Consolidated Balance Sheet
IBJ Leasing Company, Limited and Consolidated Subsidiaries
As of March 31, 2018
Thousands of
U.S. dollars(Note 1)Millions of yen
2018
ASSETS
Current Assets:
Cash and Cash Equivalents
Marketable Securities
Lease Receivables and Investments in Lease (Notes 3 and 4)
Receivables (Notes 3 and 4):
Notes and Accounts
Lease
Installment Sales
Loans
Factoring
Other
Total Receivables
Operational Investment Securities (Notes 3 and 4)
Deferred Tax Assets
Prepaid Expenses and Other
Allowance for Doubtful Receivables
Total Current Assets¥

Property and Equipment:
Leased Assets (Notes 3 and 4)
Accumulated Depreciation
Net Leased Assets
Advances for Purchases of Leased Assets
Other Operating Assets (Note 3)
Accumulated Depreciation
Net Other Operating Assets
Advances for Purchases of Other Operating Assets
Own-used Assets
Accumulated Depreciation
Net Own-used Assets
Total Property and Equipment
Investments and Other Assets:
Investment Securities (Note 4)
Investments in Unconsolidated Subsidiaries
and Associated Companies
Long-term Receivables
Goodwill
Intangible Leased Assets (Note 3)
Deferred Tax Assets
Other
Allowance for Doubtful Receivables
Total Investments and Other Assets
Total Assets

See accompanying Notes to Consolidated Financial Statements.

¥

1

29,607520
823,384

2017¥

41,563
44
809,3042018$

278,606
4,893
7,748,039

363
4,289
138,851
230,405
125,5384,130
503,577
196,860
1,595
50,760(2,265)
1,604,039

486
4,028
138,089
205,206
139,7493,130
490,690
172,493
1,874
53,763(3,130)1,566,603

3,423
40,3601,306,588
2,168,113
1,181,313
38,863
4,738,660
1,852,456
15,010477,659(21,321)
15,094,002

251,467(91,366)
160,100
5,858
3,941
(52)
3,888
1,873
6,315
(3,322)
2,992
174,714

236,482(95,568)
140,913311
6,187(3,200)2,986
144,2112,366,309(859,762)
1,506,547
55,13137,086(492)
36,594
17,63059,425(31,265)
28,1601,644,062

21,6808,359

20,3407,907

204,01078,662

2,440
133
105
631
9,567
(171)
42,747
1,821,501

3,331
168
101
975
8,987
(343)
41,4691,752,284

22,968
1,259
993
5,941
90,035(1,610)402,258
17,140,322¥$

Consolidated Balance Sheet
IBJ Leasing Company, Limited and Consolidated Subsidiaries
As of March 31, 2018
Thousands of
U.S. dollars(Note 1)Millions of yen
2018
LIABILITIES and EQUITYCurrent Liabilities:
Short-term Borrowings (Notes 4 and 5)
Current Portion of Long-term Debt (Notes 4 and 5)
Lease Payable
Accounts Payable - trade
Accrued Expenses
Income Taxes Payable
Deferred Profit on Installment Sales (Note 3)
Accruals for Debt Guarantees
Other
Total Current Liabilities¥

Long-term Liabilities:
Long-term Debt (Notes 4 and 5)
Deposits Received
Liability for Employees' Retirement Benefits
Other
Total Long-term Liabilities

2017

788,165
202,054
7,251
54,383
2,669
2,015
258
27
25,3181,082,143¥

805,696
155,509
7,329
53,400
2,619
1,200
268
68
19,671
1,045,764

2018$

7,416,630
1,901,328
68,234
511,750
25,12418,9652,431
256
238,246
10,182,964

546,020
29,126
2,410
7,167
584,725531,232
25,623
2,533
5,375
564,764

5,138,053
274,083
22,68667,4435,502,265

17,874

17,874

168,196

16,070105,148(1)

16,086
94,319(1)

151,221989,447
(9)

9,047
141
621
48
148,951
5,681
154,632
1,821,501

8,036
24
348
(116)
136,571
5,183
141,755
1,752,284

85,138
1,335
5,852
454
1,401,634
53,4591,455,093
17,140,322

Contingent Liabilities (Note 6)
Equity:Common Stock
Authorized, 140,000,000 Shares;
Issued, 42,649,000 Shares as of March 31, 2018 and 2017
Capital Surplus
Retained Earnings
Treasury Stock - at cost
583 shares as of March 31, 2018 and 2017
Accumulated Other Comprehensive Income:Unrealized Gain on Available-for-sale Securities
Deferred Gain on Derivatives under Hedge Accounting
Foreign Currency Translation Adjustments
Defined Retirement Benefit Plans
Total
Non-controlling Interests
Total Equity
Total Liabilities and Equity

See accompanying Notes to Consolidated Financial Statements.

