FINANCIAL
INFORMATION2023

For the fiscal year ended March 31, 2023

02 Management’s Discussion and Analysis
06 Business and Related Risks
16 Consolidated Balance Sheets
18 Consolidated Statements of Income
19 Consolidated Statements of Comprehensive Income
20 Consolidated Statements of Changes in Equity
22 Consolidated Statements of Cash Flows
25 Notes to Consolidated Financial Statements
97 Independent Auditor’s ReportM AN AGE ME NT’S D IS CU S S ION
A ND ANALYSIS

Business Results
The Mitsubishi HC Capital Group’s business results
for the fiscal year ended March 31, 2023 wereas follows.
On the sales front, the volume of new transactions
increased by ¥132.7 billion or 5.3% year on year to¥2,640.6 billion.
Revenues were up by ¥130.6 billion or 7.4% to¥1,896.2 billion.
Meanwhile, gross profit rose by ¥22.6 billion or 6.8%
to ¥357.3 billion and operating income by ¥24.6 billion
or 21.6% to ¥138.7 billion.
The Group recorded record-high net income
attributable to owners of the parent for the fiscal year
ended March 31, 2023. The ¥16.8 billion (16.9%)
increase over the previous fiscal year to ¥116.2 billion
was driven by the profit contribution of CAI
International, Inc., a marine container leasing
company in the U.S.A. that became our wholly owned
subsidiary in November 2021, reduced credit costs,
and growth in the Americas business within the
Global Business segment. Net income attributable toowners of the parent for the fiscal year ended March
31, 2023 exceeded the financial forecast of ¥110.0 billionby ¥6.2 billion.
In conjunction with outperforming the earnings
forecast, the annual dividend per share has been set to¥33, up ¥2 from the forecast dividend of ¥31, bringing
the payout ratio to 40.8%. This is a ¥5 increase overthe previous fiscal year’s dividend of ¥28.
Along with the organizational changes effective
April 1, 2022, the Group changed its reportablesegments to the seven segments below. The figures forthe fiscal year ended March 31, 2022 have been updated
to reflect this change.
Operating results by reportable segment arepresented below.
Customer Solutions
Segment profit increased by ¥5.4 billion or 16.7% fromthe previous fiscal year to ¥38.1 billion, mainly thanks
to the recording of large gains on sales related to realestate leasing and a decrease in credit costs.
Global Business
Segment profit decreased by ¥11.8 billion, or 29.0%
year on year, to ¥29.0 billion due to the posting of aloss on revaluation of securities associated with adecline in market value of certain strategic shareholdings

Increase/Decrease in Net Income Attributable to Owners of the Parent (¥ Billion)
Positive factor

Negative factor

+21.5
+25.9

+10.9

–18.6

+16.8

–22.9

31.8

* Net income attributable to owners of the parent

116.2

99.4

Financial Information

2023

rs
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ss y

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sg
es
sin
Bu

02

O
ex perpe at
ns ing
es

th

99.4

55.3

FYE 3/2022

Net income*FYE 3/2023

Notes:
1) Except for Others (tax expenses), the amounts
provided reflect the impact on income before
income taxes.
2) The amount of business growth is the combined
total of gross profit and non-operating
income/loss (the amount of non-operating
income/loss does not include recoveries ofwritten-off receivables).

and an absence of large gains on sales of strategic
shareholdings recorded in the fiscal year ended
March 31, 2022 despite factors contributing to profit
increase such as the business growth of the subsidiaries
mainly in the Americas, a decrease in credit costs, andgains on revaluation of securities recorded at a
European subsidiary.
Environment, Energy & Infrastructure
Segment profit was up by ¥9.3 billion or 411.6%
compared to the previous fiscal year to ¥11.6 billion,
mainly thanks to an increase in profits from overseas
renewable energy-related equity-method investments,
recording of gains on sales of investments in certain
projects in the infrastructure business, and the absenceof credit costs for certain customers in the infrastructure
projects recorded in the previous fiscal year.
Aviation
Segment profit rose by ¥0.5 billion or 9.3% to ¥6.2 billion
as the business showed signs of recovery, including an
increase in leasing revenue and gains on sales of owned
assets and a decrease in credit costs. This was despite
the absence of gains on sales of certain receivablesfrom bankrupt debtors recorded in the previous fiscal

year and an increase in exchange revaluation losses
related to foreign currency-denominated borrowings
due to yen depreciation in the Japanese Operating
Lease with Call Option (JOLCO), as well as an increasein impairment losses.
Logistics
Segment profit climbed to ¥15.3 billion, up ¥14.5 billion
or 1,787.4% from the previous fiscal year, mainly
thanks to the full-year profit contribution from CAI
International, Inc., a marine container leasing company
in the U.S.A. that became our wholly owned subsidiary
in November 2021, and the steady performance ofBeacon Intermodal Leasing, LLC, which operates inthe same space.
These companies, which both operated a marine
container leasing business, were merged on
January 1, 2023.
Real Estate
Segment profit was up by ¥0.2 billion or 2.0% fromthe previous fiscal year to ¥12.6 billion, mainly thanks
to a decrease in tax expenses associated with the sharetransfer of our wholly owned subsidiary Diamond
Asset Finance Company Limited despite the recording

Segment Profit (¥ Billion)
Customer Solutions
Aviation
Logistics

Global Business
Real Estate

Environment, Energy & Infrastructure
Mobility
Adjustments

2.2
FYE 3/2022

32.6

Total: 99.4

FYE 3/2023
Total: 116.2

38.1

40.8

29.0

11.6

0.8
5.6

6.2

15.3

1.5
12.3

3.1

12.6

3.7

–0.6

Financial Information

2023

03

M AN AGE ME NT’S D IS CU S S ION
A ND ANALYSISAs of March 31, 2023, total assets were up by ¥397.3
billion or 3.8% from the previous fiscal year-end to¥10,726.1 billion, while total equity rose by ¥217.5
billion or 16.3% to ¥1,551.0 billion. The equity ratio
increased 1.6 points to 14.3%.
Interest-bearing debt (excluding lease obligations)
was up ¥170.0 billion or 2.1% to ¥8,236.1 billion, andtotal liabilities were up ¥179.7 billion to ¥9,175.1 billion.
Out of interest-bearing debt, long-term liabilities suchas long-term loans decreased by ¥95.9 billion to¥5,194.0 billion, while short-term liabilities such as
short-term loans and commercial paper increased by¥266.0 billion to ¥3,042.0 billion.

Operating activities provided net cash of ¥46.7 billion
compared to ¥195.8 billion in the previous fiscal year.
Inflows of ¥153.1 billion in income before income
taxes with an adjustment including ¥515.8 billion for
depreciation and amortization and loss on disposals
and sales of leased assets were set against outflows
including ¥496.1 billion for purchases of leased assets
and other operating assets, ¥61.3 billion for an
increase in receivables, and ¥22.6 billion for a decreasein trade payables.
Investing activities used net cash of ¥127.3 billion
compared to ¥107.8 billion in the previous fiscal year.
Inflows including ¥139.0 billion in proceeds fromwithdrawal of time deposits were set against outflows
including ¥252.4 billion in payments into time deposits.
Financing activities used net cash of ¥8.9 billion
compared to ¥192.1 billion in the previous fiscal year.
This included net outflows of ¥120.4 billion for direct
funding, net inflows of ¥154.6 billion for bank loans
and other forms of indirect funding, and ¥43.0 billion
in cash dividends paid.
As a result, cash and cash equivalents as of March
31, 2023 totaled ¥460.4 billion, a decrease of ¥59.5
billion or 11.4% from the previous fiscal year-end. The
decrease came from ¥46.7 billion provided by

Segment Assets* (¥ Billion)

Total Equity (¥ Billion) / Equity Ratio (%)

of credit costs for a certain project in the U.S.A. andother factors.
Mobility
Segment profit came to ¥3.7 billion, up ¥0.6 billion or
21.2% from the previous fiscal year. This was mainly
thanks to an increase in gains on sales of vehicles forwhich the leasing term has matured against the
backdrop of high demand for used cars in Japan.

Financial Position

Equity ratio

Total equity

10,0009,345.3

9,632.9

8,000

1,200

6,000

900

4,000

600

2,000

300

0

FYE 3/2022

FYE 3/2023* The values for segment assets do not include adjustments. Refer to pages 85–90 for details.

04

Financial Information

1,551.0
1,500

2023

0

25

1,333.4

20
15

12.7

14.3

10
5

FYE 3/2022

FYE 3/2023

0operating activities, set against ¥127.3 billion used ininvesting activities and ¥8.9 billion used in financing
activities.

Establishment of Medium-termManagement Plan
The Group formulated a Medium-term Management
Plan covering the three-year period from the fiscal
year ending March 31, 2024 (“2025 MTMP”), which
was announced in May 2023. We established Our
10-year Vision, “Together we innovate, challenge andexplore the frontiers of the future.” To achieve thisvision, we will proceed with the evolution and layeringof business models by developing services and promoting
business investment, utilizing tangible and intangible
assets, such as data and other elements, to theirfullest potential.
For the promotion of the above, we will aim forsustainable growth by solving environmental, social,and economic issues. At the same time, we will aim toenhance our medium- to long-term corporate valueby achieving an optimal balance sheet based on wellbalanced growth potential, return on capital, andfinancial soundness.

The 2025 MTMP is positioned as the “hop” plan of
our three Medium-term Management Plans (“hop,”“step,” and “jump”) toward Our 10-year Vision. We
will address the management plan with “sowing seeds”
and “gaining a solid foothold” as keywords leading toa leap to the “step” and “jump” plans.
The financial targets for the fiscal year ending
March 31, 2026, the final fiscal year of the 2025 MTMP,
are net income attributable to owners of the parent of¥160.0 billion, ROA of approximately 1.5%, ROE ofapproximately 10%, and a payout ratio of 40% or
higher during the 2025 MTMP period.
For details on the 2025 MTMP, see “Medium-termManagement Plan for FY2023–FY2025” on the
Company’s website.
(2025 MTMP on the Company’s Website)
https://www.mitsubishi-hc-capital.com/english/investors/
managementplan/index.html

Financial Targets

Net income*1: ¥160.0 billion

ROA*3: Approx. 1.5%

ROE*3: Approx. 10%(end of FYE 3/2026)(CAGR* vs. FYE 3/2023: +11.2%)(vs. FYE 3/2023: Approx. +0.4 pts)

(vs. FYE 3/2023: Approx. +1.8 pts)

Dividend Policy(2025 MTMP period)

Financial Soundness(2025 MTMP period)

Exchange rates:(FYE 3/2023) U.S.$1=¥131.43, £1=¥163.15(FYE 3/2026) U.S.$1=¥130, £1=¥160

2

Payout ratio: 40% or higher

Maintain A ratings• As a general rule, return profits to shareholders by paying dividends•S ustainably increase the total amount of dividend payment through profit growth• Establish both a sound financial base and an active investment strategy• Maintain current stand-alone ratings*1. Net income attributable to owners of the parent*2. CAGR: Compound Annual Growth Rate
*3. Net income attributable to owners of the parent is used for the calculation of ROA and ROE

Financial Information

2023

05

B USIN ESS AN D RELAT ED RIS K S

Of the business and related risks of the Mitsubishi HC

include credit risk, asset risk, investment risk, market risk,

Capital Group, the main items with potential for

liquidity risk, and operational risk. Risk management isimportant impact on investors’ decisions are managed

conducted on a consolidated basis.

comprehensively in the framework set out below under 1.

Specifically, risk capital is allocated to the respective

Integrated Risk Management. An outline of the risk andrisk category based on the Company’s risk capitala specific statement of the main efforts to address it aremanagement policy after quantifying each risk using risk

given under 2. Major Risks Managed within Framework ofassessment methods tailored to the characteristics of theIntegrated Risk Management. The Group has establishedasset or business. Reasonable risk-taking is then carried

an appropriate system to manage these risks and strives

out within the scope of risk tolerance.

to prevent them from emerging or to minimize their impact
if they occur.

Within this risk management framework, regularmonitoring is undertaken of the utilization of risk capital

To manage these potential risk factors, we operate aand the status of portfolios, the results of which are reported

system whereby the division responsible for the relevant

to and discussed by the Risk Management Meeting, thearea of risk monitors and identifies issues arising from

Executive Committee, and the Board of Directors. In thischanges in the external environment and other factors.

way, efforts are made to ensure appropriate response

Each of these divisions holds regular discussions tomeasures and to promote effective internal communication

review appropriate response measures and reports

about risk. Arrangements are in place to ensure that the

promptly to the Executive Committee, a consultative and

Board of Directors is fully informed of the risk management

decision-making body that controls the execution ofsystem and risk management status and that it maintains

business. Specifically, in addition to the Asset Liability

oversight thereof.

Management (ALM) Committee, Compliance Committee,
Disclosure Committee on J-SOX, and other committees
that discuss the issues surrounding and measures toaddress individual risks, the Risk Management Committee
meets quarterly or as necessary to undertake comprehensive

Risks Managed within
02 Major
Framework of Integrated Risk
Management

and systematic management of risks affecting all

The Mitsubishi HC Capital Group conducts business

operational areas. Additionally, important matters at

activities globally. The Group provides capital investments

each committee are reported to and discussed by theand services necessary for customer businesses throughBoard of Directors.

leases and other means. The assets it holds for leases and

The forward-looking statements herein are based on
judgments made by the Group as of March 31, 2023.

related transactions are diversified, ranging from general
movable property such as office equipment and production
equipment to assets, such as aircraft, that are used in

01 Integrated Risk Management06

particular industries. Demand for capital investment candecline considerably if a customer’s business environment
deteriorates with deceleration or slowdown in business at

Mitsubishi HC Capital engages in business operations

home or abroad. In that case, a decline in leases and otherthat incorporate the framework of integrated risk

transactions could impact the Group’s business results

management in order to work toward sustainable growthand financial position. Additionally, losses arising fromby balancing maintenance of management soundness

inadequacy of internal processes, personnel, or systems orwith improving profitability. The major risks managed

their failure to function, or exogenous events could impact

within the framework of integrated risk management

the Group’s business results and financial position.

Financial Information

2023

The major items among these envisioned risks are

HC Capital Group holds such global assets as aircraft

managed within the framework set out under 1. Integrated

and real estate, including buildings, and conducts a business

Risk Management.

leasing these assets in and outside Japan in the form ofoperating leases and others. In this business, the Group is(1) Credit Risk

exposed to asset risk in addition to the aforementioned

The Mitsubishi HC Capital Group conducts business thatcredit risk, so fluctuation in revenue from asset

extends credit over the medium to long term through leases,

management and disposals could impact the profitability

installment sales, monetary loans, and other financialof the leases. For this reason, when engaging in operating

services of various forms. Depending on future businessleases, the Group carefully assesses the future value

trends and the financial landscape, additional provisions

according to asset type in addition to the customer’sof allowance for doubtful receivables could be necessary

credit standing before working on each deal. Even afterwith increasing non-performing loans due toentering into business relations, the Group continues

deterioration in a company’s credit status, which could

monitoring the status of the leasing and secondary markets

impact the Group’s business results and financial

for said assets along with the status of asset use by the

position. Furthermore, because the Group is engaged inleaseholder, striving to prevent risks from emerging or tobusiness globally, it is subject to country risk in which

mitigate their impact if they occur.

losses may arise depending on the political and economic
situations in the countries and territories where customers

a. Global Assets

and investees are located.

The Group holds global assets such as aircraft and aircraft
engines, containers, and railway cars and conducts a

Main Efforts to Address Risk

business leasing these assets in and outside Japan in the

When considering the advisability of each deal, the Group

form of operating leases and others. In the businesscarefully reviews the customer’s credit standing using its

related to global assets, the Group is exposed to priceown rating system and makes a thorough study in light offluctuation risk pertaining to said assets in addition to

the value of the leased property, country risk, and otherthe aforementioned credit risk. With operating leases, infactors in an effort to ensure a reasonable return for the

addition to lease fee revenue received from the customer,

risk. Additionally, the Group continues to check the

the Group recovers funds by selling the asset at the end

customer’s credit standing on an ongoing basis even afterof the lease period. Additionally, in the event of a customer

entering into business relations and has a system in placebankruptcy, the Group takes the asset back and recovers

to take the necessary steps in the event that the customer’s

funds by leasing it to a different customer or selling it. As

credit standing worsens. Moreover, it engages in credit

for selling assets, in addition to business trends and the

management with respect to the portfolio as a whole andfinancial landscape, major incidents arising from technicalconsiders risk diversification to ensure that credit is notproblems, obsolescence due to technological change,

concentrated with a specific customer, industry, country,

revisions to laws and regulations, increased concern overterritory, and so on, while striving to ensure soundglobal pandemics or terrorism, natural disasters, war,

management by regularly measuring the credit risk of its

or geopolitical risk may render the asset irrecoverable orportfolio and monitoring to ensure that it is within acause its selling price to fluctuate. Furthermore, thecertain scope of capital.

recording of an impairment loss or increased costs associatedwith property management could also impact the Group’s(2) Asset Risk

business results and financial position.

In addition to general movable property, the Mitsubishi

Financial Information

2023

07

B USIN ESS AN D RELAT ED RIS K S

Main Efforts to Address Risk

Main Efforts to Address Risk

When engaging in operating leases with global assets, the

The Group makes a careful decision based on aGroup conducts a comprehensive review that includes acomprehensive review of future asset value and liquidity

checklist for deals involving movable property and future

before working on each deal and endeavors to ensure a

asset liquidity before working on each deal and endeavors

reasonable return for the asset value fluctuation risk.

to ensure a reasonable return for the credit risk and asset

Furthermore, the Group continues to check the status ofvalue fluctuation risk. Furthermore, the Group has

asset management, price trends, and industry trends on

established internal criteria to maintain a portfolio withan ongoing basis even after entering into business relations

risk diversification taken into account, including asset

and has a system in place to maximize revenue. Additionally,

types, regions, and time of expiration. Moreover, thethe Group holds warning sign management meetings asGroup continues to check the customer’s credit standing

necessary at business divisions and risk management

and industry trends on an ongoing basis even after entering

divisions to review industry trends and signs of problems

into business relations and has a system in place to takethat could impact asset value fluctuation. The Groupthe necessary steps in the event that the customer’s credit

also regularly measures the risk of fluctuations in thestanding worsens, such as collecting a deposit from thevalue of assets in its portfolio to monitor whether it iscustomer to cover asset wear and tear as necessary.

within a certain scope of capital, in an effort to ensure

Additionally, the Group holds warning sign managementsound management.

meetings as necessary at business divisions and risk
management divisions for each major asset category to(3) Investment Risk

review applicable industry trends and signs of problems

The Mitsubishi HC Capital Group is engaged in investmentthat could impact asset value fluctuation. The Groupin and financing of projects such as solar power generation

also regularly measures customer credit risk and the risk

and other renewable energy businesses and an overseasof fluctuations in the value of assets in its portfolio to

infrastructure business as well as various businessmonitor whether it is within a certain scope of capital,

investments, including loans to operating companies andin an effort to ensure sound management.

funds. These investing activities are subject to such risks
as risk of changes in the business environment including

08

b. Real Estatebusiness fluctuations and declining demand, risk of revenue

The Group is engaged in and outside Japan in investment

falling below the plan due to sluggish performance ofin and financing of commercial real estate such as offices,

investees or partners, risk of diminished recoverability ofresidences, commercial facilities, logistics facilities, andthe investment amount, risk of investee stock value falling

hotels, and in leasing and other business operations based

below a certain level, and risk of investee stock value

on its portfolio of owned properties. These assets arestaying below a certain level for a considerable period of

subject to revenue fluctuation risk and price fluctuation

time due to sudden changes in the economic or financial

risk. In the real estate-related business, in addition to leasesituation or a major disruption of the financial markets

fee revenue from tenants, the Group recovers funds byregardless of the investee’s performance. These risks

selling those assets that are not long-term holdings at the

could result in a total or partial loss of the investment,right time. Lease fee revenue and revenue from sale ofincluding through valuation loss, or create the necessity

assets may fluctuate depending on the market environment,of additional funding. In addition, there are the risk thatsuch as business trends, the financial landscape, and the lease

the Group may be unable to exit or restructure the businessmarket in the specific location of the asset, and this couldat the desired time or using the desired method due toimpact the Group’s business results and financial position.

differences with the partner’s management policy or low

Financial Information2023

liquidity of the investment asset and the risk that theas foreign currency-denominated assets increase, so doesGroup may be disadvantaged by not being able totheir percentage of consolidated operating assets. The

obtain relevant information from the investee, and thesefinancial statements of the Group’s consolidated subsidiaries

risks could impact the Group’s business results andoutside Japan are expressed in the local currency while

financial position.

the Company’s consolidated financial statements are
expressed in Japanese yen. As such, although fundraising is,

Main Efforts to Address Risk

in principle, conducted in the same currency as the asset,

The Group holds investment meetings according to theshould a large fluctuation occur in exchange rates, it could

individual investment amounts and severity of risk to gather

impact the Group’s business results and financial position

the opinions of the relevant departments and makes a

in Japanese yen terms.

careful decision based on a comprehensive review of future
investment value and liquidity from a broad point of view

Main Efforts to Address Risk

when considering each investment, thereby endeavoring

The Group constantly watches movements in the financial

to ensure a reasonable return for the risk. Additionally,markets and, as needed, monitors through ALM any

the Group continues to check the status of investment

imbalances in the form of interest rates or currency

management and industry trends on an ongoing basis

exchange for asset management and for procurement ofeven after entering into business relations and has a systemfunds. It then manages interest rate fluctuation riskin place to maximize revenue. The Group also regularly

through appropriate hedge operations while taking

measures the risk of fluctuations in the value ofinterest rate movements into account. To address exchange

investments in its portfolio to monitor whether it is withinrate fluctuation risk, in principle, the Group raises funds

a certain scope of capital, in an effort to ensure soundin the same currency as the operating asset in an effort tomanagement.

minimize loss on currency valuation of assets. The Groupalso regularly measures the quantitative risk of the position(4) Market Riskof portfolio holdings incurring a loss over a certain perioda. Interest Rate Fluctuation Riskof time at a certain probability and to what extent in the

The fees for leases and installment sales conducted by theevent that interest or currency exchange rates take a

Mitsubishi HC Capital Group are set based on the purchasedisadvantageous turn based on past statistics, and monitors

price for the transacted property and the market interest

whether it is within a certain scope of capital in an effort

rates at the time of contract. Most of these basically do

to ensure sound management. Meanwhile, the ALM

not fluctuate during the contract term. Acquisition funds

Committee meets quarterly or as required to analyze

for the leased property, on the other hand, are procured

scenarios and data in connection with geopolitical risk,

at both fixed and variable interest rates for fundraising

pandemics, and various other risk factors and to determine

diversification and reduction of funding costs, and the

ALM policy based on trends in the financial market

cost of capital is affected by fluctuations in the market

environment, the risk situation, and other considerations.

interest rate. As such, a sharp rise in the market interest
rate resulting from sudden changes in the financial(5) Liquidity Risk

situation could impact the Group’s business results andWhen engaging in acquisition of lease properties for leases,

financial position.

installment sales, and monetary lending, the Mitsubishi
HC Capital Group raises a large amount of funds inb. Exchange Rate Fluctuation Risk

Japanese yen and other currencies. The Group attempts

The Group actively conducts business outside Japan, andto balance the period of leases and other credit transactions

Financial Information

2023

09

B USIN ESS AN D RELAT ED RIS K S

and investments with the period of fundraising, but

Meanwhile, to support the globalization of its businessshould it experience difficulty securing enough funds

over recent years and also to increase its ability to procure

because of heightened risk aversion on the part of financial

foreign currency, the Group is progressing with theinstitutions and investors due to a free fall in economic

reorganization of its regional financial bases. As part ofand financial conditions and major confusion in thethis, it has established a regional financial base in Northfinancial markets or a decline in the Group’s

America where it holds a large asset balance, thus putting

creditworthiness, it could impact the Group’s businessin place a Group financing system, which includes theresults and financial position.

consolidation of financing. The North American regional
financial base offers not only indirect financing but also

Main Efforts to Address Risk

various forms of fund procurement, including issuance ofWith respect to the procurement of funds, the Group

commercial paper and corporate bonds, thus providing

tries to ensure the liquidity of funds through efforts tofunds to Group companies expanding into North America.

diversify by procuring funds directly from the market
including corporate bonds, commercial paper, and(6) Operational Risk

securitization of lease receivables in addition to borrowinga. ‌Risk Related to Earthquakes, Wind and Flood Damage,from financial institutions as well as through procurement

Pandemics, War, Terrorism, etc.

with long- and short-term balance, careful management

The Mitsubishi HC Capital Group uses facilities, includingof cash flow, and measures to supplement liquidity during

sites and systems, in and outside Japan to conduct its

emergencies, such as through the acquisition of commitment

operations. Earthquakes, wind and flood damage, orlines. Additionally, the Group conducts stage-by-stageother natural disasters as well as pandemics, war, terrorism,

management of liquidity, putting in place fundingor other unpredictable circumstances could cause aarrangements to ensure that the immediately necessary

reduction of activities or prevent operations at those sites

funds can be secured, including funds for repayment,by damaging the sites themselves or the systems or byeven if the fundraising environment deteriorates, andinjuring employees or preventing them from coming toreporting on the status of funding to the ALM Committee.

work, thereby disrupting business operations. Moreover,In addition to analyses of credit, interest rate sensitivity

depending on the extent of the damages or how long the(the impact on revenue of interest rate fluctuation) andevent lasts, a large sum of money could be required toother items, the ALM Committee carries out comprehensive

restore the systems or other facilities, or it may take ainvestigations of (4) Market Risk and (5) Liquidity Risk

long time for business operations to recover. Such ain the event of stress developing in the financial markets

situation could impact the Group’s business results andor other relevant areas, including the potential impact onfinancial position.

profit. It then decides a fund procurement strategy and10risk response policies as the basis for the rollout of a

Main Efforts to Address Risk

Companywide strategy reflecting the market environment.

The Group has established responsible departments

Regarding risk management in particular, it coordinates

depending on the envisioned risk to prepare for suchwith the Risk Management Committee, which is one arm

circumstances and has a system in place to establish a crisisof the Companywide integrated risk management system.

response headquarters to respond to a critical situation.

By strengthening the warning sign management system and

The Group is also working to establish a system forcoordinating with contingency planning, it makes effortsbusiness continuity by putting together a business continuity

to improve the flexibility and resilience of financial

plan, implementing redundancy measures for backbone

structures in the event of a crisis situation emerging.

systems, establishing a system infrastructure that allows

Financial Information

2023

work from home, and implementing office shifts limited

implemented for system development at the Group

to operations that must continue.

companies in Japan and other countries by using

As the Group does not have bases in Ukraine or Russia,

standardized methods as part of a proprietary process.

it envisages limited direct impact from the situation in theregion. However, should the situation escalate goingc. Cybersecurity Risk and Information Security Risk

forward, there may be indirect impacts such as an increase

The Group utilizes e-mail as well as a variety ofin non-performing loans due to worsening of the credit

information systems to conduct account processing,status of customers. This might require measures such as

management of various contracts, customer

additional provisions of allowance for doubtful receivables,

management, asset management of leased properties,

which could impact the Group’s business results andand other operations. These information systems arefinancial position.

subject to risk of business e-mail scams, malware

In March 2022, the Group set up a Crisis Management

infections, unauthorized access by outside parties, andHeadquarters that is working to address cybersecurity,

other cyberattacks. Unauthorized access by outsidetrade control, and money laundering, track financial trends,

parties, malware infections, human error, fraud, scams,

enhance screening and management of deals, monitor theand other problems could result in system outages or

impact on the value of Group operating assets, and identify

failures, monetary damages, leaks or unauthorized use

and manage other indirect impacts.

of confidential information or customer information, orother incidents. These could cause an interruption ofb. System Risk

contract and collection operations or services provided

The Group utilizes e-mail as well as a variety of information

to customers, which in turn could cause a suspension ofsystems to conduct account processing, management ofoperating activities, economic loss, or loss of social

various contracts, customer management, asset management

confidence from leakage of important information,of leased properties, and other operations. An outage orthereby impacting the Group’s business results andfailure of these information systems arising from poor

financial position.

maintenance, poor development, or other such problems
could cause an interruption of contract and collection

Main Efforts to Address Risk

operations or services provided to customers, which in

The Group has established a cross-organizational

turn could cause a suspension of operating activities andSecurity Incident Response Team (MHC-SIRT) toeconomic loss, thereby impacting the Group’s businessaddress these risks and has a system in place to prevent

results and financial position.

incidents at the entrance, internal, and exit stages andrespond to them if they occur. Specifically, in preparation

Main Efforts to Address Riskfor cyberattacks that exploit vulnerabilities, the GroupThe Group has a system in place to properly manage andkeeps software up to date to detect unauthorized access,maintain these systems through internal cooperation andmalware, and other cyberattacks and maintains

partnership with other companies in order to ensure their

management preparedness to prevent problems. At thestable operation. The Group is equipped with an integrated

same time, the Group has established an internal andresponse system for failures that includes swift action

external coordination system and conducts drills toand sharing of information internally and externallyprepare for incidents. Moreover, targeted e-mail training

where the failure occurs as well as establishment andis provided for all employees, and internal education on

implementation of measures to prevent subsequent

information security is carried out on an ongoing basis.

recurrence. Additionally, Group-wide IT control is

Financial Information

2023

11

B USIN ESS AN D RELAT ED RIS K S

d. Compliance Riskbases in Japan, and sites in each country continuously

The Group’s operations are subject to a range of relevant

monitor revisions and changes to the various systems inlegislation in and outside Japan. As the primary examples,and outside Japan, such as legal, accounting, and tax

in Japan its operations must comply with the Companies

systems, applying to the relevant country and services. In

Act, tax laws, the Financial Instruments and Exchange

addition, the Group gathers information on and implements

Act, the Anti-Monopoly Act, the Personal Information

measures to address changes and revisions as quickly as

Protection Act, the Money Lending Business Act, thepossible while reinforcing such monitoring by actively

Installment Sales Act, the Act on Prevention of Transfer

utilizing outside experts.

of Criminal Proceeds, and laws and regulations related tothe environment. Outside Japan, the Group’s operations

f. Administrative Risk

are subject to the legislation of each country and region

The Group conducts transactions in various forms, andas well as to oversight by regulatory authorities. Should

various administrative work arises with each transaction.

there be a failure of compliance with legislation, social

Improper administrative work, including human error,

norms, or company rules, it could impact the Group’s

fraud, and other irregularities, could cause an interruption

business results and financial position by causing restrictionof contract and collection operations or services provided

on or interruption of operations, a claim for damages

to customers, which in turn could cause a suspension

from customers or others, and a fall in social confidence.

of operating activities or loss of customer trust,
thereby impacting the Group’s business results andMain Efforts to Address Risk

financial position.

In addition to rigorous compliance with legislation andcompany rules, the Group makes it a practice to carry

Main Efforts to Address Risk

out operations in accordance with high ethical standards

The Group has established administrative rules for eachand social norms. The Group provides continuingtransaction and conducts business according to these rules

training on compliance and takes measures to prevent

while reviewing them as needed. Additionally, an internalmoney laundering, funding of terrorism, and fraud in an

reporting system is in place for internal administrative

effort to further strengthen its compliance system.

incidents. Should such an incident occur, the system
includes internal reporting, swiftly addressing the incident,

e. System Change Risk

identifying the cause, and establishing/implementing

The Group’s operations are subject to a range of relevantmeasures to prevent recurrence.

legislation, accounting and tax regulations, and othersystems in and outside Japan. Should there be substantialchanges or revisions to any of the various systems closely
related to the Group’s operations that the Group was

03 Other Major Risks

unable to properly address, there could be penalties for

In addition to risk addressed in the framework of integrated

nonconformance, suspension of product offering,risk management, the Group recognizes the major risks

restrictions on business activities, sales losses, or otherlisted below. These risks are managed within the integrated

negative consequences that could impact the Group’s

risk management framework, including individual

business results and financial position.

impact and combined impacts across multiple risk items,
according to their individual characteristics and status.

