consolidated financial results...consolidated financial results for the fiscal year ended march 31,...

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Consolidated Financial Results For the Fiscal Year Ended March 31, 2017

All Rights Reserved, Copyright © Tokyo Century Corporation All Rights Reserved, Copyright © Tokyo Century Corporation 2

Financial Highlights Statement of Income Sales Revenues by Reportable Segment Balance Sheet Analysis on Year-on-Year Change in Ordinary Income Transaction Volume Operating Assets and Interest-Bearing Debts FY2017 Consolidated Results Forecast Dividend and Dividend Payout Ratio ROA (Return on Assets)

1. Financial Highlights

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Business Summary by Operating Segment Balance of Operating Assets by Operating Segment Equipment Leasing Business 1-1 Specialty Financing Business 2-1 Balance of Operating Assets Specialty Financing Business 2-2 Solar Power Generation Business Specialty Financing Business 2-3 Aviation Business Domestic Automobile Financing Business 3-1 Results by Subsidiary Domestic Automobile Financing Business 3-2 Fleet of Vehicles under Management International Business 4-1 Balance of Operating Assets International Business 4-2 About CSI Leasing International Business 4-3 Results by Region Global Assets Ratio

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2. Results by Operating Segment

Summary of the Third Medium-Term Management Plan Towards Shift to a High-Revenue Business Model Topic (1) Business Alliance with Indonesia’s Lippo Group (International Business) Topic (2) Partnership with Grab, Ride-hailing Service Provider (International Business) Topic (3) Business Alliance with China’s UnionPay Merchant Services (International Business) Topic (4) Joint Venture Establishment with China’s Dalian Bingshan Group (International Business) Topic (5) Enhance Automobile Leasing and Financing in ASEAN (International Business) Promote Alliance Strategies with Local Blue-Chip Companies (International Business)

Lease Transaction Volume by Type of Equipment ROA and ROE Foreign Exchange Rates Major Domestic Group Companies and Affiliates Major Overseas Group Companies and Affiliates

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4. Appendix

3. Progress on the Third Medium-Term Management Plan


1. Financial Highlights


Financial Highlights

<Continue earning record-high profits> Eight consecutive periods in ordinary income and six consecutive periods in net income*

* Calculated from the fiscal year ended March 31, 2009, the period just before the merger

(Bi l l ions of yen)

FY2015 FY2016

Result Result Change % ChangeAnnounced on

May 11, 2016

Achievement

Rate

Revenues 940.5 976.1 35.7 3.8% 950.0 102.7%

Operating income 65.9 72.0 6.1 9.2% 70.5 102.1%

Ordinary income 68.0 73.5 5.5 8.1% 72.0 102.1%

Net income attributable to owners

of parent40.0 43.7 3.6 9.0% 42.5 102.7%

Mar. 31, 2016 Mar. 31, 2017

Change % Change

Total assets 3,317.9 3,579.9 262.0 7.9%

Balance of operating assets 2,991.1 3,216.0 224.9 7.5%

Net assets 374.9 404.8 30.0 8.0%

Shareholders' equity ratio 9.6% 9.9% 0.3pt

ROA (Return on asset) 2.1% 2.1% －

ROE (Rate of return on equity) 13.1% 12.9% -0.2pt

FY2016 Forecast


Statement of Income

Ordinary income Increased by ¥5.5 billion from the previous fiscal year, mainly due to an increase in profit in the domestic automobile financing companies and the consolidated subsidiaries related Equipment Leasing, as well as the consolidation of CSI Leasing

Net income attributable to owners of parent Up by ¥3.62 billion from the previous fiscal year, primarily due to an increase in ordinary income, apart from an increase in net income attributable to non-controlling interests

Major Factors of Change (Bi l l ions of yen)

FY2015 FY2016

Result Result Change % Change

Revenues 1 940.5 976.1 35.7 3.8%

Costs 2 803.7 823.3 19.7 2.4%

Funding cost 3 13.3 17.5 4.2 31.2%

Gross profit 4 136.8 152.8 16.0 11.7%

SG&A expenses 5 70.9 80.8 9.9 14.0%

Personnel expenses 6 40.6 46.1 5.5 13.5%

Non-personnel expenses 7 29.1 33.5 4.4 15.3%

Allowance for doubtful accounts 8 1.2 1.2 0.0 －

Operating income 9 65.9 72.0 6.1 9.2%

Extraordinary income and losses 10 2.1 1.5 -0.6 -28.1%

Ordinary income 11 68.0 73.5 5.5 8.1%

Extraordinary income and losses 12 0.5 0.2 -0.2 -49.0%

Income before income taxes 13 68.5 73.7 5.3 7.7%

Income taxes 14 23.2 22.9 -0.2 -1.0%

Net income 15 45.3 50.8 5.5 12.2%

Net income attributable to non-controlling interests 16 5.3 7.2 1.9 36.0%

17 40.0 43.7 3.6 9.0%Net income attributable to owners of parent

#


Sales Revenues by Reportable Segment

Major Factors of Change

Leasing Consolidation of CSI Leasing and a profit growth in the automobile leasing contributed to the growth