¥

2

¥

$

Consolidated Statement of Income
IBJ Leasing Company, Limited and Consolidated Subsidiaries
For the year ended March 31, 2018
Thousands of
U.S. dollars(Note 1)Millions of yen
2018

2017

¥ 399,738¥ 429,405

Cost and Expenses
Gross Profit

361,541
38,197

390,198
39,206

3,402,099
359,436

Selling, General and Administrative Expenses
Operating Income

19,034
19,162

21,244
17,962

179,117
180,319

Other Income (Expenses):
Interest Income
Dividend Income
Equity in Earnings of Associated Companies
Profit from Investments
Interest Expenses
Bond Issuance Costs
Gain on Sales of Fixed Assets
Gain on Sales of Investment Securities
Loss on Devaluation of Investment Securities
Loss on Impairment of Long-lived Assets (Note 7)
Other ─ net
Income before Income Taxes

2
516
124
445
(308)
(3)
586
(16)
25
20,535

3
506
212
357
(268)
(106)
0
266
(162)
(39)
121
18,854

26
4,861
1,169
4,190
(2,907)
(28)
5,522
(156)
239
193,235

Income Taxes:
Current
Deferred
Total

5,380
984
6,365

5,864
374
6,239

50,634
9,263
59,897Net Income
Net Income attributable to Non-controlling Interests
Net Income attributable to Owners of the Parent

14,169526
13,643

12,615201
12,414

133,338
4,952
128,386

Revenues

¥

¥

2018

See accompanying Notes to Consolidated Financial Statements.

3

3,761,535$

U.S. dollars(Note 1)

Yen

Amounts per Share of Common Stock (Note 8)
Net Income attributable to Owners of the Parent per Share

$

2018

2017

¥ 319.91¥ 291.08

2018
$

3.01

Consolidated Statement of Comprehensive Income
IBJ Leasing Company, Limited and Consolidated Subsidiaries
For the year ended March 31, 2018
Thousands of
U.S. dollars(Note 1)Millions of yen

Net Income

2018

2017

¥

¥

Other Comprehensive Income (Loss):
Unrealized Gain on Available-for-sale Securities
Deferred Gain on Derivatives under Hedge Accounting
Foreign Currency Translation Adjustments
Defined Retirement Benefit Plans
Share of Other Comprehensive Income (Loss) in Associated Companies
Total Other Comprehensive Income (Loss)

14,169

1,020
112
126
169
97
1,525

2018

12,615

$

80
171
(526)
132
(100)
(243)

133,338

9,600
1,060
1,188
1,591
920
14,359Comprehensive Income¥

15,695¥

12,372$

147,697

Total Comprehensive Income attributable to:
Owners of the Parent
Non-controlling Interests¥

15,210485¥

12,147224$

143,131
4,566

See accompanying Notes to Consolidated Financial Statements.

4Consolidated Statement of Changes in Equity

IBJ Leasing Company, Limited and Consolidated Subsidiaries
For the year ended March 31, 2018

Balance as of April 1, 2016
Net Income attributable to Ownersof the Parent
Cash Dividends Paid
Purchase of Treasury Stock
Changes in Scope of Consolidation
Changes in an Interest in Subsidiary
Net change during year
Balance as of March 31, 2017
Net Income attributable to Ownersof the Parent
Cash Dividends Paid
Purchase of Treasury Stock
Changes in Scope of Consolidation
Changes in an Interest in Subsidiary
Net change during year
Balance as of March 31, 2018

Thousands
Number ofshares ofCommon Stock
Outstanding
42,648Millions of yen
CommonStockCapitalSurplusRetained
Earnings

TreasuryStock¥ 17,874¥ 16,086¥ 84,514
12,414¥ (0)(2,558)

(0)

(0)
(50)

42,648¥ 17,874¥ 16,086¥ 94,319
13,643¥ (1)(2,814)(15)
42,648¥ 17,874¥ 16,070¥ 105,148¥ (1)Millions of yen

Balance as of April 1, 2016
Net Income attributable to Ownersof the Parent
Cash Dividends Paid
Purchase of Treasury Stock
Changes in Scope of Consolidation
Changes in an Interest in Subsidiary
Net change during year
Balance as of March 31, 2017
Net Income attributable to Ownersof the Parent
Cash Dividends Paid
Purchase of Treasury Stock
Changes in Scope of Consolidation
Changes in an Interest in Subsidiary
Net change during year
Balance as of March 31, 2018

Accumulated Other Comprehensive Income
Unrealized Deferred Gain
ForeignDefinedGain onCurrency
on Derivatives
Retirement
Available-for-sale under Hedge
Translation
Benefit Plans
Securities
Accounting Adjustments¥ 7,956¥ (174)¥ 1,026¥ (249)Total¥ 127,033
12,414

Noncontrolling
Interests¥ 5,753(2,558)(0)(50)
79¥ 8,036

198
¥ 24

(677)
¥ 348

132
¥ (116)(266)¥ 136,571
13,643

117
¥ 141

273
¥ 621

164
¥ 48

(15)
1,566
¥ 148,951¥ 132,786
12,414(2,558)
(0)
(50)

(570)
¥ 5,183(2,814)1,011¥ 9,047

Total Equity(836)¥ 141,755
13,643(2,814)497¥ 5,681(15)
2,064¥ 154,632

Thousands of U.S. dollars (Note 1)

Balance as of March 31, 2017
Net Income attributable to Ownersof the Parent
Cash Dividends Paid
Purchase of Treasury Stock
Changes in Scope of Consolidation
Changes in an Interest in Subsidiary
Net change during year
Balance as of March 31, 2018