12

Main Efforts to Address Risk

The Group explores a unified response and formulates

The Group’s corporate centers, business divisions, sales

a response policy as necessary and additionally conducts

Financial Information

2023

scenario analysis appropriate to the situation as part ofor financial functions could impact a wide range ofa multi-faceted verification of risk resilience.

customers or businesses utilizing the assets of the
Mitsubishi HC Capital Group. This may result in(1) ‌Risk Related to Expansion of Operating Base,
Strategic Partnerships, and M&As
In pursuit of continued growth through expansion of its

customer bankruptcies or a drop in the value of the Group’s
asset holdings, which could impact the Group’s businessresults and financial position.

operating base, the Mitsubishi HC Capital Group engages,

We have taken steps in response to the COVID-19

in and outside Japan, in strategic partnerships with outside

pandemic being downgraded to a “Category V” on May

entities aimed at the enhancement of various services and8, 2023. Based on our recognition that we are now in thetries to diversify and expand the Group’s business portfolio

post-COVID-19 phase, while remaining cautious about

through M&As in addition to expanding business on its

the possibility of a resurgence in infections, we will

own. The Group endeavors to diversify its business andcontinue to utilize the remote IT communication tools

enhance its services through this kind of approach.

whose usage became widespread during the pandemic for

However, changes in the domestic or international

both internal and external communication. We will also

economic and financial conditions, intensification offurther enhance and expand face-to-face communicationcompetition, changes in the business environment or

and proactively undertake new initiatives.

strategy of partners, revision of relevant legislation, andother factors could cause a failure to achieve expected

Impact of the COVID-19 Pandemic

results or result in the need to record additional expenses,

Although the COVID-19 pandemic, which began in 2020,

such as impairment of goodwill recorded at the time ofis subsiding, the potential for the spread of new variant

an M&A. Such a situation could impact the Group’s

strains has not completely disappeared.

business results and financial position.

Should a global resurgence of a new variant strain of
COVID-19 occur, it could impact the Group’s business in

Main Efforts to Address Risk

several ways, including curtailment, reduction, or

In addition to review by the relevant departments according

postponement of capital investment by customers due toto the individual investment amounts and severity of risks,

the stagnation of global economic activities. As a result,the Group brings in outside experts for a comprehensive

the Group’s operating assets may not increase as planned

review of the fitness of the investment structure and theor may decrease, leading to a decline in revenue. A range

future investment effect from a broad point of view whenof additional impacts, including rising prices and interest

considering each M&A or partnership deal. Even after anrates as well as supply chain disruption resulting in

M&A deal is executed, the Group’s rules are applied toworsening customer credit status, may in turn lead to an

establish a system for proper operational management,

increase in non-performing loans, which could requireand monitoring is carried out on the business plan, results

additional provisions of allowance for doubtful receivables

management, and other aspects so that the necessaryor other measures.

actions can be taken in a timely manner.

Moreover, these impacts could affect the assets held as
operating assets by the Group through price falls, reduced(2) Global Pandemic Risk

operating rates for leases and similar assets, and priceShould a global pandemic arise, negative consequences

falls in shares or similar assets.

such as broad disruption of the supply chain, temporary

Furthermore, in the event of a financial crisis arising

restrictions on or suspension of economic activity by eachfrom resurgence of the COVID-19 pandemic, it could

national government, and damage to industrial systems

become impossible to procure funds as planned. However,Financial Information

2023

13

B USIN ESS AN D RELAT ED RIS K S

the Group has taken measures to ensure reliable on-handviolations were to occur within the Group or be committed

liquidity. It has also worked on reviewing the workflow,by customers of the Group, it could be perceived as theutilizing IT tools, and enhancing information security

Group itself causing, encouraging, or directly participating

while taking sufficient steps to prevent the spread ofin those human rights violations. In turn, this could lead

infection. As such, it has already expanded its preparedness

to damage to the Group’s corporate value.

to enable smooth remote business operations.
Main Efforts to Address Risk
(3) Climate Change Risk

The Group established the Human Rights Policy in

Failure to respond to regulatory changes, technological

September 2022, declaring that we “recognize that

innovations, or shifts in business models associated with

conducting business with the utmost respect of human

the transition to a decarbonized society, or extreme

rights is a major challenge, and we will fulfill ourweather conditions associated with global warming could

responsibilities in this matter across all our businesscause customer bankruptcies due to deteriorating

activities.” In addition, the Group launched an internal

performance or could cause the value of assets held byproject to address human rights violation risk in October

the Group to decline, which could impact the Group’s2022. Moving forward, the Group will continue tobusiness results and financial position. Moreover,advance efforts to eliminate human rights violations.

if the Group’s response to climate change risk or its
information disclosure are inadequate, or are deemed to(5) Risk Associated with Expansion of Business Domains

be so, there is the possibility for the Group’s corporate

The Mitsubishi HC Capital Group is expanding the scope

value to be damaged.

of its operations on a global basis, including new businessdomains, within the scope permissible under laws,

Main Efforts to Address Risk

regulations, and various other conditions. Should risks

The Group recognizes promoting a decarbonated society

emerge within that process that exceed the scope ofas a priority task in achieving sustainable growth thatreasonable assumptions despite verification of the risks

forms part of its materiality (important issues). Accordingly,

along with our knowledge and experience in the expanded

the Group has expressed its support for the recommendations

business domain, or if the expanded business does notof the Task Force on Climate-Related Financial Disclosuresdevelop as envisioned, it could impact the Group’s(TCFD) and is working to enhance risk identification

business results and financial position.

and assessment and relevant information disclosure inaccordance with the recommendations. Additionally, the(6) Intensifying Competition

Group recognizes climate change as a significant risk forCompetition in the leasing and other businesses of theCompanywide risk management and is progressing with

Mitsubishi HC Capital Group conducted in and outside

relevant initiatives.

Japan could intensify not only from companies in thesame business but also from financial institutions and

14(4) Human Rights Violation Riskothers, or the competitive landscape could change due toWith corporate responsibility extending throughout thea shift in business models of other industries, technicalsupply chain and the emphasis on sustainability initiatives,

innovation, or other factors. The Group makes various

the prevailing view is that companies should recognize

efforts to maintain and strengthen its competitiveness,stakeholders as broadly encompassing ordinary individuals

including by offering greater added value to its customers

and local residents. Under these circumstances, if the Groupand creating value as an asset holder and through low-costwere to neglect these stakeholders, and human rights

fund procurement. However, should the current competitive

Financial Information2023

situation intensify further, a fall in market share anddecline in income could impact the Group’s businessresults and financial position.

04 Stress Tests
In the execution of management strategy, the Group makes(7) Risk Related to Personnel Recruitment

efforts to gauge the degree of impact of stress periods

The Mitsubishi HC Capital Group must stably securecaused by various risk events with potential impact on its

adequate human resources, in order to maintain andbusiness, such as deterioration in market conditions

strengthen its competitiveness in the various businesses it

including economic downturns and market fluctuation.

operates in and outside Japan. The Group strives toSpecifically, the Group has posited a number of potential

continuously recruit and train capable personnel, but

high-stress scenarios, ranging from a deterioration in theshould it not be able to adequately secure and train theoverall world economy to market fluctuation, deteriorationneeded personnel this could impact the Group’s businessin credit, and the emergence of large-scale concentrations

results and financial position.

of risk in individual business fields. Based on thesescenarios, it has undertaken analysis and verification of(8) Risk Related to Labor and Employment Management

the potential degree of impact of stress conditions on

The Group employs a large number of staff in its businessprofitability and equity in each fiscal period.

operations. This involves the risk of long working hours

These multifaceted verifications enable the Group to

having a negative effect on the mental or physical healthconfirm its risk resilience and to ensure that the risk-of employees or other negative impacts, making them

return balance of management plans does not exceed

unable to fulfill the expected duties, and the risk of legal

tolerable levels.

infringement due to failure to appropriately monitor
legal requirements relating to employment and relatedareas. Additionally, there is the possibility of these risks
resulting in damage to public trust.
To lessen the abovementioned risks, the Group promotes
projects aimed at improved productivity and introduces
systems to enable diverse workstyles (teleworking,flextime, etc.). In this way, it works not only to reduce
long working hours but also to put in place a work
environment that accommodates employees with childcare
or nursing care responsibilities. Additionally, to address
harassment and other personnel issues, the Group has
introduced measures for employees in Japan and overseas,
including internal whistleblowing systems and advice
services. To enable employees to develop their abilities tothe full, the Group is addressing workplace enhancement
as a major focus of initiatives.

Financial Information

2023

15

Consolidated Balance Sheets
Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
March 31, 2023 and 2022

Thousands of U.S.
dollars (Note 1)

Millions of yen

AssetsCurrent assets:
Cash and cash equivalents (Notes 11 and 26)
Time deposits other than cash equivalents (Notes 11 and 26)
Bank overdrafts (Note 26)
Marketable securities (Notes 4 and 26)
Receivables:
Lease (Note 18)
Installment sales (Notes 11 and 26)
Loans (Notes 11, 12, and 26)
Lease receivables and investments in leases(Notes 7, 11, 23, and 26)
Inventories (Notes 5, 11, and 12)
Prepaid expenses and other (Notes 11 and 18)
Allowance for doubtful receivables (Notes 2.t. and 26)
Total current assets
Property and equipment:
㻌㻌㻌Leased assets — at cost
Accumulated depreciation
Net leased assets
Advances for purchases of leased assets
Total leased assets (Notes 6, 8, 11, and 12)
Other operating assets — at cost
Accumulated depreciation
Net other operating assets (Note 11)
Own-used assets — at cost
Accumulated depreciation
Net own-used assets
Total property and equipment
Investments and other assets:
Investment securities (Notes 4, 11, and 26)：
Unconsolidated subsidiaries and associated companies
Other securities
Goodwill (Notes 2.t. and 9)
Long-term receivables (Note 26)
Asset for retirement benefits (Note 14)
Deferred tax assets (Note 24)
Other (Note 11)
Allowance for doubtful receivables (Notes 2.t. and 26)
Total investments and other assets
Deferred assets:
Bond issue costs
Total deferred assets

Total assets
See notes to consolidated financial statements.

16

Financial Information

2023

2023

2022

2023

¥460,486
126,952
2,249
3,213

¥520,083
12,9907,868
2,019$3,462,305
954,531
16,912
24,162

77,647231,280
1,911,212

80,382
255,143
1,845,975

583,816
1,738,949
14,370,015

3,264,169
46,064160,487(22,094)
6,261,670

3,265,267
48,242
156,006(22,657)
6,171,321

24,542,631
346,350
1,206,676(166,122)
47,080,228

4,388,259(1,055,425)
3,332,834
58,9693,391,803
265,280(45,655)
219,625
31,812(14,334)
17,4783,628,907

3,918,302(832,153)
3,086,149
34,622
3,120,771
253,466(30,811)
222,654
23,757(9,975)
13,782
3,357,208

32,994,434(7,935,530)
25,058,903
443,380
25,502,284
1,994,589(343,272)
1,651,317
239,190(107,775)
131,414
27,285,016

192,861
207,252
91,497
99,912
3,389
33,224
271,683(68,806)
831,015

168,891
207,754
90,326108,188
1,593
38,137
257,449(76,791)
795,550

1,450,083
1,558,288
687,951
751,22125,482249,8112,042,734(517,339)
6,248,233

4,603
4,603

4,791
4,791

34,614
34,614¥10,726,196¥10,328,872$80,648,092

Thousands of U.S.
dollars (Note 1)

Millions of yen

Liabilities and Equity
Current liabilities:
Short-term loans from banks and other financial institutions(Notes 13 and 23)
Commercial paper (Note 13)
Current maturities of bonds (Notes 11, 13, and 26)
Current maturities of long-term loans (Notes 11, 12, 13, 23, and 26)
Current maturities of loans from the securitizations of theminimum future rentals on lease contracts (Notes 11, 13, and 26)
Current maturities of lease obligations (Note 13)
Notes and accounts payable — trade
Income taxes payable
Deferred profit on installment sales (Note 26)
Other (Notes 13 and 18)
Total current liabilities
Long-term liabilities:
Bonds, less current maturities (Notes 11, 12, 13, and 26)
Long-term loans from banks and other financial institutions,less current maturities (Notes 11, 12, 13, 23, and 26)
Loans from the securitizations of the minimum future rentals
on lease contracts, less current maturities (Notes 11, 13, and 26)
Lease obligations, less current maturities (Note 13)
Liability for retirement benefits (Note 14)
Asset retirement obligations
Reserve for insurance policy liabilities
Deferred tax liabilities (Note 24)
Other (Notes 11 and 13)
Total long-term liabilities

2023

2022

2023

¥633,099
559,485
642,883
959,951¥591,431
682,593443,647
810,475$4,760,145
4,206,661
4,833,709
7,217,683

246,640
19,794
160,678
9,381
9,648
270,789
3,512,353

247,900
21,676
184,042
24,818
11,110217,646
3,235,343

1,854,438
148,830
1,208,110
70,53472,5472,036,010
26,408,670

1,582,848

1,820,244

11,901,115

3,253,535

3,113,196

24,462,669

357,662
43,0896,573
40,635
12,055
143,810
222,6025,662,813

356,592
53,331
8,992
40,431
11,148
108,580
247,542
5,760,061

2,689,188323,981
49,427
305,532
90,646
1,081,280
1,673,700
42,577,543

33,19633,196

249,594547,3442,138
710,989

548,586
1,861
638,043

4,115,374
16,075
5,345,789(19,158)(19,369)(144,047)

14,81753,051
186,545
1,985
1,530,911
20,118
1,551,029¥10,726,196

14,953
1,460
92,776123
1,311,631
21,835
1,333,467¥10,328,872

111,413398,884
1,402,599
14,927
11,510,611
151,267
11,661,878$80,648,092

Commitments and contingent liabilities (Notes 15 and 27)
Equity (Notes 16 and 31):
Common stock —authorized, 4,800,000,000 shares in 2023 and 2022;
issued, 1,466,912,244 shares in 2023 and 2022
Capital surplus
Stock acquisition rights (Note 17)
Retained earnings
Treasury stock — at cost, 30,718,231 shares in 2023 and
31,056,328 shares in 2022
Accumulated other comprehensive income:Net unrealized gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Total
Noncontrolling interests
Total equity
Total liabilities and equity

See notes to consolidated financial statements.

Financial Information

2023

17

Consolidated Statements of Income

Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Years ended March 31, 2023 and 2022

Thousands of U.S.
dollars (Note 1)

Millions of yen
2023

2022

¥1,896,231¥1,765,559$14,257,381

Costs (Notes 2.t. and 23)
Gross profit

1,538,904
357,327

1,430,898
334,661

11,570,708
2,686,673

218,600
138,727

220,569
114,092

1,643,612
1,043,060

1,907

2,447

14,344(5,278)
(479)
2,996
7,194

(5,338)(39,685)(3,604)
22,52654,095

Selling, general, and administrative expenses (Note 19)
Operating income
Other income (expenses):Dividend income
Interest expense — net of interest income of¥2,467 million ($18,555 thousand) in 2023 and¥540 million in 2022 (Note 23)
Impairment loss (Note 10)
Gain on sales of investment securities (Note 4)
Gain on revaluation of investment securities (Note 20)
Loss on sales of shares of subsidiaries and affiliates(Notes 3.a. and 22)
Gain (loss) on step acquisition (Notes 3.c. and 21)
Gain from bargain purchase (Note 3.c.)Other — net
Other income — net
Income before income taxes
Income taxes (Note 24):
Current
Deferred
Total income taxes
Net income
Net income attributable to noncontrolling interests
Net income attributable to owners of the parent(1,006)
1,159

29,967

Amounts per share of common stock (Note 30):
㻌㻌㻌㻌Basic net income㻌㻌㻌㻌Diluted net income㻌㻌㻌㻌Cash dividends applicable to the year
See notes to consolidated financial statements.

Financial Information

2023(7,566)
8,720

7,942
14,436
153,164

(273)
431
5,923
33,158147,250

59,717
108,548
1,151,609

24,941
10,51035,451
117,7121,471¥116,24138,807
7,088
45,896
101,354
1,953¥99,401

187,528
79,024
266,552
885,056
11,062$873,994
U.S. dollars

Yen

18

2023

Revenues (Notes 18, 23, and 29)

2023

2022

2023

¥80.9580.71
33.00¥69.24
69.06
28.00

$0.60
0.60
0.24

Consolidated Statements of Comprehensive Income

Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Years ended March 31, 2023 and 2022

Thousands of U.S.
dollars (Note 1)

Millions of yen

Net income

2023

2022

2023

¥117,712¥101,354$885,056

Other comprehensive income (Note 28):
Net unrealized loss on available-for-sale securities
Deferred gain on derivatives under hedge
accounting
Foreign currency translation adjustments
㻌Defined retirement benefit plans
Share of other comprehensive income in associates
Total other comprehensive income
Comprehensive income(463)(15,578)(3,487)

39,631
93,891
1,854
12,510147,424¥265,136

15,001
69,3581,061
3,389
73,232¥174,586

297,984
705,949
13,944
94,062
1,108,452$1,993,509

Total comprehensive income attributable to:
Owners of the parent
Noncontrolling interests¥262,934
2,202¥171,878
2,708$1,976,951
16,558

See notes to consolidated financial statements.

Financial Information

2023

19

Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Mitsubishi
HCMarch
CapitalandandConsolidated
Subsidiaries
Years ended
31,Inc.
2023
2022
Consolidated
Statementsof Changes
in Equity
Years ended March Statements
31, 2023 and 2022
Consolidatedof Changes in EquityThousands
Mitsubishi
HC Capital
Inc. and Consolidated
Subsidiaries
Consolidated
Statementsof Changes
in EquityThousands
Mitsubishi
HCMarch
CapitalandandConsolidated
Subsidiaries
Years ended
31,Inc.
2023
2022
Years ended
31,Inc.
2023
2022
Numberof
Mitsubishi
HCMarch
CapitalandandConsolidated
Subsidiaries
Thousands
Consolidated
Statements
ofofChanges
ininEquity
Consolidated
Statements
Changes
EquityConsolidatedof
Changesin Equity
NumberThousands
Stockshares ofof
Years ended March Statements
31,Statements
2023 and 2022
Consolidatedof Changes
in Equity
Stocksharesof
Mitsubishi
acquisitioncommonMitsubishiHC
HCCapital
CapitalInc.
Inc.andandConsolidated
ConsolidatedSubsidiaries
Subsidiaries
Thousands
Mitsubishi
HCCapital
CapitalConsolidated
Subsidiaries
Mitsubishi
HC
Inc.Inc.
andandConsolidated
Subsidiaries
acquisitioncommonNumberYears
CommonCapitalRetainedrightsstock ofYears ended
endedMarch
March31,
31,20232023andand20222022
NumberYears
endedMarch
March
2023
Years ended
31,31,
2023
andand20222022
CommonCapitalRetainedrightsstockofof
Stocksharesstock
surplusearnings(Note17)
issuedThousands
Thousands
Stocksharesof
NumberofThousands
stock
surplusearnings(Note 17)
issuedThousands
acquisitioncommonacquisitioncommonStocksharesCommonCapitalRetainedrightsstockofCommonCapitalRetainedrightsstock of
Numberacquisitioncommonstock
surplusearnings(Note17)
issuedNumberof
BALANCE, APRIL 1, 2021 (as restated) (Note 2.r.)895,834¥33,196¥167,280¥1,552¥568,335
Numberofstock
surplusearnings(Note17)
issuedsharesof
StockCommonCapitalRetainedrightsstock
NumberofStocksharesof
BALANCE, APRIL 1, 2021 (as restated) (Note 2.r.)895,834¥33,196¥167,280¥1,552¥568,335
Stocksharesofcommonacquisition
stock
surplusearnings(Note17)
issuedshares ofacquisition StockcommonNet income attributable to owners of the parent
99,401acquisitioncommonCapitalRetainedstock
rightsCommonCapitalRetainedrights acquisition
stockcommonCommon
BALANCE,APRIL
1, 2021
restated)
2.r.)
895,834¥33,196¥167,280¥1,552¥568,335
Net
attributableto (asownersof the(Noteparent99,401
CommonCapitalRetainedrightsstock
Cashincome
dividends(29,693)
issuedstock
surplus(Note
17)
earnings
BALANCE,APRIL 1, 2021 (as restated) (Note 2.r.)895,834¥33,196¥167,280¥1,552¥568,335
stock
surplus Capitalearnings Retained(Note 17) rights
issuedCash dividends(29,693)
surplusearnings(Note 17)
issued stock stock Common
Purchaseof treasury stock (4,503 shares)
BALANCE,APRIL
1, 2021(asrestated)
(Note
2.r.)
895,834issued ¥33,196 stock ¥167,280 surplus¥1,552 (Note¥568,335
Net
incomeattributabletoownersoftheparent99,401earnings
17)
Purchaseoftreasurystock(4,503
shares)
Disposalof treasury
stock
(60)
Net income
attributableto (296,520
owners ofshares)
the parent
99,401
Cashdividends(29,693)
Disposaltreasury stock
shares)(60)
Changeinofownershipof the(296,520
parent due
to transaction withBALANCE,APRIL
1, 2021(as restated)
2.r.)
895,834¥33,196¥167,280¥1,552¥568,335
Cashdividends(29,693)
Net
incomeattributableofthe(Noteparent99,401
ChangeinofAPRIL
ownershipof totheowners
parentdueto(Notetransaction
BALANCE,
APRIL
2021
(as
restated)2.r.) with
895,834¥33,196¥167,280¥1,552¥568,335
Purchasetreasurystock(4,503
shares)noncontrollingshareholders(113)
BALANCE,
1,1,2021
restated)
(Note
2.r.)
895,834¥33,196¥167,280¥1,552¥568,335
Purchaseof treasury
stock (as(4,503
shares)Cashdividends(29,693)
noncontrollingshareholders(113)
Disposalof treasurystock(296,520
shares) shares,(60)
Increasedue
to merger(issued,571,078,084
BALANCE,
APRIL
1,
2021
(as571,078,084
restated)
(Note
2.r.)
895,834¥33,196 (60) ¥167,280¥1,552¥568,335
Net
incomeattributabletoownersofthetoparent
99,401
Disposaloftreasurystock(296,520
shares)Purchase
ofstock,treasurystock(4,503
shares)Increase
to merger
shares, with
Changeindue
ownershipof(issued,
theparentduetransaction
treasury
26,980,329
shares)571,078
381,480Net
incomeattributable
toowners
ownersofthe
theparent99,401
Net
incomeattributableof
99,401
Changeinofstock,ownershipof tothe(296,520
parentdue
toparent
transaction withCashdividends(29,693)
treasury
26,980,329
shares)571,078
381,480
Disposaltreasurystockshares)(60)
noncontrollingshareholders
(113)
Net
change
in
the
year
308
Cash
dividends shareholders(29,693)
Cashdividends(29,693)
noncontrolling(113)
Purchase
ofownershiptreasurystockshares)Changeindue
of(issued,the(4,503
parentdueof
to thetransaction
Net
incomeattributabletoownersparent with
99,401
Increasetomerger571,078,084
shares,Netchangetheyear
308
Purchaseofintreasurystock(4,503
shares) shares,
Increasedue
tomerger(issued,571,078,084
Purchaseoftreasurystock(4,503
shares)
Disposaloftreasurystock(296,520
shares)(60)
noncontrollingshareholders(113)
treasurystock,
26,980,329
shares)571,078
381,480Cashdividends(29,693)
BALANCE,
MARCH
31,
2022
(APRIL
1,
2022,
aspreviously
Disposaloftreasurystock(296,520
shares)(60)
treasurystock,
26,980,329
shares)571,078
381,480
Disposaloftreasurystockshares)(60)
Changeindue
ownershipof(issued,the(296,520
parentduetransaction
withIncrease
tothe
merger571,078,084
shares,BALANCE,
MARCH
31,
2022
(APRIL1,to2022,
as previouslyNetchangeinyear
308
reported)
1,466,912
33,196
548,586
1,861
638,043
Purchaseoftreasurystock(4,503
shares)Changeinownershipownership
theparent
parentduetransactionwith
with
Change
in
ofof
the
due
tototransaction
Netchange
in
the
year
308
noncontrollingshareholders(113)
treasurystock,
26,980,329
shares)571,078
381,480reported)
1,466,912
33,196
548,586
1,861
638,043
noncontrollingshareholders(113)
Disposaloftreasurystock(296,520
shares)(60)
noncontrollingshareholders(113)
Increasedue
tomerger(issued,571,078,084
shares,NetchangeMARCHinthe year
308
BALANCE,
2022 (APRIL
1, 2022, as previously
Cumulative
effectof31,
accountingchangeIncreasedue
tomerger(issued,571,078,084
shares,Changeinownershipoftheparentduetotransaction
withIncreasedue
tomerger(issued,571,078,084
shares,BALANCE,
MARCH
31,
2022
(APRIL
1,
2022,
aspreviously
treasury stock,shares)571,078
381,480reported)
1,466,912
33,196
548,586
1,861
638,043
Cumulative
effect26,980,329
of accountingchangetreasurystock,
26,980,329
shares)571,078
381,480
treasury
571,078
381,480reported)
1,466,912
33,196
548,586
1,861
638,043
noncontrollingshareholders
(113)
Net
changestock,in the26,980,329
year
308
BALANCE,
MARCH
31, 2022shares)(APRIL 1, 2022, as previously
BALANCE,APRIL
1,year2022 (issued,(as restated)
1,466,912
33,196
548,586
1,861
638,043
Net changechangeinthe
themerger
Net
in
year
308308
Increasedue
to571,078,084 shares,
reported)
1,466,912
33,196
548,586
1,861
638,043
Cumulative
effectofaccountingchangeBALANCE, APRIL 1, 2022 (as restated)
1,466,912
33,196
548,586
1,861
638,043
Cumulative
effect ofaccountingchangeBALANCE,31,2022 (APRIL
1, 2022, as previously
treasuryMARCH
stock,
26,980,329
shares)571,078
381,480
BALANCE,MARCHMARCH31,
31,20222022(APRIL(APRIL1,1,2022,
2022,asaspreviously
previously
BALANCE,
reported)
1,466,912
33,196
548,586
1,861
638,043
Net changeeffectin the308
Cumulative
ofyearaccountingchangeBALANCE,1,
2022
restated)
1,466,912
33,196
548,586
1,861
638,043
reported)
1,466,912
33,196
548,586
1,861
638,043
reported)
1,466,912
33,196
548,586
1,861
638,043
Net incomeAPRIL
attributableto (asownersof the parent
116,241
BALANCE,APRIL
1, 2022(asrestated)
1,466,912
33,196
548,586
1,861
638,043
Net
incomeattributabletoownersoftheparent116,241
Cashdividends(43,087)
Cumulative
effectofaccountingchangeBALANCE,APRIL
1, 2022
restated)
33,196
548,586
1,861
638,043
BALANCE,
MARCH
31, (as2022(APRIL 1, 2022, as previously 1,466,912
Cashdividends(43,087)
Cumulative
accountingchangePurchaseof effecttreasury(689 shares)
Cumulative
effectofofstock
accountingchangereported)
1,466,912
33,196
548,586
1,861
638,043
Net
incomeattributabletoownersoftheparent116,241
Purchaseoftreasurystock(689
shares)
Disposaloftreasurystock(338,589
shares)(49)
BALANCE,1, 2022
restated)
1,466,912
33,196
548,586
1,861
638,043
Net incomeAPRIL
attributableto (asownersof the parent
116,241
Cash dividends(43,087)
Disposaloftreasurystock(338,589
shares)(49)
Changeinownership
interestduetomergerbetween
BALANCE,
APRIL
1,
2022
(as
restated)
1,466,912
33,196
548,586
1,861
638,043
BALANCE,APRIL 1, 2022 (as restated)
1,466,912
33,196
548,586
1,861
638,043
Cashdividends(43,087)
Net
incomeattributableto ownersofthe parent
116,241
Changeinofownershipinterestduetomergerbetween
Purchasetreasurystock(689
shares)consolidated
and unconsolidated
subsidiaries(206)
Cumulative
effectofaccountingchangePurchaseof treasury
stock (689 shares)
Cashdividends(43,087)
consolidated
andunconsolidated
subsidiaries(206)
Changeof the(338,589
parent due
to transaction with
Disposalinofownershiptreasury stock
shares)(49)
Net
incomeattributabletoownersofthetoparent
116,241
Disposaltreasurystockshares)(49)
Changeinofofthe(338,589
parentduetransaction
Purchase
ofownershiptreasurystock(689
shares)interestduetomergerbetween with
noncontrollingshareholders(1,191)
Net
incomeattributabletoownersoftheparent116,241
BALANCE,
APRIL
1,
2022
(as
restated)
1,466,912
33,196
548,586
1,861
638,043
Changeinownership
interestduetomergerbetweenNet
incomeattributabletoownersoftheparent116,241
Cashdividends(43,087)
noncontrollingshareholders(1,191)
Disposaloftreasurystock(338,589
shares)(49)
consolidated
andunconsolidated
subsidiaries(206)
Net change in the year276
Cashdividends(43,087)
consolidated
andunconsolidated
subsidiaries
(206)
Cash
dividends(43,087)
Purchaseoftreasurystock(689
shares)interestduetomergerbetweenChangeinownershipoftheparentduetotransaction
withNet change in the year
276
Changeinofownershipof the(338,589
parentdue
to transaction with
Purchaseoftreasurystock(689
shares)Purchaseoftreasurystock(689
shares)
Disposaltreasurystockshares)(49)
consolidated
andunconsolidated
subsidiaries(206)
noncontrollingshareholders(1,191)BALANCE,
MARCH
31,
2023
1,466,912¥33,196¥547,344¥2,138¥710,989
noncontrollingshareholders(1,191)
Disposaltreasurystockshares)(49)
interestdue
todue
mergerbetweenChangeinofownershipofthe(338,589
parentto thetransaction
Disposaloftreasurystock(338,589
shares)(49)
Netchangeinthe year276
Net
incomeattributabletoownersofparent with
116,241
BALANCE,
MARCH
31,
2023
1,466,912¥33,196¥547,344¥2,138¥710,989
Netchangein theyear
276
Changeininterest
consolidated
andunconsolidated(206)
noncontrollingshareholders(1,191)
Changeinownershipownership
interestdueduetosubsidiaries
tomergermergerbetween
betweenCashdividends(43,087)
consolidated
andunconsolidated
subsidiaries(206)
Changeinownershipoftheparentduetotransaction
withconsolidated
andunconsolidated
subsidiaries
NetchangeMARCH
in theyear
276
BALANCE,
31,
2023
1,466,912¥33,196¥547,344¥2,138¥710,989(206)
Changeinownership
ofof
thePurchaseoftreasurystock(689dueshares)noncontrollingshareholders(1,191)
ChangeinMARCH
ownership
theparent
parentduetototransaction
transactionwith
with
BALANCE,
31,
2023
1,466,912¥33,196¥547,344¥2,138¥710,989
noncontrolling(1,191)
Disposalstock (338,589 shares)(49)
Netchangeof
intreasury
theshareholders
year276
noncontrollingshareholders(1,191)BALANCE,
MARCH
31, 2023
1,466,912¥33,196¥547,344¥2,138¥710,989
Net
276276
Changein inownership
Net changechangeinthetheyearyear interest due to merger between
consolidated
and31,
unconsolidated
subsidiaries(206)
BALANCE,MARCH
2023
1,466,912¥33,196¥547,344¥2,138¥710,989
Stock
BALANCE,
MARCH
31, 2023
1,466,912¥33,196¥547,344¥2,138¥710,989
Changeinownershipoftheparentduetotransaction
with
BALANCE, MARCH 31, 2023
1,466,912¥33,196¥547,344¥710,989
Stock¥2,138
acquisition
noncontrolling shareholders(1,191)acquisition
CommonCapitalRetainedrightsNet change in the year
276
CommonCapitalRetainedrightsStockstocksurplusearnings
(Note
17)
Stock
stock
surplusearnings(Note17)
acquisitionacquisition
Stock
Common ¥33,196
CapitalRetainedrightsBALANCE, MARCH 31, 2023
1,466,912¥547,344¥2,138¥710,989
CommonCapitalRetainedrightsacquisition
stock
surplusearnings(Note
17)
BALANCE, MARCH 31, 2022 (APRIL 1, 2022, as previously
stock
surplusearnings
(Note
17)
Stock
CommonCapitalRetainedrightsBALANCE, MARCH 31, 2022 (APRIL 1, 2022, as previously
reported)$249,594$4,124,710$13,998$4,797,316
Stockacquisition
stock
surplusearnings
(Note
17)
Stock
reported)$249,594$4,124,710$13,998$4,797,316
acquisition
CommonCapitalRetainedrightsacquisition
BALANCE,
MARCH
31,2022 (APRIL
1, 2022, as previously
Cumulative
effectofaccountingchangeCommonCapitalRetainedrightsstock
surplusearnings(Note
17)
BALANCE,MARCH 31, 2022 (APRIL 1, 2022, as previously
reported)$249,594$4,124,710$13,998$4,797,316
CommonCapitalRetainedrightsCumulative effect of accounting change
stock
surplusearnings(Note17)
reported) MARCH 31, 2022 (APRIL 1, 2022, as previously$249,594$4,124,710$13,998$4,797,316
BALANCE,stock
surplusearnings(Note
17)
BALANCE, APRIL 1, 2022 (as restated)249,594
4,124,710
13,9984,797,316
reported)$249,594$4,124,710$13,998$4,797,316
CumulativeAPRIL
effect 1,of 2022accountingchangeBALANCE,(as restated)249,594
4,124,710
13,9984,797,316
CumulativeMARCH
effect of31,
accountingchangeBALANCE,
2022 (APRIL
1, 2022, as previously
Stock
Net incomeMARCH
attributableto ownersof theparentas previously
873,994
BALANCE,31, 2022(APRIL
1, 2022,reported)$249,594$4,124,710$13,998$4,797,316
Cumulative
effectofaccountingchangeBALANCE,
APRIL
1,
2022
(as
restated)
249,594
4,124,710
13,998 acquisition
4,797,316
BALANCE,
MARCH
31,
2022
(APRIL
2022, as previously
Net income
attributable to owners of the1,parent
873,994
reported)$249,594$4,124,710$13,998$4,797,316
Cashdividends(323,966)
BALANCE, APRIL 1, 2022 (as restated)249,594
4,124,710
13,9984,797,316
Common$4,124,710Capital $13,998 rights
reported)$249,594$4,797,316 Retained
Cashdividends(323,966)
Purchaseof effecttreasurystock(689 shares)
CumulativeofaccountingchangeBALANCE,1, 2022(asrestated)
249,594 stock4,124,710 surplus13,998 (Note4,797,316
Net
incomeattributableto (338,589
ownersofshares)the parent
873,994
earnings
17)
PurchaseofAPRIL
treasurystock(689
shares)Cumulative
effectofaccountingchangeDisposaloftreasury
stock
(374)
Net income attributable to owners of the parent
873,994
Cashdividends(323,966)
Cumulative
effect ofstock
accounting
Disposaltreasury(338,589(374)
Changeinofownershipinterest
due change
to shares)
merger between
BALANCE,
APRIL
1,
2022
(as
restated)
249,594
4,124,710
13,9984,797,316
Cashdividends(323,966)Net
incomeattributableto ownersofthe parent
873,994
ChangeinofAPRIL
ownership
interestduetomergerbetween
Purchasetreasurystock(689
shares)consolidated
and1,unconsolidated
subsidiaries(1,553)BALANCE,2022
restated)
249,594
4,124,710
13,9984,797,316
Purchaseof treasury
stock (as(689
shares)Cashdividends(323,966)
consolidated
and 1,
unconsolidated
subsidiaries(1,553)
Changeinofownershipof the(338,589
parentdue
to transaction with
Disposaltreasurystockshares)(374)
BALANCE,
APRIL
2022
(as
restated)
249,594
4,124,710
13,9984,797,316
BALANCE,
MARCH
31,
2022
(APRIL
1,
2022,
aspreviouslyNet
incomeattributabletoownersoftheparent873,994
Disposaltreasurystockshares)(374)
Changeinofofthe(338,589
parentto transaction
Purchase
ofownershiptreasurystock(689
shares)interestdue
todue
mergerbetween with
noncontrollingshareholders(8,960)Net
incomeattributabletoownersoftheparent873,994
Changeinofownershipinterest
due to shares)
merger between
reported)$249,594(8,960)$13,998$4,797,316
Cashdividends(323,966)
noncontrollingshareholders
consolidated
andunconsolidated(1,553)
Disposaltreasurystock(374)$4,124,710
Netchange
in
the
year
2,076
Net
incomeattributableto(338,589
ownerssubsidiariesof the parent
873,994
Cashdividends(323,966)
consolidated
andyearunconsolidated(1,553)Purchasetreasurystockshares)interestdue
tosubsidiaries
mergerbetween with
Changeinofownershipofthe(689
parentdue
to transaction
Netchangeinthe2,076
Cash dividends(323,966)
Changeinofof the(338,589
parentdue
to transaction with
Purchase
ofownershiptreasurystock(689
shares)
Disposaltreasurystockshares)(374)
consolidated
andunconsolidated
subsidiaries(1,553)
noncontrollingshareholders(8,960)
Cumulative
effectofaccountingchangeBALANCE,
MARCH
31,
2023
$249,594$4,115,374$16,075$5,345,789
noncontrollingshareholders(8,960)Purchaseoftreasurystock(689
shares)
Disposaloftreasurystock(338,589
shares)(374)
interestduetomergerbetweenChangeinownershipoftheparentduetotransaction
withNet changeMARCH
in the year
2,076
BALANCE,31, 2023$249,594$4,115,374$16,075$5,345,789
Netchangeintreasury
the
year
2,076
Changeinofownershipinterest
due tosubsidiaries
merger
Disposalstock(338,589
shares)between(374)
consolidated
andunconsolidated(1,553)
noncontrollingshareholders(8,960)
BALANCE,
APRIL
1,
2022
(as
restated)
249,594
4,124,710
13,9984,797,316
consolidated
andyearunconsolidated(1,553)
Changeinownershipownership
due subsidiaries
to merger
betweenwith
Changeinofinterest
the parent
due
to transaction
Netchangein the2,076
BALANCE,
MARCH
31,
2023
$249,594$4,115,374$16,075$5,345,789
See
notes
to
statements.
Changein consolidated
ownership
offinancial
the parent
due
to transaction withconsolidated
andunconsolidated
subsidiaries(1,553)
noncontrollingshareholders(8,960)
BALANCE,
MARCH
31,
2023
$249,594$4,115,374$16,075$5,345,789
SeeChange
notes toinconsolidated
financialstatements.
noncontrolling(8,960)ownership
of
the
due
transaction
Net
incometoparent
ownersoftotheparent with873,994Netchangeinattributabletheshareholders
year
2,076
BALANCE,
MARCH
31, 2023$249,594$4,115,374$16,075$5,345,789
Netchange in the shareholders
year
2,076
noncontrolling(8,960)dividends(323,966)
SeeCashnotes
toconsolidated
financialstatements.
Netchangein the year
2,076 $5,345,789
BALANCE,
MARCH
31,financial
2023 (689$249,594$4,115,374$16,075
Seenotes
to consolidated
statements.
Financial Information
Purchaseof treasury
stock
shares)BALANCE, MARCH 31, 2023
$249,594$4,115,374$16,075$5,345,789
SeeDisposal
notes to consolidated
financialstatements.
of treasury stock(338,589
shares)(374)
BALANCE, MARCH 31, 2023
$249,594$4,115,374$16,075$5,345,789
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Millions of yen
Millionsof yenAccumulated
other comprehensive
incomeAccumulated other comprehensive income
Millionsyen
Deferredgain of
Millionsof yenForeign
Accumulated
incomeDeferredgain comprehensive
Net unrealized(loss)otheron
Accumulated
other
Foreign income DefinedMillionsof yencurrency
Netgainunrealized(loss)
on comprehensive
onderivatives
currency incomeretirement
Definedtranslation
gain on Accumulated
derivatives
otheravailable-forunder
hedge
Deferredgain comprehensive
Deferredgain of yen
translation
retirement
Foreign
Millions
available-forunder
hedge
sale
securities
accounting
adjustments
benefitplans
Netunrealized(loss)
on
Foreign
Millionsof yenNetunrealized(loss)
on comprehensive
salegainsecurities
accounting
adjustments
benefitplans
currency income
Definedotheron Accumulated
derivatives
Deferredgaincurrency
Definedgain on Accumulated
derivatives
Foreign incomeretirement
other
translation
available-forunderNet
unrealized(loss)hedge
on comprehensive
translation
retirement
available-forunderhedge
currency
Definedsale
securities
accounting
adjustments
benefit
plans
gain
on
derivatives
Deferredgain¥30,678¥(15,519)¥22,278¥(925)
sale securities
accounting
adjustments
benefitplans
Foreigntranslation
retirement
Deferredgainavailable-forunderhedge
Net unrealized(loss)
on¥30,678¥(15,519)¥22,278¥(925)
ForeignDefinedcurrencyNetunrealized(loss) on
salegainsecurities
accounting
adjustments
benefitplansonderivatives
currency
Definedgain onderivatives
retirementtranslation
available-forunderhedge¥30,678¥(15,519)¥22,278¥(925)
translation
retirement
available-forunder
hedge
sale
securities
accounting
adjustments
benefitplans¥30,678¥(15,519)¥22,278¥(925)
sale securities
accounting
adjustments
benefit plans¥30,678¥(15,519)¥22,278¥(925)

