FINANCIAL
INFORMATION

2022
For the year ended March 31, 2022

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
24 Notes to Consolidated Financial Statements
94 Independent Auditor’s ReportM AN AGE ME NT’S D IS CU S S ION
A ND ANALYSISOn April 1, 2021, the Company (the former Mitsubishi
UFJ Lease & Finance Company Limited; hereinafter
Mitsubishi UFJ Lease & Finance) executed the businessintegration with Hitachi Capital Corporation (Hitachi
Capital) and changed the trade name to Mitsubishi HC
Capital Inc (Mitsubishi HC Capital).

represent a comparison with the sum of theconsolidated figures for Mitsubishi UFJ Lease &Finance and Hitachi Capital.

Business Results
The Group’s business results for the fiscal year ended
March 31, 2022 were as follows.
On the sales front, the volume of new transactions
increased by ¥246.3 billion or 10.9% year on year to¥2,507.8 billion.
Revenues increased by ¥51.6 billion or 3.0% to¥1,765.5 billion.
On the profit front, gross profit increased by ¥38.8 billion
or 13.1% to ¥334.6 billion.
Similarly, operating income increased by ¥16.0 billion
or 16.4% to ¥114.0 billion.
Net income attributable to owners of the parent
increased by ¥12.2 billion or 14.0% to ¥99.4 billion, ¥4.4
billion higher than the full-year forecast of ¥95.0 billion.
This was mainly thanks to business growth in subsidiaries
in Europe and the United States in the Account Solution
segment and marine container leasing in the Logistics
segment, an increase in gains on sale of assets in the
Aviation segment, continuous replacement of the portfolio,and steady promotion of asset turnover businesses.
In conjunction with outperforming the full-year earnings
forecasts, the annual dividend per share has been set to ¥28,

• Comparison figures in “Business Results” represent a
comparison with the figures for the previous fiscal year
(from April 1, 2020 to March 31, 2021), which are the sumof the consolidated results of Mitsubishi UFJ Lease &Finance and those of Hitachi Capital (IFRS basis)converted into J-GAAP basis in a simplified manner.
• In the fiscal year ended March 31, 2022, the Groupchanged its reporting segments to 10 segments andchanged its accounting policies. The figures have been
restated retrospectively for comparative analysis. In
addition, segment profit or loss matches net income
attributable to owners of the parent from theConsolidated Statements of Income.
• Figures for the previous fiscal year in operating resultsby reporting segment are the sum of consolidated resultsof Mitsubishi UFJ Lease & Finance and those of Hitachi
Capital (IFRS basis) converted into J-GAAP basis in a
simplified manner, which are reclassified to conform to
the new segmentation and presented as reference value.
• The figures in the comparison with the end of the previous
fiscal year (March 31, 2021) in “Financial Position”

Increase/Decrease in Net Income Attributable to Owners of the Parent (¥ Billion)
Mitsubishi UFJ Lease & Finance results

Hitachi Capital results

+9.7

+34.2

Positive factor

Negative factor
Net income*

+2.1

+12.2

–9.4
–15.0

87.1

–9.3

FYE3/21(Reference value)

02

Financial Information

2022

Ot

he

rs

99.4
O
ex perpe at
ns inges

E
to xp
in th enste e esgr bu rat si elio ne atn s ed
s

s
co
st
it
ed
Cr

Bu
s

in

es

sg

ro

w

55.3

E
in xtra
co o
m rdi
e/ na
lo r
ss y

th

31.8

FYE3/22* Net income attributable to ownersof the parent
Notes:
1) Except for Others (tax expenses),
the amounts provided reflect the
impact on income before income
taxes.
2) The amount of business growth isthe combined total of gross profit
and non-operating income/loss (theamount of non-operating
income/loss does not include
recoveries of written-off
receivables).
3) The amount of operating expenses
does not include expenses related
to the business integration.

Real Estate
Segment profit decreased by ¥8.8 billion or 31.7% fromthe previous fiscal year (reference value) to ¥19.1 billion.
This was due to the reactionary fall in sales gains andabsence of compensation received in association with theredevelopment project, both recorded in the previous
fiscal year.
Environment & Renewable Energy
Segment profit remained flat compared to the previous
fiscal year (reference value) at ¥7.0 billion. This was mainly
due to the absence of the gain on step acquisition in thesolar power generation business recorded in the previous
fiscal year, despite an increase in electricity sales revenue.
Aviation
Segment profit increased by ¥2.9 billion or 105.4% fromthe previous fiscal year (reference value) to ¥5.7 billion.
The increase was mainly thanks to an increase in gain onsale of assets and posting of gain on sale of certain receivablesfrom bankrupt debtors, despite recognition of credit costs
for certain existing customers, expenses in relation tomodification of terms for certain existing lease contracts,
posting of impairment losses, and foreign exchange losses
related to borrowings denominated in foreign currencies
in certain businesses.
Logistics
Segment profit increased by ¥0.8 billion or 47.7% fromthe previous fiscal year (reference value) to ¥2.7 billion.
The increase was mainly thanks to a steady performancean increase of ¥2 from the forecast dividend of ¥26. Thisis a ¥2.5 increase over the previous fiscal year’s dividendof ¥25.5.
Operating results by reporting segment are presented below.
Customer Business
Segment profit increased by ¥7.9 billion or 31.2% fromthe previous fiscal year (reference value) to ¥33.4 billion.
This was mainly thanks to business growth of ENGS
Holdings Inc., a U.S. sales finance company, and anincrease in gain on sale of strategic shareholdings.
Account Solution
Segment profit increased by ¥6.9 billion or 34.9% fromthe previous fiscal year (reference value) to ¥26.9 billion.
The increase was mainly thanks to business growth inEurope and the United States despite an increase in
selling, general, and administrative expenses associatedwith expansion of business activities.
Vendor Solution
Segment profit decreased by ¥1.1 billion or 28.2% fromthe previous fiscal year (reference value) to ¥3.0 billion.
The decline was due to a decrease in segment assets
despite an increase in the volume of new transactions.
LIFE
Segment profit increased by ¥0.6 billion or 14.6% fromthe previous fiscal year (reference value) to ¥4.8 billion.
This was thanks to an increase in sales gain of logistics
facilities in real estate-related businesses and a decrease in
selling, general and administrative expenses.

Segment Profit (¥ Billion)
Customer BusinessAccount Solution
Vendor Solution
LIFE
Aviation
Logistics
Mobility
OthersAdjustments

Real Estate

Environment & Renewable Energy

0.7 –0.2
FYE3/21(Reference value)

25.5

Total: 87.1

FYE3/22

Total: 99.4

33.4

19.9

26.9

4.1 4.2

3.0 4.8

1.8
7.0 2.8
–6.9

28.0

19.1

7.0

1.9
5.7 2.7 –3.4
–2.1

Financial Information

2022

03

M AN AGE ME NT’S D IS CU S S ION
A ND ANALYSIS
by marine container leasing company Beacon Intermodal
Leasing, LLC and an increase in equity-method investment
gains in the auto leasing business, despite recording one-time
expenses in connection with reconfiguration of the portfolio
in the railway freight car leasing business and expenses
related to the acquisition of CAI International, Inc.
Mobility
Segment profit increased by ¥1.1 billion or 160.7% fromthe previous fiscal year (reference value) to ¥1.9 billion.
This was mainly thanks to an increase in gain on sales ofvehicles for which the leasing term has matured in Japanand overseas, etc., responding to the high demand forused cars on a global basis.
OthersSegment profit decreased by ¥3.1 billion from the previous
fiscal year (reference value) to a segment loss of ¥3.4 billion.
This was primarily due to recording credit costs for certain
customers in the infrastructure business.
In conjunction with the organizational changes, thereporting segments will be changed in the fiscal year ending
March 31, 2023.

Financial Position
As of March 31, 2022, total assets increased by ¥4,313.9
billion from the previous fiscal year-end to ¥10,328.8 billion,
mainly thanks to the business integration with Hitachi
Capital on April 1, 2021. Total equity rose by ¥515.5 billion

Segment Assets*1 (¥ Billion)

10,0008,604.8

Total Equity (¥ Billion) /Equity Ratio (%)
9,345.3

900

817.9

4,000

600

13.4

2,000

300

FYE3/22

2022

0

30
24

6,000

FYE3/21*2

Total equity
Equity ratio

1,333.4

1,200*1 The values for segment assets do not include adjustments. Refer to pages 83-87 for details.
*2 Figures for FYE3/2021 are the sum of the figures of Mitsubishi UFJ Lease & Finance and those of Hitachi Capital.

Financial Information

1,500

8,000

0

04

to ¥1,333.4 billion. The equity ratio fell 0.7 percentage
points to 12.7%.
Interest-bearing debt (excluding lease obligations)increased by ¥3,431.1 billion to ¥8,066.0 billion, and total
liabilities were up ¥3,798.4 billion to ¥8,995.4 billion. Out
of interest-bearing debt, long-term liabilities such as longterm loans rose by ¥2,004.3 billion to ¥5,290.0 billion,
while short-term liabilities such as short-term loans andcommercial paper increased by ¥1,426.7 billion to¥2,776.0 billion.
Operating activities provided net cash of ¥195.8 billion
compared to ¥199.3 billion in the previous fiscal year.
Inflows of ¥147.2 billion in income before income taxes
with an adjustment including ¥328.6 billion for depreciation
and amortization and ¥148.2 billion for loss on disposals
and sales of leased assets were set against outflows
including ¥397.2 billion for purchases of leased assets and¥7.7 billion for purchases of other operating assets.
Investing activities used net cash of ¥107.8 billion
compared to net cash provided of ¥1.2 billion in theprevious fiscal year. Inflows of ¥36.0 billion in proceedsfrom sales and redemption of investment securities wereoffset by outflows including ¥124.5 billion in payments
for acquisition of newly consolidated subsidiaries and¥13.6 billion in purchases of investment securities.
Financing activities used net cash of ¥192.1 billion
compared to ¥372.8 billion in the previous fiscal year.
Net outflows of ¥68.5 billion for direct funding and ¥73.2

18
12.7

12
6

FYE3/21FYE3/220billion for bank loans and other forms of indirect funding
were set against items including ¥29.6 billion in cash
dividends paid.
As a result, cash and cash equivalents as of March 31,
2022 totaled ¥520.0 billion, an increase of ¥233.8 billion
or 81.7% from the previous fiscal year-end. The increase
comes from ¥195.8 billion provided by operating activities,
being set against ¥107.8 billion used in investing activitiesand ¥192.1 billion used in financing activities, with a¥316.8 billion increase associated with the merger.

Medium- to Long-term Management Direction
The Company has formulated the Medium- to Long-termManagement Direction.
The medium- to long-term direction has been formulated
based on the “Basic Management Policy (Our Mission,
Our Vision, Action Principles).” It describes “Our 10-year
Vision（(Together we innovate, challenge and explore thefrontiers of the future)” toward the realization of Our
Mission, and shows how we want to be recognized byour stakeholders and how we should transform to becomesuch a company.
Through the three-phase medium-term management
plans, “Hop,” “Step,” and “Jump,” with the first phase“Hop” being the Medium-term Management Plan covering
the three-year period from the year ending March 31, 2024,
we will promote Corporate Transformation / Customer

Experience (CX) through “Sustainability Transformation(SX) / Digital Transformation (DX)” and “Business
Portfolio Transformation,” with an aim to achieve “Our10-year Vision.” CX refers to both Corporate Transformation
and Customer Experience, meaning that we will createcustomer value through company-wide transformation.
Our expected targets for the fiscal year ending March
31, 2026, which is the final year of “Hop,” include ROAof approximately 1.5% and ROE of approximately 10%.
Also included is our expected target dividend payout
ratio for the new Medium-term Management Plan periodof approximately 40%. The medium-term management
policy/strategy and specific KPI targets will be determinedin the formulation process of the new Medium-termManagement Plan covering the three-year period fromthe year ending March 31, 2024.
Please refer to pages 24–29 of “Financial Results for the
Fiscal Year Ended March 31, 2022” posted on IR Libraryon the Company’s website for details of the Medium- to
Long-term Management Direction.
URL of IR Library on the Company’s Website
https://www.mitsubishi-hc-capital.com/english/investors/
library/report/index.html

Our
10-year
VisionTogether we innovate, challenge and explore the frontiers of the future□ To achieve our mission, continue to be an “innovator (who ventures into unexplored
fields and creates innovation)” who challenges the frontiers of the future without beingbound by precedents.
□ Anticipate the changes in society and the business environment including changes in
global industrial structures, accelerating digitalization and the increasing importance ofsustainability, and continue addressing social issues that can be solved only by Mitsubishi HC Capitalthrough approaches such as SX and DX with customers and partners.

1stMedium-term Management Plan

2nd
Medium-term Management Plan

Hop
ROA*2
ROE *2
Payout Ratio

FYE3/2022
1.0%
8.0%
40.4%

FYE3/2023*1
1.1%
8.2%
40.5%

3rd
Medium-term Management Plan

Step

FYE3/2024...
...
Approx. 40%

FYE3/2026
Approx. 1.5%
Approx. 10%

Jump
FYE3/2029

FYE3/2032(during the period of new Medium-term Management Plan)*1. The figures of the fiscal year ending March 31, 2023 are the forecast as of May 16, 2022.
*2. ROA and ROE are based on net income attributable to owners of the parent.

[Expected target]

Financial Information

2022

05

B USIN ESS AN D RELAT ED RIS K S

Of the business and related risks of the Mitsubishi HC

liquidity risk, and operational risk. Risk management is

Capital Group, the main items with potential for

conducted on a consolidated basis.

important impact on investors’ decisions are managed

Specifically, risk capital is allocated to the respective

comprehensively in the framework set out below under 1.

risk category based on the Company’s risk capital

Integrated Risk Management. An outline of the risk andmanagement policy after quantifying each risk using riska specific statement of the main efforts to address it areassessment methods tailored to the characteristics of thegiven under 2. Major Risks Managed within Frameworkasset or business. Reasonable risk-taking is then carriedof Integrated Risk Management. The Group has establishedout within the scope of risk tolerance.

an appropriate system to manage these risks and strives

Within this risk management framework, regular

to prevent them from emerging or to minimize their impact

monitoring is undertaken of the utilization of risk capitalif they occur.

and the status of portfolios, the results of which are reported

To manage these potential risk factors, we operate ato and discussed by the Risk Management Meeting, thesystem whereby the division responsible for the relevant

Executive Committee, and the Board of Directors. In thisarea of risk monitors and identifies issues arising fromway, efforts are made to ensure appropriate responsechanges in the external environment and other factors.

measures and to promote effective internal communication

Each of these divisions holds regular discussions to review

about risk. Arrangements are in place to ensure that theappropriate response measures and reports promptly to

Board of Directors is fully informed of the risk management

the Executive Committee, a consultative and decision-

system and risk management status and that it maintains

making body that controls the execution of business.

oversight thereof.

Specifically, in addition to the Asset Liability Management(ALM) Committee, Compliance Committee, Disclosure
Committee on J-SOX, and other committees that discuss
the issues surrounding and measures to address individual
risks, the Risk Management Committee meets quarterly

Risks Managed within
02 Major
Framework of Integrated Risk
Management

or as necessary to undertake comprehensive and systematic

The Mitsubishi HC Capital Group conducts business

management of risks affecting all operational areas.

activities globally. The Group provides capital investments

Additionally, important matters at each committee are

and services necessary for customer businesses throughreported to and discussed by the Board 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, 2022.

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 Management

decline 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

with improving profitability. The major risks managed

or their failure to function, or exogenous events could

within the framework of integrated risk management

impact the Group’s business results and financial position.

include credit risk, asset risk, investment risk, market risk,
06

particular industries. Demand for capital investment can

Financial Information

2022

The major items among these envisioned risks aremanaged within the framework set out under 1. Integrated

leasing these assets in and outside Japan in the form of

Risk Management.

operating leases and others. In this business, the Group is
exposed to asset risk in addition to the aforementioned(1) Credit Risk

credit risk, so fluctuation in revenue from asset management

The Mitsubishi HC Capital Group conducts businessand disposals could impact the profitability of the leases.

that extends credit over the medium to long term throughFor this reason, when engaging in operating leases, theleases, installment sales, monetary loans, and other financial

Group carefully assesses the future value according toservices of various forms. Depending on future businessasset type in addition to the customer’s credit standing

trends and the financial landscape, additional provisions

before working on each deal. Even after entering intoof allowance for doubtful receivables could be necessary

business relations, the Group continues monitoring thewith increasing non-performing loans due to deterioration

status of the leasing and secondary markets for said assets

in a company’s credit status, which could impact the Group’salong with the status of asset use by the leaseholder,business results and financial position. Furthermore,

striving to prevent risks from emerging or to mitigate

because the Group is engaged in business globally, it istheir impact if they occur.

subject to country risk in which losses may arise dependingon the political and economic situations in the countries(i) Global Assets

and territories where customers and investees are located.

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

Main Efforts to Address Riska 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 business related

carefully reviews the customer’s credit standing using its

to global assets, the Group is exposed to price fluctuation

own rating system and makes a thorough study in light ofrisk pertaining to said assets in addition to the aforementioned

the value of the leased property, country risk, and othercredit risk. With operating leases, in addition to lease fee

factors in an effort to ensure a reasonable return for therevenue received from the customer, the Group recovers

risk. Additionally, the Group continues to check thefunds by selling the asset at the end of the lease period.

customer’s credit standing on an ongoing basis even after

Additionally, in the event of a customer bankruptcy, theentering into business relations and has a system in place

Group takes the asset back and recovers funds by leasing

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

it to a different customer or selling it. As for selling assets,credit standing worsens. Moreover, it engages in credit

in addition to business trends and the financial landscape,management with respect to the portfolio as a whole andmajor incidents arising from technical problems,considers risk diversification to ensure that credit is not

obsolescence due to technological change, revisions to laws

concentrated with a specific customer, industry, country,

and regulations, increased concern over global pandemics

territory, and so on, while striving to ensure soundor terrorism, natural disasters, war, or geopolitical risk

management by regularly measuring the credit risk of its

may render the asset irrecoverable or cause its selling priceportfolio and monitoring to ensure that it is within ato fluctuate. Furthermore, the recording of an impairment

certain scope of capital.

loss or increased costs associated with property management
could also impact the Group’s business results and(2) Asset Risk

financial position.

In addition to general movable property, the Mitsubishi
HC Capital Group holds such global assets as aircraft andreal estate, including buildings, and conducts a business
Financial Information

2022

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 a comprehensive

Group conducts a comprehensive review that includes areview of future asset value and liquidity before working

checklist for deals involving movable property and futureon each deal and endeavors to ensure a reasonable returnasset liquidity before working on each deal and endeavors

for the asset value fluctuation risk. Furthermore, theto ensure a reasonable return for the credit risk and asset

Group continues to check the status of asset management,

value fluctuation risk. Furthermore, the Group has establishedprice trends, and industry trends on an ongoing basis

internal investment criteria to maintain a portfolio witheven after entering into business relations and has a systemrisk diversification taken into account, including applicablein place to maximize revenue. Additionally, the Groupmodels, regions, and time of expiration. Moreover, theregularly holds warning sign management meetings at

Group continues to check the customer’s credit standing

business divisions and risk management divisions to review

and industry trends on an ongoing basis even after entering

industry trends and signs of problems that could impact

into business relations and has a system in place to takeasset value fluctuation. The Group also regularly measures

the necessary steps in the event that the customer’s credit

the risk of fluctuations in the value of assets in its portfolio

standing worsens, such as collecting a deposit from theto monitor whether it is within a certain scope of capital,customer to cover asset wear and tear as necessary.

in an effort to ensure sound management.

