- 2 questions concerning the mid-term directions for the company to follow. I'm looking at Page 7. My first question is -- sorry. I may go into some of the details. Actually, net income, JPY 300 billion. Right now, JPY 260 billion. So the gap there is going to be JPY 40 billion.

And how that JPY 40 billion is going to be filled up based upon the overall impressions, Mr. President, you may have. This is my first question. My second question is concerning M&A. M&A may become necessary for your operation activities.

Up until last year, I think new areas, new -- and to mention have been -- actually, I didn't find it in the presentation materials. But this time, it seems that you are still on the extension doing activities you have had so far.

So what are the specific areas you may have interest in finding more opportunities in going forward, what mid-term perspectives?.

Well, last fiscal year, our capital gain was JPY 130 billion. And this fiscal year, probably it'll be around JPY 100 billion capital gain. It's still within our forecast and probably 50% the real estate and 50% private equity. I think that's the kind of switch of we may be having.

So on the overall, which one is going to be in the solar? Which is going to be kept in the real estate and hotels and should belong to the REIT but making lots of profits? Maybe we should delay putting the hotels into the REIT. So we are still working on such an adjustment.

If I'm not wrong, the hotel portfolio is going to be put into the REIT portfolio, but it did actually went up on 1.5, excellent improvement. So it'll be a shame for us not to do some, so that is why now we are delaying this process. As for hotels, of course, there are many issues such as inbound.

How long inbound is going to be lasting? And what's going to happen after the Tokyo Olympic games are finished? So we have to take into account all these data points, working on the definition of the new portfolio; and also new activities including the hotels and Japanese inns; and the developments on the deals on the surface.

And all these facilities are going to be built by the end of 2018. And so that, we have -- still have 2 years to go for the Olympic in 2020, so in the meantime, we would like to enjoy the stable stream of the profitability. And also, the solar actually operation actually, 200 megawatts and up at 1,000 megawatts; and by the time, how we're conserving.

And of course then, out of that, we should be able to enjoy the good and stable profit. And also, the private equity, next, usually exit is going to be done once every 4 to 5 years. So the -- possible for us to have replenished within that kind of frame mark. We're going on to the U.S.A.

And of course, there could be some changes, and expect changes, due to this upcoming presidential election. But I still believe in the potential opportunities in terms of investment activity in the United States.

So this fiscal year, moving into next fiscal year, actually, we are working on this scenario and looking at the level of JPY 200 billion up to JPY 300 billion. It all depends upon the market factors. You pointed out that no new major opportunities, but Kansai International Airport; and also health care, for that matter; and also vaccine for animals.

As for the private equity, new areas are going to be quite important driving factor even though it is somewhat small and limited. And for example, the food and the agricultural activities. I think -- agricultural, I think it is going to take a lot more longer time than we have thought. So we have to work on new areas.

We are talking about new areas, not necessarily purely futuristic activities. I think we are looking at those potentials sitting next to us, kind of our neighbor. Well, how you define that kind of distance, it all depends upon how you see it, but again, on -- we believe that it's not going to be that futuristic.

And we believe that we should be able to grab those opportunities within 1 or 2 years, within several years. So we should be able to actually give you an update stat, yes. And we are now working on these new, the business opportunities. .

Thank you very much. We'd like to entertain the next question.

Anyone?.

Tsujino with JPMorgan. As you just explained, as for exit, you have been giving consideration to your pipeline, and you are seizing investment opportunities. And also, you're not -- you are going to stick the JPY 300 billion. And if you aim at that, then this year, you want to increase profit, this year, but still, then a high ROE is to be realized.

And JPY 23, well, if you are talking about such a -- the payout ratio, the ROE maintenance is very difficult to do. Given the numbers, I think it's quite evident. Still, if you say JPY 23, well, the investors are rather unhappy.

But still, well, my questions may sound similar, but so what are your thoughts on this point at this moment?.

