Consolidated Balance Sheet
IBJ Leasing Company, Limited and Consolidated Subsidiaries
As of March 31, 2019
Thousands of
U.S. dollars(Note 1)Millions of yen
2019
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)
Prepaid Expenses and Other
Allowance for Doubtful Receivables
Total Current Assets¥

Property and Equipment:
Leased Assets (Notes 3 and 4)
Advances for Purchases of Leased Assets
Other Operating Assets (Note 3)
Advances for Purchases of Other Operating Assets
Own-used Assets (Note 4)
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
Asset for Employees' Retirement Benefits
Other
Allowance for Doubtful Receivables
Total Investments and Other Assets
Total Assets

See accompanying Notes to Consolidated Financial Statements.

¥

1

25,438930,3182018¥

29,607520
823,3842019$229,155
8,380,489

1,015
3,336
147,979
235,279
233,106
750
621,467
239,814
51,121(1,555)
1,866,604

363
4,289
138,851
230,405
125,5384,130
503,577
196,860
50,760(2,265)
1,602,444

9,144
30,057
1,333,031
2,119,442
2,099,870
6,756
5,598,300
2,160,295
460,515(14,010)
16,814,744

229,817
6,042
6,311
3,360
245,531

160,100
5,858
3,888
1,873
2,992
174,7142,070,240
54,42956,85330,2762,211,798

18,215
13,77021,6808,359

164,086
124,050

3,432
528
82
2,338
11
11,573(215)
49,7362,161,872

2,440
133
105
2,006
9,567
(171)
44,123
1,821,282

30,9184,759
747
21,063
106
104,252(1,945)448,036
19,474,578¥$

Consolidated Balance Sheet
IBJ Leasing Company, Limited and Consolidated Subsidiaries
As of March 31, 2019
Thousands of
U.S. dollars(Note 1)Millions of yen
2019
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
Reserve for Management Board Benefit Trust
Other
Total Long-term Liabilities

2018

994,386
197,959
8,010
56,040
3,561
4,654
2,091
31
27,442
1,294,178¥

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

2019$

8,957,630
1,783,258
72,160504,828
32,08641,92818,840284
247,205
11,658,219

642,411
33,217
2,461
144
7,299
685,534

546,020
29,1262,410
6,947
584,505

5,786,973
299,227
22,172
1,297
65,7586,175,427

26,08817,874

235,006

23,941
118,219(400)

16,070105,148(1)

215,670
1,064,942(3,607)

6,755
(502)
(577)
109
173,633
8,526
182,159
2,161,872

9,047
141
621
48
148,951
5,681
154,632
1,821,282

60,851(4,528)(5,198)987
1,564,123
76,8091,640,932
19,474,578

Contingent Liabilities (Note 6)
Equity (Note 8):
Common Stock
Authorized, 140,000,000 Shares;
Issued, 49,004,000 Shares as of March 31, 2019 and
42,649,000 Shares as of March 31, 2018
Capital Surplus
Retained Earnings
Treasury Stock - at cost
147,127 shares as of March 31, 2019 and583 shares as of March 31, 2018
Accumulated Other Comprehensive Income:Unrealized Gain on Available-for-sale Securities
Deferred (Loss) 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, 2019
Thousands of
U.S. dollars(Note 1)Millions of yen
2019

2018

¥ 384,893¥ 399,738

Cost and Expenses
Gross Profit

340,765
44,128361,541
38,1973,069,681
397,516

Selling, General and Administrative Expenses
Operating Income

21,21422,913

19,034
19,162

191,108
206,408

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

5
515
332
1,512
(526)
(109)
(345)
(143)
908
42
(53)
(8)
71
25,114

2
516
124
445
(308)
(31)
(3)
586
(16)
56
20,535

46
4,644
2,994
13,626(4,744)(982)(3,108)(1,297)
8,180
384
(481)
(76)
645
226,239

Income Taxes:
Current
Deferred
Total

7,581
327
7,909

5,380
984
6,365

68,3002,950
71,250Net Income
Net Income attributable to Non-controlling Interests
Net Income attributable to Owners of the Parent

17,205611
16,594

14,169526
13,643

154,989
5,505
149,484

Revenues

¥

¥

2019

See accompanying Notes to Consolidated Financial Statements.

