Kazuo Kojima - Deputy President and Chief Financial Officer Makoto Inoue - President and Chief Executive Officer.

Kazuki Watanabe - Daiwa Securities Co. Ltd Masao Muraki - Deutsche Securities, Inc. Futoshi Sasaki - Merrill Lynch Securities Co., Ltd. Natsumu Tsujino - J.P. Morgan Securities.

[Interpreted] If I may, I’d like to begin the session. First I want to thank you now for all your precious time despite your busy schedule. [Waiting until we] [ph] explain the financial results for the second quarter and FY in March 2017. Allow me to introduce myself. [I’m serving as MC. My name is Hara] [ph], Corporate Planning, ORIX Corporation.

If I, now like to take a moment to double-check on the materials you should have. You should have received fact materials from the top, earnings main materials, and also an earnings appendix, and also a case-extension [ph], and also the earnings release, and also lastly you should have the feedback sheet.

Please let us know if you are not having any one of these materials. And with that said, in the first-half I would like to have Mr. Kojima, our group CFO to explain the actual results of the first-half and FY March 2017; and following that we’d like to have group CEO, Mr. Inoue.

He is going to share the corporation views and on the mid-term basis, as well as our ideas to return to the shareholders. So we’d like to complete the session at around 14:00. So let us now begin the presentations..

first, the net profit, the points, please look at left-hand side, existing business, existing operations, and for this particular period of time, actually, compared with the previous year, actually ¥9.6 billion down - down ¥9.6 billion.

And as for the gains on sales and, of course, of equity, private equity sold, we had a ¥60 billion there; also, the real estate, on selling, ¥23.5 billion; put them together, around ¥83.5 billion. So now, we were able to book that number.

But, at the same time, we had, previous year, the same period, actually ¥90.7 billion on equity, and also in real estate ¥14.8 billion, respectively, so ¥101.5 billion. So we had that number in the previous year; so in terms of comparison between these two, now in terms actually down ¥26 billion.

The capital gain actually was down ¥26 billion, and also on existing operation ¥9.6 billion. So put them together, their total is going to be ¥31.5 billion. And this is going to be the comparative number compared with the previous year. The capital gain actually was already touched upon.

Actually in the previous fiscal year, the yen actually had a major impact behind this number and we were not able to actually repeat the same thing now surpassing that gain we had last year. As for the existing operations, down ¥9.6 billion, several factors behind that, the biggest factor goes to the stronger yen, FX loss, the ¥7.3 billion.

And besides that, the Hartford profit last year, it was the black figures, but this year actually there was slightly red number, ¥4.8 billion, a small number, but actually we are in the red region.

And, well, in energy and the environment and also the infrastructure actually grew and also real estate business saw growth among the existing operations, positive side. And moving on to the right-hand side, the assets situations, asset decline; six months earlier and end of March the comparison, down ¥436.2 billion.

I’d like to go one by one from the right-hand side. The first, the existing operations, ¥60 billion growth. We’re happy as for that. But after that, securitization is following there and about ¥70 billion.

And Hartford, the run-off, ¥110 billion approximately and RE, actually now we sold now the real estate investments actually for ¥30 billion and ¥40 billion RE, and also in the sales of investments. Of course, the biggest factor goes to in the currencies, actually ¥240 billion. That was the biggest factor.

What else? In the existing business, maintenance grew and automotive business. And also, the environment and energy investments actually grew. But at the same time, if you remember this point I made earlier, and actually now the life insurance and also in the bank, actually the business certainly grew, but actually we sold the securities.

And if we are able to actually make reinvestment into other marketable shares, actually that wasn’t the case. And actually, we ended up with an increase in cash. That shouldn’t be part of the operating asset, so actually that pushed down the number I have given to you earlier. Allow me to move on to the next page.

Here, I’d like to actually go one by one on six segments. The first, corporate financial services, in this services segment profit, actually year-on-year basis, actually 8% decline, ¥19.9 billion.