Treasury
Treasury
stock
stock
Treasury
Treasurystock¥(1,528)
stock
Treasury¥(1,528)
stock
Treasury¥(1,528)
Treasurystock¥(1,528)
stock (3)¥(1,528)
(3)
184
184
¥(1,528)(3)¥(1,528)
(3)
184
184
(3)
(18,022)(18,022)
184
(3)
(3)
184
(18,022)(18,022)184(19,369)(18,022)(19,369)(18,022)(19,369)(18,022)(19,369)(19,369)(19,369)(19,369)(19,369)(19,369)(19,369)(19,369)(19,369)

㼚㻙㻢
㼚㻙㻢
㼛㻙㻢
㼛㻙㻢
㼚㻙㻢
㼚㻙㻢
㼛㻙㻢
㼛㻙㻢
㼚㻙㻢
㼛㻙㻢
㼚㻙㻢
㼚㻙㻢
㼛㻙㻢
㼡㻙㻢
㼛㻙㻢
㼡㻙㻢

211
¥(19,158)
211¥(19,158)

㼡㻙㻣

㼡㻙㻢
㼡㻙㻢

¥(19,158)¥(19,158)

㼡㻙㻣

㼡㻙㻢

¥(19,158)㼡㻙㻢㼡㻙㻢¥(19,158)¥(19,158)

211(19,369)
211(19,369)¥30,678¥30,678¥(15,519)¥(15,519)¥22,278¥22,278¥(925)¥(925)(15,725)(15,725)

16,97916,97970,49770,497

1,049
1,049

(15,725)
14,953(15,725)
14,953(15,725)394
14,953394
14,953(15,725)
15,347(15,725)
14,953394
15,347394
14,953394
15,347
14,953
15,347394
15,347394

16,9791,460
16,9791,460
16,9791,460
1,460
16,9791,460
16,9791,460
1,460

70,497
92,77670,497
92,77670,497
92,776
92,77670,497
92,77670,497
92,776
92,776

1,049
123
1,049
123
1,049
123
123
1,049
123
1,049
123
123

1,460
1,460
1,460
1,460

92,776
92,776
92,776
92,776

123
123
123
123

1,460

92,776

123

15,347
15,347

1,460
1,460

92,776
92,776

123
123

(529)
(529)

51,591
51,591

93,76993,769

1,861
1,861

211
211
211

Treasury
Treasury
stock
stock
Treasury
Treasury
stock
stock
Treasury($145,632)
stock($145,632)
Treasury
Treasurystock($145,632)
stock($145,632)(145,632)($145,632)(145,632)($145,632)(145,632)($145,632)(145,632)(3)(145,632)
(3)
1,587
1,587
(145,632)(3)(145,632)
(3)
1,587
1,587
(3)
1,587
(3)
(3)
1,587
($144,047)
1,587($144,047)($144,047)($144,047)($144,047)($144,047)($144,047)

㼡㻙㻣

㼡㻙㻣

㼡㻙㻣

㼡㻙㻣

㼡㻙㻣

¥14,817(529)¥14,817
(529)

㼡㻙㻤

㼡㻙㻤

¥53,051
51,591¥53,051
51,591㼡㻙㻥㼡㻙㻥¥186,545
93,769¥186,545
93,769㼡㻙㻝㻜㼡㻙㻝㻜

¥1,985
1,861¥1,985
1,861(529)
51,591
93,7691,861¥14,817¥53,051¥186,545¥1,985¥14,817¥53,051¥186,545¥1,985of U.S. dollars (Note1)(529)Thousands
51,591
93,7691,861¥14,817¥53,051¥186,545¥1,985(529)
93,769
1,861
Thousands51,591
of
U.S.comprehensive
dollars (Note1)
Accumulated
otherincomeAccumulated
othercomprehensive
income¥14,817¥53,051¥186,545¥1,985ofgainU.S. dollars(Note 1)
Foreign¥14,817 Thousands¥53,051¥186,545¥1,985Net unrealized
DeferredThousandsof U.S. dollars(Note 1)
Foreigncurrency income Defined
other
Netgainunrealized
Deferredgain comprehensive
on Accumulatedonderivatives
Accumulated
othercomprehensive
incomecurrency
Definedof U.S. dollars(Note 1)translation
retirement
gain on Thousandsonderivatives
available-forunderhedge
translation
retirement
Foreign income
available-forunderhedge
Accumulated
other
sale
securities
accounting
adjustments
benefitplans
Netunrealized
Deferredgain comprehensive
ForeignNetunrealized
DeferredofgainU.S. dollars(Note 1) benefit
salegainsecurities
accounting
adjustments
plans
currency
Definedon Thousandsonderivatives
currency
DefinedThousands
ofU.S. dollars(Note 1)
gain on Accumulatedonderivatives
Foreigntranslation
otherincomeretirement
available-forunder
hedge
Net
unrealized
Deferredgain comprehensive
translation
retirement
available-forunder hedge
other comprehensive
currency income
Definedsale
securities
adjustments
benefitplans
gain
on Accumulated
onaccounting
derivatives
sale securities
accounting
adjustments
benefitplans
Foreigntranslation
retirement
available-forunder hedge
Netunrealized
Deferredgain$112,430$10,978$697,566$928
Foreigncurrency
DefinedNet
unrealized
Deferred
gain
salegainsecurities
accounting
adjustments
benefitplans
ononderivatives$112,430$10,978$697,566$928
currency
Definedgain ononderivatives
translation
retirement
available-forunder
hedge
2,965
translation
retirement
available-forunder
hedge
sale
securities
accounting
adjustments
benefitplans$112,430$10,978$697,566$928
2,965
sale$112,430
securities
accounting
adjustments
benefit plans$10,978$697,566$928
115,395
10,978
697,566
928$112,430$10,978$697,566$928
2,965
115,395
10,978
697,566
928
2,965$112,430$10,978$697,566$928
2,965
115,395
10,978
697,566
928$112,430$10,978$697,566$928
115,395
10,978
697,566
928
2,965
115,395
10,978
697,566
928
2,965

Noncontrolling
Noncontrollinginterests
interests
Noncontrolling
Noncontrollinginterests¥12,557
interests
Noncontrolling¥12,557
interests
Noncontrolling¥12,557
Noncontrollinginterests¥12,557
interests¥12,557

Total
Total

㼡㻙㻝㻝

㼡㻙㻝㻝

㼡㻙㻤

㼡㻙㻥

㼡㻙㻝㻜

㼡㻙㻝㻝

㼡㻙㻤

㼡㻙㻥

㼡㻙㻝㻜

㼡㻙㻝㻝

㼡㻙㻤

㼡㻙㻥

㼡㻙㻝㻜

㼡㻙㻝㻝

㼡㻙㻤

㼡㻙㻥

㼡㻙㻝㻜

㼡㻙㻝㻝

㼡㻙㻤

㼡㻙㻥

㼡㻙㻝㻜

㼡㻙㻝㻝

Total
¥805,349
Total¥805,349
Total
99,401¥805,349
99,401(29,693)
Total¥805,349(29,693)Total(3)¥805,349
99,401(3)
123
99,401(29,693)123¥805,349(29,693)
99,401(3)(113)¥805,349(3)(29,693)(113)
123
99,401123(3)363,457
99,401(29,693)363,457
123(113)
73,109(29,693)(113)(3)
73,109
(3)
123
(113)
363,457
363,457
123
73,1091,311,631
73,109(113)
363,457
1,311,631(113)
73,109394
363,457
1,311,631
394
363,457
1,311,631
73,1091,312,025
73,1091,311,631
394
1,312,025
394
1,311,631
394
1,312,025
1,311,631
116,241
1,312,025
116,241(43,087)394
1,312,025(43,087)394
116,241
161
1,312,025
116,241(43,087)161
1,312,025(43,087)
116,241(206)(43,087)(206)
161
116,241
161(1,191)
116,241(43,087)(1,191)
161(206)
146,969(43,087)(206)
146,969
161(206)(1,191)¥1,530,911(1,191)
161
146,969¥1,530,911
146,969(206)(1,191)(206)
146,969¥1,530,911(1,191)¥1,530,911(1,191)
146,969¥1,530,911
146,969¥1,530,911¥1,530,911
Total
Total
Total
Total
$9,861,890
Total$9,861,890

115,395
115,395

10,978
10,978

697,566
697,566

928
928(3,982)(3,982)387,906
387,906

705,033
705,033

13,99913,999$111,413(3,982)$111,413(3,982)$398,884
387,906$398,884
387,906$1,402,599
705,033$1,402,599
705,033$14,927
13,999$14,927
13,999(3,982)$111,413$111,413(3,982)$111,413(3,982)387,906$398,884$398,884
387,906$398,884
387,906

705,033$1,402,599$1,402,599
705,033$1,402,599
705,033

13,999$14,927$14,927
13,999$14,927
13,999Total2,965$9,861,890
Total2,965$9,861,890
9,864,855$9,861,890
2,965
9,864,855
2,965
873,994$9,861,890
2,965
9,864,855
873,994$9,861,890(323,966)
9,864,855(323,966)(3)
2,965
9,864,855
873,994
(3)
2,965
1,213
873,994(323,966)
1,213
9,864,855(323,966)
873,994(3)(1,553)9,864,855(3)(323,966)(1,553)
1,213
873,994
1,213(3)(8,960)873,994(323,966)(8,960)(1,553)
1,213
1,105,033(323,966)(1,553)(3)
1,105,033(3)
1,213(1,553)(8,960)$11,510,611(8,960)1,213
1,105,033$11,510,611
1,105,033(1,553)(8,960)(1,553)
1,105,033$11,510,611(8,960)$11,510,611(8,960)1,105,033$11,510,611
1,105,033$111,413$111,413$398,884$398,884$1,402,599$1,402,599$14,927$14,927$11,510,611$11,510,611¥12,557¥12,557
9,278
9,278
9,278
21,835
9,278
21,835
9,278
21,835
21,835
9,278
21,835
9,278
21,835
21,835
21,835
21,835
21,835
21,835
21,835
21,835
21,835(1,717)(1,717)
㼡㻙㻝㻞

㼡㻙㻝㻞

㼡㻙㻝㻞

㼡㻙㻝㻞

㼡㻙㻝㻞

㼡㻙㻝㻞

㼡㻙㻝㻞

¥20,118(1,717)¥20,118(1,717)(1,717)¥20,118¥20,118(1,717)¥20,118(1,717)¥20,118¥20,118
Noncontrolling
Noncontrollinginterests
interests
Noncontrolling
Noncontrollinginterests
interests
Noncontrolling$164,178
interests$164,178
Noncontrolling
Noncontrollinginterests$164,178
interests$164,178
164,178$164,178
164,178

㼡㻙㻝㻟

㼡㻙㻝㻟

㼡㻙㻝㻟

㼡㻙㻝㻟

㼡㻙㻝㻟

㼡㻙㻝㻟

㼡㻙㻝㻟

Total
Total
equityequityTotal
Total
equity¥817,906
equityTotal¥817,906
equity99,401
Total¥817,906
99,401
Total(29,693)
equity¥817,906(29,693)
equity(3)¥817,906
99,401(3)
123
99,401(29,693)
123¥817,906(29,693)
99,401(3)(113)¥817,906(3)(29,693)(113)
123
99,401123(3)363,457
99,401(29,693)363,457
123(113)
82,387(29,693)(113)(3)
82,387
(3)
123
(113)
363,457
363,457
123
82,387
1,333,467
82,387(113)
363,457
1,333,467(113)
82,387394
363,457
1,333,467
394
363,457
1,333,467
82,387
1,333,861
82,387
1,333,467
394
1,333,861
394
1,333,467
394
1,333,861
1,333,467
116,241
1,333,861
116,241(43,087)394
1,333,861(43,087)394
116,241161
1,333,861
116,241(43,087)161
1,333,861(43,087)
116,241(206)(43,087)(206)
161
116,241
161(1,191)
116,241(43,087)(1,191)
161(206)
145,252(43,087)(206)
145,252
161(206)(1,191)¥1,551,029(1,191)
161
145,252¥1,551,029
145,252(206)(1,191)(206)
145,252¥1,551,029(1,191)¥1,551,029(1,191)
145,252¥1,551,029
145,252¥1,551,029¥1,551,029(12,910)$151,267$151,267(12,910)$151,267(12,910)

Total
Total
equityequityTotal
Total
equityequityTotal$10,026,068
equity$10,026,068
Total
Total2,965
equity$10,026,068
2,965
equity$10,026,068
10,029,033$10,026,068
2,965
10,029,033
2,965
873,994$10,026,068
2,965
10,029,033
873,994$10,026,068(323,966)
10,029,033(323,966)(3)
2,965
10,029,033
873,994
(3)
2,965
1,213
873,994(323,966)
1,213
10,029,033(323,966)
873,994(3)(1,553)
10,029,033(3)(323,966)(1,553)
1,213
873,994
1,213(3)(8,960)873,994(323,966)(8,960)(1,553)
1,213
1,092,122(323,966)(1,553)(3)
1,092,122(3)
1,213(1,553)(8,960)$11,661,878(8,960)1,213
1,092,122$11,661,878
1,092,122(1,553)(8,960)(1,553)
1,092,122$11,661,878(8,960)$11,661,878(8,960)1,092,122$11,661,878
1,092,122$151,267$151,267$11,661,878
Financial Information$11,661,878$164,178
164,178$164,178
164,178
164,178
164,178
164,178(12,910)(12,910)$151,267(12,910)$151,267(12,910)2023

21

Consolidated Statements of Cash Flows

Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Years ended March 31, 2023 and 2022

Thousands of U.S.
dollars (Note 1)

Millions of yen

Operating activities:
Income before income taxes
Adjustment for:
Income taxes — paid
Depreciation and amortization(Reversal)㻌provision of allowance for doubtful receivables
Gain from bargain purchase
Loss on disposals and sales of leased assets
Loss on sales of shares of subsidiaries and affiliates
Gain on revaluation of investment securities
Gain on sales of investment securities(Gain) loss on step acquisition
Changes in assets and liabilities:
Increase in receivables
Decrease (increase) in lease receivables and investments in leases
Decrease in operating securities and investments in private
equity securities(Decrease) increase in trade payables
Increase (decrease) in interest payable
Purchases of leased assets
Purchases of other operating assets
Other — net
Total adjustments
Net cash provided by operating activities
Investing activities:
Purchases of own-used assets
Proceeds from sales of own-used assets
Purchases of investment securities
Proceeds from sales and redemption of investment securities
Payments for sales of consolidated subsidiaries
Proceeds from sales of consolidated subsidiaries
Payments for acquisition of newly consolidated subsidiaries
Payments into time deposits
Proceeds from withdrawal of time deposits
Other — net
Net cash used in investing activities
Financing activities:
Net increase in short-term loans
Net (decrease) increase in commercial paper
Proceeds from loans from the securitizations of theminimum future rentals on lease contracts
Repayments of loans from the securitizations of theminimum future rentals on lease contracts
Proceeds from long-term loans
Repayments of long-term loans
Proceeds from issuance of bonds
Redemption of bonds
Cash dividends paid
Cash dividends paid to noncontrolling shareholders
Proceeds from share issuance to noncontrolling shareholders
Payments from changes in ownership interests in subsidiaries that do not
result in change in scope of consolidation
Other — net
Net cash used in financing activities
Foreign currency translation adjustments on cash and cash equivalents
Net decrease in cash and cash equivalents
Increase in cash and cash equivalents resulting from change in the scopeof consolidated subsidiaries
Increase in cash and cash equivalents resulting from merger
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
See notes to consolidated financial statements.

22

Financial Information

2023

2023

2022

2023

¥153,164¥147,250$1,151,609(53,800)
350,108(13,265)(36,505)
328,690
19,479(431)
148,205(404,512)
2,632,392(99,740)

165,768
1,006(7,194)(2,996)(1,159)(29,967)273

1,246,376
7,566(54,095)(22,526)(8,720)(61,325)
23,458(16,345)(29,406)(461,095)
176,376

14,385(22,646)4,185(479,501)(16,629)(6,803)(106,411)
46,752

7,242
3,885
(958)
(397,205)(7,770)59,411
48,594
195,845

108,159(170,273)
31,470(3,605,273)(125,036)(51,155)(800,087)
351,521(8,793)738(9,981)
20,302(14,157)
2,816(4,677)(252,427)
139,045(186)(127,322)(9,623)553(13,663)
36,065
2,271(124,592)(5,913)6,976
45(107,879)(66,115)5,552(75,051)
152,650(106,447)
21,179(35,171)(1,897,954)
1,045,451(1,404)(957,309)

80,025(130,161)

49,90430,707

601,694(978,660)

519,089359,310

3,902,929(407,007)
1,065,363(990,689)
361,330(463,710)(43,087)(2,552)
7,282(423,974)
562,540(685,685)
498,011(532,561)(29,693)(3,140)(3,060,203)
8,010,252(7,448,793)
2,716,769(3,486,548)(323,966)(19,193)
54,753(3,553)(1,276)(8,948)29,816(59,701)(12,346)(5,229)(192,157)
21,066(83,124)(26,717)(9,597)(67,282)
224,185(448,884)10499
316,895
286,213¥520,083

785

520,083¥460,486

3,910,404$3,462,305

Additional information

Transfer of Diamond Asset Finance Company Limited (Diamond Asset Finance) (Note 3.a.)Payments for sales of consolidated subsidiaries mainly consist of the transfer of Diamond Asset Finance.
On March 24, 2023, the Company transferred entire shares of Diamond Asset Finance according to the sharetransfer agreement executed on December 23, 2022.
Reconciliation of the net cash paid for the transfer of Diamond Asset Finance is as follows:
Millions of yen

Current assets
Fixed assets
Current liabilities
Long-term liabilities
Loss on sales of shares of subsidiaries and affiliates
Transfer amount
Cash and cash equivalents
Net cash paid for transfer of shares of Diamond Asset FinanceThousands of U.S.
dollars (Note 1)

2023

2023

¥198,411
8,709(70,312)(129,403)(1,006)
6,400(20,557)¥(14,157)$1,491,813
65,482(528,664)(972,955)(7,566)
48,120(154,568)$(106,448)

Exclusion of Mitsubishi HC Capital Auto-Lease Corporation (Mitsubishi HC Capital Auto-Lease) from scope of consolidation (Note 3.b.)
Mitsubishi HC Capital Auto-Lease increased capital through third-party allotment. As a result, the Company
excluded Mitsubishi HC Capital Auto-Lease from scope of consolidation and applied equity method.
Details of assets and liabilities of Mitsubishi HC Capital Auto-Lease at the exclusion from scope of consolidation is as follows:
Millions of yen

Thousands of U.S.
dollars (Note 1)

2023

2023

Current assets (*)
Fixed assets
Total assets¥47,235
53,758¥100,993$355,153
404,195$759,349

Current liabilities
Long-term liabilities
Total liabilities¥86,062410¥86,472$647,085
3,085$650,170(*) Cash and cash equivalents of ¥112 million ($844 thousand) is included. The amount of difference from paid-in capital fromnoncontrolling shareholders of ¥7,394 million ($55,598 thousand) is ¥7,282 million ($54,753 thousand), which was recorded as proceedsfrom share issuance to noncontrolling shareholders in consolidated statement of cash flows.

Acquisition of CAI International, Inc. (CAI) (Note 3.d.)Payments for acquisition of newly consolidated subsidiaries mainly consist of the acquisition of CAI.
On November 22, 2021, the Company made CAI a wholly owned subsidiary.
Reconciliation of the net cash paid for acquisition of CAI is as follows:
Millions of yen
2022

Current assets
Fixed assets
Deferred assets
Goodwill
Current liabilities
Long-term liabilities
Foreign currency translation adjustment
Acquisition cost
Cash and cash equivalents
Net cash paid for acquisition of CAI¥127,629
303,794
6
33,613(38,173)(302,356)(323)
124,190(5,281)¥118,909

Financial Information

2023

23

Business integration with Hitachi Capital Corporation (Hitachi Capital) (Note 3.c.)Increase in cash and cash equivalents resulting from merger is from business integration with Hitachi Capital.
Effective April 1, 2021, Mitsubishi UFJ Lease & Finance Company Limited (Mitsubishi UFJ Lease) and Hitachi
Capital integrated their businesses and changed the company name to Mitsubishi HC Capital Inc.
Details of assets acquired and liabilities assumed in merger is as follows:
Millions of yen
2022

Current assets (*)
Fixed assets
Deferred assets
Total assets¥2,853,966
860,780
978¥3,715,725

Current liabilities
Long-term liabilities
Total liabilities¥1,376,757
1,921,232¥3,297,990(*) Cash and cash equivalents of ¥316,895 million is included and disclosed as increase in cash and cash
equivalents resulting from merger.