3

3,467,197$

U.S. dollars(Note 1)

Yen

Amounts per Share of Common Stock (Note 9)
Net Income attributable to Owners of the Parent per Share

$

2019

2018

¥ 388.64¥ 319.91

2019
$

3.50

Consolidated Statement of Comprehensive Income
IBJ Leasing Company, Limited and Consolidated Subsidiaries
For the year ended March 31, 2019
Thousands of
U.S. dollars(Note 1)Millions of yen

Net Income

2019

2018

¥

¥

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

17,205(2,295)(647)(1,223)64(40)(4,142)

2019

14,169

$

1,020
112
126
169
97
1,525

154,989(20,675)(5,833)(11,024)583(368)(37,317)Comprehensive Income¥

13,062¥

15,695$

117,672

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

12,519543¥

15,210485$

112,778
4,894

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, 2019

Millions of yen

Thousands
Number of sharesof Common Stock
Outstanding
Balance as of April 1, 2017
Net Income attributable to Ownersof the Parent
Cash Dividends Paid
Purchase of Treasury Stock
Issuance of New Stock
Change in Scope of Applicationof Equity Method
Change in an Interest in Subsidiary bySales Transaction
Change in an Interest in Subsidiary due
to Transactions with Non-controlling
Interests
Net change during year
Balance as of March 31, 2018
Net Income attributable to Ownersof the Parent
Cash Dividends Paid
Purchase of Treasury Stock (Note 8)
Issuance of New Stock (Note 8)
Change in Scope of Applicationof Equity Method
Change in an Interest in Subsidiary bySales Transaction
Change in an Interest in Subsidiary due
to Transactions with Non-controlling
Interests
Net change during year
Balance as of March 31, 2019

42,648

CommonStock¥ 17,874

CapitalSurplus¥ 16,086

Retained
Earnings

Treasury Stock¥ 94,319
13,643¥ (1)(2,814)(15)

42,648¥ 17,874¥ 16,070

6,208

8,213

8,213

¥ 105,148
16,594¥ (1)(3,241)
(399)
(282)
(59)
(283)

48,856¥ 26,088¥ 23,941¥ 118,219¥ (400)Millions of yen
Accumulated Other Comprehensive Income
Deferred (Loss) Gain
Defined
Foreign
Retirement
Currency
on Derivatives
Available-for-saleTranslation
Benefit Plans
under Hedge
Accounting
Securities
Adjustments¥ 8,036¥ 24¥ 348¥ (116)
Unrealized
Gain onBalance as of April 1, 2017
Net Income attributable to Ownersof the Parent
Cash Dividends Paid
Purchase of Treasury Stock
Issuance of New Stock
Change in Scope of Applicationof Equity Method
Change in an Interest in Subsidiary bySales Transaction
Change in an Interest in Subsidiary due
to Transactions with Non-controlling
Interests
Net change during year
Balance as of March 31, 2018
Net Income attributable to Ownersof the Parent
Cash Dividends Paid
Purchase of Treasury Stock (Note 8)
Issuance of New Stock (Note 8)
Change in Scope of Applicationof Equity Method
Change in an Interest in Subsidiary bySales Transaction
Change in an Interest in Subsidiary due
to Transactions with Non-controlling
Interests
Net change during year
Balance as of March 31, 2019

1,011
¥ 9,047

117
¥ 141

273
¥ 621

Noncontrolling
Interests

Total¥ 136,571
13,643164¥ 48¥ 5,183(644)¥ (502)(1,198)¥ (577)(2,814)

(15)

(15)

1,566
¥ 148,951
16,59461¥ 109¥ 141,755
13,643(2,814)497¥ 5,681(3,241)(399)
16,427(282)(2,292)¥ 6,755

Total Equity

2,064¥ 154,632
16,594(3,241)(399)
16,427
(282)

(59)

(59)

(283)

(283)