If remember this point, actually in our operating and in lending declined, and that actually had an impact in terms of the profit we were able to make in this segmentation. But at the same time, actually we are trying to grow the services businesses.

Actually, Yayoi and other fee businesses actually grew and ¥2.7 billion was the growth we had from the previous year. And the segment assets mainly, and the operating loans actually went down, 1% decline from the previous year, ¥1.344 trillion. Let us now move on to the next page, maintenance leasing.

The segment profit on a YoY basis was actually a ¥3.5 billion decline and ¥19.7 billion. The factors behind that decline are in this particular segmentation, so automotive leasing and also the so-called instrumentation, and PCs and IT, the rental business, are the major items.

And in this particular period of time, the automotive, the leasing and the rental business actually suffered, in terms of number. And the major reason behind that would be the asset itself actually has grown.

But unfortunately, the leasing or rental and the items actually used in the product to market actually did not have a good market, so actually under those circumstances the number came down. Segment assets actually down 1% and ¥724.2 billion from the previous year.

But, actually, in this period, actually we had a ¥37.5 billion assets decrease due to the securitization, as much as ¥37.5 billion, so that was the major impact on this final number. But in substance, I think we had growth. Please turn to the next page. I would like to explain real estate.

In the real-estate segment, we have been selling the profit-making assets, which went well, so the segment profit was up 5% year-on-year and at ¥35.4 billion.

On the other hand, when it comes to the service income, in the first quarter, where a major portion of the service income is the operations business and here, in the first quarter we experienced the Kumamoto earthquake.

And because of the earthquake disaster, our hot spas in Beppu and golf courses in Kumamoto had temporary reduction in the number of customers. And compared with the previous term, this experienced reduced revenue, but from August they resumed the normal operation.

The segment assets due to the series of rental real estate was 5% down year-to-date at ¥705.1 billion. Also we were able to post a lot of revenue from sales, so the ROA on an annualized basis was as high as 6.7%. So please turn to the next page. I would like to talk about the investment and operation.

Here, private equity investment, environment and energy business and from April, we started infrastructure business and servicing business. These constitute this segment. In this term, mainly the private equity investment saw two exits. The business software vendor, WingArc1st and the post-payment services company, Net Protections.

We assigned the shares of these companies. So with these two deals ¥27 billion of gains on sales were achieved. And also in the environment and energy, we actually had made an investment in the Philippines for power, the coal-fired thermal power. There is a global business power. We also exited from this.

So due to all this we saw an increase in the gain on the sale and ¥52 billion segment profits were able to be achieved. And so, as you see on the right-hand side, the red dot, that’s ROA, and from 5.6% it increased to 10.2% in a substantial manner. Also with respect to Kansai Airport, from April 1 we started this business.

It’s equity method, so it’s three months behind. But in the first quarter the expenses were posted. But from the second quarter, it started contributing to the revenue. Please flip another page and we’ll go to retail. With respect to retail segment, the segment profits were up by 11% year on year at 35.5%. At ORIX Life, the policies in force grew.

Also as I talked before, the JGBs were sold and so gains on a series of JGB also made a contribution. Plus, the ORIX Bank’s the housing mortgage and card loan, the balance increased and so finance revenue increased. That contributed to the segment profits. Regarding segment assets, it went down 4% year to date at ¥3.3254 trillion.

One point here is the Hartford Life run-off business decrease accounting for ¥100 billion. The other point is, as I said before, the investible securities turned into cash. And that is another factor for the decline. The bank’s housing mortgage and card loan increased. Please go to the next page. This is the last segment, the overseas segment.

With respect to the overseas business segment, as I said before, in the previous term we had the IPO of Houlihan’s. And last year that pushed up the number quite substantially and this didn’t happen in this term. And also we experienced the ForEx fluctuation. And so the segment profit came down 47% year on year at ¥51.5 billion.

The segment assets were affected by the foreign exchange and so they were down 10% year to date at ¥2.0515 trillion. With respect to ROA, it was at 3.2%. So it was above the 3% level. Lastly, now please turn to the next page.

