My name is Kojima, Group CFO. Thank you very much for taking your time in participating the ORIX Corporation Group's financial reporting. So please look at Page one, overview of the explanation of the second quarter consolidated financial results. This is the net profit and net income and ROE and in March ending 2018, was ¥166 billion of net income, so that -- compared to 17% increase from the previous year, and also the record high as the first half net income. The ROE annual -- annualized ROE 13%, which exceeded the ROE 11%, which is the mid-term plan target. And now in this year's target of this three year, which is last year of the three year mid-term plan, is ¥300 billion, progress ratio is 55%. So that it has been going very smoothly, continuation from the first quarter. Please look at next page. This is overview two. This is the trend of the segment profits. The total of the segment profits is the ¥249.8 billion and it is versus 17% increase from the previous year. In the -- on Page 18, the annex, those sure numbers are described. The capital gain related and compared to the previous term is about -- it's on the business other than those segments, which declined ¥20 billion or so. But the other five segments all increased its profits. And the base profits and capital gain have increased the overseas segments, have shown the significant growth of the profits, was the 17% profit increase and net income increase. That was a driver of the 17% income growth. In the -- for some of the business segments, the environmental energy business and concession business is contributing more, increasing in the domestic PE investment and also the new Investment One , and also divestiture or…

My name is Inoue, from ORIX. I will be talking about some of the points might be overlapped. That in March 2018 is the last fiscal year of the mid-term planned. But this first half, i.e. against the net income target ¥300 billion, we have accounted the ¥166 billion, has been a very smooth progress. ROE was 13%. And also our rating, A-rating, we continue to maintain as we have already targeted. In the fast progress, Mr. Kojima, CFO, have already explained about the major progress in the first half of the year. And I think that we have shown you the progress as we have already scheduled and planned. For second half of the year, unless there is no other special situation of [out of] assumption that we should be able to achieve this ¥300 billion target. As we have reported, in terms of interim dividend, it is the ¥27 per share, as we have already reported last time. In March 2018, the full year dividend projection is [for a] payout ratio of 27% EBIT assumption. So therefore, the net income is ¥300 billion at March ending 2018. Then the is to be expected to become ¥63.25 per share in full year, for the dividend. And we believe that the new investment is going very smoothly as well in the Ormat Technologies, which is the thermal power generation company in the U.S. exchange market listed, and also Hong Kong listed, the solar power generation company and a green energy, we have acquisition on those equities. And also we have acquired the rights to operate the Kobe Airport. And also, in the U.S. the Boston Financial, in the future possible to do IPO in the -- thinking about IPO for the residential [SH Financial Service]. And also we have acquired…

In the future payout ratio, we like to maintain 27% payout ratio for some time, but also we are going to think about employing our own share buyback in order to contribute more to that shareholders, and that is what we will be thinking. And in terms of the profit configuration, business centered stable growth and that -- it should generate the profits. In the next stage, from the existing business in the new growth area to create a business, which would be add, we would do our own operations. And also cash flow to be further expanded. And from finance, to the investment and then to business, the known financial area, we have been expanding our business domain, but also we'll be further working on the new growth area to be explored in the function of finance and also to find new growth opportunities, and to have the investment function, to do operation and to do the fusion of those different functions of the business to provide a new value creation. We would not limit our area of investment, especially environment/infrastructure area will be the important critical issue in the near future and also greater needs of growth has been positioned for that environment or infrastructure. Outside of Japan, the knowledge and expertise which we have accumulated in Japan, we can imply that overseas as well. So therefore, we will not be keen on any particular region in terms of the growth opportunities. Our view is looking at globally. ORIX was born in Japan, but whereas many of the business has been already deployed globally and already the nationwide network has been sensibly built as well. Also in the future, we can expect to see some of the -- acquisition of the growth opportunities in Japan as well. Our…

Now I would like to invite the questions. If you have any question, please raise your hand and then we will bring you the microphone. And also the maximum question you can ask is two questions per person. Please identify yourself before asking questions.