Additionally, the Group regularly holds warning sign
management meetings at business divisions and risk

(3) Investment Risk

management divisions for each major asset category to

The Mitsubishi HC Capital Group is engaged in investment

review applicable industry trends and signs of problems

in and financing of projects such as solar power generationthat could impact asset value fluctuation. The Groupand other renewable energy businesses and an overseas

also regularly measures customer credit risk and the risk

infrastructure business as well as various businessof fluctuations in the value of assets in its portfolio toinvestments, including loans to operating companies andmonitor whether it is within a certain scope of capital,

funds. These investing activities are subject to such risks

in an effort to ensure sound management.

as risk of changes in the business environment including
business fluctuations and declining demand, risk of

08(ii) Real Estaterevenue falling below the plan due to sluggish performance

The Group is engaged in and outside Japan in investment

of investees or partners, risk of diminished recoverability

in and financing of commercial real estate such as offices,of the investment amount, risk of investee stock value

residences, commercial facilities, logistics facilities, andfalling below a certain level, and risk of investee stock

hotels, and in leasing and other business operations basedvalue staying below a certain level for a considerable

on its portfolio of owned properties. These assets are subject

period of time due to sudden changes in the economic or

to revenue fluctuation risk and price fluctuation risk. In thefinancial situation or a major disruption of the financial

real estate-related business, in addition to lease fee revenue

markets regardless of the investee’s performance. Thesefrom tenants, the Group recovers funds by selling thoserisks could result in a total or partial loss of the investment,

assets that are not long-term holdings at the right time.

including through valuation loss, or create the necessity

Lease fee revenue and revenue from sale of assets mayof additional funding. In addition, there are the risk thatfluctuate depending on the market environment, such as

the Group may be unable to exit or restructure the businessbusiness trends, the financial landscape, and the leaseat the desired time or using the desired method due tomarket in the specific location of the asset, and this could

differences with the partner’s management policy or low

impact the Group’s business results and financial position.

liquidity of the investment asset and the risk that the Group

Financial Information

2022

may be disadvantaged by not being able to obtain relevant

The financial statements of the Group’s consolidated

information from the investee, and these risks could impact

subsidiaries outside Japan are expressed in the local

the Group’s business results and financial position.

currency while the Company’s consolidated financial
statements are expressed in Japanese yen. As such,

Main Efforts to Address Risk

although fundraising is, in principle, conducted in the same

The Group holds investment meetings according to thecurrency as the asset, should a large fluctuation occur inindividual investment amounts and severity of risk to

exchange rates, it could impact the Group’s business results

gather the opinions of the relevant departments andand financial position in Japanese yen terms.

makes a careful decision based on a comprehensive
review of future investment value and liquidity from a

Main Efforts to Address Risk

broad point of view when considering each investment,

The Group constantly watches movements in the financial

thereby endeavoring to ensure a reasonable return for themarkets and, as needed, monitors through ALM any

investment value fluctuation risk. Additionally, the Group

imbalances in the form of interest rates or currency

continues to check the status of investment management

exchange for asset management and for procurement ofand industry trends on an ongoing basis even after

funds. It then manages interest rate fluctuation riskentering into business relations and has a system in placethrough appropriate hedge operations while taking interest

to maximize revenue. The Group also regularly measures

rate movements into account. To address exchange rate

the risk of fluctuations in the value of investments in its

fluctuation risk, in principle, the Group raises funds in

portfolio to monitor whether it is within a certain scope

the same currency as the operating asset in an effort toof capital, in an effort to ensure sound management.

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(i) Interest Rate Fluctuation Risk

period of time at a certain probability and to what extent

The fees for leases and installment sales conducted by thein the event that interest or currency exchange rates take

Mitsubishi HC Capital Group are set based on the purchasea disadvantageous turn based on past statistics, andprice for the transacted property and the market interest

monitors whether it is within a certain scope of capital inrates at the time of contract. Most of these basically doan effort to ensure sound management. Meanwhile, thenot fluctuate during the contract term. Acquisition funds

ALM 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 forfinancial position.

leases, installment sales, and monetary lending, theMitsubishi HC Capital Group raises a large amount of(ii) Exchange Rate Fluctuation Risk

funds in Japanese yen and other currencies. The GroupThe Group actively conducts business outside Japan,

attempts to balance the period of leases and other credit

and as foreign currency-denominated assets increase, sotransactions and investments with the period of fundraising,does their percentage of consolidated operating assets.

but should it experience difficulty securing enough funds
Financial Information

2022

09

B USIN ESS AN D RELAT ED RIS K S

because of heightened risk aversion on the part offoreign currency, the Group is progressing with thefinancial institutions and investors due to a free fall inreorganization of its regional financial bases. As part ofeconomic and financial conditions and major confusion

this, it has opened a regional financial base in Northin the financial markets or a decline in the Group’s

America, thus establishing a Group financing system increditworthiness, it could impact the Group’s businessNorth America, where it holds a large asset balance. The

results and financial position.

base offers not only indirect financing but also various
forms of fund procurement, including issue of commercial

Main Efforts to Address Risk

paper and medium-term notes, thus providing funds toWith respect to the procurement of funds, the Group

Group companies expanding into North America. By also

tries to ensure the liquidity of funds through efforts toreinforcing the Group’s ability to monitor the financial

diversify by procuring funds directly from the market

situation, it promotes sharing of knowledge and information

including corporate bonds, commercial paper, andwithin the Group, thus providing optimal operational

securitization of lease receivables in addition to borrowing

support in North America.

from financial institutions as well as through procurementwith long- and short-term balance, careful management(6) Operational Riskof cash flow, and measures to supplement liquidity during(i) ‌Risk Related to Earthquakes, Wind and Flood Damage,emergencies, such as through the acquisition of commitment

Pandemics, War, Terrorism, etc.

lines. Additionally, the Group conducts stage-by-stage

The Mitsubishi HC Capital Group uses facilities, including

management of liquidity, putting in place fundingsites and systems, in and outside Japan to conduct its

arrangements to ensure that the immediately necessary

operations. Earthquakes, wind and flood damage, or

funds can be secured, including funds for repayment,

other natural disasters as well as pandemics, war, terrorism,

even if the fundraising environment deteriorates, andor other unpredictable circumstances could cause areporting on the status of funding to the ALM Committee.

reduction of activities or prevent operations at those sites

In addition to analyses of credit, interest rate sensitivity

by damaging the sites themselves or the systems or by(the impact on revenue of interest rate fluctuation) andinjuring employees or preventing them from coming toother items, the ALM Committee carries out comprehensive

work, thereby disrupting business operations. Moreover,investigations of (4) Market Risk and (5) Liquidity Risk

depending on the extent of the damages or how long thein the event of stress developing in the financial markets

event lasts, a large sum of money could be required toor other relevant areas, including the potential impact on

restore the systems or other facilities, or it may take aprofit. It then decides a fund procurement strategy andlong time for business operations to recover. Such arisk response policies as the basis for the rollout of asituation could impact the Group’s business results andCompanywide strategy reflecting the market environment.

financial position.

Regarding risk management in particular, it coordinateswith the Risk Management Committee, which is one arm

Main Efforts to Address Riskof the Companywide integrated risk management system.

The Group has established responsible departments

By strengthening the warning sign management systemdepending on the envisioned risk to prepare for suchand coordinating with contingency planning, it makes

circumstances and has a system in place to establish aefforts to improve the flexibility and resilience of financial

crisis response headquarters to respond to a criticalstructures in the event of a crisis situation emerging.

situation. The Group is also working to establish a system

Meanwhile, to support the globalization of its businessover recent years and also to increase its ability to procure
10

Financial Information

2022

for business continuity by putting together a business
continuity plan, implementing redundancy measures forbackbone systems, establishing a system infrastructure

recurrence. Additionally, Group-wide IT control isthat allows work from home, and implementing office

implemented for system development at the Group

shifts limited 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, depending on the development of the(iii) Cybersecurity Risk and Information Security Risk

situation going forward, there may be indirect impacts

The Group utilizes e-mail as well as a variety ofsuch as an increase in non-performing loans due toinformation systems to conduct account processing,worsening of the credit status of customers. This mightmanagement of various contracts, customer management,

require measures such as additional provisions of allowance

asset management of leased properties, and other operations.

for doubtful receivables, which could impact the Group’s

These information systems are subject to risk of businessbusiness results and financial position.

e-mail scams, computer virus infections, unauthorized

In March 2022, the Group set up a Crisis Management

access by outside parties, and other cyberattacks.

Headquarters that is working to address cybersecurity,

Unauthorized access by outside parties, computer virus

trade control, and money laundering, track financial

infections, human error, fraud, scams, and other problems

trends, enhance screening and management of deals,

could result in system outages or failures, monetary

monitor the impact on the value of Group operating

damages, leaks or unauthorized use of confidential

assets, and identify and manage other indirect impacts.

information or customer information, or other incidents.
These could cause an interruption of contract and collection(ii) System Risk

operations or services provided to customers, which in

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

turn could cause a suspension of operating activities,

systems to conduct account processing, management of

economic loss, or loss of social confidence from leakage

various contracts, customer management, asset managementof important information, thereby impacting the Group’sof leased properties, and other operations. An outage orbusiness results and financial position.

failure of these information systems arising from poor
maintenance, poor development, or other such problems

Main Efforts to Address Risk

could cause an interruption of contract and collection

The Group has established a cross-organizational

operations or services provided to customers, which inSecurity Incident Response Team (MHC-SIRT) to address

turn could cause a suspension of operating activities andthese risks and has a system in place to prevent incidents

economic loss, thereby impacting the Group’s businessat the entrance, internal, and exit stages and respond toresults and financial position.

them if they occur. Specifically, in preparation forcyberattacks that exploit vulnerabilities, the Group keeps

Main Efforts to Address Risk

software up to date to detect unauthorized access,

The Group has a system in place to properly manage andcomputer viruses, and other cyberattacks and maintains

maintain these systems through internal cooperation andmanagement preparedness to prevent problems. At thepartnership with other companies in order to ensure theirsame time, the Group has established an internal andstable operation. The Group is equipped with an integrated

external coordination system and conducts drills to prepare

response system for failures that includes swift action

for incidents. Moreover, targeted e-mail training is provided

and sharing of information internally and externallyfor all employees, and internal education on information

where the failure occurs as well as establishment andsecurity is carried out on an ongoing basis.

implementation of measures to prevent subsequent
Financial Information

2022

11

B USIN ESS AN D RELAT ED RIS K S(iv) Compliance Risk

Main Efforts to Address Risk

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

The Group’s corporate centers, business divisions, sales

legislation in and outside Japan. As the primary examples,bases in Japan, and sites in each country continuously

in Japan its operations must comply with the Companies

monitor revisions and changes to the various systems in

Act, tax laws, the Financial Instruments and Exchange

and outside Japan, such as legal, accounting, and tax

Act, the Anti-Monopoly Act, the Personal Information

systems, applying to the relevant country and services.

Protection Act, the Money Lending Business Act, theIn addition, the Group gathers information on andInstallment Sales Act, the Act on Prevention of Transfer

implements measures to address changes and revisions asof Criminal Proceeds, and laws and regulations related toquickly as possible while reinforcing such monitoring by

the environment. Outside Japan, the Group’s operations

actively utilizing outside experts.

are subject to the legislation of each country and region
as well as to oversight by regulatory authorities. Should(vi) Administrative Risk

there be a failure of compliance with legislation, social

The Group conducts transactions in various forms, andnorms, or company rules, it could impact the Group’s

various administrative work arises with each transaction.

business results and financial position by causing

Improper administrative work, including human error,

restriction on or interruption of operations, a claim

fraud, and other irregularities, could cause an interruption

for damages from customers or others, and a fall inof contract and collection operations or services provided

social confidence.

to customers, which in turn could cause a suspension ofoperating activities or loss of customer trust, thereby

Main Efforts to Address Risk

impacting the Group’s business results and financial

In addition to rigorous compliance with legislation andposition.

company rules, the Group makes it a practice to carryout operations in accordance with high ethical standards

Main Efforts to Address Risk

and social norms. The Group provides continuing training

The Group has established administrative rules for eachon compliance and takes measures to prevent moneytransaction and conducts business according to these rules

laundering, funding of terrorism, and fraud in an effort

while reviewing them as needed. Additionally, an internal

to further strengthen its compliance system.

reporting system is in place for internal administrative
incidents. Should such an incident occur, the system(v) System Change Risk

includes internal reporting, swiftly addressing the incident,

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

identifying the cause, and establishing/implementing

legislation, accounting and tax regulations, and othermeasures to prevent recurrence.

systems 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
unable to properly address, there could be penalties for

03 Other Major Risks

nonconformance, suspension of product offering,In addition to risk addressed in the framework of

restrictions on business activities, sales losses, or otherintegrated risk management, the Group recognizes thenegative consequences that could impact the Group’s

major risks listed below. If the Group recognizes thebusiness results and financial position.

possibility of such a risk emerging, it analyzes the status
and outlook of the risk and the impact on each risk
managed within the integrated risk management framework,

12

Financial Information2022

including combined impacts across multiple risk items.

such as broad disruption of the supply chain, temporary

It then explores a Group response and formulates a response

restrictions on or suspension of economic activity by eachpolicy as necessary and additionally carries out stress tests

national government, and damage to industrial systems orbased on envisioned new or multiple scenarios appropriate

financial functions could impact a wide range of customers

to the situation as part of a multi-faceted verification ofor businesses utilizing the assets of the Mitsubishi HC

risk resilience.

Capital Group. This may result in customer bankruptcies
or a drop in the value of the Group’s asset holdings, which(1) ‌Risk Related to Expansion of Operating Base,
Strategic Partnerships, and M&As
In pursuit of continued growth through expansion of its

could impact the Group’s business results and financial
position.
To create a global response system, the Group set up a

operating base, the Mitsubishi HC Capital Group engages,

Crisis Management Headquarters in February 2020 andin and outside Japan, in strategic partnerships with outside

put in place a business continuity system. Aware that weentities aimed at the enhancement of various services andare currently in the pandemic phase of COVID-19, thetries to diversify and expand the Group’s business portfolio

Group continues to implement preventive measuresthrough M&As in addition to expanding business on its own.

against infection. At the same time, however, it is ensuring

The Group endeavors to diversify its business andcontinued progress with new initiatives by utilizing IT tools

enhance its services through this kind of approach. However,to strengthen internal and external communication,changes in the domestic or international economic andevolving its business style, and taking other relevant steps.

financial conditions, intensification of competition, changes
in the business environment or strategy of partners, revision

Impact of the COVID-19 Pandemicof relevant legislation, and other factors could cause a

Despite the progress of vaccination programs, the pandemic,

failure to achieve expected results or result in the need toongoing since 2020, has been characterized across different

record additional expenses, such as impairment of goodwill

countries by a repeated pattern of temporary improvement

recorded at the time of an M&A. Such a situation could

followed by the spread of new variants. It is therefore difficult

impact the Group’s business results and financial position.

to predict a definitive end to the pandemic and some levelof impact is expected to persist for the foreseeable future.

Main Efforts to Address Risk

In terms of the impact of the pandemic on the Group’s

In addition to review by the relevant departments according

business, the stagnation of global economic activity has

to the individual investment amounts and severity of risks,

resulted in customer capital investment being limited,

the Group brings in outside experts for a comprehensive

scaled down, postponed or otherwise affected in ways

review of the fitness of the investment structure and thethat could prevent the Group’s operating assets fromfuture investment effect from a broad point of view whenachieving the planned expansion or cause them toconsidering each M&A or partnership deal. Even after andecrease, leading to a decline in revenue. A range of

M&A deal is executed, the Group’s rules are applied toadditional impacts, including rising prices and interest

establish a system for proper operational management,

rates as well as supply chain disruption resulting in worsening

and monitoring is carried out on the business plan, results

customer credit status, may in turn lead to an increase inmanagement, and other aspects so that the necessary

non-performing loans, which could require additional

actions can be taken in a timely manner.

provisions of allowance for doubtful receivables orother measures.

(2) Global Pandemic Risk
Should a global pandemic arise, negative consequences

Moreover, these impacts could affect the assets held as
operating assets by the Group through price falls, reduced
Financial Information

2022

13

B USIN ESS AN D RELAT ED RIS K S

operating rates for leases and similar assets, and price falls

Accordingly, the Group has expressed its support for thein shares or similar assets.

recommendations of the Task Force on Climate-Related

Meanwhile, if a financial crisis emerges while the impact

Financial Disclosures (TCFD) and is working to enhanceof the COVID-19 pandemic persists, it could becomerisk identification and assessment and relevant information

impossible to procure funds as planned. However, no suchdisclosure in accordance with the recommendations.

situation has yet arisen. This is thanks, among other factors,

Additionally, the Group recognizes climate change as ato the Group’s measures to ensure reliable on-hand liquidity

significant risk for Companywide risk management andand to the control exercised by the central banks of theis progressing with relevant initiatives.

various countries and regions.
It should be noted that the restriction of human movement(4) Risk Associated with Expansion of Business Domains

and other measures could continue to limit the Group’s

The Mitsubishi HC Capital Group is expanding thebusiness activities in the future. In response, the Group is

scope of its operations on a global basis, including new

taking steps to adapt its internal project activities tobusiness domains, within the scope permissible underpandemic and post-pandemic conditions. In addition tolaws, regulations, and various other conditions. Should

continuing with appropriate measures to prevent infection

risks emerge within that process that exceed the scope ofand revising operational procedures, this means that thereasonable assumptions despite verification of the risksGroup is utilizing IT tools and strengthening information

along with our knowledge and experience in the expanded

security to enhance the provision of systems that enablebusiness domain, or if the expanded business does notbusiness operations to function smoothly on a remote basis.

develop as envisioned, it could impact the Group’sbusiness results and financial position.

(3) Climate Change Risk

14

Should climate change occur that has a major impact on(5) Intensifying Competitionsociety, the scale and frequency of natural disasters would

Competition in the leasing and other businesses of theincrease. If the Mitsubishi HC Capital Group and its

Mitsubishi HC Capital Group conducted in and outside

customers were unable to adapt to the regulatory changes,

Japan could intensify not only from companies in thetechnical innovation, or a shift in business models forsame business but also from financial institutions andpreventing the negative effects of climate change, or if theothers, or the competitive landscape could change due tobusiness model or business infrastructure and tools changeda shift in business models of other industries, technicaldramatically resulting in customer bankruptcy due to ainnovation, or other factors. The Group makes various

drop in performance or loss of assets or a drop in the value

efforts to maintain and strengthen its competitiveness,of assets held by the Group or loss of property, it could

including by offering greater added value to its customers

impact the Group’s business results and financial position.

and creating value as an asset holder and through low-costMoreover, if the Group’s response to climate change risk

fund procurement. However, should the current competitiveor its information disclosure are inadequate, or are deemedsituation intensify further, a fall in market share and decline

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

in income could impact the Group’s business results andvalue to be damaged.

financial position.

Main Efforts to Address Risk

(6) Risk Related to Personnel Recruitment

The Group recognizes realizing carbon neutrality and a

The Mitsubishi HC Capital Group must stably secure

circular economy as priority tasks in achieving sustainable

adequate human resources, in order to maintain andgrowth that form part of its materiality (important issues).

strengthen its competitiveness in the various businesses it

Financial Information2022

operates in and outside Japan. The Group strives toin credit, and the emergence of large-scale concentrations

continuously recruit and train capable personnel, but

of risk in individual business fields. Based on these scenarios,

should it not be able to adequately secure and train theit has undertaken analysis and verification of the potential

needed personnel this could impact the Group’s business

degree of impact of stress conditions on profitability andresults and financial position.

equity in each fiscal period.
These multifaceted verifications enable the Group to(7) Risk Related to Labor and Employment Management

confirm its risk resilience and to ensure that the risk-return

The Group employs a large number of staff in its businessbalance of management plans does not exceed tolerable levels.

operations. This involves the risk of long working hours
having a negative effect on the mental or physical healthof employees or other negative impacts, making them
unable to fulfill the expected duties, and the risk of legal
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.