Let’s take a look at the results from the perspective of three categories of our business portfolio; from the left, finance, operation and the investment. As you can see on this slide, in the first-half, the gain from service in the field of investment pushed up the performance.

Excluding the extraordinary factors, if you look at ROA, in terms of finance it was 1.9% sidelining. As for operation, it was 5% to 4.9%, so it was more or less also sidelining. And in investment, it was 5% to 6.5%, so the profitability grew quite rapidly. So that is my explanation of the financial results for the first half of fiscal year 2017..

[Interpreted] Hello everyone, my name is Inoue. Well, I may actually make the same points, but allow me to make my presentations. As for the first-half ending March 2017, actual our net income was ¥142.2 billion and ROE was 12.2%.

Of course, in the first-half in last year, we had the Houlihan Lokey IPO and activities, and we were able to gain capital gain. But that did not happen, of course, in the same period. Of course, we did not have the same level of capital gains. So also we suffered from the stronger yen situations. So all in all, the number actually came down by 11.8%.

As for the FX, actually it was ¥113 to the US$1 in the previous year. And actually in the first-half actually it became ¥101. In other words, the yen actually appreciated by 11%. As for the profit of the overseas corporation and the number has been calculated in the Japanese yen, so the first-half it was negative ¥7.3 billion, that was impact.

And of course due to –of course, as for the yen fluctuations, of course, that is going to be affected by the economic situations. Particularly in terms of the U.S. interest rate hike, so I simply cannot speak with authority. But again, all in all, I’m afraid that we’re going to be affected by the FX in terms of the consolidated numbers. So, that’s it.

Now, I’d like to go through some of the important points in terms of ORIX business environment. And I think we had to be wary of the situation surrounding us. It is not going to be rosy. And the biggest surprise in the first-half, of course, having to do with the UK’s decision to leave the EU and that increased the European economic uncertainties.

And actually, for the first time in two years and seven months, actually the yen went down below ¥1. And in September, the United States started to postpone the rates until December. Of course, many people keep an eye on an outcome of the U.S. presidential election. So, I think kind of lull situation is taking place right now.

And it all depends upon the situations and yen may become stronger or yen turn out to be weaker. I think both possible. The BoJ decided back in January - decided to go for negative interest rate. And that is going to give us benefit in terms of the funding and particularly the project finance is going to be the area which should be benefited.

And that said we have operation business and also investment business. And in this area, suddenly we can have an access to cheaper money. But actually this latest addition is not necessarily having the overall positive impact on the Japan’s real economy.

I think till the end of this year no-one knows for sure in which direction the global economy is going to go. And that said, now we are faced with lots of uncertainties at a macroeconomic level.

And still I think in ORIX Corporation that we’d like to actually get the best opportunities out of this situation, since we’d like to maintain our growth strategy if yen becoming stronger. Of course, we should be able to actually make investments outside of Japan.

And if yen become weakened, definitely we should be able to accelerate the turnover of our asset portfolio. We have set a net income target of ¥300 billion for fiscal 2018 and toward the achievement it is important, we believe to steadily expand profit and solid development of new views [ph].

In the first half, with the investment of ¥32 billion in the Kansai Airport, we have received lots of enquiries for participation in the infrastructure business and from many infrastructure-related business fields. So, we’d like to carefully consider the portfolio going forward.

In the first-half we executed five key investments both at home and abroad. We have completed several sales, the exits and we repeated the processes of investment and sales at - to five-year short cycle while controlling risks, achieving high profitability.

Toward the expansion of the aircraft-related business, we newly acquired about 35 aircrafts, mainly narrow-body types step by step. We also changed asset portfolio through sales of our existing aircraft, achieving high profits. The total value of acquisition of 35 aircrafts was about ¥180 billion. The expected IRR should be about 10%.