CommonStockCapitalSurplusRetained
Earnings

TreasuryStock$ 168,196$ 151,371$ 887,548
128,386$ (9)(26,487)(150)$ 168,196$ 151,221$ 989,447$ (9)Thousands of U.S. dollars (Note 1)

Balance as of March 31, 2017
Net Income attributable to Ownersof the Parent
Cash Dividends Paid
Purchase of Treasury Stock
Changes in Scope of Consolidation
Changes in an Interest in Subsidiary
Net change during year
Balance as of March 31, 2018

Accumulated Other Comprehensive Income
Unrealized Deferred Gain
ForeignDefinedGain onon Derivatives
Currency
Retirement
Available-for-sale under Hedge
Translation
Benefit Plans
Securities
Accounting Adjustments$ 75,620$ 228$ 3,281$ (1,095)

Total$ 1,285,140
128,386

Noncontrolling
Interests$ 48,774(26,487)

9,518$ 85,138

1,107$ 1,335

See accompanying Notes to Consolidated Financial Statements.

2,571$ 5,852

5

1,549
$ 454

(150)
14,745$ 1,401,634

Total Equity$ 1,333,914
128,386(26,487)

4,685$ 53,459(150)
19,430$ 1,455,093

Consolidated Statement of Cash Flows
IBJ Leasing Company, Limited and Consolidated Subsidiaries
For the year ended March 31, 2018
Thousands of
U.S. dollars(Note 1)Millions of yen
2017

2018

2018

Cash Flows from Operating Activities:
Income before Income Taxes
Adjustments for:
Income Taxes Paid
Depreciation and Disposal of Fixed Assets
Equity in Earnings of Associated Companies
Profit from Investments
Loss on Impairment of Long-lived Assets
Decrease in Allowance for Doubtful Receivables(Decrease) Increase in Accruals for Debt Guarantees
Gain on Sales of Marketable and Investment Securities
Loss on Devaluation of Marketable and Investment Securities
Gain on Sales of Fixed Assets
Change in assets and liabilities:¥¥

20,53518,854$

193,235(4,565)
11,679(124)(445)(1,037)
(40)
(586)
16
-

(8,951)
10,891
(212)
(357)
39
(610)
31
(266)
162
(0)

(42,964)
109,904(1,169)(4,190)(9,759)(385)(5,522)
156-

Increase in Lease Receivables and Investments in Lease(Increase) Decrease in Receivables
Increase in Operational Investment Securities
Increase in Accounts Payable ─ trade
Purchases of Leased Assets
Proceeds from Sales of Leased Assets
Increase in Interest Payable
Other ─ net
Total Adjustments
Net Cash Used in Operating Activities(14,175)(14,931)(24,366)
955(92,767)
57,83450
7,773(74,731)(54,196)(8,855)31,863(75,383)
2,177(138,384)
104,750
21(8,870)(91,954)(73,100)(133,395)(140,504)(229,293)
8,992(872,940)
544,220478
73,147(703,224)(509,989)

Cash Flows from Investing Activities:
Purchases of Own-used Assets
Proceeds from Sales of Fixed Assets(1,637)-(1,333)
15(15,404)
-

(825)
650

(1,603)
61(7,768)
6,118

-

2,546

-

(284)
(2,096)

(172)
(487)

(2,678)(19,732)

5,643
210,921(169,286)(2,814)(146)
44,317
19(11,955)(57,411)295,430(168,793)(2,558)546
67,213(342)(6,716)

53,106
1,984,770(1,592,981)(26,487)(1,377)417,031
187(112,503)

41,563-

48,332(52)

391,109-

Purchases of Marketable and Investment Securities
Proceeds from Sales and Redemption of Marketable
and Investment Securities
Proceeds from Sales of Subsidiaries causing Changes
in Scope of Consolidation
Other ─ net
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Net Increase (Decrease) in Short-term Borrowings
Proceeds from Long-term Debt
Repayments of Long-term Debt
Cash Dividends Paid
Other ─ net
Net Cash Provided by Financing Activities
Foreign Currency Translation Adjustments on Cash and Cash Equivalents
Net Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Decrease in Cash and Cash Equivalents resulting from Exclusionfrom Scope of Consolidation
Cash and Cash Equivalents at End of Year

See accompanying Notes to Consolidated Financial Statements.

6¥

29,607¥

41,563$

278,606

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of IBJ Leasing Company, Limited (“IBJL”) and its
consolidated subsidiaries (together with IBJL, “IBJL Group”) 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 application and disclosure requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements havebeen made to the company’s financial statements issued domestically in order to present them in a form ofwhich is more familiar to readers outside Japan. In addition, certain reclassifications have been made in the2017 consolidated financial statements to conform to the classifications used in 2018. Certain disclosuresrequired in the notes to the financial statements by the Japanese Financial Instruments and Exchange Law
are omitted in this Business Report (Kessan Tanshin).
The consolidated financial statements are stated in Japanese yen, the currency of the country in which
IBJL is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts areincluded solely for the convenience of readers outside Japan and have been made at the rate of ¥106.27 to
US$1.00, the approximate rate of exchange at March 31, 2018. The 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.
The amounts indicated in millions of yen are rounded down by truncating the figures below one million. As
a result, totals may not add up exactly.