(4,074)¥ 173,633

2,845¥ 8,526(1,229)¥ 182,159

Thousands of U.S. dollars (Note 1)

Balance as of March 31, 2018
Net Income attributable to Ownersof the Parent
Cash Dividends Paid
Purchase of Treasury Stock (Note 8)
Issuance of New Stock (Note 8)
Change in Scope of Applicationof Equity Method
Change in an Interest in Subsidiary bySales Transaction
Change in an Interest in Subsidiary due
to Transactions with Non-controlling
Interests
Net change during year
Balance as of March 31, 2019

CommonStockCapitalSurplusRetained
Earnings$ 161,014$ 144,764$ 947,199
149,484

73,99273,992

Treasury Stock$ (9)(29,198)(3,598)(2,543)(535)(2,551)$ 235,006$ 215,670$ 1,064,942$ (3,607)

Thousands of U.S. dollars (Note 1)

Balance as of March 31, 2018
Net Income attributable to Ownersof the Parent
Cash Dividends Paid
Purchase of Treasury Stock (Note 8)
Issuance of New Stock (Note 8)
Change in Scope of Applicationof Equity Method
Change in an Interest in Subsidiary bySales Transaction
Change in an Interest in Subsidiary due
to Transactions with Non-controlling
Interests
Net change during year
Balance as of March 31, 2019

Accumulated Other Comprehensive Income
Deferred (Loss) Gain
ForeignDefinedUnrealized
on Derivatives
Gain onCurrency
Retirement
Available-for-saleTranslation
Benefit Plans
under Hedge
Securities
Adjustments
Accounting$ 81,502$ 1,278$ 5,602$ 435

Noncontrolling
Interests

Total$ 1,341,785
149,484$ 51,176(29,198)(3,598)147,984(2,543)(20,651)$ 60,851(5,806)$ (4,528)(10,800)$ (5,198)

See accompanying Notes to Consolidated Financial Statements.

552
$ 987

5

Total Equity$ 1,392,961
149,484(29,198)(3,598)147,984(2,543)

(535)

(535)

(2,551)(2,551)(36,705)$ 1,564,123

25,633$ 76,809(11,072)$ 1,640,932

Consolidated Statement of Cash Flows
IBJ Leasing Company, Limited and Consolidated Subsidiaries
For the year ended March 31, 2019
Thousands of
U.S. dollars(Note 1)Millions of yen
2018

2019

2019

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
Increase (Decrease) in Accruals for Debt Guarantees
Gain on Sales of Marketable and Investment Securities
Loss on Devaluation of Marketable and Investment Securities
Change in assets and liabilities:¥

Increase in Lease Receivables and Investments in Lease
Increase in Receivables
Increase in Operational Investment Securities
Decrease in Accounts Payable ─ trade
Gain on Step Acquisition
Purchases of Leased Assets
Proceeds from Sales of Leased Assets
Increase in Interest Payable
Other ─ net
Total Adjustments
Net Cash Used in by Operating Activities
Cash Flows from Investing Activities:
Purchases of Own-used Assets
Purchases of Marketable and Investment Securities
Proceeds from Sales and Redemption of Marketable
and Investment Securities
Purchase of Subsidiaries causing Changes in Scope of Consolidation
Other ─ net
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Net Increase in Short-term Borrowings
Proceeds from Long-term Debt
Repayments of Long-term Debt
Proceeds from Common Stock IssuanceCash Dividends Paid
Other ─ net
Net Cash Provided by Financing Activities
Foreign Currency Translation Adjustments on Cash and Cash Equivalents
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year

See accompanying Notes to Consolidated Financial Statements.

