FINANCIAL
INFORMATION2024

For the fiscal year ended March 31, 2024

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 Flows25

Notes to Consolidated Financial Statements

96

Independent Auditor’s ReportM AN AGE ME NT’S D IS CU S S ION
A ND ANALYSISThe annual dividend was ¥37 per share (payout ratioof 42.9%) as per the full-year dividend forecast. This isa ¥4 increase over the previous fiscal year’s dividend of¥33, marking the 25th consecutive year of increases.
Operating results by reportable segment arepresented below.

Business Results
The Mitsubishi HC Capital Group’s business results forthe fiscal year ended March 31, 2024 were as follows.
On the sales front, the volume of new transactions
increased by ¥411.3 billion or 15.6% year on year to¥3,051.9 billion.
Revenues increased by ¥54.3 billion or 2.9% to¥1,950.5 billion.
Meanwhile, gross profit rose by ¥22.7 billion or 6.4%
to ¥380.0 billion and operating income by ¥7.4 billion
or 5.4% to ¥146.1 billion.
Though there were impairment losses not includedin the initial plan and an increase in credit costs in the
Global Business segment (the Americas), the Groupsaw business growth driven by the Aviation segment,
profit in the Logistics segment exceeded the plan,and gain on sales of assets in the Real Estate andEnvironment & Energy segments also exceeded
the plan.
As a result, net income attributable to owners of
the parent came to ¥123.8 billion, which exceeded thefinancial forecast of ¥120.0 billion by ¥3.8 billion(3.2%), marking the second consecutive year of arecord high.

■ Customer Solutions

Segment profit remained unchanged year on year at¥38.1 billion mainly due to an increase in gains on salesof strategic shareholding, despite the absence of large
gains on sales related to real estate leasing andinsurance claim income from a certain deal recorded in
the previous fiscal year.

■ Global Business

Segment profit decreased by ¥12.4 billion, or 42.8%
year on year, to ¥16.6 billion. This was mainly due toan increase in credit costs in line with the worsening
market condition of the transportation sector that wasstrong during the COVID-19 pandemic in theAmericas and the absence of gains on revaluation of
securities recorded in Europe, despite the positiveeffects of adjusting the fiscal period associated withthe reorganization of subsidiaries in the Americas.

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

Negative factor

+28.8
+8.9

–6.9

–5.8

Net income*

–6.9

–10.5

+7.6

Business growth* Net income attributable to owners of the parent

+21.9

123.8

FYE 3/2023

02

Financial Information

2024

lo
e/
na
Ex

tra
or

di

g
in
at
er
Op

s,

et

c.

)

m
co
in
ry

pe
ex

s
st
co
it
ed
Cr

Ot
h
(ta ers
xe
xp
en
se

es
ns

s,
se
os
tl
en
irm
pa

Im

Bu
s
(e inexc ss
l. i gm ro
pa w
irm th
en
tl

os

et

se

c.

s,

ss

et

c.
)

116.2

FYE 3/2024

Notes:
1) Except for Others (tax expenses, etc.), theamounts provided reflect the impact on
income before income taxes.
2) The amount of business growth is the combined
total of gross profit and non-operating
income/loss (the amount of non-operating
income/loss does not include recoveries ofwritten-off receivables).
3) Impairment losses, etc. is the total amount of
impairment losses and losses in the Real Estatesegment in the U.S.A.

Effective April 1, 2023, we executed the businessintegration of three subsidiaries in the Americas witha different fiscal year-end. While the surviving
company’s fiscal year-end is March 31, the twomerged companies’ fiscal year-end was December 31.
Accordingly, results of the two merged companies forthe period from January 1, 2023 to March 31, 2023 arealso included in the consolidation for the fiscal year
ended March 31, 2024, resulting in a year-on-yearincrease in profit.

■ Environment & Energy*

Segment profit decreased by ¥4.3 billion, or 37.1%
year on year, to ¥7.3 billion mainly due to recording of
impairment losses on a solar power generation projectin Japan and a decrease in profits from equity-method
investments despite an increase in gains on sale of assets.
* The name of the segment was changed from “Environment,
Energy & Infrastructure” to “Environment & Energy” in the fiscal
year ended March 31, 2024.

■ Aviation

Segment profit increased by ¥21.1 billion, or 340.3%
year on year, to ¥27.3 billion mainly thanks to anincrease in leasing revenues, a reversal of large credit
costs, a decrease in impairment losses, and a decreasein exchange revaluation losses related to foreign
currency-denominated borrowings in aircraft leasingtransactions that our head office is engaged in.

■ Logistics

Segment profit increased by ¥2.4 billion, or 15.9% year
on year, to ¥17.8 billion mainly thanks to an increasein gains on sale of assets (mainly shipping) despite adecrease in leasing revenues attributable to thenormalization of the utilization rates of marine containers
after a period of overheated market conditions.

■ Real Estate

Segment profit decreased by ¥0.7 billion, or 5.6% year
on year, to ¥11.9 billion mainly due to recording oflosses in U.S. projects against a backdrop of theworsening real estate market, the negative effect ofthe deconsolidation of Diamond Asset Finance
Company Limited, and an increase in tax expenses
despite an increase in gains on sale of assets and therecording of gains on step acquisitions in relation
to making CenterPoint Development Inc. a wholly
owned subsidiary.

Segment Profit (¥ Billion)
Customer Solutions
Aviation
Logistics

Global Business
Real Estate

Environment & Energy
Mobility
Adjustments–0.6
FYE 3/2023

38.1

Total: 116.2

FYE 3/2024
Total: 123.8

38.1

29.0

16.6

7.3

11.6

27.3

6.2

15.3

12.6

3.7

17.8

11.9

2.7
1.8

Financial Information

2024

03

M AN AGE ME NT’S D IS CU S S ION
A ND ANALYSIS■ Mobility

As of March 31, 2024, total assets increased by ¥423.6
billion or 3.9% from the previous fiscal year-end to¥11,149.8 billion, while total equity rose by ¥154.3 billion
or 9.9% to ¥1,705.3 billion, and interest-bearing debt
(excluding lease obligations) increased by ¥203.6 billion
or 2.5% to ¥8,439.7 billion. The equity ratio increased
by 0.8 points to 15.1%.
Total liabilities were up ¥269.3 billion to ¥9,444.5
billion. Out of interest-bearing debt, long-term
liabilities such as long-term loans rose by ¥189.8 billion
to ¥5,383.9 billion, while short-term liabilities such as
short-term loans and commercial paper increased by¥13.8 billion to ¥3,055.8 billion.
Operating activities used net cash of ¥49.1 billion
compared to net inflows of ¥46.7 billion in the previous
fiscal year. Inflows from income before income taxesof ¥167.6 billion with an adjustment of ¥213.4 billion
for loss on disposal and sales of leased assets, a decreasein lease receivables and investments in leases of ¥64.1
billion, an increase in receivables of ¥31.7 billion, andan increase in trade payables of ¥10.9 billion were set
against outflows from purchases of leased assets of¥884.8 billion.
Investing activities provided net cash of ¥143.3 billion
compared to net outflows of ¥127.3 billion in theprevious fiscal year. This mainly consisted of proceedsfrom withdrawal of time deposits of ¥186.5 billion.
Financing activities used net cash of ¥222.9 billion
compared to ¥8.9 billion in the previous fiscal year.
Net outflows of ¥70.5 billion for direct funding and¥89.8 billion for bank loans and other forms of indirect
funding were set against items including ¥51.7 billion
in cash dividends paid.
As a result, cash and cash equivalents as of March
31, 2024 totaled ¥335.3 billion, a decrease of ¥125.1
billion or 27.2% from the previous fiscal year-end.
The ¥125.1 billion decrease came from ¥49.1 billion
used in operating activities and ¥222.9 billion used infinancing activities despite ¥143.3 billion provided byinvesting activities.

Segment Assets* (¥ Billion)

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

Segment profit decreased by ¥1.0 billion, or 26.4%
year on year, to ¥2.7 billion mainly due to the negative
effect of the deconsolidation of Mitsubishi HC
Capital Auto-Lease Corp.

Financial Position

Equity ratio

Total equity

10,0009,632.9

10,179.4

2,000

8,000

1,600

6,000

1,200

1,551.0

14.3

20

15.1

15

800

10

2,000

400

5

FYE 3/2023

FYE 3/2024* The values for segment assets do not include adjustments. Refer to pages 84–88 for details.

Financial Information

25

4,000

0

04

1,705.3

2024

0

FYE 3/2023

FYE 3/2024

0Medium-term Management Plan
The Group formulated a Medium-term Management
Plan covering the three-year period from the fiscal
year ended March 31, 2024 to the fiscal year ending
March 31, 2026 (“2025 MTMP”), which wasannounced in May 2023. With “Together we innovate,challenge and explore the frontiers of the future” as
Our 10-year Vision, we are proceeding with theevolution and layering of business models bydeveloping services and promoting business
investment, utilizing tangible and intangible assets,such as data and other elements, to their fullest
potential. For the promotion of the above, we will aim
for sustainable growth by solving environmental,social, and economic issues. At the same time, we will
aim to enhance our medium- to long-term corporate
value by achieving an optimal balance sheet based onwell-balanced growth potential, return on capital, andfinancial soundness.
The financial targets for the fiscal year ending
March 31, 2026, the final fiscal year of the 2025
MTMP, are net income attributable to owners of theparent of ¥160.0 billion, return on assets (ROA) ofapproximately 1.5%, return on equity (ROE) ofapproximately 10%, and a payout ratio of 40% or
higher during the 2025 MTMP period. Net income
attributable to owners of the parent is used for the
calculation of ROA and ROE.
For details on the 2025 MTMP, please refer to“Medium-term Management Plan for FY2023–
FY2025” on the Company’s website.
(2025 MTMP on the Company’s Website)
https://www.mitsubishi-hc-capital.com/english/
investors/managementplan/index.html

Financial Targets

Net income*1: ¥160.0 billion

ROA*3: Approx. 1.5%

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

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

Dividend Policy(2025 MTMP period)

Financial Soundness(2025 MTMP period)

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

2

Payout ratio: 40% or higher

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

Financial Information

2024

05

B USIN ESS AN D RELAT ED RIS K S

Of the business and related risks of the Mitsubishi HC

risk category based on the Company’s risk capital

Capital Group, the main items with potential for importantmanagement policy after quantifying each risk using risk

impact on investors’ decisions are managed comprehensively

assessment methods tailored to the characteristics of thein the framework set out below under 1. Integrated Risk

asset or business. Reasonable risk-taking is then carriedManagement. The Group has established an appropriate

out within the scope of risk tolerance.

system to manage these risks and strives to prevent themWithin this risk management framework, regularfrom emerging or to minimize their impact if they occur.

monitoring is undertaken of the utilization of risk capital

Furthermore, to manage these potential risk factors,

and the status of portfolios, the results of which are

we operate a system whereby the division responsible forreported to and discussed by the Risk Management Meeting,the relevant area of risk monitors and identifies issues

the Executive Committee, and the Board of Directors. In

arising from changes in the external environment andthis way, efforts are made to ensure appropriate responseother factors. Each of these divisions holds regularmeasures and to promote effective internal communication

discussions to review appropriate response measuresabout risk. Arrangements are in place to ensure that theand reports promptly to the Executive Committee, aBoard of Directors is fully informed of the risk management

consultative and decision-making body that controls thesystem and risk management status and that it maintains

execution of business. Specifically, in addition to the Risk

oversight thereof.

Management Committee that undertakes comprehensive
and systematic management of risks affecting all
operational areas, the Asset Liability Management(ALM) Committee, Compliance Committee, and other

Risks Managed within Framework
02 Majorof Integrated Risk Management

committees meet quarterly or as necessary to discuss the

The Mitsubishi HC Capital Group conducts businessissues surrounding and measures to address individual

activities globally. The Group provides capitalrisks. Additionally, important matters at each committee

investments and services necessary for customer

are reported to and discussed by the Board of Directors.

businesses through leases and other means. The assets it

The forward-looking statements herein are based onholds for leases and related transactions are diversified,judgments made by the Group as of March 31, 2024.

ranging from general movable property such as officeequipment and production equipment to assets, such as

01

Integrated Risk Management

for capital investment can decline considerably if acustomer’s business environment deteriorates with

Mitsubishi HC Capital engages in business operations

deceleration or slowdown in business at home or abroad.

that incorporate the framework of integrated risk

In that case, a decline in leases and other transactions

management in order to work toward sustainable growth

could impact the Group’s business results and financial

by balancing maintenance of management soundness

position. Additionally, losses arising from inadequacy ofwith improving profitability. The major risks managed

internal processes, personnel, or systems or their failure

within the framework of integrated risk management

to function, or exogenous events could impact theinclude credit risk, asset risk, investment risk, market risk,

Group’s business results and financial position.

liquidity risk, and operational risk. Risk management is

The major items among these envisioned risks

conducted on a consolidated basis.
Specifically, risk capital is allocated to the respective
06

aircraft, that are used in particular industries. Demand

Financial Information

2024

are managed within the framework set out under
1. Integrated Risk Management.

(1) Credit Risk

Group is exposed to asset risk in addition to the

The Mitsubishi HC Capital Group conducts businessaforementioned credit risk, so fluctuation in revenue

that extends credit over the medium to long term throughfrom asset management and disposals could impact theleases, installment sales, monetary loans, and other financial

profitability of the leases. For this reason, when engaging

services of various forms. Depending on future business

in operating leases, the Group carefully assesses the future

trends and the financial landscape, additional provisions

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

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

in a company’s credit status, which could impact the Group’s

monitoring the status of the leasing and secondary markets

business results and financial position. Furthermore,

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

because the Group is engaged in business globally, it isleaseholder, striving to prevent risks from emerging or to

subject to country risk in which losses may arise depending

mitigate their impact if they occur.

on the political and economic situations in the countries
and territories where customers and investees are located.

a. Global Assets
The Group holds global assets such as aircraft andMain Efforts to Address Risk

aircraft engines, containers, and railway cars and conducts

When considering the advisability of each deal, thea business leasing these assets in and outside Japan in theGroup carefully reviews the customer’s credit standing

form of operating leases and others. In the businessusing its own rating system and makes a thorough study

related to global assets, the Group is exposed to pricein light of the value of the leased property, country risk,

fluctuation risk pertaining to said assets in addition toand other factors in an effort to ensure a reasonable

the aforementioned credit risk. With operating leases, inreturn for the risk. Additionally, the Group continues toaddition to lease fee revenue received from the customer,

check the customer’s credit standing on an ongoing basis

the Group recovers funds by selling the asset at the end

even after entering into business relations and has aof the lease period. Additionally, in the event of a customer

system in place to take the necessary steps in the event

bankruptcy, the Group takes the asset back and recovers

that the customer’s credit standing worsens. Moreover,funds by leasing it to a different customer or selling it. As

it engages in credit management with respect to thefor selling assets, in addition to business trends and theportfolio as a whole and considers risk diversification tofinancial landscape, major incidents arising from technicalensure that credit is not concentrated with a specificproblems, obsolescence due to technological change,customer, industry, country, territory, and so on, whilerevisions to laws and regulations, increased concern overstriving to ensure sound management by regularly

global pandemics or terrorism, natural disasters, war, or

measuring the credit risk of its portfolio and monitoring

geopolitical risk may render the asset irrecoverable or

to ensure that it is within a certain scope of capital.

cause its selling price to fluctuate. Furthermore, therecording of an impairment loss or increased costs(2) Asset Risk

associated with property management could also impact

In addition to general movable property, the Mitsubishi

the Group’s business results and financial position.

HC Capital Group holds such global assets as aircraft
and real estate, including buildings, and conducts a

Main Efforts to Address Risk

business leasing these assets in and outside Japan in the

When engaging in operating leases with global assets, theform of operating leases and others. In this business, theGroup conducts a comprehensive review that includes a

Financial Information

2024

07

B USIN ESS AN D RELAT ED RIS K S

checklist for deals involving movable property andMain Efforts to Address Risk

future asset liquidity before working on each deal and

The Group makes a careful decision based on aendeavors to ensure a reasonable return for the credit

comprehensive review of future asset value and liquidity

risk and asset value fluctuation risk. Furthermore, thebefore working on each deal and endeavors to ensure aGroup has established internal criteria to maintain areasonable return for the asset value fluctuation risk.

portfolio with risk diversification taken into account,

Furthermore, the Group continues to check the status ofincluding asset types, regions, and time of expiration.

asset management, price trends, and industry trends on

Moreover, the Group continues to check the customer’s

an ongoing basis even after entering into business relations

credit standing and industry trends on an ongoing basisand has a system in place to maximize revenue. Additionally,

even after entering into business relations and has a

the Group holds warning sign management meetings as

system in place to take the necessary steps in the event

necessary at business divisions and risk managementthat the customer’s credit standing worsens, such as

divisions to review industry trends and signs of problems

collecting a deposit from the customer to cover asset

that could impact asset value fluctuation. The Group

wear and tear as necessary. Additionally, the Groupalso regularly measures the risk of fluctuations in theholds warning sign management meetings as necessary atvalue of assets in its portfolio to monitor whether it isbusiness divisions and risk management divisions forwithin a certain scope of capital, in an effort to ensureeach major asset category to review applicable industry

sound management.

trends and signs of problems that could impact asset
value fluctuation. The Group also regularly measures(3) Investment Risk

customer credit risk and the risk of fluctuations in the

The Mitsubishi HC Capital Group is engaged in investment

value of assets in its portfolio to monitor whether it isin and financing of projects such as solar power, wind power,

within a certain scope of capital, in an effort to ensureand other renewable energy businesses in Japan andsound management.

overseas as well as various business investments, includingloans to operating companies and funds. These investing08

b. Real Estate

activities are subject to such risks as risk of changes in the

The Group is engaged in and outside Japan in investment

business environment including business fluctuations andin and financing of commercial real estate such as offices,

declining demand, risk of revenue falling below the plan

residences, commercial facilities, logistics facilities, anddue to sluggish performance of investees or partners, risk

hotels, and in leasing and other business operations basedof diminished recoverability of the investment amount,on its portfolio of owned properties. These assets arerisk of investee stock value falling below a certain level,

subject to revenue fluctuation risk and price fluctuation

and risk of investee stock value staying below a certain

risk. In the real estate-related business, in addition tolevel for a considerable period of time due to suddenlease fee revenue from tenants, the Group recovers fundschanges in the economic or financial situation or a major

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

disruption of the financial markets regardless of thethe right time. Lease fee revenue and revenue from saleinvestee’s performance. These risks could result in a totalof assets may fluctuate depending on the market

or partial loss of the investment, including throughenvironment, such as business trends, the financial

valuation loss, or create the necessity of additional funding.

landscape, and the lease market in the specific location of

In addition, there are the risk that the Group may be

the asset, and this could impact the Group’s business

unable to exit or restructure the business at the desired

results and financial position.

time or using the desired method due to differences withFinancial Information2024

the partner’s management policy or low liquidity of theas foreign currency-denominated assets increase, so does

investment asset and the risk that the Group may betheir percentage of consolidated operating assets. The

disadvantaged by not being able to obtain relevant

financial statements of the Group’s consolidated subsidiaries

information from the investee, and these risks could

outside Japan are expressed in the local currency while

impact the Group’s business results and financial position.

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

Main Efforts to Address Risk

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

The Group holds investment meetings according to theasset, should a large fluctuation occur in exchange rates,individual investment amounts and severity of risk to

it could impact the Group’s business results and financial

gather the opinions of the relevant departments and makes

position in Japanese yen terms.

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

Main Efforts to Address Riskof view when considering each investment, thereby

The Group constantly watches movements in the financial

endeavoring to ensure a reasonable return for the risk.

markets and, as needed, monitors through ALM any

Additionally, the Group continues to check the status of

imbalances in the form of interest rates or currency

investment management and industry trends on an ongoingexchange for asset management and for procurement ofbasis even after entering into business relations andfunds. It then manages interest rate fluctuation risk throughhas a system in place to maximize revenue. The Groupappropriate hedge operations while taking interest rate

also regularly measures the risk of fluctuations in the

movements into account. To address exchange rate

value of investments in its portfolio to monitor whether it

fluctuation risk, in principle, the Group raises funds in

is within a certain scope of capital, in an effort tothe same currency as the operating asset in an effort toensure 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 perioda. Interest Rate Fluctuation Riskof time at a certain probability and to what extent in the

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

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

price for the transacted property and the market interest

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

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

to ensure sound management. Meanwhile, the ALM

not fluctuate during the contract term. The cost of funds

Committee meets quarterly or as required to analyze

for acquiring the leased property, on the other hand, isscenarios and data in connection with geopolitical risk,

affected by fluctuations in the market interest rate as the

pandemics, and various other risk factors and to determine

funds are procured at both fixed and variable interest rates

ALM policy based on trends in the financial market

for fundraising diversification and reduction of funding

environment, the risk situation, and other considerations.

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

impact the Group’s business results and financial position.

When engaging in acquisition of lease properties for leases,
installment sales, and monetary lending, the Mitsubishi

b. Exchange Rate Fluctuation Risk

HC Capital Group raises a large amount of funds in

The Group actively conducts business outside Japan, andJapanese yen and other currencies. The Group attempts

Financial Information

2024

09

B USIN ESS AN D RELAT ED RIS K S

to balance the period of leases and other credit transactions

and coordinating with contingency planning, it makes

and investments with the period of fundraising, butefforts to improve the flexibility and resilience of financial

should it experience difficulty securing enough funds

structures in the event of a crisis situation emerging.

because of heightened risk aversion on the part of

Meanwhile, to support the globalization of its businessfinancial institutions and investors due to a free fall inover recent years and also to increase its ability to procure

economic and financial conditions and major confusion

foreign currency, the Group is progressing with thein the financial markets or a decline in the Group’s

reorganization of its regional financial bases. As part ofcreditworthiness, it could impact the Group’s business

this, it has established a regional financial base in North

results and financial position.

America where it holds a large asset balance, thus putting
in place a Group financing system, which includes theMain Efforts to Address Risk

consolidation of financing. The North American regional

With respect to the procurement of funds, the Groupfinancial base offers not only indirect financing but also

tries to ensure the liquidity of funds through efforts tovarious forms of fund procurement, including issuance ofdiversify by procuring funds directly from the market

commercial paper and corporate bonds, thus providing

including corporate bonds, commercial paper, andfunds to Group companies expanding into North America.

securitization of lease receivables in addition to borrowing
from financial institutions as well as through procurement(6) Operational Riskwith long- and short-term balance, careful managementa. ‌Risk Related to Earthquakes, Wind and Flood Damage,of cash flow, and measures to supplement liquidity

Pandemics, War, Terrorism, etc.

during emergencies, such as through the acquisition of

The Mitsubishi HC Capital Group uses facilities, including

commitment lines.

sites and systems, in and outside Japan to conduct its

Additionally, the Group conducts stage-by-stage

operations. Earthquakes, wind and flood damage, ormanagement of liquidity, putting in place funding

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

arrangements to ensure that the immediately necessaryor other unpredictable circumstances could cause afunds can be secured, including funds for repayment,

reduction of activities or prevent operations at those sites

even if the fundraising environment deteriorates, andby damaging the sites themselves or the systems or byreporting on the status of funding to the ALM Committee.

injuring employees or preventing them from coming to

In addition to analyses of credit, interest rate sensitivity

work, thereby disrupting business operations. Moreover,(the impact on revenue of interest rate fluctuation) anddepending on the extent of the damages or how long theother items, the ALM Committee carries out comprehensive

event lasts, a large sum of money could be required toinvestigations of (4) Market Risk and (5) Liquidity Risk

restore the systems or other facilities, or it may take ain the event of stress developing in the financial markets

long time for business operations to recover. Such aor other relevant areas, including the potential impact on

situation could impact the Group’s business results andprofit. It then decides a fund procurement strategy andfinancial position.

risk response policies as the basis for the rollout of a

10

Companywide strategy reflecting the market environment.

Main Efforts to Address Risk

Regarding risk management in particular, it coordinates

The Group has established responsible departmentswith the Risk Management Committee, which is one arm

depending on the envisioned risk to prepare for suchof the Companywide integrated risk management system.

circumstances and has a system in place to establish a

By strengthening the warning sign management system

crisis response headquarters to respond to a critical

Financial Information2024

situation. The Group is also working to establish a system

response system for failures that includes swift action

for business continuity by putting together a businessand sharing of information internally and externallycontinuity plan, implementing redundancy measures forwhere the failure occurs as well as establishment andbackbone systems, establishing a system infrastructure

implementation of measures to prevent subsequent

that allows work from home, and implementing officerecurrence. Additionally, Group-wide IT control isshifts limited to operations that must continue.

implemented for system development at the GroupAs the Group does not have bases in Ukraine or Russia,
it envisages limited direct impact from the situation in thecompanies in Japan and other countries by using
standardized methods as part of a proprietary process.

region. However, should the situation escalate going
forward, there may be indirect impacts such as an increasec. Cybersecurity Risk and Information Security Risk

in non-performing loans due to worsening of the credit

The Group utilizes e-mail as well as a variety ofstatus of customers. This might require measures such as

information systems to conduct account processing,

additional provisions of allowance for doubtful receivables,

management of various contracts, customer management,

which could impact the Group’s business results andasset management of leased properties, and other operations.

financial position.

These information systems are subject to risk of business

In March 2022, the Group set up a Crisis Management

e-mail scams, malware infections, unauthorized access by

Headquarters that is working to address cybersecurity,

outside parties, and other cyberattacks. Unauthorized

trade control, and money laundering, track financial trends,

access by outside parties, malware infections, humanenhance screening and management of deals, monitor theerror, fraud, scams, and other problems could result in

impact on the value of Group operating assets, and identify

system outages or failures, monetary damages, leaks or

and manage other indirect impacts.

unauthorized use of confidential information or customer
information, or other incidents. These could cause an

b. System Risk

interruption of contract and collection operations or

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

services provided to customers, which in turn could cause

systems to conduct account processing, management ofa suspension of operating activities, economic loss, orvarious contracts, customer management, asset management

loss of social confidence from leakage of importantof leased properties, and other operations. An outage orinformation, thereby impacting the Group’s business results

failure of these information systems arising from poorand financial position.

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

Main Efforts to Address Risk

operations or services provided to customers, which in

The Group has established a cross-organizational Security

turn could cause a suspension of operating activities andIncident Response Team (MHC-SIRT) to address these

economic loss, thereby impacting the Group’s businessrisks and has a system in place to prevent incidents at theresults and financial position.

entrance, internal, and exit stages and respond to them ifthey occur. Specifically, in preparation for cyberattacks

Main Efforts to Address Risk

that exploit vulnerabilities, the Group keeps software up

The Group has a system in place to properly manage andto date to detect unauthorized access, malware, and othermaintain these systems through internal cooperation andcyberattacks and maintains management preparedness topartnership with other companies in order to ensure theirprevent problems. At the same time, the Group has

stable operation. The Group is equipped with an integrated

established an internal and external coordination system

Financial Information

2024

11

B USIN ESS AN D RELAT ED RIS K S

and conducts drills to prepare for incidents. Moreover,e. System Change Risktargeted e-mail training is provided for all employees,

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

and internal education on information security is carried

legislation, accounting and tax regulations, and otherout on an ongoing basis.

systems in and outside Japan. Should there be substantialchanges or revisions to any of the various systems closely

d. Legal Risk

related to the Group’s operations that the Group was

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

unable to properly address, there could be penalties

legislation in and outside Japan. As the primary examples,for nonconformance, suspension of product offering,in Japan its operations must comply with the Companies

restrictions on business activities, sales losses, or other

Act, tax laws, the Financial Instruments and Exchange

negative consequences that could impact the Group’s

Act, the Anti-Monopoly Act, the Personal Information

business results and financial position.