24

Financial Information

2023

Notes to Consolidated Financial Statements
Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Years ended March 31, 2023 and 2022

1. Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated financial statements of Mitsubishi HC Capital Inc. (the “Company”) and its
consolidated subsidiaries (collectively, the “Companies”) have been prepared in accordance with theprovisions set forth in the Japanese Financial Instruments and Exchange Act and its related accounting
regulations and in accordance with accounting principles generally accepted in Japan, which are different incertain respects as to the application and disclosure requirements of International Financial ReportingStandards (IFRS).
In preparing these consolidated financial statements, certain reclassifications and rearrangements havebeen made to the consolidated financial statements issued domestically in order to present them in a form
that is more familiar to readers outside Japan. In addition, certain reclassifications have been made to the2022 consolidated financial statements to conform to the classifications used in 2023.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts
are included solely for the convenience of readers outside Japan and have been made at the rate of ¥133 to
USD1, the approximate rate of exchange at March 31, 2023.
Such translations should not be construed as representations that the Japanese yen amounts could be
converted into U.S. dollars at that or any other rate.
Japanese yen figures less than a million yen and U.S. dollar figures less than thousand dollars are rounded
down to the nearest million yen and thousand dollars, except for per share data. As a result, totals in millionsof yen and thousands of U.S. dollars may not add up exactly.
2. Summary of Significant Accounting Policies
a. Consolidation — The consolidated financial statements as of March 31, 2023, include the accounts of theCompany and its 254 (266 in 2022) significant subsidiaries.
Under the control and influence concepts, those companies in which the Company, directly or indirectly, isable to exercise control over operations are fully consolidated and those companies over which the Company
has the ability to exercise significant influence are accounted for by the equity method.
Investments in one (one in 2022) unconsolidated subsidiary and 70 (73 in 2022) associated companies areaccounted for by the equity method.
In September 2006, the Accounting Standards Board of Japan (ASBJ) issued Practical Issues Task Force
No. 20, Practical Solution Application of Control Criteria and Influence Criteria to Investment Associations.
The practical solution clarifies how the control and influence concept should be practically applied to theconsolidation scope of collective investment vehicles, such as limited partnerships, silent partnerships, andother entities with similar characteristics. The Company applied this practical solution and consolidated 54
such collective investment vehicles in 2023 (60 in 2022).
Investments in the remaining unconsolidated subsidiaries and associated companies are stated at cost. If
the equity method of accounting had been applied to the investments in these companies, the effect on theaccompanying consolidated financial statements would not be material.
The excess of the cost of acquisition over the fair value of the net assets of an acquired subsidiary at thedate of acquisition is shown as “Goodwill” in “Investments and other assets.” Goodwill is amortized using thestraight-line method over a period of 20 years.
All significant intercompany balances and transactions have been eliminated in consolidation. All thematerial unrealized profit included in assets resulting from transactions within the Companies is also
eliminated.
The fiscal years of the subsidiaries are not necessarily the same as the Company’s. Accounts of thosesubsidiaries that have different fiscal periods have been adjusted for significant transactions to reflect
properly their financial positions at March 31 of each year and the results of operations for the years thenFinancial Information

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25

ended. Certain subsidiaries have prepared provisional statements of accounts, prepared in the equivalent way
as the year-end closing, as of March 31, 2023.
If a consolidated foreign subsidiary prepares the financial statements in accordance with IFRS or
Generally Accepted Accounting Principles in the United States (U.S. GAAP), the financial statements areused in consolidation.
If a consolidated foreign subsidiary prepares the financial statements in accordance with the generally
accepted accounting standards in its residing country other than IFRS or U.S. GAAP, the financial statements
are adjusted in accordance with IFRS.
b. Business Combinations — Business combinations are accounted for using the purchase method.
Acquisition-related costs, such as advisory fees or professional fees, are accounted for as expenses in the
periods in which the costs are incurred. If the initial accounting for a business combination is incomplete by
the end of the reporting period in which the business combination occurs, an acquirer shall report in its
financial statements, provisional amounts for the items for which the accounting is incomplete. During themeasurement period, which shall not exceed one year from the acquisition, the acquirer shall retrospectively
adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about
facts and circumstances that existed as of the acquisition date and that would have affected the measurementof the amounts recognized as of that date. Such adjustments shall be recognized as if the accounting for thebusiness combination had been completed at the acquisition date. A parent's ownership interest in a
subsidiary might change if the parent purchases or sells ownership interests in its subsidiary. The carrying
amount of noncontrolling interest is adjusted to reflect the change in the parent's ownership interest in its
subsidiary, while the parent retains its controlling interest in its subsidiary. Any difference between the fairvalue of the consideration received or paid and the amount by which the noncontrolling interest is adjusted isaccounted for as capital surplus as long as the parent retains control over its subsidiary.
c. Cash Equivalents — Cash equivalents are short-term investments that are readily convertible into cash
and that are exposed to insignificant risk of changes in value.
Cash equivalents include time deposits, all of which mature or become due within three months of the dateof acquisition, and bank overdrafts (negative cash equivalents) that are utilized in a similar manner to othercash equivalents in fund management. Time deposits in trust, restricted for payment of maintenance of leased
assets and reserved to refund security deposits under lease contracts to lessees, are not included in cash
equivalents.
d. Lease Accounting — In March 2007, the ASBJ issued ASBJ Statement No. 13, Accounting Standard forLease Transactions, which revised the previous accounting standard for lease transactions issued in June
1993. The revised accounting standard for lease transactions was effective for fiscal years beginning on orafter April 1, 2008.
Lessee — Finance leases that are deemed to transfer ownership of the leased property to the lessee arecapitalized. However, under the previous accounting standard, other finance leases were permitted to beaccounted for as operating lease transactions if certain “as-if capitalized” information was disclosed in thenotes to the lessee’s consolidated financial statements. In principle, the revised accounting standard requiresthat all finance lease transactions be capitalized by recognizing lease assets and lease obligations in the
consolidated balance sheets, but it permits leases that existed at the transition date and do not transfer
ownership of the leased property to the lessee to continue to be accounted for as operating lease transactions.
The Company and its consolidated domestic subsidiaries applied the revised accounting standard effective
April 1, 2008.
Lessor — Finance leases that are deemed to transfer ownership of the leased property to the lessee are to betreated as sales. However, under the previous accounting standard, other finance leases were permitted to beaccounted for as operating lease transactions if certain “as-if sold” information was disclosed in the notes tothe lessor’s consolidated financial statements. The revised accounting standard requires that all finance leases
that are deemed to transfer ownership of the leased property to the lessee be recognized as “leasereceivables” and all finance leases that are not deemed to transfer ownership of the leased property to thelessee be recognized as “investments in leases.”
The Company and its consolidated domestic subsidiaries applied the revised accounting standard effective
April 1, 2008. The leased assets are initially recorded at their acquisition cost and depreciated over the term

26

Financial Information2023

of the lease or estimated useful lives on a straight-line basis to the residual value that is the amount to berealized at the time when the lease contract is terminated.
Effective April 1, 2022, certain consolidated foreign subsidiaries applied Financial Accounting Standards
Board (FASB) Accounting Standards Update (ASU) No. 2016-02 Leases.
As a result, in principle, all leases were recorded as assets and liabilities on the consolidated balance
sheets for the lease transactions of lessees in the certain consolidated foreign subsidiaries.
The effects of this change on the consolidated financial statements were immaterial.
e. Revenue Recognition
Finance Leases — The Companies recognize lease revenues and related costs over the lease term. Interest
revenues on finance lease contracts are calculated by the interest method after April 1, 2008, and by thestraight-line method prior to April 1, 2008, over the remaining lease period.
Operating Leases — The Companies recognize lease revenues on a straight-line basis over the lease term
based on the minimum rentals on the lease contracts. At disposal of leased assets, disposal value and disposal
cost were recognized separately as revenues and costs by the Company and its consolidated domestic
subsidiaries.
Installment Sales — In accordance with Treatment of Installment Sales Transactions as prescribed by
Tentative Accounting and Auditing Treatment Regarding Application of Accounting Standard for Financial
Instruments to Leasing Industry (Japanese Institute of Certified Public Accountants Industry Auditing
Committee Report No. 19, November 14, 2000), the Companies recognize the gross amount of receivables asreceivables-installment sales at the time of execution of the installment sales contract, and record revenues
and related costs from installment sales depending on the relevant elapsed period based on payment dates of
installment sales contract. Unrealized profit in relation to receivables-installment sales that have not comedue is deferred and recorded as deferred profit on installment sales.
The Companies follow the industry practice of including receivables-installment sales due after one year
in current assets. Receivables due after one year amounted to ¥151,286 million ($1,137,495 thousand) in
2023 and ¥169,231 million in 2022.
Revenue from Contracts with Customers — The Companies recognize revenue in an amount that reflects
the consideration to which it expects to be entitled in exchange for satisfying performance obligations totransfer the goods or services promised in contracts with customers. The nature of performance obligations
for each of the Companies’ major businesses and when such obligations are satisfied are as follows:
Sales from Maintenance Contracts
The Companies provide maintenance and similar services, which are attached to lease contracts. Revenue isrecognized at the time such services are provided to customers.
Sales from Selling Merchandise and Sales from Disposal of Lease Properties
With regard to sales from selling merchandise and sales from disposal of lease properties at maturity of lease
contracts of foreign subsidiaries, that adopted IFRS or U.S. GAAP, revenue is recognized at the time ofcompleting delivery of merchandise and lease properties to customers.
Electricity Sales
Revenue is recognized by calculating sales of electricity for the applicable reporting period based onelectricity supply volumes to customers.
Effective April 1, 2021, the Company applied Accounting Standard for Revenue Recognition (ASBJ
Statement No. 29, March 31, 2020) and other related guidance and recognize revenue in an amount thatreflects the consideration to which it expects to be entitled in exchange for satisfying performanceobligations to transfer the goods or services promised in contracts with customers.
The Company applied the transitional treatment as stipulated in Paragraph 84 of Accounting Standard for
Revenue Recognition. As a result, revenues and costs decreased by ¥9,400 million for the year ended March
31, 2022. The effects on income before income taxes for the year ended March 31, 2022, and retained
earnings as of April 1, 2021, were immaterial.
f. Marketable and Investment Securities — All securities are classified as available-for-sale securities.
Available-for-sale securities other than nonmarketable available-for-sale equity securities are reported at fair

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27

value with unrealized gains and losses, net of applicable taxes, reported in a separate component of equity.
The cost of securities sold is determined based on the moving-average method.
Nonmarketable available-for-sale equity securities are mainly stated at cost determined by the movingaverage method.
The Company reviews the fair value of its available-for-sale securities on a regular basis to determine if thefair value of any individual security has declined below its cost and if such decline is other than temporary. If
the decline in value is judged to be other than temporary, the security is written down to fair value. The
resulting realized loss is recorded as other – net in other income (expenses) included in the consolidated
statements of income in the period in which the decline was deemed to be other than temporary.
Investments in limited partnerships, which are considered securities under Article 2, Clause 2 of theJapanese Financial Instruments and Exchange Act, are recorded under the equity method and based on thelatest consolidated financial statements available on the reportable date ruled by the partnership contracts.
In addition, investments in partnerships, etc., invested by certain consolidated foreign subsidiaries arerecorded under the equity method and based on valuation of fair value that each of the invested entities
recognized.
The Companies have operating securities to gain interest or dividend income. The amount of operating
securities included in “Marketable securities” and “Investment securities” was ¥2,199 million ($16,536
thousand) and ¥156,907 million ($1,179,757 thousand), respectively, as of March 31, 2023, and ¥1,413
million and ¥154,456 million, respectively, as of March 31, 2022. In addition, the Companies record income
from those securities as “Revenues” in the consolidated statements of income.
Effective April 1, 2021, the Company applied ASBJ Statement No. 30, Accounting Standard for Fair
Value Measurement and ASBJ Guidance No. 31, Implementation Guidance on Accounting Standard for Fair
Value Measurement, and revised related ASBJ Statements and ASBJ Guidance (the “New AccountingStandards”). Under the New Accounting Standards, nonmarketable available-for-sale equity securities arestated at cost, while under the previous accounting standards, nonmarketable available-for-sale securities arestated at cost.
According to the transitional treatment in Paragraph 19 of Accounting Standard for Fair Value
Measurement and Paragraph 44-2 of Accounting Standard for Financial Instruments (ASBJ Statement No.
10, July 4, 2019), the Company applied the New Accounting Standards prospectively.
As a result of this change, there was no effect on the consolidated financial statements.
The Company disclosed information on financial instruments categorized by fair value hierarchy in Note
26. Financial Instruments and Related Disclosures.
Effective April 1, 2022, the Company applied Implementation Guidance on Accounting Standard for Fair
Value Measurement (ASBJ Guidance No. 31, June 17, 2021) (the “New Guidance”).
According to the transitional treatment in Paragraph 27-2 of the New Guidance, the Company applied the
New Guidance prospectively.
As a result of this change, the effects on the consolidated financial statements were immaterial.
g. Inventories — Inventories held for sale in the ordinary course of business are stated at the lower of cost,which is determined by the specific identification method, or net selling value, which is defined as the selling
price, less additional estimated manufacturing costs and estimated direct selling expenses. The replacement
cost may be used in place of the net selling value, if appropriate.
h. Property and Equipment
Leased Assets — See Note 2.d.
Other Operating Assets — Property and equipment held for the Companies’ operating use other than leased
assets are stated at cost. Depreciation is computed based on the estimated useful lives of the assets under thestraight-line method.
Own-Used Assets — Property and equipment held for the Companies’ own use are stated at cost.
Depreciation is computed based on the estimated useful lives of the assets under the declining-balancemethod, while the straight-line method is applied to buildings acquired after April 1, 2000, and leasehold
improvements and structures acquired after April 1, 2016, by the Company and its consolidated domestic
subsidiaries and right-of-use assets of certain consolidated foreign subsidiaries that adopted IFRS or U.S.
GAAP.

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i. Long-Lived Assets — The Companies review their long-lived assets for impairment whenever events orchanges in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. An
impairment loss is recognized if the carrying amount of an asset or asset group exceeds the sum of theundiscounted future cash flows expected to result from the continued use and eventual disposition of theasset or asset group. The impairment loss would be measured as the amount by which the carrying amount of
the asset exceeds its recoverable amount, which is the higher of the discounted cash flows (DCFs) from thecontinued use and eventual disposition of the asset or the net selling price at disposition.
j. Allowance for Doubtful Receivables — The Company classifies the receivables into receivables from thecounterparties not in bankruptcy but in financial difficulties (“doubtful claims”), receivables from thecounterparties in bankruptcy (“bankrupt claims”), and the other receivables (“general claims”) based on thecredit information, such as the financial condition and payment history of the counterparties.
For the general claims, the allowance for doubtful receivables is provided based on the historical rate ofcredit losses. For the doubtful claims and bankrupt claims, the allowance for doubtful receivables is provided
based on the estimated uncollectible amounts taking into account the collectability of each receivable.
The amounts of long-term receivables considered uncollectible were directly written off from theaccounts. The amounts directly written off were ¥16,770 million ($126,093 thousand) and ¥9,441 million atMarch 31, 2023 and 2022, respectively.
In addition, the consolidated foreign subsidiaries that adopted IFRS record allowance for doubtfulreceivables by measuring their expected credit losses based on the allowance ratio, etc., that is adjusted
considering current and future economic situations, mainly depending on their past credit loss experiences.
k. Retirement and Pension Plans
Employees’ Retirement Benefits — The Company and certain consolidated subsidiaries have defined
benefit corporate pension plans for employees or unfunded retirement benefit plans.
The liability for retirement benefits of the Company and a certain consolidated subsidiary is computed
based on projected benefit obligations and plan assets at the consolidated balance sheets date, while theliability for retirement benefits of the other subsidiaries is provided at 100% of the amount that would be
required if all employees had retired at the consolidated balance sheets date.
Assumptions were set forth as follows:
Method of attributing expected retirement
benefit to periods ..............................................
Amortization period of prior service cost .........
Recognition period of actuarial gain/loss .........

Benefit formula basis method
14 to 15 years (six to 21 years in 2022 )seven to 20 years (10 to 20 years in 2022 )l. Asset Retirement Obligations — An asset retirement obligation is recorded for a legal obligation imposed
either by law or contract that results from the acquisition, construction, development, and normal operationof a tangible fixed asset and is associated with the retirement of such tangible fixed asset. The asset
retirement obligation is recognized as the sum of the DCFs required for the future asset retirement and isrecorded in the period in which the obligation is incurred if a reasonable estimate can be made. If areasonable estimate of the asset retirement obligation cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized when a reasonable estimate of the asset retirement
obligation can be made. Upon initial recognition of a liability for an asset retirement obligation, an asset
retirement cost is capitalized by increasing the carrying amount of the related fixed asset by the amount of
the liability. The asset retirement cost is subsequently allocated to expense through depreciation over theremaining useful life of the asset. Over time, the liability is accreted to its present value each period. Any
subsequent revisions to the timing or the amount of the original estimate of undiscounted cash flows arereflected as an adjustment to the carrying amount of the liability and the capitalized amount of the related
asset retirement cost.
m. Stock Options — The cost of employee stock options is measured based on the fair value at the date of
grant and recognized as compensation expense over the vesting period as consideration for receiving goods
or services. In the consolidated balance sheets, stock options are presented as stock acquisition rights as aseparate component of equity until exercised.

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29

n. Income Taxes — The provision for income taxes is computed based on the pretax income included in the
consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets
and liabilities for the expected future tax consequences of temporary differences between the carrying
amounts and the tax bases of assets and liabilities. Deferred taxes are measured by applying the currently
enacted tax laws to the temporary differences.
o. Translation of Foreign Currency Accounts
Foreign Currency Transactions — All short-term and long-term monetary receivables and payables
denominated in foreign currencies are translated into Japanese yen at the exchange rates at the consolidatedbalance sheets date or, for hedged transactions, the applicable exchange rates. The foreign exchange gains
and losses from translation are recognized in the consolidated statements of income to the extent that they are
not hedged.
However, assets and liabilities denominated in foreign currencies covered by currency swap agreements
and foreign exchange forward contracts are translated into Japanese yen at the contract amounts.
Foreign Currency Financial Statements — The balance sheet accounts of the consolidated foreignsubsidiaries are translated into Japanese yen at the current exchange rate as of the balance sheet date, except
for equity, which is translated at the historical rate. Revenue and expense accounts of the consolidated
foreign subsidiaries are translated into Japanese yen at the average exchange rate during the fiscal year.
Differences arising from such translation are shown as “Foreign currency translation adjustments” underaccumulated other comprehensive income in a separate component of equity.
p. Derivative and Hedging Activities — The Companies enter into foreign exchange forward contracts andcross-currency interest rate swap contracts mainly to hedge foreign exchange risk associated with certain
assets and liabilities denominated in foreign currencies. The Companies also enter into interest rate swap
contracts, interest rate cap contracts, and currency interest rate swaps to manage their interest rate risk andforeign currency exposures on certain assets and liabilities. The Company also utilizes foreign currencydenominated debt to manage its foreign currency exposures associated with the net investments in theforeign subsidiaries and affiliates and available-for-sale securities denominated in foreign currencies.
Almost all derivative transactions are utilized to hedge interest and foreign currency exposuresincorporated within the Companies’ businesses. Accordingly, market risk in these derivatives is basicallyoffset by opposite movements in the value of the hedged assets or liabilities. The Companies do not hold or
issue derivatives for trading or speculative purposes. Because the counterparties to these derivatives arelimited to major international financial institutions, the Companies do not anticipate any losses arising fromcredit risk. Derivative transactions entered into by the Companies have been made in accordance withinternal policies, which regulate the authorization and credit limit amounts. Derivative financial instruments
are classified and accounted for as follows: (a) all derivatives are recognized as either assets or liabilities andmeasured at fair value and gains or losses on the derivative transactions are recognized in the consolidated
statements of income and (b) for derivatives used for hedging purposes, if such derivatives qualify for hedge
accounting because of high correlation and effectiveness between the hedging instruments and the hedged
items, gains or losses on derivatives are deferred until maturity of the hedged transactions.
All derivative transactions, except for interest rate swaps and currency interest rate swaps that qualify forhedge accounting and meet specific matching criteria, are assessed for their hedging effectiveness to verify
whether hedge instruments offset interest rate risk or foreign exchange risk of hedged items in application ofhedge accounting.
Foreign exchange forward contracts, currency interest rate swap contracts and foreign currencydenominated debt are utilized to hedge foreign exchange risk. Certain assets and liabilities denominated inforeign currencies are translated at the contracted rates if the contracts qualify for hedge accounting.
Interest rate swaps and currency interest rate swaps that qualify for hedge accounting and meet specificmatching criteria are not remeasured at fair value. Instead, the differential paid or received under the swap
contracts is recognized and included in interest expense or income. Other interest rate swaps and currencyinterest rate swaps that qualify for hedge accounting are measured at fair value at the consolidated balance
sheet date, and the unrealized gains or losses are deferred until maturity in a separate component of equity.
Special treatment of Practical Solution on the Treatment of Hedge Accounting for Financial Instrumentsthat Reference LIBOR (ASBJ Practical Solution No. 40, March 17, 2022) is applied to all hedging

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transactions that qualify for the application of the Practical Solutions. Details of hedging transactions forwhich the Practical Solutions are applied are as follows:
Method of hedge accounting:Deferral method of hedge accounting or hedge accounting for interest rate
swaps which meet specific matching criteria
Hedging instruments:
Interest rate swaps
Hedged items:
Borrowings
Types of hedging transactions: To fix cash flows
q. Per Share Information — Basic net income per share is computed by dividing net income available tocommon shareholders by the weighted-average number of common shares outstanding for the period.
Diluted net income per share reflects the potential dilution that could occur if the stock options were
exercised. Diluted net income per share of common stock assumes full exercise of the outstanding stock
options.
Cash dividends per share presented in the accompanying consolidated statements of income are dividends
applicable to the respective years, including dividends to be paid after the end of the year.
r. Accounting Change(Accounting Change due to the Merger with Hitachi Capital)
Effective April 1, 2021, the Company merged with Hitachi Capital. Due to the merger, the Company andcertain consolidated subsidiaries retrospectively changed accounting policies of items stated below from theyear ended March 31, 2022.

Revenue Recognition for Re-Lease Contracts
The Companies used to recognize revenues from re-lease contracts (usually one year) at the beginning of there-lease term. The Companies have changed to recognize revenues from re-lease contracts on a monthly
straight-line basis over the re-lease term.
The Companies used to recognize revenues from re-lease contracts at the beginning of the re-lease term
because re-leasing rentals in lump are usually received at the beginning of the re-leasing contracts, and manyof those contracts do not need to refund for the unexpired period when cancelled. However, the outstandingbalances of re-leasing contracts have increased after the merger, and considering re-leasing contracts aretransactions of asset leases, the Companies decided to change the method to prorate re-leasing rentals onto
the remaining months more appropriately reflects revenues from re-leasing contracts into consolidated
financial statements.
Leases Treated as Financial Transactions
The Companies used to record certain leases treated substantially as financial transactions based on theirnature as “Receivables – Loans” in the consolidated balance sheets and as “Revenues” in the consolidated
statements of income for interest revenues from those leases. However, considering the nature of the lease
contracts, the Companies have changed to record leases treated as financial transactions as “Lease
receivables and investments in leases” in the consolidated balance sheets, and lease revenues and related
costs as “Revenue” and “Costs” in the consolidated statements of income, respectively.
The Companies used to account for these leases similar to loans as financial transactions for which theleased properties themselves were pledged as collateral, based on the intent of the related customers and thenature of the leased properties. Though, nowadays an increasing number of leased properties those wasreturned to the Companies at the end of lease term indicated more obvious nature of finance lease. Also, theoutstanding balance of these leases increased due to the merger with Hitachi Capital, which is an additional
reason for the change.
Bond Issue Costs
The Company and consolidated domestic subsidiaries used to expense bond issue costs as incurred, and haschanged it to the method of amortizing by interest method over the period of redemption.
This change has been made because bond issue costs are fundraising costs same as interests on bonds; theinternational accounting standard for recording expenses of bond issue costs stipulates the method ofamortizing by interest method; bond issue costs for the foreign subsidiaries of the Company have been

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31

recorded by the interest method. The change will more appropriately reflect the Companies’ fundraising
activities into the consolidated financial statements.
s. New Accounting Pronouncements
Financial Instruments–Credit Losses (FASB ASU No. 2016-13)(1) Outline
FASB issued ASU No. 2016-13 Financial Instruments–Credit Losses on June 16, 2016. The new standard
introduced expected loss methodology, replacing the existing incurred loss methodology, under whichallowance for credit losses will be recognized by estimating expected loss for entire credit period at the timeof its initial recognition.
(2) Date of application
The certain consolidated foreign subsidiaries adopting U.S. GAAP expect to apply the accounting standard forannual periods beginning on or after April 1, 2023.
(3) Effect of adopting the accounting standards
The Company is in the process of measuring the effects of applying the accounting standard in futureapplicable periods.
t. Significant Accounting Estimates
Impairment of Leased Assets
The Companies review leased assets for impairment whenever events or changes in circumstances indicate
the carrying amount of an asset or asset group may not be recoverable. When the Companies identified
impairment indicators for leased assets, the carrying amounts of leased assets are reduced to their respective
recoverable amounts and the differences between the carrying amounts and the recoverable amounts arerecorded as impairment losses.
Future cash flows used in determining recoverable amounts are estimated mainly based on future leaserents, lease terms, residual values at maturity and other information. The Companies believe that theseestimates are reasonable; however, changes in assumptions used and business environment may have amaterial impact on the future consolidated financial statements.
As to the aircraft held by JSA International Holdings, L.P. group, which engaged in aircraft leasing
business in the United States of America with leased assets of ¥1,098,940 million ($8,262,713 thousand) and¥926,454 million at March 31, 2023 and 2022, respectively, the Companies regularly reviewed future cash
flows and performed impairment evaluation in accordance with U.S. GAAP. The Companies compared thecarrying amounts to the sum of the undiscounted future cash flows, and the amount by which the carrying
value exceeded the fair value was recorded as an impairment loss for the assets where the carrying amount ofaircraft exceeded the sum of the undiscounted future cash flows. Future cash flows were comprised ofcurrent lease rents, future lease rents, residual values at maturity, disposal costs, lease terms, off-lease
periods, renewal lease term, and other factors. Future lease rents and residual values at maturity were basedon appraisal results by appraisal companies and disposal costs, lease terms, off-lease periods and renewal
periods were estimated based on historical experience and other information.
Impairment losses on aircraft of ¥5,635 million ($42,370 thousand) and ¥2,673 million were included incosts in the accompanying consolidated statements of income for the years ended March 31, 2023 and 2022,
respectively.
Valuation of Goodwill
The Companies review goodwill for impairment whenever events or changes in circumstances indicate thecarrying amount of goodwill may not be recoverable. If the Companies identified impairment indicators forgoodwill, the carrying amount of goodwill is reduced to its recoverable amount and the difference between
the carrying amount and the recoverable amount is recorded as an impairment loss.
Future cash flows for the remaining amortization period of goodwill used in determining recoverable
amounts are estimated mainly based on historical business results, business plans, which is developed byconsidering the outlook for the business environment and other information of the company related togoodwill under review. The Companies believe that these estimates are reasonable; however, changes in

32

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2023

assumptions used and business environment may have a material impact on the future consolidated financial
statements.
The Companies recorded ¥91,497 million ($687,951 thousand) and ¥90,326 million of goodwill as ofMarch 31, 2023 and 2022, respectively.
Allowance for Doubtful Receivables
In accordance with the internal management policies, the Company classifies the receivables into doubtful
claims, bankrupt claims, and general claims based on the credit information, such as the financial conditionand payment history of the counterparties. For the general claims, the allowance for doubtful receivables isprovided based on the historical rate of credit losses. For the doubtful claims and bankrupt claims, theallowance for doubtful receivables is provided based on the estimated uncollectible amounts taking into
account the collectability of each receivable.
The potential losses are measured based on financial condition of customers, estimated recoverable
amount of collaterals, and future cash flows by the estimated cash flow method. In addition, based on the
expected credit loss model, the consolidated foreign subsidiaries that adopted IFRS record allowance for
doubtful receivables by measuring their expected credit losses based on the allowance ratio, etc., that is
adjusted considering current and future economic situations, mainly depending on their past credit loss
experiences.
The Companies believe that these estimates are reasonable; however, changes in assumptions used andbusiness environment may have a material impact on the future consolidated financial statements.
The Companies recorded allowance for doubtful receivables of ¥ 90,900 million ($683,461 thousand) and¥99,448 million as of March 31, 2023 and 2022, respectively.
Assets Acquired and Liabilities Assumed by the Business Combination
Effective April 1, 2021, the Companies integrated their businesses with Hitachi Capital. Assets acquired andliabilities assumed at the acquisition date were recorded based on the acquisition costs allocated according tofair values at the acquisition date. The fair value was calculated using appraisal models appropriate to eachbusiness operations based on future cash flows from assets and liabilities, discount rates and estimatedreplacement costs.
Details of assets acquired and liabilities assumed at the acquisition date are described in Note 3.d.. Major
assets and liabilities and appraisal models used were as follows:

Lease receivables and investments inleases ......................................................
Receivables – Loans .................................
Leased assets ............................................
Other operating assets ............................
Other assets (valuation amounts of power
supply and reception contracts inelectricity sales business) .......................
Bonds........................................................
Long-term loans from banks and otherfinancial institutions...............................

Millions of yen
2022¥1,510,238
782,794536,791
83,324

Appraisal model used

DCF model
DCF model
Replacement costs method
Replacement costs method

25,494996,245

DCF model
DCF model

1,065,564

DCF model

Effect of COVID-19
The global spread of COVID-19 has affected the Companies business operation. Accounting estimates usedin preparation of the consolidated financial statements for the year ended March 31, 2022, include
assumptions regarding future effects of COVID-19 on each business of the Companies.

Financial Information

2023

33

3. Business Combinations
Business Divestitures
a. Transfer of Diamond Asset FinanceAt the meeting of the Board of Directors held on December 23, 2022, the Company resolved to sell all sharesof Diamond Asset Finance, a consolidated subsidiary of the Company, and signed a share transfer agreementon the same day. The share transfer was completed on March 24, 2023.
(1) Outline of the share transfer(a) Name and business of the subsidiary
Name:
Diamond Asset Finance Company Limited
Business: Corporate financing for real estate, personal loans for real estate investments, realestate leasing(b) Name of the counterparty of the share transfer
Parle G.K.
Wholly owned subsidiary of Emerald G.K., which is held in silent partnership with Japan Revival
Sponsor Fund Ⅳ LLP. Japan Revival Sponsor Fund Ⅳ LLP is operated and managed by Keystone
Partners Co., Ltd.
(c) Reason for the share transfer
The Company established Our 10-year Vision, “Together we innovate, challenge and explore thefrontiers of the future”, and aim to achieve this vision by promoting “CX (Corporate Transformation /Customer Experience)” through “SX (Sustainability Transformation)”, “DX (Digital
Transformation)”, and “Business Portfolio Transformation.”
For “Business Portfolio Transformation”, the Company will strive to achieve an optimal portfolio
for the medium to long term growth based on “Developing new businesses”, “Shifting existing
business to high value-added services”, and “Enhancing profitability and efficiency of existing
businesses.” As a part of this effort, the Company decided to transfer the shares of Diamond Asset
Finance, a subsidiary of the Company specialized in real estate related businesses, in order toconcentrate resources on focused businesses and improve profitability in the real estate sector.
(d) Date of the share transfer
March 24, 2023(e) Method of the share transfer
Share transfer agreement in exchange for cash(2) Outline of accounting treatment(a) Amount of loss on sales of shares¥1,006 million ($7,566 thousand)

34

Financial Information

2023

(b) Appropriate book value of the assets and liabilities related to the transferred business and its breakdown

Current assets ..........................................................................................
Property and equipment, Investments and other assets ............................
Total assets ................................................................................................
Current liabilities ....................................................................................
Long-term liabilities ...............................................................................
Total liabilities ..........................................................................................

Millions of yen

Thousands of
U.S. dollars¥198,411
8,709¥207,120$1,491,813
65,482$1,557,295¥70,312
129,403¥199,715$528,664
972,955$1,501,619(c) Accounting treatment
The Company presented the difference between the book value and the transfer price of Diamond
Asset Finance as a loss on sales of shares of subsidiaries and affiliates in other income (expenses) inthe consolidated financial statements for the year ended March 31, 2023.
(3) Name of the main segment in which the subsidiary’s business was included in the Company’s segment
information
Real Estate(4) Estimated amount of profits and losses related to the business included in the consolidated statement ofincome for the year ended March 31, 2023

Revenues ..................................................................................
Operating income ....................................................................