04 Stress Tests
In the execution of management strategy, the Group makes
efforts to gauge the degree of impact of stress periods
caused by various risk events with potential impact on its
business, such as deterioration in market conditions
including economic downturns and market fluctuation.
Specifically, the Group has posited a number of potential
high-stress scenarios, ranging from a deterioration in theoverall world economy to market fluctuation, deterioration
Financial Information

2022

15

Consolidated Balance Sheets
Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
March 31, 2022 and 2021
Thousands of U.S.
dollars (Note 1)

Millions of yen

AssetsCurrent assets:
Cash and cash equivalents (Notes 11 and 25)
Time deposits other than cash equivalents (Notes 11 and 25)
Bank overdrafts (Note 25)
Marketable securities (Notes 4 and 25)
Receivables:
Lease (Notes 2.r., 11, and 18)
Installment sales (Notes 11 and 25)
Loans (Notes 2.r., 11, 12, and 25)
Lease receivables and investments in leases(Notes 2.r., 7, 11, 22, and 25)
Inventories (Notes 5, 11, and 12)
Prepaid expenses and other (Notes 2.r., 11, and 18)
Allowance for doubtful receivables (Notes 2.t. and 25)
Total current assets
Property and equipment:
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 25)：
Unconsolidated subsidiaries and associated companies
Other securities
Goodwill (Notes 2.t. and 9)
Long-term receivables (Note 25)
Asset for retirement benefits (Note 14)
Deferred tax assets (Notes 2.r. and 23)
Other (Notes 2.r. and 11)
Allowance for doubtful receivables (Notes 2.t. and 25)
Total investments and other assets
Deferred assets:
Bond issue costs (Note 2.r.)
Total deferred assets

Total assets
See notes to consolidated financial statements.

16

Financial Information

2022

2022

2021

2022

¥520,083
12,9907,868
2,019¥286,213
8,028
5,469

$4,262,981
106,477
64,491
16,55280,382
255,143
1,845,975

31,198191,043867,738

658,871
2,091,339
15,130,947

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

1,628,749
27,468120,042(5,794)
3,160,157

26,764,486
395,428
1,278,737(185,713)
50,584,603

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

2,709,336(658,254)
2,051,082
59,7502,110,833
165,236(13,097)
152,138
12,537(6,289)6,248
2,269,220

32,117,233(6,820,929)
25,296,304
283,792
25,580,096
2,077,590(252,556)
1,825,034
194,737(81,766)
112,970
27,518,101

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

150,054
207,737
57,27739,26921
10,229139,976(22,501)
582,064

1,384,354
1,702,904
740,382
886,788
13,062
312,605
2,110,241(629,434)
6,520,904

4,791
4,791

3,454
3,454

39,27639,276¥10,328,872¥6,014,896$84,662,885

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 11, 13, and 22)
Commercial paper (Note 13)
Current maturities of bonds (Notes 11, 13, and 25)
Current maturities of long-term loans (Notes 11, 12, 13, 22, and 25)
Current maturities of loans from the securitizations of theminimum future rentals on lease contracts (Notes 11, 13, and 25)
Current maturities of lease obligations (Note 13)
Notes and accounts payable — trade (Note 2.r.)Income taxes payable
Deferred profit on installment sales (Note 25)
Other (Notes 2.r., 13, and 18)
Total current liabilities
Long-term liabilities:
Bonds, less current maturities (Notes 11, 12, 13, and 25)
Long-term loans from banks and other financial institutions,less current maturities (Notes 11, 12, 13, 22, and 25)
Loans from the securitizations of the minimum future rentals
on lease contracts, less current maturities (Notes 11, 13, and 25)
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 23)
Other (Notes 11 and 13)
Total long-term liabilities

2022

2021

2022

¥591,431
682,593443,647
810,475¥236,730
434,171
244,025
372,344$4,847,798
5,595,031
3,636,454
6,643,240

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

61,995
23,13388,062
10,805
10,095
109,417
1,590,780

2,031,970
177,680
1,508,544
203,428
91,071
1,783,986
26,519,209

1,820,244

980,181

14,920,034

3,113,196

2,261,273

25,518,007

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

44,234
66,667
3,173
25,05552,816
172,806
3,606,209

2,922,890
437,140
73,712
331,403
91,381890,0082,029,038
47,213,618

33,19633,196

272,098

548,586
1,861
638,043

167,280
1,552
568,335

4,496,610
15,2605,229,860(19,369)(1,528)(158,763)

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

30,678(15,519)
22,278(925)
805,349
12,557
817,906¥6,014,896

122,567
11,968760,462
1,011
10,751,077
178,981
10,930,058$84,662,885

Commitments and contingent liabilities (Notes 15 and 26)
Equity (Notes 16 and 30):
Common stock —authorized, 4,800,000,000 shares in 2022 and 3,200,000,000 shares in
2021;
issued, 1,466,912,244 shares in 2022 and 895,834,160 shares in 2021
Capital surplus
Stock acquisition rights (Note 17)
Retained earnings (Note 2.r.)Treasury stock — at cost, 31,056,328 shares in 2022 and
4,368,016 shares in 2021
Accumulated other comprehensive income:Net unrealized gain on available-for-sale securities
Deferred gain (loss) on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Total
Noncontrolling interests (Note 2.r.)
Total equity
Total liabilities and equity

See notes to consolidated financial statements.

Financial Information

2022

17

Consolidated Statements of Income

Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Years ended March 31, 2022 and 2021

Thousands of U.S.
dollars (Note 1)

Millions of yen
2022

2021

¥1,765,559¥947,658$14,471,799

Costs (Notes 2.r., 2.t., and 22)
Gross profit

1,430,898
334,661

787,174
160,483

11,728,672
2,743,127

220,569
114,092

98,16662,316

1,807,945
935,181

2,447

3,384

20,063(5,338)29,967(3,849)10,029
431
1,395
3,488
3,112

(43,755)
245,635

Selling, general, and administrative expenses (Note 19)
Operating income
Other income (expenses):Dividend income
Interest expense — net of interest income of¥540 million ($4,433 thousand) in 2022 and¥356 million in 2021 (Note 22)
Gain on sales of investment securities (Note 4)
Gain on sales of shares of subsidiaries and affiliates (Note 3.c.)(Loss) gain on step acquisition (Note 20)
Compensation income (Note 21)
Gain on sales of own-used assets
Gain from bargain purchase (Note 3.a.)Other — net (Note 2.r.)Other income — net
Income before income taxes

431
5,923
33,158147,250

Income taxes (Notes 2.r. and 23):
Current
Deferred
Total income taxes
Net income
Net income attributable to noncontrolling interests
Net income attributable to owners of the parent

38,807
7,088
45,896
101,354
1,953¥99,401(273)

Amounts per share of common stock (Note 29):
Basic net income
Diluted net income
Cash dividends applicable to the year
See notes to consolidated financial statements.

Financial Information

2022(2,245)2,874
20,866
83,183

3,538
48,555
271,793
1,206,975

22,457
3,907
26,36456,8181,504¥55,314318,096
58,104376,200
830,774
16,010$814,764
U.S. dollars

Yen

18

2022

Revenues (Notes 2.r., 18, 22, and 25)

2022

2021

2022

¥69.2469.06
28.00¥62.07
61.84
25.50

$0.56
0.56
0.22

Consolidated Statements of Comprehensive Income

Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Years ended March 31, 2022 and 2021

Thousands of U.S.
dollars (Note 1)

Millions of yen

Net income

2022

2021

2022

¥101,354¥56,818$830,774

Other comprehensive income (loss) (Note 27):
Net unrealized (loss) gain on available-for-sale securities
Deferred gain (loss) on derivatives under hedge
accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Share of other comprehensive income in associates
Total other comprehensive income (loss)
Comprehensive income(15,578)

19,845(127,693)

15,001
69,3581,061
3,389
73,232¥174,586(10,516)(14,194)
330
782(3,751)¥53,066

122,960
568,514
8,702
27,781
600,265$1,431,039

Total comprehensive income attributable to:
Owners of the parent
Noncontrolling interests¥171,878
2,708¥51,785
1,281$1,408,843
22,196

See notes to consolidated financial statements.

Financial Information

2022

19

Consolidated Statements of Changes in Equity
Consolidated Statements of Changes in Equity

Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Mitsubishi
HCMarch
CapitalandandConsolidated
Subsidiaries
Years ended
31,Inc.
2022
2021
Consolidated
Statementsof Changes
Changesin Equity
EquityConsolidatedofinYears ended MarchStatements
31,
2022 and 2021
Consolidated
StatementsofChangesin Equity
Thousands
Consolidated
StatementsofChangesinEquityMitsubishi HC Capital Inc. and Consolidated Subsidiaries
Thousands
Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Mitsubishi
HC
CapitalInc.
andConsolidated
Subsidiaries
Years ended
March
31, 2022
and
2021
Mitsubishi
HC
Capitaland
Consolidated
Subsidiaries
Years ended
March
31,Inc.
2022
and
2021
Years
endedMarch
March31,
31,20222022
2021
NumberofYears ended
andand2021
Thousands
Thousands
NumbersharesThousands
ofof
Stock
Thousands
sharesofStockcommonacquisition
Numberofcommonacquisition
stock ofCommonCapitalRetainedrightsNumbershares
of
Stock
stock
CapitalRetainedrightsNumberissuedstock
surplusearnings(Note
17)
NumberofCommonsharesofof
Stockcommonacquisition
issuedsurplusearnings(Note
17)
sharesofStockcommonacquisition
sharesof stock
Stock
stock
CommonCapitalRetainedrightscommonacquisition
stockcommon Common
CapitalRetainedrights acquisition
issuedstock
surplusearnings
(Note
17)
stock
CommonCapitalRetainedrightsBALANCE, MARCH 31, 2020 (April 1, 2020, as previously
issuedstock Commonsurplus
earnings
(Note
17)
stock
CapitalRetainedrightsissuedstock
surplusearnings(Note
17)
BALANCE,MARCH 31, 2020 (April 1, 2020, as previously
reported)
895,834¥33,196¥167,164¥1,507¥538,977
issuedstock
surplusearnings(Note 17)reported)
895,834¥33,196¥167,164¥1,507¥538,977
BALANCE,
MARCH
31,
2020
(April1,
2020,
aspreviously
CumulativeMARCH
effect of 31,
accountingchanges(Noteas2.r.)(3,107)BALANCE,
2020 (April
1, 2020,
previously
reported)
895,834¥33,196¥167,164¥1,507¥538,977
BALANCE,31, 2020 (April
1, 2020,
previously
CumulativeMARCH
effect of accountingchanges(Noteas2.r.)(3,107)
reported)
895,834¥33,196¥167,164¥1,507¥538,977
BALANCE,MARCH 31, 2020 (April 1, 2020, as previously
reported)
895,834¥33,196¥167,164¥1,507¥538,977
BALANCE, APRIL 1, 2020 (as restated)
33,196167,164
1,507
535,869
Cumulative effect ofaccountingchanges (Note 2.r.)(3,107) ¥538,977
reported)
895,834 33,196¥33,196167,164 ¥167,164 1,507¥1,507BALANCE,
2020 (as restated)
535,869
Cumulative APRIL
effect of1,accountingchanges (Note 2.r.)(3,107)
Cumulative effect of accounting changes (Note 2.r.)(3,107)
Net income attributable to owners of the parent
55,314BALANCE,APRIL
1,of2020(asrestated)
33,196167,164
1,507
535,869
Cumulative
effectaccountingchanges(Note
2.r.)(3,107)
Net
incomeattributabletoownersoftheparent55,314BALANCE,APRIL 1, 2020 (as restated)
33,196167,164
1,507
535,869
Cash dividends(22,501)
BALANCE,APRIL 1, 2020 (as restated)
33,196167,164
1,507
535,869
Cashdividends(22,501)
Disposal of treasury stock (393,700 shares)
32
Net
incomeattributableto ownersforofshares)
the parent
55,314
DisposalofAPRIL
treasury
32 167,164
Adjustmentof retained
earnings
consolidated
Net
incomeattributableto (393,700
ownersofnewly
the parent
55,314BALANCE,1,stock
2020(as restated)
33,196
1,507
535,869
Cashdividends(22,501)
Net
incomeattributableto ownersforofnewly
the parent
55,314
Adjustmentofretainedearnings
consolidated
subsidiaries(336)
Cash dividends(22,501)
subsidiaries(336)
Disposalof treasurystock(393,700
shares)32
Cashdividends(22,501)
Adjustmentof retained
earnings
for shares)
newly associatedDisposalof treasurystock(393,700
32
Net
incomeattributableof theparent55,314
associatedAdjustmentofretainedearnings
for
newly
consolidated
companies
forto
byowners
theforequitymethod(10)
Disposalof treasurystock(393,700
shares)32
Adjustment
ofaccounted
retainedearnings
newly
consolidated
Cashdividends(22,501)
companies
accounted
forby
theforequitymethod(10)
subsidiaries(336)
Changeinownershipoftheparentduetotransaction
with
Adjustmentofretainedearnings
newly
consolidated
subsidiaries(336)
Changeinofownershipofthe parent
totransaction
Adjustmentofretainedearnings
forduenewly
associated with
noncontrollingshareholders
83
subsidiaries(336)
Disposaltreasurystock(393,700
shares)32
Adjustmentofretainedearnings
for newly
associatednoncontrollingshareholders
83
companies
accounted
for
by
the
equitymethod(10)
Adjustmentofretained
newly
associatedNetchange inyear earnings
45
Adjustment
ofthe
retainedfor
newly
consolidated
companies
accounted
forearnings
by thefor
equitymethod(10)
Changeinownershipoftheparentduetotransaction
withNetchange
in
the
year
45
companies
accounted
for
by
the
equitymethod(10)
subsidiaries(336)
Changein ownership of the parent due to transaction with
noncontrollingshareholders
83
Changein MARCH
ownershipof2021theparentduetransaction
with
Adjustmentof retained
earnings
for tonewly
associatednoncontrollingshareholders
83
BALANCE,31,(as restated)
895,834
33,196167,280
1,552
568,335
Netchange in theshareholders
year
45
noncontrolling
83
BALANCE,31, 2021
895,834
33,196167,280
1,552
568,335
NetchangeMARCH
in accounted
the year45
companiesfor (asby restated)the equity method(10)
Net change
in the year of the parent due to transaction with
45
Changein ownership
Net income
attributable to owners of the parent
99,401BALANCE,
MARCH
31, 2021(as restated)
895,834
33,196167,280
1,552
568,335
Net
incomeattributableto ownersof the parent
99,401
noncontrollingshareholders
83 1,552
BALANCE,
MARCH
31, 2021(as restated)
895,834
33,196167,280
568,335
Cashdividends(29,693)
BALANCE,MARCH 31, 2021 (as restated)
895,834
33,196167,280
1,552
568,335
Cashdividends(29,693)
Purchaseof treasury
stock (4,503 shares)
Netchangein the year
45
Net
incomeattributableto ownersof the parent
99,401
Purchaseof attributable
treasury stock
stock(4,503 shares)
Net
incometo (296,520
ownersofshares)the parent
99,401
Disposaloftreasury(60)
Cashincome
dividends(29,693)Net
attributabletoownersofthetoparent
99,401
Disposaloftreasurystock(296,520
shares)(60)
Changeinownershipoftheparentduetransaction
withCash dividends(29,693)
BALANCE,
MARCH
31, 2021(asrestated)
895,834
33,196167,280
1,552
568,335
Purchase
ofownershiptreasurystock(4,503
shares)Cashdividends(29,693)
Changeinofof the(4,503
parentshares)
due to transaction with
noncontrollingshareholders(113)
Purchasetreasurystock
noncontrollingshareholders(113)
Disposalofstock(296,520
shares)(60)
Purchaseof treasury
treasurystock(4,503
shares)Increasedue
to merger(issued,571,078,084
Disposalof treasurystock(296,520
shares) shares,(60)
Net
incomeattributableownersofto
parent99,401
Increasedue
to merger
571,078,084
shares,Changeinownershipof(issued,
thetoparent
due
tothe
transaction
withtreasury
26,980,329
shares;Notes
3.a.
and 16)
571,078
381,480
Disposaltreasurystockshares)(60)
Changeinofstock,ownershipof the(296,520
parentduetransaction
withtreasury
26,980,329
shares;dueNotes
3.a. and 16)
571,078
381,480
noncontrollingshareholders(113)
Changein stock,ownership
to transaction
with
Cash
dividends(29,693)Netchangein theshareholders
yearof the parent
308
noncontrolling(113)
Increasedueintothe
merger(issued, 571,078,084 shares,
Netchangeyear stock308
noncontrollingshareholders(113)
Increasedue
merger(issued,571,078,084
Purchaseof totreasury(4,503
shares)shares,
treasurydue
stock,
26,980,329
shares;
Notes 3.a.
and 16)
571,078
381,480
Increasetomerger(issued,571,078,084
shares,treasuryMARCH
stock,
26,980,329
shares;Notes
3.a.
and 16)
571,078
381,480
BALANCE,31,stock
2022
1,466,912¥33,196¥548,586¥1,861¥638,043
Disposaloftreasury(296,520
shares)(60)
Netchangein the26,980,329
year308
treasurystock,
shares; Notes 3.a. and 16)
571,078
381,480
BALANCE,31, 2022¥33,196¥548,586¥1,861¥638,043
Net change
in the year
308
ChangeinMARCH
ownershipof the parent due to transaction with 1,466,912
Net change in the year308
noncontrolling shareholders(113)
BALANCE, MARCH 31, 2022
1,466,912¥33,196¥548,586¥1,861¥638,043
BALANCE,
MARCH
31, 2022
1,466,912¥33,196¥548,586¥1,861¥638,043
Increase due
to merger(issued, 571,078,084 shares,
BALANCE, MARCH 31, 2022
1,466,912¥33,196¥548,586¥1,861¥638,043
e-1

e-1

e-1

e-1

e-1

e-1

m-1

m-1

m-1

m-1

m-1

m-1

p-1

p-1

treasury stock, 26,980,329 shares; Notes 3.a. and 16)
Net change in the year

571,078

p-1

p-1

381,480p-1

1,466,912

BALANCE, MARCH 31, 2022

¥33,196¥548,586
Stock

p-1

BALANCE, MARCH 31, 2021 (as restated)
BALANCE, MARCH 31, 2021 (as restated)
Net income attributable to owners of the parent
BALANCE,
MARCH
31, 2021(as restated)
Net income
attributableto ownersof the parent
BALANCE,
MARCH
31, 2021(as restated)Cashdividends
BALANCE,MARCH 31, 2021 (as restated)Cashdividends
Purchase of treasury stock (4,503 shares)
Net
incomeattributableto ownersof the parent
Purchaseof attributable
treasury stock
stock(4,503 shares)
Net
incometo (296,520
ownersofshares)the parent
DisposaloftreasuryCashdividends
Net
incomeattributabletoownersofthetoparent
Disposaloftreasurystock(296,520
shares)Changeinownershipoftheparentduetransaction with
Cash dividends
Purchase
ofownershiptreasurystock(4,503
shares)Cashdividends
Changeinofof the(4,503
parentshares)
due to transaction with
noncontrollingshareholders
Purchasetreasurystock
noncontrollingshareholders
Disposalofstock(296,520
shares)Purchaseof treasury
treasurystock(4,503
shares)Increasedue
to merger(issued,571,078,084
Disposalof treasurystock(296,520
shares) shares,
Increasedue
to merger
571,078,084
shares,Changeinownershipof(issued,
theparentdue
to transaction
withtreasury
26,980,329
shares;Notes
3.a.
and 16)
Disposaltreasurystock(296,520
shares)BALANCE,
MARCH
31,
2021
(asduerestated)
Changeinofstock,ownershipoftheparentto transaction
withtreasurystock,
26,980,329
shares;dueNotes
3.a. and 16)
noncontrollingshareholders
Changeinownershipoftheparenttotransaction
withNetchangeintheyear
noncontrolling shareholders
Increasedueintothe
merger(issued, 571,078,084 shares,
Netchangeyear (issued,
noncontrollingshareholders
Increasedue
tomerger571,078,084
shares,Net
incomeattributable
to shares;
ownersof the3.a.
parenttreasurystock,
26,980,329
Notes
and 16)
Increase
to merger(issued,571,078,084
shares,treasurydue
stock,
26,980,329
shares;
Notes 3.a.
and 16)BALANCE,
MARCH
31, 2022
Cashdividends
Netchangein the26,980,329
year
treasurystock,
shares; Notes 3.a. and 16)
BALANCE,
MARCH
31,
2022
Net change in the year
Purchase
Net changeofintreasury
the year stock (4,503 shares)
BALANCE,
MARCH
31, 2022 (296,520 shares)
Disposaloftreasury
BALANCE,31,stock2022
See notes to MARCH
consolidated
financialstatements.
Changeownershipof the parent
due to transaction withBALANCE,
MARCH
31, financial
2022
See
notes toin
consolidated
statements.

noncontrolling shareholders

20

to merger(issued,571,078,084 shares,
SeeIncrease
notes to due
consolidated
financialstatements.
See notes to consolidated financial statements.
Financial Information
treasurystock, 26,980,329
Notes 3.a. and 16)
See notes
to consolidated
financialshares;
statements.