As part of the expansion of the asset investment business, in the United States we acquired Boston Financial Investment Management. Boston Financial is a syndicator for investors, using the tax credit that was for the developers of rental housing in that low-income earners that was put in place by the federal government in 1969.

The balance of client assets under management as of the end of 2015 was about US$7.8 billion. Our asset management company, Robeco, at the end of March 2016 the AUM slightly decreased from €263 billion to €276.1 billion. In the first-half, there was some outflow of funds, but we believe the impact of Brexit was limited.

Now, just this October, we acquired 9.99% of Robeco that was held by Rabobank, turning it into our wholly-owned subsidiary. In the field of the environment energy, the operation of mega-solar projects made a good progress. At the end of the first-half, 510 megawatt started to operate. 410 megawatt will gradually start operations.

As of now, we are not thinking about actively selling mega-solar projects, but the most of it are projects with FIT at ¥40. So we have been able to secure substantial unrealized gains. Also, following wind power generation projects in India in the first-half, we took part in a hydropower generation business in Vietnam in September.

Besides the mega-solar business and our track record here in Japan, actually in our activities outside of Japan actually growing and actually now we are given an increased number of the potential opportunities, on especially [ph] actually ORIX owned environment energy and business, and footprint actually is becoming extended.

I think going forward, and I will actually establish in our really good position in the field of the renewable energy and on the business, particularly here in Asia and in the United States. As for the real estate, and actually now we are working on the logistic facilities and activities, and actually emphasis has been placed upon in operation.

But looking at the economic environment, of course loan or interest rate, and also actually and that is, of course, giving us a tailwind. And so, in the first-half, actually now we try to actually - now we were on the selling aside. And actually, we’re able to actually gain a really good capital gain.

But we do not believe that we’re going to end up with then a huge amount of assets on in the end. There is nothing to be noted in the finance in low interest rate, and also in a tightening spread, and actually all the factories and how we need to keep an eye on.

And also the BOJ decided to go for the negative interest rate, and that is actually sparking the competition and lending on the business. And actually we’re now actively trying to an increase the finance and assets. As for life insurance, actually unprecedentedly low interest rate.

And of course, we have agency channels and direct sales, and also the Bancassurance. But on top of that actually are starting from October 1 as a new channel, actually we started have the direct sales in channels, particularly in Tokyo and in Osaka.

And on high-quality consultancy is going to be quite important, we’d like to offer to you, so that now customers can be truly satisfied. Next, now I’d like to move on to the theme of the shareholders’ return.

As I mentioned this point earlier, in the first-half we had a total of ¥300 billion plus, on a full the - on investment, the clients executed and unexecuted.

So we actually are in that level, but that said though, it’s very important for us to understand what is going on in terms of funding environment and even if we are going to - in a buyback and treasury stocks that will not have a negative impact on our growth strategy.

So this time we decided to actually hang - to have the - we have approved the up to ¥50 billion and for the share buyback in activities. And we are suffering from - even though now we are having - firm performance, actually we are - our PBL [ph] has been a one ex [ph] or lesser.

So now I think we have to be fully aware of this, and we have to be fully aware of the now cost equation, in terms of the assets. Long-term investors are increasingly calling for measures to stabilize share price. Conducting a share buyback, at this point in time, would lead to more efficient funding for investors.

And we believe it is also effective in terms of filling the gap with what we consider to be our intrinsic value. That’s why we made this announcement. Going forward, from the prospective of capital efficiency, we would like to give thoughts to a share buyback without ruling it out as a strategic or strategy option.

Also in the first, we procured ¥94 billion through a subordinated term loan. We have secured a capital level required to maintain a single A credit rating, so from the viewpoint of capital efficiency, we believe this to be a measure that contributes to shareholder value.

With respect to dividend, the interim dividends are set at ¥23, the year-end dividend at ¥28, the full-year dividend is at ¥51. So the three-year dividend payout will be 25%.

With respect to the yearend financials, at this moment, as I said before, we believe it is difficult to anticipate the degree of impact to be brought about by such external factors as Forex and politics on ORIX’s financial results. So this time we made a conservative calculation and announced the dividend numbers.