Millions of yen¥22,282
5,390

Thousands of
U.S. dollars$167,534
40,532b. Exclusion of Mitsubishi HC Capital Auto-Lease from scope of consolidation due to capital increase
through third-party allotment
Mitsubishi HC Capital Auto-Lease, a consolidated subsidiary of the Company, increased capital by a third
party allotment with Mitsubishi Corporation as allotee. The payment was completed on March 29, 2023.
As a result, the Company excluded Mitsubishi HC Capital Auto-Lease from the scope of consolidation
and applied equity method due to the decrease in the Company’s holding ratio.
(1) Outline of the Business Divestitures(a) Name of the subsidiary
Mitsubishi HC Capital Auto-Lease Corporation(b) Business of the subsidiary
Car leasing and car maintenance(c) Reason for the Business Divestitures
Mobility industry entered a phase of major change and solutions to a social challenges such as reducing
the effect on the environment, efficiency in logistics and flow of people, safety improvement,
constraint-free transfer, are required.
Especially promoting the use of eco car to achieve carbon-neutral is the critical goal of the entire
industry, when the Japanese Government defined that new car sales in domestic market should be 100%
switched to electric vehicle by 2035 as the Government target.
In these circumstances, Mitsubishi HC Capital Auto-Lease increased its capital through the third
party allotment with Mitsubishi Corporation as allotee. Also, Mitsubishi Auto Leasing Corporation

Financial Information

2023

35

(Mitsubishi Auto Leasing) and Mitsubishi HC Capital Auto-Lease completed the merger which
Mitsubishi Auto Leasing as the surviving company on April 1, 2023, according to the merger agreement.
The Company and Mitsubishi Corporation continue to build and provide efficient, highly
convenient, and global environmentally conscious mobility services through joint operation of
Mitsubishi Auto Leasing to meet clients’ needs and social expectations.
(d) Date of the Business Divestitures
March 29, 2023(e) Method and legal form of the Business Divestitures
Issuing new shares and dispose of treasury stock through a third party allotment with Mitsubishi
Corporation as allotee(2) Outline of accounting treatment(a) Amount of gain on change in ownership interest
The effects of this change on the consolidated financial statements were immaterial.
(b) Appropriate book value of the assets and liabilities related to the Business Divestitures and its
breakdown
Current assets ..........................................................................................
Property and equipment, Investments and other assets ............................
Total assets ................................................................................................
Current liabilities ....................................................................................
Long-term liabilities ...............................................................................
Total liabilities ..........................................................................................

Millions of yen

Thousands of
U.S. dollars¥86,062410¥86,472$647,085
3,085$650,170¥47,235
53,758¥100,993$355,153
404,195$759,349(c) Accounting treatment
The Company presented the difference between the book value and the paid-in amount of Mitsubishi
HC Capital Auto-Lease as other-net in other income (expenses) in the consolidated financial statements
for the year ended March 31, 2023.
(3) Name of the main segment in which the subsidiary’s business was included in the Company’s segment
information
Mobility(4) Estimated amount of profits and losses related to the business included in the consolidated statement ofincome for the year ended March 31, 2023

Revenues ..................................................................................
Operating income ....................................................................

Millions of yen¥53,085
2,652

Thousands of
U.S. dollars$399,140
19,943Acquisitionc. Business integration with Hitachi Capital
Effective April 1, 2021, Mitsubishi UFJ Lease and Hitachi Capital integrated their businesses (the “Business
Integration”) and changed the company name to Mitsubishi HC Capital Inc.
1. Outline of the business combination(1) Name and business of the acquired company
Name: Hitachi Capital Corporation

36

Financial Information

2023

Business: Leasing service, installment sales, other financial services, and service business(2) Main reason of the business combination(Background of the Business Integration)(a) Changes in social situation
In recent years, there have been drastic changes in the external environment, as well as the accelerating
trends and megatrends influencing domestic and international economies in the long term, such as climatechange and shortages of resources, de-carbonization to break dependence on resources and fossil fuels,
demographic changes, technological innovation, urbanization, the shifting of power of the global economy,
and global multi-polarization.
Further, the COVID-19 pandemic has caused a paradigm shift in economy and society at large, which is
expected to promote qualitative restructuring of supply chains, digitalization to adapt to a data economy, andshifts from mass production and consumption to a circular economy in corporate activities.
(b) Perception of challenges
In connection with these changes in the external environment, the roles required for leasing companies arechanging to solve social issues through business investments and operations in addition to conventional
leases and finances.
Moreover, in both during and after the COVID-19 pandemic, business models at an industry level are
expected to change rapidly at a speed exceeding all expectations. In such circumstances where all companies
need to adapt to the environmental changes, the prominence of leasing companies, holding various assetrelated functions and offering flexible services that are not limited to financial functions, will increase
further.
As both companies have been closely cooperating with various industries, they have reached a conclusion
that, while regarding these drastic environmental changes in society and the relevant industries as new
business opportunities, it is necessary to further expand the operational bases and to strengthen the financial
bases of both companies to contribute to various customers and local communities and to create social value.
(Purposes of the Business Integration)
Until the integration, the two companies have aimed to create social value for the realization of a rich societythat can adapt to environment change and to sustainably enhance corporate value through such value
creation, as stated in the medium- to long-term corporate vision statements of their respective medium-term
management plans. With the Business Integration, the two companies will realize (i) complementing eachother’s business domains, (ii) strengthening their management bases, and (iii) creating new value based on (i)and (ii) and grow stronger, by developing the business as an integrated entity under a unified vision andphilosophy.
(i) Complementing each other’s business domains
By building ideal, mutually complementary relationships, the new integrated company will establish an
extensive and comprehensive lineup of businesses, and achieve diversification in its portfolios in terms ofboth business domains and geographical areas. This will help the new integrated company not only toestablish a solid and stable revenue structure that will be less susceptible to the external environment, butalso to increase profitability by expanding investment activities utilizing its enhanced capabilities.
(ii) Strengthening the management base
The new integrated company aims to build strong management base, which will support sustainable growthby concentrating the management resources and expertise, which are sources of corporate competitiveness,
via utilization and enhancement of human resources, utilization of partner networks, reinforcement offinancial bases, advancement of risk management, and promotion of digitalization.
(iii) Creating new value
The new integrated company is intended to offer new value beyond the framework of traditional leasing
companies to customers by entering into new business domains and geographical areas, as well as
strengthening and expanding the focal business domains.
Due to the Business Integration, the Company will be one of the largest global players in the industry interms of both its size and business domains. The Company will utilize its expanding scale and accumulating

Financial Information

2023

37

capital and accurately capture the changing needs of its customers and local communities around the world,
to develop into a company that can provide solutions to modern social issues.
(3) Date of the business combination
April 1, 2021
(4) Legal form of the business combination
An absorption-type merger in which Mitsubishi UFJ Lease was the surviving company, and Hitachi Capital
was the merged company(5) Company name after the business combination
Mitsubishi HC Capital Inc.
(6) The percentage of voting rights acquired
Voting ratio held immediately before the business combination
Voting ratio after the acquisition

4.20%
100.00%(7) Background for determining the acquiring company
The type of consideration of the business combination was the shares and the Company was to issue
those shares. The shareholders of the Company before the combination were going to acquire the largest
share of the voting ratios after the combination. These reasons made the Company to be the acquiring
company.
2.

The period for which the operations of the acquired company are included in the Company’s consolidated
statement of income for the year ended March 31, 2022
April 1, 2021, to March 31, 2022

3.

Details of acquisition cost and consideration by type
Consideration

Fair value on the business combination date ofcommon stock held immediately before thebusiness combination ..............................................
Consideration
Fair value of common stock of the Company issued
on the business combination date ............................
Acquisition cost ........................................................................................
4.

Millions of yen¥16,725
381,480¥398,205

Exchange ratio by share class and its calculation method and the number of shares issued(1) Exchanged ratio by share classCompany name
Merger ratio
Number of sharesissued in relation to
the Business
Integration

Mitsubishi UFJ Lease(the surviving company)1

Hitachi Capital(the merged company)
5.10

Common stock: 571,078,084 shares(2) Method to calculate share exchange ratio
In order to ensure fairness of the merger ratio, both companies individually appointed a third-party
valuation institute to calculate the merger ratio, and Mitsubishi UFJ Lease has appointed Mitsubishi UFJ
Morgan Stanley Securities Co., Ltd. and Hitachi Capital has appointed Goldman Sachs Japan Co., Ltd.
After careful and repeated negotiations and discussions about the merger ratio considering financial
situations and recent trends of performance and stock prices, etc. of both companies, by reference to the38

Financial Information2023

calculation results provided by their respective valuation institutes, Mitsubishi UFJ Lease and Hitachi
Capital have eventually determined that the above merger ratio was appropriate and would contribute to
the benefit of their respective shareholders, and agreed on the ratio.
5.

Details and amount of major acquisition-related costFees and commissions for advisory services, etc. ..............................

6.

¥6,494The difference between acquisition cost of the acquired company and the total in acquisition costs bytransaction
Loss on step acquisition .....................................................................

7.

Millions of yen

Millions of yen¥229

The amount of gain from bargain purchase recognized and reason for recognition(1) The amount of gain from bargain purchase¥431 million(2) Reason for recognition
As a result of the identification of identifiable assets and liabilities on the business combination date, thecalculation of fair value, and the allocation of acquisition cost based on this calculation, the net assets on
the business combination date surpassed the acquisition cost, and therefore, the difference wasrecognized as gain from bargain purchase.
8. Details of assets acquired and liabilities assumed at the acquisition dateMillions of yen

Current assets .......................................................................................... ¥2,853,966
Property and equipment, Investments and other assets ............................
860,780
Deferred assets ..........................................................................................
978Total assets ................................................................................................ ¥3,715,725
Current liabilities .................................................................................... ¥1,376,757
Long-term liabilities ............................................................................... 1,921,232
Total liabilities .......................................................................................... ¥3,297,990

d. Acquisition of shares of CAI
At the Board of Director’s meeting held on June 18, 2021, the Company resolved to acquire all theoutstanding shares of CAI by a “reverse triangular merger”, where Cattleya Acquisition Corp. (Delaware,“Cattleya Acquisition”), the Company’s wholly owned subsidiary established in the U.S. for the acquisition,
merges with CAI. The Company, Cattleya Acquisition and CAI executed a merger agreement. Pursuant to themerger agreement, the Company completed the procedures to acquire CAI on November 22, 2021 and madeCAI Inc. a wholly owned subsidiary.
1. Outline of business combination(1) Name and business of the acquired company
Name:
CAI International, Inc.
Business: Marine container leasing business(2) Reason for acquisition
The Company acquired CAI to boost “global assets,” which is the business domain that the Company
emphasizes as a growth driver under the medium- to long-term corporate vision. CAI is one of theworld’s leading marine container leasing companies with sixth in the global share (TEU* base) and has

Financial Information

2023

39

an advantage in worldwide sites of marketing and operating, and global platform of container depots.
Together with Beacon Intermodal Leasing, LLC, a subsidiary of the Company in marine container
leasing business, the Company and its group reach the second largest in numbers of containers held in theworld. The Company plans to increase revenue and accelerate the growth by utilizing the platforms andintegrating experience, expertise and knowledge of both companies. The Company will aim to enhance
the global competitiveness in the marine container leasing business, seize growth opportunities, and will
strengthen it as the driver of the medium- to long-term growth of the entire group.
* TEU: one twenty-foot equivalent unit
(3) Date of the business combination
November 22, 2021
(4) Legal form of the business combination
Acquisition by “reverse triangular merger” in exchange for cash(5) Company name after the business combination
CAI International, Inc. (remain the same)(6) The percentage of voting rights acquired
100%(7) Background for determining the acquiring company
The reason is because the Company acquired the majority of voting rights of CAI for cash consideration.
2. The period for which the operations of the acquired company are included in the Company’s consolidated
statement of income for the year ended March 31, 2022
November 23, 2021, to December 31, 2021
3. Details of acquisition cost and consideration by type
Consideration
Cash ...........................................................................
Acquisition cost ........................................................................................

Millions of yen¥124,190¥124,190

4. Details and amount of major acquisition-related costFees and commissions for advisory services, etc. ....................................

Millions of yen¥1,595

5. The amount of goodwill recognized and reason for recognition(1) The amount of goodwill¥33,613 million(2) Reason for the goodwill incurred
Due to the expected excess earnings power expected from future business development.
(3) Method and period of amortization
Straight-line amortization over 20 years

40

Financial Information

2023

6. Details of assets acquired and liabilities assumed at the acquisition dateCurrent assets ..........................................................................................
Property and equipment, Investments and other assets ............................
Deferred assets ..........................................................................................
Total assets ................................................................................................

Millions of yen¥127,629
337,4076¥465,043

Current liabilities ....................................................................................
Long-term liabilities ...............................................................................
Total liabilities ..........................................................................................

¥38,173
302,356¥340,529

7. Estimated impact on the consolidated statement of income for the year ended March 31, 2022, assuming
the business combination was completed at the beginning of the current fiscal year
Total revenues .........................................................................................
Operating profit ......................................................................................
Net income before income taxes...............................................................
Net loss attributable to owners of the parent ............................................

Basic net loss per share ............................................................

Millions of yen¥49,498
15,024
14,951(5,541)Yen¥(3.86)(Method of estimating the impact)
The above amounts were estimated as the difference between the amount of total revenue and income
calculated with the assumption that the business combination was completed at the beginning of thecurrent fiscal year and the amount of total revenue and income recorded in the consolidated
statements of income of the Company. Also, the difference include amortization of goodwill for theperiod from the beginning of the current fiscal year to the deemed acquisition date of the businesscombination. The estimated amounts of the impact of the business combination have not been
audited.
4. Marketable and Investment Securities
The carrying amounts of marketable and investment securities recognized in the consolidated balance sheets
as of March 31, 2023 and 2022, were as follows:Marketable securities ....................................................................
Investment securities:
Unconsolidated subsidiaries and associated companies ...........
 Other securities .........................................................................
Total ..........................................................................................

¥3,213¥2,0192022

Thousands of
U.S. dollars
2023

192,861
207,252¥403,327

168,891
207,754¥378,665

1,450,083
1,558,288$3,032,534

Millions of yen
2023$24,162

Marketable and investment securities as of March 31, 2023 and 2022, consisted of the following:Equity securities ...........................................................................
Debt securities ..............................................................................
Trust fund investments and other .................................................
Total ..........................................................................................

Millions of yen
2023¥182,857
33,234
187,235¥403,327

2022¥164,751
22,423
191,490¥378,665

Thousands of
U.S. dollars
2023$1,374,869
249,882
1,407,782$3,032,534

Financial Information

2023

41

The carrying amounts and aggregate fair values of marketable and investment securities as of March 31,
2023 and 2022, were as follows:

March 31, 2023

Securities classified as:
Available for sale:Equity securities ....................................................
Debt securities .......................................................
Trust fund investments and other ..........................
Total ...................................................................

March 31, 2022

Securities classified as:
Available for sale:Equity securities ....................................................
Debt securities .......................................................
Trust fund investments and other ..........................
Total ...................................................................

March 31, 2023

Securities classified as:
Available for sale:Equity securities ....................................................
Debt securities .......................................................
Trust fund investments and other ..........................
Total ...................................................................

Millions of yen
Unrealized
Unrealized
gains
lossesCost¥32,304
33,311
5,926¥71,542¥16,720
7
1,112¥17,840

Fair value¥(863)(84)¥(947)

Millions of yen
Unrealized
Unrealized
gains
lossesCost¥27,152
22,4662,331¥51,951

Fair value¥15,5088¥(232)(51)¥15,516¥(284)

Thousands of U.S. dollars
Unrealized
Unrealized
gains
lossesCost$242,893
250,461
44,557$537,912$125,717
53
8,367$134,138¥48,161
33,234
7,039¥88,434¥42,428
22,4232,331¥67,183

Fair value$(6,494)(631)$(7,126)$362,116
249,882
52,925$664,924

Carrying amounts of nonmarketable equity securities and investments in partnerships, etc., that the equity
interest equivalents are recorded as net in the consolidated balance sheets as of March 31, 2023 and 2022,
respectively, were as follows:

Nonmarketable equity securities:
Shares of subsidiaries and associatedcompanies .......................................................
Unlisted shares ..................................................
Total ............................................................
Investments in partnership, etc.:
Trust beneficiary interests...................................
Silent partnership interests and other..................
Unconsolidated subsidiaries and associatedcompanies .......................................................
Total ............................................................

42

Financial Information

2023

2022

Thousands of
U.S. dollars
2023¥125,362
9,333¥134,696¥95,132
27,190¥122,323$942,578
70,174$1,012,752¥122,904¥2,240117,835$924,092

57,291¥180,195

63,853¥183,929

430,763$1,354,857

Millions of yen
2023

The proceeds from realized gains and losses of the available-for-sale securities, which were sold during
the years ended March 31, 2023 and 2022, were as follows:
Millions of yen
2023¥28,322
5,089
(407)

Proceeds..........................................................................................
Realized gains.................................................................................
Realized losses ...............................................................................

2022¥46,155
33,682(118)

Thousands of
U.S. dollars
2023$212,954
38,263(3,063)The impairment losses on marketable and investment securities recognized for the years ended March 31,
2023 and 2022, were as follows:
Millions of yen
2023¥2,444
1,546¥3,990Equity securities .............................................................................
Trust fund investments and other ...................................................
Total ........................................................................................

2022

Thousands of
U.S. dollars
2023

¥145

$18,381
11,624$30,0052022

Thousands of
U.S. dollars
2023

¥145

5. Inventories
Inventories as of March 31, 2023 and 2022, consisted of the following:

Merchandise ...................................................................................
Real estate for resale .......................................................................
Total ..........................................................................................

Millions of yen
2023¥32,262
13,802¥46,064¥21,731
26,511¥48,242$242,574
103,776$346,350

6. Investment Property
The Companies own certain rental properties, such as office buildings, commercial facilities, and rental
residential properties, in major cities throughout Japan. The net of rental income and operating expenses for
those properties was ¥12,550 million ($94,368 thousand) and ¥17,157 million for the fiscal years ended
March 31, 2023 and 2022, respectively. The net gain from sales of those properties was ¥9,261 million($69,637 thousand) for the fiscal year ended March 31, 2023.
The carrying amounts, changes in such balances, and fair value of those properties as of March 31, 2023
and 2022, were as follows:
Millions of yen

Beginning of year

¥418,126

Carrying amount (1)Net change (2)2023¥(39,404)

End of year

Fair value (3)End of year

End of year

Fair value (3)End of year

¥378,721¥439,244

Millions of yen
2022

Beginning of year

¥318,620

Carrying amount (1)Net change (2)¥99,505¥418,126¥482,922

Thousands of U.S. dollars

Beginning of year

$3,143,807

Carrying amount (1)Net change (2)$(296,276)2023

End of year

$2,847,530

Fair value (3)End of year

$3,302,589

Financial Information

2023

43

Notes:(1) Carrying amounts recognized in the consolidated balance sheets are net of accumulated depreciation andaccumulated impairment losses, if any.
(2) Net change during the fiscal year ended March 31, 2023, was primarily attributable to a ¥27,236 million ($204,782
thousand) increase from the acquisition of real estate and ¥50,306 million ($378,245 thousand) decrease from thesales of real estate.
Net change during the fiscal year ended March 31, 2022, was primarily attributable to a ¥73,370 million increase
due to the merger with Hitachi Capital.
(3) For fair value disclosure related to major properties, the Company obtains the fair values using third-party realestate appraisers or by the DCF method. When changes in facts or circumstances indicate that there is no significant
change in indices from the latest appraisal, the Companies use the fair value of these properties based on suchappraisal. For fair value disclosure on other properties, the Company obtains fair value using the DCF rationallycalculated by the Companies, amounts calculated using market price indices, or appropriate book value for certain
depreciable assets or properties newly acquired in this fiscal year.

7. Lease Receivables and Investments in Leases
The aggregate annual maturities of the future rentals on lease receivables as of March 31, 2023, were as
follows:

Years Ending March 312024 ......................................................................................
2025 ......................................................................................
2026 ......................................................................................
2027 ......................................................................................
2028 ......................................................................................
Thereafter .............................................................................
Total ................................................................................

Millions of yen
2023¥467,698
358,573285,030
173,252
110,720
225,245¥1,620,520

Thousands of
U.S. dollars
2023$3,516,528
2,696,039
2,143,084
1,302,651
832,485
1,693,577$12,184,367

Investments in leases as of March 31, 2023 and 2022, consisted of the following:

Gross investments in leases ..................................................
Residual values .....................................................................
Unearned interest income .....................................................
Total ................................................................................

Millions of yen
2023¥2,179,684
83,715(411,381)¥1,852,018

2022¥2,251,727
84,144(409,033)¥1,926,838

Thousands of
U.S. dollars
2023$16,388,602
629,438(3,093,091)$13,924,950

The aggregate annual maturities of the future rentals on investments in leases as of March 31, 2023, wereas follows:

Years Ending March 312024 ......................................................................................
2025 ......................................................................................
2026 ......................................................................................
2027 ......................................................................................
2028 ......................................................................................
Thereafter .............................................................................
Total ..............................................................................

44

Financial Information

2023

Millions of yen
2023¥582,272
458,635
347,546
229,498
136,614425,117¥2,179,684

Thousands of
U.S. dollars
2023$4,377,985
3,448,387
2,613,131
1,725,552
1,027,174
3,196,370$16,388,602

The consolidated balance sheets’ amounts of sublease contracts, including those that aim to disperse credit
risks, including interest as of March 31, 2023 and 2022, were as follows:

Lease receivables ..................................................................
Investments in leases ............................................................
Lease obligations ..................................................................

Millions of yen
2023¥18,018
29,53149,6562022¥22,955
41,52365,635

Thousands of
U.S. dollars
2023$135,475
222,040
373,357“Lease receivables and investments in leases” include receivables from hire-purchase contract of theconsolidated foreign subsidiaries that adopted IFRS.
8. Leased Assets
The minimum future rentals on lease contracts as of March 31, 2023 and 2022, were as follows:

Due within one year..............................................................
Due after one year ................................................................
Total ..............................................................................

Millions of yen
2023¥304,597
1,257,432¥1,562,030

2022¥291,470
1,177,714¥1,469,185

Thousands of
U.S. dollars
2023$2,290,208
9,454,380$11,744,588

9. Goodwill
Goodwill as of March 31, 2023 and 2022, consisted of the following:

Goodwill in connection with acquisition ..............................
Consolidation goodwill ........................................................
Total ..............................................................................

Millions of yen
2023¥8,46983,027¥91,4972022¥10,587
79,739¥90,326

Thousands of
U.S. dollars
2023$63,681624,269$687,951

Goodwill in connection with acquisition is related when Diamond Lease Company Limited and UFJ
Central Leasing Company Limited merged and became Mitsubishi UFJ Lease in 2007. Consolidation
goodwill is related to the acquisition of the consolidated subsidiaries.
10. Long-Lived Assets
The Companies reviewed their long-lived assets for impairment as of March 31, 2023 and 2022.
(1) Property and equipment
The Company recognized impairment losses of ¥8,420 million ($63,308 thousand) on the following property
and equipment in the accompanying consolidated statement of income for the year ended March 31, 2023.
Use

Leased assets
Leased assets
Leased assets

Type of assets
2023

Aircraft
Aircraft engine
Railroad car

Millions of yen

Thousands of
U.S. dollars¥5,635311
2,473$42,370
2,342
18,595Certain consolidated subsidiaries of the Company have reduced the carrying amount of leased assets
whose profitability has declined due to a decrease in future cash flows that are expected to occur in the future
to the recoverable amount, and the reduced amount was recorded in costs as impairment losses.
The recoverable value of the assets is mainly calculated based on the value in use, and the value in use isevaluated based on the future cash flows discounted mainly by 3.7%. In the case of the recoverable value of

Financial Information

2023

45

the assets is calculated based on the net selling price, the net selling price is evaluated based on the valuation
reasonably calculated by a third party.

The Companies recognized impairment losses of ¥3,549 million on the following property and equipmentin the accompanying consolidated statement of income for the year ended March 31, 2022.
Use

Leased assets
Leased assets

Type of assets
2022

Aircraft
Aircraft engine

Millions of yen¥2,673876

Certain consolidated subsidiaries of the Company have reduced the carrying amount of leased assets
whose profitability has declined due to a decrease in future cash flows that are expected to occur in the future
to the recoverable amount, and the reduced amount was recorded in costs as impairment losses.
The recoverable value of the assets is mainly calculated based on the value in use, and the value in use isevaluated based on the future cash flows discounted mainly by 3.7%.
(2) Investments and other assets
Use

Type of assets
2023

Millions of yen

Thousands of
U.S. dollars

Goodwill (Mobility Mixx B. V.)
¥123
$929
Goodwill (EuroFleet Zrt.)
200
1,505
The Company considers each company as a unit of grouping in determining the impairment of goodwill.
The Company decided to sell whole shares of Mobility Mixx B. V., a consolidated subsidiary, and reduced
the carrying amount of goodwill to the recoverable amount. The reduced amount of ¥123 million ($929
thousand) was recorded as an impairment loss in other income (expenses).
The recoverable value of the assets is mainly calculated based on the value in use, and the value in use isevaluated as zero.
As a result of that EuroFleet Zrt., a consolidated subsidiary, revaluated the discount rate due to changes ininterest rates, EuroFleet Zrt., has reduced the carrying amount to the recoverable amount that is discounted
by 20.7% for expected the future cash flow. The reduced amount of ¥200 million ($1,505 thousand) wasrecorded as an impairment loss in other income (expenses).

UseType of assets
2023

Millions of yen

Thousands of
U.S. dollars

Investments and other assets Own-used assets
other (EuroFleet Zrt.)¥155$1,169EuroFleet Zrt., a consolidated subsidiary, has reduced the carrying amount of investments and other assetsthat are not expected to be used in the future to the recoverable amount. The reduced amount of ¥155 million($1,169 thousand) was recorded as an impairment loss in other expenses.
The recoverable value of the assets is mainly calculated based on the value in use, and the value in use isevaluated as zero.

46

Financial Information

2023

11. Pledged Assets
As of March 31, 2023, the following assets were pledged as collateral for long-term debt, other current
liabilities, and other long-term liabilities:

Cash, cash equivalents, and time deposits other than cash
equivalents ........................................................................
Receivables — loans ............................................................
Receivables — installment sales ..........................................
Lease receivables and investments in leases ........................
Inventories ............................................................................
Current assets — other .........................................................
Leased assets ........................................................................
Other operating assets...........................................................
Investment securities ............................................................
Other intangible assets ..........................................................
Investments and other assets — other ..................................
Future rentals on operating lease contracts...........................
Total ..............................................................................

Millions of yen
2023

Thousands of
U.S. dollars
2023¥19,205
153,039
22,737533,785
8,923
19,122
1,030,226
94,091
48,887
2,534
2,187
2,474
¥1,937,217$144,402
1,150,670
170,957
4,013,426
67,096
143,7817,746,063
707,452
367,578
19,056
16,45018,606$14,565,543

The liabilities secured by the foregoing assets were as follows:

Bonds ....................................................................................
Long-term loans from banks and other financial
institutions ........................................................................
Loans from the securitizations of the minimum future
rentals on lease contracts ..................................................
Long-term liabilities — other ...............................................
Total ..............................................................................

Millions of yen
2023

Thousands of
U.S. dollars
2023

728,6475,478,551

603,352
1,395¥1,339,799

4,536,486
10,493$10,073,680¥ 6,403$ 48,148

12. Nonrecourse Loans
Nonrecourse loans as of March 31, 2023 and 2022, were as follows:

Current maturities of nonrecourse long-term loans ..............
Nonrecourse bond.................................................................
Nonrecourse long-term loans, less current maturities ..........
Total ..............................................................................

Millions of yen
2023¥4,223100
34,367¥38,6902022¥3,829100
34,862¥38,792

Thousands of
U.S. dollars
2023$31,752751
258,402$290,907

Pledged assets for nonrecourse loans as of March 31, 2023 and 2022, were as follows:

Inventories ............................................................................
Leased assets ........................................................................
Total ..............................................................................

Millions of yen
2023¥6,75943,809¥50,569

2022¥6,72052,477¥59,198

Thousands of
U.S. dollars
2023$50,822329,396$380,219

Financial Information

2023

47

13. Short-Term Borrowings and Long-Term Debt
Short-term borrowings and long-term debt as of March 31, 2023 and 2022, were as follows:

Short-term loans from banks and other financial
institutions:
3.59% ..............................................................................
0.98% ..............................................................................
Commercial paper:
0.72% ..............................................................................
0.14% ..............................................................................

48

Financial Information

2023

Millions of yen
2023¥633,099¥559,485

2022¥591,431¥682,593

Thousands of
U.S. dollars
2023$4,760,145$4,206,661

Millions of yen
2023

Bonds:
Bonds without collateral:Due 2023-2036, 0.030%-0.963% ...................................
Due 2022-2036, 0.010%-0.963% ...................................
Subordinated bonds without collateral with interest
deferral and early redemption clauses:
Due 2076-2081, 0.630%-1.310% ...................................
Due 2076-2081, 0.630%-1.310% ...................................
U.S. dollar bonds without collateral:Due 2023-2030, 3.559%-5.080% ...................................
Due 2022-2030, 2.652%-3.967% ...................................
Euroyen bonds issued under the Medium Term Note
(MTN) program:Due 2023-2027, 0.010%-0.340%................................
Due 2022-2024, 0.010%-0.180% ...................................
Bonds without collateral issued by Bangkok Mitsubishi
HC Capital Co., Ltd. (*1):
Due 2023-2024, 0.130% - 0.260% .................................
Due 2023-2024, 0.130% - 0.260% .................................
U.S. dollar bonds without collateral issued by Bangkok
Mitsubishi HC Capital Co., Ltd. (*1):
Due 2022, 0.155% - 0.202% ...........................................
U.S. dollar bonds without collateral issued by Jackson
Square Aviation Ireland Ltd.:Due 2024-2028, 3.520%-3.990% ...................................
Due 2024-2028, 3.520%-3.990% ...................................
U.S. dollar bonds without collateral issued by Engine
Lease Finance Corporation:Due 2026-2031, 4.480%-4.730% ...................................
Due 2026-2031, 4.480%-4.730% ...................................
U.S. dollar bonds issued under the MTN program by
MHC America Holdings Corporation (*2):
Due 2023-2030, 2.252 % -7.102% .................................
Due 2022-2030, 1.249 % -3.097% .................................
U.S. dollar bonds without collateral issued by MHC
America Holdings Corporation (*2):
Due 2033, 5.658% ....................................................
U.S. dollar bond with collateral issued by Container
Applications Limited, LLC:
Due 2022, 4.900% ....................................................
Sterling pound bonds issued under the MTN program by
Mitsubishi HC Capital UK PLC:
Due 2023-2027, 0.833%-5.686%................................
Due 2022-2027, 0.833%-2.200%................................
Euro bonds issued under the MTN program by
Mitsubishi HC Capital UK PLC:
Due 2023-2029, 4.782%-5.296%................................
Due 2022-2029, 1.220%-1.810%................................
U.S. dollars bonds issued under the MTN program by
Mitsubishi HC Capital UK PLC:
Due 2023-2029, 4.747%-5.466%................................
Due 2022-2029, 1.260%-2.154%................................

¥937,541

110,109
307,119


47,2002022¥1,103,047

Thousands of
U.S. dollars
2023$7,049,187



110,138
281,497

65,200827,889

2,309,165



354,887




3,015

3,029

22,6703,456
39,81034,506299,323

26,54023,004

199,548



70,770

79,553

66,765

156,496

71,603



501,992
4,664

67,606

532,112

55,671

195,901

54,023508,318

1,176,665

538,368

Financial Information

2023

49

Bonds issued under the MTN program by Mitsubishi HC
Capital UK PLC:
Due 2023-2028, 4.787%-5.836%................................
Due 2023-2026, 1.340%-2.350%................................
Hong Kong dollars bonds issued under the MTN
program by Mitsubishi HC Capital UK PLC:
Due 2023-2026, 4.844%-5.196%................................
Due 2022-2026, 1.532%-1.710%................................
Chinese yuan bonds issued under the MTN program by
Mitsubishi HC Capital UK PLC:
Due 2023, 1.816% ....................................................
Due 2022-2023, 1.510%-1.816%................................
Australian dollars bonds issued under the MTN programby Mitsubishi HC Capital UK PLC:
Due 2023-2029, 1.830%-5.396%................................
Due 2023-2029, 1.410%-1.910%................................
Swiss franc bonds issued under the MTN program by
Mitsubishi HC Capital UK PLC:
Due 2023-2024, 4.627%-4.927%................................
Due 2023, 1.140% ....................................................
South African Rand bond issued under the MTN programby Mitsubishi HC Capital UK PLC:
Due 2024, 4.507% ....................................................
U.S. dollars bonds without collateral issued under MTN
program by Mitsubishi HC Capital America, Inc.:Due 2023-2027, 0.805%-3.916%................................
Due 2022-2027, 0.699%-3.916%................................
U.S. dollars bond without collateral issued by Mitsubishi
HC Capital Management (China) Limited:Due 2022, 1.706% ....................................................
Bonds— other (*3):
Total ..............................................................................