Protection Act, the Money Lending Business Act, theInstallment Sales Act, the Act on Prevention of Transfer

Main Efforts to Address Risk

of Criminal Proceeds, and laws and regulations related to

The Group’s corporate centers, business divisions, sales

the environment. Outside Japan, the Group’s operations

bases in Japan, and sites in each country continuously

are subject to the legislation of each country and region

monitor revisions and changes to the various systems inas well as to oversight by regulatory authorities. Should

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

there be a failure of compliance with legislation orsystems, applying to the relevant country and services.

company rules, it could impact the Group’s businessIn addition, the Group gathers information on andresults and financial position by causing restriction on or

implements measures to address changes and revisions

interruption of operations, a claim for damages fromas quickly as possible while reinforcing such monitoringcustomers or others, and a fall in social confidence.

by actively utilizing outside experts.

Main Efforts to Address Risk

f. Administrative Risk

The Group strictly adheres to laws, regulations, and

The Group conducts transactions in various forms, andcompany rules in conducting its operations. The Groupvarious administrative work arises with each transaction.

has established the Principles for Prevention of Bribery

Improper administrative work, including human error,

and Corruption, the Principles for Compliance withfraud, and other irregularities, could cause an interruption

Competition Laws, the Basic Policy on Anti-socialof contract and collection operations or services provided

Elements, the Principles for Money-Laundering

to customers, which in turn could cause a suspension ofPrevention, the Personal Information Protection Policy,

operating activities or loss of customer trust, thereby

and the Principles for National Security Export Control

impacting the Group’s business results and financial position.

and prepared a Compliance Manual, which is available
for viewing at any time on the Company intranet. In

Main Efforts to Address Risk

addition, the Group provides ongoing compliance

The Group has established administrative rules for eacheducation. The Group is working to strengthen its

transaction and conducts business according to thesecompliance system and has also established a compliancerules while reviewing them as needed. Additionally,

hotline system, which it operates while regularly

an internal reporting system is in place for internal

incorporating feedback from outside experts.

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

12

Financial Information2024

the incident, identifying the cause, and establishing/

and respect both laws and regulations and the spirit of

implementing measures to prevent recurrence.

social norms, the Group also provides ongoing educationon the topic of integrity.

03 Other Major Risks(2) Risk Related to Personnel Recruitment

In addition to risk addressed in the framework of integrated

adequate human resources, in order to maintain andrisk management, the Group recognizes the major risks

strengthen its competitiveness in the various businesses it

listed below. These risks are managed within the integrated

operates in and outside Japan. The Group strives torisk management framework, including individual impact

continuously recruit and train capable personnel, but

and combined impacts across multiple risk items,

should it not be able to adequately secure and train theaccording to their individual characteristics and status.

needed personnel this could impact the Group’s business

The Group explores a unified response and formulates a

results and financial position.

The Mitsubishi HC Capital Group must stably secure

response policy as necessary and additionally conducts
scenario analysis appropriate to the situation as part of a(3) Risk Related to Labor and Employment Management

multi-faceted verification of risk resilience.

The Group employs a large number of staff in its business
operations. This involves the risk of long working hours(1) ‌Risk Related to Conduct

having a negative effect on the mental or physical health

The Group is implementing various measures based onof employees or other negative impacts, making them

the keyword of “transformation” to achieve Our 10-year

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

Vision of “Together we innovate, challenge and explore

infringement due to failure to appropriately monitor

the frontiers of the future.” During this process, anylegal requirements relating to employment and related

actions by our executives and employees that compromiseareas. Additionally, there is the possibility of thesecustomer protection, fair competition, market integrity,

risks resulting in damage to public trust. To lessen the

public interest, or social norms and cause harm to ourabovementioned risks, the Group promotes projects

stakeholders could impact the Group’s credibility,

aimed at improved productivity and introduces systems

business results, and financial position.

to enable diverse workstyles (teleworking, flextime, etc.).
In this way, it works not only to reduce long working

Main Efforts to Address Risk

hours but also to put in place a work environment that

The Group emphasizes integrity as one of the coreaccommodates employees with childcare or nursing careelements of the Action Principles, which set forth the

responsibilities. Additionally, to address harassment

values and attitude each employee should have along

and other personnel issues, the Group has introducedwith the actions they should take within the Basicmeasures for employees in Japan and overseas, including

Management Policy. This means maintaining high ethicalinternal whistleblowing systems and advice services. To

standards and constantly returning to the basics. The

enable employees to develop their abilities to the full, theGroup ensures that all executives and employees conduct

Group is addressing workplace enhancement as a major

themselves accordingly. In addition, the Group has

focus of initiatives.

established the Mitsubishi HC Capital Group Code of
Ethics and Code of Conduct. While ensuring that all
executives and employees maintain high ethical standards

Financial Information

2024

13

B USIN ESS AN D RELAT ED RIS K S(4) Risk Related to Expansion of Operating Base,
Strategic Partnerships, and M&As

along with our knowledge and experience in the expandedbusiness domain, or if the expanded business does not

In pursuit of continued growth through expansion of its

develop as envisioned, it could impact the Group’s business

operating base, the Mitsubishi HC Capital Group engages,

results and financial position.

in and outside Japan, in strategic partnerships with outside
entities aimed at the enhancement of various services and(6) Intensifying Competition

tries to diversify and expand the Group’s business portfolio

Competition in the leasing and other businesses of thethrough M&As in addition to expanding business on its

Mitsubishi HC Capital Group conducted in and outside

own. The Group endeavors to diversify its business andJapan could intensify not only from companies in the sameenhance its services through this kind of approach.

business but also from financial institutions and others,

However, changes in the domestic or internationalor the competitive landscape could change due to a shifteconomic and financial conditions, intensification of

in business models of other industries, technical innovation,competition, changes in the business environment oror other factors. The Group makes various efforts tostrategy of partners, revision of relevant legislation, andmaintain and strengthen its competitiveness, including byother factors could cause a failure to achieve expected

offering greater added value to its customers and creating

results or result in the need to record additional expenses,

value as an asset holder and through low-cost fundsuch as impairment of goodwill recorded at the time ofprocurement. However, should the current competitive

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

situation intensify further, a fall in market share and decline

business results and financial position.

in income could impact the Group’s business results andfinancial position.

Main Efforts to Address Risk
In addition to review by the relevant departments according(7) Climate Change Risk

to the individual investment amounts and severity of risks,

Failure to respond to regulatory changes, technologicalthe Group brings in outside experts for a comprehensive

innovations, or shifts in business models associated withreview of the fitness of the investment structure and thethe transition to a decarbonized society, or extreme

future investment effect from a broad point of view when

weather conditions associated with global warming could

considering each M&A or partnership deal. Even after ancause customer bankruptcies due to deteriorating

M&A deal is executed, the Group’s rules are applied toperformance or could cause the value of assets held by

establish a system for proper operational management,

the Group to decline, which could impact the Group’s

and monitoring is carried out on the business plan, results

business results and financial position. Moreover, if the

management, and other aspects so that the necessaryGroup’s response to climate change risk or its information

actions can be taken in a timely manner.

disclosure are inadequate, or are deemed to be so, thereis the possibility for the Group’s corporate value to(5) Risk Associated with Expansion of Business Domains

be damaged.

The Mitsubishi HC Capital Group is expanding the scope

14of its operations on a global basis, including new business

Main Efforts to Address Risk

domains, within the scope permissible under laws,

The Group recognizes promoting a decarbonizedregulations, and various other conditions. Should risks

society as a priority task in achieving sustainable growth

emerge within that process that exceed the scope ofthat forms part of its materiality (important issues).

reasonable assumptions despite verification of the risks

Accordingly, the Group has expressed its support for the

Financial Information2024

recommendations of the Task Force on Climate-Related

bankruptcies or a drop in the value of the Group’s asset

Financial Disclosures (TCFD) and is working to enhanceholdings, which could impact the Group’s business results

risk identification and assessment and relevant informationand financial position.

disclosure in accordance with the recommendations.

Despite the subsiding of the COVID-19 pandemic,

Additionally, the Group recognizes climate change as awhich had continued since 2020, the Group will continue

significant risk for Companywide risk management andto promote diverse and flexible workstyles that utilize theis progressing with relevant initiatives.

IT remote communication tools and telecommuting
systems, which were rolled out during the pandemic for(8) Human Rights Violation Risk

both internal and external use. This will be done from theWith corporate responsibility extending throughout thestandpoint of improvement of productivity and businesssupply chain and the emphasis on sustainability initiatives,

continuity management (BCM) including the prevention

the prevailing view is that companies should recognizeof the spread of infection.

stakeholders as broadly encompassing ordinary
individuals and local residents. Under these circumstances,
if the Group were to neglect these stakeholders, and humanrights violations were to occur within the Group or be

04 Stress Tests

committed by customers of the Group, it could be perceived

In the execution of management strategy, the Groupas the Group itself causing, encouraging, or directly

makes efforts to gauge the degree of impact of stressparticipating in those human rights violations. In turn,

periods caused by various risk events with potential

this could lead to damage to the Group’s corporate value.

impact on its business, such as deterioration in market
conditions including economic downturns and market

Main Efforts to Address Risk

fluctuation. Specifically, the Group has posited a number

The Group established the Human Rights Policy inof potential high-stress scenarios, ranging from a

September 2022, declaring that we “recognize that

deterioration in the overall world economy to market

conducting business with the utmost respect of humanfluctuation, deterioration in credit, and the emergence ofrights is a major challenge, and we will fulfill ourlarge-scale concentrations of risk in individual business

responsibilities in this matter across all our businessfields. Based on these scenarios, it has undertaken

activities.” In addition, the Group launched an internal

analysis and verification of the potential degree of impact

project to address human rights violation risk in Octoberof stress conditions on profitability and equity in each2022. Moving forward, the Group will continue tofiscal period.

advance efforts to eliminate human rights violations.

These multifaceted verifications enable the Group to
confirm its risk resilience and to ensure that the risk-(9) Global Pandemic Risk

return balance of management plans does not exceed

Should a global pandemic arise, negative consequences

tolerable levels.

such as broad disruption of the supply chain, temporary
restrictions on or suspension of economic activity by eachnational government, and damage to industrial systems
or financial functions could impact a wide range ofcustomers or businesses utilizing the assets of the
Mitsubishi HC Capital Group. This may result in customer

Financial Information

2024

15

Consolidated Balance Sheets
Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
March 31, 2024 and 2023
Thousands of U.S.
dollars (Note 1)

Millions of yen

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

Total assets
See notes to consolidated financial statements.

16

Financial Information

2024

2024

2023

2024

¥335,307
27,4663,704
2,565¥460,486
126,952
2,249
3,213

$2,220,576
181,898
24,533
16,99280,030172,368
2,061,346

77,647231,280
1,911,212

530,002
1,141,510
13,651,298

3,153,989
38,240
194,181(28,373)
6,040,826

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

20,887,345
253,247
1,285,972(187,907)
40,005,471

5,165,373(1,274,316)
3,891,057
119,139
4,010,196
269,208(61,251)
207,957
34,699(16,138)
18,561
4,236,715

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

34,207,774(8,439,185)
25,768,589
789,001
26,557,590
1,782,837(405,636)
1,377,200
229,799(106,874)
122,925
28,057,717

216,492
211,037
102,091
122,035
12,37926,148245,290(66,983)
868,490

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

1,433,722
1,397,596
676,099
808,178
81,984
173,167
1,624,442(443,596)
5,751,595

3,825
3,825

4,603
4,603

25,33525,335¥11,149,858¥10,726,196$73,840,120

Thousands of U.S.
dollars (Note 1)

Millions of yen

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

2024

2023

2024

¥471,060
784,178
563,684
1,012,618¥633,099
559,485
642,883
959,951$3,119,605
5,193,232
3,733,013
6,706,081

224,330
17,852
171,616
13,083
7,016
280,530
3,545,972

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

1,485,634
118,225
1,136,535
86,647
46,4691,857,815
23,483,261

1,606,588

1,582,848

10,639,662

3,435,702

3,253,535

22,752,995

341,628
37,427
6,635
39,481
12,818159,118
259,139
5,898,539

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

2,262,443
247,863
43,943
261,464
84,887
1,053,764
1,716,154
39,063,178

33,19633,196

219,841546,268
1,866
775,152

547,3442,138
710,989

3,617,674
12,362
5,133,458(20,894)(19,158)(138,372)

14,98736,817
292,477
7,262
1,687,134
18,211
1,705,345¥11,149,858

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

99,254
243,824
1,936,937
48,094
11,173,074
120,606
11,293,681$73,840,120

Commitments and contingent liabilities (Notes 15 and 27)
Equity (Notes 16 and 31):
Common stock —authorized, 4,800,000,000 shares in 2024 and 2023;
issued, 1,466,912,244 shares in 2024 and 2023
Capital surplus
Stock acquisition rights (Note 17)
Retained earnings
Treasury stock — at cost, 29,804,554 shares in 2024 and30,718,231 shares in 2023
Accumulated other comprehensive income:Net unrealized gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Total
Noncontrolling interests
Total equity
Total liabilities and equity

See notes to consolidated financial statements.

Financial Information

2024

17

Consolidated Statements of Income

Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Years ended March 31, 2024 and 2023

Thousands of U.S.
dollars (Note 1)

Millions of yen
2024

2023

¥1,950,583¥1,896,231$12,917,769

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

1,570,487
380,095

1,538,904
357,327

10,400,579
2,517,189

233,919
146,176

218,600
138,727

1,549,132
968,056

2,411

1,907

15,968(7,149)(5,278)
(479)
2,996

(47,347)

Selling, general, and administrative expenses (Note 19)
Operating income
Other income (expenses):Dividend income
Interest expense — net of interest income of¥3,912 million ($25,909 thousand) in 2024 and¥2,467 million in 2023 (Note 23)
Impairment loss (Note 10)
Gain on sales of investment securities (Note 4)
Gain on sales of shares of subsidiaries and affiliates (Note 3.b.)Gain on revaluation of investment securities (Note 20)
Loss on sales of shares of subsidiaries and affiliates(Notes 3.c., 3.d., and 22)
Gain on step acquisition (Notes 3.a. and 21)
Other — net
Other income — net
Income before income taxes(1,032)
4,822
9,899
21,500167,676(1,006)
1,159
7,942
14,436
153,164(6,840)31,93565,556142,385
1,110,441

Income taxes (Note 24):
Current
Deferred
Total income taxes
Net income
Net income attributable to noncontrolling interests
Net income attributable to owners of the parent

27,215
15,79743,013
124,663820¥123,842

24,941
10,51035,451
117,7121,471¥116,241180,237
104,621284,858
825,5835,432$820,150

7,243
5,306

7,194

Yen

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

18

2024

Revenues (Notes 18, 23, and 29)

Financial Information

2024

47,96935,142

U.S. dollars

2024

2023

2024

¥86.3086.06
37.00¥80.95
80.71
33.00

$0.57
0.56
0.24

Consolidated Statements of Comprehensive Income

Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Years ended March 31, 2024 and 2023

Thousands of U.S.
dollars (Note 1)

Millions of yen

Net income

2024

2023

2024

¥124,663¥117,712$825,583

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

140

(463)

930

(18,484)
104,217
4,992
4,692
95,558¥220,222

39,631
93,891
1,854
12,510147,424¥265,136(122,412)
690,181
33,06531,075
632,840$1,458,424

Total comprehensive income attributable to:
Owners of the parent
Noncontrolling interests¥218,986
1,235¥262,934
2,202$1,450,242
8,181

See notes to consolidated financial statements.

Financial Information

2024

19

Years ended
31,Inc.
2024
2023
Mitsubishi
HCMarch
CapitalandandConsolidated
Subsidiaries
Consolidated
StatementsofChangesin Equity
ConsolidatedofYears ended March Statements
31, 2024 and 2023
Consolidated
Statementsof Changes
Changes inin Equity
EquityThousands
Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Consolidated
StatementsofChangesinEquityThousands
Mitsubishi
HC
CapitalInc.
andConsolidated
Subsidiaries
Mitsubishi
HCMarch
CapitalandandConsolidated
Subsidiaries
Consolidated
Statementsof Changes
in Equity
Years ended
31,Inc.
2024
2023
Years
March Statements
31,2024
and 2023
Consolidatedof Changes
in EquityNumber ofYears ended
ended
31,Inc.
2024
2023
Mitsubishi
HCMarch
CapitalandandConsolidated
Subsidiaries
Thousands
Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Thousands
Years ended
31,Inc.
2024
2023
Thousands
shares ofof
Mitsubishi
HCMarch
CapitalandandConsolidated
Subsidiaries
Consolidatedof Changes
in EquityNumber
Years ended March Statements
31, 2024 and 2023
commonsharesofYears ended March 31, 2024 and 2023
Thousands
Thousands
NumberMitsubishi HC Capital Inc. and Consolidated Subsidiaries
stock ofcommonThousands
Numberof
NumberofsharesYears ended March 31, 2024 and 2023
issuedstockofsharesofsharesofof
Numbercommonissued ofThousands
Numbercommoncommonsharesstockofof
Numbersharesstock
stockofcommonissuedsharesof
BALANCE, APRIL 1, 2022 (as restated)
1,466,912
commonissuedissuedNumberstock ofcommonBALANCE, APRIL 1, 2022 (as restated)
1,466,912
stock
issuedsharesstockofissuedNet income attributable to owners of the parent
commonissuedBALANCE,
APRIL
1,
2022
(as
restated)
1,466,912
Net
attributableto ownersof the parent
Cashincome
dividends
BALANCE,APRIL
1,466,912
stock
BALANCE,APRIL 1,
1, 20222022 (as(as restated)restated)
1,466,912
Cashdividends
Purchaseof treasury stock (689 shares)
issuedBALANCE,
APRIL
1,
2022
(as
restated)
1,466,912
Net
incomeattributableto(asownersofshares)the parent
Purchaseoftreasurystock(689
shares)
Disposaloftreasury
stock
BALANCE,APRIL
1, 2022
restated)
1,466,912
Net income
incomeattributableto (338,589
ownersof thethe parent
parentNet
attributabletoownersof
BALANCE,APRIL
1, 2022(asrestated)
1,466,912
Cashdividends
Changeinownership
interestduetomergerbetween
Disposaloftreasurystock(338,589
shares)Cashincome
dividends
Cashdividends
Net
attributabletoownersoftheparentPurchaseoftreasurystock(689
shares)consolidated
andunconsolidated
subsidiaries
Changeinownership
interestduetomergerbetweenNet
incomeattributableto(asownersof the parent
Purchaseoftreasurystock(689
shares)BALANCE,APRIL
1, 2022
restated)
1,466,912
Purchaseoftreasurystock(689
shares)Cashdividends
Net
incomeattributableownersofthetoparent
Disposaltreasurystockshares)Changeinofownershipof tothe(338,589
parentduetransaction withconsolidated
and unconsolidated
subsidiaries
Cashdividends
Disposaloftreasurystock(338,589
shares)
Disposaloftreasurystock(338,589
shares)Purchasetreasurystockshares)Changeinofownershipinterestdue
todue
mergerbetween withCashdividends
noncontrollingshareholdersof the(689parentto transaction
Purchase
ofownershiptreasury stock(689
shares)ChangeininterestduetomergerbetweenChangeinofinterestduetomergerbetweenNet
incomeattributableto (338,589
ownersofthe parent
consolidated
andunconsolidated
subsidiaries
Disposaltreasurystockshares)Purchase
ofownershiptreasurystock(689
shares)noncontrollingshareholders
Netchangeintheyear
consolidated
andunconsolidated
subsidiaries
Disposalofownershiptreasurystock(338,589
shares)consolidated
and unconsolidated
subsidiaries
Cashdividends
Changeinoftheparentduetotransaction
interestduetomergerbetween with
Disposaloftreasurystock(338,589
shares)Netchangeintheyear
Change inin ownershipownership ofofthe parent
parentdue
to transaction
transaction
withinterest
due todue
mergerbetween with
ChangethetoPurchaseoftreasurystock(689
shares)noncontrollingshareholders
consolidated
andunconsolidated
subsidiaries
Changeinownership
interestduetomergerbetween
BALANCE,
MARCH
31,
2023
(APRIL1,
2023,
as previously
noncontrollingshareholders
consolidated
andunconsolidated
subsidiaries
noncontrollingshareholders
Changeinownershipoftheparentduetotransaction
with
Disposalof intreasurystock(338,589
shares)Netchangetheconsolidated
andyearunconsolidated
subsidiaries
reported)
1,466,912
BALANCE,
31,(APRIL1,to2023,
as previously
ChangeinMARCH
ownershipof2023the parent
duetransaction
withNetchangein thetheshareholders
yearNetchangeinyear
noncontrolling
Changein ownershipinterest
due todue
mergerbetween withof the parent
to transaction
reported)
1,466,912
noncontrolling shareholders
consolidated
andunconsolidated
subsidiaries
Netchangein
theyear
BALANCE,
MARCH
31,2023 (APRIL
1, 2023, as previously
noncontrollingshareholders
Cumulative
effectofaccountingchangeNet change
in the year
BALANCE,
MARCH
31,of2023
2023(APRIL1,to2023,
2023,
as previously
previously
BALANCE,
31,(APRILas
ChangeinMARCH
ownership
the parent
due1,
transactionwithreported)
1,466,912
Netchangeinthe year
Cumulative
effectof accounting changereported)
1,466,912
reported)
1,466,912
noncontrollingshareholders
BALANCE,
MARCH
31, 2023 (APRIL 1, 2023, as previously
BALANCE, APRIL
1,
2023
(as
restated)
(Note
2.r.)
1,466,912
MARCH 31, 2023 (APRIL 1, 2023, as previouslyNetchangeinthe yearreported)
1,466,912
BALANCE,
MARCH
31,
2023
(APRIL
1,
2023,
aspreviously
Cumulative
effectofaccountingchangeBALANCE,APRIL
1,of2023(as restated)(Note 2.r.)
1,466,912
reported)
Cumulative
effectaccountingchangeCumulative effect of accounting changereported)
1,466,912
BALANCE,
MARCH
31,
2023
(APRIL
1,
2023,
aspreviously
Cumulative
effect1,of2023
accountingchangeBALANCE,APRIL(asrestated)
(Note
2.r.)
1,466,912
Net
incomeattributableto(asownersof theparentCumulative
effect1,
of2023
accountingchangeBALANCE,
APRIL
restated)
(Note
2.r.)
reported)
1,466,912
BALANCE,APRIL(asrestated)
(Note
2.r.)
Cumulative
effect1,of2023
accountingchangeNet
attributable to owners of the parent
Cashincome
dividends
BALANCE, APRIL 1, 2023 (as restated) (Note 2.r.)
1,466,912
Cashdividends
Purchaseoftreasurystock(596
shares)BALANCE,APRIL
1,of2023(asrestated)(Note 2.r.)
1,466,912
Cumulative
effectaccountingchangeBALANCE,APRIL
1, 2023(asrestated)
(Note
2.r.)
1,466,912
Net
incomeattributabletoownersoftheparentPurchaseof treasury
treasury stock
stock(596 shares)
Disposalof(612,200
shares)Net
incomeattributabletoownersoftheparentNet
incomeattributable to owners of the parent
Cashdividends
Changeinownershipoftheparentduetotransaction
with
Disposaloftreasurystock(as(612,200
shares)Cashdividends
BALANCE,APRIL
1, 2023
restated)
(Note
2.r.)
1,466,912
Cashdividends
Net
incomeattributableoftheparentPurchasetreasurystock(596
shares)noncontrollingshareholders
Changeinofownershipof totheowners
parentduetransaction withNet
incomeattributabletoownersofthetoparent
Purchaseoftreasurystock(596
shares)Purchaseoftreasurystock(596
shares)Cashdividends
Net
incomeattributableto (612,200
owners ofshares)
the parent
Disposalof intreasurystock
noncontrollingNetchangetheshareholders
year
Cash
dividends
Disposaloftreasurystock(612,200
shares)
Disposaltreasurystockshares)Purchase
ofownershiptreasurystock(596
shares)Changeinofof the(612,200
parentdue
to transaction withCashdividends
Netchangeintheyear
Purchase
ofownershiptreasury stock(596
shares)Changeinoftheparentduetransaction
Changeinofownershipof tothe(612,200
parentdue
toparent
transaction withwithNet
incomeattributableownersoftheto
Disposaltreasurystockshares)noncontrollingshareholders
Purchaseoftreasurystock(596
shares)BALANCE,
MARCH
31,
2024
1,466,912
noncontrollingshareholders
Disposaloftreasurystock(612,200
shares)noncontrollingshareholders
Cashdividends
Changeinownershipoftheparentduetotransaction
withNetchangeintheyear
Disposalinoftreasury31,
stock
shares)BALANCE,
MARCH
1,466,912
Changeownershipof2024the(612,200
parent due
to transaction with
Netchange
in
the
year
Net
changeintheyear
Purchaseoftreasurystock(596
shares)noncontrollingshareholders
Changein ownershipof the parent due to transaction with
noncontrolling shareholders
Disposaloftreasurystock(612,200 shares)
Netchangeintheshareholders
year
noncontrolling
BALANCE,
MARCH
31,
2024
1,466,912
Net change
in the year
BALANCE,31,
1,466,912
ChangeinMARCH
ownership
the parent due to transaction withBALANCE,
MARCH
31,of2024
2024
1,466,912
Net change
in the year
noncontrollingshareholders
BALANCE, MARCH 31, 2024
1,466,912
BALANCE,
MARCH
31, 2024
1,466,912
Net change
in the year
BALANCE, MARCH 31, 2024
1,466,912

Commonstock
Commonstock
CommonCommonCommonstock¥33,196stock
stock
Common¥33,196
Commonstock
Commonstock
stock¥33,196¥33,196
Common¥33,196
stock¥33,196¥33,196¥33,196

CapitalsurplusCapitalsurplusCapitalCapitalCapitalsurplus¥548,586
surplussurplusCapital¥548,586
CapitalsurplusCapitalsurplussurplus¥548,586¥548,586
Capital¥548,586
surplus¥548,586(49)¥548,586¥548,586(49)¥33,196¥548,586
(49)
(49)
(49)
(1,191)(49)(1,191)(49)(49)(1,191)(1,191)(1,191)(49)
547,344(1,191)
547,344(1,191)(1,191)
547,344547,344547,344(1,191)
547,344547,344547,344547,344

33,19633,19633,19633,19633,19633,19633,19633,19633,19633,19633,19633,19633,19633,196

㼙㻙㻝

33,196

㼙㻙㻝

㼙㻙㻝
㼙㻙㻝
㼙㻙㻝

㼙㻙㻝
㼙㻙㻝

㼡㻙㻞

㼙㻙㻝

㼜㻙㻝

㼡㻙㻞

㼜㻙㻝

㼙㻙㻝

㼡㻙㻞
㼡㻙㻞
㼡㻙㻞

㼜㻙㻝
㼜㻙㻝
㼜㻙㻝

㼜㻙㻝

㼡㻙㻞
㼡㻙㻞
㼡㻙㻞

¥33,196¥33,196¥33,196¥33,196¥33,196¥33,196¥33,196¥33,196

㼡㻙㻟

㼡㻙㻟

㼡㻙㻟
㼡㻙㻟
㼡㻙㻟

㼡㻙㻟
㼡㻙㻟
㼡㻙㻟

547,344547,344547,344547,344547,344(109)(109)
547,344
(966)
(109)
(966)
(109)
(109)
(109)
(966)
¥546,268
(966)
(109)
(966)
(109)
¥546,268
(966)
(966)
(109)
(966)
¥546,268¥546,268¥546,268(966)¥546,268¥546,268¥546,268

Stockacquisition
Stockrightsacquisition
Stock
(Note
17)
rightsStock
Stockacquisition
(Note
17)
acquisitionacquisition
StockrightsStockrightsrightsacquisition
(Note
17)
Stock
¥1,861acquisition
(Note
17)
(Note
17)
rightsacquisition¥1,861rights
(Note
17)
Stock
rights(Note 17)acquisition
(Note
17)
¥1,861¥1,861rights¥1,861(Note
17)¥1,861¥1,861¥1,861¥1,861
276
276
㼕㻙㻠