Depending on the full-year net income, with a payout ratio of 25% as a basis, we could make an adjustment with the year-end dividend, just like the previous term. With regard to the net income target of ¥300 billion for the fiscal year ending March 2018, we’re not considering changing it as we speak. But the result of the U.S.

presidential election, expansion of geopolitical risk, possible further deterioration of neighboring countries economic situation do affect our financial results.

We would like to look at the economic conditions both at home and abroad closely before making decisions about whether to revise the - revise or not the medium-term target of ¥300 billion net income, and the timing of the ensuing formulation announcement of the mid-term plan. Let me recap.

Net income at ¥142.2 billion and ROE at 12.2% are results considered solid. The current business environment is one in which we intend to have larger gains from sales.

But with investment and the operational fields at the center that give us a foundation for the next growth, we’ll focus on continuing to further strengthening stable earning streams and steadily developing new businesses actively, so that we’ll be able to have businesses that will be the next pillars for us. Thank you very much for listening..

[Interpreted] It appears now we’re going to have questions and answers..

[Interpreted] Let us now, going to have questions and answers. If any questions, would you please raise your hand and then the microphone will be delivered to you. We would like to receive many questions from many people, so I would like to ask each person to limit yourself to maximum two questions.

And, appreciate if you could identify your name and your affiliations. Please show your hands if you any questions. I see a hand, a male person in the front section, please..

[Interpreted] Daiwa Securities, my name is Watanabe, and I have two questions. Question number one, I want to ask to your outlook and the full-year profit. 25% was the number you gave to us in terms of the dividend and actually annualized and ¥51 actually, and the EPS is going to be ¥24.

You emphasize uncertainties going on in terms of the business activities. ¥204, is that going to be the minimum target you would like to achieve? This is my first question. My second question is concerning the returns to the shareholders.

The buyback actually was announced - the buyback was announced actually, I would like to - and also now you told us that you are going to continuously work on the buyback on operations.

and again, how people are going to actually evaluate your own stocks? And from the buyback aspects, besides the buyback, and how about the dividend? The dividend ratio is going to be maintained and being raised, on the mid-term basis. These are the two questions..

[Interpreted] Concerning 25% on ¥204, those numbers, and that is going to be ¥267 billion. I think as far as I’m concerned that is going to be the minimum set of numbers, and - we’re not thinking that it goes below the ¥51 actually. Now, it all depends upon the performance and the dividend may go up actually. ¥267 billion is going to be assumed line.

And moving on, in my presentation I’m talking about buyback in operations. And of course, this is going to be one of the options for us up until last year. Now, when you raised many questions, actually, I kept saying that in front of that, I will not buy back the stocks.

That was the situation back then, but now actually, interest rate in the [foreign funding] [ph] has come down and the stock price has come down, so I think we’re now on this edge point. And so we decided to buy back the stocks and then the stock price have started going up, giving me lots of paying points.

But I think we have to be truly careful as what we to do, because in terms of the responsibility to the shareholders. So I will not eliminate this one option and look at buyback operations and 25% payout ratio, well, actually, whether or not we can make it, 25% and it’s rather difficult for me to say anything here.

Well, actually we have a long history and had a really low level of the payout ratio, so we raise it to the 25%. But other financial organizations actually at the level of the 30% much higher than us, at least that’s what they are saying. But I have to say that there seems to have been a lack of the growth strategies among those organizations.

But may I mention that we’re going to aim at growth. I cannot speak with authority what’s going to happen next year. But, again, we’re going to aim at 25% and if there was further growth, definitely, we may ask for 25%. If the market is going to be flowing and liquid then there could be some other numbers we may need to announce..

[Interpreted] Thank you indeed for your clear answers..

[Interpreted] Thank you. Next question. Anyone? Someone at the center of the room..

