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,…

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…

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.

Well, in the previous fiscal year and actually in our first half, yes, we had many investments and exit just done. Yes, if I'm not wrong, in the previous meeting like this and in the -- well then, our shortages in ORIX are expected to come and include in China factors, and therefore, the exit should be accelerated. I think that's far than ours are sharing with you. I think what I said turned out to be right. And at the time of the Houlihan Lokey, I think it was -- really it was back in August and an IPO and a price. And what is shown now was carried out. And then Shanghai market actually crashed. At that point of time, it was rather sensitive an issue, but actually IPO was done successfully. And after the IPO done, actually the price was a little bit lower than our expectation. But going forward actually, the price actually was going beyond an IPO. Moving into the second half, well, the overseas on the PEs, actually no major PEs outside Japan, so the activities are centered around and in Japan; and also the concessions. Therefore, in the -- not given much impact on the market was what we tried to work out. And the last share [ph], because the interest rate was expected to up, go up, so -- and to what extent interest will go up. And we had a big concern as for that. Well, there are some people who said that no interest rise and down, and actually it did not go up. The FX, particularly dollar FX, of course, it's going to have impact on the -- our associations and particularly in the Southeast Asian regions. So we had to be sensitive and careful. And if -- what's…

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…

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…

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