2022

Net change in the year

CommonCommonstock
stockCommonCommonstock
Commonstock$272,098
stock$272,098

CapitalCapitalsurplussurplusCapitalCapitalsurplusCapitalsurplus$1,371,150
surplus$1,371,150

StockacquisitionacquisitionrightsStockrights
(Note
17)
Stock
acquisition
(Note
17)
Stock
acquisitionrightsacquisitionrights(Note
17)
rights(Note
17)$12,728(Note
17)$12,728308¥1,861¥638,043

Retained
Retainedearnings
earnings
Retained
Retainedearnings
Retainedearnings$4,658,488
earnings$4,658,488

814,764
Stock$12,728$4,658,488
814,764$12,728acquisition$4,658,488(243,391)$12,728$4,658,488(243,391)
CommonCapitalrights814,764 Retained
814,764 earnings(499)surplus
stock(Note 17)
(243,391)
814,764(499)(243,391)(243,391)
(927)
(927)
(499)
(499)
3,126,886(499)$272,098$1,371,150$12,728$4,658,488
3,126,886
(927)
2,532
(927)
2,532
(927)
814,764
3,126,886
3,126,886$272,098$4,496,610$15,260$5,229,860(243,391)
2,532
3,126,886$272,098$4,496,610$15,260$5,229,860
2,532
2,532
$272,098$4,496,610$15,260$5,229,860(499)$272,098$4,496,610$15,260$5,229,860$272,098$4,496,610$15,260$5,229,860$272,098$272,098$272,098$1,371,150$1,371,150$1,371,150(927)

3,126,886

2,532

Treasury
Treasury
stock
stock
Treasurystock
Treasurystock¥(1,665)¥(1,665)

Millions of yen
Millionsyen
Accumulated
otherofcomprehensive
incomeAccumulated other comprehensive income
Millions of yen
Deferred gain
Accumulated
othercomprehensive
Millions
yen Foreign income
Deferred
gainof
Net unrealized(loss)
on
Foreign income Definedcurrency
Netgainunrealized(loss)otheron comprehensive
on Accumulated
derivatives
currency
Definedtranslation
retirement
gain onderivatives
available-forunder
hedge
Deferredgain
Foreigntranslation
retirement
available-forunder
hedge
sale
securities
accounting
adjustments
benefitplans
Netunrealized(loss)
on
Deferred gain
currency
Definedsalegainsecurities
accounting
adjustments
benefitplans
Foreignonderivatives
Net
unrealized(loss) on
translation
retirement
Definedcurrency
available-forunderhedge
gain onderivatives
salesecurities
accounting
adjustments
benefitplans
retirementtranslation
available-forunderhedge
sale securities
accounting
adjustments
benefitplans¥10,752¥(5,597)¥36,219¥(1,333)¥10,752¥(5,597)¥36,219¥(1,333)¥(1,665)¥(1,665)(1,665)(1,665)¥10,752¥10,752
10,752
10,752¥(5,597)¥(5,597)(5,597)(5,597)¥36,219¥36,219
36,21936,219¥(1,333)¥(1,333)(1,333)(1,333)(1,665)(1,665)
137
137

10,752
10,752(5,597)(5,597)36,21936,219(1,333)(1,333)19,92519,925(9,922)(9,922)(13,940)(13,940)407
407

30,67819,92530,67819,92530,67830,678(15,519)(9,922)(15,519)(9,922)(15,519)(15,519)

22,278(13,940)
22,278(13,940)
22,27822,278

(925)
407
(925)
407
(925)
(925)

(15,725)(15,725)

16,97916,97970,49770,497

1,049
1,049

137
137

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

Treasury
Treasury
stock
stock
Treasurystock
Treasury$(12,526)
stock$(12,526)$(12,526)$(12,526)
(24)
(24)
1,514
1,514
(24)
1,514
(24)
(147,726)
1,514(147,726)(147,726)$(158,763)(147,726)$(158,763)$(158,763)$(158,763)¥14,953¥1,460¥92,776¥123(15,725)
16,97970,497
1,049¥14,953¥1,460¥92,776¥123(15,725)
16,97970,497
1,049¥14,953¥1,460¥92,776¥123¥14,953¥1,460¥92,776¥123
Thousands of U.S. dollars (Note 1)
ThousandsofU.S.
dollars(Note
1)
Accumulated other comprehensive income
Accumulated other comprehensive income
Thousandsof U.S. dollars (Note 1)
Deferred gain
Accumulated
Thousands
ofotherU.S.
dollarsForeign(Note 1)income
Deferredgain comprehensive
Net unrealized(loss)
on
Foreign income Definedcurrency
Netgainunrealized(loss)otheron comprehensive
on Accumulated
derivatives
Definedcurrencytranslation
retirement
gain onderivatives
available-forunder
hedge
Deferredgain
Foreignretirementtranslation
available-forundersale
securities
accounting
adjustments
benefitplans
Netunrealized(loss)hedge
onDeferredgaincurrency
Definedsalegainsecurities
accounting
adjustments
benefitplans
Foreignonderivatives
Net
unrealized(loss) on
translation
retirement
currency
Definedavailable-forunderhedge
gain onderivatives
salesecurities
accounting
adjustments
benefitplans
translation
retirement
available-forunder
hedge$251,466$(127,208)$182,611$(7,586)
sale$251,466
securities
accounting
adjustments
benefitplans$(127,208)$182,611$(7,586)$251,466$251,466$(127,208)$(127,208)$182,611$182,611$(7,586)$(7,586)(128,899)(128,899)

139,176
139,176

577,851
577,851

8,598
8,598

$122,567(128,899)$122,567(128,899)$122,567$122,567$11,968
139,176$11,968
139,176$11,968$11,968$760,462
577,851$760,462
577,851$760,462$760,462$1,0118,598$1,0118,598$1,011$1,011

Total
Total
Total
Total
¥779,220¥779,220(3,107)¥779,220(3,107)¥779,220776,112(3,107)776,112(3,107)55,314776,11255,314(22,501)
776,112(22,501)
169
55,314
169(22,501)
55,314
(336)
(336)
169
(22,501)
(10)
169
(10)
(336)
83
(336)
83
(10)
(3,483)(3,483)(10)
83805,349(3,483)
83805,349(3,483)
99,401
805,349
99,401(29,693)805,349(29,693)(3)
99,401(3)
123(29,693)
99,401123(3)(29,693)
(113)
(113)
123
(3)
363,457
123
363,457(113)
73,10973,109(113)
363,457¥1,311,631
73,109363,457¥1,311,631
73,109¥1,311,631¥1,311,631

Total
Total
Total
$6,601,222
Total$6,601,222
814,764$6,601,222
814,764(243,391)$6,601,222(243,391)(24)
814,764(24)
1,015(243,391)
814,7641,015(24)(243,391)
(927)
(927)
1,015
(24)
2,979,159
1,015
2,979,159(927)
599,258599,258(927)
2,979,159$10,751,077
599,258
2,979,159$10,751,077
599,258$10,751,077$10,751,077

Noncontrolling
Noncontrollinginterests
interests
Noncontrollinginterests
Noncontrollinginterests¥19,599¥19,599

Total
Total
equityequityTotalequityTotalequity¥798,820¥798,820(195)¥19,599(195)¥19,599
19,404(195)
19,404(195)
19,404
19,404¥21,835
9,278¥21,835
9,278¥21,835¥21,835(3,303)¥798,820(3,303)¥798,820
795,517(3,303)
795,517(3,303)55,314
795,51755,314(22,501)
795,517(22,501)
169
55,314
169(22,501)
55,314
(336)
(336)
169
(22,501)
(10)
169
(10)
(336)
83
(336)
83
(10)
(10,330)(10,330)(10)
83
817,906(10,330)
83
817,906(10,330)
99,401
817,906
99,401(29,693)
817,906(29,693)(3)
99,401(3)
123(29,693)
99,401123(3)(29,693)
(113)
(113)
123
(3)
363,457
123
363,457(113)
82,387
82,387(113)
363,457¥1,333,467
82,387363,457¥1,333,467
82,387¥1,333,467¥1,333,467

Noncontrolling
Noncontrollinginterests
interests
Noncontrollinginterests
Noncontrolling$102,928
interests$102,928

Total
Total
equityequityTotalequityTotal$6,704,151
equity$6,704,151(6,838)(6,838)12,557(6,838)12,557(6,838)12,557
12,557

9,278
9,278

$102,928$102,928

76,052
76,052$178,981
76,052$178,981
76,052$178,981$178,981

814,764$6,704,151
814,764(243,391)$6,704,151(243,391)(24)
814,764(24)
1,015(243,391)
814,7641,015(24)(243,391)
(927)
(927)
1,015
(24)
2,979,159
1,015
2,979,159(927)
675,311675,311(927)
2,979,159$10,930,058
675,3112,979,159$10,930,058
675,311$10,930,058$10,930,058

Financial Information

2022

21

Consolidated Statements of Cash Flows

Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Years ended March 31, 2022 and 2021

Thousands of U.S.
dollars (Note 1)

Millions of yen

Operating activities:
Income before income taxes
Adjustment for:
Income taxes — paid
Depreciation and amortization
Provision of allowance for doubtful receivables
Gain from bargain purchase
Loss on disposals and sales of leased assets
Gain on sales of own-used assets
Gain on sales of shares of subsidiaries and affiliates
Loss (gain) on step acquisition
Changes in assets and liabilities:(Increase) decrease in receivables (Note 2.r.)(Increase) decrease in lease receivables and investments in leases(Note 2.r.)
Decrease (increase) in operating securities and investments in private
equity securities
Increase in trade payables (Note 2.r.)(Decrease) increase in interest payable
Purchases of leased assets
Purchases of other operating assets
Other — net (Note 2.r.)
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 acquisition of newly consolidated subsidiaries
Proceeds from sales of consolidated subsidiaries
Payments into time deposits
Proceeds from withdrawal of time deposits
Other — net
Net cash (used in) provided by investing activities
Financing activities:
Net increase (decrease) in short-term loans
Net increase (decrease) 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
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

2022

2022

2021

2022

¥147,250¥83,183$1,206,975(36,505)
328,690
19,479(431)
148,205(7)(22,335)
151,808
9,810(299,227)
2,694,181
159,665(3,538)1,214,798
(60)

273

45,783(3,112)(431)(1,395)(16,345)

92,784(133,982)(29,406)

77,426(241,040)

7,242
3,885
(958)
(397,205)(7,770)29,45048,594
195,845(17,293)
9,602
1,337
(185,989)(32,781)(9,081)
116,131
199,31459,36331,846(7,855)(3,255,785)(63,694)
241,400
398,316
1,605,291(9,623)553(13,663)
36,065(124,592)
2,271(5,913)6,976
45(107,879)(2,648)
3,272(15,699)
14,664
2,019(55,524)
54,250886
1,220(78,880)
4,537(111,999)
295,616(1,021,247)
18,622(48,468)
57,183376(884,260)

49,90430,707(211,716)(328,318)

409,054251,703359,310

103,767

2,945,165(423,974)
562,540(685,685)
498,011(532,561)(29,693)(3,140)(132,989)
578,241(402,652)
280,426(230,079)(22,501)(5,530)(3,475,203)
4,610,989(5,620,372)
4,082,060(4,365,257)(243,391)(25,741)(12,346)(5,229)(192,157)
21,066(83,124)(1,068)(388)(372,808)
2,818(169,455)(101,197)(42,868)(1,575,058)
172,679(681,348)

99
316,895
286,213¥520,083

80

819
2,597,500
2,346,009$4,262,981

455,588¥286,213

2,245

Additional information

Acquisition
CAI International, Inc. (CAI) (Note 3.b.)Additionalofinformation

Acquisition
CAI International, Inc. (CAI) (Note 3.b.)Additionalofinformation
Payments
forofacquisitionof newlyInc.
consolidated
subsidiaries
mainly consist of the acquisition of CAI.
Acquisition
CAI International,(CAI) (Note3.b.)
On
November22, 2021, theCompany
made CAIsubsidiaries
a wholly owned
Payments
for acquisitionof newly
consolidated
mainlysubsidiary.
consist of the acquisition of CAI.
On November
22, 2021, theCompany
made CAIsubsidiaries
a wholly owned
Payments
for acquisitionof newly
consolidated
mainlysubsidiary.
consist of the acquisition of CAI.
On
November 22,
2021,
CAI aofwholly
subsidiary.
Reconciliationof thenet thecashCompany
paid for madeacquisition
CAI isowned
as follows:
Reconciliation of the net cash paid for acquisition of CAI is as follows:
Reconciliation of the net cash paid for acquisition of CAI is as follows:
Current assets
Fixed
assetsCurrent
assetsDeferred
assetsFixed
assetsCurrent
assetsGoodwill
Deferred
assetsFixed
assetsCurrent
Goodwillliabilities
Deferred
assetsLong-term
liabilities
Current liabilities
Goodwill
Foreign liabilities
currencytranslation adjustment
Long-term
liabilities
Current
Acquisition
cost translation adjustment
Foreigncurrency
Long-term
liabilities
Cashandcurrency
cash
equivalents
Acquisition
cost
Foreigntranslation adjustment
Net
cash
paid
for
acquisition of CAI
Cash
and
cash
equivalents
Acquisition cost
Net cashacquisition of CAI
Cash
andpaid
cashforequivalents
Net cash paid for acquisition of CAI¥127,629
2022
Millionsof yenThousands of U.S.
dollars (Note 1)
Thousands of U.S.
dollars (Note 1) 2022
Thousands of U.S.
dollars $1,046,145(Note 1) 2022

¥118,909(5,281)¥118,909$974,666(43,292)$974,666

Millions of yen
2022
Millions of yen

303,794¥127,629
2022
303,7946¥127,629
33,6136
303,794(38,173)
33,6136(302,356)(38,173)
33,613(323)(302,356)(38,173)
124,190(323)(302,356)(5,281)
124,190(323)¥118,909(5,281)
124,1902,490,115$1,046,145
2022
54
2,490,115$1,046,145
275,51854
2,490,115(312,893)
275,51854(2,478,332)(312,893)
275,518(2,647)(2,478,332)(312,893)
1,017,958(2,647)(2,478,332)(43,292)
1,017,958(2,647)$974,666(43,292)
1,017,958

Business integration with Hitachi Capital Corporation (Hitachi Capital) (Note 3.a.)Business integration with Hitachi Capital Corporation (Hitachi Capital) (Note 3.a.)Increasecash and cash
resultingfrom merger
is frombusiness
with Hitachi Capital.
Businessin
integration
with equivalents
Hitachi Capital
Corporation(Hitachi
Capital)(Noteintegration
3.a.)EffectiveinApril
2021,
UFJ
Lease &
FinanceCompany
Limited (Mitsubishi
UFJ Hitachi
Lease) and
Hitachi
Increase
cash1,and
cashMitsubishi
equivalents
resultingfrommergeris from businessintegration with
Capital.
Capitalintegrated
their businesses
andchangedthecompany
name toLimited
Mitsubishi
HC Capital
Effective
2021,
UFJ
Lease &
FinanceCompany(Mitsubishi
UFJ Inc.
Lease) and
Hitachi
IncreaseinAprilcash1,and
cashMitsubishi
equivalents
resultingfrommergeris from businessintegration with
HitachiCapital.
Capitalintegrated
their businesses
company
name toLimited
Mitsubishi
HC Capital
Effective
April 1, 2021,
Mitsubishiand
UFJchanged
Lease &theFinanceCompany(Mitsubishi
UFJ Inc.
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:
Details of assets acquired and liabilities assumed in merger is as follows:
Details of assets acquired and liabilities assumed in merger is as follows:
Current assets (*)
Fixed assets
Current
assets (*)
Deferred
assets(*)
Fixed assets
Current
assetsTotal
assetsDeferred
assetsFixed assets

Millions of yen
2022
Millions of yen¥2,853,966
2022
Millionsof yen860,780¥2,853,966
2022
978
860,780¥2,853,966¥3,715,725
978860,780
Total assets¥3,715,725
Deferred
assets978
Current
liabilities¥1,376,757
Total assets¥3,715,725
Long-term
liabilities
1,921,232
Current liabilities¥1,376,757
Total liabilities¥3,297,990
Long-term
liabilities
1,921,232
Current
liabilities¥1,376,757
Total liabilities¥3,297,990
Long-term
liabilities
1,921,232(*) Cash and cash equivalents of ¥316,895 million ($2,597,500 thousand) is included and disclosed as increase in
Total liabilities¥3,297,990
cashCashand cashequivalents
resultingfrom merger.
(*)
and cashequivalentsof ¥316,895
million ($2,597,500 thousand) is included and disclosed as increase in
cashCashand cashequivalents
resultingfrom merger.
(*)
and cashequivalentsof ¥316,895
million ($2,597,500 thousand) is included and disclosed as increase in
cash and cash equivalents resulting from merger.