㼕㻙㻠

㼕㻙㻠
㼕㻙㻠
㼕㻙㻠
N

㼕㻙㻠
N
㼕㻙㻠

㼕㻙㻠

N
N
㼕㻙㻠
N

N
N
N

N

276
2,138
276
276
2,138
276
276
2,138
276
2,138
2,138
2,138
276
2,138
2,138
2,138
2,138
2,138
2,138
2,138
2,138
2,138

㼕㻙㻡

㼕㻙㻡

㼕㻙㻡
㼕㻙㻡
㼕㻙㻡
N

㼕㻙㻡
N
㼕㻙㻡

㼕㻙㻡

N
N
㼕㻙㻡
N

N
N
N

N

(271)
(271)
㼡㻙㻠

㼡㻙㻠

㼡㻙㻠
㼡㻙㻠
㼡㻙㻠

㼡㻙㻠
㼡㻙㻠
㼡㻙㻠

¥1,866(271)¥1,866
(271)
(271)
(271)
¥1,866(271)¥1,866¥1,866(271)¥1,866¥1,866(271)¥1,866

㼡㻙㻡

㼡㻙㻡

㼡㻙㻡
㼡㻙㻡
㼡㻙㻡

㼡㻙㻡
㼡㻙㻡
㼡㻙㻡

Retainedearnings
Retainedearnings
Retained
Retained
Retainedearnings¥638,043
earnings
earnings
Retained¥638,043
Retainedearnings
Retainedearnings
116,241
earnings¥638,043
116,241(43,087)¥638,043
Retained¥638,043(43,087)
earnings¥638,043
116,241¥638,043
116,241
116,241¥638,043(43,087)(43,087)(43,087)
116,241(206)
116,241¥638,043(43,087)
116,241(206)(43,087)(43,087)
116,241
(206)
(206)
(206)
(43,087)
(206)
(206)
(206)
710,989
710,989(206)(7,957)710,989(7,957)710,989
710,989
703,032
710,989(7,957)703,032
710,989(7,957)(7,957)710,989(7,957)703,032
123,842(7,957)703,032
710,989
703,032(7,957)
123,842(51,723)
703,032(51,723)
703,032(7,957)703,032
123,842
123,842
123,842(51,723)(51,723)
703,032(51,723)
123,842
123,842(51,723)
123,842(51,723)(51,723)
123,842¥775,152(51,723)¥775,152¥775,152¥775,152¥775,152¥775,152¥775,152¥775,152

Net
Netg
avag
sale
ava
Net
Net
Net
saleg
g
avag
Net
ava
Net
ava
saleg
Net
sale
sale
avag
avag
sale
ava
Net
sale
saleg
ava
sale

Treasurystock
Treasurystock
Treasury
Treasury
Treasurystock¥(19,369)
stock
stock
Treasury¥(19,369)
Treasurystock
Treasury
stock
stock
¥(19,369)¥(19,369)
Treasury¥(19,369)
stock¥(19,369)
211¥(19,369)¥(19,369)
211¥(19,369)
211
211
211
211
211
211
㼕㻙㻢

㼕㻙㻢

㼕㻙㻢
㼕㻙㻢
㼕㻙㻢
N

㼕㻙㻢
N
㼕㻙㻢

㼕㻙㻢

N
N
㼕㻙㻢
N

N
㼚㻙㻢
N
N
㼚㻙㻢
㼛㻙㻢

㼛㻙㻢
N
㼚㻙㻢
㼚㻙㻢
㼚㻙㻢
㼛㻙㻢
㼛㻙㻢
㼛㻙㻢
㼚㻙㻢
㼚㻙㻢
㼛㻙㻢
㼚㻙㻢
㼡㻙㻢
㼛㻙㻢
㼛㻙㻢
㼡㻙㻢
㼚㻙㻢

㼛㻙㻢
㼡㻙㻢
㼡㻙㻢
㼡㻙㻢

㼡㻙㻢
㼡㻙㻢
㼡㻙㻢

211
(19,158)(19,158)(19,158)(19,158)(19,158)(19,158)(19,158)(19,158)(19,158)(19,158)(19,158)(19,158)(2,134)(19,158)(19,158)(2,134)398
398(19,158)(2,134)(2,134)(2,134)398
398
398(2,134)(2,134)398(2,134)¥(20,894)
398
398¥(20,894)(2,134)398¥(20,894)¥(20,894)¥(20,894)¥(20,894)¥(20,894)¥(20,894)

㼡㻙㻣

㼡㻙㻣

㼡㻙㻣
㼡㻙㻣
㼡㻙㻣

㼡㻙㻣
㼡㻙㻣
㼡㻙㻣

㼜㻙㻝

BALANCE, MARCH 31, 2024

㼜㻙㻝

㼜㻙㻝

BALANCE, MARCH 31, 2023 (APRIL 1, 2023, as previously
reported)
BALANCE,MARCH 31, 2023 (APRIL 1, 2023, as previously
reported)
BALANCE,
MARCH
2023 (APRIL
1, 2023, as previously
Cumulative
effect of31,
accountingchangeBALANCE,
MARCH
31,2023 (APRIL(APRIL
1, 2023,2023, asas previously
previously
BALANCE,
MARCH
31,
2023
1,
reported)
Cumulative
effectofaccountingchangereported)reported)
BALANCE, MARCH 31, 2023 (APRIL 1, 2023, as previously
APRIL 1, 31,2023(as (APRIL
restated)1,(NoteBALANCE, MARCH
2023
2023,2.r.)
as previously
reported)
BALANCE,
MARCH
2023
1,(Note2023,2.r.)
as previously
Cumulative
effect1,of31,
accountingchangeBALANCE,
APRIL
2023(as (APRIL
restated)reported)
Cumulative
effectofaccountingchangeCumulative effect of accounting changereported)Net
incomeattributabletoownersoftheparentBALANCE,
MARCH
2023(APRIL
1,(Note2023,2.r.)
as previously
Cumulative
effect1,of31,
accountingchangeBALANCE,
APRIL
restated)Net
incomeattributableto(asownersof theparentCashdividends
Cumulative
effect1,
of2023
accountingchangeBALANCE,
APRIL
2023
(as
(Note
reported)
BALANCE,APRIL(as restated)restated)(Note 2.r.)
2.r.)
Cumulative
effect1,of2023
accountingchangeCashdividends
Purchaseof treasury stock (596 shares)
BALANCE,APRIL
1, 2023to(asrestated)
(Note
2.r.)
Net
incomeattributableownersofshares)theparentPurchaseoftreasurystock(596
shares)
Disposaloftreasurystock(612,200
BALANCE,APRIL
1,of2023
restated)
(Note
2.r.)
Net
incomeattributabletoownersofparentCumulative
effectaccountingchangeNet
incomeattributableto(asownersof thetheparentBALANCE,
APRIL
1,
2023
(as
restated)
(Note
2.r.)
Cash
dividends
Changeinofownershipof the(612,200
parent due
to transaction
with
Disposaltreasury stock
shares)Cashdividends
Cashdividends
Net
incomeattributabletoownersofthetoparent
Purchaseoftreasurystock(596
shares)noncontrollingshareholders
Changeinownershipoftheparentduetransaction
withNet
incomeattributabletoownersoftheparentPurchaseoftreasurystock(596
shares)BALANCE,
APRIL
1,
2023
(as
restated)
(Note
2.r.)
Purchaseof treasury
treasury stock
stock(596 shares)
Cashdividends
Net
incomeattributableto (612,200
ownersofshares)the parent
Disposalofnoncontrollingshareholders
Netchange
in
the
year
Cash
dividends
Disposal ofof treasury
treasurystock(612,200
shares)
Disposalstock
shares)Purchasetreasurystock(596
shares)Changeinofownershipof the(612,200
parentdue
to transaction withCashdividends
Netchangeinthe year
Purchase
ofownershiptreasurystock(596
shares)Changeinoftheparentduetransaction
Changeinofownershipof tothe(612,200
parentdue
toparent
transaction withwithNet
incomeattributableownersofthetononcontrollingshareholders
Disposaltreasurystockshares)Purchaseoftreasurystock(596
shares)BALANCE,
MARCH
31,
2024
noncontrollingshareholders
Disposaloftreasurystock(612,200
shares)noncontrollingshareholders
Cashdividends
Changeinownershipoftheparentduetotransaction
withNet change
inthe year
Disposaltreasurystockshares)BALANCE,
MARCH
31,
Changeinofownershipof2024the(612,200
parent due
to transaction with
Netchange
in
the
year
Net
changeintheshareholders
year
Purchasetreasurystockshares)noncontrolling
Changeinofownershipof the(596parentdue to transaction with
noncontrolling shareholders
Disposaloftreasurystock(612,200 shares)
Netchangeintheshareholders
year
noncontrolling
BALANCE,
MARCH
31,
2024
SeeNetnotes
toinconsolidated
financialstatements.
changein the year
BALANCE,
MARCH
31,
Changeownership
the parent
due to transaction withBALANCE,
MARCH
31,of2024
2024
Net change
in the year
See notes
to consolidated
financial statements.
noncontrollingshareholders
BALANCE, MARCH 31, 2024
BALANCE,
MARCH
31, 2024
Net change
in the year
BALANCE,
MARCH
31,financial
2024 statements.
See notes to consolidated
See
notes
to
consolidated
See notes to consolidated financial
financial statements.
statements.

20

BALANCE,MARCH 31,financial
2024 statements.
See notes to consolidated
See notes to consolidated financial statements.

2024

See notes to consolidated financial statements.
Financial Information

1,466,912

㼡㻙㻞¥33,196㼡㻙㻟

¥546,268

㼡㻙㻠

Stock
¥1,866acquisition
Stockrightsacquisition
Stock
(Note
17)
rightsStock
Stockacquisition
(Note
17)
acquisitionacquisition
StockrightsStockrightsrightsacquisition
(Note
17)
Stock
acquisition
(Note
17)
(Note
17)
rightsacquisition$14,158
rights
(Note
17)
Stock
rights$14,158(Note
17)
acquisition(Note 17)
rights$14,158$14,158(Note
17)$14,158
14,158$14,158
14,158$14,158$14,158

Commonstock
Commonstock
CommonCommonCommon
stock
stock
stock
Common$219,841
Commonstock
Common$219,841
stock
stock
Common$219,841$219,841
stock$219,841
219,841$219,841
219,841$219,841$219,841

CapitalsurplusCapitalsurplusCapitalCapitalCapitalsurplussurplussurplusCapital$3,624,800
CapitalsurplusCapital$3,624,800
surplussurplusCapital$3,624,800$3,624,800
surplus$3,624,800
3,624,800$3,624,800
3,624,800$3,624,800$3,624,800

219,841
219,841$219,841
219,841
219,841
219,841
219,841

14,15814,158$14,158
14,15814,15814,15814,158$219,841$219,841$219,841$219,841$219,841$219,841

3,624,800
3,624,800$3,624,800
3,624,800
3,624,800(726)
3,624,800
3,624,800(726)(6,399)3,624,800(726)(6,399)(726)(726)(6,399)(726)$3,617,674(6,399)(726)(6,399)(726)$3,617,674(6,399)(6,399)(726)(6,399)$3,617,674$3,617,674$3,617,674(6,399)$3,617,674$3,617,674$3,617,674$219,841$3,617,674$12,362

219,841$219,841$219,841

14,158(1,796)(1,796)$12,362(1,796)$12,362(1,796)(1,796)(1,796)$12,362(1,796)$12,362$12,362(1,796)$12,362$12,362(1,796)$12,362㼡㻙㻡¥775,152
Retainedearnings
Retainedearnings
Retained
Retained
Retainedearnings
earnings
earnings
Retained$4,708,542
Retainedearnings
Retained$4,708,542
earnings
earnings(52,698)
Retained$4,708,542(52,698)$4,708,542
earnings$4,708,542
4,655,844$4,708,542(52,698)
4,655,844$4,708,542(52,698)(52,698)$4,708,542
820,150(52,698)
4,655,844
820,150(342,536)(52,698)
4,655,844$4,708,542
4,655,844(52,698)(342,536)
4,655,844
820,150
4,655,844
820,150(52,698)
820,150
4,655,844(342,536)(342,536)(342,536)
820,150
820,150
4,655,844(342,536)
820,150(342,536)(342,536)
820,150$5,133,458(342,536)$5,133,458

㼡㻙㻢¥(20,894)
Treasurystock
Treasurystock
Treasury
Treasury
Treasury
stock
stock
stock
Treasury($126,876)
Treasurystock
Treasury($126,876)
stock
stock
Treasury($126,876)($126,876)
stock($126,876)(126,876)($126,876)(126,876)($126,876)($126,876)$5,133,458$5,133,458$5,133,458$5,133,458$5,133,458$5,133,458(126,876)(126,876)($126,876)(126,876)(14,133)(126,876)(14,133)
2,636(126,876)(126,876)
2,636(14,133)(14,133)(126,876)(14,133)
2,636
2,636
2,636
(14,133)(14,133)
2,636(14,133)($138,372)
2,636
2,636
($138,372)(14,133)
2,636($138,372)($138,372)($138,372)($138,372)($138,372)($138,372)$5,133,458($138,372)

㼡㻙㻣

Net
Netg
avag
sale
ava
Net
Net
Net
saleg
g
avag
Net
ava
Net
avag
sale
Net
sale
sale
avag
avag
sale
ava
Net
sale
saleg
ava
sale

Millions of yen
Millions ofyen
Accumulated other comprehensive
incomeAccumulated other comprehensive income
Millions of yen
Millions of yen
Millionsof yenMillionsyenkForeign ofAccumulated
Accumulated
other Deferredcomprehensive
othercomprehensive
incomeincomeNet unrealized
gain
Accumulated
othercomprehensive
incomeAccumulated
othercomprehensive
incomeion
Millions
yen Definedkcurrency
Foreign ofononderivatives
Netgainunrealized
DeferredgainMillions of yen
sion
Retained
Treasury
Noncontrolling
Totaltranslation
other comprehensive
incomecurrency
Definedavailable-forunderhedge
Millions of
yen retirement
gain on Accumulatedonderivatives
Accumulated Foreignother comprehensive
ksForeign income
17)
earnings
stock
interests
equityTotal
Retained
Treasury
Noncontrolling
Total
sale
securities
accounting
adjustments
benefitplans
translation
retirement
available-forunderhedge
Net unrealizedNet
unrealized
Deferredgain Deferredgain comprehensive
Accumulated
otherincomekk
Foreign
ForeignNetunrealized
Deferredgain
ioncurrency
currency
DefinedDefinedNet
unrealized
Deferredgain
17)
earnings
stock
interests
equityTotal
MillionsofMillions
yen
of
yen
sale
securities
accounting
adjustments
benefit
plans
gain
on
gain
on
on
derivatives
onderivativesioncurrency
Definedgain
onon derivatives
currency
Definedketainedsion
Retained
Treasury Treasury
Noncontrolling
Noncontrolling
Total
Total
Foreign
gain
on Accumulated
derivatives
translationtranslation
retirement retirement
available-for-Accumulated
available-forunder
hedge
under
hedge
otheroncomprehensive
otherincomeNetunrealized
Deferredgain comprehensive
kss
Retained
Treasury
Noncontrolling
Total
Foreign incomeretirementtranslation
available-forunder
hedge
Retained
TreasuryTotaltranslation
retirementNet
unrealized
Deferredgainionavailable-forunder
hedge
17)
rningsearnings
stock
stock
interestsequity
equityTotal
Totalinterests Noncontrollingcurrency
Definedk861
sale securities salegain
securities
accounting
accounting
adjustments
adjustments
benefit plansbenefit
plans
Foreignononderivatives¥638,043¥(19,369)¥15,347¥1,460¥92,776¥123¥1,312,025¥21,835¥1,333,861
Net
unrealized
Deferred
gain
ion
17)
earnings
stock
interests
equityTotal
currency
Definedsale
securities
accounting
adjustments
benefitplans
17)
earnings
stock
interests
equity
Total
gain
on
on
derivatives
salesecurities
accounting
adjustments
benefitplans
sion
Retained
Treasury
Noncontrolling
Totaltranslation
retirement
available-forunderhedge
currency
Definedgainononderivatives¥638,043¥(19,369)¥15,347¥1,460¥92,776¥123¥1,312,025¥21,835¥1,333,861
s861
Retained
Treasury
Noncontrolling
Totaltranslation
retirement
available-forunder
hedge
17)
earnings
stock
interests
equity
Total
ks
sale
securities
accounting
adjustments
benefitplans
Foreign
Foreign
Retained
Treasury
Noncontrolling
Totaltranslation
retirement
available-forunder
hedge
Net
unrealizedNet
unrealized
Deferredgain
Deferredgain
17)
earnings
stock
interests
equityTotal
116,241
116,241
116,241
sale securities
accounting
adjustments
benefit plansioncurrency
currency
DefinedDefined17)
stockgain
equityTotal ¥21,835 interests
securities
adjustments
benefitplans
on salegain
ononderivatives
onaccounting
derivatives
861
638,043 earnings¥638,043¥(19,369)¥(19,369)¥15,347¥15,347¥1,460¥1,460¥92,776¥92,776¥123¥123¥1,312,025¥1,312,025¥21,835¥1,333,861¥1,333,861
116,241
116,241
116,241(43,087)(43,087)(43,087)¥638,043¥(19,369)¥15,347¥92,776¥123¥1,312,025¥21,835¥1,333,861
s861
Retained
Retained
Treasury Treasury
Noncontrolling
Noncontrolling
Total
Total
translation translation
retirement retirement
861¥638,043¥(19,369)¥15,347¥1,460¥92,776¥123¥1,312,025¥21,835¥1,333,861
available-for-available-forunder hedge under¥1,460
hedge(43,087)(43,087)(43,087)17)
arnings
earnings
stock
stock
interests
interests
equityequityTotal
Total
sale securitiessale securities
accounting accounting
adjustmentsadjustments
benefit plansbenefit plans
861¥(19,369)¥15,347¥1,460¥92,776¥123116,241 ¥1,312,025¥21,835116,241 ¥1,333,861
116,241 ¥638,043
116,241
116,241
116,241
211
161
161
861
¥638,043¥(19,369)¥15,347¥1,460¥92,776¥123¥1,312,025¥21,835¥1,333,861
116,241
116,241
116,241
116,241
116,241
116,241861¥(19,369)¥15,347¥1,460¥92,776¥123(43,087) ¥1,312,025¥21,835(43,087) ¥1,333,861(43,087) ¥638,043(43,087)(43,087)(43,087)
211
161
161
(43,087)(43,087)(43,087)(43,087)(43,087)(43,087)
116,241
116,241
116,241
(206)
(206)
(206)
116,241
116,241
116,241¥638,043
861¥638,043¥(19,369)¥(19,369)¥15,347¥15,347¥1,460¥1,460¥92,776¥92,776¥123¥123¥1,312,025¥1,312,025¥21,835¥21,835¥1,333,861¥1,333,861(43,087)(43,087)(43,087)
116,241
116,241
116,241
211
161
161
161
161
(206) 211
(206)
(206)
(43,087)(43,087)(43,087)
211
161
161
211
161
161
(43,087)(43,087)(43,087)(1,191)(1,191)
116,241
116,241
116,241
116,241
116,241
116,241
(206)
(206)
(206)
(206)
(206)
(206)
211
161
161
(1,191)(1,191)276(529)
51,591
93,7691,861
146,969(1,717)145,252
(206)
(206)
(206)
211
161
161
(206)
(206)
(206)
(43,087) (43,087)(43,087)(43,087)
211
161
161
276
(529)
51,591
93,7691,861 (43,087) 146,969(1,717)(43,087) 145,252(1,191)(1,191)(1,191)(1,191)
(206)
(206)
(206)
(1,191)(1,191)
(206)
(206)
(206)
(1,191)(1,191)
211(529)
161 1,530,911
161(1,717)
161 1,551,029
161
276
(529)
51,591
51,591
93,76993,7691,861
1,861146,969
146,969(1,717)145,252
145,252(206) 211
(206)
(206)
138
710,989(19,158)
14,81753,051
186,545
1,985
20,118276(529)
51,591
93,7691,861
146,969(1,717)145,252276(529)
51,591
93,7691,861
146,969(1,717)145,252(1,191)(1,191)
138
710,989(19,158)
14,81753,051
186,545
1,985
1,530,911
20,118
1,551,029(1,191)(1,191)(206)(206) 146,969
(206)
(206)
276 (206)(529)
51,591
93,7691,861(1,717) (206) 145,252(1,191)(1,191)(7,957)(7,957)(7,957)276(529)
51,591
93,7691,861
146,969(1,717)145,252138
710,989
710,989(19,158)(19,158)
14,817
14,81753,05153,051
186,545
186,545
1,985
1,985
1,530,911
1,530,911
20,118
20,118
1,551,029
1,551,029
276(529)
51,591
93,7691,861
146,969(1,717)145,252(7,957)(7,957)(7,957)138
710,989(19,158)
14,81753,051
186,545
1,985
20,118138
710,989(19,158)
14,81753,051
186,545
1,985 (1,191) 1,530,911
1,530,911
20,118 (1,191) 1,551,029
1,551,029(1,191)(1,191)
138
703,032(19,158)
14,81753,051
186,545
1,985
1,522,953
20,1181,543,072
276(529)
51,591
51,591
93,769 186,545
93,7691,861
1,861
146,969(1,717)(1,717)145,252
145,252138
710,989(19,158) (529)
14,81753,051
1,985 146,969
1,530,911
20,118
1,551,029(7,957)(7,957)(7,957)(7,957)(7,957)(7,957)138
703,032(19,158)
14,81753,051
186,545
1,985
1,522,953
20,1181,543,072
710,989
1,530,911
1,551,029(7,957)(7,957)(7,957)(7,957)(7,957)(7,957)138
710,989(19,158)
14,81753,051
186,545
1,985
1,530,911
20,118
1,551,029(7,957)(7,957)(7,957)138
703,032
703,032(19,158)(19,158)
14,817
14,81753,05153,051
186,545
186,545
1,985
1,985
1,522,953
1,522,953
20,118
20,1181,543,072
1,543,072
123,842
123,842(7,957)(7,957)20,118(7,957)703,032
1,522,953
1,543,072
138
710,989 123,842
710,989(19,158) (19,158)
14,817
14,81753,05153,051
186,545 186,5451,985
1,985
1,530,911 1,530,911
20,118
1,551,029 1,551,029
703,032
1,522,953
1,543,072(7,957)(7,957)(7,957)
123,842
123,842
123,842(51,723)(51,723)(51,723)138
703,032(19,158)
14,81753,051
186,545
1,985
1,522,953
20,1181,543,072(51,723)(51,723)(51,723)(2,134)(2,134)(2,134)
138(7,957) 703,032(19,158)
14,81753,051
186,545
1,985
1,522,953
20,1181,543,072(7,957)(7,957) 1,522,953(7,957)(7,957) 1,543,072(7,957)138
703,032(19,158)
14,81753,051
186,545
1,985123,842
20,118123,842
123,842
123,842
123,842
123,842(2,134)(2,134)(2,134)398
288
288
123,842
123,842
123,842
123,842
123,842
123,842(51,723)(51,723)(51,723)(51,723)(51,723)(51,723)398
28820,118
288(51,723)(51,723)(51,723)138
703,032 703,032(19,158)(19,158)
14,817
14,81753,05153,051
186,545
186,545
1,985
1,985
1,522,953
1,522,953
20,1181,543,072
1,543,072(51,723)(51,723)(51,723)
123,842(2,134)(2,134)(2,134) 123,842(2,134)(2,134) 123,842(2,134)(966)(966)
123,842
123,842
123,842(2,134)(2,134)(2,134)(2,134)(2,134)(2,134)(51,723) 398(51,723)(51,723)
123,842
123,842
123,842
398
288
288
288
(966)
(966)
271)
169
(16,234)
105,931
5,276
94,872(1,906) 288
92,965(51,723)(51,723)(51,723)
398
288
288
398
288
288
(2,134)(2,134)(2,134)(51,723)(51,723)(51,723)271)
169(16,234)
105,931
5,276
94,872(1,906)
92,965(2,134)(2,134)(2,134)
123,842 123,842
123,842
123,842
123,842
123,842
398
288
288
(966)
(966)
(966)
(966)
(2,134)(2,134)(2,134)866¥(20,894)¥14,987¥36,817¥292,477¥7,262 (51,723)¥1,687,134¥18,211 (51,723)¥1,705,345
(966)
(966)
398
288
288
(966)
(966)
(51,723) ¥775,152(51,723)(51,723)(51,723)271)
169(16,234)(16,234)
105,931
105,9315,276
5,276 94,872
94,872(1,906)92,965
92,965398 169288(1,906) ¥18,211
288
866¥775,152¥(20,894)¥14,987¥36,817¥292,477¥7,262¥1,687,134¥1,705,345
271)
169(16,234)
105,931
5,276
94,872(1,906)
92,965271)
169(16,234)
105,931
5,276 (2,134)
94,872(1,906)
92,965(2,134)(2,134)(2,134)(2,134)(2,134)
(966)
(966)
(966)
(966)
398 ¥(20,894)
398
288 ¥1,687,134
288
288 ¥1,705,345
288
271)
169
(16,234)
105,931
5,276
94,872(1,906)
92,965
(966)
(966)
866
775,152 ¥775,152¥(20,894)¥14,987¥14,987¥36,817¥36,817¥292,477 ¥292,477¥7,262¥7,262¥1,687,134¥18,211¥18,211¥1,705,345
271)
169(16,234)
105,931
5,276
94,872(1,906)
92,965866¥775,152¥(20,894)¥14,987¥36,817¥292,477¥7,262¥1,687,134¥18,211¥1,705,345
866¥775,152¥(20,894)¥14,987¥36,817¥292,477¥7,262¥1,687,134¥18,211¥1,705,345
271)
169(16,234)
105,931
5,276
94,872(1,906)
92,965
Thousands of U.S. dollars (Note 1)(966)¥1,687,134
(966)
(966)
866
¥775,152¥(20,894)¥14,987¥36,817¥292,477¥7,262¥18,211 (966)¥1,705,345
866¥775,152¥(20,894) 169 ¥14,987¥36,817¥292,477¥7,262Thousandsof U.S.income
dollars (Note1) 94,872 ¥1,687,134
271)
169(16,234)(16,234)
105,931
105,9315,276
5,276
94,872 (1,906) ¥18,211(1,906) 92,965 ¥1,705,345
92,965
Accumulated
othercomprehensive
866¥775,152¥(20,894)¥14,987¥36,817¥292,477¥7,262¥1,687,134¥18,211¥1,705,345
Accumulated other comprehensive income
Thousands ofThousands
U.S. dollarsof (Note
U.S. dollars
1)(Note 1)kForeigngain
Thousandsofdollars
1)¥775,152866¥775,152¥(20,894) ¥(20,894)¥14,987Net unrealized¥14,987¥36,817Deferred¥36,817¥292,477¥292,477¥7,262¥1,687,134 ¥1,687,134¥18,211 ¥18,211¥1,705,345 ¥1,705,345
Thousandsof U.S.
U.S.¥7,262
dollars (Note(Note1)
currencykion
Accumulated
other oncomprehensive
othercomprehensive
incomeForeign income Definedon Accumulated
derivatives
Netgainunrealized
Deferredgain
Accumulated
othercomprehensive
incomeAccumulated
othercomprehensive
incomeThousandsofU.S.
dollars
(Note
1)
sion
Retained
Treasurytranslation
retirement
NoncontrollingTotalcurrency
Definedavailable-forunderhedgeThousands
gain ononderivativesof U.S. dollars(Note 1)ks
Foreign
Foreign
Accumulated
othercomprehensive
Thousandsof U.S.income
dollars
(Note
1)
17)
earnings
stock
sale
securities
accounting
adjustments
benefitplans
Totalinterests
equityRetained
Treasurytranslation
retirement
Noncontrolling
Total
available-forunderhedge
Net unrealizedNet
unrealized
Deferredgain DeferredgainkkForeign
Accumulated
othercomprehensive
income Defined
ForeignNetunrealized
Deferredgain
ioncurrency
currency
DefinedNet
unrealized
Deferredgain comprehensive
17)
earnings
stock
sale
securities
accounting
adjustments
benefitplans
Totalinterests
equitygain
ononderivatives
gain
on
on
derivatives
Accumulated
otherincomeion
currency
Definedgainononderivatives
currency
Definedketained
Foreign
gain
on hedge ThousandsonderivativesofThousands
U.S. translation
dollars
of
U.S.
(Note
dollars1) retirement(Note 1)sion
Retained
Treasury Treasurytranslation
retirement
Noncontrolling
Noncontrolling
Total
Total
available-for- Net
underavailable-forunder
hedge
unrealized
Deferredgain
kssRetained
Treasury
Foreigntranslation
retirement
Noncontrolling
Total
available-forunder
hedge
Retained
Treasurytranslation
retirement
Total
Net
unrealized
Deferredgainavailable-forunderhedge
currency
Defined17)
rningsearnings
stock
stock
sale securitiesAccumulatedsale
securities
accounting
accounting
adjustments
adjustments
benefitplans
benefitplans
Total
Totalinterests Noncontrollinginterestsequity
equitykion
Accumulated
othercomprehensive
othercomprehensive
incomeincomeForeign
gain
ononderivatives
Net
unrealized
Deferred
gain
ion
17)
earnings
stock
currency
Definedsale
securities
accounting
adjustments
benefitplans
Totalinterests
equitygain
ononderivatives
17)
earnings
stock
sale
securities
accounting
adjustments
benefitplans
Totalinterests
equitysion
Retained
Treasurytranslation
retirement
Noncontrolling
Total
available-forunderhedge
currency
Definedgainononderivatives$4,708,542($126,876)$98,132$351,335$1,235,402$13,148$10,138,485$133,235$10,271,721
s158
Retained
Treasurytranslation
retirement
Noncontrolling
Total
available-forunder
hedge
17)
earnings
stock
ks
sale
securities
accounting
adjustments
benefitplans
Totalinterests
equityForeign
Foreign
Retained
Treasurytranslation
retirement
Noncontrolling
Total
available-forunderhedge
Net unrealizedNet
unrealized
Deferred gainDeferredgain
158$4,708,542($126,876)$98,132$351,335$1,235,402$13,148$10,138,485$133,235$10,271,721
17)
earnings
stock
sale
securities
accounting
adjustments
benefitplans
Totalinterests
equityion
currency
currency
DefinedDefined17)
earnings
stockgain on salegain
securities
adjustments
benefit plans
Totalinterests
equityonon
derivativesonaccounting
derivatives(52,698)(52,698)(52,698)
s158
Retained
Retained
Treasury Treasurytranslation translation
retirement
Noncontrolling
Noncontrolling
Total
Total
available-forunderhedge under
hedge
708,542 $4,708,542($126,876)($126,876)$98,132 available-for$98,132$351,335$351,335$1,235,402$1,235,402$13,148 retirement$13,148$10,138,485$10,138,485$133,235$133,235$10,271,721$10,271,721(52,698)(52,698)(52,698)
158$4,708,542($126,876)$98,132$351,335$1,235,402$13,148$10,138,485$133,235$10,271,721
17)
arnings
earnings
stock
stock
sale
securities
sale
securities
accounting
accounting
adjustments
adjustments
benefitplans
benefit
plans
Total
Total
interests
interests
equityequity158$4,708,542($126,876)$98,132$351,335$1,235,402$13,148$10,138,485$133,235$10,271,721
158
4,655,844(126,876)
98,132
351,335
1,235,402
13,14810,085,786
133,235
10,219,022
158($126,876)$98,132$351,335$1,235,402$13,148(52,698)$10,138,485$133,235(52,698)$10,271,721(52,698) $4,708,542(52,698)(52,698)(52,698)
158
4,655,844(126,876)
98,132
351,335
1,235,402
13,14810,085,786
133,235
10,219,022$4,708,542($126,876)$98,132$351,335$1,235,402$13,148$10,138,485$133,235$10,271,721(52,698)(52,698)(52,698)(52,698)(52,698)(52,698)
158$4,708,542($126,876)$98,132$351,335$1,235,402$13,148$10,138,485$133,235$10,271,721
820,150
820,150
820,150(52,698)(52,698)(52,698)158
655,844 4,655,844(126,876)(126,876)
98,132
98,132
351,335
351,335
1,235,402
1,235,402
13,14813,14810,085,786
10,085,786
133,235
133,235
10,219,022
10,219,022
820,150
820,150
820,150(342,536)(342,536)(342,536)(52,698)(52,698)(52,698)
158
4,655,844(126,876)
98,132
351,335
1,235,402
13,14810,085,786
133,235
10,219,022
4,708,542$4,708,542($126,876) ($126,876)$98,132 $98,132$351,335 $351,335$1,235,402 $1,235,402$13,148 $13,148$10,138,485$10,138,485$133,235 $133,235$10,271,721$10,271,721
158
4,655,844(126,876)
98,132
351,335
1,235,402
13,14810,085,786
133,235
10,219,022(52,698)(52,698)(52,698)(342,536)(342,536)(342,536)(14,133)(14,133)(14,133)
158
4,655,844(126,876)
98,132
351,335
1,235,402
13,148820,150 10,085,786
133,235820,150 10,219,022
820,150
820,150
820,150
820,150(14,133)(14,133)(14,133)
2,636
1,910
1,910
158
4,655,844(126,876)
98,132
351,335
1,235,402
13,148 (52,698)10,085,786
133,235 (52,698)10,219,022
820,150
820,150
820,150(52,698)(52,698)(52,698)(52,698)
820,150
820,150
820,150
158(126,876)
98,132
351,335
1,235,402
13,148133,235
342,536) 4,655,844(342,536)(342,536) 10,085,786(342,536)(342,536) 10,219,022(342,536)
2,636
1,910
1,910
(342,536)(342,536)(342,536)(342,536)
820,150
820,150
820,150(14,133)(14,133)(14,133) (342,536)(14,133)(14,133) (342,536)(14,133)(6,399)(6,399)820,150
820,150
820,150(14,133)(14,133)(14,133)
4,655,844
158
4,655,844(126,876)(126,876)
98,132
98,132
351,335
351,335
1,235,402
1,235,402
13,14813,14810,085,786
10,085,786
133,235
133,235
10,219,022
10,219,022(14,133)(14,133)(14,133)(342,536)
820,1502,636
820,150
820,150
2,636
1,910
1,910
(6,399)(6,399)796)
1,121(107,510)
701,535
34,945 1,910 (342,536)
628,295(12,628) 1,910 (342,536)
615,667(342,536)(342,536)(342,536)
2,636
1,910
1,910
2,636
1,910
1,910
(14,133)(14,133)(14,133)(342,536)(342,536)(342,536)
796)
1,121
(107,510)
701,535
34,945628,295(12,628)
615,667(14,133)(14,133)(14,133)
820,150 820,150
820,150
820,150
820,150
820,150(6,399)(6,399)(6,399)(6,399)
2,636
1,910
1,910
(14,133)(14,133)(14,133)
362$5,133,458($138,372)$99,254$243,824$1,936,937$48,094$11,173,074$120,606$11,293,681(6,399)(6,399)
2,636
1,910
1,910
(6,399)(6,399)(342,536) (342,536)(342,536) (342,536)(342,536) (342,536)
796)
1,121
(107,510) $243,824(107,510)
701,535 $1,936,937
701,535
34,94534,945628,295
628,295(12,628) $120,606(12,628)
615,667
615,667
2,6361,121
1,910
1,910
362
$5,133,458($138,372)$99,254$48,094$11,173,074$11,293,681
796)
1,121
(107,510)
701,535
34,945628,295(12,628)
615,667
796)
1,121(107,510)
701,535
34,945628,295(12,628)
615,667(14,133) (14,133)(14,133) (14,133)(14,133) (14,133)(6,399)(6,399)(6,399)(6,399)2,636 ($138,372)
2,636
1,910$11,173,074
1,910
1,910$11,293,681
1,910
796)
1,121
(107,510)
701,535
34,945628,295(12,628)
615,667(6,399)(6,399)362
133,458 $5,133,458($138,372)$99,254$99,254$243,824 $243,824$1,936,937 $1,936,937$48,094$48,094$11,173,074$120,606 $120,606$11,293,681
796)
1,121
(107,510)
701,535
34,945628,295(12,628)
615,667362$5,133,458($138,372)$99,254$243,824$1,936,937$48,094$11,173,074$120,606$11,293,681
362$5,133,458($138,372)$99,254$243,824$1,936,937$48,094$11,173,074$120,606$11,293,681
796)
1,121
(107,510)
701,535
34,945628,295(12,628)
615,667(6,399)(6,399)362$5,133,458($138,372)$99,254$243,824$1,936,937$48,094 (6,399)$11,173,074$120,606 (6,399)$11,293,681
362$5,133,458($138,372)1,121 $99,254
796)
1,121
(107,510) $243,824(107,510)
701,535 $1,936,937
701,535
34,945 $48,094
34,945 628,295$11,173,074
628,295(12,628) $120,606(12,628)615,667$11,293,681
615,667362$5,133,458($138,372)$99,254$243,824$1,936,937$48,094$11,173,074$120,606$11,293,681
㼕㻙㻡