My name is Watanabe from Daiwa Securities, I have two questions, in terms of the next stage mid-term plan. In terms of your profit target goal, is the 4% to 8% per year, the -- between the -- about ¥340 billion to ¥380 billion in the last year. And then capital gain, what is the configuration of the base profits and also capital gain, and also what is the growth driver of that? And my second question is the asset level. In the mid-term last year, how many trillion yen of the asset level by last year of your mid-term plan?

It's a very difficult question to answer. We have the 4% to 8%. Originally the reason for that is because we cannot predict the market in the future and also because it is -- the prices tend to be increasing and very expensive. So just like -- we are not going to do the -- what the other large companies are doing. But let's say if it is 4%, then -- and then the first year is the ¥312 billion, and then 11% ROE cannot be maintained for that. Then including our asset policy, we need to be considering that. But we don't want to say on the 4%, we want to increase more than that. And if it's a target, then I've have not mentioned a specific number, because otherwise we may be writing about it, so -- but in the past three years, if it is -- about 660, meaning that ¥66 billion accumulation in profits in the last three years, and a similar amount can be achieved. In other words, our denominator will be increasing. So in capital gain, and regular basis, profits, it is very dependent on the market. To be frank with you, in the real estate property market, we expect that the current situation is likely to continue for the next one to two years, then obviously capital gain from the real estate will be increasing. And PE, it is just occasionally, so we don't know the ratio -- we cannot really tell and explain the ratio between the two. However, for the next three years, however, we need to accumulate and then -- so that we can gain the capital gain, or in the subsequent future, and/or the base profits to be -- we want to increase those purchase/acquisition of those assets. And…

Muraki is my name, from Deutsche Securities and I have two questions to ask. The first is on Page seven, and you have in fact stated that this is the progress that was made in the first half. But if you were to look over the past two years, the stable source of income is environment, concession and aircraft and United States, I suppose. Those were the stable source of income. And at the time of the next round of mid-term management plan, for the next three years, environment maybe a prospective area for growth. But if you could be so kind enough to explain, perhaps elaborate on this environmental businesses and in the next three years as the business -- in the operation category, if there was to be any areas where you have hopeful expectations for the growth?

Now as to the concession business, we do have some deals coming up, but as you know, Kansai International Airport has been concluded; Kobe, we have won the deal; Takamatsu, unfortunately we have lost the game, and Fukuoka as well. Unfortunately, the reason why we did not win the mandate is because there were a consortium that had -- they quoted a much higher price than ours. And we have quoted the price line, which was on the verge of making profit. Chitose, Nagasaki, there will be some airports coming along the way that they are much smaller, this -- excluding Chitose that is. And with regard to the airport concession business, from here down the road, there will be no further deals as we foresee. Of course, there are some of water supply and also highway concessions that we would like to target at those concession business as well. Whatever that may contribute to profit generation, we would target at acquiring those, but there will be no way that we will be engaging ourselves in non-profitable business. Mega solar and also wind farm, and also at the same time, wind turbine and geothermal. And in India, as well as elsewhere, we have already kicked off our businesses and that would start to generate income. But this is going to be long-term businesses. And it may take one to two years before we can start the operation in earnest. So it may start contributing to our profit in four to five years. And also at the same time, with regard to the acquisition of solar power business, unfortunately we have lost the deal. So recently, our price that have been quoting, in fact, has been a price that has not been paid attention by the body. So ROA of 11%…

Now the second question is with regard to capital policy. So with the internal reserve of 70% or so, so you have to keep up the pace of the investment, otherwise you will not be able to meet your ROA target. So 12% of ROA, I'm sure will be secured this year. So the trigger in considering the shares repurchase, would you be considering to judge with this falling through the 10% level, or would you be perhaps executing the program much earlier, or somewhere in-between?

Somewhere in-between would be my answer. Quite naturally, just when we start to see ROAs falling below 10%, I think by that time we will be too late. So therefore, we have to think of the capital policy, alongside with us monitoring the level of ROA. So therefore we would remain to be flexible, agile and proactive as we have said in terms of the execution of the shares repurchase program. So 11% is something that we want to keep and because the level of profit impact has enlarged so much, so therefore, achieving 11% is not an easy task. So from that perspective, shares repurchase program is something that we need to think about in a serious manner than before. But before shares repurchase, we will still be prioritizing growth of our business, but dependent on the market conditions, we know that there could be a case whereby we have to trigger this shares repurchase program. Thank you very much.