Thousands of U.S.
dollars (Note 1)
Thousands of U.S.
dollars (Note 1) 2022
Thousands of U.S.
dollars$23,393,168(Note 1) 2022

7,055,574$23,393,168
2022
8,020
7,055,574$23,393,168$30,456,763
8,020
7,055,574$30,456,763
8,020$11,284,896$30,456,763
15,747,810$11,284,896$27,032,706
15,747,810$11,284,896$27,032,706
15,747,810$27,032,706

Transfer of HIROGIN LEASE CO., LTD. (HIROGIN LEASE) (Note 3.c.)Transfer of HIROGIN LEASE CO., LTD. (HIROGIN LEASE) (Note 3.c.)
Proceeds
fromsales of LEASE
consolidated
mainlyconsist (Noteof the 3.c.)transfer of HIROGIN LEASE.
Transfer of
HIROGIN
CO., subsidiaries
LTD. (HIROGIN
LEASE)On Marchfrom
1, 2021,transferred
entiresharesconsistof HIROGIN
LEASEofaccording
the share transfer
Proceeds
salestheof Company
consolidated
subsidiaries
mainlyof the transfer
HIROGINtoLEASE.
agreement
executedon
Decembertransferred
23,subsidiaries
2020. entire
Proceeds
salestheof Company
consolidated
mainlyof the transfer
HIROGINtoLEASE.
On
Marchfrom1,
2021,
sharesconsistof HIROGIN
LEASEofaccording
the share transfer
agreement
executedon Company
Decembertransferred23, 2020. entire shares of HIROGIN LEASE according to the share transfer
On
March 1,2021, theReconciliationof theon
netDecember
cash provided
by the transfer of HIROGIN LEASE is as follows:
agreement executed
23, 2020.
Millions of yen
Reconciliation of the net cash provided by the transfer of HIROGIN LEASE is as follows:
2021
Millions of yen
Reconciliation of the net cash provided by the transfer of HIROGIN LEASE is as follows:
Current assets¥73,732
2021
Millions of yen
Fixed assets
2,718
Current
assets¥73,732
2021
Current
liabilities(44,681)
Fixed
assets2,718
Current
assets¥73,732
Long-term
liabilities(26,412)Current
liabilities(44,681)
Fixed
assets2,718
Noncontrollinginterests(1,071)Long-term
liabilities(26,412)Current
liabilities(44,681)
Others(1)
Noncontrollinginterests(1,071)Long-term
liabilities(26,412)
Gain
431
Otherson share transfer(1)
Noncontrollinginterests(1,071)
Transferamount4,716
Gain
transfer
431
Otherson share(1)
Cash onandsharecashtransfer
equivalents(3,629)Transferamount
4,716
Gain
431
Net
providedby transfer of shares of HIROGIN LEASE¥1,086
Cashcashandamountcash equivalents(3,629)Transfer
4,716
Net
by transfer of shares of HIROGIN LEASE
Cashcashandprovided
cash equivalents
Net cash provided by transfer of shares of HIROGIN LEASE¥1,086(3,629)¥1,086

Financial Information

2022

23

Notes to Consolidated Financial Statements
Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Years ended March 31, 2022 and 2021

1. Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated financial statements of Mitsubishi HC Capital Inc. (formerly: Mitsubishi
UFJ Lease & Finance Company Limited ) (the “Company”) and its consolidated subsidiaries (collectively,
the “Companies”) have been prepared in accordance with the provisions 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 in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards (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 the2021 consolidated financial statements to conform to the classifications used in 2022.
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 ¥122 to
USD1, the approximate rate of exchange at March 31, 2022.
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 a thousand dollars arerounded down to the nearest million yen and thousand dollars, except for per share data. As a result, totals in
millions of 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, 2022, include the accounts of theCompany and its 266 (188 in 2021) 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 2021) unconsolidated subsidiary and 73 (52 in 2021) 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 60
such collective investment vehicles in 2022 (56 in 2021).
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 then24

Financial Information2022

ended. Certain subsidiaries have prepared provisional statements of accounts, prepared in the equivalent way
as the year-end closing, as of March 31, 2022.
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

Financial Information

2022

25

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.
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.
(Additional Information)
Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections (therevised ASBJ Statement No. 24, March 31, 2020) was applied for the consolidated financial statements forthe year ended March 31, 2021, and accounting policies and procedures applied were newly disclosed if
relative accounting standards and guidance are not specified.
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 ¥169,231 million ($1,387,144 thousand) in
2022 and ¥128,306 million in 2021.
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, which adopt 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 ($77,054 thousand) for theyear 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.
In accordance with the transitional treatment as stipulated in Paragraph 89-2 of Accounting Standard for
Revenue Recognition, reclassification has not been made to the 2021 consolidated financial statements. In
accordance with the transitional treatment as stipulated in Paragraph 89-3 of Accounting Standard for

26

Financial Information

2022

Revenue Recognition, notes disclosure on revenue recognition has been omitted for the year ended March 31,
2021.
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 fairvalue 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 ¥1,413 million ($11,583
thousand) and ¥154,456 million ($1,266,040 thousand), respectively, as of March 31, 2022, and ¥5,411
million and ¥123,966 million, respectively, as of March 31, 2021. 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
25. Financial Instruments, while the Company omitted disclosure for the year ended March 31, 2021
according to Paragraph 7-4 of Implementation Guidance on Disclosure about Fair Value of Financial
Instruments (ASBJ Guidance No. 19, July 4, 2019).
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

Financial Information

2022

27

subsidiaries and right-of-use assets of certain consolidated foreign subsidiaries which adopt IFRS or U.S.
GAAP.
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 allowance for doubtful receivables is stated at the amountconsidered to be appropriate based on the Companies’ past credit loss experiences and an evaluation ofpotential losses in the receivables outstanding. The amounts of long-term receivables considered
uncollectible were directly written off from the accounts. The amounts directly written off were ¥9,441
million ($77,387 thousand) and ¥9,671 million at March 31, 2022 and 2021, respectively.
In addition, the consolidated foreign subsidiaries which adopt 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
six to 21 years ( 13 to 15 years in 2021 )10 to 20 years ( 13 to 15 years in 2021 )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.

28

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2022

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

Financial Information

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29

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 changed accounting policies of items stated below from the year ended
March 31, 2022. The consolidated financial statements for the year ended March 31, 2021, wereretrospectively adjusted for all items to reflect the accounting changes.
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.
As a result of this change, “Other current liabilities” increased by ¥8,392 million ($68,790 thousand),“Receivables – Lease” decreased by ¥1,884 million ($15,446 thousand) and “Retained earnings” decreasedby ¥6,926 million ($56,776 thousand) as of March 31, 2021. “Retained earnings” as of April 1, 2020,
decreased by ¥6,833 million ($56,014 thousand) due to the cumulative effect of this change to net asset as ofApril 1, 2020.
The effects of this change on net income and per share information for the year ended March 31, 2021,
were immaterial.
As a result of this retrospective adjustment, there was no effect on net cash provided by operating
activities, investing activities and financing activities in the consolidated statement of cash flows for the year
ended March 31, 2021.
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 statement 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, the30

Financial Information2022

outstanding balance of these leases increased due to the merger with Hitachi Capital, which is an additional
reason for the change.
As a result of the change, “Lease receivables and investments in leases” and “Retained earnings”
increased by ¥214,643 million ($1,759,370 thousand) and ¥1,732 million ($14,198 thousand), as of March
31, 2021, respectively, “Receivables – Loans” decreased by ¥212,146 million ($1,738,904 thousand) as ofMarch 31, 2021, and “Revenue” and “Costs” both increased by ¥53,460 million ($438,204 thousand) for theyear ended March 31, 2021. “Retained earnings” as of April 1, 2020, increased by ¥1,732 million ($14,198
thousand) due to the cumulative effect of this change to net asset as of April 1, 2020.
The effects of this change on net income and per share information for the year ended March 31, 2021,
were immaterial.
As a result of this retrospective adjustment, “(Increase) decrease in lease receivables and investments inleases” decreased by ¥17,684 million ($144,953 thousand), “(Increase) decrease in receivables” increased by¥17,684 million ($144,953 thousand) in the consolidated statement of cash flows for the year ended March
31, 2021. There was no effect on net cash provided by operating activities, investing activities, and financing
activities.
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 beenrecorded by the interest method. The change will more appropriately reflect the Companies’ fundraising
activities into the consolidated financial statements.
As a result of the change, “Bond issue costs” and “Retained earnings” increased by ¥3,454 million($28,319 thousand) and by ¥2,070 million ($16,973 thousand), as of March 31, 2021, respectively. “Retained
earnings” as of April 1, 2020, increased by ¥1,993 million ($16,341 thousand) due to the cumulative effect of
this change to net asset as of April 1, 2020.
The effects of this change on net income and per share information for the year ended March 31, 2021,
were immaterial.
As a result of this retrospective adjustment, there was no effect on net cash provided by operating
activities, investing activities and financing activities in the consolidated statement of cash flows for the year
ended March 31, 2021.
s. New Accounting Pronouncements
Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31,
June 17, 2021)(1) Outline
The ASBJ revised ASBJ Guidance No. 31 Implementation Guidance on Accounting Standard for Fair Value
Measurement on June 17, 2021. At the time of its initial release on July 4, 2019, deliberation on method offair value measurement for investment trusts and investments in partnership and similar instruments forwhich net interest amounts are recorded on balance sheet, were to be performed roughly over one year period
after the release as further consideration had been required among related parties.
(2) Date of application
The Company expects to apply the guidance for annual periods beginning on or after April 1, 2022.
(3) Effect of adopting the revised guidance
The Company is in the process of measuring the effects of applying the guidance in future applicable
periods.

Financial Information

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31

Financial Instruments–Credit Losses (Financial Accounting Standards Board (FASB) Accounting Standards
Update (ASU) 2016-13)(1) Outline
The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13
Financial Instruments–Credit Losses on June 16, 2016. The new standard introduced expected loss
methodology, replacing the existing incurred loss methodology, under which allowance for credit losses will
be recognized by estimating expected loss for entire credit period at the time of 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
Accounting Standard for Disclosure of Accounting Estimates（ASBJ Statement No. 31, March 31, 2020）
has been applied from the year ended March 31, 2021, and the significant accounting estimates used in
preparation of the consolidated financial statements were disclosed in notes to the consolidated financial
statements.
Asset 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.a.. 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

Thousands of
U.S. dollars

Appraisal model used

¥1,510,238
782,794536,791
83,324$12,379,006
6,416,351
4,399,933
682,986

DCF model
DCF model
Replacement costs method
Replacement costs method

25,494996,245

208,967
8,165,950

DCF model
DCF model

1,065,564

8,734,138

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 years ended March 31, 2022 and 2021, include
assumptions regarding future effects of COVID-19 on each business of the Companies.
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 is reduced to their respective

32

Financial Information2022

recoverable amounts and the differences between the carrying amounts and recoverable amounts is recorded
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 ¥926,454 million ($7,593,892 thousand) and¥832,416 million at March 31, 2022 and 2021, respectively, the Companies regularly reviewed future cash
flows and performs impairment evaluation in accordance with the accounting principles generally acceptedin the United States of America. The Companies compared the carrying amounts to the sum of theundiscounted future cash flows, and the amount by which the carrying value exceeded the fair value wasrecorded as an impairment loss for the assets where the carrying amount of aircraft exceeded the sum of theundiscounted future cash flows. Future cash flows were comprised of current lease rents, future lease rents,
residual values at maturity, disposal costs, lease terms, off lease periods, renewal lease term, and otherfactors. Future lease rents and residual values at maturity were based on 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 ¥2,673 million ($21,917 thousand) and ¥1,691 million were included incosts in the accompanying consolidated statements of income for the years ended March 31, 2022 and 2021,
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 inassumptions used and business environment may have a material impact on the future consolidated financial
statements.
The Companies recorded ¥90,326 million ($740,382 thousand) and ¥57,277 million of goodwill for theyears ended March 31, 2022 and 2021, respectively.
For the year ended March 31, 2021, the Companies assessed impairment for goodwill recognized related
to the acquisition of ENGS Holdings Inc. (ENGS) (¥11,261 million at March 31, 2021), which engages invendor financing in U.S. because ENGS was affected by COVID-19, and the Companies identified
impairment indicators for goodwill on ENGS. The Companies determined not to recognize an impairment
loss as a result of comparing the total of the undiscounted future cash flows and carrying amounts of theasset group including the goodwill since the total of the undiscounted future cash flows exceeded thecarrying amounts.
Allowance for Doubtful Receivables
The allowance for doubtful receivables is stated at the amount considered to be appropriate based on the
Companies’ past credit loss experiences and an evaluation of potential losses in the receivables outstanding.
The potential losses are measured based on financial condition of customers, estimated recoverable
amount of collaterals and other information. In addition, based on the expected credit loss model, theconsolidated foreign subsidiaries which adopt 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 ¥99,448 million ($815,147 thousand) and¥28,296 million for the years ended March 31, 2022 and 2021, respectively.

Financial Information

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33

3. Business Combinations
Acquisition
a. 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
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.

34

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2022

(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
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 ........................................................................................

Millions of yen

Thousands of
U.S. dollars¥16,725$137,091

381,480¥398,205

3,126,886$3,263,977

Financial Information

2022

35

4.

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 thecalculation 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.

¥6,494

Thousands of
U.S. dollars$53,234

The 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

Thousands of
U.S. dollars$1,878The amount of gain from bargain purchase recognized and reason for recognition(1) The amount of gain from bargain purchase¥431 million ($3,538 thousand)(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, therefore, the difference was recognized asgain from bargain purchase.
8. Details of assets acquired and liabilities assumed at the acquisition dateMillions of yen

36

Financial Information

Thousands of
U.S. dollars

Current assets .......................................................................................... ¥2,853,966
Property and equipment, Investments and other assets ............................
860,780
Deferred assets ..........................................................................................
978Total assets ................................................................................................ ¥3,715,725$23,393,168
7,055,574
8,020$30,456,763

Current liabilities .................................................................................... ¥1,376,757
Long-term liabilities ............................................................................... 1,921,232
Total liabilities .......................................................................................... ¥3,297,990$11,284,896
15,747,810$27,032,706

2022

b. 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 hasan 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

Thousands of
U.S. dollars$1,017,958$1,017,958

Financial Information

2022

37

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

Millions of yen¥1,595

Thousands of
U.S. dollars$13,080

5. The amount of goodwill recognized and reason for recognition(1) The amount of goodwill¥33,613 million ($275,518 thousand)(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
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

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

Thousands of
U.S. dollars¥127,629
337,4076¥465,043$1,046,145
2,765,633
54$3,811,833¥38,173
302,356¥340,529$312,893
2,478,332$2,791,226

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)

Thousands of
U.S. dollars$405,724
123,151
122,553(45,418)

U.S. dollars$(0.032)(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.

38

Financial Information

2022

Business Divestituresc. Transfer of HIROGIN LEASEAt the meeting of the Board of Directors held on December 23, 2020, the Company resolved to sell all sharesof HIROGIN LEASE, a consolidated subsidiary of the Company, by way of HIROGIN LEASE acquiring its
treasury stock, and signed a share transfer agreement on the same day. The share transfer was completed on
March 1, 2021.
(1) Outline of the share transfer(a) Name and business of the subsidiaryName:
HIROGIN LEASE CO., LTD.
Business: Lease, installment sales and financing(b) Name of the counterparty of the share transfer
HIROGIN LEASE CO., LTD.
(c) Reason for the share transfer
The Company has been operating finance business through HIROGIN LEASE as a joint venturebusiness with The Hiroshima Bank Group mainly in Chugoku region. The Company decided to enter
into the share transfer agreement because operating under the umbrella of Hirogin Holdings Inc.
would provide HIROGIN LEASE an opportunity to expand its strength and further development.
The Company aims for further growth and pursue the Companies’ own vision from the viewpoint ofasset efficiency.
(d) Date of the share transfer
March 1, 2021(e) Method of the share transfer
Share transfer agreement in exchange for cash(2) Outline of accounting treatment(a) Amount of gain on sales of shares¥431 million(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¥73,732
2,718¥76,451¥44,681
26,412¥71,094(c) Accounting treatment
The Company presented the difference between the book value and the transfer price of HIROGIN
LEASE as a gain on sales of shares of subsidiaries and affiliates in Other income (expenses) in the
consolidated financial statement for the year ended March 31, 2021.
(3) Name of the main segment in which the subsidiary’s business was included in the Company’s segment
information
Customer Business

Financial Information

2022

39

(4) Estimated amount of profits and losses related to the business included in the consolidated statement ofincome for the year ended March 31, 2021
Revenues .................................................................................................
Operating income .....................................................................................

Millions of yen¥19,0161,077

4. Marketable and Investment Securities
The carrying amounts of marketable and investment securities recognized in the consolidated balance sheets
as of March 31, 2022 and 2021, were as follows:Marketable securities ....................................................................
Investment securities:
Unconsolidated subsidiaries and associated companies ...........
 Other securities .........................................................................
Total ..........................................................................................

¥2,019¥5,4692021

Thousands of
U.S. dollars
2022

168,891
207,754¥378,665

150,054
207,737¥363,260

1,384,354
1,702,904$3,103,811

Millions of yen
2022$16,552

Marketable and investment securities as of March 31, 2022 and 2021, consisted of the following:Equity securities ...........................................................................
Debt securities ..............................................................................
Trust fund investments and other .................................................
Total ..........................................................................................

40

Financial Information

2022

Millions of yen
2022¥164,751
22,423
191,490¥378,665

2021¥185,657
10,610166,993¥363,260

Thousands of
U.S. dollars
2022$1,350,420
183,800
1,569,590$3,103,811

The carrying amounts and aggregate fair values of marketable and investment securities as of March 31,
2022 and 2021, were as follows:

March 31, 2022

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

March 31, 2021

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 ...................................................................

Cost¥27,152
22,4662,331¥51,951

Cost¥29,179
10,48950¥39,719

Cost$222,563
184,154
19,112$425,830

Millions of yen
Unrealized
Unrealized
gains
losses¥15,5088¥(232)(51)¥15,516¥(284)

Millions of yen
Unrealized
Unrealized
gains
losses¥43,491120¥(1,216)¥43,611¥(1,216)

Thousands of U.S. dollars
Unrealized
Unrealized
gains
losses$127,117
68$(1,909)(422)$127,185$(2,332)

Fair value¥42,428
22,4232,331¥67,183

Fair value¥71,453
10,61050¥82,114

Fair value$347,771
183,800
19,112$550,684

Marketable and investment securities whose fair value is not readily determinable as of March 31, 2021 wereas follows:

Investments in unconsolidated subsidiaries and associatedcompanies ...................................................................................
Available for sale:
Equity securities ...........................................................................
Trust beneficiary interests ............................................................
Silent partnership and other ..........................................................
Total ........................................................................................

Carrying amountMillions of yen
2021¥148,169
28,6082,068
102,299¥281,146

Financial Information

2022

41

Carrying amounts of nonmarketable equity securities and investments in partnerships, etc., that the equity
interest equivalents are recorded as net in the consolidated balance sheet as of March 31, 2022 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 ............................................................

Millions of yen
2022

Thousands of
U.S. dollars
2022¥95,132
27,190¥122,323$779,774
222,874$1,002,649¥2,240117,835$18,362
965,862

63,853¥183,929

523,391$1,507,617

The proceeds from realized gains and losses of the available-for-sale securities, which were sold during
the years ended March 31, 2022 and 2021, were as follows:

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

Millions of yen
2022¥46,155
33,682(118)

2021¥15,435
11,149(242)

Thousands of
U.S. dollars
2022$378,321
276,090(971)

The impairment losses on marketable and investment securities recognized for the years ended March 31,
2022 and 2021, were as follows:

Equity securities .............................................................................
Trust fund investments and other ...................................................
Total ........................................................................................

Millions of yen
2022

¥145
¥145

2021

¥106
1
¥108

Thousands of
U.S. dollars
2022$1,190$1,1905. Inventories
Inventories as of March 31, 2022 and 2021, consisted of the following:

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

Millions of yen
2022¥21,731
26,511¥48,2422021¥12,664
14,803¥27,468

Thousands of
U.S. dollars
2022$178,124
217,304$395,428

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 ¥17,157 million ($140,636 thousand) and ¥12,369 million for the fiscal years ended
March 31, 2022 and 2021, respectively. The net gain from sales of those properties was ¥9,031 million for
the fiscal year ended March 31, 2021.

42

Financial Information

2022

The carrying amounts, changes in such balances, and fair value of those properties as of March 31, 2022
and 2021, were as follows:
Millions of yen
2022

Beginning of year

¥318,620

Carrying amount (1)Net change (2)¥99,505

End of year

Fair value (3)End of year

End of year

Fair value (3)End of year

¥418,126¥482,922

Millions of yen
2021

Beginning of year

¥348,744

Carrying amount (1)Net change (2)¥(30,123)¥318,620¥370,177

Thousands of U.S. dollars
2022

Beginning of year

$2,611,644

Carrying amount (1)Net change (2)$815,621

End of year

$3,427,265

Fair value (3)End of year

$3,958,382

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, 2022, was primarily attributable to a ¥73,370 million ($601,395
thousand) increase due to the merger with Hitachi Capital. Net change during the fiscal year ended March 31, 2021,
was primarily attributable to a ¥22,151 million decrease from the sales of real estate.
(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, 2022, were as
follows:

Years Ending March 312023 ......................................................................................
2024 ......................................................................................
2025 ......................................................................................
2026 ......................................................................................
2027 ......................................................................................
Thereafter .............................................................................
Total ................................................................................