Millions of yen
2023¥244,565

9,667

1,952

11,705

9,919

2022

¥149,185

14,873

5,784

12,474

3,690

1,493
34,702

7,147¥2,225,731

Thousands of
U.S. dollars
2023$1,838,836

72,688

14,68088,011

74,582

11,22944,807
12,2787,103¥2,263,891

260,923

53,742$16,734,825(*1) Formerly Bangkok Mitsubishi UFJ Lease Co., Ltd.
(*2) Formerly MUL Asset Finance Corporation(*3) Bonds— other includes nonrecourse bonds of ¥100 million ($751 thousand) and ¥100 million at March
31, 2023 and 2022, respectively.
Certain bonds issued under MTN program are hedged by derivative contracts to hedge foreign exchange
risk and interest rate risk, and interest rates for those bonds has been adjusted considering the impact ofhedging.

50

Financial Information

2023

Millions of yen
2023

Long-term loans from banks and other financial
institutions, partially collateralized:
Due within one year, 2.51% ............................................
Due 2024-2050, 2.86% ...................................................
Due within one year, 1.15% ............................................
Due 2023-2050, 1.53% ...................................................
Total ..............................................................................
Nonrecourse loans:
Due within one year, 0.92% ............................................
Due 2024-2033, 0.88% ...................................................
Due within one year, 0.92%............................................
Due 2023-2032, 0.87% ...................................................
Total ..............................................................................
Lease obligations, including fixed interests:
Due within one year ........................................................
Due 2024-2049 ...............................................................
Due within one year ........................................................
Due 2023-2049 ...............................................................
Total ..............................................................................
Loans from the securitizations of the minimum future
rentals on lease contracts:
Due within one year, 1.48% ............................................
Due 2024-2031, 1.62% ...................................................
Due within one year, 0.47% ............................................
Due 2023-2031, 0.96% ...................................................
Total ..............................................................................
Other current liabilities and other long-term liabilities:
Due within one year ........................................................
Due 2024-2032 ...............................................................
Due within one year ........................................................
Due 2023-2039 ...............................................................
Total ..............................................................................

¥955,728
3,219,167¥4,174,896¥4,22334,367¥38,590¥19,794
43,089¥62,883¥246,640
357,662¥604,302¥187
935¥1,1232022¥806,645
3,078,334¥3,884,980¥3,82934,862¥38,692¥21,676
53,331¥75,008¥247,900
356,592¥604,493

¥162
1,872
¥2,034

Thousands of
U.S. dollars
2023$7,185,930
24,204,266$31,390,196$31,752
258,402$290,155$148,830
323,981$472,811$1,854,438
2,689,188$4,543,627$1,408
7,035$8,444The interest rates of loans from banks and other financial institutions, commercial paper, and loans fromthe securitizations of the minimum future rentals on lease contracts represent weighted-average rates on
outstanding balances at March 31, 2023 and 2022.
As it is customary in Japan, substantially all of the Company’s short-term bank loans are made underagreements, which provide that, at the request of such banks, the Company will provide additional collateralor guarantors with respect to the loan. As of March 31, 2023, the Company has not received any such
request.

Financial Information

2023

51

Annual maturities of long-term debt as of March 31, 2023, for the next five years were as follows:
Millions of yen
Due after
Due after one Due after two
three years
Due after four
Due in one
year throughyears throughthrough four
years throughyear or lesstwo years
three years
years
five years
March 31, 2023
Short-term loans frombanks and otherfinancial
institutions ................
¥633,099
Commercial paper ......
559,485Bonds ..........................
642,883¥411,827¥289,311¥133,614¥197,198
Nonrecourse bonds .....
100
Long-term loans frombanks and otherfinancial
institutions ................
955,728
859,984
570,714498,292
490,791
Nonrecourse loans ......
4,223
4,296
4,372
4,450
8,754
Lease obligations ........
19,794
15,456
9,493
5,382
3,030
Loans from thesecuritizations of theminimum future
rentals on lease
contracts and other....
246,827
142,314
93,411
44,95820,124
Total ......................
¥3,062,042¥1,433,880¥967,303¥686,698¥719,998

March 31, 2023

Short-term loans frombanks and otherfinancial
institutions ................
Commercial paper ......
Bonds ..........................
Nonrecourse bonds .....
Long-term loans frombanks and otherfinancial
institutions ................
Nonrecourse loans ......
Lease obligations ........
Loans from thesecuritizations of theminimum future
rentals on lease
contracts and other....
Total ......................

Due in one
year or lessThousands of U.S. dollars
Due after
Due after one Due after two
three years
year throughyears throughthrough four
two years
three years
years$4,760,145
4,206,661
4,833,709$3,096,448$2,175,274$1,004,621$1,482,692
751

7,185,930
 31,752
148,830

6,466,048
32,308116,212

4,291,083
32,87871,377

3,746,562
33,461
40,4693,690,160
65,82422,785

1,855,846$23,022,876

1,070,037$10,781,054

702,345$7,272,959

338,034$5,163,149

151,308$5,413,523

Due after four
years throughfive years

The Company and certain consolidated subsidiaries had loan commitment agreements as of March 31,
2023 and 2022, amounting to ¥915,146 million ($6,880,799 thousand) and ¥920,238 million, respectively, of
which ¥703,054 million ($5,286,125 thousand) and ¥678,198 million, respectively, were unused.

52

Financial Information2023

14. Retirement and Pension Plans
The Company and certain consolidated subsidiaries have defined benefit corporate pension plans for
employees or unfunded retirement benefit plans and defined contribution pension plans. In addition, theCompany adopted a defined contribution pension plan on October 1, 2016.
Under most circumstances, employees terminating their employment are entitled to retirement benefits
that are determined based on the rate of pay at the time of termination, years of service, and certain otherfactors. Such retirement benefits are made in the form of a lump-sum severance payment from the Company
or from its domestic subsidiaries and annuity payments from a trustee. If the termination is involuntary, suchas when caused by retirement at the mandatory retirement age or caused by death, the employee is entitled toa larger payment than in the case of a voluntary termination.
The liabilities for retirement benefits for directors and Audit and Supervisory Board members of theconsolidated domestic subsidiaries at March 31, 2023 and 2022, were ¥110 million ($831 thousand) and¥136 million, respectively. The retirement benefits for directors and Audit and Supervisory Board members
are paid subject to the approval of the shareholders.
(1) The changes in defined benefit obligation for the years ended March 31, 2023 and 2022, were as
follows:

Balance at beginning of year ..............................................
 Current service cost ........................................................
 Interest cost .............................................................
 Actuarial losses ...............................................................
Benefits paid ...................................................................
Prior service cost.............................................................
Change in the scope of consolidation .............................
Increase due to the merger ..............................................
Balance at end of year.........................................................

2022

Thousands of
U.S. dollars
2023

63,944¥91,020$587,866

Millions of yen
2023¥91,020
3,368
681(6,844)(3,531)(1,934)(4,572)¥78,186¥26,322
2,966
509
(191)
(2,530)$684,361
25,323
5,124(51,465)(26,552)(14,546)(34,378)(2) The changes in plan assets for the years ended March 31, 2023 and 2022, were as follows:
Thousands of
U.S. dollars

Millions of yen

Balance at beginning of year ..............................................
Expected return on plan asset .........................................
Actuarial (losses) gains ...................................................
Contributions from the employer....................................
Benefits paid ...................................................................
Change in the scope of consolidation .............................
Increase due to the merger ..............................................
Balance at end of year.........................................................

2023¥83,757
1,665(5,886)2,238(2,457)(4,204)¥75,1122022¥23,282
1,564
1,197
2,075
(1,987)57,624¥83,7572023$629,753
12,521(44,262)
16,827(18,473)(31,613)$564,752

Financial Information

2023

53

(3) Reconciliation between the liability recorded in the consolidated balance sheets and the balances ofdefined benefit obligation and plan assets was as follows:
2022

Unfunded defined benefit obligation ..................................
Net liability arising from defined benefit obligation ..........

¥75,286(75,112)174
2,899¥3,074¥87,488(83,757)
3,731
3,531
¥7,262Thousands of
U.S. dollars
2023

Liability for retirement benefits..........................................
Asset for retirement benefits ..............................................
Net liability arising from defined benefit obligation ..........

¥6,463(3,389)¥3,074¥8,856(1,593)¥7,262$48,596(25,482)$23,113

Funded defined benefit obligation ......................................
Plan assets...........................................................................

Millions of yen
2023$566,064(564,752)
1,312
21,801$23,113(4) The components of net periodic benefit costs for the years ended March 31, 2023 and 2022, were as
follows:

Service cost .........................................................................
Interest cost .........................................................................
Expected return on plan assets ............................................
Recognized actuarial losses ................................................
Amortization of prior service cost ......................................
Others..................................................................................
Net periodic benefit costs ...................................................

Millions of yen
2023¥3,368681(1,665)
147
(233)
13
¥2,3112022¥2,966509(1,564)233(95)
19¥2,069Thousands of
U.S. dollars
2023$25,323
5,124(12,521)1,109(1,754)98$17,379(5) Amounts recognized in other comprehensive income (before income tax effect) in respect of defined
retirement benefit plans for the years ended March 31, 2023 and 2022, were as follows:

Prior service cost ................................................................
Actuarial gains ....................................................................
Total ....................................................................................

Millions of yen
2023¥1,701
1,105¥2,806

2022

¥(95)
1,622
¥1,527

Thousands of
U.S. dollars
2023$12,792
8,312$21,104(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respectof defined retirement benefit plans as of March 31, 2023 and 2022, were as follows:

Unrecognized prior service cost .........................................
Unrecognized actuarial (gains) losses ................................
Total ....................................................................................

54

Financial Information

2023

Millions of yen
2023¥(2,066)(990)¥(3,056)2022¥(364)
115¥(249)

Thousands of
U.S. dollars
2023$(15,534)(7,446)$(22,980)

(7) Plan assets
a. Components of plan assets
Plan assets consisted of the following:
2023

2022

Debt investments ...............................................................
40%
38%
Equity investments ............................................................
20
19
General account .................................................................
14
16
Alternative investments* ....................................................
15
13
Others ................................................................................
11
14
Total ...................................................................................
100%
100%
* Alternative investments are invested for the purpose of diversifying risks and primarily invested in hedge
funds.
b.

Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term rates of return,which are expected currently and in the future from various components of the plan assets.

(8) Assumptions used for the years ended March 31, 2023 and 2022, were set forth as follows:
Discount rate .....................................................................
Expected rate of return on plan assets...............................

2023
0.35-0.99%
1.7-2.02022
0.22-0.73%
1.7-2.0

Other than the above, an expected rate of salary increase is used for the assumption.
(9) Defined contribution pension plans
Contributions to defined contribution pension plans for the years ended March 31, 2023 and 2022, were
¥2,852 million ($21,449 thousand) and ¥2,016 million, respectively.
15. Commitments and Contingent Liabilities
The Companies, as lenders, have loan commitment agreements as of March 31, 2023, totaling ¥331,790
million ($2,494,662 thousand), where the used portion is ¥172,245 million ($1,295,077 thousand), and theunused portion is ¥159,544 million ($1,199,585 thousand). This amount includes unused portions of the
facilities which will not necessarily be utilized in full because these facilities are subject to periodic reviewsof the borrower’s purpose for the loan, credit standing, etc.
The Companies are contingently liable as of March 31, 2023, as guarantor or co-guarantor for operatingtransactions of ¥21,860 million ($164,368 thousand), and borrowings and others of ¥22 million ($168
thousand) for their unconsolidated subsidiaries and others.
The Companies have entered into various interest rate swap contracts, interest rate cap contracts, crosscurrency interest rate swap contracts, and foreign exchange forward contracts in the ordinary course ofbusiness (see Note 27).
16. Equity
Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The significant
provisions in the Companies Act that affect financial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to
the year-end dividend upon resolution at the shareholders’ meeting. Additionally, for companies that meet

Financial Information

2023

55

certain criteria, including (1) having a Board of Directors, (2) having independent auditors, (3) having an
Audit and Supervisory Board, and (4) the term of service of the directors being prescribed as one year
rather than the normal two-year term by its articles of incorporation, the Board of Directors may declare
dividends (except for dividends-in-kind) at any time during the fiscal year if the company has prescribed soin its articles of incorporation. With respect to the third condition above, the Board of Directors ofcompanies with (a) board committees (namely, appointment committee, compensation committee, andaudit committee) or (b) an audit and supervisory committee (as implemented under the Companies Act
effective May 1, 2015) may also declare dividends at any time because such companies, by nature, meetthe criteria under the Companies Act. The Company is organized as a company with an audit andsupervisory committee, effective April 1, 2021. The Company meets all the above criteria and, accordingly,
the Board of Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal
year.
The Companies Act permits companies to distribute dividends-in-kind (noncash assets) to shareholders
subject to a certain limitation and additional requirements. Semiannual interim dividends may also be paid
once a year upon resolution by the Board of Directors if the articles of incorporation of the company sostipulate. The Companies Act provides certain limitations on the amounts available for dividends or thepurchase of treasury stock. The limitation is defined as the amount available for distribution to theshareholders, but the amount of net assets after dividends must be maintained at no less than ¥3 million.
Moreover, the additional dividend restriction based upon the consolidated retained earnings is applicableto the Company.
(b) Increases/decreases and transfer of common stock, reserve, and surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal
reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus),depending on the equity account charged upon the payment of such dividends, until the aggregate amountof the legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies
Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation.
The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capitalsurplus, and retained earnings can be transferred among the accounts within equity under certain
conditions upon resolution of the shareholders.
As described in Note 3.c., on April 1, 2021, the Company issued shares as a consideration of Business
Integration with Hitachi Capital.
Number of shares issued:
Increase in capital surplus:

Common stock: 571,078,084 shares¥381,480 million(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury
stock by resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed theamount available for distribution to the shareholders, which is determined by a specific formula.
Under the Companies Act, stock acquisition rights are presented as a separate component of equity. The
Companies Act also provides that companies can purchase both treasury stock acquisition rights andtreasury stock. Such treasury stock acquisition rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
On April 1, 2013, the Company completed a ten-for-one stock split by way of a free share distribution basedon the resolution of the Board of Directors’ meeting held on December 20, 2012.

56

Financial Information

2023

17. Stock-Based Compensation
The Company has a stock option plan for certain directors and executive officers, except for Audit andSupervisory Committee members. Under the plan, the right to purchase the common shares of the Company
is granted at an exercise price of ¥1 per share. The contractual term of the stock options is 30 years. The
stock option holders may exercise their stock acquisition rights during the five-year period starting the day
one year after leaving their position as either director or executive officer of the Company.
The stock options outstanding as of March 31, 2023, were as follows:

Persons granted...................................................................
Number of options granted* ...............................................
Date of grant .......................................................................
The fair value of options granted under the plan at the
grant dates*.....................................................................

Persons granted...................................................................
Number of options granted* ...............................................
Date of grant .......................................................................
The fair value of options granted under the plan at the
grant dates*.....................................................................

Persons granted...................................................................
Number of options granted* ...............................................
Date of grant .......................................................................
The fair value of options granted under the plan at the
grant dates*.....................................................................

Persons granted...................................................................
Number of options granted* ...............................................
Date of grant .......................................................................
The fair value of options granted under the plan at the
grant dates*.....................................................................

2011 stock
option9 directors
17 executive
officers
651,600
October 15,
2010¥250.1($1.88)2012 stock
option10 directors
17 executive
officers
721,700
October 14,
2011¥283.1($2.12)

2013 stock
option10 directors
17 executive
officers
583,100
October 15,
2012¥312.8($2.35)2014 stock
option10 directors
19 executive
officers
419,000
October 15,
2013
¥502
($3.77)2015 stock
option10 directors
18 executive
officers
350,300
October 15,
2014
¥490
($3.68)2016 stock
option9 directors
20 executive
officers
368,800
October 15,
2015
¥546
($4.10)2017 stock
option9 directors
20 executive
officers
451,700
October 14,
2016
¥436
($3.27)2018 stock
option9 directors
27 executive
officers
493,000
October 13,
2017
¥566
($4.25)2019 stock
option6 directors
33 executive
officers
422,400
July 13,2018¥590($4.43)2020 stock
option5 directors
30 executive
officers
490,400
July 12,2019¥513($3.85)2021 stock
option5 directors
31 executive
officers
507,000
July 15,2020¥424($3.18)2022 stock
option6 directors
55 executive
officers
866,300
July 15,2021¥499($3.75)

Financial Information

2023

57

Persons granted...................................................................
Number of options granted* ...............................................
Date of grant .......................................................................
The fair value of options granted under the plan at the
grant dates*.....................................................................

2023 stock
option6 directors
55 executive
officers
855,400
July 15,2022¥511.0($3.84)

The total stock-based compensation costs recognized for the years ended March 31, 2023 and 2022, were¥437 million ($3,286 thousand) and ¥432 million, respectively.
The fair value of 2023 stock option is estimated using the Black-Scholes option-pricing model with theassumptions noted as follows in the table:

Volatility of stock price.......................................................
Estimated remaining outstanding period ............................
Estimated dividend .............................................................
Risk-free interest rate .........................................................

2023 stock
option30.02%
4.3 years
4.52%(0.01)%The volatility of the stock price is based on the historical volatility of the Company’s stock for the period
equal to the option’s estimated remaining outstanding period from the grant date. The estimated remaining
outstanding period is based on the average term period and the average age as of retirement. The estimateddividend is based on the per share dividends of ¥28.0 ($0.21) made in the preceding year ended March 31,
2022. The risk-free interest rate is based on the yield of government bonds having a remaining life equal tothe option’s estimated remaining outstanding period.
The stock option activity for the fiscal years ended March 31, 2023 and 2022, was as follows:2011 stock
optionFor the year ended March 31, 2022
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................
For the year ended March 31, 2023
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................

58

Financial Information

2023

2012 stock2013 stock
optionoptionNumber of shares*

2014 stock
option52,100109,700

239,800
188,500

52,10052,10055,50054,20054,20085,200154,600
154,600

36,300152,200
152,200

52,10054,200154,600

152,200

17,80034,30034,30054,20054,20053,400101,200
101,200

51,000101,200
101,200

2015 stock
optionFor the year ended March 31, 2022
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................
For the year ended March 31, 2023
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................

For the year ended March 31, 2022
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................
For the year ended March 31, 2023
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................

2016 stock2017 stock
optionoptionNumber of shares*

2018 stock
option214,400

241,600

340,000

441,100

22,100
192,300
192,300

13,200228,400
228,400

340,000
340,000

27,000414,100
414,100

192,300

228,400

340,000

414,100

12,700179,600
179,600

19,400209,000
209,000

27,100312,900
312,900

46,700367,400
367,4002019 stock
option2020 stock
2021 stock
optionoptionNumber of shares*

2022 stock
option403,000

490,400

507,000

19,400383,600
383,600

10,700479,700
479,700

10,700496,300
496,300

16,000850,300
850,300

383,600

479,700

496,300

850,300

60,100323,500
323,500

25,200454,500
454,500

25,300471,000
471,000

850,300
850,300

866,300

Financial Information

2023

59

2023 stock
optionNumber ofshares*For the year ended March 31, 2022
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................
For the year ended March 31, 2023
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................

855,400
855,400
855,400* On April 1, 2013, the Company split each share of its common stock, which was held by shareholders
stated or recorded in the register of shareholders as of March 31, 2013, into ten (10) shares. Number of
options, the fair value of options, and per share dividends have been retrospectively adjusted to reflect thestock split for all periods presented.
18. Revenue Recognition(1) Disaggregation of revenue
Revenues from contracts with customers on a disaggregated basis for the year ended March 31, 2023 and2022, were as follows:Year Ended March 31,
Customer
2023
Solutions
Revenues:
Sales from maintenance¥ 34,613
contracts .........................
Sales from selling
24,134merchandise ..................
Electricity sales ................
Sales from disposal oflease properties (3) .........
7,468
Others...............................
Revenue from contracts
66,216
with customers ...............
Other revenue (4) ............. 1,015,919
Total ................................. ¥ 1,082,135

60

Financial Information

2023

GlobalBusiness¥ 18,313

Environment
Energy &Infrastructure

Millions of yen
Reportable segment
Real Estate

Mobility¥ 10,668¥ 7,092¥ 586

31,43150,514
11,247

Logistics

¥ 21

4,071
326

Aviation

¥ 902
931

8,396

940

8
3,470

989

84,47332,38419,064

1,843

10,562

1,584

247,301¥ 331,775

15,720¥ 48,104

147,958¥ 167,022

114,827¥ 116,671

83,047¥ 93,609

54,211¥ 55,796

Millions of yen
Year Ended March 31,
Adjustments
2023(2)
Consolidated
Revenues:
Sales from maintenance¥ 11¥ 52,960
contracts .........................
Sales from selling
46,553merchandise ..................
Electricity sales ................
31,757
Sales from disposal of
51,425lease properties (3)..........
1,476
34,921Others...............................
Revenue from contracts
1,488
217,618
with customers ...............
Other revenue (4) .............
(371) 1,678,613
Total .................................  ¥ 1,116 ¥ 1,896,231
Millions of yen
Reportable segment

Year Ended March 31,
Customer
2022
Solutions
Revenues:
Sales from maintenance¥ 33,582
contracts .......................
Sales from selling
13,258merchandise ................
Electricity sales ..............
Sales from disposal oflease properties (3)........
7,923
Others.............................
Revenue from contracts
54,764
with customers .............
Other revenue (4) ...........
1,080,885
Total ............................... ¥1,135,650

GlobalBusiness¥ 14,381

Environment
Energy &Infrastructure

Logistics

Real Estate

Mobility

¥ 15

7,907
93

Aviation¥ 5,497¥ 4,528

¥ 904

1,707

902

34,50740,02016,525

985

7,091

¥ 415

78,92835,508

12,588

415

6,236

1,806

189,339¥ 268,268

15,010¥ 50,519

143,938¥ 156,526

50,522¥ 50,938

42,748¥ 48,984

53,213¥ 55,019

Millions of yen
Year Ended March 31,
Adjustments
2022(2)
Consolidated
Revenues:
Sales from maintenance¥ 26¥ 48,006
contracts .........................
Sales from selling
32,096merchandise ..................
Electricity sales ................
34,600
Sales from disposal of
40,020lease properties (3)..........
1,738
37,289Others...............................
Revenue from contracts
1,764
192,014with customers ...............
Other revenue (4) .............
(2,112) 1,573,545
Total .................................
 ¥ (347) ¥ 1,765,559

Financial Information

2023

61

Thousands of U.S. dollars
Reportable segment

Year Ended March 31,
Customer
2023
Solutions
Revenues:
Sales from maintenance$ 260,251
contracts .........................
Sales from selling
181,465
merchandise ..................
Electricity sales ................
Sales from disposal oflease properties (3)..........
56,153
Others...............................
Revenue from contracts
497,870
with customers ...............
Other revenue (4) ............. 7,638,489
Total ................................. $ 8,136,360

GlobalBusiness$ 137,698

Environment
Energy &Infrastructure

Logistics

Real Estate

Mobility$ 161

30,613
2,455

Aviation$ 80,213$ 53,324$ 4,409236,324

379,808$ 6,786
63,1297,073

61

84,566

7,004

26,093

7,442

635,142

243,490

143,342

13,86079,418

11,912

1,859,409$ 2,494,551

118,195$ 361,685

1,112,466$ 1,255,809

863,365$ 877,225

624,414$ 703,832

407,606$ 419,519

Thousands of U.S. dollars
Year Ended March 31,
Adjustments
2023(2)
Consolidated
Revenues:
Sales from maintenance$ 88$ 398,199
contracts .........................
Sales from selling
350,026
merchandise ..................
Electricity sales ................
238,780
Sales from disposal of
386,656lease properties (3)..........
11,100262,563
Others...............................
Revenue from contracts
11,1891,636,227
with customers ...............
Other revenue (4) .............
(2,792) 12,621,154
Total .................................  $ 8,396 $ 14,257,381

Notes:(1) As disclosed in Note 29 “Segment Information,” the Company changed the reportable segments effective April 1,
2022. The segment information for the year ended March 31, 2022, has been presented based on the new segmentclassification.
(2) Adjustments include ¥(3,062) million ($(23,029) thousand) million and ¥(5,804) million of adjusted amount of sales
following the merger with Hitachi Capital to which the purchase method was applied for the years ended March 31,
2023 and 2022, respectively.
(3) Sales from disposal of lease properties are sales from disposal of lease properties due to lease contract maturities of
the consolidated foreign subsidiaries that adopted IFRS or U.S. GAAP.
(4) Other revenue primarily includes revenue from finance lease, operating lease, loans, and installment sales.

As shown in the above table, revenue from contracts with customers is immaterial to total revenue.
Therefore, the Companies omitted disclosure of basic information to understand revenues from contracts
with customers and information on relationship between satisfaction of performance obligations in contracts
with customers and transaction prices allocated to remaining performance obligations.
(2) Contract balances
Receivables from contracts with customers, contract assets, and contract liabilities as of March 31, 2023 and2022, respectively, are as follows:

Receivables from contracts with customers (1) ...................................
Contract assets .....................................................................................
Contract liabilities (2) ..........................................................................

62

Financial Information

2023

Millions of yen
2023
2022

¥8,768¥ 10,739

4,199

5,594

Thousands of
U.S. dollars
2023$65,931
31,573

Notes:(1) Receivables arising from contracts with customers are included in “Receivables — Lease” and “Prepaid expenses
and other” in the consolidated balance sheet.
(2) Contract liabilities are included in “Other current liabilities” in the consolidated balance sheet.

19. Selling, General, and Administrative Expenses
Selling, general, and administrative expenses for the years ended March 31, 2023 and 2022, consisted of thefollowing:

Provision for doubtful receivables.......................................................
Employees’ salaries, bonuses, and allowances ....................................
Other ....................................................................................................
Total .............................................................................................

Millions of yen
2023
2022

¥16,858 ¥37,477
70,27462,303
131,467 120,789¥218,600 ¥220,569

Thousands of
U.S. dollars
2023$126,754
528,380
988,477$1,643,612

20. Gain on Revaluation of Investment Securities
Investment securities held by the consolidated foreign subsidiaries that adopted IFRS were reported at fairvalue. Some of these investment securities are excluded from the scope of applying the equity method as theholding ratio decreased and the Companies determined that they do not have the ability to exercise
significant influence, for the year ended March 31, 2023.
The Companies did not recognize any gain on revaluation of investment securities for the year ended
March 31, 2022.

21. Gain on Step Acquisition
The Companies recognized a step acquisition gain on its existing holdings of Mirai Soden Chita Mihama
LLC (Mirai Soden Chita Mihama), which engages in solar power generation, when Mirai Soden Chita
Mihama became consolidated subsidiary due to the additional silent partnership shares purchased by theCompany for the year ended March 31, 2023.
The Companies did not recognize any step acquisition gain for the year ended March 31, 2022.

22. Loss on Sales of Shares of Subsidiaries and Affiliates
The Companies recognized loss on the sale of whole shares of Diamond Asset Finance, formerly the
consolidated subsidiaries of the Company, for the year ended March 31, 2023.
The Companies did not recognize any loss on sales of shares of subsidiaries and affiliates for the year
ended March 31, 2022.

Financial Information

2023

63

23. Related-Party Transactions
The transactions with subsidiaries of Mitsubishi UFJ Financial Group, Inc. or Mitsubishi Corporation, which
has significant influence over the Company, for the years ended March 31, 2023 and 2022, were as follows:

Interest expense*1................................................................................
Interest expense (U.S. dollars)*1 .........................................................
Lease revenue ......................................................................................

*1 Interest expense recorded in costs and other income (expenses).
*2 $55,710 thousand

Millions of yen
2023
2022

¥12,886
N/A
19,799¥8,206
N/A *2
17,957

Thousands of
U.S. dollars
2023$96,889
125,870
148,865

Amounts due from and to subsidiaries of Mitsubishi UFJ Financial Group, Inc. or Mitsubishi Corporation,
which has significant influence over the Company, as of March 31, 2023 and 2022, were as follows:

Lease receivables and investments in leases*3 ....................................
Short-term loans ..................................................................................
Short-term loans (U.S. dollars) ............................................................
Long-term loans, including current maturities ....................................
Long-term loans, including current maturities (U.S. dollars) *4 .........

Millions of yen
2023
2022

¥101,428
43,346
N/A
399,765
N/A¥111,623
43,113
N/A *5355,225
N/A *6

Thousands of
U.S. dollars
2023$762,623
325,912
1,393,566
3,005,755
3,275,901*3 Lease receivables and investments in leases include the amounts of lease contracts, which aim to disperse credit risk,
including interest, presented in consolidated balance sheets.
*4 The balance of long-term loans (U.S. dollars) secured by the foregoing assets as of March 31, 2023 and 2022, were$1,543,571 thousand and $1,353,004 thousand, respectively.
*5 $871,160 thousand*6 $2,517,908 thousand

24. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes, which,in the aggregate, resulted in a normal effective statutory tax rate of approximately 30.6% for the years ended
March 31, 2023 and 2022.
The tax effects of significant temporary differences, which resulted in deferred tax assets and liabilities, asof March 31, 2023 and 2022, were as follows:

Deferred tax assets:
Tax loss carryforwards...................................................................
Allowance for doubtful receivables...............................................
Accrued expenses ..........................................................................
 Asset retirement obligations ..........................................................
Advances received — leases .........................................................
Other ..............................................................................................
  Total of tax loss carryforwards and temporary differences .......
Less valuation allowance for tax loss carryforwards .....................
Less valuation allowance for temporary differences .....................
  Total valuation allowance*3 .......................................................
Less deferred tax liabilities ............................................................
  Net deferred tax assets ...............................................................

64

Financial Information

2023

Millions of yen
2023
2022

Thousands of
U.S. dollars
2023¥101,147 ¥79,956
16,21016,127
11,424
10,39011,194
10,646
10,341
11,29240,13040,162
190,450 168,574(6,968)(4,451)(8,693)(8,824)(15,662) (13,276)(141,562) (117,161)¥ 33,224 ¥38,137$760,511
121,886
85,902
84,16977,756
301,731
1,431,956(52,395)(65,366)(117,761)(1,064,383)$ 249,811

Deferred tax liabilities:
Depreciation of leased assets of foreign subsidiaries .......................
Deferred gain on derivatives under hedge accounting......................
Other .................................................................................................
  Total deferred tax liabilities .........................................................
Less deferred tax assets ....................................................................
  Net deferred tax liabilities ...........................................................

Millions of yen
2023
2022

Thousands of
U.S. dollars
2023¥224,401 ¥181,141
12,508
1,742
48,46342,858285,373 225,741(141,562) (117,161)¥143,810 ¥108,580$1,687,230
94,045364,388
2,145,664(1,064,383)$1,081,280

The expiration of tax loss carryforwards, the related valuation allowances and the resulting net deferred
tax assets as of March 31, 2023 and 2022, were as follows:

March 31, 2023

Deferred tax assets relating to tax
loss carryforwards*1 .................
Less valuation allowances for tax
loss carryforwards....................
Net deferred tax assets relating to
tax loss carryforwards*2 ...........

March 31, 2022

Deferred tax assets relating to tax
loss carryforwards*1 .................
Less valuation allowances for tax
loss carryforwards....................
Net deferred tax assets relating to
tax loss carryforwards*2 ...........

March 31, 2023

Deferred tax assets relating to tax
loss carryforwards*1 .................
Less valuation allowances for tax
loss carryforwards....................
Net deferred tax assets relating to
tax loss carryforwards*2 ...........