㼕㻙㻢

㼕㻙㻡

㼕㻙㻢

㼕㻙㻡

㼕㻙㻢

㼕㻙㻢
㼕㻙㻢
㼕㻙㻢

㼕㻙㻡
㼕㻙㻡

N

N

㼕㻙㻡

㼕㻙㻢

N
㼕㻙㻡

N
㼕㻙㻢

㼕㻙㻢

㼕㻙㻡

N
N
㼕㻙㻡
N

N

㼕㻙㻢

N

N
㼕㻙㻢
N

N

N

N

㼚㻙㻢
N
N

N

㼚㻙㻢
㼛㻙㻢

N

N

㼛㻙㻢
N

㼚㻙㻢

㼚㻙㻢

㼛㻙㻢

㼚㻙㻢
㼚㻙㻢
㼛㻙㻢
㼛㻙㻢
㼛㻙㻢
㼚㻙㻢
㼚㻙㻢
㼛㻙㻢
㼚㻙㻢

㼡㻙㻢
㼛㻙㻢

㼡㻙㻡

㼡㻙㻣

㼛㻙㻢

㼡㻙㻢

㼡㻙㻡

㼡㻙㻡

㼚㻙㻢

㼚㻙㻢

㼛㻙㻢

㼛㻙㻢

㼡㻙㻢

㼡㻙㻢

㼡㻙㻣

㼡㻙㻣

㼡㻙㻣

㼡㻙㻡
㼡㻙㻡

㼡㻙㻢
㼡㻙㻢

㼡㻙㻣
㼡㻙㻣

㼡㻙㻡

㼡㻙㻢

㼡㻙㻣

㼡㻙㻡

㼡㻙㻢

㼡㻙㻣

㼡㻙㻡

㼡㻙㻢

㼡㻙㻣

㼡㻙㻡

㼡㻙㻢

㼡㻙㻢

㼡㻙㻣

㼡㻙㻣

5,133,458
362$5,133,458($138,372) ($138,372)$99,254$99,254$243,824 $243,824$1,936,937 $1,936,937$48,094$48,094$11,173,074$11,173,074$120,606 $120,606$11,293,681$11,293,681
Financial Information

2024

21

Consolidated Statements of Cash Flows

Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Years ended March 31, 2024 and 2023

Thousands of U.S.
dollars (Note 1)

Millions of yen

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

22

Financial Information

2024

2024

2023

2024

¥167,676¥153,164$1,110,441(7,852)
349,319(11,845)
213,422(4,273)(52,006)
2,313,374(78,448)
1,413,394(28,301)(6,947)(4,822)(53,800)
350,108(13,265)
165,768
1,006(7,194)(2,996)(1,159)31,74564,179(61,325)
23,458210,233
425,031(9,530)10,9242,211(884,863)(21,718)
63,245(216,805)(49,128)

14,385(22,646)4,185(479,501)(16,629)(6,803)(106,411)
46,752(63,114)72,35014,645(5,860,025)(143,830)
418,845(1,435,796)(325,354)(7,532)(49,886)(2,965)23,412(849)
12,167(8,659)(60,714)
186,516
1,960
143,336(8,793)738(9,981)
20,302(14,157)
2,816(4,677)(252,427)
139,045(186)(127,322)(19,635)
155,048(5,626)80,580(57,345)(402,080)
1,235,210
12,985949,250(205,345)
204,526

80,025(130,161)(1,359,902)
1,354,479

304,665

519,089

2,017,651(369,364)
1,212,669(1,097,132)
494,368(704,767)(51,723)(3,227)385(407,007)
1,065,363(990,689)
361,330(463,710)(43,087)(2,552)7,282(2,446,120)
8,030,927(7,265,781)
3,273,963(4,667,333)(342,536)(21,371)
2,552(1,834)(6,199)(222,977)
3,589(125,179)(3,553)(1,276)(8,948)29,816(59,701)(12,147)(41,054)(1,476,673)
23,774(829,003)

460,486¥335,307104
520,083¥460,486

3,049,580$2,220,576(46,008)(31,935)

Additional information

Transfer of DFL Lease Co., Ltd. ("DFL Lease") (Note 3.b.)Proceeds from sales of consolidated subsidiaries mainly consist of the transfer of DFL Lease.
On January 4, 2024, the Company transferred entire shares of DFL Lease according to the share transfer agreement
executed on November 8, 2023.
Reconciliation of the net cash paid for the transfer of DFL Lease is as follows:
Millions of yen

Current assets
Fixed assets
Current liabilities
Long-term liabilities
Noncontrolling interests
Gain on sales of shares of subsidiaries and affiliates
Transfer amount
Cash and cash equivalents
Net cash received from transfer of shares of DFL Lease

Thousands of U.S.
dollars (Note 1)

2024

2024

¥64,067
3,866(35,888)(27,390)
(931)
1,475
5,199
(373)
¥4,825$424,286
25,604(237,671)(181,394)(6,165)9,770
34,432(2,476)$31,956

Transfer of Shutoken Leasing Co., Ltd. ("Shutoken Leasing") (Note 3.c.)Payments for sales of consolidated subsidiaries mainly consist of the transfer of Shutoken Leasing.
On January 4, 2024, the Company transferred entire shares of Shutoken Leasing according to the share transfer
agreement executed on November 8, 2023.
Reconciliation of the net cash paid for the transfer of Shutoken Leasing is as follows:
Millions of yen

Current assets
Fixed assets
Current liabilities
Long-term liabilities
Net unrealized loss on available-for-sale securities
Noncontrolling interests
Loss on sales of shares of subsidiaries and affiliates
Transfer amount
Cash and cash equivalents
Net cash paid for transfer of shares of Shutoken Leasing

Thousands of U.S.
dollars (Note 1)

2024

2024

¥158,247
6,870(95,434)(63,124)(319)(1,921)(847)
3,470(4,172)¥(701)$1,047,995
45,503(632,016)(418,043)(2,115)(12,722)(5,614)22,982(27,630)$(4,647)

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

Current assets
Fixed assets
Current liabilities
Long-term liabilities
Loss on sales of shares of subsidiaries and affiliates
Transfer amount
Cash and cash equivalents
Net cash paid for transfer of shares of Diamond Asset Finance¥198,411
8,709(70,312)(129,403)(1,006)
6,400(20,557)¥(14,157)

Financial Information

2024

23

Exclusion of Mitsubishi HC Capital Auto-Lease Corporation ("Mitsubishi HC Capital Auto-Lease") from scope of consolidation (Note 3.e.)Mitsubishi HC Capital Auto-Lease increased capital through third-party allotment. As a result, the Company
excluded Mitsubishi HC Capital Auto-Lease from scope of consolidation and applied equity method.
Details of assets and liabilities of Mitsubishi HC Capital Auto-Lease at the exclusion from scope of consolidation are as follows:
Millions of yen
2023

Current assets (*)
Fixed assets
Total assets¥47,235
53,758¥100,993

Current liabilities
Long-term liabilities
Total liabilities¥86,062410¥86,472(*) Cash and cash equivalents of ¥112 million is included. The amount of difference from paid-in capital from noncontrolling shareholders of ¥7,394 million is ¥7,282 million, which was recorded as proceeds from share issuance to noncontrolling shareholders in consolidated statementof cash flows.

24

Financial Information

2024

Notes to Consolidated Financial Statements
Mitsubishi HC Capital Inc. and Consolidated Subsidiaries
Years ended March 31, 2024 and 2023

1. Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated financial statements of Mitsubishi HC Capital Inc. (the “Company”) and its
consolidated subsidiaries (collectively, the “Companies”) have been prepared in accordance with theprovisions set forth in the Japanese Financial Instruments and Exchange Act and its related accounting
regulations and in accordance with accounting principles generally accepted in Japan, which are different incertain respects as to the application and disclosure requirements of IFRS Accounting Standards.
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 the2023 consolidated financial statements to conform to the classifications used in 2024.
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 ¥151 to
USD1, the approximate rate of exchange at March 31, 2024.
Such translations should not be construed as representations that the Japanese yen amounts could be
converted into U.S. dollars at that or any other rate.
Japanese yen figures less than a million yen and U.S. dollar figures less than thousand dollars are rounded
down to the nearest million yen and thousand dollars, except for per share data. As a result, totals in millionsof yen and thousands of U.S. dollars may not add up exactly.
2. Summary of Significant Accounting Policies
a. Consolidation — The consolidated financial statements as of and for the year ended March 31, 2024,
include the accounts of the Company and its 245 (254 in 2023) 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 2023) unconsolidated subsidiary and 67 (70 in 2023) 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 66
such collective investment vehicles in 2024 (54 in 2023).
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 thenended. Certain subsidiaries have prepared provisional statements of accounts, prepared in the equivalent way
as the year-end closing, as of March 31, 2024.

Financial Information

2024

25

If a consolidated foreign subsidiary prepares the financial statements in accordance with IFRS AccountingStandards or Generally Accepted Accounting Principles in the United States (“U.S. GAAP”), the financial
statements are used 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 Accounting Standards or U.S. GAAP,
the financial statements are adjusted in accordance with IFRS Accounting Standards.
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 termof 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.

26

Financial Information

2024

Effective April 1, 2022, certain consolidated foreign subsidiaries applied Financial Accounting Standards
Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-02 Leases.
As a result, in principle, all leases were recorded as assets and liabilities in the consolidated balance
sheets for the lease transactions of lessees in certain consolidated foreign subsidiaries.
The effects of this change on the consolidated financial statements were immaterial.
e. Revenue Recognition
Finance Leases — The Companies recognize lease revenues and related costs over the lease term. Interest
revenues on finance lease contracts are calculated by the interest method after April 1, 2008, and by thestraight-line method prior to April 1, 2008, over the remaining lease period.
Operating Leases — The Companies recognize lease revenues on a straight-line basis over the lease term
based on the minimum rentals on the lease contracts. At disposal of leased assets, disposal value and disposal
cost were recognized separately as revenues and costs by the Company and its consolidated domestic
subsidiaries.
Installment Sales — In accordance with Treatment of Installment Sales Transactions as prescribed by
Tentative Accounting and Auditing Treatment Regarding Application of Accounting Standard for Financial
Instruments to Leasing Industry (Japanese Institute of Certified Public Accountants Industry Auditing
Committee Report No. 19, November 14, 2000), the Companies recognize the gross amount of receivables asreceivables-installment sales at the time of execution of the installment sales contract, and record revenues
and related costs from installment sales depending on the relevant elapsed period based on payment dates of
installment sales contract. Unrealized profit in relation to receivables-installment sales that have not comedue is deferred and recorded as deferred profit on installment sales.
The Companies follow the industry practice of including receivables-installment sales due after one year
in current assets. Receivables due after one year amounted to ¥113,577 million ($752,169 thousand) in 2024
and ¥151,286 million in 2023.
Revenue from Contracts with Customers — The Companies recognize revenue in an amount that reflects
the consideration to which it expects to be entitled in exchange for satisfying performance obligations totransfer the goods or services promised in contracts with customers. The nature of performance obligations
for each of the Companies’ major businesses and when such obligations are satisfied are as follows:
Sales from Maintenance Contracts
The Companies provide maintenance and similar services, which are attached to lease contracts. Revenue isrecognized at the time such services are provided to customers.
Sales from Selling Merchandise and Sales from Disposal of Lease Properties
With regard to sales from selling merchandise and sales from disposal of lease properties at maturity of lease
contracts of foreign subsidiaries, that adopted IFRS Accounting Standards or U.S. GAAP, revenue isrecognized at the time of completing 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.
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 atfair value with unrealized gains and losses, net of applicable taxes, reported in a separate component ofequity. 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.

Financial Information

2024

27

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 ¥763 million ($5,054
thousand) and ¥160,977 million ($1,066,078 thousand), respectively, as of March 31, 2024, and ¥2,199
million and ¥156,907 million, respectively, as of March 31, 2023. In addition, the Companies record income
from those securities as “Revenues” in the consolidated statements of income.
Effective April 1, 2022, the Company applied Implementation Guidance on Accounting Standard for Fair
Value Measurement (ASBJ Guidance No. 31, June 17, 2021) (the “New Guidance”).
According to the transitional treatment in Paragraph 27-2 of the New Guidance, the Company applied the
New Guidance prospectively.
As a result of this change, the effects on the consolidated financial statements were immaterial.
g. Inventories — Inventories held for sale in the ordinary course of business are stated at the lower of cost,which is determined by the specific identification method, or net selling value, which is defined as the selling
price, less additional estimated manufacturing costs and estimated direct selling expenses. The replacement
cost may be used in place of the net selling value, if appropriate.
h. Property and Equipment
Leased Assets — See Note 2.d.
Other Operating Assets — Property and equipment held for the Companies’ operating use other than leased
assets are stated at cost. Depreciation is computed based on the estimated useful lives of the assets under thestraight-line method.
Own-Used Assets — Property and equipment held for the Companies’ own use are stated at cost.
Depreciation is computed based on the estimated useful lives of the assets under the declining-balancemethod, while the straight-line method is applied to buildings, leasehold improvements, and structuresacquired after April 1, 2016, by the Company and its consolidated domestic subsidiaries. Depreciation is
primarily computed based on the estimated useful lives of the assets under the straight-line method byconsolidated foreign subsidiaries.
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 (“DCF”) from thecontinued use and eventual disposition of the asset, or the net selling price at disposition.
j. Allowance for Doubtful Receivables — The Company classifies the receivables into receivables from thecounterparties not in bankruptcy but in financial difficulties (“doubtful claims”), receivables from thecounterparties in bankruptcy (“bankrupt claims”), and the other receivables (“general claims”) based on thecredit information, such as the financial condition and payment history of the counterparties.
For the general claims, the allowance for doubtful receivables is provided based on the historical rate ofcredit losses. For the doubtful claims and bankrupt claims, the allowance for doubtful receivables is provided
based on the estimated uncollectible amounts taking into account the collectability of each receivable.
The amounts of long-term receivables considered uncollectible were directly written off from theaccounts. The amounts directly written off were ¥6,836 million ($45,275 thousand) and ¥16,770 million atMarch 31, 2024 and 2023, respectively.
In addition, the consolidated foreign subsidiaries that adopted IFRS Accounting Standards record
allowance for doubtful receivables by estimating their expected credit losses for 12 months or lifetime basedon the loss rate, etc., that is adjusted considering current and future economic conditions, mainly dependingon the historical credit loss.
The consolidated foreign subsidiaries that adopted U.S. GAAP record allowance for doubtful receivables
by measuring their expected credit losses for the estimated remaining contractual periods based on the loss

28

Financial Information

2024

rate, etc., that is adjusted considering current and future economic conditions, mainly depending on thehistorical credit loss.
k. Retirement and Pension Plans
Employees’ Retirement Benefits — The Company and certain consolidated subsidiaries have defined
benefit corporate pension plans for employees or unfunded retirement benefit plans.
The liability for retirement benefits of the Company and a certain consolidated subsidiary is computed
based on projected benefit obligations and plan assets at the consolidated balance sheets date, while theliability for retirement benefits of the other subsidiaries is provided at 100% of the amount that would be
required if all employees had retired at the consolidated balance sheets date.
Assumptions were set forth as follows:
Method of attributing expected retirement
benefit to periods ..............................................
Amortization period of prior service cost .........
Recognition period of actuarial gain/loss .........

Benefit formula basis method
14 to 15 years (14 to 15 years in 2023)
7 to 17 years (7 to 20 years in 2023)

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 stock options are measured based on the fair value at the date of grant andrecognized as compensation expense over the vesting period as consideration for receiving goods or services.
In the consolidated balance sheets, stock options are included in stock acquisition rights as a separate
component of equity until exercised.
The Company introduced the performance-based share remuneration plan for directors during the year
ended March 31, 2024. The dividend amounts include dividends to the Company’s shares held by the trust
for the performance-based share remuneration plan.
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 foreign exchange forward
contracts and others are translated into Japanese yen at the contract amounts.

Financial Information

2024

29

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.
Currency-related derivative transactions and foreign currency-denominated debt are utilized to hedge
foreign exchange risk. Certain assets and liabilities denominated in foreign currencies are translated at thecontracted 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
sheets 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
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.

30

Financial Information

2024

r. Accounting Change
Financial Instruments–Credit Losses (FASB ASU No. 2016-13)
Certain consolidated foreign subsidiaries applied ASU No. 2016-13, Financial Instruments–Credit Losses, fromthe year ended March 31, 2024. Allowance for doubtful receivables was recorded by measuring their expectedcredit losses throughout the estimated remaining credit periods at the initial recognition for the financial assets ofthe consolidated foreign subsidiaries. As a result, the retained earnings as of April 1, 2023, decreased by ¥7,957
million ($52,698 thousand). The effects of this change on the per share information for the year ended March 31,
2024, were immaterial.
s. Significant Accounting Estimates
Impairment of Leased Assets
The Companies review leased assets for impairment whenever events or changes in circumstances indicate
the carrying amount of an asset or asset group may not be recoverable. When the Companies identified
impairment indicators for leased assets, the carrying amounts of leased assets are reduced to their respective
recoverable amounts and the differences between the carrying amounts and the recoverable amounts arerecorded as impairment losses.
Future cash flows used in determining recoverable amounts are estimated mainly based on future leaserents, lease terms, residual values at maturity, and other information. The Companies believe that theseestimates are reasonable; however, changes in assumptions used and business environment may have amaterial impact on the future consolidated financial statements.
As to the aircraft held by JSA International Holdings, L.P. group, which engaged in aircraft leasing
business in the United States of America with leased assets of ¥1,289,006 million ($8,536,469 thousand) and¥1,098,940 million at March 31, 2024 and 2023, respectively, the Companies regularly reviewed future cash
flows and performed impairment evaluation in accordance with U.S. GAAP. The Companies compared thecarrying amounts to the sum of the undiscounted future cash flows, and the amount by which the carrying
value exceeded the fair value was recorded as an impairment loss for the assets where the carrying amount ofaircraft exceeded the sum of the undiscounted future cash flows. Future cash flows were comprised ofcurrent lease rents, future lease rents, residual values at maturity, disposal costs, lease terms, off-lease
periods, renewal lease term, and other factors. Future lease rents and residual values at maturity were basedon appraisal results by appraisal companies, and disposal costs, lease terms, off-lease periods, and renewal
periods were estimated based on historical experience and other information.
Impairment losses on aircraft of ¥1,998 million ($13,233 thousand) and ¥5,635 million were included incosts in the accompanying consolidated statements of income for the years ended March 31, 2024 and 2023,
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 and business plans, which are developedby considering 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 ¥102,091 million ($676,099 thousand) and ¥91,497 million of goodwill as ofMarch 31, 2024 and 2023, respectively.
Allowance for Doubtful Receivables
In accordance with the internal management policies, the Company classifies the receivables into the
doubtful claims, bankrupt claims, and general claims based on the credit information, such as the financial
condition and payment history of the counterparties. For the general claims, the allowance for doubtfulreceivables is provided based on the historical rate of credit losses. For the doubtful claims and bankrupt
claims, the allowance for doubtful receivables is provided based on the estimated uncollectible amounts
taking into account the collectability of each receivable.