25,114¥

6$

226,239(4,938)13,227(332)(1,512)8(1,022)
4(908)
53(4,565)
11,679(124)(445)(1,037)
(40)
(586)
16

(44,487)
119,158(2,994)(13,626)76(9,208)39(8,180)481(107,665)(105,120)(43,330)1,739(42)(120,504)
38,874
193
10,461(320,816)(295,701)(14,175)(14,931)(24,366)
955(92,767)
57,83450
7,773(74,731)(54,196)(969,876)(946,947)(390,331)
15,667(384)(1,085,525)
350,186
1,739
94,235(2,889,977)(2,663,738)(3,368)(1,637)(30,340)(9,812)
6,434

(825)
650

(88,396)
57,963(711)(487)(7,945)(284)(2,096)(6,408)(4,394)(71,575)

193,162
304,488(211,098)
16,427(3,241)(192)
299,546(68)(4,168)

5,643
210,921(169,286)(2,814)(146)
44,317
19(11,955)

1,740,045
2,742,894(1,901,614)
147,984(29,198)(1,734)
2,698,377(619)(37,555)

29,607¥

20,53525,43841,563¥29,607

266,710$229,155

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
which is more familiar to readers outside Japan. In addition, certain reclassifications have been made in the2018 consolidated financial statements to conform to the classifications used in 2019. 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 ¥111.01 to
US$1.00, the approximate rate of exchange at March 31, 2019. 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, KL Lease &Estate Co., Ltd., IBJ Leasing (China) Ltd., PT. VERENA MULTI FINANCE Tbk, PT. IBJ VERENAFINANCE, IBJ Air Leasing Limited and IBJ Air Leasing (US) Corp.
The number of consolidated subsidiaries as of March 31, 2019 and 2018 was 32 and 26, respectively.
The consolidated financial statements for the year ended March 31, 2019 newly include the accounts of PT.
VERENA MULTI FINANCE Tbk, Aircraft MSN 7316 LLC and Aircraft MSN 7791 LLC, of which IBJL
acquired shares, as well as the accounts of IBJL Aircraft Lotus Co., Limited, IBJL Aircraft Rafflesia Co.,
Limited, Aircraft MSN 33212 LLC and IBJ Air Leasing (Ireland) 2 Limited as they were newly incorporated.
The accounts of IBJ Air Funding (US) LLC were excluded from the consolidated financial statements, as it
was liquidated during the year.
The number of associated companies accounted for under the equity method as of March 31, 2019 and2018 was 3. Investments in associated companies consist of MG Leasing Corporation, Krung Thai IBJ
Leasing Co., Ltd. and PNB-IBJL Leasing and Finance Corporation.
Kaikias Leasing Co., Ltd. and 106 other subsidiaries are neither consolidated nor accounted for underthe equity method, as they are acting as operators under Tokumei Kumiai agreements and the leased assets
and liabilities do not substantially belong to the subsidiaries. Aries Line Shipping S.A. and 28 othersubsidiaries are also not consolidated or accounted for under the equity method, as they are immaterial. IBJ
ROYAL LINE S.A. and 1 associated company 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 or7

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
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, 2019 and 2018. Total assets (simply compiled amount) of such SPEs as of March 31, 2019 and2018 were ¥124,429 million ($1,120,889 thousand) and ¥120,601 million, respectively. Total liabilities(simply compiled amount) of such SPEs as of March 31, 2019 and 2018 were ¥124,935 million ($1,125,444
thousand) and ¥121,161 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 in2019 and 2018 was ¥11,151 million ($104,940 thousand) and ¥2,109 million, respectively, with no gain/loss
on the transfer of such receivables. IBJL holds subordinated interests of such transferred receivables of ¥212
million ($2,002 thousand) and ¥81 million in 2019 and 2018, respectively. IBJL recognized profit dividendsof ¥173 million ($1,633 thousand) and ¥153 million, respectively, for the years ended March 31, 2019 and2018, and servicing fees received of ¥1 million ($12 thousand) with respect to the transactions with such
SPEs for both of the years ended March 31, 2019 and 2018. 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.
8(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.
(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
9(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
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) Stock Issue Costs and Bond Issue Costs
Costs for stock issuance and 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 ¥8,406 million($75,728 thousand) and ¥8,400 million at March 31, 2019 and 2018, 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.
10(p) Reserve for Management Board Benefit Trust
Reserve for Management Board Benefit Trust is provided for the payment of IBJL’s shares, etc. to executive
officers based on the estimated amount of stock benefit obligations at the end of the fiscal year.
(q) 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
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.
(r) 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.
(s) 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.
(t) Recognition of Revenues and Cost of Sales
Revenues and cost of sales relating to finance lease transactions are recognized when lease payments arereceived.
(u) 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.