One year or
less

After oneyear throughfive years

Millions of yen
After five
years through10 years¥468¥5,026¥2,077¥93,574(260)(3,905)(1,995)

(806)

¥208

¥1,121¥82¥92,767

One year or
less

After oneyear throughfive years

Millions of yen
After five
years through10 years¥297¥3,320¥2,259¥74,078¥79,956(138)(1,825)(1,684)(803)(4,451)¥159¥1,494¥575¥73,274¥75,504

One year or
less

After 10
years

Total

¥101,147*3¥94,179

After 10
years

Total

Thousands of U.S. dollars
After one
After five
year throughyears throughAfter 10
five years
10 years
years$3,522$37,796$15,623$703,568(1,957)(29,366)(15,004)(6,066)$1,565$8,429$618$697,502(6,968)

Total$760,511*3(52,395)$708,115*1 Tax loss carryforwards were calculated by applying the normal effective statutory tax rate.
*2 Net deferred tax assets are recognized primarily for tax loss carryforwards (calculated by applying the normal effective statutory
tax rate) of consolidated subsidiaries of the Company. The tax loss carryforwards of these foreign consolidated subsidiaries arose
by applying the accelerated depreciation for leased assets. Valuation allowances have not been recognized for these tax loss
carryforwards because they are expected to be collectible considering future taxable income.
*3 Valuation allowance increased by ¥2,386 million ($17,941 thousand). Major reasons are an increase in valuation allowance fortax loss carryforwards as well as an increase in valuation allowance for allowance for doubtful receivables and valuation allowance
for investment securities recorded by subsidiaries newly included in consolidation in relation to the merger with Hitachi Capital.

Financial Information

2023

65

Certain subsidiaries of the Company have tax loss carryforwards as stated above and those will mainly
begin to expire in 2023.
A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflectedin the accompanying consolidated statements of income for the year ended March 31, 2023, is as follows:
Normal effective statutory tax rate .........................................................
Difference in statutory tax rates of foreign subsidiaries .....................
Income not taxable for tax purpose, such as dividends received ........
Other — net ........................................................................................
Actual effective tax rate ..........................................................................

2023

30.6%
(3.7)
(2.4)
(1.4)
23.1%

The difference between the normal effective statutory tax rate and the actual effective tax rate reflected in
the accompanying consolidated statements of income for the year ended March 31, 2022, was not disclosed
because the difference was less than 5% of the normal effective statutory tax rate.
25. Leases
The future minimum payments under noncancelable operating leases as lessee as of March 31, 2023 and2022, were as follows:

Due within one year.............................................................................
Due after one year ...............................................................................
  Total .............................................................................................

Millions of yen
2023
2022

¥3,773
6,293¥10,066¥4,455
10,352¥14,808

Thousands of
U.S. dollars
2023$28,368
47,318$75,687

26. Financial Instruments and Related Disclosures(1) Policy for financial instruments
The Companies mainly conduct business of lease transactions, installment sales, and financialtransactions.
In order to finance these businesses, the Companies utilize indirect financing, primarily bank loans, aswell as direct financing, issuance of bonds, commercial paper, and securitization receivables.
So as to properly manage the interest rate risk that arises from the mismatch of interest conditions andthat of duration between invested assets and financing liabilities, the Companies utilize asset liability
management (ALM).
Derivatives are used, not for speculative and trading purposes, but mainly to hedge interest and foreign
currency exposures as described in Note 27.
(2) Nature and extent of risks arising from financial instruments
Major financial assets of the Companies are receivables relating to leases, installment sales, and loans,which are exposed to customer credit risk.
Marketable and investment securities, mainly composed of equity securities, debt securities, andothers, which are held for maintaining business relationships with customers and investment income
purposes, are exposed to issuer credit risk, interest rate risk, and market price fluctuation risk.
The Companies are exposed to liquidity risk, namely the risk that, under certain conditions, they may
not be able to procure the funds needed from the market to meet payment obligations for loans, bonds,
commercial paper, and so on, on their maturity dates. The Companies are also exposed to interest rate
fluctuation risk on floating interest rate liabilities.
The Companies mainly conduct business of lease transactions, installment sales, and financialtransactions. Some receivables related to leases, installment sales, and loans have fixed interest rates.
However, the Companies use some floating interest rate financing instruments, which expose them tointerest rate risk.

66

Financial Information2023

In order to comprehensively manage these interest rate risks, or to secure stable earnings by fixing a
profit margin for individual business projects, the Companies utilize interest rate-related derivativetransactions.
In order to manage foreign exchange risk for individual foreign currency-denominated assets andliabilities, the Companies also utilize currency-related derivative transactions and foreign currencydenominated debt.
Please see Note 27 for more details about derivatives.
(3) Risk management for financial instruments(a) Credit risk management
The Companies manage the credit risk of individual customers based on their overall strategy,
financial position, credit rating portfolio characteristics, and other factors in accordance with theinternal credit management rules. This credit management process is conducted by the businessdepartments and the credit department, with regular reporting to the Risk Management Committee,
the Executive Committee, and the Board of Directors. In addition, the Internal Audit department
monitors and audits credit administration and management status.
(b) Market risk management (foreign exchange risk and interest rate fluctuation risk)
The Companies manage exposure to interest rate fluctuation risk, foreign exchange risk, and pricefluctuation risk according to internal rules for market risk management.
(i) Interest rate fluctuation risk management
In order to properly manage interest rate fluctuation risk, the Companies not only constantly
monitor interest rate movements, but also monitor any mismatches of interest conditions and thatof duration between invested assets and financing liabilities. With respect to interest rate
fluctuation risk, the Company convenes the ALM Committee quarterly, attended by officers andthe managers of related departments, to review market conditions and asset/liability portfolio
analysis. The ALM Committee deliberates and decides on policies with regard to current risk
management and new financing. In addition, the Company reports quarterly to the Risk
Management Committee.
(ii) Quantitative information of market risk
The Companies have financial instruments exposed to market risk, which are composed mainly of
installment sales receivables, lease receivables, and investments in leases, loans, marketable andinvestment securities, short-term borrowings, and long-term debt. The Companies adopt ALM tothese financial instruments and use indices, such as 10 BPV (*1) and VaR (*2) to measure market
risks.
In calculating the market risk and the VaR, the Companies adopt a historical simulation model(holding period, one year; confidence interval, 99.9%; and observation period, 10 years).
The 10 BPV at March 31, 2023 and 2022, was ¥4,334 million ($32,587 thousand) and ¥2,882
million, respectively. The market risk VaR at March 31, 2023 and 2022, was ¥130,849 million($983,827 thousand) and ¥47,126 million, respectively.
(*1) 10 BPV: One of the interest rate indices, which estimates changes in the market value of subject assets andliabilities assuming a 10 basis-point (0.10%) upward shift of underlying interest rates(*2) VaR:
Quantitatively measured amount which estimates potential loss of portfolios over a certain period andaccording to a certain probability based on the past statistics

The Companies measure and manage market risks, including the risks of the future rentals on
and residual values of operating lease transactions, since they are also exposed to market risks
similar to lease receivables and investments in leases (which are related to finance leasetransactions).
The Companies have adopted a historical simulation model, which calculates a VaR as astatistically possible amount of losses in a fixed confidence interval based on historical market
volatility. However, this model is not designed to capture certain abnormal market fluctuations.
(c) Foreign exchange risk management
The Companies reduce foreign exchange risk of foreign currency-denominated assets individually

Financial Information

2023

67

by financing commensurate foreign currency-denominated debt and by using foreign currencyrelated derivative transactions. Reports regarding foreign exchange risk status are made to the Risk
Management Committee.
(d) Price fluctuation risk management
Price fluctuation risk for marketable and investment securities are reported to the Risk Management
Committee. Most equity securities held by the Companies are for the purpose of maintaining
business relationships with customers, and the Companies perform an annual review on whether tomaintain these shares by monitoring the financial condition of the issuers (customers) andtransaction status with customers as well as evaluating the cost of capital.
(e) Liquidity risk management on financing
The Companies monitor their cash management status as a whole and control the duration mixtureof financing. Through maintaining commitment lines with multiple financial institutions anddiversification of financing methods, the Companies endeavor to secure liquidity. Liquidity risk
management related to financing is conducted based on the Companies’ internal liquidity risk
management rule monitoring the probability of realization of the risk under the current financing
environment and monthly reports on liquidity risk status to the executive officer in charge. The
executive officer in charge decides the stage of liquidity risk and reports the decision to the Risk
Management Committee. The Company has also prepared a contingency plan for each stage ofliquidity risk and has been prepared for appropriate action addressing any such contingency.
(f) Derivative transactions
The financial department of the Company utilizes derivative transactions in accordance withinternal rules. Interest rate fluctuation risk is managed comprehensively through ALM with interest
rate fluctuation risk of assets and liabilities in the consolidated balance sheets. Foreign currency
fluctuation risk is managed on an individual project basis. The status of these derivative transactions
is reported to the President every quarter. Credit risk due to nonfulfillment of contracts bycounterparties is managed by setting individual credit limits according to the financing credit ratingof the customer.
(4) Supplementary information on fair value of financial instruments
Quoted market prices, when available, are used to estimate fair values of financial instruments. However,when quoted market prices are not available for financial instruments, fair values for such financial
instruments are estimated using DCF models or other valuation techniques. Considerable judgment isrequired in determining methodologies and assumptions used in estimating fair values of financial
instruments; therefore, the effect of using different methodologies and assumptions may have a material
impact to the estimated fair value amounts.
(5) Financial instruments categorized by fair value hierarchy
The fair value of financial instruments is categorized into the following three levels, depending on theobservability and significance of the inputs used in making fair value measurements:
Level 1:
Level 2:
Level 3:

Fair values measured by using quoted prices (unadjusted) in active markets for
identical assets or liabilities.
Fair values measured by using inputs other than quoted prices included within
Level 1 that are observable for the assets or liabilities, either directly or
indirectly.
Fair values measured by using unobservable inputs for the assets or liabilities.

If multiple inputs are used that have a significant impact on the measurement of fair value, fair value isclassified at the lowest level in the fair value measurement among the levels to which each of these inputs
belongs.
According to Paragraph 5 of Implementation Guidance on Disclosure about Fair Value of Financial
Instruments (ASBJ Guidance No. 19), nonmarketable equity securities are not included in the tables

68

Financial Information

2023

below. In addition, investments in partnerships, etc., that the equity interest equivalents are recorded as
net in the balance sheet applying the Paragraph 24-6 of Implementation Guidance on AccountingStandard for Fair Value Measurement are not included in the tables below.
(a) The financial assets and liabilities measured at the fair values in the consolidated balance sheet:
Millions of yen
March 31, 2023
Marketable and investment securities:
Available-for-sale securities (1):Equity securities ..............................
Government and municipal bonds ....
Corporate bonds ...............................
Other .................................................
Derivative transactions (2):Foreign currency forward contracts .
Interest rate swaps ............................
Total assets............................................

Level 1

¥26,9223,624¥30,546

Level 2

Level 3

Total

¥21,238
1,618¥48,161
3,624
29,6107,039¥22,857(38,249)
53,331¥103,516¥29,6105,420(38,249)
53,331¥50,112

Millions of yen
March 31, 2022
Marketable and investment securities:
Available-for-sale securities (1):Equity securities ..............................
Government and municipal bonds ...
Corporate bonds ...............................
Other .................................................
Derivative transactions (2):Foreign currency forward contracts .
Interest rate swaps ............................
Total assets............................................

Level 1

¥26,233
2,604¥28,838

Level 2

¥19,819(44,313)
4,592¥ (19,902)

Level 3

Total

¥16,1942,331¥42,428
2,604
19,8192,331¥18,526(44,313)
4,592¥27,462

Thousands of U.S. dollars
March 31, 2023
Marketable and investment securities:
Available-for-sale securities (1):Equity securities ..............................
Government and municipal bonds ....
Corporate bonds ...............................
Other .................................................
Derivative transactions (2):Foreign currency forward contracts .
Interest rate swaps ............................
Total assets............................................

Level 1$202,425
27,249$229,674

Level 2

$222,633
40,757(287,593)
400,985$376,783

Level 3

Total

$159,691
12,167$362,116
27,249222,633
52,925$171,859$(287,593)
400,985$778,317

Notes:(1) Investment trust funds applying the transitional clause of Paragraph 26 of Implementation Guidance on AccountingStandard for Fair Value Measurement were not included in the tables above. The investment trust funds of ¥5,229
million are included in “Investment securities” on the consolidated balance sheet as of March 31, 2022.
(2) Carrying amounts of derivative transactions to which hedge accounting is applied were ¥19,402 million ($145,886
thousand) and ¥(28,883) million as of March 31, 2023 and 2022, respectively, to which Treatment of Hedge

Financial Information

2023

69

Accounting for Financial Instruments that Reference LIBOR (the revised Practical Solution No. 40, March 17, 2022)
is applied.

(b) The financial assets and liabilities not measured at the fair values in the consolidated balance sheet:
Millions of yen
Fair value
March 31, 2023
Receivables:
Installment sales .....
Deferred profit on
installment sales ....................
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Receivables:
Loans ......................
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Lease receivables andinvestments inleases .....................
Residual values ofinvestments inleases ..................
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Long-term
receivables .............
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Total ...........................

Bonds .........................
Long-term loans frombanks and otherfinancial
institutions .............
Loans from thesecuritizations of
the minimum future
rentals on lease
contracts.................
Total ...........................

70

Financial Information

2023

Level 1

Level 2

Level 3

Total

Carrying
amountUnrealized
gain (loss)¥231,280(9,648)¥227,514¥227,514(1,063)
220,567¥6,9471,911,212¥263

1,842,492

1,842,755(10,128)
1,901,084(58,328)

3,264,169(83,715)

79,9703,185,697

3,265,668(7,259)3,173,194

92,473

99,912

31,128¥5,367,067(68,784)
31,128¥5,325,974¥41,092¥2,183,956¥2,183,956¥2,225,731¥(41,775)

4,137,837

4,137,837

4,213,486(75,649)

600,046¥6,921,840

600,046¥6,921,840

604,302¥7,043,521(4,255)¥(121,680)¥80,234

31,128¥5,286,833

Millions of yen
Fair value
March 31, 2022
Receivables:
Installment sales .....
Deferred profit on
installment sales .
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Receivables:
Loans ......................
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Lease receivables andinvestments inleases .....................
Residual values ofinvestments inleases ..................
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Long-term
receivables .............
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Total ...........................

Bonds .........................
Long-term loans frombanks and otherfinancial
institutions .............
Loans from thesecuritizations of
the minimum future
rentals on lease
contracts.................
Total ...........................

Level 1

Level 2

Level 3

Total

Carrying
amountUnrealized
gain (loss)¥255,143(11,110)¥251,647¥251,647(1,268)242,763¥8,884

1,845,975¥211

1,854,363

1,854,575(9,977)
1,835,998

18,5763,265,267(84,144)

75,9483,231,741

3,307,689(8,304)
3,172,818

134,871

108,188

31,419¥5,445,331(76,769)
31,419¥5,282,999¥162,332¥2,236,181¥2,236,181¥2,263,891¥(27,710)

3,877,899

3,877,899

3,923,672(45,773)

609,674¥6,723,754

609,674¥6,723,754

604,493¥6,792,057

5,180¥(68,302)¥76,159

31,419¥5,369,172

Financial Information

2023

71

Thousands of U.S. dollars
Fair value
March 31, 2023
Receivables:
Installment sales .....
Deferred profit on
installment sales ....................
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Receivables:
Loans ......................
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Lease receivables andinvestments inleases .....................
Residual values ofinvestments inleases ..................
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Long-term
receivables .............
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Total ...........................

Bonds .........................
Long-term loans frombanks and otherfinancial
institutions .............
Loans from thesecuritizations of
the minimum future
rentals on lease
contracts.................
Total ...........................

Level 1

Level 2

Level 3

Total

Carrying
amountUnrealized
gain (loss)$1,738,949(72,547)$1,710,638$1,710,638(7,999)1,658,401$52,236

14,370,015$1,97913,853,326

13,855,306(76,150)
14,293,864(438,558)

24,542,629(629,438)

601,284

23,952,611

24,553,896(54,584)
23,858,606

695,289

751,221234,047

234,047(517,173)
234,047$39,750,624$40,353,889$40,044,920$308,968$16,420,723$16,420,723$16,734,825$(314,101)

31,111,556

31,111,556

31,680,352(568,796)

4,511,631$52,043,911

4,511,631$52,043,911

4,543,627$52,958,805(31,995)$(914,893)$603,264

Cash and cash equivalents, time deposits other than cash equivalents, bank overdrafts, notes andaccounts payable- trade, short-term loans and commercial paper were omitted as the carrying values areapproximate fair value because of their short maturities.

72

Financial Information

2023

The following is a description of valuation methodologies and inputs used for measurement of the fair valueof assets and liabilities:
The financial assets and liabilities measured at the fair values in the consolidated balance sheet
Marketable and investment securities
The fair values of listed equity securities are measured at the quoted market prices and categorized as
Level 1. Non-listed equity securities whose fair value is calculated by significant unobservable inputs are
categorized as Level 3.
The fair values of debt securities with the quoted market prices are measured at those prices.
Government bonds and municipal bonds are categorized as Level 1 and other bonds are categorized as
Level 2. Among debt securities without the quoted market prices, the carrying values of debt securities
with floating interest rates approximate fair value because the floating rates will be determined by themarket interest rate in the short term as long as there are no significant fluctuations in the credit standing.
The fair values of debt securities with fixed interest rates are determined by discounting the future cash
flows at a rate adding spread to a risk-free rate at the fiscal year end. These are calculated by observable
inputs and categorized as Level 2.
Derivatives
The fair values of derivative transactions are measured at the offered price by financial institutions or
discounted present values measured by using observable inputs, and categorized as Level 2. Interest rate
swaps, foreign exchange forward contracts and currency interest rate swaps that are accounted for by hedge
accounting are treated together with hedged long-term borrowings, etc. Therefore, their fair values areincluded in the fair values of hedged assets or liabilities. (See “Long-term loans from banks and otherfinancial institutions” on below “The financial assets and liabilities not measured at the fair values in the
consolidated balance sheet”).
The financial assets and liabilities not measured at the fair values in the consolidated balance sheet
Receivables — Installment sales
The fair values of receivables — installment sales are measured by discounting the amounts to bereceived based on the collection schedule at the interest rate assumed when similar and new installment
sales are made, based on the same internal rating and periods, or by discounting the amount to bereceived based the collection schedule reduced by the amount of the estimated bad debts at a risk-freerate at the fiscal year end, based on the same internal rating and periods. These are categorized as Level
3.
Lease receivables and investments in leases
The fair values of lease receivables and investments in leases are measured by discounting the amount tobe received based on the collection schedule reduced by the amount of the estimate for the administrativeand maintenance expenses at the interest rates assumed when similar and new lease dealings are made,based on the same internal rating and periods, or by discounting the amount to be received based thecollection schedule reduced by the amount of the estimate for the administrative and maintenanceexpenses and estimated bad debts at a risk-free rate at the fiscal year end, based on the same internalrating and periods.
Those calculated by significant unobservable inputs are categorized as Level 3 and others are categorized
as Level 2.
Receivables — Loans
The carrying values of loan receivables with floating interest rates approximate fair value because thefloating rates will be determined by the market interest rate in the short term as long as there are no
significant fluctuations in the credit standing after lending. The fair values of loan receivables with fixedinterest rates are measured by discounting the amounts to be received, including principal and interest at
the interest rates assumed when similar and new lending is made, based on the same internal rating andperiods, or by discounting the total of principal and interest reduced by the estimated bad debts at a risk-

Financial Information

2023

73

free rate at the fiscal year end, based on the same internal rating and periods. These are categorized as
Level 3.
Long-term receivables
The fair values of long-term receivables, which are composed of receivables to customers in distress, aremeasured at carrying value reduced by the estimated uncollectible amount based on the estimatedamount of the collateral value and the recoverable amount by guarantee. These are categorized as Level
3.
Bonds
The carrying values of bonds settled in the short-term approximate fair value. The carrying values ofbonds settled in the long term with floating interest rates approximate fair value because the floating
rates will be determined by the market interest rate in the short term and there were no significant
fluctuations in the credit standing of the Companies after issuance. The fair values of other bonds with
the quoted market prices are measured by those prices. The fair values of other bonds without the quoted
market prices are measured by discounting the total amount to be paid, including principal and interest
based on the specific periods at the interest rates assumed when issuing a new bond with similar terms.
These are categorized as Level 2.
Loans from the securitizations of the minimum future rentals on lease contracts
The carrying values of loans from the securitizations of the minimum future rentals on lease contracts
settled in the short-term approximate fair value. The carrying values of loans from the securitizations of
the minimum future rentals on leases settled in the long term with floating interest rates approximate fairvalue because the floating interest rate will be determined by the market interest rate in the short term
and there are no significant fluctuations in the credit standing of the Companies after securitizing. The
fair values of other loans from the securitizations of the minimum future rentals on lease contracts aremeasured by discounting the cash flows to be paid, including principal and interest based on specificperiod, at interest rates assumed when a similar and new securitization is made. These are categorized as
Level 2.
Long-term loans from banks and other financial institutions
The carrying values of long-term loans with floating interest rates approximate fair value because thefloating rates will be determined by the market interest rate in the short term and there are no significant
fluctuations in the credit standing of the Companies after borrowing. The fair values of long-term loans
with fixed interest rates are measured by discounting the total amount to be paid, including principal andinterest (*) based on specific period, at interest rates assumed when a similar and new borrowing ismade. These are categorized as Level 2.
(*) Regarding the long-term loans involved in the interest rate swap contracts that qualify for hedge accounting and meet
specific matching criteria, the total amount of principal and interest at the post-swap rate is applied.
Regarding the long-term loans involved in the cross-currency interest rate swap contracts that qualify for hedge
accounting and meet specific matching criteria, the total amount of principal and interest is considered as borrowings of yen
currency at a fixed rate.

Information on the financial instruments measured at the fair values in the consolidated balance sheet thatcategorized as Level 3 is summarized below:
Quantitative information related to significant unobservable inputs
March 31, 2023

Valuation method

Marketable and investment securities:
Equity securities ............. Multiple method

Significant unobservable
inputs

Input range

Weighted averageof input

EV/RAV ratio

1.37

1.37

In addition to the above, for certain unlisted equity securities held by the consolidated foreign subsidiaries that
adopted IFRS, present value method is applied where future cash flows estimated with consideration of profitability,
capital expenditure and repayment of debts is used as significant unobservable inputs. These are categorized as
Level 3.
Large fluctuation of estimated future cash flows cause significant fluctuation of stock values.

74

Financial Information

2023

Information for others has been omitted as it is immaterial.

March 31, 2022

Valuation method

Marketable and investment securities:
Equity securities ............. Multiple method

Significant unobservable
inputs

Input range

Weighted averageof input

EV/RAV ratio

1.37

1.37

Information for others has been omitted as it is immaterial.

Reconciliation from the beginning balance to the ending balance
Millions of yen
2023
Marketable and investment securities
Equity securities
Other
Beginning balance .................................
Income and other comprehensive income:
Income (1)...........................................
Other comprehensive income (2) ........
Purchase, sales, and redemption:
Purchase (3) ........................................
Sales and redemption ..........................
Reclassified to Level 3 ..........................
Reclassified from Level 3 .....................
Ending balance ......................................
Income on financial assets andliabilities held at end of year (1) .......

¥16,194¥2,331¥18,526

(273)
1,711

(167)
1

(441)
1,712

7,140
(3,534)

216
(762)

7,356
(4,297)

21,238

1,618

22,857

(273)

(167)

(441)

Millions of yen
2022
Marketable and investment securities
Equity securities
Other
Beginning balance .................................
Income and other comprehensive income:
Income (1)...........................................
Other comprehensive income (2) ........
Purchase, sales, and redemption:
Purchase (3) ........................................
Sales and redemption ..........................
Reclassified to Level 3 ..........................
Reclassified from Level 3 .....................
Ending balance ......................................
Income on financial assets andliabilities held at end of year (1) .......

Total

Total

¥ 9,829¥9,829

226
1,386

226
1,386

4,776
(24)

¥3,746(1,414)

8,522(1,439)16,1942,331

18,526

226

226

Financial Information

2023

75

Thousands of U.S. dollars
2023
Marketable and investment securities
Equity securities
Other
Beginning balance .................................
Income and other comprehensive income:
Income (1)...........................................
Other comprehensive income (2) ........
Purchase, sales, and redemption:
Purchase (3) ........................................
Sales and redemption ..........................
Reclassified to Level 3 ..........................
Reclassified from Level 3 .....................
Ending balance ......................................
Income on financial assets andliabilities held at end of year (1) .......

Total$121,762$17,531$139,294(2,057)
12,871(1,258)5(3,316)
12,87753,687(26,572)

1,625(5,736)55,312(32,308)

159,691

12,167

171,859(2,057)(1,258)(3,316)

Notes:(1) Mainly included in “Other — net” for the year ended March 31, 2023, and “Revenues” for the year ended
March 31, 2022, in the consolidated statements of income.
(2) Mainly included in “Foreign currency translation adjustments” for the year ended March 31, 2023, and “Netunrealized gain on available-for-sale securities” for the year ended March 31, 2022, in the consolidated
statements of comprehensive income.
(3) Purchase includes increases due to transfer from other accounts for the year ended March 31, 2023, andincreases due to the merger with Hitachi Capital and transfer from other accounts for the year ended March 31,
2022.

Details of fair value measurement
Measurement of fair value is controlled by Administrative department which is independent from sales
department. The fair value was calculated using various appraisal models appropriate to each financial
instrument, considering their nature and risk. Administrative department monitors changes in important
indexes that may affect fluctuation of fair value to assess the adequacy of fair value measurement.
Effect on fair value when significant unobservable inputs changed
EV/RAV ratio
EV/RAV ratio is a ratio that enterprise value of comparable companies divided by restricted asset value of
those companies. Large fluctuation of the ratio causes large fluctuation of fair value of equity securities.

76

Financial Information

2023

Carrying amounts of nonmarketable equity securities and investments in partnerships, etc., that theequity interest equivalents are recorded as net in the consolidated balance sheets
Carrying amount

Nonmarketable equity securities (1):
Shares of subsidiaries and associatedcompanies .......................................................
Unlisted shares ...................................................
Total ............................................................
Investments in partnership, etc. (2):Trust beneficiary interests ..................................
Silent partnership interests and other .................
Unconsolidated subsidiaries and associatedcompanies .......................................................
Total ............................................................

2022

Thousands of
U.S. dollars
2023¥125,362
9,333¥134,696¥95,132
27,190¥122,323$942,578
70,174$1,012,752¥122,904¥2,240117,835$924,092

57,291¥180,195

63,853¥183,929

430,763$1,354,857

Millions of yen
2023

Notes:(1) Nonmarketable equity securities include unlisted equity securities and the fair values are not subject to fair value
disclosure according to Paragraph 5 of Implementation Guidance on Disclosure about Fair Value of Financial
Instruments (ASBJ Guidance No. 19).
(2) Investments in partnership etc., are mainly investments in silent partnerships and limited partnerships and the fairvalues are not subject to fair value disclosure according to Paragraph 24-16 of Implementation Guidance on
Accounting Standard for Fair Value Measurement.

These financial instruments are not included in “Marketable securities” in the tables in (5) Financial
instruments categorized by fair value hierarchy.
(6) Maturity analysis for receivables and securities with contractual maturities

March 31, 2023
Cash and cash
equivalents ....................
Time deposits other thancash equivalents ............
Bank overdrafts ................
Receivables
Installment sales (1) ......
Loans ............................
Lease receivables andinvestments in leases(2) .................................
Investment securities
Available-for-salesecurities with
contractual maturities
Debt securities ..........
Other.........................
Total ..................................

Due in one
year or lessDue after one
year throughtwo years

Millions of yen
Due after
Due after
two years
three years
throughthrough four
three years
years

Due after
four years
through fiveyears

Due after
five years¥460,486
126,952
2,249
79,993
838,619¥58,355
340,672¥41,266
268,551¥26,640
164,075¥13,506
128,981¥11,516
170,310

1,049,970

817,208

632,576402,751

247,334

650,363

1,003
2,209
¥2,561,485

5,077
36,407¥1,257,722

1,651
20,115¥964,162

2,009
20,889¥616,366

2,453
6,383
¥398,658

21,03878,523¥931,752

Financial Information

2023

77

March 31, 2022

Cash and cash
equivalents ....................
Time deposits other thancash equivalents ............
Bank overdrafts ................
Receivables
Installment sales (1) ......
Loans ............................
Lease receivables andinvestments in leases(2) .................................
Investment securities
Available-for-salesecurities with
contractual maturities
Debt securities ..........
Other.........................
Total ..................................

March 31, 2023
Cash and cash
equivalents ....................
Time deposits other thancash equivalents ............
Bank overdrafts ................
Receivables
Installment sales (1) ......
Loans ............................
Lease receivables andinvestments in leases(2) .................................
Investment securities
Available-for-salesecurities with
contractual maturities
Debt securities ..........
Other.........................
Total ..................................

Due in one
year or lessDue after
one yearthrough twoyears

Millions of yen
Due after
Due after
two years
three years
throughthrough four
three years
years

Due after
four years
through fiveyears

Due after
five years¥520,083
12,9907,868
85,911
661,374¥66,045
288,379¥46,341
272,777¥29,251
161,525¥14,826
146,037¥12,765
315,880

1,040,057

827,658

628,720

413,639

240,182

623,123701
1,318¥2,330,305

1,760
30,975¥1,214,820

4,428
22,003¥974,272

1,947
30,681¥637,046

1,020
19,043¥421,111

12,56473,928¥1,038,261

Due in one
year or lessDue after
one yearthrough two
years

Thousands of U.S. dollars
Due after
Due after
two years
three years
throughthrough four
three years
years

Due after
four years
through fiveyears

Due after
five years$3,462,305
954,531
16,912
601,454
6,305,412$438,766
2,561,450$310,276
2,019,187$200,307
1,233,647$101,551
969,783$86,592
1,280,533

7,894,514

6,144,427

4,756,216

3,028,204

1,859,659

4,889,948

7,546
16,615$19,259,292

38,179273,737$9,456,561

12,418151,243$7,249,342

15,108157,064$4,634,333

18,44747,993$2,997,435

158,181590,398$7,005,654(1) Including unrealized profit of installment sales.
(2) Including unearned interest income.
(3) Long-term receivables to customers in distress, whose repayment schedule cannot be expected, are notpresented in the above table.
(4) Please see Note 13 for information on the maturity of short-term borrowings and long-term debt.