Financial Information

2024

31

The potential losses are measured based on financial condition of customers, estimated recoverable
amount of collaterals, and future cash flows by the estimated cash flow method.
In addition, based on the expected credit loss model (“ECL”), the consolidated foreign subsidiaries that
adopted IFRS Accounting Standards apply IFRS No. 9, Financial Instruments, and record allowance for
doubtful receivables by estimating their expected credit losses for 12 months or lifetime based on the loss
rate, etc., that is adjusted considering current and future economic conditions, mainly depending on thehistorical credit loss.
Based on the current expected credit loss model (“CECL”), the consolidated foreign subsidiaries that
adopted U.S. GAAP apply ASU No. 2016-13, Financial Instruments–Credit Losses, and record allowance for
doubtful receivables by measuring their expected credit losses for the estimated remaining contractual
periods based on the loss rate, etc., that is adjusted considering current and future economic conditions,mainly depending on the historical credit loss.
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 ¥95,357 million ($631,504 thousand) and¥90,900 million as of March 31, 2024 and 2023, respectively.
t. Stock Compensation Plan for Directors —The Company has introduced a performance-based stockcompensation plan (herein after, the “Plan”) for Directors (excluding non-Executive Directors and nonresidents in Japan) excluding Directors who are Audit & Supervisory Committee Members and Executive
Officers, etc. (excluding non-residents in Japan; hereinafter, the Directors and the Executive Officers, etc. arecollectively referred to as the “Director(s), etc.”) as an incentive plan.
Outline of the Plan
The Plan is a stock compensation plan where the Company shares and cash equivalent to the conversion
value of the Company shares (hereinafter, the “Company Shares, etc.”) are delivered or paid (hereinafter, the“Delivery, etc.”) to the Directors, etc., based on the achievement level of performance targets of the Mediumterm Management Plan (“MTMP”) of the Company. The Company entrusts money to a trust bank to acquire,in advance, the Company shares of which the Delivery, etc. will be conducted in the future, and the trustbank acquires the Company shares with the entrusted money. Furthermore, in accordance with the separately
established company rules on share delivery, points are granted to the Directors, etc. and the Delivery, etc. of
the Company Shares, etc. to the Directors, etc. is conducted according to the points.
Shares Held in the Trust
The Company shares held by the trust bank are accounted for as treasury stock in the equity section of theCompany’s consolidated balance sheets at the book value in the trust. The book value and number of treasury
stock held by the trust bank as of March 31, 2024, was ¥2,318 million ($15,356 thousand) and 2,685
thousand shares, respectively.
3. Business Combinations
Acquisitiona. Acquisition of CenterPoint Development Inc.
The Company signed a share transfer agreement on April 14, 2023, to acquire all shares of CenterPoint
Development Inc. ("CPD”), which provides Investment advisory and asset management services specializing
in logistic real estate sector, a former associated company accounted for by the equity method. The
acquisition of shares was completed on April 21, 2023.
1. Outline of the business combination(1) Name and business of the acquired company
Name: CenterPoint Development Inc.
Business: investment advisory and asset management services specializing in the logistics real estate sector

32

Financial Information2024

(2) Main reason of the business combination
The logistics market continues to grow supported by increasing demand due to the expansion of domestic
e-commerce and the leasing market for logistics facilities has also been strong. E-commerce is expected
to continue to expand in the future and there is a growing need for response to labor saving and automation,
integration and reconstruction of facilities due to deterioration and obsolescence, and locations withexcellent transportation convenience. Under such circumstances, the Company decided to make CPD awholly owned subsidiary, which engages in development of logistics facilities that meet the needs ofcompanies and asset management business specializing in these areas, in order to strengthen and expand
the logistics facility-related business of the group.
(3) Date of the business combination
April 21, 2023
(4) Legal form of the business combination
Acquisition in exchange for cash(5) Company name after the business combination
CenterPoint Development Inc. (remains the same)(6) The percentage of voting rights acquired
Voting ratio held immediately before the business combination
Voting ratio after the acquisition

33.4%
100.0%(7) Background for determining the acquiring company
The reason is because the Company acquired all voting rights of CPD 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, 2024
The fiscal year end of the acquired company is December 31, which is different for three months from theCompany’s fiscal year end for consolidation. The results of operations for the period from April 1, 2023,
to December 31, 2023, are included in the consolidated statement of income for the period ended March
31, 2024, since the deemed acquisition date for the business combination is April 1, 2023.
The portion of the results of operations attributable to the Company for the period from January 1, 2023,
to March 31, 2023, is recorded as equity in earnings of affiliates.
3. Details of acquisition cost and consideration by type

Fair value of stocks held immediately before the businesscombination date ....................................................................
Fair value of stocks additionally purchased on the businesscombination date ....................................................................
Acquisition cost ........................................................................

Millions of yen

Thousands of
U.S. dollars¥4,109$27,214

11,499¥15,608

76,155$103,369

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

Millions of yen¥91

Thousands of
U.S. dollars$606

Financial Information

2024

33

5. The difference between acquisition cost of the acquired company and the total in acquisition costs bytransaction

Gain on step acquisition ...........................................................

Millions of yen¥3,067

Thousands of
U.S. dollars$20,314

6. The amount of goodwill recognized and reason for recognition(1) The amount of goodwill¥13,207 million ($87,469 thousand)(2) Reason for the goodwill recognized
Due to the expected excess earnings power expected from future business development.
(3) Method and period of amortization
Straight-line amortization over 20 years
7. Details of assets acquired and liabilities assumed at the acquisition dateCurrent assets ..........................................................................
Property and equipment, and Investments and other assets......
Total assets ................................................................................
Current liabilities ....................................................................
Long-term liabilities ...............................................................
Total liabilities ..........................................................................

Millions of yen¥1,931
2,113¥4,045

Thousands of
U.S. dollars

¥778
865
¥1,644$12,789
13,999$26,788$5,153
5,734$10,888

8. Estimated impact on the consolidated statement of income for the year ended March 31, 2024, assuming
the business combination was completed at the beginning of the current fiscal year
There is no impact since the deemed acquisition date coincides with the beginning of the fiscal year ended
March 31, 2024.
Business Divestitures
b. Transfer of DFL Lease
At the meeting of the Board of Directors held on November 8, 2023, the Company resolved to sell all sharesof DFL Lease, a consolidated subsidiary of the Company, and signed a share transfer agreement on the sameday. The share transfer was completed on January 4, 2024.
(1) Outline of the share transfer(a) Name and business of the subsidiaryName:
DFL Lease Company Limited
Business: General leasing business using Resona group as the main distribution channel(b) Name of the counterparty of the share transfer
Resona Holdings, Inc.

34

Financial Information2024

(c) Reason for the share transfer
The Company made DFL Lease its consolidated subsidiary in 2004, and has been providing various
financing solutions, mainly to the customers of Resona group through DFL Lease. DFL Lease became
the equity-method affiliated company of Resona Holdings, Inc. (“Resona HD”) in July 2018, andcollaborating with Resona HD, DFL Lease has been providing diverse service solution held by theCompanies to Resona group.
The Company made a decision that it will be meaningful for DFL Lease to encourage further
collaboration with Resona HD to further expand the business of DFL Lease by utilizing the customer
base and network of Resona group and executed the share transfer agreement.
The Companies have launched the “MTMP for FY2023 - FY2025” and have undertaken thebusiness portfolio transformation including the strategic allocation of management resources andoptimization of business process within the Companies toward realizing “Our 10-year Vision,” andthis share transfer is conducted as a part of the transformation.
(d) Date of the share transfer
January 4, 2024(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¥1,475 million ($9,770 thousand)(b) Appropriate book value of the assets and liabilities related to the transferred business and its breakdown

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

Millions of yen¥64,067
3,866¥67,933¥35,888
27,390¥63,278

Thousands of
U.S. dollars$424,286
25,604$449,891$237,671
181,394$419,065(c) Accounting treatment
The Company presented the difference between the book value and the transfer price of DFL Lease asa gain on sales of shares of subsidiaries and affiliates in other income (expenses) in the consolidated
financial statements for the year ended March 31, 2024.
(3) Name of the main segment in which the subsidiary’s business was included in the Company’s segment
information
Customer Solutions

Financial Information

2024

35

(4) Estimated amount of profits and losses related to the business included in the consolidated statement ofincome for the year ended March 31, 2024

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

Millions of yen¥14,364
608

Thousands of
U.S. dollars$95,125
4,026

c. Transfer of Shutoken Leasing
At the meeting of the Board of Directors held on November 8, 2023, the Company resolved to sell all sharesof Shutoken Leasing, a consolidated subsidiary of the Company, and signed a share transfer agreement on
the same day. The share transfer was completed on January 4, 2024.
(1) Outline of the share transfer(a) Name and business of the subsidiary
Name:
Shutoken Leasing Company Limited
Business: General leasing business using Resona group as the main distribution channel(b) Name of the counterparty of the share transfer
Resona Holdings, Inc.
(c) Reason for the share transfer
The Company made Shutoken Leasing its consolidated subsidiary in 2004, and has been providing
various financing solutions, mainly to the customers of Resona group through Shutoken Leasing.
Shutoken Leasing became the equity-method affiliated company of Resona HD in July 2018, andcollaborating with Resona HD, Shutoken Leasing has been providing diverse service solutions heldby the Companies to Resona group.
The Company made a decision that it will be meaningful for Shutoken Leasing to encourage
further collaboration with Resona HD to further expand the business of Shutoken Leasing by
utilizing the customer base and network of Resona group and executed the share transfer agreement.
The Companies have launched the “MTMP for FY2023 - FY2025” and have undertaken thebusiness portfolio transformation including the strategic allocation of management resources andoptimization of business process within the Companies toward realizing “Our 10-year Vision,” andthis share transfer is conducted as a part of the transformation.
(d) Date of the share transfer
January 4, 2024(e) Method of the share transfer
Share transfer agreement in exchange for cash(2) Outline of accounting treatment(a) Amount of loss on sales of shares¥847 million ($5,614 thousand)

36

Financial Information2024

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

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

Millions of yen¥158,247
6,870¥165,118¥95,434
63,124¥158,559

Thousands of
U.S. dollars$1,047,995
45,503$1,093,498$632,016
418,043$1,050,060(c) Accounting treatment
The Company presented the difference between the book value and the transfer price of Shutoken
Leasing as a loss on sales of shares of subsidiaries and affiliates in other income (expenses) in the
consolidated financial statements for the year ended March 31, 2024.
(3) Name of the main segment in which the subsidiary’s business was included in the Company’s segment
information
Customer Solutions(4) Estimated amount of profits and losses related to the business included in the consolidated statement ofincome for the year ended March 31, 2024

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

Millions of yen¥37,624
1,247

Thousands of
U.S. dollars$249,165
8,263

d. Transfer of Diamond Asset FinanceAt the meeting of the Board of Directors held on December 23, 2022, the Company resolved to sell all sharesof Diamond Asset Finance, a consolidated subsidiary of the Company, and signed a share transfer agreementon the same day. The share transfer was completed on March 24, 2023.
(1) Outline of the share transfer(a) Name and business of the subsidiary
Name:
Diamond Asset Finance Company Limited
Business: Corporate financing for real estate, personal loans for real estate investments, realestate leasing(b) Name of the counterparty of the share transfer
Parle G.K.
Wholly owned subsidiary of Emerald G.K., which is held in silent partnership with Japan Revival
Sponsor Fund Ⅳ LLP. Japan Revival Sponsor Fund Ⅳ LLP is operated and managed by Keystone
Partners Co., Ltd.
(c) Reason for the share transfer
The Company established Our 10-year Vision, “Together we innovate, challenge, and explore thefrontiers of the future,” and aims to achieve this vision by promoting “CX (Corporate Transformation/ Customer Experience)” through “SX (Sustainability Transformation)”, “DX (Digital
Transformation)”, and “Business Portfolio Transformation.”

Financial Information

2024

37

For “Business Portfolio Transformation”, the Company will strive to achieve an optimal portfolio
for the medium to long term growth based on “Developing new businesses”, “Shifting existing
business to high value-added services”, and “Enhancing profitability and efficiency of existing
businesses.” As a part of this effort, the Company decided to transfer the shares of Diamond Asset
Finance, a subsidiary of the Company specialized in real estate related businesses, in order toconcentrate resources on focused businesses and improve profitability in the real estate sector.
(d) Date of the share transfer
March 24, 2023(e) Method of the share transfer
Share transfer agreement in exchange for cash(2) Outline of accounting treatment(a) Amount of loss on sales of shares¥1,006 million(b) Appropriate book value of the assets and liabilities related to the transferred business and its breakdown
Current assets ...........................................................................
Property and equipment, and Investments and other assets.......
Total assets .................................................................................
Current liabilities .....................................................................
Long-term liabilities ................................................................
Total liabilities ...........................................................................

Millions of yen¥198,411
8,709¥207,120¥70,312
129,403¥199,715(c) Accounting treatment
The Company presented the difference between the book value and the transfer price of Diamond
Asset Finance as a loss on sales of shares of subsidiaries and affiliates in other income (expenses) inthe consolidated financial statements for the year ended March 31, 2023.
(3) Name of the main segment in which the subsidiary’s business was included in the Company’s segment
information
Real Estate(4) Estimated amount of profits and losses related to the business included in the consolidated statement ofincome for the year ended March 31, 2023
Revenues ..................................................................................
Operating income ....................................................................

Millions of yen¥22,282
5,390

e. Exclusion of Mitsubishi HC Capital Auto-Lease from scope of consolidation due to capital increase
through third-party allotment
Mitsubishi HC Capital Auto-Lease, a consolidated subsidiary of the Company, increased capital by a thirdparty allotment, with Mitsubishi Corporation as allotee. The payment was completed on March 29, 2023.
As a result, the Company excluded Mitsubishi HC Capital Auto-Lease from the scope of consolidation
and applied equity method due to the decrease in the Company’s holding ratio.

38

Financial Information2024

(1) Outline of the Business Divestitures(a) Name of the subsidiary
Mitsubishi HC Capital Auto-Lease Corporation(b) Business of the subsidiary
Car leasing and car maintenance(c) Reason for the Business Divestitures
Mobility industry entered a phase of major change and solutions to social challenges, such as reducing
the effect on the environment, efficiency in logistics and flow of people, safety improvement,
constraint-free transfer, are required.
Especially promoting the use of an eco-car to achieve carbon-neutral is the critical goal of the entire
industry, when the Japanese government defined that new car sales in domestic market should be 100%
switched to electric vehicle by 2035 as the government target.
In these circumstances, Mitsubishi HC Capital Auto-Lease increased its capital through the thirdparty allotment, with Mitsubishi Corporation as allotee. Also, Mitsubishi Auto Leasing Corporation(“Mitsubishi Auto Leasing”) and Mitsubishi HC Capital Auto-Lease completed the merger, with
Mitsubishi Auto Leasing as the surviving company on April 1, 2023, according to the merger agreement.
The Company and Mitsubishi Corporation continue to build and provide efficient, highly
convenient, and global environmentally conscious mobility services through joint operation of
Mitsubishi Auto Leasing to meet clients’ needs and social expectations.
(d) Date of the Business Divestitures
March 29, 2023(e) Method and legal form of the Business Divestitures
Issuing new shares and disposal of treasury stock through a third-party allotment with Mitsubishi
Corporation as allotee(2) Outline of accounting treatment(a) Amount of gain on change in ownership interest
The effects of this change on the consolidated financial statements were immaterial.
(b) Appropriate book value of the assets and liabilities related to the Business Divestitures and its
breakdown
Current assets ...........................................................................
Property and equipment, and Investments and other assets.......
Total assets .................................................................................
Current liabilities .....................................................................
Long-term liabilities ................................................................
Total liabilities ...........................................................................

Millions of yen¥47,235
53,758¥100,993¥86,062410¥86,472(c) Accounting treatment
The Company presented the difference between the book value and the paid-in amount of Mitsubishi
HC Capital Auto-Lease as other - net in other income (expenses) in the consolidated financial
statements for the year ended March 31, 2023.
(3) Name of the main segment in which the subsidiary’s business was included in the Company’s segment
information
Mobility

Financial Information

2024

39

(4) Estimated amount of profits and losses related to the business included in the consolidated statement ofincome for the year ended March 31, 2023
Revenues ..................................................................................
Operating income ....................................................................

Millions of yen¥53,085
2,652

4. Marketable and Investment Securities
The carrying amounts of marketable and investment securities recognized in the consolidated balance sheets
as of March 31, 2024 and 2023, were as follows:Marketable securities ....................................................................
Investment securities:
Unconsolidated subsidiaries and associated companies ...........
 Other securities .........................................................................
Total ..........................................................................................

Millions of yen
2024¥2,565
216,492
211,037¥430,095

2023

Thousands of
U.S. dollars
2024¥3,213$16,992㻌㻌
192,861
1,433,722
207,252
1,397,596¥403,327 $2,848,312

Marketable and investment securities as of March 31, 2024 and 2023, consisted of the following:Equity securities ...........................................................................
Debt securities ..............................................................................
Trust fund investments and other .................................................
Total ..........................................................................................

Millions of yen
2024¥183,552
32,026
214,515¥430,095

2023¥182,857
33,234
187,235¥403,327

Thousands of
U.S. dollars
2024$1,215,581
212,097
1,420,633$2,848,312

The carrying amounts and aggregate fair values of marketable and investment securities as of March 31,
2024 and 2023, were as follows:

March 31, 2024

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

March 31, 2023

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

40

Financial Information

2024

Cost

¥26,871
37,536
5,723¥70,132

Cost¥32,304
33,311
5,926¥71,542Millions of yen
Unrealized
Unrealized
gains
losses¥15,9071,205¥17,113¥(1,366)(5,510)¥(6,877)

Millions of yen
Unrealized
Unrealized
gains
losses¥16,720
7
1,112¥17,840¥(863)(84)㻌
¥(947)

Fair value¥41,41232,026
6,929¥80,368

Fair value¥48,161
33,234
7,039¥88,434

March 31, 2024

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

Thousands of U.S. dollars
Unrealized
Unrealized
gains
lossesCost$177,958
248,587
37,906$464,452$105,348
3
7,982$113,334

Fair value$(9,050)(36,493)$(45,544)$274,256
212,097
45,889$532,243

Carrying amounts of nonmarketable equity securities and investments in partnerships, etc., that the equity
interest equivalents are recorded as net in the consolidated balance sheets as of March 31, 2024 and 2023, wereas follows:

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

2023

Thousands of
U.S. dollars
2024¥132,405
9,734¥142,140¥125,362¥9,333¥134,696$876,858
64,466$941,324¥207,586¥122,904$1,374,744¥207,586

57,291¥180,195$1,374,744

Millions of yen
2024

The proceeds from realized gains and losses of the available-for-sale securities, which were sold during
the years ended March 31, 2024 and 2023, were as follows:

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

Millions of yen
2024¥39,584
17,813(357)

2023¥28,322
5,089
(407)

Thousands of
U.S. dollars
2024$262,148
117,970(2,367)The impairment losses on marketable and investment securities recognized for the years ended March 31,
2024 and 2023, were as follows:

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

Millions of yen
2024

¥295
¥295

2023

¥2,444
1,546¥3,990Thousands of
U.S. dollars
2024$1,956$1,956

5. Inventories
Inventories as of March 31, 2024 and 2023, consisted of the following:

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

Millions of yen
2024¥38,240¥38,2402023¥32,262
13,802¥46,064

Thousands of
U.S. dollars
2024$253,247$253,247

Financial Information

2024

41

6. Investment Property
The Companies own certain rental properties, such as office buildings, commercial facilities, rental
residential properties, and logistics warehouses, in major cities throughout Japan. The net of rental income
and operating expenses for those properties was ¥13,755 million ($91,093 thousand) and ¥12,550 million for
the fiscal years ended March 31, 2024 and 2023, respectively. The net gain from sales of those properties
was ¥14,067 million ($93,159 thousand) and ¥9,261 million for the fiscal years ended March 31, 2024 and2023, respectively.
The carrying amounts, changes in such balances, and fair value of those properties as of March 31, 2024
and 2023, were as follows:
Millions of yen
2024

Beginning of year

¥378,721

Carrying amount (1)Net change (2)¥89,990

End of year

Fair value (3)End of year

End of year

Fair value (3)End of year

¥468,712¥537,846

Millions of yen
2023

Beginning of year

¥418,126

Carrying amount (1)Net change (2)¥(39,404)¥378,721¥439,244

Thousands of U.S. dollars

Beginning of year

$2,508,089

Carrying amount (1)Net change (2)$595,964

2024

End of year

$3,104,054

Fair value (3)End of year

$3,561,899

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, 2024, was primarily attributable to ¥126,862 million ($840,147
thousand) increase from the acquisition of real estate and ¥44,053 million ($291,746 thousand) decrease from thesales of real estate.
Net change during the fiscal year ended March 31, 2023, was primarily attributable to ¥27,236 million increase
from the acquisition of real estate and ¥50,306 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.

42

Financial Information

2024

7. Lease Receivables and Investments in Leases
The aggregate annual maturities of the future rentals on lease receivables as of March 31, 2024, were as
follows:

Years Ending March 312025 ......................................................................................
2026 ......................................................................................
2027 ......................................................................................
2028 ......................................................................................
2029 ......................................................................................
Thereafter .............................................................................
Total ................................................................................

Millions of yen
2024¥473,370
387,304
287,766
186,778
109,561
234,616¥1,679,398

Thousands of
U.S. dollars
2024$3,134,905
2,564,932
1,905,741
1,236,946
725,571
1,553,750$11,121,846

Investments in leases as of March 31, 2024 and 2023, consisted of the following:

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

Millions of yen
2024¥2,028,428
81,700(398,630)¥1,711,498

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

Thousands of
U.S. dollars
2024$13,433,303
541,060(2,639,935)$11,334,427

The aggregate annual maturities of the future rentals on investments in leases as of March 31, 2024, wereas follows:

Years Ending March 312025 ......................................................................................
2026 ......................................................................................
2027 ......................................................................................
2028 ......................................................................................
2029 ......................................................................................
Thereafter .............................................................................
Total ..............................................................................

Millions of yen
2024¥542,112
422,230
315,282
220,874
144,751
383,177¥2,028,428

Thousands of
U.S. dollars
2024$3,590,148
2,796,225
2,087,965
1,462,743
958,618
2,573,601$13,433,303

The consolidated balance sheet amounts of sublease contracts, including those that aim to disperse credit
risks, and interest as of March 31, 2024 and 2023, were as follows:

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

Millions of yen
2024¥17,520
21,973
41,3342023¥18,018
29,53149,656

Thousands of
U.S. dollars
2024$116,031
145,523
273,738“Lease receivables and investments in leases” include receivables from hire-purchase contract of theconsolidated foreign subsidiaries that adopted IFRS Accounting Standards.

Financial Information

2024

43

8. Leased Assets
The minimum future rentals on lease contracts as of March 31, 2024 and 2023, were as follows:

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

Millions of yen
2024¥404,725
1,414,266¥1,818,992

2023¥304,597
1,257,432¥1,562,030

Thousands of
U.S. dollars
2024$2,680,302
9,366,004$12,046,307

9. Goodwill
Goodwill as of March 31, 2024 and 2023, consisted of the following:

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

Millions of yen
2024¥6,352
95,738¥102,091

2023¥8,46983,027¥91,497

Thousands of
U.S. dollars
2024$42,068
634,031$676,099

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, 2024 and 2023.
(1) Property and equipment
The Company recognized impairment losses of ¥2,713 million ($17,970 thousand) on the following property
and equipment in the accompanying consolidated statement of income for the year ended March 31, 2024.
Use

Leased assets
Leased assets

Type of assets
2024

Aircraft
Aircraft engine

Millions of yen

Thousands of
U.S. dollars¥1,998715$13,233
4,736

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 5.1%. In case the recoverable value of theassets is calculated based on the net selling price, the net selling price is evaluated based on the valuation
reasonably calculated by a third party.
The Company recognized impairment losses of ¥8,420 million on the following property and equipment in
the accompanying consolidated statement of income for the year ended March 31, 2023.
Use

Leased assets
Leased assets
Leased assets

44

Financial Information

2024

Type of assets
2023

Aircraft
Aircraft engine
Railroad car

Millions of yen¥5,635311
2,473

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%. In case the recoverable value of theassets is calculated based on the net selling price, the net selling price is evaluated based on the valuation
reasonably calculated by a third party.
(2) Asset group employed by solar power generation business
Use

Solar power generation business assets

Type of assets
2024

Other operating assets

Millions of yen

Thousands of
U.S. dollars¥5,816$38,516

The Company considers each project of solar power generation business as a unit of grouping in determining
the impairment. For certain projects of solar power generation business, the carrying amount of otheroperating assets whose profitability has declined due to a decrease in future cash flows that are expected tooccur in the future was reduced to the recoverable amount, and the reduced amount was recorded in costs as
impairment losses.
The recoverable value of the assets is calculated based on the value in use, and the value in use isevaluated based on the future cash flows discounted mainly by 3.9%.
(3) Investments and other assets
Use

Type of assets
2023

Millions of yen

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

Millions of yen

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

Financial Information

2024

45

11. Pledged Assets
As of March 31, 2024, the following assets were pledged as collateral for long-term debt, other current
liabilities, and other long-term liabilities:

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

Millions of yen
2024

Thousands of
U.S. dollars
2024¥30,345
162,842
17,423532,205
15,8671,401,102
73,10543,144
2,344
72
1,160
¥2,279,614$200,962
1,078,430
115,389
3,524,537
105,083
9,278,823
484,145285,724
15,523478
7,687$15,096,786

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
2024

Thousands of
U.S. dollars
2024

¥836
8,465

$5,54256,060896,126

5,934,615

565,533
1,274¥1,472,236

3,745,255
8,437$9,749,911

12. Nonrecourse Loans
Nonrecourse loans as of March 31, 2024 and 2023, were as follows:

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

Millions of yen
2024¥2,796
19,604¥22,401

2023¥4,223100
34,367¥38,690

Thousands of
U.S. dollars
2024$18,519

129,832$148,352

Pledged assets for nonrecourse loans as of March 31, 2024 and 2023, were as follows:

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

46

Financial Information

2024

Millions of yen
2024¥23,140¥23,1402023¥6,75943,809¥50,569

Thousands of
U.S. dollars
2024$153,246$153,246

13. Short-Term Borrowings and Long-Term Debt
Short-term borrowings and long-term debt as of March 31, 2024 and 2023, were as follows:

Short-term loans from banks and other financial
institutions:
3.84% ..............................................................................
3.59% ..............................................................................
Commercial paper:
1.07% ..............................................................................
0.72% ..............................................................................

Millions of yen
2024¥471,060¥784,178

2023¥633,099¥559,485

Thousands of
U.S. dollars
2024$3,119,605$5,193,232

Financial Information

2024

47

Millions of yen
2024

Bonds:
Bonds without collateral:Due 2024-2036, 0.050%-0.963% ...................................
Due 2023-2036, 0.030%-0.963% ...................................
Subordinated bonds without collateral with interest
deferral and early redemption clauses:
Due 2076-2081, 0.630%-1.310% ...................................
Due 2076-2081, 0.630%-1.310% ...................................
U.S. dollar bonds without collateral:Due 2025-2030, 3.637%-5.080% ...................................
Due 2023-2030, 3.559%-5.080% ...................................
Euroyen bonds issued under the Medium Term Note(“MTN”) program:Due 2024-2027, 0.020%-0.340% ...................................
Due 2023-2027, 0.010%-0.340%................................
Bonds without collateral issued by Bangkok Mitsubishi
HC Capital Co., Ltd.:Due 2024, 0.130% ..........................................................
Due 2023-2024, 0.130% - 0.260% .................................
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:Due 2024-2033, 2.336 % -7.879% .................................
Due 2023-2030, 2.252 % -7.102% .................................
U.S. dollar bonds without collateral issued by MHC
America Holdings Corporation:Due 2028-2033, 5.658%-5.807%................................
Due 2033, 5.658% ....................................................
Sterling pound bonds issued under the MTN program by
Mitsubishi HC Capital UK PLC:
Due 2024-2028, 0.842%-6.199%................................
Due 2023-2027, 0.833%-5.686%................................
Euro bonds issued under the MTN program by
Mitsubishi HC Capital UK PLC:
Due 2024-2029, 5,795%-6.537%................................
Due 2023-2029, 4.782%-5.296%................................
U.S. dollars bonds issued under the MTN program by
Mitsubishi HC Capital UK PLC:
Due 2024-2029, 5.839%-6,519%................................
Due 2023-2029, 4.747%-5.466%................................
Bonds issued under the MTN program by Mitsubishi HC
Capital UK PLC:
Due 2024-2031, 5.691%-6.849%................................
Due 2023-2028, 4.787%-5.836%................................