(v) 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
11

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.
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.
(w) Consumption Taxes
IBJL and its domestic consolidated subsidiaries are subject to Japanese consumption taxes. Japanese
consumption taxes are excluded from the transaction amounts.
(x) 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.
(y) 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, 2019 and 2018 consisted of the following:(Thousands of（Millions of yen）
2019

2018

U.S. dollars）
2019

Leasing and Installment Sales:
Finance Lease¥823,384¥ 930,318$ 8,380,489
Operating Lease
160,206
229,900
2,070,987
Installment Sales (*1)
138,592
145,888
1,314,191
Leasing and Installment Sales total
1,122,183
1,306,106
11,765,667
Finance
556,933
708,950
6,386,363
Other
3,888
6,311
56,853
Total Operating Assets¥1,683,005¥ 2,021,368$ 18,208,883(*1) The amount of Installment Sales represents "Installment Sales Receivables" less "Deferred Profit on
Installment Sales".
(2) The total amounts of new contracts for the years ended March 31, 2019 and 2018 were as follows:(Thousands of（Millions of yen）
2019

2018

U.S. dollars）
2019

Leasing and Installment Sales:
Finance Lease¥283,525¥ 374,218$ 3,371,038
Operating Lease87,285
120,3141,083,816
Installment Sales (*1)
59,67154,885494,417
Leasing and Installment Sales total
430,482
549,418
4,949,271
Finance
901,485996,700
8,978,477
Other
3,941
2,698
24,305
Total¥1,335,909¥ 1,548,817$ 13,952,053(*1) The amount of Installment Sales represents "Installment Sales Receivables" less "Deferred Profit on
Installment Sales".

13

4. Pledged Assets
Assets pledged as collateral as of March 31, 2019 were as follows:(Thousands of（Millions of yen）

U.S. dollars)

2019

2019

Lease Receivables and Investments
in Lease
Installment Sales Receivable
Loans Receivables
Operational Investment Securities
Leased Assets
Own-used Assets
Investment Securities
Total¥13,835
7,926
6,470
24,541
15,580100
8¥68,464$124,637
71,40558,292
221,075
140,352909
75$616,745

Liabilities secured by the above assets as of March 31, 2019 were as follows:(Thousands of（Millions of yen）

U.S. dollars)

2019

2019

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

¥25,966
4,659
28,282¥58,908$233,911
41,970254,778$530,659

5. Short-term Borrowings and Long-term Debt
(1) “Short-term Borrowings” as of March 31, 2019 and 2018 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)

2019

2018

¥302,209¥270,743$2,722,364

609,800
82,376453,800
63,621

5,493,199
742,067¥994,386¥788,165$8,957,630¥20,777
177,182¥20,000
182,054$187,166
1,596,092¥197,959¥202,054$1,783,258

2019

(2) “Long-term Debt” as of March 31, 2019 and 2018 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)

2019

2018

2019

¥85,000
524,173¥38,000
466,824$765,697
4,721,859

33,23841,196

299,417¥642,411¥546,020$5,786,973

6. Contingent Liabilities
Contingent Liabilities as of March 31, 2019 were as follows:(Thousands ofGuarantee Obligations with respect tooperating activities
Other Guarantee Obligations
Total(Millions of yen)

U.S. dollars)

2019

2019

¥11,221$101,082

15,933¥27,154

143,532$244,614

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.
(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, 2019 and2018 was as follows:(Millions of yen)
2019
Reportable segment
Leasing andInstallment

Finance

Other

Total

Sales

Reconciliations

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

Sales:
Sales to external¥366,095¥16,724¥2,073¥384,893¥-¥384,893

333

700

119

1,153

(1,153)-

17,424

2,193

386,047(1,153)384,893

customers
Intersegment sales andtransfers
Total

366,429

Operating Expenses

348,382

7,837

1,532

357,753

4,227

361,980

Segment Profit¥18,046¥9,587¥660¥28,294¥(5,380)¥22,913

Segment Assets¥1,320,729¥842,165¥11,940¥2,174,835¥(12,962)¥2,161,872

11,460--11,4601,767

13,227

120,504--

120,504

3,368

123,872

Reconciliations

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

OthersDepreciation andAmortization
Capital Expenditure(Millions of yen)
2018
Reportable segment
Leasing andInstallment