78

Financial Information

2023

27. Derivatives
Derivative transactions to which hedge accounting is not applied as of March 31, 2023 and 2022, were as
follows:
2023
Contract
amountContract due after
Fairamount one year
value

Currency interest rate swap
contracts:
U.S. dollars payment, Japanese
yen receipt ................................. ¥10,000
Indonesia rupiah payment,
Japanese yen receipt ..................
1,550
Chinese yuan payment, U.S.
dollars receipt ............................
Foreign exchange forward contracts:
Selling Sterling pound ...................
8,947
Buying Euro...................................
58
Buying U.S. dollars .......................
Buying Singapore dollars ..............
Interest rate swap contracts:
Fixed-rate payment,
floating-rate receipt ....................
9,754¥(2,437)¥1,350(146)

Millions of yen

2022
Contract
amountUnrealized Contract due afterFairgain (loss) amount one yearvalue¥(2,437) ¥70,000
(146)

950

¥10,000
950

Unrealized
gain (loss)¥(8,169) ¥(8,169)
(144)

(144)

(1,712)(1,712)

(810)

(810)

417
3,714

(1,404)(1,404)

8,065
53
7

8,288

(334)

(334)

17,365

15,112Thousands of U.S. dollars
2023
Contract
amountContract due after
Fair
Unrealized
amount one year
value
gain (loss)

Currency interest rate swap
contracts:
U.S. dollars payment, Japanese
yen receipt ................................. $75,187
Indonesia rupiah payment,
Japanese yen receipt .................. 11,654
Chinese yuan payment, U.S.
dollars receipt ............................
Foreign exchange forward contracts:
Selling Sterling pound ................... 67,272
Buying Euro...................................
437
Buying U.S. dollars .......................
Buying Singapore dollars ..............
Interest rate swap contracts:
Fixed-rate payment,
floating-rate receipt.................... 73,338$(18,324) $(18,324)$10,150(1,098)(1,098)27,927(10,560)
2(10,560)2

62,315(2,513)(2,513)Financial Information

2023

79

Derivative transactions to which hedge accounting is applied as of March 31, 2023 and 2022, were as
follows:

Hedged item

Currency interest rate swap contracts:
Indonesia rupiah payment, U.S. dollars
receipt ........................................................ Loans
Thai baht payment, U.S. dollars receipt ........ Loans
Sterling pound payment, U.S. dollars
receipt ........................................................ Bonds
Singapore dollars payment, U.S. dollars
receipt ........................................................ Loans
Indonesia rupiah payment, Japanese yen
receipt ........................................................ Loans
Thai baht payment, Japanese yen receipt ...... Loans, bonds
Sterling pound payment, Japanese yen
receipt ........................................................ Loans, bonds
Sterling pound payment, Euro receipt ........... Loans, bonds
Sterling pound payment, Hong Kong dollars
receipt ........................................................ Bonds
Sterling pound payment, Australian dollars
receipt ........................................................ Bonds
Sterling pound payment, Chinese yuan
receipt ........................................................ Bonds
Sterling pound payment, Swiss francreceipt ........................................................ Bonds
Sterling pound payment, South Africa rand
receipt ........................................................ Bonds
Indonesia rupiah payment, Singapore
dollars receipt ............................................ Loans
Cross-currency interest rate swap contracts:
Euro payment, Thai baht receipt .................... Loans
Foreign exchange forward contracts:
Buying U.S. dollars ..................................... Forecast transaction
Foreign exchange forward contracts:
Selling U.S. dollars ...................................... Forecast transaction
Buying Euro.................................................. Commercial paper
Buying U.S. dollars ..................................... Commercial paper
Interest rate swap contracts:
Floating-rate payment, fixed-rate receipt ...... Loans, bonds
Fixed-rate payment, floating-rate receipt ...... Loans, bonds
Interest rate swap contracts:
Fixed-rate payment, floating-rate receipt ...... Loans

80

Financial Information

2023

Contract
amountMillions of yen
2023
Contract
amountdue after
one year

Fair
value

¥5,526
10,104¥2,723
6,892

¥127
299

71,83952,477142

11,398

8,861

133

1,000
5,500

1,000
4,000

(117)
(645)

311,700
171,221

157,300
120,219(31,938)(1,657)

10,0357,824(9)11,659

8,520

(556)

1,942

64

9,938

256

1,498

1,498

11

721

562

17

172

105

28
282
76,271
14,508

38

58
(386)
(64)

90,2301,405,334

57,118920,949(1,311)
54,977

132,326

99,581

Hedged item

Currency interest rate swap contracts:
Thai baht payment, Japanese yen receipt ...... Loans, bonds
Thai baht payment, U.S. dollars receipt ........ Loans, bonds
Indonesia rupiah payment, Japanese yen
receipt ........................................................ Loans
Indonesia rupiah payment, U.S. dollars
receipt ........................................................ Loans
Indonesia rupiah payment, Singapore dollars
receipt ........................................................ Loans
Singapore dollars payment, U.S. dollars
receipt ........................................................ Loans
Chinese yuan payment, U.S. dollars
receipt ........................................................ Loans
Hong Kong dollars payment, U.S. dollars
receipt ........................................................ Bonds
Sterling pound payment, Japanese yen
receipt ........................................................ Loans, bonds
Sterling pound payment, U.S. dollars
receipt ........................................................ Loans, bonds
Sterling pound payment, Euro receipt ........... Loans, bonds
Sterling pound payment, Chinese yuan
receipt ........................................................ Bonds
Sterling pound payment, Hong Kong dollars
receipt ........................................................ Bonds
Sterling pound payment, Australian dollars
receipt ........................................................ Bonds
Sterling pound payment, Swiss francreceipt ........................................................ Bonds
Cross-currency interest rate swap contracts:
Thai baht payment, U.S. dollars receipt ........ Loans
Euro payment, Thai baht receipt .................... Loans
Foreign exchange forward contracts:
Selling U.S. dollars ...................................... Forecast transaction
Buying Euro.................................................. Commercial paper
Interest rate swap contracts:
Floating-rate payment, fixed-rate receipt ...... Loans, bonds
Fixed-rate payment, floating-rate receipt ...... Loans, bonds
Interest rate swap contracts:
Fixed-rate payment, floating-rate receipt ...... Loans

Contract
amountMillions of yen
2022
Contract
amountdue after
one year

Fair
value

¥5,50013,256¥5,5005,796¥(137)
199

1,000

1,000

(85)

11,661

4,888

(501)

649

649

(41)

10,818

8,615

(21)

6,119

(738)

12,23933

187,500

187,500(27,050)

56,299203,546

44,672
146,269(1,088)(4,831)

5,778

1,926

366

15,170

7,194

(468)

11,96011,960

(213)

3,711

3,711

79

5
215

156

377
61,515

282

46
169

63,551
912,297

55,507678,390(1,499)6,901

164,157

47,667

Financial Information

2023

81

Hedged item

Currency interest rate swap contracts:
Indonesia rupiah payment, U.S. dollars
receipt ........................................................ Loans
Thai baht payment, U.S. dollars receipt ........ Loans
Sterling pound payment, U.S. dollars
receipt ........................................................ Bonds
Singapore dollars payment, U.S. dollars
receipt ........................................................ Loans
Indonesia rupiah payment, Japanese yen
receipt ........................................................ Loans
Thai baht payment, Japanese yen receipt ... Loans, bonds
Sterling pound payment, Japanese yen
receipt ........................................................ Loans, bonds
Sterling pound payment, Euro receipt ........... Loans, bonds
Sterling pound payment, Hong Kong
dollars receipt.......................................... Bonds
Sterling pound payment, Australian dollars
receipt ........................................................ Bonds
Sterling pound payment, Chinese yuan
receipt ........................................................ Bonds
Sterling pound payment, Swiss francreceipt ........................................................ Bonds
Sterling pound payment, South Africa rand
receipt ........................................................ Bonds
Indonesia rupiah payment, Singapore
dollars receipt ............................................ Loans
Cross-currency interest rate swap contracts:
Euro payment, Thai baht receipt .................... Loans
Foreign exchange forward contracts:
Buying U.S. dollars ....................................... Forecast transaction
Foreign exchange forward contracts:
Selling U.S. dollars ...................................... Forecast transaction
Buying Euro.................................................. Commercial paper
Buying U.S. dollars ..................................... Commercial paper
Interest rate swap contracts:
Floating-rate payment, fixed-rate receipt ...... Loans, bonds
Fixed-rate payment, floating-rate receipt ...... Loans, bonds
Interest rate swap contracts:
Fixed-rate payment, floating-rate receipt ...... Loans

Thousands of U.S. dollars
2023
Contract
amountContract
Fair
due after
amountone yearvalue$41,554
75,969$20,474
51,820$961
2,252

540,143394,566

1,069

85,704

66,629

1,002

7,518
41,353

7,518
30,075(883)(4,852)

2,343,609 1,182,706
1,287,375 903,902(240,141)(12,463)

75,457

58,831(69)

87,66664,064(4,181)

14,601487

74,728

1,931

11,263

11,263

89

5,426

4,229

128

1,300

790

216
2,124
573,469
109,082288

441(2,902)(488)

678,422 429,460
10,566,423 6,924,430(9,862)
413,362

994,933

748,731

The fair values of derivative transactions are measured at the forward foreign exchange quotation, theoffered price by financial institutions, or the price calculated according to the present discounted value,and so on.
The contract amounts of derivatives, which are shown in the above tables, do not represent the amounts
exchanged by the parties and do not measure the Companies’ exposure to credit or market risk.
The cross-currency interest rate swap contracts, interest rate swap contracts, and foreign currency
exchange contracts that qualify for hedge accounting and meet specific matching criteria are assigned tothe associated loans from banks and other financial institutions and lease receivables recorded in the
consolidated balance sheets at March 31, 2023 and 2022, and included in the fair value of hedged items.

82

Financial Information

2023

28. Other Comprehensive Income
The components of other comprehensive income for the years ended March 31, 2023 and 2022, were as
follows:

Net unrealized loss on available-for-sale securities:(Losses) gains arising during the year .................................
Reclassification adjustments to loss ....................................
Amount before income tax effect ........................................
Income tax effect .................................................................
Total .................................................................................
Deferred gain on derivatives under hedge accounting:
Gains arising during the year ...............................................
Reclassification adjustments to profit..................................
Amount before income tax effect ........................................
Income tax effect .................................................................
Total .................................................................................
Foreign currency translation adjustments:
Adjustments arising during the year ....................................
Reclassification adjustments................................................
Amount before income tax effect ........................................
Income tax effect .................................................................
Total .................................................................................
Defined retirement benefit plans:
Adjustments arising during the year ....................................
Reclassification adjustments to profit..................................
Amount before income tax effect ........................................
Income tax effect .................................................................
Total .................................................................................
Share of other comprehensive income in associates:
Gains arising during the year ...............................................
Reclassification adjustments to profit..................................
Total .................................................................................
Total other comprehensive income ..................................

2022

Thousands of
U.S. dollars
2023¥(311)(886)(1,198)734(463)¥5,749(29,413)(23,664)
8,085(15,578)$(2,342)(6,666)(9,008)5,521(3,487)53,847(2,591)
51,256(11,624)
39,631

10,142
8,722
18,864(3,863)15,001

404,870(19,485)
385,384(87,400)
297,984

93,891

69,358705,949

93,891

69,358705,949

93,891

69,358705,949

2,892
(85)
2,806
(952)
1,854

1,389
138
1,527
(465)
1,061

21,749(644)
21,104(7,160)13,944

11,204
1,305
12,510¥147,424

3,263
125
3,389
¥73,232

84,243
9,818
94,062$1,108,452

Millions of yen
2023

Financial Information

2023

83

29. Segment Information
Under ASBJ Statement No. 17, Accounting Standard for Disclosures about Segments of an Enterprise andRelated Information, and ASBJ Guidance No. 20, Guidance on Accounting Standard for Disclosures about
Segments of an Enterprise and Related Information, an entity is required to report financial and descriptive
information about its reportable segments. Reportable segments are operating segments or aggregations ofoperating segments that meet specified criteria. Operating segments are components of an entity about which
separate financial information is available and such information is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing performance. Generally, segment
information is required to be reported on the same basis as is used internally for evaluating operating
segment performance and deciding how to allocate resources to operating segments.
1. Description of reportable segments
Effective April 1, 2022, the Companies integrated business organizations with similar functions and roles in
preparation for the 2025 Medium-term Management Plan (MTMP). Following the organizational changes,
the Companies have changed the reportable segments to the following seven segments, which are “Customer
Solutions,” “Global Business,” “Environment Energy & Infrastructure,” “Aviation,” “Logistics,” “RealEstate,” and “Mobility,” effective April 1, 2022.
Description of new reportable segments is as follows:
Reportable segment
Customer Solutions
Global Business
Environment Energy &Infrastructure
Aviation
Logistics
Real Estate
Mobility

Description of services and business
Finance solutions for companies and government agencies,
sales finance provided through collaboration with vendors,
real estate leasing, and financial services
Finance solutions, sales finance provided throughcollaboration with vendors in Europe, the Americas, China,
and ASEAN region
Renewable energy power generation business, energysaving business, and overseas infrastructure investment
business
Aircraft leasing business and aircraft engine leasing
business
Marine container leasing business, and railway freight car
leasing business
Real estate securitization finance, real estate revitalization
investment business, and real estate asset managementbusiness
Auto leasing business and supplementary services

The segment information for the year ended March 31, 2022, has been reclassified based on the newreportable segments.
Also, following the organizational changes, the Company plan to change the reportable segment name“Environment Energy & Infrastructure” to “Environment Energy,” effective April 1, 2023.

84

Financial Information

2023

2. Methods of measurement for the amounts of revenues, profit or loss, assets, and other items for eachreportable segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2,“Summary of Significant Accounting Policies.”
3. Information about revenues, profit or loss, assets, and other items

Year Ended March 31,
Customer
2023
Solutions
Revenues:
Revenue from externalcustomers ....................... ¥ 1,082,135
Intersegment revenue ortransfers..........................
1,333
Total ....................... 1,083,469
Segment profit ..................
38,167
Segment assets (3)............ 3,227,742
Other items:
Depreciation .....................
104,644
Amortization of
goodwill .........................
Cost of funds and interest
expense ..........................
12,702Equity in earnings ofaffiliates .........................
1,277
Other income....................
1,088
Gain on sales ofinvestment securities ..
1,088
Gain on revaluation of
investment securities ..
Gain on step
acquisition ..................
Other expenses ................
29
Loss on sales ofinvestment securities ..
29
Loss on revaluation of
investment securities ..
Loss on sales of sharesof subsidiaries andaffiliates ......................
Impairment loss ............
Taxes ................................
17,042
Investments in equity
method affiliates.............
21,291
Increase in property andequipment andintangible assets .............
67,069Environment
Energy &Infrastructure

GlobalBusiness

Millions of yen
Reportable segment
Aviation

Logistics

Real Estate

Mobility¥ 331,775¥ 48,104¥ 167,022¥ 116,671¥ 93,609¥ 55,796

331,775
29,0132,644,283

5
48,10911,657433,296

167,0226,209
1,640,232

116,671
15,385
1,092,910

70
93,68012,645447,277

47
55,843
3,798
41,402

77,151

14,846

83,17454,415

3,018

14,224

3,138

1,935

500

67

841
58,6606,161

38,647

22,810

5,520

732

60)
7,194

7,691
2,694

155
109

156

146

2,615

1,534

109

7,194
2,506

1,159
366

1,006

26
2,000

366
1,006

479
10,852

4,973

2,791

4,601

51)

356

3,835

86,712

4,291

1,927

15,02530,024

174,698

14,378156,170

49,971

5,445

14,428Financial Information

2023

85

Millions of yen
Year Ended March 31,
Adjustments Consolidated
2023
(1)
(2)
Revenues:
Revenue from externalcustomers .......................
¥ 1,116 ¥ 1,896,231
Intersegment revenue ortransfers..........................
(1,457)
Total .......................
(340) 1,896,231
Segment profit ..................
(636)
116,241
Segment assets (3)............ 1,199,051 10,726,196
Other items:
Depreciation .....................
(1,550)349,926
Amortization of
goodwill .........................
2,117
8,601
Cost of funds and interest
expense ..........................
(832)
144,402
Equity in earnings ofaffiliates .........................
11,982Other income....................
263
11,350Gain on sales ofinvestment securities ..
263
2,996
Gain on revaluation of
investment securities ..
7,194Gain on step
acquisition ..................
1,159
Other expenses .................
354
4,262
Loss on sales ofinvestment securities ..
350
407
Loss on revaluation of
investment securities ..
32,369
Loss on sales of sharesof subsidiaries andaffiliates ......................
1,006
Impairment loss ............
479
Taxes ................................
(5,115)35,451
Investments in equity
method affiliates.............
163,109
Increase in property andequipment andintangible assets .............
14,906
497,068

86

Financial Information

2023

Year Ended March 31,
Customer
2022
Solutions
Revenues:
Revenue from externalcustomers ....................... ¥ 1,135,650
Intersegment revenue ortransfers..........................
1,461
Total .......................
1,137,111
Segment profit ..................
32,692
Segment assets (3)............ 3,337,672
Other items:
Depreciation .....................
121,299
Amortization of
goodwill .........................
Cost of funds and interest
expense ..........................
12,655Equity in earnings ofaffiliates .........................
883
Other income....................
2,941
Gain on sales ofinvestment securities ..
2,941
Gain from bargain
purchase......................
Other expenses .................
48
Loss on sales ofinvestment securities ..
48
Loss on step
acquisition ..................
Taxes ................................
14,702
Investments in equity
method affiliates.............
20,301
Increase in property andequipment andintangible assets .............
333,575

Environment
Energy &Infrastructure

GlobalBusiness

Millions of yen
Reportable segment
Aviation

Logistics

Real Estate

Mobility¥ 268,268¥ 50,519¥ 156,526¥ 50,938¥ 48,984¥ 55,019

32
268,300
40,8562,316,383

450,523
2,278
419,399

156,526
5,682
1,365,126

24
50,963815
1,026,757

92
49,076
12,395
712,700

89
55,1093,134
129,429

66,676

15,86880,84825,634

3,126

14,414

2,621

139

500

58

696
32,053

5,521

29,715

13,5004,995

723(1,174)26,754

2,442

42
239

124

210

2,289

26,754

239

49
4
44
16,087

4,035

3,928

238

6,127

602

3,516

60,288

2,634

1,670

31,941

22,116

409,986

99,840148,896

92,50623,22368,457

Financial Information

2023

87

Millions of yen
Year Ended March 31,
Adjustments Consolidated
2022
(1)
(2)
Revenues:
Revenue from externalcustomers .......................
¥ (347) ¥ 1,765,559
Intersegment revenue ortransfers..........................
(1,705)
Total .......................
(2,052) 1,765,559
Segment profit ..................
1,546
99,401
Segment assets (3)............ 1,021,402 10,328,872
Other items:
Depreciation .....................
(1,761)
326,105
Amortization of
goodwill .........................
2,117
6,135
Cost of funds and interest
expense ..........................
(15,793)
83,372Equity in earnings ofaffiliates .........................
4,818
Other income....................
464
30,399Gain on sales ofinvestment securities ..
32
29,967
Gain from bargain
purchase......................
431
431
Other expenses .................
290
388
Loss on sales ofinvestment securities ..
61
114
Loss on step
acquisition...................
229
273
Taxes ................................
173
45,896
Investments in equity
method affiliates.............
142,469
Increase in property andequipment andintangible assets .............
41,574
1,218,059

88

Financial Information

2023

Thousands of U.S. dollars
Reportable segment

Year Ended March 31,
2023
Revenues:
Revenue from externalcustomers .......................
Intersegment revenue ortransfers..........................
Total .......................
Segment profit ..................
Segment assets (3)............
Other items:
Depreciation .....................
Amortization of
goodwill .........................
Cost of funds and interest
expense ..........................
Equity in earnings ofaffiliates .........................
Other income....................
Gain on sales ofinvestment securities ..
Gain on revaluation of
investment securities ..
Gain on step
acquisition ..................
Other expenses .................
Loss on sales ofinvestment securities ..
Loss on revaluation of
investment securities ..
Loss on sales of sharesof subsidiaries andaffiliates ......................
Impairment loss ............
Taxes ................................
Investments in equity
method affiliates.............
Increase in property andequipment andintangible assets .............

Customer
SolutionsGlobalBusiness$ 8,136,360$ 2,494,551

10,026
8,146,386
286,977
24,268,739
786,798

Environment
Energy &Infrastructure

Aviation

Logistics$ 361,685$ 1,255,809$ 877,225$ 703,832$ 419,519

2,494,551
218,149
19,881,833

41
361,727
87,646
3,257,867

1,255,809
46,68812,332,576

877,225
115,680
8,217,369

532
704,365
95,0793,362,990

355
419,874
28,559311,293580,089

111,631625,373

409,141

22,698106,954

23,597

14,555

3,762

511

6,325

Real Estate

Mobility

95,510441,054

46,325

290,584

171,506

41,504

5,508

9,608
8,182

(458)
54,09557,831
20,258

1,168
825

1,176
2

1,103

19,661

11,537

825

2

8,182
54,095223

18,845223

200
15,040

8,720
2,752

7,566

2,752
7,566

128,139

3,604
81,59537,391

20,99034,600

(384)

2,679

160,088

28,839651,975

32,267

14,493112,975

225,747

504,281

1,313,521

108,106

1,174,215

375,726

40,943

108,483

Financial Information

2023

89

Year Ended March 31,
2023
Revenues:
Revenue from externalcustomers .......................
Intersegment revenue ortransfers..........................
Total .......................
Segment profit ..................
Segment assets (3)............
Other items:
Depreciation .....................
Amortization of
goodwill .........................
Cost of funds and interest
expense ..........................
Equity in earnings ofaffiliates .........................
Other income....................
Gain on sales ofinvestment securities ..
Gain on revaluation of
investment securities ..
Gain on step
acquisition ..................
Other expenses .................
Loss on sales ofinvestment securities.
Loss on revaluation of
investment securities.
Loss on sales of sharesof subsidiaries andaffiliates ....................
Impairment loss ..........
Taxes ................................
Investments in equity
method affiliates.............
Increase in property andequipment andintangible assets .............

Thousands of U.S. dollars
Reportable segment
Adjustments Consolidated(1)(2)$ 8,396 $ 14,257,381(10,955)(2,559)(4,788)9,015,421

14,257,381
873,994
80,648,092(11,660)

2,631,027

15,92064,673(6,259)1,085,733

1,978

90,091
85,343

1,978

22,52654,095

2,663

8,720
32,050

2,638

3,063

24

17,816(38,459)

7,566
3,604
266,552
1,226,387

112,075

3,737,354

Notes:(1) “Adjustments” in revenues contain adjustments of ¥(3,062) million ($(23,029) thousand) and ¥(5,804) million forthe years ended March 31, 2023 and 2022, respectively, due to purchase method accounting applied to the mergerof Hitachi Capital.
“Adjustments” in segment profit contain mainly Company-wide expenses included in selling, general, andadministrative expenses, which are not attributed to each reportable segment. “Adjustments” in segment profit also
contain adjustments due to purchase method accounting applied to the merger of Hitachi Capital of ¥2,775 million($20,869 thousand) and ¥2,744 million for the years ended March 31, 2023 and 2022, respectively.
“Adjustments” in segment assets contain goodwill recognized when Diamond Lease Company Limited and UFJ
Central Leasing Company Limited merged and became Mitsubishi UFJ Lease in 2007, investment securities held
for Company-wide purpose which are not attributed to each reportable segment, and elimination of intersegment
transactions amounting to ¥105,820 million ($795,644 thousand) and ¥37,907 million, as of March 31, 2023 and2022, respectively. The total of such assets and the segment assets which attributed to each reportable segment,was ¥9,632,966 million ($72,428,315 thousand) and ¥9,345,376 million, as of March 31, 2023 and 2022,
respectively. The remaining amount of “Adjustments” in segment assets is the difference between the total amountof segment assets, including corporate division and the total assets on the consolidated balance sheets, and mainlycontains the assets other than the ones which are attributed to each reportable segment, such as cash and cash
equivalents, own-used assets amounting to ¥1,093,230 million ($8,219,777 thousand) and ¥983,495 million, as ofMarch 31, 2023 and 2022, respectively.
“Adjustments” in amortization of goodwill represents amortization of goodwill recognized at the time of mergerin 2007.

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“Adjustments” in cost of funds and interest expense represent the difference between the total amount of funding
cost on consolidated basis and the funding cost attributed to each reportable segment.
“Adjustments” in gain from bargain purchase represents the amount recognized as a result of the Business
Integration for the year ended March 31, 2022.
“Adjustments” in taxes represents difference between the total amount of taxes on consolidated basis and thetaxes attributed to each reportable segment.
(2) Segment profit is reconciled to reach net income attributable to owners of the parent in the consolidated statements
of income.
(3) Segment assets include operating assets, investments in the affiliates accounted for by the equity method, goodwill,
and investment securities.

4. Information about products and services
Millions of yen
2023

Installment
sales

Lease

Revenue from external customers ....... ¥1,557,642¥94,841

Revenue from external customers ....... ¥1,456,228

Other¥94,886¥148,862¥93,792

Loans

Other

¥63,057¥152,481

Thousands of U.S. dollars
2023
Installment
sales
Loans
Other

Lease

Revenue from external customers ....... $11,711,596

Total¥1,896,231

Millions of yen
2022

Installment
sales

Lease

Loans

$713,092$713,428

Total¥1,765,559

Total$1,119,263 $14,257,381

5. Information about geographical areas(1) Revenues

Japan¥1,277,960

North
America¥142,882

Millions of yen
2023
Europe/Middle andNear East
Asia/Oceania¥328,212¥127,891

Other¥19,285

Total¥1,896,231

Revenues are classified by country or region based on the location of customers.

Japan¥1,289,633

North
America¥112,303

Millions of yen
2022
Europe/Middle andNear East
Asia/Oceania¥240,737¥100,629

Other¥22,255

Total¥1,765,559

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91

Revenues are classified by country or region based on the location of customers.

Japan

North
AmericaThousands of U.S. dollars
2023
Europe/Middle andNear East
Asia/Oceania$9,608,726$1,074,300$2,467,762$961,590

Other

Total

$145,001 $14,257,381(2) Property and equipment

Other

Millions of yen
2023
Europe/Middle andNear East

Asia/Oceania¥160,398¥1,210,645¥689,033

Millions of yen
2022
Europe/Middle andNear East

Asia/Oceania¥998,616¥645,661

North AmericaJapan¥810,109

United States¥565,163

North AmericaJapan¥940,029

United States

Other¥489,382¥113,472

North America

Thousands of U.S. dollars
2023
Europe/Middle andNear East
Asia/Oceania

Japan

United States

Other$6,091,050$4,249,346$1,206,000$9,102,601$5,180,703

Other

Total

¥193,556

Other

Total

¥170,046

Other¥3,628,907¥3,357,208

Total$1,455,313 $27,285,016

6. Information about impairment loss for long－lived assets by reportable segment

Customer
Solutions
Impairment loss................

GlobalBusiness¥ 479

Millions of yen
2023
Adjustments Consolidated
Impairment loss................

92

Financial Information

2023¥ 8,899

Environment
Energy &Infrastructure

Millions of yen
2023
Aviation¥ 5,946

Logistics¥ 2,473

Real Estate

MobilityCustomer
SolutionsGlobalBusiness

Environment
Energy &Infrastructure

Impairment loss................

Millions of yen
2022
Aviation

Logistics

Real Estate

Mobility

Real Estate

Mobility¥ 3,550
Millions of yen
2022
Adjustments Consolidated

Impairment loss................

¥ 3,550
Thousands of U.S. dollars
2023

Customer
SolutionsGlobalBusiness

Environment
Energy &Infrastructure$3,604

Impairment loss................

Aviation$44,712

Logistics$18,595

Thousands of U.S. dollars
2023
Adjustments Consolidated$66,913

Impairment loss................

For the year ended March 31, 2023, the amount reported in “Global Business” is recorded in other income(expense) as impairment loss. The amounts recorded in “Aviation” and “Logistics” are recorded in costs.
For the year ended March 31, 2022, impairment loss is recorded in costs.
7. Information about amortization and unamortized balance of goodwill by reportable segment

Customer
Solutions
Amortization of goodwill...
Unamortized balance of
goodwill ...........................

GlobalBusiness

Environment
Energy &Infrastructure

Millions of yen
2023
Aviation

Logistics¥ 841¥ 3,138¥ 1,935

13,33032,00736,975

Real Estate¥ 500

Mobility¥ 67
714

Millions of yen
2023
Adjustments(1)
Consolidated
Amortization of goodwill...
Unamortized balance of
goodwill ...........................

¥ 2,117¥ 8,601

8,469

91,497

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Customer
Solutions
Amortization of goodwill...
Unamortized balance of
goodwill ...........................

GlobalBusiness

Environment
Energy &Infrastructure

Millions of yen
2022
Aviation

Logistics

Real Estate

Mobility¥ 696¥ 2,621

¥ 139

¥ 500

¥ 58

12,59530,48933,743

2,168

742

Millions of yen
2022
Adjustments(1)
Consolidated
Amortization of goodwill...
Unamortized balance of
goodwill ...........................

¥ 2,117¥ 6,135

10,58790,326
Thousands of U.S. dollars
2023

Customer
Solutions
Amortization of goodwill...
Unamortized balance of
goodwill ...........................

GlobalBusiness

Environment
Energy &Infrastructure

Aviation

Logistics$6,325$23,597$14,555

100,231240,660

278,008

Real Estate$3,762

Mobility
$511
5,368

Thousands of U.S. dollars
2023
Adjustments(1)
Consolidated
Amortization of goodwill...
Unamortized balance of
goodwill ...........................

$15,920$64,673

63,681

687,951Note:(1) “Adjustments” in amortization of goodwill and unamortized balance of goodwill segment assets represent the amountof amortization and unamortized balance of goodwill when Diamond Lease Company Limited and UFJ Central
Leasing Company Limited merged and became Mitsubishi UFJ Lease in 2007 .

8. Information about gain from bargain purchaseNo gain from bargain purchase was recorded for the year ended March 31, 2023.
Gain from bargain purchase of ¥431 million was recorded as other income (expenses) in the consolidated
statement of income for the year ended March 31, 2022, as a result of the Business Integration. The gainfrom bargain purchase was not attributed to reportable segments.

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30. Net Income per Share
Reconciliation of the differences between basic and diluted net income per share (EPS) for the years ended
March 31, 2023 and 2022, were as follows:

For the year ended March 31, 2023

Basic EPS:
Net income available to commonshareholders .............................
Effect of dilutive securities:
Warrants .......................................
Diluted EPS:
Net income for computation ........

For the year ended March 31, 2022

Basic EPS:
Net income available to commonshareholders .............................
Effect of dilutive securities:
Warrants .......................................
Diluted EPS:
Net income for computation ........

Thousands ofsharesMillions of yen
Net income
attributable toowners of the parent

Weighted-average
shares¥116,241

1,436,042

Yen

U.S. dollars
EPS¥80.95$0.60¥80.71

$0.60

4,209
¥116,241

1,440,251

Millions of yen
Net income
attributable toowners of the parent

Thousands ofsharesYen

Weighted-average
shares

EPS¥99,401

1,435,664¥69.24

3,736¥99,401

1,439,400¥69.06

31. Subsequent Events
a. On May 23, 2023, the Board of Directors declared the appropriation of retained earnings as follows:

Appropriations:
Cash dividends of ¥18.00 ($0.13) per share .....................................................

Millions of yen¥25,856

Thousands of
U.S. dollars$194,413

b. Acquisition of all shares of CenterPoint Development Inc. (CPD)
On April 14, 2023, the Company agreed to acquire all of the shares of CPD, an equity method affiliate thatprovides investment advice and asset management services related to logistics real estate. The Company
completed the share acquisition on April 21, 2023.
1. Outline of the business combination(1) Name and business of the acquired company
Name:
CenterPoint Development Inc.
Business: Investment advisory and asset management services related to logistics real estate(2) Reason for the business combination
The logistics market has continued to grow on the back of the surging demand due to expansion of domestic
e-commerce, and the logistics facility leasing market is also steadily growing. The expansion of e-commerceis expected to continue, and there is also a growing need for logistics facilities to meet demands, such as forlabor-saving and automation, integration or reconstruction due to aging or obsolescence, and the location inareas with traffic convenience.

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95

The Company has decided to make CPD its wholly owned subsidiary to enhance and expand the logistics
facility-related business with the company as it engages in the development of logistics facilities meeting
tenants’ needs and the asset management business specializing in such facilities.
(3) Date of the business combination
April 21, 2023
(4) Legal form of the business combination
Share transfer agreement in exchange for cash(5) Company name after the business combination
CenterPoint Development Inc.
(6) The percentage of voting rights acquired
Voting ratio held immediately before the business combination
Voting ratio after the acquisition

33.40%
100.00%(7) Background for determining the acquiring company
The reason is because the Company acquired the all of voting rights of CPD for cash consideration.
2. Details of acquisition cost and consideration by typeNot disclosed based on the agreement between both parties.
3. Details and amount of major acquisition-related cost
The cost is currently being determined.
4. The amount of goodwill recognized and reason for recognition
Although the amount is currently being determined, the Company expects to recognize goodwill and gain on
step acquisition by the business combination.
5. Details of assets acquired and liabilities assumed at the acquisition date
The amounts are currently being determined.

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