I have one question. You mentioned 11%, to maintain 11%, you will do your own equity or share buyback and so you are quite keen on 11%. That is my view. But the equity price level, how does that raise to that consideration, how does the equity price consideration, if the equity price is high, then you may not be able to achieve 11%, you will not purchase buyback of the share or and then add--we’ve purchased share to maintain 11% and [indiscernible] exceeds the [¥10,000], for example, then we have to really consider whether we're going to do that or not. If it is lower than the 11%, if I provide the performance that is less than 11%, our equity price obviously should go down. Then if it is around -- maintaining about 10% and the EVR -- more than the EVR, it may not be possible to achieve more than 1% in terms of EVR. I don't really know, it may be. But if it is 11%, or share price should come first, that really depend on case by case judgment. That is the only thing I think I could say. So in terms of market, so as you see, what we do in terms of market, the investment market and share price market and also 11% buyback share to -- whether we should do the share buyback, we would make most comprehensive judgment. So we cannot just say, just because of the 11%, to make some particular actions. Are you satisfied with my answer?

Well let's say, if we cannot maintain 11%, then it may go below one multiple, then your capital cost is 11% higher, is that what you're saying?

I'm sorry, that is a decision by the assessment or judgment by the market. But for us, 11%, 12% or 13%, to increase the percentage is our job. But for the time being, since some years, in terms of ROE, 11% which is our target, to achieve 11%. Now we have 13% ROE, but that is - it may be transient situation, temporary situation. in March 2018 we will be close to the -- somewhat over 11%. So as long as we are maintaining the 11% ROE, then we don't want to do our own company share buyback. But if it goes below 11%, either we would increase the dividend or we will purchase the equity price, or we'll do the new investments by our somewhat difficult challenging situation. The safest way is to increase dividend. Second one is share buyback. I think it's just a combination. It is not -- the 11% is not our maximum goal. No. But in between 11% to 12% and 13%, we want to increase. After we increase it -- but then the [3,300 and 3,600]. that is a quite challenging hurdle to do that. So if you want to achieve both, we are making efforts in trying to achieve those both targets. But then we are thinking if there's ways to achieve that and that is how the business management is done. If it goes below, it's not -- I cannot really answer why it is -- if it goes below 11%.

My last question. In this time, for the time being you would maintain 27%, you mentioned. If 27% -- during the time of the mid-term plan period, what will be the factor to change that percentage, 27%?

That is why the situation happens, where we cannot do any investment at all. If we cannot do anything, then obviously we have to increase our dividend and do the share buyback. And those are only ways we can address, or maybe I should resign. And those are the only way if that happens, so in the worst case scenario. But 27% is DOE and other industries, that may be fine, just around it. So how do we contribute back to the satisfactory shareholder contribution to -- and 27%, plus share buyback, or to look at how are we going to increase the dividend. And every time we have to consider case-by-case and thinking about market situation and then judging that market situation, and to determine on this. And that is the answer that I could only do at this moment. Thank you.

So Niwa is my name from Citigroup Securities. So as to this mid-term management plan, and I'd like to -- you to share with us the profit structure that you intend to achieve. The gross profit may not be high in the beginning, but then you can expect for it to start accelerating. Would you be foreseeing a double-digit growth coming through beyond the three years? So are you kind of explicit in kind of the landing stage, but the mid-term management level, how do you see one of -- the major challenges that is incorporated in this management plan?