2. Summary of Significant Accounting Policies(a) Consolidation
The consolidated financial statements include the accounts of IBJL Group, which include IBJL-TOSHIBA
Leasing Company, Limited, Dai-ichi Leasing Co., Ltd., IBJ Auto Lease Company, Limited, IBJ Leasing(China) Ltd. and PT.IBJ Verena Finance.
The number of consolidated subsidiaries as of March 31, 2018 and 2017 was 26. The number ofassociated companies accounted for under the equity method as of March 31, 2018 and 2017 was 3.
Investments in associated companies consist of Krung Thai IBJ Leasing Co., Ltd., Juhachi Sogo Lease Co.,
Ltd. and PNB-IBJL Leasing and Finance Corporation.
Astro Leasing International Co., Ltd. and 102 other subsidiaries are neither consolidated nor accounted
for under the equity method, as they are acting as operators under Tokumei Kumiai agreements and theleased assets and liabilities do not substantially belong to the subsidiaries. Aries Line Shipping S.A. and 26
other subsidiaries are also not consolidated or accounted for under the equity method, as they are immaterial.
I-N Information Systems, Ltd. and 2 other associated companies are not accounted for under the equity
method, as they are immaterial.
Upon consolidation, significant intercompany accounts and transactions have been eliminated. In
addition, all significant unrealized profit included in assets resulting from transactions within IBJL Group
has also been eliminated.
The accounting standard for consolidated financial statements requires a company to consolidate all
subsidiaries where the company controls the operations, irrespective of whether or not the company owns amajority of their shares. Control is considered to exist where the company has (a) the power to appoint or
remove the majority of the Board of Directors or an equivalent governing body, and/or (b) the power to castthe majority of the votes at a meeting of the Board of Directors or an equivalent governing body.
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets of theacquired subsidiary at the date of acquisition. The differences between the costs and underlying net equity ofinvestments in consolidated subsidiaries and associated companies at acquisition are recorded as Goodwill
and are amortized on a straight-line basis over the estimated benefit period.
Implementation Guidance No. 15 “Implementation Guidance on Disclosures about Certain Special
7

Purpose Entities” issued by the Accounting Standards Board of Japan (the “ASBJ”) permits companies toavoid consolidation of certain Special Purpose Entities (“SPEs”) that were established and are being
operated for the purpose of securitization of receivables.
IBJL securitizes its lease receivables to diversify its funding sources and ensure stable funding. In the
securitization structures, IBJL uses SPEs that include Tokurei Yugen Kaisha and Kabushiki Kaisha. IBJL
transfers the lease receivables to the SPEs in the securitization structures. The SPEs procure funds, such as
borrowings, backed by the transferred assets and these funds flow back to IBJL as sales proceeds of thetransferred assets. IBJL also provides collection services to the SPEs. A portion of the receivables is nottransferred and is held by IBJL. These receivables held by IBJL are properly evaluated at the end of the
fiscal year, and these are appropriately reflected in the consolidated financial statements.
As a result of securitizations, IBJL had 20 SPEs that were not consolidated under Guidance No. 15 as ofMarch 31, 2018 and 2017. Total assets (simply compiled amount) of such SPEs as of March 31, 2018 and2017 were ¥120,601 million ($1,134,862 thousand) and ¥160,191 million, respectively. Total liabilities(simply compiled amount) of such SPEs as of March 31, 2018 and 2017 were ¥121,161 million ($1,140,129
thousand) and ¥160,806 million, respectively. IBJL owns no voting rights in most of the SPEs while some
employees of IBJL serve as directors.
The total amount of Lease Receivables and Investments in Lease transferred from IBJL to such SPEs in2018 and 2017 was ¥2,109 million ($19,848 thousand) and ¥18,257 million, respectively, with no gain/loss
on the transfer of such receivables. IBJL holds subordinated interests of such transferred receivables of ¥81
million ($765 thousand) and ¥4,615 million in 2018 and 2017, respectively. IBJL recognized profit
dividends of ¥153 million ($1,444 thousand) and ¥46 million, respectively, for the years ended March 31,2018 and 2017, and servicing fees received of ¥1 million ($15 thousand) with respect to the transactions withsuch SPEs for both of the years ended March 31, 2018 and 2017. These amounts do not include transactions
with SPEs that do not meet the criteria for off-balance-sheet transactions, because IBJL treats these asset
transfer transactions to the SPEs as financial transactions.
(b) Business Combinations
Business combinations are accounted for using the purchase method. Acquisition-related costs, such asadvisory 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 forthe items for which the accounting is incomplete. During the measurement 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 theacquisition date and that would have affected the measurement of the amounts recognized as of that date.
Such adjustments shall be recognized as if the accounting for the business combination had been completed
at the acquisition date. The acquirer recognizes the bargain purchase gain in profit or loss immediately on theacquisition date after reassessing and confirming that all of the assets acquired and all of the liabilities
assumed have been identified after a review of the procedures used in the purchase price allocation. 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 theparent's ownership interest in its subsidiary while the parent retains its controlling interest in its subsidiary.
Any difference between the fair value of the consideration received or paid and the amount by which thenoncontrolling interest is adjusted is accounted 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 toinsignificant risk of changes in value. Cash Equivalents include time deposits, certificates of deposit,
commercial paper and bond funds, all of which mature or become due within three months of the date ofacquisition.