Finance

Other

Total

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

372

337

107

817

(817)

-

customers
Intersegment sales andtransfers
Total

386,379

12,8481,327

400,555(817)

399,738

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¥3,659¥1,821,282

10,119--

10,1191,544

11,664

92,767--

92,767

1,637

94,404

OthersDepreciation andAmortization
Capital Expenditure

16

(Thousands of U.S. dollars)
2019
Reportable segment

Leasing andInstallment

Finance

Other

Total

Reconciliations

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

(*4)

Sales

Sales:
Sales to external$3,297,860$150,659$18,678$3,467,197$ -$3,467,197

3,006

6,308

1,079

10,393(10,393)-

Total

3,300,866

156,967

19,7573,477,590(10,393)

3,467,197

customers
Intersegment sales andtransfers

Operating Expenses

3,138,301

70,604

13,805

3,222,710

38,0793,260,789

Segment Profit$162,565$86,363$5,952$254,880$(48,472)$206,408

Segment Assets$11,897,394$7,586,391$107,561$19,591,346$(116,768)$19,474,578

103,234--

103,234

15,920119,154

1,085,525--

1,085,525

30,3401,115,865

OthersDepreciation andAmortization
Capital Expenditure(*1) The details of Reconciliations to Segment Profit for the years ended March 31, 2019 and 2018 were as follows:(Thousands of(Millions of yen)

U.S. dollars)
2018

2019

2019

Elimination of intersegment transactions¥(426)¥(256)$(3,846)

Administrative expenses not allocated to(4,953)(4,462)(44,626)¥(5,380)¥(4,718)$(48,472)

the reportable segments
Total(*2) The details of Reconciliations to Segment Assets as of March 31, 2019 and 2018 were as follows:(Thousands of(Millions of yen)

U.S. dollars)

2019

2018

¥(49,664)¥(29,865)$( 447,390)

36,702

33,524

330,622¥(12,962)¥3,659$(116,768)

Elimination of intersegment transactions
Corporate assets not allocated to the2019reportable 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）
2019

Japan

North
America/ LatinAmerica¥18,933

Europe¥216,669¥9,515

Asia

Total

¥413

¥245,531(Thousands of U.S. dollars)
2019

Japan

North
America/ LatinAmerica$170,556

Europe$1,951,801$85,716

Asia

Total

$3,725$2,211,798(*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, 2019 and 2018 is not presented as
domestic sales exceeded 90% of all segments.

(5) Impairment loss of long-lived assets per reportable segment:(Millions of yen)
2019
Reportable segment
Leasing andInstallment

Finance

Other

Total

Reconciliations

Consolidated

¥-

¥-

¥-

¥8

¥8

Sales
Impairment loss¥-

(Millions of yen)
2019
Reportable segment
Leasing andInstallment

Finance

Other

Total

Reconciliations

Consolidated

$-

$-

$-

$76

$76

Sales
Impairment loss$-

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 applicable188. Note to Consolidated Statement of Changes in Equity(1) The increase of 6,355,000 issued shares in common stock is due to the issuance of new shares through thethird-party allotment.
(2) The increase of 146,544 shares of treasury stock is due to the acquisition of IBJL’s shares by IBJL’s board
benefit trust of 146,500 shares and the purchase of shares less than one unit of 44 shares.

9. Per Share Information
Details of basic net income attributable to owners of the parent per share (“EPS”) for the years ended March
31, 2019 and 2018 were as follows:

For the year ended March 31, 2019:
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¥16,594

42,697¥388.64$3.50¥13,643

42,648¥319.91

$2.88

EPS

For the year ended March 31, 2018:
Basic EPS
Net income available to commonshareholders

19