Millions of yen
2022¥441,924
345,144
266,042
160,547
99,550208,443¥1,521,653

Thousands of
U.S. dollars
2022$3,622,328
2,829,056
2,180,677
1,315,966
815,989
1,708,552$12,472,573

Financial Information

2022

43

Investments in leases as of March 31, 2022 and 2021, consisted of the following:

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

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

2021¥1,384,225
41,591(286,333)¥1,139,482

Thousands of
U.S. dollars
2022$18,456,784
689,706(3,352,731)$15,793,758

The aggregate annual maturities of the future rentals on investments in leases as of March 31, 2022, wereas follows:

Years Ending March 312023 ......................................................................................
2024 ......................................................................................
2025 ......................................................................................
2026 ......................................................................................
2027 ......................................................................................
Thereafter .............................................................................
Total ..............................................................................

Millions of yen
2022¥598,133
482,513362,677
253,092
140,631414,679¥2,251,727

Thousands of
U.S. dollars
2022$4,902,732
3,955,027
2,972,769
2,074,524
1,152,715
3,399,014$18,456,784

The consolidated balance sheets’ amounts of sublease contracts, including those that aim to disperse credit
risks, including interest as of March 31, 2022 and 2021, were as follows:

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

Millions of yen
2022¥22,955
41,52365,6352021¥26,938
56,52086,444

Thousands of
U.S. dollars
2022$188,158
340,358
537,995“Lease receivables and investments in leases” include receivables from hire-purchase contract of theconsolidated foreign subsidiaries which adopt IFRS.
As disclosed in Note 2, “Summary of Significant Accounting Policies,” the changes in accounting policy
for the year ended March 31, 2022 have been retrospectively applied and the amount for the year ended
March 31, 2021 have been modified to reflect retrospective adjustments.
8. Leased Assets
The minimum future rentals on lease contracts as of March 31, 2022 and 2021, were as follows:

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

44

Financial Information

2022

Millions of yen
2022¥291,470
1,177,714¥1,469,185

2021¥174,287
767,278¥941,566

Thousands of
U.S. dollars
2022$2,389,105
9,653,397$12,042,503

9. Goodwill
Goodwill as of March 31, 2022 and 2021, consisted of the following:

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

Millions of yen
2022¥10,587
79,739¥90,3262021¥12,704
44,573¥57,277

Thousands of
U.S. dollars
2022$86,779
653,602$740,382

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, 2022 and 2021. As a result,
the Companies recognized impairment losses of ¥3,549 million ($29,090 thousand) on the following longlived assets in costs in 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

Thousands of
U.S. dollars¥2,673876$21,917
7,187

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%.
The Companies recognized impairment losses of ¥2,578 million on the following long-lived assets in costsin the accompanying consolidated statement of income for the year ended March 31, 2021.
Use

Leased assets
Leased assets

Type of assets
2021

Aircraft
Aircraft engine

Millions of yen¥1,691886

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 net selling price, and the net selling
price is evaluated based on the valuation reasonably calculated by a third party.

Financial Information

2022

45

11. Pledged Assets
As of March 31, 2022, 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 ..........................................
Receivables — lease .............................................................
Lease receivables and investments in leases ........................
Inventories ............................................................................
Current assets — other .........................................................
Leased assets ........................................................................
Other operating assets...........................................................
Investment securities ............................................................
Investments and other assets — other ..................................
Future rentals on operating lease contracts...........................
Total ..............................................................................

Millions of yen
2022

Thousands of
U.S. dollars
2022¥18,751
144,831
10,34410
539,490
11,08822,307
943,31296,62835,4102,725
5,130¥1,830,031$153,704
1,187,142
84,79387
4,422,049
90,889
182,846
7,732,070
792,036
290,249
22,33642,056$15,000,261

The liabilities secured by the foregoing assets were as follows:

Short-term loans from banks and other financial
institutions ........................................................................
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
2022

Thousands of
U.S. dollars
2022

¥202
11,009$1,65590,238746,611

6,119,766

602,807
1,485¥1,362,115

4,941,041
12,176$11,164,879

12. Nonrecourse Loans
Nonrecourse loans as of March 31, 2022 and 2021, were as follows:

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

Millions of yen
2022¥3,829100
34,862¥38,792

2021

Thousands of
U.S. dollars
2022

2021

Thousands of
U.S. dollars
2022¥10,916100
53,354¥64,371$31,391819
285,756$317,968

Pledged assets for nonrecourse loans as of March 31, 2022 and 2021, were as follows:

Receivables — loans ............................................................
Inventories ............................................................................
Leased assets ........................................................................
Total ..............................................................................

46

Financial Information

2022

Millions of yen
2022¥6,72052,477¥59,198¥6,722
6,664
74,396¥87,783$55,085
430,145$485,230

13. Short-Term Borrowings and Long-Term Debt
Short-term borrowings and long-term debt as of March 31, 2022 and 2021, were as follows:

Short-term loans from banks and other financial
institutions:
0.98% ..............................................................................
0.49% ..............................................................................
Commercial paper:
0.14% ..............................................................................
0.02% ..............................................................................

Millions of yen
2022¥591,431¥682,593

2021¥236,730¥434,171

Thousands of
U.S. dollars
2022$4,847,798$5,595,031

Financial Information

2022

47

Millions of yen
2022

Bonds:
Bonds without collateral:Due 2022-2036, 0.010%-0.963% ...................................
Due 2021-2036, 0.010%-0.890% ...................................
Subordinated bonds without collateral with interest
deferral and early redemption clauses:
Due 2076-2081, 0.630%-1.310% ...................................
U.S. dollar bonds without collateral:Due 2022-2030, 2.652%-3.967% ...................................
Due 2022-2030, 2.652%-3.967% ...................................
U.S. dollar bonds issued under the Medium Term Note
(MTN) program:Due 2021, 2.250% ..........................................................
Euroyen bonds issued under the MTN program:Due 2022-2024, 0.010%-0.180%................................
Due 2021-2024, 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% ...........................................
Due 2022, 0.217% - 0.221% ...........................................
Thai baht bond without collateral issued by Bangkok
Mitsubishi HC Capital Co., Ltd. (*1):
Due 2021, 2.420% ..........................................................
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 2022-2030, 1.249 % -3.097% .................................
Due 2022-2030, 0.952 % -3.097% .................................
U.S. dollar bond with collateral issued by Container
Applications Limited, LLC:
Due 2022, 4.900% ....................................................
Sterling pound bonds issued under MTN program by
Mitsubishi HC Capital UK PLC:
Due 2022-2027, 0.833%-2.200%................................
Euro bonds issued under MTN program by Mitsubishi
HC Capital UK PLC:
Due 2022-2029, 1.220%-1.810%................................
U.S. dollars bonds issued under MTN program by
Mitsubishi HC Capital UK PLC:
Due 2022-2029, 1.260%-2.154%................................
Bonds issued under MTN program by Mitsubishi HC
Capital UK PLC:
Due 2023-2026, 1.340%-2.350%................................

48

Financial Information

2022¥1,103,047

2021¥682,000

110,138
281,497

3,029

3,456

$9,041,372

902,774
287,846

2,307,352

55,348

71,000534,426


65,200Thousands of
U.S. dollars
2022



3,039

3,117

24,82828,3333,440
34,50623,00479,55331,05020,70066,426

282,836

188,557

652,077

4,664

38,23455,671

456,322

195,901

1,605,753

54,023442,813

149,185

1,222,835

Hong Kong dollars bonds issued under MTN program by
Mitsubishi HC Capital UK PLC:
Due 2022-2026, 1.532%-1.710%................................
Chinese yuan bonds issued under MTN program by
Mitsubishi HC Capital UK PLC:
Due 2022-2023, 1.510%-1.816%................................
Australian dollars bonds issued under MTN program by
Mitsubishi HC Capital UK PLC:
Due 2023-2029, 1.410%-1.910%................................
Swiss franc bond issued under MTN program by
Mitsubishi HC Capital UK PLC:
Due 2023, 1.140% ....................................................
U.S. dollars bonds without collateral issued under MTN
program by Mitsubishi HC Capital America, Inc.: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
2022

2021

Thousands of
U.S. dollars
2022¥14,873$121,915

5,784

47,414

12,474102,249

3,690

30,24944,807367,276

12,2787,103¥2,263,891¥240¥1,224,206

100,640
58,225$18,556,489(*1) Formerly Bangkok Mitsubishi UFJ Lease Co., Ltd.
(*2) Formerly MUL Asset Finance Corporation(*3) Bonds— other includes nonrecourse bonds of ¥100 million ($819 thousand) and ¥100 million at March
31, 2022 and 2021, respectively.

Financial Information

2022

49

Millions of yen
2022

Long-term loans from banks and other financial
institutions, partially collateralized:
Due within one year, 1.15% ............................................
Due 2023-2050, 1.53% ...................................................
Due within one year, 0.83% ............................................
Due 2022-2037, 1.44% ...................................................
Total ..............................................................................
Nonrecourse loans:
Due within one year, 0.92% ............................................
Due 2023-2032, 0.87% ...................................................
Due within one year, 1.07%............................................
Due2027-2032, 1.13% ....................................................
Total ..............................................................................
Lease obligations, including fixed interests:
Due within one year ........................................................
Due 2023-2049 ...............................................................
Due within one year ........................................................
Due 2022-2037 ...............................................................
Total ..............................................................................
Loans from the securitizations of the minimum future
rentals on lease contracts:
Due within one year, 0.47% ............................................
Due 2023-2031, 0.96% ...................................................
Due within one year, 0.30% ............................................
Due 2022-2029, 0.64% ...................................................
Total ..............................................................................
Other current liabilities and other long-term liabilities:
Due within one year ........................................................
Due 2023-2039 ...............................................................
Due within one year ........................................................
Due 2022-2035 ...............................................................
Total ..............................................................................

¥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¥2,0342021¥361,427
2,207,918¥2,569,345¥10,916
53,354¥64,271¥23,133
66,667¥89,800¥61,995
44,234¥106,230¥52
1,395¥1,448

Thousands of
U.S. dollars
2022$6,611,848
25,232,251$31,844,099$31,391
285,756$317,148$177,680
437,140$614,820$2,031,970
2,922,890$4,954,861$1,33015,347$16,677

The 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, 2022 and 2021.
Substantially all of the Company’s short-term bank loans are made under agreements, as is customary inJapan, which provide that, at the request of such banks, the Company will provide additional collateral or
guarantors with respect to the loan. As of March 31, 2022, the Company has not received any such request.

50

Financial Information

2022

Annual maturities of long-term debt as of March 31, 2022, 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, 2022
Short-term loans frombanks and otherfinancial
institutions ................
¥591,431
Commercial paper ......
682,593Bonds ..........................
443,647¥529,870¥375,099¥261,638¥132,017
Long-term loans frombanks and otherfinancial
institutions ................
806,645964,547
727,161
363,066
354,839
Nonrecourse loans ......
3,829
3,790
3,854
3,920
3,988
Lease obligations ........
21,67618,15513,028
7,951
3,728
Loans from thesecuritizations of theminimum future
rentals on lease
contracts and other....
248,062
149,795
89,17939,547
16,903
Total ......................
¥2,797,887¥1,666,158¥1,208,322¥676,124¥511,478

March 31, 2022

Short-term loans frombanks and otherfinancial
institutions ................
Commercial paper ......
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$4,847,798
5,595,031
3,636,454$4,343,202$3,074,586$2,144,580$1,082,113

6,611,848
31,391
177,680

7,906,124
31,066
148,8125,960,338
31,594
106,789

2,975,951
32,13765,172

2,908,524
32,691
30,5612,033,301$22,933,507

1,227,831$13,657,038

730,976$9,904,285

324,159$5,542,000

138,555$4,192,445

Due after four
years throughfive years

The Company and certain consolidated subsidiaries had loan commitment agreements as of March 31,
2022 and 2021, amounting to ¥920,238 million ($7,542,939 thousand) and ¥447,248 million, respectively, of
which ¥678,198 million ($5,559,006 thousand) and ¥447,248 million, respectively, were unused.

Financial Information

2022

51

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, 2022 and 2021, were ¥136 million ($1,118 thousand) and¥112 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, 2022 and 2021, were as
follows:

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

2021

Thousands of
U.S. dollars
2022¥26,322524,134$746,066

Millions of yen
2022¥26,322
2,966
509
(191)
(2,530)63,944¥91,020¥25,269
1,407
130
360
(718)
(127)

$215,755
24,314
4,177(1,572)(20,742)(2) The changes in plan assets for the years ended March 31, 2022 and 2021, were as follows:
Thousands of
U.S. dollars

Millions of yen

Balance at beginning of year ..............................................
Expected return on plan asset .........................................
Actuarial gains ................................................................
Contributions from the employer....................................
Benefits paid ...................................................................
Increase due to the merger ..............................................
Balance at end of year.........................................................

2022¥23,282
1,564
1,197
2,075
(1,987)57,624¥83,7572021¥21,954
363
360
1,124
(520)
¥23,282

2022$190,842
12,822
9,815
17,010(16,287)
472,330$686,534(3) Reconciliation between the liability recorded in the consolidated balance sheets and the balances ofdefined benefit obligation and plan assets was as follows:
2021

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

¥87,488(83,757)
3,731
3,531
¥7,262¥25,436(23,282)
2,153
885¥3,039Thousands of
U.S. dollars
2022

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

¥8,856(1,593)¥7,262¥3,060(21)¥3,039$72,594(13,062)$59,532

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

52

Financial Information

2022

Millions of yen
2022$717,121(686,534)
30,58728,944$59,532(4) The components of net periodic benefit costs for the years ended March 31, 2022 and 2021, 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
2022¥2,966509(1,564)233(95)
19¥2,0692021¥1,407
130
(363)
403
87
5
¥1,671Thousands of
U.S. dollars
2022$24,314
4,177(12,822)
1,912
(779)
158
$16.960(5) Amounts recognized in other comprehensive income (before income tax effect) in respect of defined
retirement benefit plans for the years ended March 31, 2022 and 2021, were as follows:

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

Millions of yen
2022

¥(95)
1,622
¥1,527

2021

¥87
393
¥480

Thousands of
U.S. dollars
2022$(779)
13,300$12,520(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respectof defined retirement benefit plans as of March 31, 2022 and 2021, were as follows:

Unrecognized prior service cost .........................................
Unrecognized actuarial losses ............................................
Total ....................................................................................

Millions of yen
2022¥(364)
115¥(249)

2021¥(459)
1,737¥1,278

Thousands of
U.S. dollars
2022$(2,989)944$(2,044)(7) Plan assets
a. Components of plan assets
Plan assets consisted of the following:
2022

2021

General account .................................................................
44%
14%
Debt investments ...............................................................
23
40
Equity investments ............................................................
16
20
Alternative investments* ....................................................
16
15
Others ................................................................................
1
11
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 the various components of the plan assets.

Financial Information

2022

53

(8) Assumptions used for the years ended March 31, 2022 and 2021, were set forth as follows:
Discount rate .....................................................................
Expected rate of return on plan assets...............................

2022
0.22-0.73%
1.7-2.0

2021
0.56%
1.7

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, 2022 and 2021, were
¥2,016 million ($16,525 thousand) and ¥811 million, respectively.
15. Commitments and Contingent Liabilities
The Companies, as lenders, have loan commitment agreements as of March 31, 2022, totaling ¥236,114
million ($1,935,366 thousand), where the used portion is ¥66,353 million ($543,877 thousand), and theunused portion is ¥169,761 million ($1,391,489 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, 2022, as guarantor or co-guarantor for operatingtransactions of ¥36,350 million ($297,955 thousand), and borrowings and others of ¥191 million ($1,572
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 26).
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 meetcertain 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.

54

Financial Information2022

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.a., 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 ( $3,126,886 thousand )(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.

Financial Information

2022

55

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, 2022, 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($2.05)2012 stock
option10 directors
17 executive
officers
721,700
October 14,
2011¥283.1($2.32)

2013 stock
option10 directors
17 executive
officers
583,100
October 15,
2012¥312.8($2.56)2014 stock
option10 directors
19 executive
officers
419,000
October 15,
2013
¥502
($4.11)2015 stock
option10 directors
18 executive
officers
350,300
October 15,
2014
¥490
($4.01)2016 stock
option9 directors
20 executive
officers
368,800
October 15,
2015
¥546
($4.47)2017 stock
option9 directors
20 executive
officers
451,700
October 14,
2016
¥436
($3.57)2018 stock
option9 directors
27 executive
officers
493,000
October 13,
2017
¥566
($4.63)2019 stock
option6 directors
33 executive
officers
422,400
July 13,2018¥590($4.83)2020 stock
option5 directors
30 executive
officers
490,400
July 12,2019¥513($4.20)2021 stock
option5 directors
31 executive
officers
507,000
July 15,2020¥424($3.47)2022 stock
option6 directors
55 executive
officers
866,300
July 15,2021¥499($4.09)The total stock-based compensation costs recognized for the years ended March 31, 2022 and 2021, were¥432 million ($3,543 thousand) and ¥214 million, respectively.

56

Financial Information

2022

The fair value of 2022 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 .........................................................

2022 stock
option31.25%
4.7 years
4.20%(0.13)%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 ¥25.5 ($0.20) made in the preceding year for the year ended
March 31, 2022. The risk-free interest rate is based on the yield of government bonds having a remaining life
equal to the option’s estimated remaining outstanding period.
The stock option activity for the fiscal years ended March 31, 2022 and 2021, was as follows:2011 stock
optionFor the year ended March 31, 2021
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, 2022
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................

2014 stock
option69,900178,400

283,000


228,700

17,80052,10052,10068,700109,700
109,700

43,200239,800
239,800

40,200188,500
188,500

52,100109,700

239,800

188,500

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

36,300152,200
152,2002016 stock2017 stock
optionoptionNumber of shares*

2018 stock
option249,200

307,000

424,600

468,900

34,800214,400
214,400

65,400241,600
241,600

84,600340,000
340,000

27,800441,100
441,100

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
414,1002015 stock
optionFor the year ended March 31, 2021
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................

2012 stock2013 stock
optionoptionNumber of shares*

Financial Information

2022

57

For the year ended March 31, 2021
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......................

2019 stock
option2020 stock
2021 stock
optionoptionNumber of shares*

414,200

490,400

11,200403,000
403,000

490,400
490,400

507,000
507,000

403,000

490,400

507,000

19,400383,600
383,600

10,700479,700
479,700

10,700496,300
496,300

2022 stock
option507,000

866,300
16,000850,300
850,300* 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.

58

Financial Information2022

18. Revenue Recognition(1) Disaggregation of revenue
Revenues from contracts with customers on a disaggregated basis for the year ended March 31, 2022, wereas follows:
Millions of yen
Reportable segment
Year Ended March 31,
Customer
2022
Business
Revenues:
Sales from maintenancecontracts .........................
Sales from selling
merchandise ...................
¥7,365
Electricity sales ................
84
Sales from disposal oflease properties (2) ........
30
Others...............................
1,664
Revenue from contracts
with customers ..............
9,145
Other revenue (3) .............
562,054
Total .................................
¥571,200

Year Ended March 31,
2022
Revenues:
Sales from maintenancecontracts .........................
Sales from selling
merchandise ...................
Electricity sales ................
Sales from disposal oflease properties (2) ........
Others...............................
Revenue from contracts
with customers ...............
Other revenue (3) .............
Total .................................