8

(d) Lease Accounting
In March 2007, the ASBJ issued ASBJ Statement No. 13, “Accounting Standard for Lease Transactions”,
which revised the previous accounting standard for lease transactions. As a lessor, all finance leases that are
deemed to transfer ownership of the leased property to the lessee are recognized as Lease Receivables, andall finance leases that are deemed not to transfer ownership of the leased property to the lessee arerecognized as Investments in Lease. All other leases are accounted for as operating leases.
As a lessee, all finance leases that are deemed to transfer ownership of the leased property to the lessee
are capitalized.
(e) Installment Sales
For installment sales contracts, Installment Sales Receivables are recognized for the principal equivalentportion of the total contract amounts when properties are delivered. Interest equivalent amounts arerecognized as Installment Sales when the related installment receivables become due.
For sales-type contracts, Installment Sales and the corresponding Installment Cost of Sales are fullyrecognized when the property is sold. Interest equivalent amounts applicable to the portion to be collected
are deferred and recorded as Deferred Profit on Installment Sales.
(f) Marketable Securities, Operational Investment Securities and Investment Securities
Marketable Securities, Operational Investment Securities and Investment Securities are classified as
Available-for-sale Securities based upon management's intent. Available-for-sale Securities, which have areadily determinable fair value, are stated at fair value with changes in net unrealized gain or loss, net of
applicable income taxes, included directly in Equity (cost of securities sold is calculated by the moving
average method). Available-for-sale Securities, which do not have readily determinable fair value, are statedat cost.
Operational Investment Securities is held for the purpose of generating operational financial income.
The income from Operational Investment Securities is stated in Revenues in the Consolidated Statement of
Income.
(g) Loans Receivables and Factoring Receivables
Loans to customers and receivables arising from factoring are included in Loans Receivables and Factoring
Receivables, respectively. Income from these receivables is recognized as Revenues.
(h) Property and Equipment
1. Leased Assets
Leased Property and Equipment are stated at cost and depreciated over the lease term by thestraight-line method to the residual value, which is an amount to be realized at the time when the lease
contract is terminated.
2. Other Operating Assets
Other Operating Assets are stated at cost and depreciated over the estimated useful lives by thestraight-line method.
3. Own-used Assets
Own-used Assets of IBJL and its domestic consolidated subsidiaries are stated at cost and depreciatedover the following estimated useful lives mainly by the declining-balance method:
Buildings
3-65 years
Fixtures and furniture
2-20 years(i) Long-lived Assets
IBJL Group reviews its long-lived assets for impairment whenever events or changes in circumstanceindicate the carrying amount of an asset or asset group may not be recoverable. An impairment loss isrecognized if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash
flows expected to result from the continued use and eventual disposition of the asset or asset group. The
impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its
9

recoverable amount, which is the higher of the discounted cash flows from the continued use and eventual
disposition of the asset or the net selling price at disposition.
(j) Intangible Assets
1. Leased Assets
Intangible Leased Assets are accounted for in the same way as Leased Property and Equipment.
2. Own-used Software
Own-used Software is amortized over the internally estimated useful lives (5years) by the straight-line
method.
3. Other Intangible Assets
Other Intangible Assets are stated at cost. Amortization of intangible assets by IBJL and its domestic
consolidated subsidiaries is mainly computed by the straight-line method over the estimated useful lives.
(k) Bond Issue Costs
Costs for bond issuance are expensed upon payment.
(l) Allowance for Doubtful Receivables
Allowance for Doubtful Receivables is provided based on the estimated historical default rate for general
trade receivables, and is based on individual reviews for receivables from doubtful and legally bankrupt
creditors.
The amounts of Long-term Receivables considered uncollectible, which include receivables fromlegally bankrupt creditors, were directly written-off. The amounts directly written-off were ¥8,400 million($79,045 thousand) and ¥8,501 million at March 31, 2018 and 2017, respectively.
(m) Reserve for Bonus Payments
IBJL and certain domestic consolidated subsidiaries provide a reserve for future bonus payments toemployees. This reserve is maintained at the estimated amount payable after the year-end, based on theservices provided during the fiscal year.
(n) Reserve for Bonus Payments to Directors
IBJL and certain domestic consolidated subsidiaries provide a reserve for future bonus payments to
executive officers. This reserve is maintained at the estimated amount payable for the fiscal year.
(o) Retirement and Pension Plans
IBJL and certain consolidated subsidiaries have a corporate pension plan and/or lump-sum severance
payment plan as a defined benefit type of a retirement benefits plan as well as a corporate pension plan as adefined contribution type of a retirement benefits plan. There are some cases in which extra retirement
benefits are paid to employees when they retire.
IBJL and certain consolidated subsidiaries account for the liability for retirement benefits based on the
projected benefit obligations and plan assets at the balance sheet date. The projected benefit obligations are
attributed to periods on a benefit formula basis. Actuarial gains and losses that are yet to be recognized in
profit or loss are recognized within equity (accumulated other comprehensive income), after adjusting for tax
effects and are recognized in profit or loss over 10 to 15 years no longer than the expected averageremaining service period of the employees. The discount rate is determined using a single weighted-average
discount rate reflecting the estimated timing and amount of benefit payment.
(p) Asset Retirement Obligations
An asset retirement obligation is recorded for a legal obligation imposed either by law or contract that resultsfrom the acquisition, construction, development and the normal operation of a tangible fixed asset and isassociated with the retirement of such tangible fixed asset. The asset retirement obligation is recognized as
the sum of the discounted cash flows required for the future asset retirement and is recorded in the period inwhich the obligation is incurred if a reasonable estimate can be made. If a reasonable estimate of the asset
10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 initialrecognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized byincreasing 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 the remaining 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 are reflected as an adjustment to the carrying
amount of the liability and the capitalized amount of the related asset retirement cost.
(q) Accruals for Debt Guarantees
IBJL and certain domestic consolidated subsidiaries provide Accruals for Debt Guarantees for losses thatmight occur in relation to guarantees of the indebtedness of others, taking the debtors’ financial condition
into consideration.
(r) Income Taxes
IBJL and its domestic consolidated subsidiaries are subject to corporate tax, inhabitants' taxes and enterprisetaxes. Deferred income taxes are recorded by the asset and liability method based on the differences between
the tax bases of assets and liabilities and those as reported in the consolidated financial statements, using
enacted tax rates that will be in effect when the differences are expected to reverse.
(s) Recognition of Revenues and Cost of Sales
Revenues and cost of sales relating to finance lease transactions are recognized when lease payments arereceived.
(t) Translation of Foreign Currency Assets and Liabilities
1. Translation of foreign currency transactions
All monetary receivables and payables denominated in foreign currencies are translated into Japanese
yen at the exchange rates at the balance sheet date. The foreign exchange gain and loss from translation
are recognized in the Consolidated Statement of Income as income or expenses.
Revenue and expense items arising from transactions denominated in foreign currencies are
generally translated into Japanese yen at the rates effective at the respective transaction dates.
2.