48

Financial Information

2024¥797,153

110,080
196,833

28,0001,522

42,54928,366

92,057

151,410

48,642

261,567

91,764

212,8802023¥937,541

110,109
307,119

47,2003,015

39,81026,54070,77066,76567,606

156,496

71,603

244,565

Thousands of
U.S. dollars
2024$5,279,164

729,007
1,303,529

185,430

10,082281,781

187,854609,650

1,002,715

322,136

1,732,234

607,7091,409,802

Hong Kong dollars bonds issued under the MTN
program by Mitsubishi HC Capital UK PLC:
Due 2024-2026, 5.899%-6.209%................................
Due 2023-2026, 4.844%-5.196%................................
Chinese yuan bonds issued under the MTN program by
Mitsubishi HC Capital UK PLC:
Due 2023, 1.816% ....................................................
Australian dollars bonds issued under the MTN programby Mitsubishi HC Capital UK PLC:
Due 2026-2029, 1.830%-6.639%................................
Due 2023-2029, 1.830%-5.396%................................
Swiss franc bonds issued under the MTN program by
Mitsubishi HC Capital UK PLC:
Due 2023-2024, 4.627%-4.927%................................
South African Rand bond issued under the MTN programby Mitsubishi HC Capital UK PLC:
Due 2024, 5.519%-5.759% ........................................
Due 2024, 4.507% ....................................................
U.S. dollars bonds without collateral issued under MTN
program by Mitsubishi HC Capital America, Inc.:Due 2024-2027, 1.100%-2.535%................................
Due 2023-2027, 0.805%-3.916%................................
Bonds— other (*):
Total ..............................................................................

Millions of yen
2024¥30,1872023¥9,667

Thousands of
U.S. dollars
2024$199,917

1,952
43,678

11,705289,261

9,919
3,197

21,221
9,162¥2,170,273

1,493

34,702
7,147¥2,225,731

21,176

140,540
60,679$14,372,675(*) Bonds— other includes nonrecourse bonds of ¥100 million at March 31, 2023.
Certain bonds issued under the MTN program are hedged by derivative contracts to hedge foreignexchange risk and interest rate risk, and interest rates for those bonds have been adjusted considering theimpact of hedging.

Financial Information

2024

49

Millions of yen
2024

Long-term loans from banks and other financial
institutions, partially collateralized:
Due within one year, 2.96% ............................................
Due 2025-2052, 3.57% ...................................................
Due within one year, 2.51% ............................................
Due 2024-2050, 2.86% ...................................................
Total ..............................................................................
Nonrecourse loans:
Due within one year, 3.67% ............................................
Due 2025-2032, 3.53% ...................................................
Due within one year, 0.92%............................................
Due 2024-2033, 0.88% ...................................................
Total ..............................................................................
Lease obligations, including fixed interests:
Due within one year ........................................................
Due 2025-2049 ...............................................................
Due within one year ........................................................
Due 2024-2049 ...............................................................
Total ..............................................................................
Loans from the securitizations of the minimum future
rentals on lease contracts:
Due within one year, 2.30% ............................................
Due 2025-2031, 2.10% ...................................................
Due within one year, 1.48% ............................................
Due 2024-2031, 1.62% ...................................................
Total ..............................................................................
Other current liabilities and other long-term liabilities:
Due within one year ........................................................
Due 2025-2032 ...............................................................
Due within one year ........................................................
Due 2024-2032 ...............................................................
Total ..............................................................................

¥1,009,821
3,416,097¥4,425,919¥2,796
19,604¥22,401¥17,852
37,427¥55,279¥224,330
341,628¥565,959
¥191
744
¥935

2023

¥955,728
3,219,167¥4,174,896¥4,22334,367¥38,590¥19,794
43,089¥62,883¥246,640
357,662¥604,302¥187
935¥1,123Thousands of
U.S. dollars
2024$6,687,561
22,623,162$29,310,724$18,519
129,832$148,352$118,225
247,863$366,089$1,485,634
2,262,443$3,748,077$1,265
4,931$6,196The 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, 2024 and 2023.
As it is customary in Japan, substantially all of the Company’s short-term bank loans are made underagreements, which provide that, at the request of such banks, the Company will provide additional collateralor guarantors with respect to the loan. As of March 31, 2024, the Company has not received any such
request.

50

Financial Information

2024

Annual maturities of long-term debt as of March 31, 2024, 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, 2024
Short-term loans frombanks and otherfinancial
institutions ................
¥471,060
Commercial paper ......
784,178㻌㻌㻌㻌Bonds ..........................
563,684¥337,440¥303,303¥217,266¥262,371
Nonrecourse bonds .....
Long-term loans frombanks and otherfinancial
institutions ................
1,009,821
794,417754,601
557,809441,493
Nonrecourse loans ......
2,796
2,850
2,906
2,963
3,023
Lease obligations ........
17,852
12,623
7,654
4,976
3,656
Loans from thesecuritizations of theminimum future
rentals on lease
contracts and other....
224,521
139,852
87,01946,89451,880Total ......................
¥3,073,915¥1,287,185¥1,155,367¥829,910¥762,423

March 31, 2024

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

Due in one
year or lessThousands of U.S. dollars
Due after
Due after one Due after two
three years
year throughyears throughthrough four
two years
three years
years$3,119,605
5,193,232
3,733,013$2,234,708$2,008,632$1,438,852$1,737,557

6,687,561
18,519118,225

5,261,044
18,87983,6004,997,359
19,24950,691

3,694,100
19,62632,9562,923,796
20,02024,213

1,486,899$20,357,058

926,175$8,524,408

576,286$7,652,219

310,559$5,496,096

343,576$5,049,165

Due after four
years throughfive years

The Company and certain consolidated subsidiaries had loan commitment agreements as of March 31,
2024 and 2023, amounting to ¥880,449 million ($5,830,790 thousand) and ¥915,146 million, respectively, of
which ¥737,839 million ($4,886,356 thousand) and ¥703,054 million, respectively, were unused.

Financial Information

2024

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, 2024 and 2023, were ¥69 million ($457 thousand) and ¥110
million, respectively. The retirement benefits for directors and Audit and Supervisory Board members arepaid subject to the approval of the shareholders.
(1) The changes in defined benefit obligation for the years ended March 31, 2024 and 2023, were as
follows:

Balance at beginning of year ..............................................
 Current service cost ........................................................
 Interest cost .............................................................
 Actuarial losses ...............................................................
Benefits paid ...................................................................
Prior service cost.............................................................
Change in the scope of consolidation .............................
Foreign currency translation differences ........................
Balance at end of year.........................................................

Millions of yen
2024¥78,186
2,993
927(3,469)(4,020)(971)
933¥74,5812023¥91,020
3,368
681(6,844)(3,747)(1,934)(4,572)
216¥78,186

Thousands of
U.S. dollars
2024$517,789
19,826
6,144(22,975)(26,624)(6,430)6,184$493,915(2) The changes in plan assets for the years ended March 31, 2024 and 2023, were as follows:
Thousands of
U.S. dollars

Millions of yen

Balance at beginning of year ..............................................
Expected return on plan asset .........................................
Actuarial gains (losses) ...................................................
Contributions from the employer....................................
Benefits paid ...................................................................
Change in the scope of consolidation .............................
Foreign currency translation differences ........................
Balance at end of year.........................................................

52

Financial Information

2024

2024

¥75,112
1,617
3,923
2,809
(3,092)(428)
970¥80,9112023¥83,757
1,665(5,886)2,238(2,679)(4,204)
222¥75,1122024$497,430
10,70825,98418,605(20,480)(2,839)6,428$535,837

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

Funded defined benefit obligation ......................................
Plan assets...........................................................................
Unfunded defined benefit obligation ..................................
Net (asset) liability arising fromdefined benefit obligation .................................................
Liability for retirement benefits..........................................
Asset for retirement benefits ..............................................
Net (asset) liability arising fromdefined benefit obligation .................................................

¥71,637(80,911)(9,274)
2,944¥75,286(75,112)
174
2,899

2023

Thousands of
U.S. dollars
2024¥(6,330)¥3,074$(41,921)¥6,049(12,379)¥6,463(3,389)$40,063(81,984)¥(6,330)¥3,074$(41,921)

Millions of yen
2024$474,418(535,837)(61,418)
19,497(4) The components of net periodic benefit costs for the years ended March 31, 2024 and 2023, 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
2024¥2,993927(1,617)83(233)
7¥2,1612023¥3,368681(1,665)
147
(233)
13
¥2,311Thousands of
U.S. dollars
2024$19,826
6,144(10,708)549(1,545)48$14,315(5) Amounts recognized in other comprehensive income (before income tax effect) in respect of defined
retirement benefit plans for the years ended March 31, 2024 and 2023, were as follows:

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

Millions of yen
2024¥(233)
7,475¥7,2422023¥1,701
1,105¥2,806

Thousands of
U.S. dollars
2024$(1,545)
49,509$47,964(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respectof defined retirement benefit plans as of March 31, 2024 and 2023, were as follows:

Unrecognized prior service cost .........................................
Unrecognized actuarial gains .............................................
Total ....................................................................................

Millions of yen
2024¥(1,832)(8,466)¥(10,299)2023¥(2,066)(990)¥(3,056)

Thousands of
U.S. dollars
2024$(12,137)(56,068)$(68,205)

Financial Information

2024

53

(7) Plan assets
a. Components of plan assets
Plan assets consisted of the following:
2024

2023

Debt investments ...............................................................
38%
44%
Equity investments ............................................................
19
22
General account .................................................................
16
15
Alternative investments* ....................................................
13
14
Others ................................................................................
14
5
Total ...................................................................................
100%
100%
* Alternative investments are invested for the purpose of diversifying risks and primarily invested in hedge
funds.
b.

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

(8) Assumptions used for the years ended March 31, 2024 and 2023, were set forth as follows:
Discount rate .....................................................................
Expected rate of return on plan assets...............................

2024
0.62-1.41%
1.7-2.02023
0.35-0.99%
1.7-2.0

Other than the above, an expected rate of salary increase is used for the assumption.
(9) Defined contribution pension plans
Contributions to defined contribution pension plans for the years ended March 31, 2024 and 2023, were
¥3,317 million ($21,968 thousand) and ¥2,852 million, respectively.
15. Commitments and Contingent Liabilities
The Companies, as lenders, have loan commitment agreements as of March 31, 2024, totaling ¥281,117
million ($1,861,707 thousand), where the used portion is ¥120,160 million ($795,764 thousand), and theunused portion is ¥160,957 million ($1,065,943 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, 2024, as guarantor or co-guarantor for operatingtransactions of ¥20,246 million ($134,084 thousand), and borrowings and others of ¥574 million ($3,805
thousand) for their unconsolidated subsidiaries and others.
The Companies have entered into various interest rate swap contracts, interest rate cap contracts, crosscurrency interest rate swap contracts, and foreign exchange forward contracts in the ordinary course ofbusiness (see Note 27).
16. Equity
Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The significant
provisions in the Companies Act that affect financial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to
the year-end dividend upon resolution at the shareholders’ meeting. Additionally, for companies that meet

54

Financial Information2024certain criteria, including (1) having a Board of Directors, (2) having independent auditors, (3) having an
Audit and Supervisory Board, and (4) the term of service of the directors being prescribed as one year
rather than the normal two-year term by its articles of incorporation, the Board of Directors may declare
dividends (except for dividends-in-kind) at any time during the fiscal year if the company has prescribed soin its articles of incorporation. With respect to the third condition above, the Board of Directors ofcompanies with (a) board committees (namely, appointment committee, compensation committee, andaudit committee) or (b) an audit and supervisory committee (as implemented under the Companies Act
effective May 1, 2015) may also declare dividends at any time because such companies, by nature, meetthe criteria under the Companies Act. The Company is organized as a company with an audit andsupervisory committee, effective April 1, 2021. The Company meets all the above criteria and, accordingly,
the Board of Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal
year.
The Companies Act permits companies to distribute dividends-in-kind (noncash assets) to shareholders
subject to a certain limitation and additional requirements. Semiannual interim dividends may also be paid
once a year upon resolution by the Board of Directors if the articles of incorporation of the company sostipulate. The Companies Act provides certain limitations on the amounts available for dividends or thepurchase of treasury stock. The limitation is defined as the amount available for distribution to theshareholders, but the amount of net assets after dividends must be maintained at no less than ¥3 million.
Moreover, the additional dividend restriction based upon the consolidated retained earnings is applicableto the Company.
As described in Note 3.t., the Company introduced the performance-based share remuneration plan for
directors during the year ended March 31, 2024. The dividend amounts include dividends to theCompany’s shares held by the trust for the performance-based share remuneration plan.
(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.
(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.
The number of treasury stock includes the Company’s shares held by the trust for the performance-based
share remuneration plan.
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

2024

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, 2024, 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*.....................................................................

56

Financial Information

2024

2011 stock
option9 directors
17 executive
officers
651,600
October 15,
2010¥250.1($1.65)2012 stock
option10 directors
17 executive
officers
721,700
October 14,
2011¥283.1($1.87)2013 stock
option10 directors
17 executive
officers
583,100
October 15,
2012¥312.8($2.07)2014 stock
option10 directors
19 executive
officers
419,000
October 15,
2013
¥502
($3.32)2015 stock
option10 directors
18 executive
officers
350,300
October 15,
2014
¥490
($3.24)2016 stock
option9 directors
20 executive
officers
368,800
October 15,
2015
¥546
($3.61)2017 stock
option9 directors
20 executive
officers
451,700
October 14,
2016
¥436
($2.88)2018 stock
option9 directors
27 executive
officers
493,000
October 13,
2017
¥566
($3.74)2019 stock
option6 directors
33 executive
officers
422,400
July 13,2018¥590($3.90)2020 stock
option5 directors
30 executive
officers
490,400
July 12,2019¥513($3.39)2021 stock
option5 directors
31 executive
officers
507,000
July 15,2020¥424($2.80)2022 stock
option6 directors
55 executive
officers
866,300
July 15,2021¥499($3.30)Persons granted...................................................................
Number of options granted* ...............................................
Date of grant .......................................................................
The fair value of options granted under the plan at the
grant dates*.....................................................................

2023 stock
option6 directors
55 executive
officers
855,400
July 15,2022¥511.0($3.38)The Companies recognized no stock-based compensation costs for the year ended March 31, 2024. The total
stock-based compensation costs recognized for the year ended March 31, 2023 was ¥437 million.
The stock option activity for the fiscal years ended March 31, 2024 and 2023, was as follows:2011 stock
optionFor the year ended March 31, 2023
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................
For the year ended March 31, 2024
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*

2014 stock
option52,10054,200154,600
152,200

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

51,000101,200
101,200

34,30054,200101,200

101,200

34,30054,20063,70037,50037,50043,30057,90057,900Financial Information

2024

57

2015 stock
optionFor the year ended March 31, 2023
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................
For the year ended March 31, 2024
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................

For the year ended March 31, 2023
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................
For the year ended March 31, 2024
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................

58

Financial Information

2024

2016 stock2017 stock
optionoptionNumber of shares*

2018 stock
option
192,300

228,400

340,000

414,100

12,700179,600
179,600

19,400209,000
209,000

27,100312,900
312,900

46,700367,400
367,400

179,600

209,000

312,900

367,400

66,300113,300
113,300

52,200156,800
156,800

81,300231,600
231,600

30,700336,700
336,7002019 stock
option2020 stock
2021 stock
optionoptionNumber of shares*

2022 stock
option383,600

479,700

496,300

850,300

60,100323,500
323,500

25,200454,500
454,500

25,300471,000
471,000

850,300
850,300

323,500

454,500

471,000

850,300

36,000287,500
287,500

70,300384,200
384,200

70,700400,300
400,300

9,200
841,100
841,100

For the year ended March 31, 2023
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................
For the year ended March 31, 2024
Outstanding at beginning of fiscal year ..
Granted ...............................................
Canceled or expired ............................
Exercised.............................................
Outstanding at end of fiscal year .............
Vested at end of fiscal year......................

2023 stock
optionNumber ofshares*855,400
855,400
855,400
855,400

855,400
855,400* On April 1, 2013, the Company split each share of its common stock, which was held by shareholders
stated or recorded in the register of shareholders as of March 31, 2013, into ten (10) shares. Number of
options, the fair value of options, and per share dividends have been retrospectively adjusted to reflect thestock split for all periods presented.
18. Revenue Recognition(1) Disaggregation of revenue
Revenues from contracts with customers on a disaggregated basis for the years ended March 31, 2024 and2023, were as follows:Year Ended March 31,
Customer
2024
Solutions
Revenues:
Sales from maintenancecontracts .........................
¥ 36,396
Sales from selling
merchandise ..................
12,312
Electricity sales ................
Sales from disposal oflease properties (3) .........
Others...............................
8,650
Revenue from contracts
with customers ...............
57,360
Other revenue (4) .............
986,329
Total ................................. ¥ 1,043,690

GlobalBusiness

Millions of yen
Reportable segment
Environment& Energy¥ 25,397

¥3

3,526
751

29,82971,566
13,566
114,810313,351¥ 428,161

Aviation

Logistics

Real Estate

Mobility¥ 15,159

¥ 244

120

9,761

1,024

¥ 7,359¥4
63

29,953
19,853¥ 49,807

24,921
183,359¥ 208,281

1,268
123,391¥ 124,659

7,359
83,199¥ 90,558

67
3,777¥ 3,845

Financial Information

2024

59

Millions of yen
Year Ended March 31,
Adjustments
2024(2)
Consolidated
Revenues:
Sales from maintenance¥9¥ 61,808
contracts .........................
Sales from selling
31,243merchandise ..................
Electricity sales ................
30,581
Sales from disposal of
71,571lease properties (3)..........
1,537
42,083
Others...............................
Revenue from contracts
1,547
237,287with customers ...............
Other revenue (4) .............
31
1,713,295
Total .................................
¥ 1,578 ¥ 1,950,583

Year Ended March 31,
Customer
2023
Solutions
Revenues:
Sales from maintenance¥ 34,613
contracts .......................
Sales from selling
24,134merchandise ................
Electricity sales ..............
Sales from disposal oflease properties (3)........
7,468
Others.............................
Revenue from contracts
66,216
with customers .............
Other revenue (4) ...........
1,015,919
Total ............................... ¥ 1,082,135

GlobalBusiness¥ 18,313

326

2024

Aviation

Logistics

Real Estate

Mobility¥ 21¥ 10,668¥ 7,092¥ 586

31,43150,514¥ 902

8

11,247

931

8,396

940

3,470

989

84,47332,38419,064

1,843

10,562

1,584

247,301¥ 331,775

15,720¥ 48,104

147,958¥ 167,022

114,827¥ 116,671

83,047¥ 93,609

54,211¥ 55,796

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

Financial Information

Environment& Energy

4,071

Millions of yen

60

Millions of yen
Reportable segment

Year Ended March 31,
Customer
2024
Solutions
Revenues:
Sales from maintenance$ 241,038
contracts .........................
Sales from selling
81,542
merchandise ..................
Electricity sales ................
Sales from disposal oflease properties (3)..........
57,290
Others...............................
Revenue from contracts
379,871
with customers ...............
Other revenue (4) ............. 6,531,986
Total ................................. $ 6,911,857

GlobalBusiness$ 168,198

Thousands of U.S. dollars
Reportable segment
Environment& Energy

Logistics

Real Estate

Mobility$ 24

23,356
4,978

Aviation$ 100,394$ 1,616

197,544473,952$ 29

89,845797

64,645

6,782$ 48,736

420

760,331

198,366

165,040

8,399

48,736450

2,075,175$ 2,835,506

131,482$ 329,849

1,214,304$ 1,379,344

817,162$ 825,561

550,988$599,725

25,019$25,470

Thousands of U.S. dollars
Year Ended March 31,
Adjustments
2024(2)
Consolidated
Revenues:
Sales from maintenance$ 64$ 409,325
contracts .........................
Sales from selling
206,910merchandise ..................
Electricity sales ................
202,523
Sales from disposal of473,982
lease properties (3)..........
10,180278,700
Others...............................
Revenue from contracts
10,245
1,571,441
with customers ...............
Other revenue (4) .............
208 11,346,327
Total .................................
$ 10,453 $ 12,917,769

Notes:(1) As disclosed in Note 29 “Segment Information,” the Company changed the name of reportable segments effective
April 1, 2023.
(2) Adjustments include ¥(1,541) million ($(10,211) thousand) million and ¥(3,062) million of adjusted amount of sales
following the merger with Hitachi Capital to which the purchase method was applied for the years ended March 31,
2024 and 2023, respectively.
(3) Sales from disposal of lease properties are sales from disposal of lease properties due to lease contract maturities of
the consolidated foreign subsidiaries that adopted IFRS Accounting Standards or U.S. GAAP.
(4) Other revenue primarily includes revenue from finance lease, operating lease, loans, and installment sales.

As shown in the above table, revenue from contracts with customers is immaterial to total revenue.
Therefore, the Companies omitted disclosure of basic information to understand revenues from contracts
with customers and information on relationship between satisfaction of performance obligations in contracts
with customers and transaction prices allocated to remaining performance obligations.
(2) Contract balances
Receivables from contracts with customers, contract assets, and contract liabilities as of March 31, 2024 and2023, were as follows:

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

Millions of yen
2024
2023

¥8,661¥8,768

8,942

4,199

Thousands of
U.S. dollars
2024$57,359
59,221

Financial Information

2024

61

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

19. Selling, General, and Administrative Expenses
Selling, general, and administrative expenses for the years ended March 31, 2024 and 2023, consisted of thefollowing:

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

Millions of yen
2024
2023

¥21,606 ¥16,858
75,48670,274
136,825 131,467¥233,919 ¥218,600

Thousands of
U.S. dollars
2024$143,089
499,911906,131$1,549,132

20. Gain on Revaluation of Investment Securities
The Companies did not recognize any gain on revaluation of investment securities for the year ended March
31, 2024.
Investment securities held by the consolidated foreign subsidiaries that adopted IFRS Accounting Standards
were reported at fair value. Some of these investment securities are excluded from the scope of applying theequity method as the holding ratio decreased and the Companies determined that they do not have the ability
to exercise significant influence, for the year ended March 31, 2023.

21. Gain on Step Acquisition
The Company recognized a step acquisition gain on its existing holdings of CPD, when CPD and Nanko
Logistics Special Purpose Company and two other companies became consolidated subsidiary due to theacquisition of all shares by the Company for the year ended March 31, 2024.
The Company recognized a step acquisition gain on its existing holdings of Mirai Soden Chita Mihama
LLC (“Mirai Soden Chita Mihama”), which engages in solar power generation, when Mirai Soden Chita
Mihama became consolidated subsidiary due to the additional silent partnership shares purchased by theCompany for the year ended March 31, 2023.

22. Loss on Sales of Shares of Subsidiaries and Affiliates
The Companies mainly recognized loss on the sale of whole shares of Shutoken Leasing, formerly the
consolidated subsidiary of the Company, for the year ended March 31, 2024.
The Companies recognized loss on the sale of whole shares of Diamond Asset Finance, formerly the
consolidated subsidiary of the Company, for the year ended March 31, 2023.

62

Financial Information

202423. Related-Party Transactions
The transactions with subsidiaries of Mitsubishi UFJ Financial Group, Inc. or Mitsubishi Corporation, which
has significant influence over the Company, for the years ended March 31, 2024 and 2023, 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 $125,870 thousand

Millions of yen
2024
2023

¥16,460
N/A
21,017¥12,886
N/A *2
19,799Thousands of
U.S. dollars
2024$109,009
255,269
139,188

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, 2024 and 2023, 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
2024
2023

¥93,631 ¥101,428
53,821
43,346
N/A
N/A *5357,143 399,765
N/A
N/A *6

Thousands of
U.S. dollars
2024$620,077
356,430
857,660
2,365,191
3,900,334*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, 2024 and 2023, were
$1,887,714 thousand and $1,543,571 thousand, respectively.
*5 $1,393,566 thousand*6 $3,275,901 thousand

24. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes, which,in the aggregate, resulted in a normal effective statutory tax rate of approximately 30.6% for the years ended
March 31, 2024 and 2023.
The tax effects of significant temporary differences, which resulted in deferred tax assets and liabilities, asof March 31, 2024 and 2023, were as follows:

Deferred tax assets:
Tax loss carryforwards...................................................................
Accrued expenses ..........................................................................
Allowance for doubtful receivables...............................................
 Asset retirement obligations ..........................................................
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 ..........................................................
Less deferred tax liabilities ............................................................
  Net deferred tax assets ...............................................................

Millions of yen
2024
2023

Thousands of
U.S. dollars
2024¥108,555 ¥101,147
15,458
11,424
14,023
16,21011,261
11,19454,46250,471
203,761 190,450(6,377)(6,968)(11,141)(8,693)(17,518) (15,662)(160,094) (141,562)¥26,148 ¥ 33,224$718,910
102,372
92,86774,580360,681
1,349,412(42,231)(73,786)(116,017)(1,060,226)$173,167

Financial Information

2024

63

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

Millions of yen
2024
2023

¥267,549 ¥224,401
12,50851,662
48,463319,212 285,373(160,094) (141,562)¥159,118 ¥143,810

Thousands of
U.S. dollars
2024$1,771,853
342,137
2,113,991(1,060,226)$1,053,764

The expiration of tax loss carryforwards, the related valuation allowances and the resulting net deferred
tax assets as of March 31, 2024 and 2023, were as follows:

March 31, 2024

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

March 31, 2023

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

March 31, 2024

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 ...........

Millions of yen
After five
years through10 years

One year or
less

After oneyear throughfive years¥248¥5,894¥4,483¥97,928¥108,555(208)(4,916)

(713)

(537)

(6,377)¥40¥977¥3,769¥97,390¥102,178

One year or
less

After oneyear throughfive years¥468¥5,026¥2,077¥93,574¥101,147(260)(3,905)(1,995)(806)(6,968)¥208¥1,121¥82¥92,767¥94,179

One year or
lessMillions of yen
After five
years through10 years

After 10years

After 10years

Thousands of U.S. dollars
After one
After five
year throughyears throughAfter 10
five years
10 years
years

Total

Total

Total

$1,647$39,036$29,692$648,533$718,910(1,381)(32,562)(4,727)(3,560)(42,231)$266$6,474$24,965$644,973$676,678*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.

64

Financial Information

2024

Certain subsidiaries of the Company have tax loss carryforwards as stated above and those will mainly
begin to expire in 2024.
A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflectedin the accompanying consolidated statements of income for the years ended March 31, 2024 and 2023, wereas follows:
Normal effective statutory tax rate .........................................................
Difference in statutory tax rates of foreign subsidiaries .....................
Other — net ........................................................................................
Actual effective tax rate ..........................................................................