[Interpreted] Muraki with Deutsche Securities, I have two questions. With respect to the share buyback, now in having discussion and making decisions on share buyback on the part of the officials and also the board, what kind of discussion did - took place? The 25% payout ratio and the pay share back were decided.

Was there any larger plan or a smaller plan that were discussed? What did you discuss? Question number two, about the infrastructure project, the profit or loss from this for the Kansai Airport, I think there was an improvement.

But in this financial result, including the Golden Week, April through June and the next result, that’s July through September that included summer vacation period.

And what is your outlook?.

[Interpreted] Now, with respect to the share buyback, yesterday we had a board meeting and we had a discussion. Half of the people said there is no need to do share buyback. Why don’t we spend money on the investment. So these people are quite unhappy, and they scolded us.

The other half said, okay, ¥ 50 billion, that shouldn’t be a problem, or ¥100 billion, some people. So at the end of the day, with this plan, we actually came to an agreement on this plan, and the outside directors, where ORIX is equal to growth, that’s what they said.

And so based on that idea with respect to share buyback this was unexpected, I think to them. But ultimately purchasing ORIX’s shares will be an interesting investment, given the payout ratio. That’s - the year it is 3.4%, compared with that maybe it’s good, so they sort of gave us consent.

With respect to infrastructure prospect, on the point of infrastructure business, with respect to the Q1 profit, a little less than ¥3 billion in Q2 was posted. As I said before, in Q1, we had to incur cost and so it was a negative ¥1.3 billion.

So on a net basis, in the first-half ¥1.7 billion profit was recorded, and so similar level of profit is anticipated on a quarterly basis, we believe. But they show the number is - the profit is there but we are at the best timing, because of the conservative number it’s on the decline somewhat.

But given the industry, the number shouldn’t fluctuate all that much. But if something happens, well, with respect to quarter where there was advanced investment, there might be some deviation from the anticipated number. But basically, the number that was seen in second quarter could be repeated..

[Interpreted] Concerning point one, buy back shares actually ¥100 billion per year, then actually it is going to be up in the 60%. I think you should be able to have the reserves and to return it to the shareholders.

Again on the future buybacks and operations actually in hybrid loans, and hybrid bonds, those I think it could be part of the overall mixture and offering. Well, within profitability now you are going to actually restrict yourself in buying back your own stocks.

So which direction are you going to follow here?.

[Interpreted] Well, we’re going to look at the ROC ratio and also we need to look at in cost at the same time, hybrid, for example. Cost-wise, actually, it isn’t going to be that thick expensive, so we need to look at the balance overall. The ¥50 billion buyback in operations, we have done.

Then what is going impact on then our stock price? I think we have to look into that ¥50 billion buyback, and the further decline in the stock price and all in the value. If that’s the case, I think and we have to change in our activities, so it all depends upon the outcome we are going to get.

Did I answer your question?.

[Interpreted] Yes, thank you, indeed..

[Interpreted] Thank you. Let us now move on to the next question. I see a hand there..

[Interpreted] Merrill Lynch Securities, my name is Sasaki. Two questions if I may. Question number one, actually ¥300 billion is going to be the target for the next fiscal year, end of September.

Now looking at the balance sheet, and also in the second-half in this fiscal year new investment pipeline, again now what is going to be the accuracy now for you to now achieved ¥300 billion? And I wonder if you could expand on the contents of the ¥300 billion? This is my first question.

In regard to the concession on infrastructure, and I have some question. The domestic airport, well, of course, you made investment into Kansai International Airport. I think you have done the investment, but the fresh water and sewerage, the systems so - I think it could be one of the important areas.

People say that now they are going to pay us, they’re paying attention too.

What kind of possibility do you see there? What kind of opportunity you will see there, representing your management? ¥300 billion within our turnover could achieve that or not, probability wise?.

[Interpreted] Well, it isn’t going to be that difficult for us to achieve ¥300 billion. That said, though then what’s going to happen after that in three years, coming down ¥260 billion from ¥300 billion nowhere. So no, we’d like to actually enjoy the cruising speed and probably not a two-digit growth.