Translation of foreign currency financial statements
The assets, liabilities, revenues and expenses of overseas consolidated subsidiaries are translated into
Japanese yen at the exchange rates at the balance sheet dates of each subsidiary. Differences arisingfrom such translation are shown in either Non-controlling Interests or Foreign Currency Translation
Adjustments under Accumulated Other Comprehensive Income in a separate component of Equity.

(u) Derivatives and Hedging Activities
IBJL Group uses derivative financial instruments to manage its exposures to fluctuations in foreign exchange
and interest rates. Interest rate swaps are utilized to manage interest rate risks associated with certain
liabilities, including Loans Receivables and Long-term Debt. Short-term Borrowings is utilized to reducerisks from fluctuations of foreign currency exchange rates associated with certain assets including
Operational Marketable Securities. Interest rate and currency swaps are utilized to manage interest rate risks
as well as foreign currency risks. IBJL Group does not enter into derivatives for trading or speculative
purposes.
Derivative financial instruments and foreign currency transactions are classified and accounted for as
follows: a) all derivatives are recognized as either assets or liabilities and measured at fair value, and gains
or losses on derivative transactions are recognized in the Consolidated Statement of Income and b) for
derivatives used for hedging purposes, if such derivatives qualify for hedge accounting because of highcorrelation and effectiveness between the hedging instruments and the hedged items, gains or losses onderivatives are deferred until maturity of the hedged transactions.
11Interest rate swaps that qualify for hedge accounting and meet specific matching criteria are notremeasured at market value, but the differential paid or received under the swap agreements is recognized
and included in interest expense.
(v) Consumption Taxes
IBJL and its domestic consolidated subsidiaries are subject to Japanese consumption taxes. Japanese
consumption taxes are excluded from the transaction amounts.
(w) Per Share Information
Basic net income per share is computed by dividing net income attributable to common shareholders by theweighted-average number of common shares outstanding for the period, retroactively adjusted for stock
splits.
(x) Accounting Changes and Error Corrections
Under ASBJ Statement No. 24, “Accounting Standard for Accounting Changes and Error Corrections,” andASBJ Guidance No. 24, “Guidance on Accounting Standard for Accounting Changes and Error Corrections,”
accounting treatments are required as follows: (1) Changes in Accounting Policies - When a new accounting
policy is applied following revision of an accounting standard, the new policy is applied retrospectively
unless the revised accounting standard includes specific transitional provisions in which case the entity shallcomply with the specific transitional provisions. (2) Changes in Presentation - When the presentation offinancial statements is changed, prior-period financial statements are reclassified in accordance with the newpresentation. (3) Changes in Accounting Estimates - A change in an accounting estimate is accounted for in
the period of the change if the change affects that period only, and is accounted for prospectively if thechange affects both the period of the change and future periods. (4) Corrections of Prior-Period Errors When an error in prior-period financial statements is discovered, those statements are restated.