JPY 23. Basically, we started interim dividend last year. Well, at -- back then, the JPY 22. JPY 22 was the last year's number. We didn't receive any such a question, but after paying the interim dividend, we now receive questions. Frankly speaking, this year, the payout ratio is 23% -- sorry, last year. And this year, it will be beyond that.

That is what we are considering. But this year, the performance, how far will it go? These -- by looking at the earnings results, in September, we will make a formal announcement. That is what we are thinking. Naturally, last year, again, we said that we are not giving, going to disclose annual numbers but to achieve JPY 300 billion.

But we have to see it. And we will increase by 10% per annum to achieve JPY 300 billion, and that's what I said. But basically, we're not -- we have been thinking about going along those lines.

So JPY 23, say, if you are unhappy with it, then if we say JPY 25 and if we reduce it to JPY 24 in the second half, I think more people will be unhappy, right? So I hope you understand the situation. The company ORIX is a stingy company. You may tend to think so, but we are positive. And we are thinking about shareholder return positively.

So at the time of our earnings announcement in September, we'll announce our payout ratio, and so please wait until then. But we would like to always achieve growth, and please understand this sentiment on our part. .

Thank you. This person in the front row, please, if... .

Goldman Sachs. My name is Soda (sic) [ Noda ]. I have a question concerning M&A. And also, I have a question concerning how I should look at the information on Page 4. So I -- again on the -- you made a response concerning new areas for you to enter. Actually, there is kind of void in areas.

And I think probably this void in area is going to be M&A drivers or -- so if you could help me on how -- whether or not then I am looking at this graph in the right way. And Robeco, I think it was largest in terms of the value. And whether or not in turn a JPY 100 billion or above kind of deal could be possible, as far as present goals.

And so M&A and overall directions for you to follow. .

Well, actually, on operations and investments action are 2 sides of the same coin. Investment, of course, is going to be defined based upon then exit on the scenarios. And so once an investment is made, then probably, in 4 to 5 years, well, then exit is going to be done; in maximum, on 7 years.

But when it comes to the new in operations, of course, we need to have all the internal, the consistent building. And if you can make an exit within 5 years, then we can, for the first time, think about it. And Daikyo is included in there. Well, probably, well, maybe you are looking at this as available for sales.

And I think, sooner or later, we'll have to think about it, but I believe that Daikyo still has potential for its value to go up and based upon the current stock price. And of course, it is now good then at all for us to do an action right now.

So to what extent then the value is going to go up? And if we're going to then actually make an exit, right now, that is going to give us really poor performance. So I think it is -- it goes up and goes down. It all depends upon actual negotiations. In other words, liquidity needs to be looked at all the time in thinking about investment scenarios.

And whenever something has happened, we should be able to maintain certain liquidity by selling certain assets immediately. At the same time, I think we have to have data mid-term as well as long-term perspectives on working on operation and opportunities.

So if we get to see more values than we had expected, of course, we're going to now make an exit. And also, the investment is going to be carried out based upon the assumption of doing an exit JPY 100 billion and above. Definitely, I get to see those opportunities going forward. I did not mention this in my earlier presentation.

Right now, we are maintaining an A- rating. And the RAC ratio is -- if the RAC ratio is 10% or below, we are not able to maintain an A ranking, rating. So that is going to be one of the important factors we have to keep an eye on. And our tangible assets is quite small. And aircraft and ship actually are exceptions.

But again, we have goodwill, and goodwill going up. And that is going to actually give us another set of problems. So we have to pay attention to that factor as well. And also, we need to look into RAC, the ratio, coming from the rating agencies. So JPY 100 billion or above.

And if there's an opportunity for that, definitely we need to have a series of negotiations with the rating agencies and looking into then other factors and, while reducing exposures, maintaining then our D/E rating.

And also, we'll -- if we can get to see then higher profitability, why not go for those M&A even if it may be rather large?.

Thank you very much. Now we have come to the ending time, so we'd like to conclude the Q&A..

Please bring the questionnaire survey sheet..

So with this, we'd like to conclude today's financial results meeting. Thank you very much for your attention and participation today..