But again, having reached ¥300 billion we’d like to actually achieve [indiscernible] we can achieve at least one-digit growth. So what’ll be the numbers we can actually achieve after ¥3 billion, this is going to be a more important point. This is going to be an important milestone that we’re going to look at.

And so ¥12 billion existing operation and ¥1 billion confirm from the capital gain. I think that is going to be the breakdown, roughly speaking. And FX changes 10%, 20%, and it will give us a big and huge impact in terms of the yen number, it is going to change as much as ¥100 billion or ¥200 billion.

So at the time of the March when we make earnings announcement with the amount, we’re going to be in a more positive and, well, less positive. Well I believe that we should be able to achieve it. But actually, I simply cannot go into any further details and including portfolio. I think we need to look at the overall balance, that’s all I can say.

And moving on, the second question concession infrastructure. As we reported in the newspaper and as for the infrastructure actually in Kobe Airport, of course, and we decided to participate in that. But recently new investors are coming to this office, and some of them are not known that at all.

Actually, they seem to have more interest in terms of the quick money they can make, instead of paying attention to the true values, and out of the concession the infrastructure in a project. So those players coming to this office we have to be careful.

And Kobe Airport to be purchased, and also on the Itami and Kansai Airport, actually we are naturally looking into the synergy effects, and out of this and the three sets of the airport. So now out of that, and we’re going to actually come up without a bidding price in this competition.

And then also the fresh water systems and also the sewerage systems. Yes, there are some opportunities for operation, Osaka, Tokyo and also in the local cities for the water systems. These are not actually purely the infrastructure, rather more important there it’s going to be, actually no differences in terms of the revenue.

[indiscernible] due to the decline in population, the revenue may come down. So to what extent the cost can be reduced is quite important. If I may, I’d like to limit our self to Osaka landscape. People who work in this actually are the members of the [indiscernible].

So actually in other words, they are actually having a really large expensive in monthly salary. So that actually cost needs to be reduced in the background. So because of that decision, actually on the sewerage system is going to be rather tough. As for the airport, Niigata [ph], Kōchi and other locations, I think it we have to be location specific.

And we’d like to be on the - we shouldn’t be affected by the political factors. And also there are many other factors depending upon the specific marketplace. So all in all, actually now competition has become quite tough, yes, I have to admit that. Yes, we have a vision to actually add it up. But in the worst case, Kansai airport wasn’t last project.

I think actually that was really true and excellent. Actually, that pushed up in our benchmarking.

And Did I answer your question?.

[Interpreted] Yes, sir, you did. Thank you..

[Interpreted] Thank you. Next question, please. Person in front..

[Interpreted] Tsujino with J.P. Morgan. Thank you for taking up my questions. My first question is not so salient, but in your explanation, you said the environment is rather tough. For example, the corporate financial service, you can’t simply do simple types of finance. As I look at it, service revenue, well, you are trying to grow it little by little.

So you’re making steady efforts. For example, you acquired Yayoi, you have been making efforts for the corporate financial services, you’re aiming at synergy.

And how would that translate into increase in service revenue? Where are the areas where you can expect improvement? Can we expect improvement? So with respect to the corporate segment, I would like you to enlighten me on this. The second question is rather similar but regarding real estate.

You are selling off operating leasing business, and also in the operating assets there are things that are going well. With respect to rental revenue, if you sell the operating assets, that would certainly decline, and so you have to increase operating assets, on the other hand.

Well, relatively speaking you should - I think you are increasing the operating assets little by little but - so there’s no spectacular increase because of large operating assets.

What kind of efforts are you making and what kind of coordination do you do inside the company? Has a network become better? Can you expand this business? These are my questions. And also I’d be appreciative if you include some actual cases..

[Interpreted] The corporate segment, we don’t want to increase our finance assets, the service revenue and also Yayoi. We made an equity investment in it. So service industry-linked investment is something we’d like to do. But for leasing, we’re 0.5% lease rate so no matter how much you see increase that wouldn’t be reasonable so….