12

3. Operating Assets(1) Operating Assets as of March 31, 2018 and 2017 consisted of the following:(Thousands of（Millions of yen）
2018

2017

U.S. dollars）
2018

Leasing and Installment Sales:
Finance Lease¥809,304¥823,384$7,748,039
Operating Lease
141,014160,206
1,507,540
Installment Sales (*1)
137,820
138,592
1,304,157
Leasing and Installment Sales total
1,088,139
1,122,183
10,559,736
Finance
520,579
556,933
5,240,745
Other
3,888
36,594
Total Operating Assets¥1,608,718¥1,683,005$15,837,075(*1) The amount of Installment Sales represents "Installment Sales Receivables" less "Deferred Profit on
Installment Sales".
(*2) As described in Note 7, the classification of reportable segments was changed from this fiscal year. The
above information as of March 31, 2017 is presented under the new reportable segment.
(2) The total amounts of new contracts for the years ended March 31, 2018 and 2017 were as follows:(Thousands of（Millions of yen）
2018

2017

U.S. dollars）
2018

Leasing and Installment Sales:
Finance Lease¥283,415¥283,525$2,667,971
Operating Lease
137,977
87,285
821,355
Installment Sales (*1)
54,26759,671
561,508
Leasing and Installment Sales total
475,661
430,482
4,050,834
Finance
616,366
901,485
8,482,977
Other
3,941
37,086
Total¥1,092,027¥1,335,909$12,570,897(*1) The amount of Installment Sales represents "Installment Sales Receivables" less "Deferred Profit on
Installment Sales".
(*2) As described in Note 7, the classification of reportable segments was changed from this fiscal year. The
above information for the year ended March 31, 2017 is presented under the new reportable segment.

13

4. Pledged Assets
Assets pledged as collateral as of March 31, 2018 were as follows:(Thousands of（Millions of yen）

U.S. dollars)

2018

2018

Lease Receivables and Investments in Lease
Loans Receivables
Operational Investment Securities
Leased Assets
Investment Securities
Total¥14,307
4,053
1,217
12,5671¥32,147$134,629
38,144
11,459118,25916$302,507

Liabilities secured by the above assets as of March 31, 2018 were as follows:(Thousands of（Millions of yen）

U.S. dollars)

2018

2018

Short-term Borrowings
Current Portion of Long-term Debt
Long-term Debt
Total

¥1,0002,060
24,190¥27,250$9,41019,388
227,632$256,430

5. Short-term Borrowings and Long-term Debt
(1) “Short-term Borrowings” as of March 31, 2018 and 2017 was as follows:(Thousands of(Millions of yen)

Short-term Borrowings
Short-term Borrowings from banks andother financial institutions
Commercial Paper
Payables under securitized leasereceivables
Total
Current Portion of Long-term Debt
Bonds payable
Long-term Debt from banks and otherfinancial institutions
Total

14

U.S. dollars)

2018

2017

¥270,743¥312,715$2,547,696

453,800
63,621

433,800
59,1804,270,255
598,679¥788,165¥805,696$7,416,630¥20,000
182,054¥155,509$188,200
1,713,128¥202,054¥155,509$1,901,328

2018

(2) “Long-term Debt” as of March 31, 2018 and 2017 was as follows:(Thousands of(Millions of yen)

Long-term Debt
Bonds payable
Long-term Debt from banks and otherfinancial institutions
Payables under securitized leasereceivables
Total

U.S. dollars)

2018

2017

2018

¥38,000
466,824¥58,000
455,312$357,580
4,392,812

41,196

17,919387,661¥546,020¥531,232$5,138,053

6. Contingent Liabilities“Contingent Liabilities” as of March 31, 2018 was as follows:(Thousands ofGuarantee Obligations with respect tooperating activities
Other Guarantee Obligations
Total(Millions of yen)

U.S. dollars)

2018

2018

¥11,282$106,169

11,431¥22,713

107,566$213,735

7. Segment Information(1) Description and revision of reportable segments
The reportable segments of IBJL Group are those for which separate financial information is available andregular evaluation by IBJL management is being performed in order to decide periodically how resources areallocated among the IBJL Group.
IBJL Group provides total financial services such as leasing business, installment sales and loanbusiness to a wide range of customers from large companies to small and medium-sized companies. IBJL
Group has three business segments based on its services: “Leasing and Installment Sales”, “Finance” and“Other”.
“Leasing and Installment Sales” segment represents leasing business for industrial machinery,transportation equipment and information-related equipment (including sales of subject properties upon
expiration or cancellation of lease agreements) and installment sales business. “Finance” segment represents
loan business, factoring business and securities business which invests in securities that are held for the
purpose of generating operational revenues. “Other” segment represents buying and selling of used properties
business and sales of solar power business etc.
From this fiscal year, “Leasing” segment and “Installment Sales” segment, which had been presented
separately, were integrated and converted into “Leasing and Installment Sales” segment. Also, a managementbusiness of Operational Security, which had been included in “Other” segment, was separated from “Other”
segment, and integrated to “Loans” segment which had been reported separately and converted into “Finance”
segment. The segment information for the year ended March 31, 2017 was reclassified and presented under
the new reportable segment.
(2) Methods of measurement for the amounts of sales, profit, assets, liabilities and other items for eachreportable segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2, “Summaryof Significant Accounting Policies”.
15