2024

30.6%
(5.4)
0.5
25.7%

2023

30.6%
(3.7)
(3.8)
23.1%

25. Leases
The future minimum payments under noncancelable operating leases as lessee as of March 31, 2024 and2023, were as follows:

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

Millions of yen
2024
2023

¥3,525
7,296¥10,821¥3,773
6,293¥10,066

Thousands of
U.S. dollars
2024$23,344
48,324$71,668

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

Financial Information

2024

65

denominated debt.
Please see Note 27 for more details about derivatives.
(3) Risk management for financial instruments(a) Credit risk management
The Companies manage the credit risk of individual customers based on their overall strategy,
financial position, credit rating portfolio characteristics, and other factors in accordance with theinternal credit management rules. This credit management process is conducted by the businessdepartments and the credit department, with regular reporting to the Risk Management Committee,
the Executive Committee, and the Board of Directors. In addition, the Internal Audit department
monitors and audits credit administration and management status.
(b) Market risk management (foreign exchange risk and interest rate fluctuation risk)
The Companies manage exposure to interest rate fluctuation risk, foreign exchange risk, and pricefluctuation risk according to internal rules for market risk management.
(i) Interest rate fluctuation risk management
In order to properly manage interest rate fluctuation risk, the Companies not only constantly
monitor interest rate movements, but also monitor any mismatches of interest conditions and thatof duration between invested assets and financing liabilities. With respect to interest rate
fluctuation risk, the Company convenes the ALM Committee quarterly, attended by officers andthe managers of related departments, to review market conditions and asset/liability portfolio
analysis. The ALM Committee deliberates and decides on policies with regard to current risk
management and new financing. In addition, the Company reports quarterly to the Risk
Management Committee.
(ii) Quantitative information of market risk
The Companies have financial instruments exposed to market risk, which are composed mainly of
installment sales receivables, lease receivables, and investments in leases, loans, marketable andinvestment securities, short-term borrowings, and long-term debt. The Companies adopt ALM tothese financial instruments and use indices, such as 10 BPV (*1) and VaR (*2) to measure market
risks.
In calculating the market risk and the VaR, the Companies adopt a historical simulation model(holding period, one year; confidence interval, 99.9%; and observation period, 10 years).
The 10 BPV at March 31, 2024 and 2023, was ¥6,642 million ($43,989 thousand) and ¥4,334
million, respectively. The market risk VaR at March 31, 2024 and 2023, was ¥163,952 million($1,085,774 thousand) and ¥130,849 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 that 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.

66

Financial Information

2024

(d) Price fluctuation risk management
Price fluctuation risk for marketable and investment securities are reported to the Risk Management
Committee. Most equity securities held by the Companies are for the purpose of maintaining
business relationships with customers, and the Companies perform an annual review on whether tomaintain these shares by monitoring the financial condition of the issuers (customers) andtransaction status with customers as well as evaluating the cost of capital.
(e) Liquidity risk management on financing
The Companies monitor their cash management status as a whole and control the duration mixtureof financing. Through maintaining commitment lines with multiple financial institutions anddiversification of financing methods, the Companies endeavor to secure liquidity. In addition, basedon the Companies’ internal liquidity risk management rule, the probability of realization of the risk
under the current financing environment is monitored, 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 acontingency plan for each stage of liquidity 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, investments in partnerships, etc., that the equity interest equivalents are recorded as
net in the balance sheet applying the Paragraph 24-6 of Implementation Guidance on AccountingStandard for Fair Value Measurement are not included in the tables below.

Financial Information

2024

67

(a) The financial assets and liabilities measured at the fair values in the consolidated balance sheet:
Millions of yen
March 31, 2024
Marketable and investment securities:
Available-for-sale securities:
Equity securities ..............................
Government and municipal bonds ....
Corporate bonds ...............................
Other .................................................
Derivative transactions (1):Foreign currency forward contracts .
Interest rate swaps ............................
Total assets............................................

Level 1

¥19,072
5,079¥24,152

Level 2

Level 3

Total

¥22,340

1,077¥41,412
5,079
26,947
6,929¥23,417(62,283)
36,092¥54,177¥26,947
5,852(62,283)
36,092¥6,608Millions of yen
March 31, 2023
Marketable and investment securities:
Available-for-sale securities (1):Equity securities ..............................
Government and municipal bonds ...
Corporate bonds ...............................
Other .................................................
Derivative transactions (2):Foreign currency forward contracts .
Interest rate swaps ............................
Total assets............................................

Level 1

¥26,9223,624¥30,546

Level 2

Level 3

¥21,238¥29,6105,420(38,249)
53,331¥50,112

Total

1,618

¥48,161
3,624
29,6107,039¥22,857(38,249)
53,331¥103,516

Thousands of U.S. dollars
March 31, 2024
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

$126,308
33,638$159,947

Level 2

$178,458
38,755(412,474)
239,024$43,764

Level 3

Total

$147,948

7,133$274,256
33,638
178,458
45,889$155,081(412,474)
239,024$358,793

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.
(2) Carrying amounts of derivative transactions to which hedge accounting is applied were ¥(24,941) million ($(165,172)
thousand) and ¥19,402 million as of March 31, 2024 and 2023, respectively, to which Treatment of Hedge Accounting
for Financial Instruments that Reference LIBOR (the revised Practical Solution No. 40, March 17, 2022) is applied.

68

Financial Information2024

(b) The financial assets and liabilities not measured at the fair values in the consolidated balance sheet:
Millions of yen
Fair value
March 31, 2024
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 3Carrying
amountTotal

Unrealized
gain (loss)¥172,368(7,016)¥169,137

㻌㻌¥169,137
㻌
㻌
㻌

¥244

2,038,484

2,038,728(729)
164,621¥4,516

2,061,346(17,545)
2,043,800(5,071)

3,153,989(81,700)㻌㻌㻌

43,7753,125,434

3,169,209
㻌

(8,422)
3,063,866

105,342

122,035㻌㻌㻌

¥44,01955,051¥5,388,108

55,051¥5,432,127(66,983)
55,051¥5,327,340¥104,787¥2,144,743¥2,144,743¥2,170,273¥(25,530)

4,385,750

4,385,750

4,448,320(62,569)

552,714¥7,083,209

552,714¥7,083,209

565,959¥7,184,554(13,244)¥(101,345)

Financial Information

2024

69

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

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

70

Financial Information

2024

Level 1

Level 2

Level 3

Total

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

1,842,492

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

3,264,169(83,715)

79,9703,185,697

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

92,473

99,912

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

4,137,837

4,137,837

4,213,486(75,649)

600,046¥6,921,840

600,046¥6,921,840

604,302¥7,043,521(4,255)¥(121,680)

31,128¥5,286,833¥80,234¥2,183,956

 

Thousands of U.S. dollars
Fair value
March 31, 2024
Receivables:
Installment sales .....
Deferred profit on
installment sales ....................
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Receivables:
Loans ......................
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Lease receivables andinvestments inleases .....................
Residual values ofinvestments inleases ..................
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Long-term
receivables .............
Allowance for
doubtfulreceivables ..........
Subtotal ..............
Total ...........................

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

Level 1

Level 2

Level 3

Total

Carrying
amountUnrealized
gain (loss)$1,141,510(46,469)$1,120,119$1,120,119(4,834)
1,090,206$29,912

13,651,298$1,61913,499,895

13,501,514(116,195)
13,535,103(33,588)

20,887,345(541,060)

289,900

20,698,239

20,988,140(55,778)
20,290,506

697,633

808,178

364,581$35,974,355(443,596)
364,581$35,280,398$693,957$14,203,596$14,203,596$14,372,675$(169,078)

29,044,708

29,044,708

29,459,076(414,368)

3,660,364$46,908,669

3,660,364$46,908,669

3,748,077$47,579,829(87,713)$(671,160)$291,520

364,581$35,682,835

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
are approximate fair value because of their short maturities.

Financial Information

2024

71

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

72

Financial Information

2024

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

Information on the financial instruments measured at the fair values in the consolidated balance sheet thatcategorized as Level 3 is summarized below:
Quantitative information related to significant unobservable inputs
March 31, 2024

Valuation method

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

Significant unobservable
inputs

Input range

Weighted averageof input

EV/RAV ratio

1.37

1.37

In addition to the above, for certain unlisted equity securities held by the consolidated foreign subsidiaries that
adopted IFRS Accounting Standards, present value method is applied where future cash flows estimated withconsideration of profitability, capital expenditure and repayment of debts is used as significant unobservable inputs.
These are categorized as Level 3. Large fluctuation of estimated future cash flows cause significant fluctuation ofstock values.
Information for others has been omitted as it is immaterial.

Financial Information

2024

73

March 31, 2023

Valuation method

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

Significant unobservable
inputs

Input range

Weighted averageof input

EV/RAV ratio

1.37

1.37

Information for others has been omitted as it is immaterial.

Reconciliation from the beginning balance to the ending balance
Millions of yen
2024
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 ..............................................
Sales and redemption ..........................
Reclassified to Level 3 ..........................
Reclassified from Level 3 .....................
Ending balance ......................................
Income on financial assets andliabilities held at end of year (1) .......

¥21,238¥1,618¥22,857

125
2,203

(31)
4

93
2,207

61
(1,288)(513)

61(1,801)

22,3401,077

23,417

85

(31)

54

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

74

Financial Information

2024

Total

Total

¥16,194¥2,331¥18,526

(273)
1,711

(167)
1

(441)
1,712

7,140
(3,534)

216
(762)

7,356
(4,297)

21,238

1,618

22,857

(273)

(167)

(441)

Thousands of U.S. dollars
2024
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 ..............................................
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$140,655$10,717$151,372

828
14,589

(210)
27

618
14,617406(8,531)(3,401)406(11,932)

147,948

7,133

155,081

568

(210)

358

Notes:(1) Mainly included in “Revenues” for the year ended March 31, 2024, and “Other — net” for the year ended
March 31, 2023, in the consolidated statements of income.
(2) Mainly included in “Foreign currency translation adjustments” for the years ended March 31, 2024 and 2023, inthe consolidated statements of comprehensive income.
(3) Purchase includes increases due to transfer from other accounts for the year ended March 31, 2023.

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

Financial Information

2024

75

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

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

2023

Thousands of
U.S. dollars
2024¥132,405
9,734¥142,140¥125,362¥9,333¥134,696$876,858
64,466$941,324¥207,586¥122,904$1,374,744¥207,586

57,291¥180,195$1,374,744

Millions of yen
2024

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 thefair values are not subject to fair value disclosure according to Paragraph 24-16 of Implementation Guidance on
Accounting Standard for Fair Value Measurement.

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

March 31, 2024
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 ..................................

76

Financial Information2024

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¥335,307㻌

27,4663,704

㻌
㻌㻌¥8,288
169,406

58,790903,899¥43,191
390,991¥31,388
268,182¥20,360
191,509¥10,348
137,356

1,015,483

809,534

603,049

407,653

254,3122,137
428¥2,347,217

1,795
58,473¥1,303,986

2,544
17,042¥922,207

3,071
5,706
¥628,301

1,997
31,179¥435,194617,794㻌㻌
20,48065,948¥881,918

March 31, 2023

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

March 31, 2024
Cash and cash
equivalents ....................
Time deposits other thancash equivalents ............
Bank overdrafts ................
Receivables
Installment sales (1) ......
Loans ............................
Lease receivables andinvestments in leases(2) .................................
Investment securities
Available-for-salesecurities with
contractual maturities
Debt securities ..........
Other.........................
Total ..................................

Due in one
year or lessDue after
one yearthrough twoyears

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

Due after
four years
through fiveyears

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

1,049,970

817,208

632,576402,751

247,334

650,363

1,003
2,209
¥2,561,485

5,077
36,407¥1,257,722

1,651
20,115¥964,162

2,009
20,889¥616,366

2,453
6,383
¥398,658

21,03878,523¥931,752

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$2,220,576

㻌

㻌

㻌

㻌

㻌

181,898
24,533㻌㻌㻌

389,341
5,986,091$286,035
2,589,347$207,870
1,776,046$134,836
1,268,273$68,534
909,642$54,892
1,121,896

6,725,053

5,361,158

3,993,707

2,699,690

1,684,189

4,091,351
㻌

14,156
2,836$15,544,487

11,890387,241$8,635,672

16,848112,861$6,107,332

20,34137,791$4,160,933

13,229206,487$2,882,084

㻌
135,631436,747$5,840,519(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.

Financial Information

2024

77

27. Derivatives
Derivative transactions to which hedge accounting is not applied as of March 31, 2024 and 2023, were as
follows:

Currency interest rate swap
contracts:
U.S. dollars payment andJapanese yen receipt ..................
Indonesia rupiah payment andJapanese yen receipt ..................
Foreign exchange forward contracts:
Selling Sterling pound ...................
Buying Euro...................................
Buying Chinese yuan .....................
Interest rate swap contracts:
Fixed-rate payment andfloating-rate receipt....................

Currency interest rate swap
contracts:
U.S. dollars payment andJapanese yen receipt ..................
Indonesia rupiah payment andJapanese yen receipt ..................
Foreign exchange forward contracts:
Selling Sterling pound ...................
Buying Euro...................................
Buying Chinese yuan .....................
Interest rate swap contracts:
Fixed-rate payment andfloating-rate receipt....................

78

Financial Information

2024

2024
Contract
amountContract due after
Fairamount one year
value

Millions of yen

2023
Contract
amountUnrealized Contract due afterFairgain (loss) amount one year
value

¥10,000
¥950

¥950

3,714
32
6

8,288

2,000

$6,291

24,598216
40

54,887

13,245¥(2,437)¥(2,437)¥(251)¥(251)

1,550¥1,350

(146)

(146)

(822)

(822)

8,947
58

3,714

(1,404)(1,404)

(176)

(176)

9,754

8,288

(334)

(334)

Thousands of U.S. dollars
2024
Contract
amountContract due after
Fair
Unrealized
amount one year
value
gain (loss)$6,291

Unrealized
gain (loss)$(1,664)$(1,664)(5,445)2
1(5,445)2
1(1,170)(1,170)Derivative transactions to which hedge accounting is applied as of March 31, 2024 and 2023, were as
follows:

Hedged item

Currency interest rate swap contracts:
Indonesia rupiah payment andU.S. dollars receipt .................................... Loans
Thai baht payment andU.S. dollars receipt .................................... Loans
Sterling pound payment andU.S. dollars receipt .................................... Bonds
Singapore dollars payment andU.S. dollars receipt .................................... Loans
Indonesia rupiah payment andJapanese yen receipt .................................. Loans
Thai baht payment andJapanese yen receipt .................................. Loans and bonds
Sterling pound payment andJapanese yen receipt .................................. Loans and bonds
Sterling pound payment and Euro receipt ..... Loans and bonds
Sterling pound payment andHong Kong dollars receipt ......................... Bonds
Sterling pound payment andAustralian dollars receipt ........................... Bonds
Sterling pound payment andSouth Africa rand receipt ........................... Bonds
Indonesia rupiah payment andSingapore dollars receipt ........................... Loans
Cross-currency interest rate swap contracts:
Euro payment and Thai baht receipt .............. Loans
Foreign exchange forward contracts:
Buying U.S. dollars ..................................... Forecast transaction
Foreign exchange forward contracts:
Selling U.S. dollars ...................................... Forecast transaction
Buying Euro.................................................. Commercial paper
Buying U.S. dollars ..................................... Commercial paper
Buying Japanese yen ................................... Loans
Interest rate swap contracts:
Floating-rate payment andfixed-rate receipt ........................................ Loans and bonds
Fixed-rate payment andfloating-rate receipt.................................... Loans and bonds
Interest rate swap contracts:
Fixed-rate payment andfloating-rate receipt.................................... Loans

Contract
amountMillions of yen
2024
Contract
amountdue after
one year

Fair
value

¥13,103¥5,811

¥81

9,647

8,479

(21)

92,81461,018(3,119)

8,534

3,065

135

1,900

500

(231)

4,000

(807)

291,800
273,590

201,000
123,246(50,942)(5,182)30,5578,896

529

43,88143,881

(463)

3,196

57

626

298

114

38

49

315
38
49,135
3,028
7,000

16

13
(800)
(32)
(482)

68,647

2,677

(399)

1,587,394 1,212,540

36,668107,299

81,407

Financial Information

2024

79

Hedged item

Currency interest rate swap contracts:
Indonesia rupiah payment andU.S. dollars receipt .................................... Loans
Thai baht payment andU.S. dollars receipt .................................... Loans
Sterling pound payment andU.S. dollars receipt .................................... Bonds
Singapore dollars payment andU.S. dollars receipt .................................... Loans
Indonesia rupiah payment andJapanese yen receipt .................................. Loans
Thai baht payment andJapanese yen receipt .................................. Loans and bonds
Sterling pound payment andJapanese yen receipt .................................. Loans and bonds
Sterling pound payment and Euro receipt ..... Loans and bonds
Sterling pound payment andHong Kong dollars receipt ......................... Bonds
Sterling pound payment andAustralian dollars receipt ........................... Bonds
Sterling pound payment andChinese yuan receipt .................................. Bonds
Sterling pound payment andSwiss franc receipt ..................................... Bonds
Sterling pound payment andSouth Africa rand receipt ........................... Bonds
Indonesia rupiah payment andSingapore dollars receipt ........................... Loans
Cross-currency interest rate swap contracts:
Euro payment and Thai baht receipt .............. Loans
Foreign exchange forward contracts:
Buying U.S. dollars ..................................... Forecast transaction
Foreign exchange forward contracts:
Selling U.S. dollars ...................................... Forecast transaction
Buying Euro.................................................. Commercial paper
Buying U.S. dollars ..................................... Commercial paper
Interest rate swap contracts:
Floating-rate payment andfixed-rate receipt ........................................ Loans and bonds
Fixed-rate payment andfloating-rate receipt.................................... Loans and bonds
Interest rate swap contracts:
Fixed-rate payment andfloating-rate receipt.................................... Loans

80

Financial Information

2024

Contract
amountMillions of yen
2023
Contract
amountdue after
one year

Fair
value

¥5,526¥2,723¥127

10,104

6,892

299

71,83952,477142

11,398

8,861

133

1,000

1,000

(117)

5,500

4,000

(645)

311,700
171,221

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

10,0357,824(9)11,659

8,520

(556)

1,942

64

9,938

256

1,498

1,498

11

721

562

17

172

105

28
282
76,271
14,508

38

58
(386)
(64)

90,23057,118(1,311)

1,405,334

920,949

54,977

132,326

99,581

Hedged item

Currency interest rate swap contracts:
Indonesia rupiah payment andU.S. dollars receipt .................................... Loans
Thai baht payment andU.S. dollars receipt .................................... Loans
Sterling pound payment andU.S. dollars receipt .................................... Bonds
Singapore dollars payment andU.S. dollars receipt .................................... Loans
Indonesia rupiah payment andJapanese yen receipt .................................. Loans
Thai baht payment andJapanese yen receipt .................................. Loans and bonds
Sterling pound payment andJapanese yen receipt .................................. Loans and bonds
Sterling pound payment and Euro receipt ..... Loans and bonds
Sterling pound payment andHong Kong dollars receipt ......................... Bonds
Sterling pound payment andAustralian dollars receipt ........................... Bonds
Sterling pound payment andSouth Africa rand receipt ........................... Bonds
Indonesia rupiah payment andSingapore dollars receipt ........................... Loans
Cross-currency interest rate swap contracts:
Euro payment and Thai baht receipt .............. Loans
Foreign exchange forward contracts:
Buying U.S. dollars ....................................... Forecast transaction
Foreign exchange forward contracts:
Selling U.S. dollars ...................................... Forecast transaction
Buying Euro.................................................. Commercial paper
Buying U.S. dollars ..................................... Commercial paper
Buying Japanese yen ................................... Loans
Interest rate swap contracts:
Floating-rate payment andfixed-rate receipt ........................................ Loans and bonds
Fixed-rate payment andfloating-rate receipt.................................... Loans and bonds
Interest rate swap contracts:
Fixed-rate payment andfloating-rate receipt.................................... Loans

Thousands of U.S. dollars
2024
Contract
amountContract
Fair
due after
amountone yearvalue$86,779$38,487$539

63,89056,152(141)

614,664

404,094(20,661)

56,517

20,302899

12,582

3,311(1,534)

26,490(5,347)

1,932,450 1,331,125
1,811,855 816,200(337,365)(34,318)

202,365

58,916

3,505

290,605

290,605(3,072)

21,165

378

4,151

1,976

756

255

326

2,088
254
325,398
20,05446,357110

90(5,300)(212)(3,196)454,622

17,729(2,645)

10,512,546 8,030,067

242,840

710,595

539,123

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, 2024 and 2023, and included in the fair value of hedged items.

Financial Information

2024

81

28. Other Comprehensive Income
The components of other comprehensive income for the years ended March 31, 2024 and 2023, were as
follows:

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

82

Financial Information

2024

2023

Thousands of
U.S. dollars
2024¥8,754(8,551)
203
(62)
140

¥(311)(886)(1,198)734(463)$57,978(56,632)
1,346
(416)
930

12,356(36,011)(23,654)
5,170(18,484)

53,847(2,591)
51,256(11,624)
39,631

81,832(238,487)(156,655)
34,242(122,412)

104,217

93,891

690,181104,217

93,891

690,181104,217

93,891

690,181

7,392
(150)
7,242
(2,249)
4,992

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

48,959(995)
47,964(14,898)
33,065

6,521(1,828)
4,692¥95,558

11,204
1,305
12,510¥147,424

43,187(12,111)31,075$632,840

Millions of yen
202429. Segment Information
Under ASBJ Statement No. 17, Accounting Standard for Disclosures about Segments of an Enterprise andRelated Information, and ASBJ Guidance No. 20, Guidance on Accounting Standard for Disclosures about
Segments of an Enterprise and Related Information, an entity is required to report financial and descriptive
information about its reportable segments. Reportable segments are operating segments or aggregations ofoperating segments that meet specified criteria. Operating segments are components of an entity about which
separate financial information is available and such information is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing performance. Generally, segment
information is required to be reported on the same basis as is used internally for evaluating operating
segment performance and deciding how to allocate resources to operating segments.
1. Description of reportable segments
Effective April 1, 2022, the Companies integrated business organizations with similar functions and roles in
preparation for the 2025 MTMP. Following the organizational changes, the Companies have changed thereportable segments to the following seven segments, which are “Customer Solutions,” “Global Business,”“Environment Energy & Infrastructure,” “Aviation,” “Logistics,” “Real Estate,” and “Mobility,” effective
April 1, 2022.
Following the organizational changes effective April 1, 2023, the name of the reportable segment“Environment, Energy & Infrastructure” was changed to “Environment & Energy” from April 1, 2023. Thechange was merely a name change, and there were no impacts on classification or amounts of segment
information, etc.
Description of new reportable segments is as follows:
Reportable segment
Customer Solutions

Global Business
Environment & Energy
Aviation
Logistics
Real Estate
Mobility

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

The segment information for the year ended March 31, 2023, is presented under the new segment name.

Financial Information

2024

83

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

Year Ended March 31,
Customer
2024
Solutions
Revenues:
Revenue from externalcustomers ....................... ¥1,043,690
Intersegment revenue ortransfers..........................
1,343
Total ....................... 1,045,033
Segment profit ..................
38,159Segment assets (3)............ 2,966,569
Other items:
Depreciation .....................
92,463
Amortization of
goodwill .........................
Cost of funds and interest
expense ..........................
14,553Equity in earnings ofaffiliates .........................
971
Other income....................
6,635
Gain on sales ofinvestment securities ..
5,160
Gain on sales of sharesof subsidiaries andaffiliates ......................
1,475
Gain on step
acquisition ..................
Other expenses ................
890
Loss on sales ofinvestment securities ..
Loss on sales of sharesof subsidiaries andaffiliates ......................
890
Taxes ................................
16,154
Investments in equity
method affiliates.............
17,055
Increase in property andequipment andintangible assets .............
97,38984

Financial Information

2024

GlobalBusiness

Millions of yen
Reportable segment
Environment& Energy

Aviation

Logistics¥428,161¥49,807¥208,281¥124,659

365
428,526
16,6093,070,801

3
49,8107,331
416,600

208,281
27,3382,020,037

95,342

18,31585,021

124,659
17,835
1,099,079
㻌51,322

3,356

1,105

Real Estate

Mobility¥90,558¥3,845

17
90,576
11,934525,414

3,845
2,796
51,952

3,133

1,124

2,070

511

71

109,555

8,530

57,38828,395

4,095

810

112

3,958
5

106
1,481

214

283
4,822

3,630

5

1,481

393

45

250

45

4,822

142
7,280

(1,981)

6,355

5,073

8,914

(366)

9,674

94,901

4,694

2,062

17,36932,091

238,103

16,651

398,067

32,80892,6809,087

Millions of yen
Year Ended March 31,
Adjustments Consolidated
2024
(1)
(2)
Revenues:
Revenue from externalcustomers .......................
¥1,578 ¥1,950,583
Intersegment revenue ortransfers..........................
(1,729)Total .......................
(151) 1,950,583
Segment profit ..................
1,837
123,842
Segment assets (3)............
999,401 11,149,858
Other items:
Depreciation .....................
380
347,103
Amortization of
goodwill .........................
2,117
9,232
Cost of funds and interest
expense ..........................
(3,140)220,189
Equity in earnings ofaffiliates .........................
9,278
Other income....................
4,427
17,372Gain on sales ofinvestment securities ..
595
7,243
Gain on sales of sharesof subsidiaries andaffiliates ......................
3,831
5,306
Gain on step
acquisition ..................
4,822
Other expenses .................
1,329
Loss on sales ofinvestment securities ..
296
Loss on sales of sharesof subsidiaries andaffiliates ......................
1,032
Taxes ................................
1,583
43,013
Investments in equity
method affiliates.............
177,850
Increase in property andequipment andintangible assets .............
4,126
888,915

Financial Information

2024

85

Year Ended March 31,
Customer
2023
Solutions
Revenues:
Revenue from externalcustomers ....................... ¥ 1,082,135
Intersegment revenue ortransfers..........................
1,333
Total ....................... 1,083,469
Segment profit ..................
38,167
Segment assets (3)............ 3,227,742
Other items:
Depreciation .....................
104,644
Amortization of
goodwill .........................
Cost of funds and interest
expense ..........................
12,702Equity in earnings ofaffiliates .........................
1,277
Other income....................
1,088
Gain on sales ofinvestment securities ..
1,088
Gain on revaluation of
investment securities ..
Gain on step
acquisition ..................
Other expenses .................
29
Loss on sales ofinvestment securities ..
29
Loss on revaluation of
investment securities ..
Loss on sales of sharesof subsidiaries andaffiliates ......................
Impairment loss ............
Taxes ................................
17,042
Investments in equity
method affiliates.............
21,291
Increase in property andequipment andintangible assets .............
67,06986

Financial Information

2024

Millions of yen
Reportable segment

GlobalBusiness

Environment& Energy

Aviation

Logistics

Real Estate

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

331,775
29,0132,644,283

5
48,10911,657433,296

167,0226,209
1,640,232

116,671
15,385
1,092,910

70
93,68012,645447,277

47
55,843
3,798
41,402

77,151

14,846

83,17454,415

3,018

14,224

3,138

1,935

500

67

841
58,6606,161

38,647

22,810

5,520

732

(60)
7,194

7,691
2,694

155
109

156

146

2,615

1,534

109

7,194
2,506

1,159
366

1,006

26
2,000

366
1,006

479
10,852

4,973

2,791

4,601

(51)

356

3,835

86,712

4,291

1,927

15,02530,024

174,698

14,378156,170

49,971

5,445

14,428

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

Financial Information

2024

87

Year Ended March 31,
2024
Revenues:
Revenue from externalcustomers .......................
Intersegment revenue ortransfers..........................
Total .......................
Segment profit ..................
Segment assets (3)............
Other items:
Depreciation .....................
Amortization of
goodwill .........................
Cost of funds and interest
expense ..........................
Equity in earnings ofaffiliates .........................
Other income....................
Gain on sales ofinvestment securities ..
Gain on sales of sharesof subsidiaries andaffiliates ......................
Gain on step
acquisition ..................
Other expenses .................
Loss on sales ofinvestment securities ..
Loss on sales of sharesof subsidiaries andaffiliates ......................
Taxes ................................
Investments in equity
method affiliates.............
Increase in property andequipment andintangible assets .............