Account
Solution

VendorSolution

LIFE

Real Estate

Environment& Renewable
EnergyAviation¥39,572

¥ 88

¥651

¥15

8,975
8

74

160

¥4,52830,954
17,145

118

2,103

2,490

976

7,091

96,658340,957¥437,615

282
145,882¥146,165

2,915
100,766¥103,682

7,019
98,908¥105,927

35,49912,247¥47,746

12,588143,938¥156,526

Millions of yen
Reportable segment
Adjustments
Logistics
Mobility
Others(1)

Consolidated¥7,650¥26¥48,006

1,972

3,522

32,096
34,600

¥466

9,034
851

2,857

466
52,916¥53,382

19,50973,280¥92,790

6,405
49,967¥56,373¥1,52334,507¥5,49740,02037,2891,523
192,014(7,374) 1,573,545¥(5,850) ¥1,765,559

Financial Information

2022

59

Thousands of U.S. dollars
Reportable segment
Year Ended March 31,
2022

CustomerBusiness

Revenues:
Sales from maintenancecontracts ........................
Sales from selling
merchandise ...................
$60,375
Electricity sales ................
696
Sales from disposal oflease properties (2) ........
249
Others...............................
13,642
Revenue from contracts
with customers ...............
74,963
Other revenue (3) ............. 4,607,006
Total ................................. $4,681,969

Year Ended March 31,
2022
Revenues:
Sales from maintenancecontracts .........................
Sales from selling
merchandise ...................
Electricity sales ................
Sales from disposal oflease properties (2) .........
Others...............................
Revenue from contracts
with customers ...............
Other revenue (3) .............
Total .................................

Account
Solution

VendorSolution

LIFE

Real Estate

Environment& Renewable
EnergyAviation$324,368$728$5,340$13073,571
70

614

1,315

$37,120

253,728
140,539972

17,244

20,412

8,002

58,126792,279
2,794,732$3,587,011

2,315
1,195,761$1,198,076

23,900825,958$849,858

57,533810,722$868,255

290,979
100,388$391,368

103,183
1,179,820$1,283,003

Thousands of U.S. dollars
Reportable segment
Adjustments
Logistics
Mobility
Others(1)

Consolidated$62,712$213$393,493

16,16528,870263,089283,614$3,821

74,056
6,981

23,421

3,821
433,739$437,560

159,916
600,660$760,576

52,505409,571$462,077$12,489

282,847$45,057

328,035
305,654

12,4891,573,888(60,448) 12,897,911$(47,958) $14,471,799

Notes:(1) Adjustments include ¥(7,571) million ($(62,064) thousand) of adjusted amount of sales following the merger with
Hitachi Capital to which the purchase method was applied.
(2) Sales from disposal of lease properties are sales from disposal of lease properties due to lease contract maturities of
the consolidated foreign subsidiaries which adopt IFRS or U.S. GAAP.
(3) 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, 2022, areas follows:

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

Millions of yen
2022

Thousands of
U.S. dollars
2022

5,594

45,855¥10,739$88,024

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.

60

Financial Information2022

19. Selling, General, and Administrative Expenses
Selling, general, and administrative expenses for the years ended March 31, 2022 and 2021, consisted of thefollowing:

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

Millions of yen
2022
2021

¥37,477
62,303
120,789¥220,569¥15,095
25,05358,018¥98,166

Thousands of
U.S. dollars
2022$307,189
510,680
990,075$1,807,945

20. Gain on Step Acquisition
The Company recognized no step acquisition gain for the year ended March 31, 2022.
The Company recognized a step acquisition gain on its existing holdings of IP Fukushima Onomachi Solar
Power Generation LLC (IP) and Bangchak Solar yield-co LLC (Bangchak), which engages in solar power
generation, when IP and Bangchak became consolidated subsidiaries due to the additional silent partnershipshares purchased by the Company for the year ended March 31, 2021.
21. Compensation Income
The Companies recognized no compensation income for the year ended March 31, 2022.
The Companies recognized a compensation income in association with a real estate redevelopment project
for the year ended March 31, 2021.
22. Related-Party Transactions (As restated*)* Refer to *4, *5 and *6

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, 2022 and 2021, 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 $52,376 thousand

Millions of yen
2022
2021

¥8,206
N/A
17,957¥7,630
N/A*2
17,511Thousands of
U.S. dollars
2022$67,267
55,710147,196

Financial Information

2022

61

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, 2022 and 2021, 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
2022
2021

¥111,623 ¥117,140
43,11333,000N/A
N/A*5
355,225 331,321
N/A
N/A*6

Thousands of
U.S. dollars
2022$914,943
353,385
871,160
2,911,686
2,517,908*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, 2022 and 2021, were
$1,353,004 thousand and $1,302,604 thousand, respectively. (This information was not previously disclosed)*5 $100,000 thousand*6 $2,402,604 thousand

23. 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, 2022 and 2021.
The tax effects of significant temporary differences, which resulted in deferred tax assets and liabilities, asof March 31, 2022 and 2021, were as follows:

Deferred tax assets:
Tax loss carryforwards...................................................................
Allowance for doubtful receivables...............................................
Advances received — leases .........................................................
 Asset retirement obligations ..........................................................
Accrued expenses ..........................................................................
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 ...............................................................

Deferred tax liabilities:
Depreciation of leased assets of foreign subsidiaries .......................
Other .................................................................................................
  Total deferred tax liabilities .........................................................
Less deferred tax assets ....................................................................
  Net deferred tax liabilities ...........................................................

62

Financial Information

2022

Millions of yen
2022
2021

¥79,956
16,127
11,292
10,646
10,39040,162
168,574(4,451)(8,824)(13,276)(117,161)¥38,137

Thousands of
U.S. dollars
2022¥61,441
10,908
5,744
5,783
4,860
27,044
115,782(2,801)(3,194)(5,996)(99,556)¥10,229$655,377
132,191
92,55987,267
85,165329,200
1,381,762(36,490)(72,329)(108,820)(960,336)$312,605

Millions of yen
2022
2021

Thousands of
U.S. dollars
2022¥181,141 ¥115,678
44,60036,694
225,741 152,372(117,161) (99,556)¥108,580 ¥52,816$1,484,762
365,5811,850,344(960,336)$890,008

The expiration of tax loss carryforwards, the related valuation allowances and the resulting net deferred
tax assets as of March 31, 2022 and 2021, were as follows:

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, 2021

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 ...........

One year or
less

After oneyear throughfive years

Millions of yen
After five
years through10 years¥297¥3,320¥2,259¥74,078(138)(1,825)(1,684)

(803)

159

1,494

575

73,274

One year or
less

After oneyear throughfive years

Millions of yen
After five
years through10 years¥348¥2,224¥2,641¥56,226¥61,441(1,011)(1,532)(257)(2,801)

1,212

1,109

55,96858,639348

One year or
less

After 10
years

Total

¥79,956*3

75,504After 10
years

Total

Thousands of U.S. dollars
After one
After five
year throughyears throughAfter 10
five years
10 years
years$2,442$27,213$18,521$607,200(1,136)(14,960)(13,804)(6,589)1,306

12,252

4,716

600,611(4,451)

Total$655,377*3(36,490)
618,886*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 ¥7,279 million ($59,668 thousand). Major reasons are an increase in valuation allowance for tax
loss carryforwards as well as an increase in valuation allowance for allowance for doubtful receivables and valuation allowance forinvestment securities recorded by subsidiaries newly included in consolidation in relation to the merger with Hitachi Capital.

Certain subsidiaries of the Company have tax loss carryforwards as stated above and those will mainly
begin to expire in 2023.
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 years ended March 31, 2022 and 2021, was notdisclosed because the difference was less than 5% of the normal effective statutory tax rate.
As disclosed in Note 2, “Summary of Significant Accounting Policies,” the changes in accounting policy forthe year ended March 31, 2022 have been retrospectively applied and the amount for the year ended March
31, 2021 have been modified to reflect retrospective adjustments.

Financial Information

2022

63

24. Leases
The future minimum payments under noncancelable operating leases as lessee as of March 31, 2022 and
2021, were as follows:

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

Millions of yen
2022
2021

¥4,455
10,352¥14,808¥2,848
4,267¥7,115

Thousands of
U.S. dollars
2022$36,523
84,858$121,381

25. 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 26.
(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.
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 26 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.

64

Financial Information

2022

(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, 2022 and 2021, was ¥2,882 million ($23,629 thousand) and ¥2,463
million, respectively. The market risk VaR at March 31, 2022 and 2021, was ¥47,126 million($386,279 thousand) and ¥35,845 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 individuallyby 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 with quoted market prices inparticular are reported to the Risk Management Committee. Most equity securities held by theCompanies are for the purpose of maintaining business relationships with customers, and theCompanies perform an annual review on whether to maintain these shares by monitoring thefinancial condition of the issuers (customers) and transaction 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

Financial Information

2022

65

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
below. In addition, investment trust funds applying the transitional clause of Paragraph 26 of
Implementation Guidance on Accounting Standard for Fair Value Measurement, and investments inpartnerships, etc., that the equity interest equivalents are recorded as net in the balance sheet applying thetransitional clause of Paragraph 27 of Implementation Guidance on Accounting Standard for Fair Value
Measurement are not included in the tables below.

66

Financial Information

2022

(a) The financial assets and liabilities measured at the fair values in the consolidated balance sheet:
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

Level 2

¥26,233
2,604¥28,838¥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, 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$215,030
21,348$236,378

Level 2

$162,451(363,227)
37,643$ (163,132)

Level 3

Total

$132,740

19,112$347,771
21,348
162,451
19,112$151,853(363,227)
37,643$225,100Millions of yen
March 31, 2021

Marketable and investment securities:
Available-for-sale securities .......................
Total assets......................................................
Derivative transactions:
Derivative transactions to which hedge
accounting is not applied ..........................
Derivative transactions to which hedge
accounting is applied ................................
Total derivative transactions ...........................

Carrying
amountFair value¥82,114¥82,114¥82,114¥82,114¥(1,946)¥(1,946)(19,266)¥(21,213)(19,266)¥(21,213)

Unrealized
gain (loss)

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 ($42,861 thousand) 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 ¥(28,883) million $(236,750
thousand), to which Treatment of Hedge Accounting for Financial Instruments that Reference LIBOR (the revised
Practical Solution No. 40, March 17, 2022) is applied.

Financial Information

2022

67

(b) The financial assets and liabilities not measured at the fair values in the consolidated balance sheet:
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 ...........................

68

Financial Information

2022

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

Thousands of U.S. dollars
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)$2,091,339(91,071)(10,399)$2,062,688$2,062,688

1,989,868$72,820

15,130,947$1,73015,199,704

15,201,434(81,779)
15,049,168

152,266

26,764,486(689,706)

622,525

26,489,684

27,112,210(68,073)
26,006,706

1,105,504

886,788(629,254)
257,534

257,534

257,534$44,009,612$44,633,868$43,303,277$1,330,590$18,329,356$18,329,356$18,556,489$(227,132)

31,786,058

31,786,058

32,161,248(375,189)$624,256

4,997,328

4,997,328

4,954,861

42,466$55,112,743$55,112,743$55,672,599$(559,855)

Financial Information

2022

69

Millions of yen
March 31, 2021

Receivables:
Installment sales .........................................
Deferred profit on installment sales ............
Allowance for doubtful receivables ............
Subtotal ...................................................
Receivables:
Loans ..........................................................
Allowance for doubtful receivables ............
Subtotal ...................................................
Lease receivables and investments in leases ..
Residual values of investments in leases ....
Allowance for doubtful receivables ............
Subtotal ...................................................
Long-term receivables ....................................
Allowance for doubtful receivables ............
Subtotal ...................................................
Total ................................................................

Bonds .............................................................
Loans from the securitizations of theminimum future rentals on lease
contracts.....................................................
Long-term loans from banks and otherfinancial institutions ..................................
Total ...............................................................

Carrying
amount¥191,043(10,095)(428)
180,519

Fair value

Unrealized
gain (loss)¥188,039¥7,519892,762

26,942867,738(1,918)865,820
1,628,749(41,591)(1,933)
1,585,225
39,269(22,479)
16,789¥2,648,354

1,689,752

104,527

16,789¥2,787,344¥138,989¥1,224,206¥1,239,403¥15,196

2,633,617

2,653,168

19,550106,230¥3,964,055

106,331¥3,998,902

100¥34,847

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.
As disclosed in Note 2, “Summary of Significant Accounting Policies,” the changes in accounting
policy for the year ended March 31, 2022 have been retrospectively applied and the amount for the year
ended March 31, 2021 have been modified to reflect retrospective adjustments.

70

Financial Information

2022

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 non-observable 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 mainly measured at the offered price by financial institutions,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-termborrowings, etc. Therefore, their fair values are included in the fair values of hedged assets or liabilities.
(See “Long-term loans from banks and other financial institutions” on below “The financial assets andliabilities 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 non-observable 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 riskfree rate at the fiscal year end, based on the same internal rating and periods. These are categorized as
Level 3.

Financial Information

2022

71

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.

72

Financial Information2022

Information on the financial instruments measured at the fair values in the consolidated balance sheet thatcategorized as Level 3 is summarized below:
Significant financial instruments measured at the fair values in the consolidated balance sheet
Valuation method

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

Significant nonobservable inputs

Input range

Weighted averageof input

EV/RAV ratio

1.37

1.37

Information for others has been omitted due to quantitative immateriality.

Reconciliation from the beginning balance to the ending balance
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) .......

¥ 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

Thousands of U.S. dollars
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

$80,573$80,573

1,855
11,365

1,855
11,365

39,147(201)$30,706(11,593)

69,853(11,795)

132,740

19,112

151,853

1,855

1,855

Notes:(1) Mainly included in “Revenues” in the consolidated statements of income.
(2) Mainly included in “Net unrealized gain on available-for-sale securities” in the consolidated statements ofcomprehensive income.
(3) Purchase includes increases due to the merger with Hitachi Capital and transfer from other accounts.

Financial Information

2022

73

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 non-observable 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.
Financial instruments whose fair value is not readily determinableNonmarketable securities as of March 31, 2021, were summarized as follows:                                Millions

of yen2021

Shares of subsidiaries and associated companies ......................
Unlisted shares ..........................................................................
Trust beneficiary interests .........................................................
Silent partnership interests and other ........................................
Total ...................................................................................

¥85,594
28,6082,068
164,874¥281,146

Carrying amounts of nonmarketable equity securities and investments in partnerships, etc., that theequity interest equivalents are recorded as net in the consolidated balance sheet as of March 31, 2022

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 ............................................................

Carrying amountThousands ofMillions of yen
U.S. dollars
2022
2022

¥95,132
27,190¥122,323$779,774
222,874$1,002,649¥2,240117,835$18,362
965,862

63,853¥183,929

523,391$1,507,617

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 27 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.

74

Financial Information

2022

(6) Maturity analysis for receivables and securities with contractual maturities

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, 2021

Cash and cash
equivalents ....................
Time deposits other thancash equivalents ............
Receivables
Installment sales (1) ......
Loans (5) .......................
Lease receivables andinvestments in leases(2)(5).............................
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¥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 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

Due in one
year or less
¥286,213
8,028
62,736211,864¥47,034
118,828¥35,091
98,764¥21,420
97,033¥11,463
71,976¥13,296269,271474,685

391,911300,264

210,604

144,705

412,897

1
5,467¥1,048,998

101
23,200¥581,076

607
13,394¥448,122

9,544
24,495¥363,097

355
6,983¥235,484

56,930¥752,396

Financial Information

2022

75

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 ..................................

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$4,262,981
106,477
64,491
704,194
5,421,102$541,359
2,363,769$379,851
2,235,879$239,768
1,323,982$121,532
1,197,030$104,632
2,589,183

8,525,060

6,784,084

5,153,447

3,390,491

1,968,705

5,107,567


5,749
10,803$19,100,861

14,430253,899$9,957,543

36,302
180,358$7,985,839

15,963
251,487$5,221,691

8,366
156,098$3,451,733


102,988605,968$8,510,339(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.
(5) As disclosed in Note 2, “Summary of Significant Accounting Policies,” the changes in accounting
policy for the year ended March 31, 2022 have been retrospectively applied and the amount for theyear ended March 31, 2021 have been modified to reflect retrospective adjustments.

76

Financial Information2022

26. Derivatives
Derivative transactions to which hedge accounting is not applied as of March 31, 2022 and 2021, were as
follows:
Millions of yen

2022
Contract
amountContract due after
Fairamount one year
value

Currency interest rate swap
contracts:
U.S. dollars payment, Japanese
yen receipt ................................. ¥70,000
Indonesia rupiah payment,
Japanese yen receipt ..................
950
Chinese yuan payment, U.S.
dollars receipt ............................
417
Foreign exchange forward contracts:
Selling Sterling pound ...................
8,065
Buying U.S. dollars .......................
53
Buying Singapore dollars ..............
7
Interest rate swap contracts:
Fixed-rate payment,
floating-rate receipt .................... 17,365¥10,000
950

15,1122021
Contract
amountUnrealized Contract due afterFairgain (loss) amount one yearvalue

¥ (8,169) ¥ (8,169) ¥80,000
(144)

(144)

(1,712)(1,712)

(810)

(810)

¥70,000

1,100

Unrealized
gain (loss)¥(2,046) ¥(2,046)
100

100

734

375

9

9

330

198

(10)

(10)

Thousands of U.S. dollars
2022
Contract
amountContract due after
Fair
Unrealized
amount one year
value
gain (loss)

Currency interest rate swap
contracts:
U.S. dollars payment, Japanese
yen receipt ................................. $573,770
Indonesia rupiah payment,
Japanese yen receipt ..................
7,786
Chinese yuan payment, U.S.
dollars receipt ............................
3,420
Foreign exchange forward contracts:
Selling Sterling pound ................... 66,113
Buying U.S. dollars .......................
440
Buying Singapore dollars ..............
61
Interest rate swap contracts:
Fixed-rate payment,
floating-rate receipt.................... 142,336$81,967
7,786

123,876$(66,966) $(66,966)(1,184)(1,184)2

2(14,037)3(14,037)
3(6,639)(6,639)Financial Information

2022

77

Derivative transactions to which hedge accounting is applied as of March 31, 2022 and 2021, were as
follows:

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

78

Financial Information

2022

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

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
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 ...................................... Lease receivables
Interest rate swap contracts:
Fixed-rate payment, floating-rate receipt ...... Loans
Interest rate swap contracts:
Floating-rate payment, fixed-rate receipt ...... Loans
Fixed-rate payment, floating-rate receipt ...... Loans

Contract
amount¥5,50015,675

Millions of yen
2021
Contract
amountdue after
one year¥5,50010,473

1,000

Fair
value

¥(216)(1,656)41

11,031

6,809

240
274

4
216

(650)

201
321,946

266,937

5,000
199,657

171,330(16,778)

Financial Information

2022

79

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

Thousands of U.S. dollars
2022
Contract
amountContract
Fair
due after
amountone yearvalue$45,081
108,656$45,081
47,516$(1,124)
1,633

8,196

8,196

(703)

95,58240,072(4,114)

5,321

5,321

(337)

88,67970,621(173)

50,159(6,054)

100,319274

1,536,885 1,536,885(221,726)

461,470
366,1661,668,412 1,198,926(8,925)(39,600)

47,36015,786

3,003

124,350

58,970(3,843)98,032

98,032(1,746)30,41930,419

651

44
1,769

1,279

3,093
504,211

2,315

377
1,388

520,914454,975
7,477,848 5,560,579(12,289)
56,572

1,345,551

390,714

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, 2022 and 2021, and included in the fair value of hedged items.

80

Financial Information2022

27. Other Comprehensive Income (Loss)
The components of other comprehensive income (loss) for the years ended March 31, 2022 and 2021, wereas follows:

Net unrealized (loss) gain on available-for-sale securities:
Gains arising during the year ...............................................
Reclassification adjustments to loss ....................................
Amount before income tax effect ........................................
Income tax effect .................................................................
Total .................................................................................
Deferred gain (loss) on derivatives under hedge accounting:
Gains (losses) 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 (loss) ........................