So as to the level of profit, 4% to 5% of range is to be achieved. So over the past three years it was 8.5%. It is likely to be 8.5%. Whether we can maintain this 8.5% of growth is very much dependent on the market conditions. So to be honest, out of all the assets, there are quite a number of assets that has very tentative gain and unrealized gains. So if it is coming to the peak, then we will be divesting those assets. And if they are not, then of course we would continue to hold them. So in the first year, we will keep it to -- it's not that we are going to be keeping it to a very low level of profit generation. Of course, asset is going to shrink or it will be downsized, so which means in the next one to two years, we're going to cover for this shrinkage and making new investments. But in the case of cash -- referring to the cash projection, quite naturally we will start from ROA of 1%, and in turn it will proceed to 3%, 5% and so on and so forth. Then the deals tend to be -- follow such a progress, it is likely to be. So we will be -- if we are successful in building up the assets, there could be a case where we will be able to return back to the double-digit growth. And I'm sure this is something that we need to achieve. So therefore, we need to, of course, jump up from ¥300 billion and we will be -- if we can achieve ¥300 billion, you may perhaps have some concern that it may perhaps cut through this ¥300 billion that will again -- but with regard to this ¥300 billion, should we be in the position to be successfully achieving this, we want to, of course, regard this to be a starting point and go to the next level of ¥400 billion. But we have to make a new investment. So for that purpose we need this next three years. So 4% to 8% is something that we commit to in terms of achieving of the growth of that profit.

And talking about this landing you said, you're talking about ORIX, or what? So would you -- if you were to make an investment much earlier, you don't have to use this term of making this next three years to be the preparation period, or am I wrong in thinking that?

Well, I will not be able to answer to your question in a straight-forwarded manner. Our investment standing is cautious and aggressive somewhat. But in the past, we have considered various different deals, and there were some that we have dropped and there were some that we have put on pending and whereas there were some that we have proceeded with. And over the past several years, as we look back, we haven't made a lot of mistakes, coming to think about it. So of course, there is always if and only if we have made much more investment, of course, we could have been in a better position. But in the marketplace, quite a number of -- we have taken part in quite a number of deals, especially inclusive of tender deals. So of course, we had an expected level of pricing which we wanted to win the deal with in making an approach or taking part in these deals and the tender. So if the price does not meet the expectations, then, of course, we cannot just do anything, but to leave it at best. So there are no kind of assets that we may have to experience some impairment. So therefore, I don't think we are at any level of plateauing. So therefore, the risk of impairment of the assets may have been bigger if we had to tend much more aggressive, I would say. Is that okay? Thank you.

Next question please.

My name is Sasaki from Merrill Lynch. I have two questions. At the end of the September balance sheet, the hidden gain, how much is it -- how much is there, especially where the market -- you have the assets, which is not exposed to market, such as mega solar and aircraft, and real estate. I think you have those assets. But in your head thinking, in the balance sheet of -- what is the market price or mark-to-market of the pricing of those assets? And also second question, when next three years, the integrated results will be one of the major topics to consider, especially since your base in Osaka area, you mentioned a development for the IR will be developed. And for this integrated result projects, what is your perspective and outlook on the business on IR?

In terms of hidden gain, I don't have -- I cannot talk about some of those specifics, but let's say, in the solar power generations, our investment is ¥100 billion. And in recent market the trading companies that are selling them and the price they're selling is about double amount of the book price. And so that means, I think you can easily guess our hidden gain on the solar power generation. In terms of real estate, recently most of them we are selling now. But most of them 1.5x to 2x of entry price. So as long as this situation continues of the real estate, we have about the ¥600 billion portfolio of real estate today. In the current market, we may not be able to sell all of them, but sudden starts and hidden gain, I think we can easily guess how much hidden gain we can gain. In terms of private equity for the PE investment, private equity investment, how much hidden gain is there, EBITDA, for example 12 multiples is purchased -- acquired, then it is now between traded in 16x or 18x today. So I think we can perhaps calculate those projections. So I have not really, of course, calculated specifics, but most likely, we have the hidden gain of the several hundreds billions of yen. But in our assets, which we cannot really sell on the market is the life insurance company. Reason is because life insurance is the -- we are making profit in U.S. GAAP. But in the Japanese, life insurance company situated in Japan, with the Japanese GAAP base, then the high speed growth life insurance company, because of the DAC, we're making a red ink in Japanese GAAP. But in the U.S. GAAP that is making profits. So life insurance…