(3) Information about sales, profit, assets, liabilities and other items for the years ended March 31, 2018 and2017 was as follows:(Millions of yen)
2018
Reportable segment
Leasing andInstallment

Finance

Other

Total

Sales

Reconciliations

Consolidated(*1) (*2) (*3)(*4)

Sales:
Sales to external¥386,007¥12,510¥1,220¥399,738¥-¥399,738

372

337

107

817

(817)

-

12,8481,327

400,555(817)

399,738

customers
Intersegment sales andtransfers
Total

386,379

Operating Expenses

370,855

4,884

934

376,674

3,901

380,575

Segment Profit¥15,524¥7,963¥393¥23,881¥(4,718)¥19,162

Segment Assets¥1,199,470¥609,459¥8,692¥1,817,622¥3,879¥1,821,501

10,119--

10,1191,544

11,664

92,767--

92,767

1,637

94,404

Reconciliations

Consolidated(*1) (*2) (*3)(*4)

OthersDepreciation andAmortization
Capital Expenditure(Millions of yen)
2017
Reportable segment
Leasing andInstallment

Finance

Other

Total

Sales
Sales:
Sales to external¥416,594¥11,438¥1,372¥429,405¥-¥429,405

411

269

95

777

(777)

-

customers
Intersegment sales andtransfers
Total

417,005

11,7081,468

430,182(777)

429,405

Operating Expenses

401,235

5,567

1,000

407,803

3,639

411,443

Segment Profit¥15,770¥6,140¥467¥22,378¥(4,416)¥17,962

Segment Assets¥1,167,914¥559,170¥4,063¥1,731,148¥21,136¥1,752,284

9,105

-

-

9,105

1,785

10,891

138,384--

138,384

1,333

139,717

OthersDepreciation andAmortization
Capital Expenditure

16

(Thousands of U.S. dollars)
2018
Reportable segment

Leasing andInstallment

Finance

Other

Total

Reconciliations

Consolidated(*1) (*2) (*3)

(*4)

Sales

Sales:
Sales to external$3,632,326$117,720$11,489$3,761,535$ -$3,761,535

3,504

3,180

1,008

7,692

(7,692)-

Total

3,635,830

120,900

12,4973,769,227(7,692)

3,761,535

customers
Intersegment sales andtransfers

Operating Expenses

3,489,748

45,962

8,795

3,544,505

36,711

3,581,216

Segment Profit$146,082$74,938$3,702$224,722$(44,403)$180,319

Segment Assets$11,287,011$5,735,012$81,795$17,103,818$36,504$17,140,322

95,227--

95,227

14,537

109,764

872,940--

872,940

15,404

888,344

OthersDepreciation andAmortization
Capital Expenditure(*1) The details of Reconciliations to Segment Profit for the years ended March 31, 2018 and 2017 were as follows:(Thousands of(Millions of yen)

U.S. dollars)
2017

2018

2018

Elimination of intersegment transactions¥(256)¥(287)$(2,412)Administrative expenses not allocated to(4,462)(4,129)(41,991)¥(4,718)¥(4,416)$(44,403)

the reportable segments
Total(*2) The details of Reconciliations to Segment Assets as of March 31, 2018 and 2017 were as follows:(Thousands of(Millions of yen)

U.S. dollars)

2018

2017

¥(29,865)¥(11,786)$(281,034)

33,74432,922

317,538¥3,879¥21,136$36,504

Elimination of intersegment transactions
Corporate assets not allocated to the2018reportable segments
Total(*3) Reconciliations of “Depreciation and Amortization” and “Capital Expenditure” are related to corporate assets notallocated to the reportable segments.
(*4) Segment Profits are reconciled to Operating Income in the Consolidated Statement of Income.

17

(4) Information about Geographical Areas
Property and Equipment（Millions of yen）
2017

North America/ Latin America¥17,392

Japan¥126,555

Asia

Total
¥263

¥144,211(*1)Assets are classified by country or region based on the location of IBJL and consolidated subsidiaries.
(*2) Information by geographic segment of Property and Equipment for the year ended March 31, 2018 is not presented
as domestic assets exceeded 90% of all segments.
(*3) Information by geographic segment of Sales for the years ended March 31, 2018 and 2017 is not presented as
domestic sales exceeded 90% of all segments.

(5) Impairment loss of long-lived assets per reportable segment:(Millions of yen)
2017
Reportable segment
Leasing andInstallment

Finance

Other

Total

Reconciliations

Consolidated

¥-

¥-

¥39

¥-

¥39

Sales
Impairment loss

¥39

Reportable segment information for the year ended March 31, 2018 is not presented as the amount of
impairment loss is immaterial.
(6) Goodwill per reportable segment:
Not applicable

8. Per Share Information
Details of basic net income attributable to owners of the parent per share (“EPS”) for the years ended March
31, 2018 and 2017 were as follows:

For the year ended March 31, 2018:
Basic EPS
Net income available to commonshareholders(Millions of yen)(Thousands of shares)(Yen)(U.S. dollars)

Net income
attributable toowners of theparentWeighted-average
shares¥13,643

42,648¥319.91$3.01¥12,41442,648¥291.08

$2.74

EPS

For the year ended March 31, 2017:
Basic EPS
Net income available to commonshareholders

18