Millions of yen
2022

2021

¥5,749(29,413)(23,664)
8,085(15,578)¥35,633(9,659)25,974(6,128)
19,845

10,142
8,722
18,864(3,863)15,001(17,849)
4,458(13,390)
2,874(10,516)

69,35869,358(14,067)(126)(14,194)

69,358(14,194)

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

(9)
490
480
(150)
330

3,263
125
3,389
¥73,232

327
455
782
¥(3,751)

Thousands of
U.S. dollars
2022$47,124(241,094)(193,970)
66,277(127,693)
83,13571,494
154,629(31,668)
122,960

568,514568,514568,514

11,388
1,132
12,520(3,817)8,702

26,7491,031
27,781$600,265

Financial Information

2022

81

28. Segment Information (As restated)
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
In connection with the Business Integration, the Company reorganized the reportable segments of Mitsubishi
UFJ Lease and Hitachi Capital and the reportable segments have been changed to 10 segments of “Customer
Business,” “Account Solution,” “Vendor Solution,” “LIFE,” “Real Estate,” “Environment & Renewable
Energy,” “Aviation,” “Logistics,” “Mobility,” and “Others,” effective April 1, 2021.
“Healthcare,” “Infrastructure & Investment,” and other businesses were integrated as “Others” according
to integration standard stipulated on ASBJ Statement No. 17, Accounting Standard for Disclosures about
Segments of an Enterprise and Related Information.
Description of new reportable segments is as follows:
Reportable segment
Customer BusinessAccount Solution
Vendor Solution
LIFE

Real Estate

Environment & Renewable
EnergyAviation
Logistics
Mobility
OthersDescription of services and business
Finance solutions for corporations
Financial services for companies, government agencies, andvendors
Sales finance provided through collaboration with vendors
Development, operation, and leasing of logistics andcommercial facilities
Community development
Food, agriculture and living essentials
Non-life insurance
Real estate securitization financeReal estate revitalization investment
Real estate asset management business
Real estate leasing
Power generation by renewable energy
Environment-related equipment leasing and financeAircraft leasing
Aircraft engine leasing
Marine container leasing
Railway freight car leasing
Auto leasing
Auto leasing and supplementary services
Servicing
Trust service
Settlement service
Medical equipment leasing and finance
Investment and financing to social infrastructure, etc.

The segment information for the year ended March 31, 2021 has been presented using the reportablesegments of Mitsubishi UFJ Lease.

82

Financial Information

2022

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, “Summaryof Significant Accounting Policies.”
As disclosed in Note 2, “Summary of Significant Accounting Policies,” the changes in accounting policy
for the year ended March 31, 2022 have been retrospectively applied and the segment information for theyear ended March 31, 2021 have been modified to reflect retrospective adjustments.
3. Information about revenues, profit or loss, assets, and other items
The following errors were identified subsequent to the issuance of the Financial Information 2022. The
amounts, which were previously reported and restated, are as follows:
As previously reported
Millions of yen
Reportable segment
Year Ended March 31,
Customer
2022
Business
Increase in property andequipment andintangible assets .............
22,906

Account
Solution
551,283

VendorSolution
9,585

Millions of yen
Reportable segment

Year Ended March 31,
2022
Logistics
Increase in property andequipment andintangible assets .............
93,928

Mobility
155,473

OthersLIFE

Real Estate

Environment& Renewable
Energy27,647102,140

97,425

Year Ended March 31,
2022
Increase in property andequipment andintangible assets .............

Account
Solution

8,531

4,518,719

VendorSolution
78,566

148,896

Adjustments Consolidated
(1)
(2)
240

1,218,059

Thousands of U.S. dollars
Reportable segment
Year Ended March 31,
Customer
2022
Business
Increase in property andequipment andintangible assets .............
187,761

Aviation

LIFE
798,566

Real Estate

Environment& Renewable
Energy226,616

837,214

Aviation
1,220,466

Thousands of U.S. dollars
Reportable segment
Adjustments Consolidated
Logistics
Mobility
Others(1)(2)
769,905

1,274,374

69,933

1,971

9,984,095

Financial Information

2022

83

As restatedMillions of yen
Reportable segment
Year Ended March 31,
Customer
2022
Business
Increase in property andequipment andintangible assets .............
22,906

Account
Solution
528,359

VendorSolution
2,550

Millions of yen
Reportable segment

Year Ended March 31,
2022
Logistics
Increase in property andequipment andintangible assets .............
93,928

Mobility
151,076

Others
6,798

LIFE

Real Estate

Environment& Renewable
Energy27,647

99,84094,972

Year Ended March 31,
2022
Increase in property andequipment andintangible assets .............

84

Financial Information

2022

Account
Solution
4,330,815

VendorSolution
20,90741,081

1,218,059

LIFE
778,459

Real Estate

Environment& Renewable
Energy226,616

818,364

Thousands of U.S. dollars
Reportable segment
Adjustments Consolidated
Logistics
Mobility
Others(1)(2)
769,905

1,238,335

55,725

148,896

Adjustments Consolidated(1)(2)

Thousands of U.S. dollars
Reportable segment
Year Ended March 31,
Customer
2022
Business
Increase in property andequipment andintangible assets .............
187,761

Aviation

336,737

9,984,095

Aviation
1,220,466

As restatedMillions of yen
Reportable segment
Year Ended March 31,
Customer
2022
Business
Revenues:
Revenue from externalcustomers ....................... ¥ 571,200
Intersegment revenue ortransfers..........................
198
Total .......................
571,399
Segment profit (loss) ........
33,472
Segment assets (3)............ 2,002,128
Other items:
Depreciation .....................
44,328
Amortization of
goodwill .........................
663
Cost of funds and interest
expense ..........................
14,254Equity in earnings ofaffiliates .........................
857
Other income....................
29,695Gain on sales ofinvestment securities ..
29,695Gain from bargain
purchase......................
Other expenses .................
47
Loss on sales ofinvestment securities ..
47
Loss on step
acquisition ..................
Taxes ................................
15,479Investments in equity
method affiliates.............
16,890
Increase in property andequipment andintangible assets .............
22,906

Real Estate

Environment& Renewable
Energy¥ 103,682¥ 105,927¥47,746¥ 156,526

146,165
3,008
424,629630
104,313
4,846
312,74592
106,019
19,162974,9374
47,751
7,081
315,486

156,526
5,767
1,365,126

2,594

7,058

8,503

15,82680,848

Account
Solution

VendorSolution

LIFE¥ 437,615¥ 146,165

772
438,387
26,9562,353,483
114,675500
24,095

1,151(1,083)Aviation

2,621

1,155

6,860

3,831

29,715

15

210

715

42
239
239

4
4
8,866

1,397

3,516
528,359

2,550

2,413

9,163

3,337

3,965

2,734

31,941

19,607

2,634

94,972

27,647

99,840148,896

Financial Information

2022

85

Millions of yen
Reportable segment

Year Ended March 31,
2022
Logistics
Revenues:
Revenue from externalcustomers .......................
¥ 53,382
Intersegment revenue ortransfers..........................
Total .......................
53,382
Segment profit (loss) ........
2,774
Segment assets (3)............ 1,063,226
Other items:
Depreciation .....................
26,299Amortization of
goodwill .........................
198
Cost of funds and interest
expense ..........................
14,047
Equity in earnings ofaffiliates .........................
2,413
Other income....................
Gain on sales ofinvestment securities ..
Gain from bargain
purchase......................
Other expenses .................
Loss on sales ofinvestment securities ..
Loss on step
acquisition...................
Taxes ................................
272
Investments in equity
method affiliates.............
23,786
Increase in property andequipment andintangible assets .............
93,92886

Financial Information

2022

Mobility

OthersAdjustments Consolidated(1)(2)¥ 92,790¥56,373¥ (5,850) ¥ 1,765,559

89
92,879
1,905
174,807500
56,874(3,424)355,578(2,288)(8,139) 1,765,559(2,148)99,401
986,721 10,328,872

26,729

1,524

33
1,297

2,881

(91)

1,737

44

44
781

1,384

(2,283)

326,105

2,117

6,135

(15,919)

83,372464

4,818
30,39932

29,967

431
290

431
388

61

114

229
(1,164)273
45,896

41,356
151,076

6,798

142,469
41,081

1,218,059

Year Ended March 31,
Customer
Environment
2021
Business& Energy
Revenues:
Revenue from externalcustomers ....................... ¥ 559,151 ¥17,902
Intersegment revenue ortransfers..........................
386
Total ....................... 559,537
17,902
Segment profit .................. 25,503
3,734
Segment assets (3)............ 2,129,561 198,592
Other items:
Depreciation ..................... 48,823
6,115
Amortization of
goodwill .........................
645
Cost of funds and interest
expense .......................... 17,643
2,643
Equity in earnings ofaffiliates .........................
684
590
Other income.................... 13,496
1,395
Gain on sales ofinvestment securities ..
9,952
Gain on sales of sharesof subsidiaries andaffiliates ......................
431
Gain on step
acquisition ..................
1,395
Compensation income ..
Gain on sales of ownused assets ..................
3,112
Other expenses .................
86
Loss on sales ofinvestment securities ..
86
Taxes ................................
9,543
873
Investments in equity
method affiliates............. 15,044
11,292
Increase in property andequipment andintangible assets ............. 31,806
22,597

Millions of yen
Reportable segment
Healthcare

Real Estate

Aviation

Logistics

Infrastructure& Investment¥39,887 ¥155,537 ¥ 127,493¥41,431¥3,447

176
155,713 127,493
28,037
2,807
955,654 1,203,858

41,431
1,878
545,5253,447
304
111,688
46

39,887712
157,373
932

8,808

64,933

17,411

500

2,546

56

414

6,889

28,864

13,337

2,330

15

(54)
3,544

159

1,822

59

15

56

Adjustments(1)

Consolidated(2)¥2,806 ¥947,658(562)
2,244 947,658(7,664) 55,314
712,641 6,014,896

1,448 148,520
2,117

5,866

(5,546)

66,575

6

3,261
18,457

6

10,029
431
1,395
3,488

3,488

3,112
242

156
375

4,132

12,551

156
4,484

192

246

22,1082,484

21,96743,181

19,180102,278

56,853(1,902)242
26,364116,078

2,951

239,799

Financial Information

2022

87

Thousands of U.S. dollars
Reportable segment
Year Ended March 31,
2022
Revenues:
Revenue from externalcustomers .......................
Intersegment revenue ortransfers..........................
Total .......................
Segment profit (loss) ........
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 from bargain
purchase......................
Other expenses .................
Loss on sales ofinvestment securities ..
Loss on step
acquisition...................
Taxes ................................
Investments in equity
method affiliates.............
Increase in property andequipment andintangible assets .............

88

Financial Information

2022

Real Estate

Environment& Renewable
Energy$849,858$868,255$391,368$1,283,003

1,198,076
24,6583,480,573

5,170
855,028
39,7222,563,490

757
869,012
157,073
7,991,294

35
391,403
58,046
2,585,957

1,283,003
47,271
11,189,558

21,26757,85369,698

129,721662,690

CustomerBusiness

Account
Solution

VendorSolution

LIFE$4,681,969$3,587,011$1,198,076

1,629
4,683,599
274,364
16,410,885

6,330
3,593,341
220,954
19,290,845

363,348939,964

5,440

4,102

116,838

197,508

7,030
243,407(8,877)

9,435

Aviation

21,491

9,473

56,232

31,407

243,572

130

1,728

5,862

350
1,961

243,407

1,961

387

39

6

387

39

6

126,885

72,677

138,446

28,823

187,761

4,330,815

11,451

20,907

19,77875,11027,35332,50722,417

261,816

160,717

21,597

778,459

226,616

818,364

1,220,466

Year Ended March 31,
2022
Revenues:
Revenue from externalcustomers .......................
Intersegment revenue ortransfers..........................
Total .......................
Segment profit (loss) ........
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 from bargain
purchase......................
Other expenses .................
Loss on sales ofinvestment securities ..
Loss on step
acquisition...................
Taxes ................................
Investments in equity
method affiliates.............
Increase in property andequipment andintangible assets .............

Thousands of U.S. dollars
Reportable segment
Adjustments Consolidated
Logistics
Mobility
Others(1)(2)$437,560$760,576$462,077$(47,958) $14,471,799

437,560
22,7438,714,971

732
761,30915,615
1,432,850

4,105
466,182(28,072)
2,914,574(18,761)(66,720) 14,471,799(17,613)814,764
8,087,883 84,662,885

215,572

219,094

12,4991,629

270

115,147

10,637

23,615

19,781(752)

14,243

366

2,232

366
6,407

194,971769,905

11,345(18,714)2,672,996

17,35550,290(130,488)

683,3803,804

39,497249,174266

245,635

3,538
2,380

3,538
3,181

501

935

1,878
(9,548)2,245
376,200

338,990
1,238,335

55,725

1,167,780
336,737

9,984,095

Notes:(1) For the year ended March 31, 2022, “Adjustments” in revenues contain adjustments of ¥(7,571) million ($(62,064)
thousand) due to purchase method accounting applied to the merger of Hitachi Capital. For the year ended March
31, 2021, “Adjustments” in revenues contain mainly revenues from system development contract, which are not
attributed to each reportable segment.
“Adjustments” in segment profit (loss) contain mainly Company-wide expenses included in selling, general andadministrative expenses, which are not attributed to each reportable segment. “Adjustments” in segment profit(loss) also contain adjustments of ¥2,877 million ($23,582 thousand) due to purchase method accounting applied tothe merger of Hitachi Capital for the year ended March 31, 2022.
“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 ¥3,226 million ($26,444 thousand) and ¥34,426 million, as of March 31, 2022 and 2021,
respectively. The total of such assets and the segment assets which attributed to each reportable segment, was¥9,345,376 million ($76,601,447 thousand) and ¥5,336,681 million, as of March 31, 2022 and 2021, respectively.
The remaining amount of “Adjustments” in segment assets is the difference between the total amount of segment
assets, including corporate division and the total assets on the consolidated balance sheets, and mainly contains theassets other than the ones which are attributed to each reportable segment, such as cash and cash equivalents, ownused assets amounting to ¥983,495 million ($8,061,438 thousand) and ¥678,215 million, as of March 31, 2022 and
2021, respectively.
“Adjustments” in amortization of goodwill represents amortization of goodwill recognized at the time of mergerin 2007.
“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.

Financial Information

2022

89

“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

Installment
sales

Lease

Revenue from external customers ....... ¥1,456,228¥93,792¥780,314

Loans

Other

¥63,057¥152,481

Revenue from external customers ....... $11,936,297¥67,906$ 768,792

Other

Total

¥32,817¥66,620¥947,658$516,860Japan¥1,289,633

North
America¥112,303¥240,737¥100,629

Other¥22,255

Total¥1,765,559

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

Japan¥745,326

North
America¥58,592

Millions of yen
2021
Europe/Middle andNear East
Asia/Oceania¥60,615¥69,934

Other

Total

¥13,188¥947,658

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

Japan$10,570,767

90

Financial Information

2022

North
AmericaThousands of U.S. dollars
2022
Europe/Middle andNear East
Asia/Oceania

Other$920,518$1,973,260$182,421 $14,471,799$824,831

Total$1,249,849 $14,471,799

5. Information about geographical areas(1) Revenues
Millions of yen
2022
Europe/Middle andNear East
Asia/Oceania¥1,765,559

Loans

Thousands of U.S. dollars
2022
Installment
sales
Loans
Other

Lease

Total

Millions of yen
2021

Installment
sales

Lease

Revenue from external customers .......

Millions of yen
2022

Total

(2) Property and equipment
Millions of yen
2022
Europe/Middle andNear East

Asia/Oceania¥998,616¥645,661

Millions of yen
2021
Europe/Middle andNear East

Asia/Oceania¥503,980¥470,895

North AmericaJapan¥940,029

United States¥489,382

Other¥113,472

North AmericaJapan¥658,345

United States¥386,630

Other¥96,601

North America

Other¥170,046

Other

United States

Other$7,705,159$4,011,329$930,103$8,185,381

Other$5,292,307¥3,357,208

Total¥152,766

Thousands of U.S. dollars
2022
Europe/Middle andNear East
Asia/Oceania

Japan

Total

¥2,269,220

Total$1,393,819 $27,518,101

6. Information about impairment loss for long-lived assets
Millions of yen
2022
CustomerBusiness

Account
Solution

VendorSolution

LIFE

Real Estate

Environment& Renewable
EnergyAviation¥ 3,550

Impairment loss................
2022
Mobility

Logistics

Millions of yen
OthersAdjustments

Consolidated¥ 3,550

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

CustomerBusiness

Environment& Energy

2021
Healthcare

Real Estate

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

Millions of yen
Aviation

Logistics

Infrastructure& Investment

Adjustments¥ 2,578¥ 2,578

Thousands of U.S. dollars
2022
CustomerBusiness

Account
Solution

VendorSolution

LIFE

Consolidated

Real Estate

Environment& Renewable
EnergyAviation$29,105

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

Logistics
Impairment loss................

Thousands of U.S. dollars
2022
Mobility
OthersAdjustments

Consolidated$29,105

Impairment loss is recorded in costs.

Financial Information

2022

91

7. Information about amortization and unamortized balance of goodwill by reportable segment
Millions of yen
2022
CustomerBusiness
Amortization of goodwill...
Unamortized balance of
goodwill ...........................

Account
Solution

Real Estate¥ 2,621

11,8202,168

30,4892022
Mobility

Millions of yen
Adjustments
Others(1)

Consolidated

¥198

¥33

¥2,117¥ 6,135

34,485775

10,58790,326

Environment& Energy

2021
Healthcare

Millions of yen

Real Estate

Aviation

Infrastructure& Investment

Logistics

Consolidated¥500¥2,546¥56¥2,117¥5,866

11,261

2,669

29,907734

12,70457,277

CustomerBusiness

Account
Solution

VendorSolution

LIFE

Real Estate

Environment& Renewable
EnergyAviation$5,440$4,102$21,491

96,886

17,775249,917

Logistics
Amortization of goodwill...
Unamortized balance of
goodwill ...........................

Adjustments
(1)

¥645

Thousands of U.S. dollars
2022

Amortization of goodwill...
Unamortized balance of
goodwill ...........................

Aviation¥500

CustomerBusiness

Amortization of goodwill...
Unamortized balance of
goodwill ...........................

LIFE

Environment& Renewable
Energy¥663

Logistics
Amortization of goodwill...
Unamortized balance of
goodwill ...........................

VendorSolution

Thousands of U.S. dollars
2022
Adjustments
Mobility
Others(1)

Consolidated$1,629$270$17,355$50,290282,666

6,356

86,779740,382Note:(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 purchase
Gain from bargain purchase of ¥431 million ($3,538 thousand) was recorded as other income (expenses) inthe consolidated statement of income for the year ended March 31, 2022, as a result of the Business
Integration. The gain from bargain purchase was not attributed to reportable segments.
No gain from bargain purchase was recorded for the year ended March 31, 2021.

92

Financial Information202229. Net Income per Share
Reconciliation of the differences between basic and diluted net income per share (EPS) for the years ended
March 31, 2022 and 2021, was as follows:

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 ........

For the year ended March 31, 2021

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¥99,401

1,435,664

Yen

U.S. dollars
EPS¥69.24$0.56¥69.06

$0.56

3,736
¥99,401

1,439,400

Millions of yen
Net income
attributable toowners of the parent

Thousands ofsharesYen

Weighted-average
sharesEPS¥55,314891,207¥62.073,334¥55,314894,541¥61.84

As disclosed in Note 2, “Summary of Significant Accounting Policies,” the changes in accounting policy
for the year ended March 31, 2022 have been retrospectively applied and the amount for the year ended
March 31, 2021 have been modified to reflect retrospective adjustments.
30. Subsequent Events
On May 24, 2022, the Board of Directors declared the appropriation of retained earnings as follows:

Appropriations:
Cash dividends of ¥15.00 ($0.12) per share .....................................................

Millions of yen

Thousands of
U.S. dollars¥21,542$176,576

Financial Information

2022

93

94

Financial Information

2022

Financial Information

2022

95

96

Financial Information

2022

Financial Information

2022

97

98

Financial Information

2022

Financial Information

2022

99