88

Financial Information

2024

Thousands of U.S. dollars
Reportable segment

Customer
SolutionsGlobalBusiness$6,911,857$2,835,506$329,849$1,379,344$825,561$599,725$25,470

8,895
6,920,753
252,714
19,646,157

2,417
2,837,924
109,999
20,336,435

23
329,872
48,5492,758,946

1,379,344
181,049
13,377,731

825,561
118,116
7,278,675

116
599,841
79,0333,479,564

25,47018,521
344,053

612,340

631,410

121,294

563,054339,883

20,7507,445

22,22813,711

3,389

470

Environment& Energy

7,320

Aviation

Logistics

㻌Real Estate

Mobility

96,380725,533

56,492

380,059

188,051

27,122

5,366

6,435
43,945746

26,216
36

703
9,812

1,423

1,879
31,93524,04336

9,812

34,175
9,770
5,894

2,607

300

1,661

300

31,935

5,894
106,982

945
48,215(13,123)

42,08633,60259,033(2,427)112,953

64,069628,488

31,086

13,661

115,032

212,524

644,961

1,576,845

110,274

2,636,209

217,275

613,778

60,184

Year Ended March 31,
2024
Revenues:
Revenue from externalcustomers .......................
Intersegment revenue ortransfers..........................
Total .......................
Segment profit ..................
Segment assets (3)............
Other items:
Depreciation .....................
Amortization of
goodwill .........................
Cost of funds and interest
expense ..........................
Equity in earnings ofaffiliates .........................
Other income....................
Gain on sales ofinvestment securities ..
Gain on sales of sharesof subsidiaries andaffiliates ......................
Gain on step
acquisition ..................
Other expenses .................
Loss on sales ofinvestment securities.
Loss on sales of sharesof subsidiaries andaffiliates ....................
Taxes ................................
Investments in equity
method affiliates.............
Increase in property andequipment andintangible assets .............

Thousands of U.S. dollars
Reportable segment
Adjustments Consolidated(1)(2)$10,453 $12,917,769(11,453)(1,000) 12,917,769
12,165820,150
6,618,555 73,840,120
㻌
2,519
2,298,696
14,022

61,142(20,798)

1,458,207

29,31861,449115,048

3,945

47,96925,37235,142
31,9358,802
1,961

10,4896,840
284,858
1,177,816

27,3295,886,859

Notes:(1) “Adjustments” in revenues contain adjustments of ¥(1,541) million ($(10,211) thousand) and ¥(3,062) million forthe years ended March 31, 2024 and 2023, respectively, due to purchase method accounting applied to the mergerof Hitachi Capital.
“Adjustments” in segment profit contain mainly Company-wide expenses and revenues, which are not attributed
to each reportable segment. “Adjustments” in segment profit also contain adjustments due to purchase method
accounting applied to the merger of Hitachi Capital of ¥1,387 million ($9,189 thousand) and ¥2,775 million for theyears ended March 31, 2024 and 2023, respectively.
“Adjustments” in segment assets contain goodwill recognized when Diamond Lease Company Limited and UFJ
Central Leasing Company Limited merged and became Mitsubishi UFJ Lease in 2007, investment securities held
for Company-wide purpose which are not attributed to each reportable segment, and elimination of intersegment
transactions amounting to ¥29,016 million ($192,164 thousand) and ¥105,820 million, as of March 31, 2024 and2023, respectively. The total of such assets and the segment assets which attributed to each reportable segment,was ¥10,179,473 million ($67,413,729 thousand) and ¥9,632,966 million, as of March 31, 2024 and 2023,
respectively. The remaining amount of “Adjustments” in segment assets is the difference between the total amountof segment assets, including corporate division and the total assets on the consolidated balance sheets, and mainlycontains the assets other than the ones which are attributed to each reportable segment, such as cash and cash
equivalents, own-used assets amounting to ¥970,385 million ($6,426,390 thousand) and ¥1,093,230 million, as ofMarch 31, 2024 and 2023, respectively.
“Adjustments” in amortization of goodwill represents amortization of goodwill recognized at the time of mergerin 2007.

Financial Information

2024

89

“Adjustments” in cost of funds and interest expense represent the difference between the total amount of funding
cost on consolidated basis and the funding cost attributed to each reportable segment.
“Adjustments” in taxes represents difference between the total amount of taxes on consolidated basis and thetaxes attributed to each reportable segment.
(2) Segment profit is reconciled to reach net income attributable to owners of the parent in the consolidated statements
of income.
(3) Segment assets include operating assets, investments in the affiliates accounted for by the equity method, goodwill,
and investment securities.

4. Information about products and services
Millions of yen
2024

Installment
sales

Lease

Revenue from external customers ....... ¥1,588,627¥84,762

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

Other

Total

¥130,106¥147,086¥1,950,583

Millions of yen
2023

Installment
sales

Lease

Loans

¥94,841

Loans

Other

Total

¥94,886¥148,862¥1,896,231

Thousands of U.S. dollars
2024
Installment
sales
Loans
Other

Lease

Revenue from external customers ....... $10,520,711$561,341$861,635

Total$974,080 $12,917,769

5. Information about geographical areas(1) Revenues

Japan¥1,181,741

North
America

Millions of yen
2024
Europe/Middle and Near East
UnitedKingdom
Other
Asia/Oceania

Other¥188,488¥236,434¥21,381¥189,442¥133,094

Total¥1,950,583

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

Japan¥1,277,960

North
America

Millions of yen
2023
Europe/Middle and Near East
UnitedKingdom
Other
Asia/Oceania

Other¥142,882¥173,946¥19,285¥154,266¥127,891

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

90

Financial Information

2024

Total

¥1,896,231

JapanNorth
AmericaThousands of U.S. dollars
2024
Europe/Middle and Near East
UnitedKingdom
Other
Asia/Oceania$7,826,100$1,248,270$1,565,793$1,254,588$881,420

Other

Total

$141,596 $12,917,769“Revenues” in the “United Kingdom” previously included in “Europe/Middle and Near East” in the year
ended March 31, 2023, is independently presented from the year ended March 31, 2024, due to increasedmateriality. “5. Information about geographical areas (1) Revenues” for the year ended March 31, 2023, hasbeen reclassified to reflect the change.
As a result, “Revenues” of ¥ 328,212 million previously presented in “Europe/Middle and Near East” isreclassified as the “United Kingdom” of ¥ 173,946 and “Europe/Middle and Near East – Other” of¥ 154,266, respectively, for the year ended March 31, 2023.
(2) Property and equipment

Japan

United States

Other

Millions of yen
2024
Europe/Middle and Near East
UnitedKingdom
Other¥878,220¥698,401¥213,448¥427,813 ¥1,072,867

North America

Japan

United States

Other

Millions of yen
2023
Europe/Middle and Near East
UnitedKingdom
Other¥810,109¥565,163¥160,398¥344,282

North America

North America
Japan

United States

Other$5,816,032$4,625,174$1,413,567

Asia/Oceania¥742,969

Asia/Oceania¥866,363¥689,033

Thousands of U.S. dollars
2024
Europe/Middle and Near East
UnitedKingdom
Other

Asia/Oceania$2,833,199$4,920,328$7,105,083

Other

Total

¥202,993 ¥4,236,715

Other

Total

¥193,556 ¥3,628,907

Other

Total

$1,344,330 $28,057,717“Property and equipment” in the “United Kingdom” previously included in “Europe/Middle and Near East”
in the year ended March 31, 2023, is independently presented from the year ended March 31, 2024, due toincreased materiality. “5. Information about geographical areas (2) Property and equipment” for the year
ended March 31, 2023, has been reclassified to reflect this change.
As a result, “Property and equipment” of ¥ 1,210,645 million previously presented in “Europe/Middle
and Near East” is reclassified as the “United Kingdom” of ¥ 344,282 and “Europe/Middle and Near East –Other” of ¥ 866,363, respectively, for the year ended March 31, 2023.

Financial Information

2024

91

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

Customer
SolutionsGlobalBusiness

Environment& Energy¥5,816

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

Millions of yen
2024
Aviation

Logistics

Real Estate

Mobility

Logistics

Real Estate

Mobility

Real Estate

Mobility¥2,713

Millions of yen
2024
Adjustments Consolidated¥ 8,529

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

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

GlobalBusiness

Environment& Energy¥ 479

Millions of yen
2023
Aviation¥ 5,946¥ 2,473

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

¥ 8,899

Customer
SolutionsGlobalBusiness

Thousands of U.S. dollars
2024
Environment& Energy
Aviation
Logistics$38,516

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

$17,970

Thousands of U.S. dollars
2024
Adjustments Consolidated
Impairment loss................

$56,487

For the year ended March 31, 2024, the amounts reported in “Environment & Energy” is recorded in costs as
impairment loss of other operating assets. The amounts reported in “Aviation” is recorded in costs as
impairment loss of leased assets.
For the year ended March 31, 2023, the amounts reported in “Global Business” is recorded in otherincome (expense) as impairment loss of goodwill and investments and other assets - other. The amounts
reported in “Aviation” and “Logistics” are recorded in costs as impairment loss of leased assets.

92

Financial Information

2024

7. Information about amortization and unamortized balance of goodwill by reportable segment

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

GlobalBusiness

Environment& Energy

Millions of yen
2024
Aviation

Logistics

Real Estate

Mobility¥ 1,105¥ 3,356¥ 2,070

¥ 511

¥ 71

14,07030,82337,42912,712

702

Millions of yen
2024
Adjustments(1)
Consolidated
Amortization of goodwill...
Unamortized balance of
goodwill ...........................

¥ 2,117¥ 9,232

6,352

102,091

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

GlobalBusiness

Environment& Energy

Millions of yen
2023
Aviation

Logistics¥ 841¥ 3,138¥ 1,935

13,33032,00736,975

Real Estate¥ 500

Mobility¥ 67
714

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

¥ 2,117¥ 8,601

8,469

91,497

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

GlobalBusiness

Thousands of U.S. dollars
2024
Environment& Energy
Aviation
Logistics

Real Estate

Mobility$ 7,320$ 22,228$ 13,711$ 3,389$ 470

93,181

204,127

247,880

84,189

4,652

Thousands of U.S. dollars
2024
Adjustments(1)
Consolidated
Amortization of goodwill...
Unamortized balance of
goodwill ...........................

$ 14,022$ 61,142

42,068676,099

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

8. Information about gain from bargain purchaseNo gain from bargain purchase was recorded for the years ended March 31, 2024 and 2023.

Financial Information

2024

93

30. Net Income per Share
Reconciliation of the differences between basic and diluted net earnings per share (“EPS”) for the years
ended March 31, 2024 and 2023, were as follows:

For the year ended March 31, 2024

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

For the year ended March 31, 2023

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

Thousands ofsharesMillions of yen
Net income
attributable toowners of the parent

Weighted-average
shares¥123,842

1,435,070

Yen

U.S. dollars
EPS¥86.30$0.57¥86.06

$0.56

3,966
123,842

1,439,036

Millions of yen
Net income
attributable toowners of the parent

Thousands ofsharesYen

Weighted-average
sharesEPS¥116,241

1,436,042¥80.95

4,209¥116,241

1,440,251¥80.71

The number of the Company’s shares held by the trust for the performance-based share remuneration planis deducted in the number of treasury shares from the number of weighted-average shares used for
calculating the basic and diluted EPS.
31. Subsequent Events
a. On May 22, 2024, the Board of Directors declared the appropriation of retained earnings as follows:

Appropriations:
Cash dividends of ¥19.00 ($0.12) per share .....................................................

Millions of yen¥27,305

Thousands of
U.S. dollars

$180,828

b. Investment in European Energy A/S
At the meeting of the Board of Directors held on January 19, 2024, the Company resolved to invest
approximately EUR 700 million in European Energy A/S (“European Energy”) (the “Investment”), a Danish
company developing and operating renewable and next generation energy business mainly in Europe, andsigned an Investment Agreement (the “Agreement”) to acquire 20% of outstanding shares and voting rights
in European Energy. The investment was completed on April 16, 2024, in accordance with the Agreement.
As a result, European Energy became an affiliate of the Company, which is accounted for by the equity
method.
1. Objective of the investment
European Energy, active in 28 countries, achieved more than accumulated 3GW of renewable energy
development and has more than 60GW of development and construction pipelines mainly in Europe. Further,
European Energy has a large growth potential by being a global leading and pioneering player in Power-to-X

94

Financial Information2024

(*), which produces green energy, such as e-methanol and green hydrogen generated from renewable energy
sources.
“Promote a Decarbonized Society” is one of the Company’s important materiality. The Company has been
expanding its renewable energy business and increasing added value in the segment to realize thismateriality. In the fiscal year ended March 31, 2024, the Company launched its MTMP for FY2023 FY2025, and is proceeding with the evolution and layering of business models to achieve business portfoliotransformation. As one of its long-term growth strategies, the Company has been pursuing to enhancedevelopment functions of renewable energy business in Europe, whereby this Investment will accelerate theinitiative.
The Company, through the strategic partnership with European Energy and by leveraging the capability
and knowledge of both companies, will accelerate the development of renewable and green energy on a
global scale. By enhancing its initiatives in the Environment & Energy Business, the Company willcontribute to realizing a decarbonized society.
(*) Produce green fuels with low environmental impact using green electricity.
2. Overview of European Energy
Name:Business:
Financial condition(as of December 31, 2023)

European Energy A/S
Renewable energy and next generation energy business
Consolidated net assets
EUR 432 million
Consolidated total assets
EUR 2,027 million

3. Date of the investment
April 16, 2024
4. Number of shares to be acquired, acquisition price, and number of shares held before and after theinvestment
Number of shares held
before the investment
Number of shares to beacquired
Acquisition price
Number of shares held
after the investment

0 share(number of voting rights：0)(voting rights holding ratio：0%)
Outstanding share：Approximately 75 million shares
Approximately EUR 700 million
Approximately 75 million shares(number of voting rights：Approximately 75 million)(voting rights holding ratio：20.0%)

5. Procurement of the funds for the investment and the method of payment
The Company will acquire the shares of European Energy through its wholly owned subsidiary in Denmark,MHC Energy Europe ApS, mainly by undertaking new shares privately issued and allocated by European
Energy. Own funds, funds from borrowings and bonds and others are used for the investment.

Financial Information

2024

95

Deloitte.

Deloitte Touche Tohmatsu LLC
Marunouchi Nijubashi Building
3-2-3 Marunouchi
Chiyoda-ku, Tokyo 100-8360
Japan
Tel: +81 (3) 6213 1000
Fax +81 (3) 6213 1005
www2.deloitte.com/jp/en

INDEPENDENT AUDITOR'S REPORTTo the Board of Directors of Mitsubishi HC Capital Inc.:<Audit of Consolidated Financial Statements>
OpinionWe have audited the consolidated financial statements of Mitsubishi HC Capital Inc. and its consolidated
subsidiaries (the "Group"), which comprise the consolidated balance sheets as of March 31, 2024 and2023, and the consolidated statements of income, consolidated statements of comprehensive income,consolidated statements of changes in equity and consolidated statements of cash flows for the years
then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, all expressed in Japanese yen.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as of March 31, 2024 and 2023, and its
consolidated financial performance and its consolidated cash flows for the years then ended inaccordance with accounting principles generally accepted in Japan.
Convenience Translation
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in
our opinion, such translation has been made in accordance with the basis stated in Note 1 to theconsolidated financial statements. Such U.S. dollar amounts are presented solely for the convenience ofreaders outside Japan.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Auditof the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled ourother ethical responsibilities as auditors. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in thecontext of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.

Member of

Deloitte Touche Tohmatsu Limited

96

Financial Information2024

We determined those matters that required significant auditor attention in performing the audit from thematters communicated with those charged with governance by taking into account the risks of material
misstatement through understanding the Group, its management policies and the environments
surrounding the Group, and significant auditor judgments relating to areas in the consolidated financial
statements that involved significant management judgment, including accounting estimates. We
determined which of the matters determined in accordance with the process above, in the auditor's
professional judgment, were of most significance in the audit of the consolidated financial statements ofthe current period and therefore are the key audit matters, by considering various factors, such as therelative magnitude of the matters, the nature and effect of the matters and the expressed interests ofintended users or recipients. The details of key audit matters description and how the key audit matterswere addressed in the audit are as follows:
Impairment judgment on the aircraft held as leased assets
How the Key Audit Matter Was
Addressed in the Audit

Key Audit Matter Description

As described in Note 2.s. Summary of Significant Our audit procedures related to the impairment
Accounting Policies-Significant Accounting
evaluation for the aircraft held by JSA as leased
Estimates, Impairment of Leased Assets to theassets included the following, among others:
consolidated financial statements, the aircraft heldby JSA International Holdings, L. P. ("JSA")
Evaluated the design and operating
located in the United States (the "U.S.") ofeffectiveness of controls over the estimation of¥1 ,289,006 million were recorded as leased
undiscounted future cash flows used to evaluate
assets in the consolidated balance sheet as ofwhether impairment indicators exist on the
March 31, 2024.
aircraft held by JSA as leased assets.

►

The Group performs an impairment evaluation for
the aircraft in accordance with accounting
principles generally accepted in the U.S. by thefollowing:(1) For each aircraft, the carrying amount iscompared to the sum of the undiscounted
future cash flows.

► Inquired of the official in charge of the Aviation
Division and CEO of JSA about the businessenvironment and asset risk surrounding JSA.

► Inquired of the Aviation Division manager about
the customers who had a delayed payment oflease rents or requested to defer lease rental
payments in order to understand the extent of
uncertainty of undiscounted future cash flows.

(2) Where the carrying amount of aircraft
exceeded the sum of the undiscounted future In addition, with the assistance of the component
cash flows, the carrying amounts areauditor of JSA, we performed the following audit
compared to the fair value of aircraft. The
procedures:amount by which the carrying amountexceeded the fair value is recorded as an
Inquired of management of JSA about any
impairment loss.
changes in the methodologies and assumptions
used in the undiscounted future cash flows
As a result, the Group recorded ¥1,998 million ofanalysis based on the current businessthe impairment loss which was included in costs inenvironment.
the consolidated statement of income for the year
ended March 31, 2024.
Inspected the external appraisal reports
obtained by management on the future leaserents and residual values at maturity of aircraftat lease maturity and assessed thecompetencies and objectivity of the third-party
appraisers.

►►► Compared the current lease rate of leaseagreements renewed or amended during thecurrent year with the rates of the appraisal
reports used in the prior-year's impairment
evaluation to examine the reasonableness of thethird-party appraisals.

-2Financial Information

2024

97

The undiscounted future cash flows used in the
impairment evaluation by management are
estimated based on assumptions, such as current
lease rents, future lease rents, residual values atmaturity, disposal costs, lease terms, off-lease
periods and renewal lease terms. The judgments
made in the impairment evaluation need toconsider the uncertainty of accounting estimates
regarding certain assumptions, such as futurelease rents, off-lease periods and residual values
at maturity. There is a potential risk that the
impairment losses on the leased assets are notappropriately recognized if these estimates are
not appropriate. Therefore, we determined the
impairment evaluation for the aircraft held by JSA
as leased assets as a key audit matter.

► Evaluated management's estimation of theoff-lease period by inspecting the historical data
for the period it took until lease renewal andtested the assumption of the off-lease period forany leases coming due in the near term andwhether to change the off-lease period.

► Evaluated the assumptions, such as future leaserents and off lease periods, used in the
impairment analysis of the aircraft leased tolessees in bankruptcies by challenging theassumptions and assessing if they are
consistent with the current businessenvironment surrounding the lessee.

► Recalculated the undiscounted future cash flows
used in the impairment analysis and, whereapplicable, the impairment losses recorded forthe current period.

► Performed a sensitivity analysis on theundiscounted future cash flows.

A ppropriateness of the receivables classification in calculating an allowance for doubtful receivables andcalculation of an allowance for doubtful receivables of consolidated foreign subsidiaries
How the Key Audit Matter Was
Addressed in the Audit

Key Audit Matter Description

The Group recorded ¥95,357 million of an
1. Appropriateness of the receivables
allowance for doubtful receivables in theclassification in calculating the allowance forconsolidated balance sheet as of March 31, 2024.
doubtful receivables of the Company
The allowance for doubtful receivables was mainly
related to ¥172,368 million of
Our audit procedures related to the appropriatenessreceivables-installment sales, ¥3, 153,989 millionof the Company's classification of the generalof lease receivables and investments in leases,
claims, doubtful claims, and bankrupt claims in¥1,850, 117 million of receivables-loans, andcalculating the estimated uncollectible amount¥122,035 million of long-term receivables. The
included the following, among others:balance of Mitsubishi HC Capital Inc. (the"Company") and its significant consolidated(Evaluation of compliance with accounting
foreign subsidiaries that adopt IFRS Accounting
standards and evaluation of internal controls)
Standards or accounting principles generally
accepted in the United States (the "U.S. GAAP")
Evaluated whether the internal management
accounted for a significant portion of thesepolicies used by management to determine thereceivables subject to the allowance for doubtfulclassification of the general claims, doubtfulreceivables. We determined the following 1 and 2
claims, and bankrupt claims were in accordanceas key audit matters because subjectivewith accounting principles generally accepted injudgments and significant assumptions made by
Japan.
management were particularly involved in thecalculation of the allowance for doubtful
Evaluated the design and operatingreceivables.
effectiveness of internal controls over theapproval for changes in credit rating of thecounterparties conducted by the credit
management department.

►

►

-398

Financial Information

2024

1.

Appropriateness of the receivables
classification in calculating the allowance for
doubtful receivables of the Company

As described in Note 2.s. Summary of Significant
Accounting Policies-Significant Accounting
Estimates, Allowance for Doubtful Receivables tothe consolidated financial statements, inaccordance with the internal management
policies, the Company classifies these receivables
into receivables from the counterparties not inbankruptcy but in financial difficulties ("doubtful
claims"), receivables from the counterparties inbankruptcy ("bankrupt claims"), and the otherreceivables ("general claims") based on the credit
information, such as the financial condition andpayment history of the counterparties. For thegeneral claims, the allowance for doubtfulreceivables is provided based on the historicalrate of credit losses. For the doubtful claims andbankrupt claims, the allowance for doubtfulreceivables is provided based on the estimateduncollectible amounts considering the collectabilityof each receivable.

(Examination of the appropriateness of receivables
classification)► Tested the appropriateness of receivables

classification performed by management for
counterparties which were selected based on
the credit amount and the financial condition by
performing the following procedures:✓ Inquiry of the personnel in the credit
management department regarding thebusiness condition of the counterparties✓ Inspection of credit information such as
payment history✓ Inspection of the management's assessment
for the realizability of the counterparty's
business plan, inquiry of the personnel in thecredit management department andreconciliation of key assumptions used in thebusiness plan with available external
information when management used thecounterparty's business plan in thedetermination of receivables classification

Due to the qualitative significance and a variety of
the Company's receivable balance, management's 2. Calculation of the allowance for doubtful
judgment involved in the determination ofreceivables of significant consolidated foreign
receivables classification, and large differences insubsidiaries that adopt IFRS Accounting
the allowance ratios among the general claims,
Standards or U.S. GAAP
doubtful claims and bankrupt claims, theOur audit procedures related to the appropriatenessdetermination of the receivables classification in
calculating the estimated uncollectible amount has of loss rates used to calculate the allowance for
doubtful receivables of significant consolidated
a significant impact on the consolidated financial
statements.
foreign subsidiaries that adopt IFRS AccountingStandards or U.S. GAAP included the following,Considering the items above, we determined theamong others:
appropriateness of the Company's classification ofInspected the accounting policy memo prepared
the general claims, doubtful claims, and bankrupt
by the accounting departments to examine
claims in calculating the estimated uncollectible
whether the accounting policies for theamount as a key audit matter.
applications of ECL and CECL models complied
2. Calculation of the allowance for doubtful
with IFRS Accounting Standards and U.S.
receivables of significant consolidated foreign
GAAP, respectively.
subsidiaries that adopt IFRS Accounting
Inquired of directors in charge of Global
Standards or U.S. GAAP
Business division and Risk Management division
and CEOs of significant consolidated foreignsubsidiaries about the business and credit risk
environment surrounding those subsidiaries.

►►-4Financial Information

2024

99

As described in Note 2.s. Summary of Significant
Accounting Policies-Significant Accounting
Estimates, Allowance for Doubtful Receivables tothe consolidated financial statements, significant
consolidated foreign subsidiaries that adopt IFRS
Accounting Standards apply IFRS No. 9 Financial
Instruments and record the allowance for doubtfulreceivables based on the expected credit loss("ECL") model. Also, significant consolidated
foreign subsidiaries that adopt U.S. GAAP apply
Financial Instruments-Credit Losses,
ASU 2016-13, Financial Instruments-Credit
Losses, effective from the beginning of the fiscal
year ended March 31, 2024, and record theallowance for doubtful receivables based on thecurrent expected credit losses ("CECL") model.
Significant consolidated foreign subsidiaries that
adopt IFRS Accounting Standards use loss rates
in estimating their expected credit losses for 12months or lifetime.
Significant consolidated foreign subsidiaries that
adopt U.S. GAAP use loss rates in estimating their
expected credit losses for remaining contractual
periods.

In addition, with the assistance of component
auditor of significant consolidated foreignsubsidiaries, we performed the following audit
procedures:(Evaluation of internal controls)

Evaluated the design and operating► effectivenessof internal controls over thedetermination of loss rates used in calculating
the allowance for doubtful receivables.

(Examination of the appropriateness of loss rates)
We performed the following procedures with theassistance of our credit specialists:► Tested whether historical loss data wasappropriate as a basis of estimation under the
ECL model or the CECL model through theunderstanding of the portfolios.

► Evaluated models used for the calculation of theloss rates for 12 months or lifetime in the ECL
model or the remaining contractual periods in
the CECL model based on the understanding of
the calculation models.

These loss rates are determined based on
historical credit losses, considering current andfuture economic conditions, and involve subjective
judgments made by management. When the loss
rates used are not appropriate, the allowance for
doubtful receivables is not properly calculated andit has a significant impact on the consolidated
financial statements.

► Tested the accuracy and completeness of theConsidering the items above, we determined thecalculation of the allowance for doubtfulreceivables of significant consolidated foreignsubsidiaries that adopt IFRS AccountingStandards or U.S. GAAP as a key audit matter.

Evaluated the adequacy of an adjustment to the► lossrates considering current and futuredata used in the calculation of the loss rates.

► Recalculated of the loss rates.
► Compared actual loss rates with those used in
the ECL or CECL models and analyzed
differences identified.

economic conditions.

Other Information
Management is responsible for the other information. The Audit and Supervisory Committee is
responsible for overseeing the Directors' execution of duties relating to the design and operating
effectiveness of the controls over the other information. The other information comprises the information
included in the Financial Information, but does not include the consolidated financial statements and our
auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistent withthe consolidated financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.
-5100

Financial Information

2024

Responsibilities of Management and the Audit and Supervisory Committee for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan and using the going concern basis ofaccounting unless management either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
The Audit and Supervisory Committee is responsible for overseeing the Directors' execution of duties
relating to the design and operating effectiveness of the controls over the Group's financial reporting
process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor'sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with auditing standards generally accepted in Japan
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks. The
procedures selected depend on the auditor's judgment. In addition, we obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant tothe audit in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group's ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However, future events or conditions may cause the Group to cease to continue as agoing concern.
• Evaluate whether the overall presentation and disclosures of the consolidated financial statements arein accordance with accounting principles generally accepted in Japan, as well as the overall
presentation, structure and content of the consolidated financial statements, including the disclosures,and whether the consolidated financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

-6Financial Information

2024 101• Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.
We communicate with the Audit and Supervisory Committee regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide the Audit and Supervisory Committee with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with it all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable,
actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Audit and Supervisory Committee, we determine those mattersthat were of most significance in the audit of the consolidated financial statements of the current period
and are therefore the key audit matters. We describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of such communication.
<Fee-Related Information>
Fees for audit and other services for the year ended March 31, 2024, which were charged by us and our
network firms to Mitsubishi HC Capital Inc. and its subsidiaries were ¥1,685 million and ¥276 million,
respectively.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required
to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

July 9, 2024

-7102

Financial Information

2024