[Interpreted] ROA 1.9%?.

[Interpreted] Right, 1.9% should be maintained. That’s where the service revenue is making a great contribution. But service revenue, that’s one-off revenue so there’s no recurring profit, so you have to achieve the same number every year, which is very difficult. Up until last year we had the PV and also life insurance..

[Interpreted] Are you going to have PV next year?.

[Interpreted] If not, then the next product has to be developed. We have to supply one product after another to the market. If we can’t do that, the corporate financial segment that cannot be viable. If we can do it, we can do better. And so, more than the life insurance, the marketing service people walk around and try to get the number.

I think this is a great number, but finance shouldn’t be done, leasing shouldn’t be done. But to knock at the doors, you can do a leasing business. You knock the door for leasing and make further investment, say Yayoi and business investment. If that is involved, then that would translate into the corporate business, well, business.

And so cross-selling would be a central part of our business, so we have to make steady efforts. That’s what we must do. Having said that, the fee - we are making money from fee income, so it’s not really non-steady. Well, it’s a cash-cow unit. So, are we okay with the things as they are? We need to do some restructuring.

Well, real estate - well, sorry, I made a mistake. As for the corporate finance, ROA is 2.6%. Well, including others that’s 1.9%, so the number isn’t all that bad, including bank. And for real estate, we look at the situation and the transfer of the property to the ORIX REIT.

The ORIX REIT value is ¥800 billion, ¥600 billion AuM and, to the extent possible, we would like to bring it up to ¥1 trillion. ORIX’s real estate is transferred and also we buy external assets to do that. On the part of the REIT, they are increasing their revenue.

Also, with respect to the real estate segment, well, you say they are just selling it off, but in projects, we have 12 or 13 projects, including the ones under development. And total sum is on a gross basis is beyond ¥100 billion. Most of them are hotels, logistics facilities. These are the centers.

Hotels recently, in terms of revenue that has been stagnating but inbound businesses are still okay. So if the location is good, reasonably, and we establish a good facility, we can secure a revenue and so we are constructing more and by 2018 or 2019, these will start to open. And so again, for ORIX real estate this will contribute to the revenue.

So it’s not that we are not doing anything for real estate. We sell them but we also build more. So the expecting is while we expect a crash - we want a crash, then that gives us an opportunity to buy. Not small ones, but Class A buildings are what we like to buy, but it depends on the market situation.

Have I answered your question?.

[Interpreted] Well, with respect to corporate finance, the service revenue you said is not recurring, so the service revenue and corporate finance.

You said it’s not recurring, the revenue?.

[Interpreted] Recurring?.

[Interpreted] I think that’s what you said. It’s not continuous.

That’s what you said, right?.

[Interpreted] Right, continuous. Well, BCO, it’s a one-off business..

[Interpreted] Well, you make me somewhat concerned..

[Interpreted] Well, but for the last few years we are posting a similar level of numbers and for a few years we have been increasing our service fees, so you should trust me at long last. Our sales people, if we have one product, I think our sales capability is number one in Japan.

So we have to develop products, we have to continue to supply products to the market. That’s the key. We did that PV, we had the life insurance. So what’s next? We are also selling aircraft.

Well, we sold 10 and the regional service people, of course, those people who want assets or those people who want to save tax, we identified them and the aircraft unit people would try to sell the aircraft to these people, and the total management fee comes to the Dublin, the ORIX aircraft.

Also when we sell them that, we act as our agency, so this is a continuous service network that we have. And so in this respect, you can have confidence in us..

[Interpreted] Thank you..

[Interpreted] Thank you. Due to the time factor, we would like to actually conclude our Q&A session. I appreciate if you could actually fill up the feedback sheet before you leave this meeting room. You can leave your sheet at your table. So let us now conclude our earnings briefing. I’d like to again thank you for your participation, for long hours.

Thank you..