Finance Decreased due to a reactionary drop from the increased profit in the previous fiscal year associated with successful exit strategies for large real estate financing

Other Income from the electric power sales in solar power generation business gained

Note: Sales revenues (Gross profit before deducting funding cost)

(Bi l l ions of yen)

FY2015 FY2016

Result Result Change % Change

Revenues 1 940.5 976.1 35.7 3.8%

Leasing 2 808.5 850.6 42.2 5.2%

Installment sales 3 81.5 73.6 -7.8 -9.6%

Finance 4 29.3 24.2 -5.1 -17.3%

Other 5 21.3 27.7 6.4 30.1%

Costs (excluding funding cost) 6 790.3 805.8 15.5 2.0%

Leasing 7 698.4 716.9 18.5 2.6%


Finance 9 1.3 0.9 -0.4 -28.9%

Other 10 14.9 19.8 4.9 32.7%

Sales revenues 11 150.2 170.3 20.2 13.4%

Leasing 12 110.1 133.8 23.7 21.5%


Finance 14 28.0 23.3 -4.7 -16.7%

Other 15 6.4 7.9 1.5 23.9%

#


Balance Sheet


Total assets and total liabilities Increased primarily due to the consolidation of CSI Leasing, in addition to a contribution from a growth in operating assets in Domestic Automobile Financing

Total net assets Gained due to an increase in retained earnings, which was accompanied by the expanded profits, despite the drop in non-controlling interests associated with the full acquisition of aircraft leasing companies and a decline in translation adjustments impacted by the yen’s appreciation

Change % Change

Total assets 1 3,317.9 3,579.9 262.0 7.9%

Current assets 2 2,619.0 2,766.8 147.8 5.6%

Non-current assets, etc. 3 698.9 813.1 114.2 16.3%

Total liabilities 4 2,943.0 3,175.1 232.1 7.9%

Current liabilities 5 1,878.2 2,014.2 136.0 7.2%

Long-term liabilities 6 1,064.8 1,160.8 96.1 9.0%

Total net assets 7 374.9 404.8 30.0 8.0%

Shareholders' equity 8 320.2 354.7 34.5 10.8%

Non-controlling interests, etc. 9 54.7 50.1 -4.6 -8.4%

(Bill ions of yen)

# Mar. 31, 2016 Mar. 31, 2017


Analysis on Year-on-Year Change in Ordinary Income


Transaction Volume


Leasing Gained as a result of the consolidation of CSI Leasing, while large operating lease transactions decreased

Other Fell in transaction volume of solar power generation business from the previous fiscal year

FY2014 FY2015 FY2016Result Result Result Change % Change1,474.1 1,497.9 1,500.0 2.1 0.1%

Leasing 688.7 775.1 796.4 21.3 2.8%Installment sales 106.1 91.1 93.5 2.4 2.6%Finance 673.5 617.1 602.8 -14.3 -2.3%Other 5.7 14.6 7.2 -7.4 -50.5%

Reference: Announced by Japan Leasing Association (FY2016 Result: Preliminary figure) (Bill ions of yen)

FY2014 FY2015 FY2016Result Result Result Change % Change4,413.2 4,721.3 4,724.0 2.7 0.1%Capital investment financed by leasing

Transaction volume

(Bill ions of yen)


Operating Assets and Interest-Bearing Debts

Leasing Increased due to the consolidation of CSI Leasing and the expanded operating assets in Domestic Automobile Financing

Finance Increase in financing businesses mainly in Specialty Financing

Long-term borrowings and Interest-bearing debt Consolidation of CSI Leasing led to the increase

Commercial paper Increased by the new issuance of commercial paper of Orico Auto Leasing, which was accompanied by the rating from external rating agency

Corporate bond Increased due to the issuance of unsecured bonds amounted to ¥50 billion in April 2016

Major Factors of Change Change % Change

Balance of operating assets 1 2,865.6 2,991.1 3,216.0 224.9 7.5%

Leasing 2 1,915.0 2,026.9 2,237.7 210.8 10.4%

Installment sales 3 239.4 214.4 201.5 -13.0 -6.0%

Finance 4 699.2 724.4 750.0 25.6 3.5%

Other 5 12.0 25.4 26.8 1.4 5.4%

Total Assets 6 3,151.9 3,317.9 3,579.9 262.0 7.9%

Shareholders' equity 7 292.9 320.2 354.7 34.5 10.8%

Shareholders' equity ratio 8 9.3% 9.6% 9.9% 0.3pt

Interest-bearing debt 9 2,419.9 2,551.5 2,733.0 181.6 7.1%

Commercial paper 10 754.6 763.4 800.7 37.3 4.9%

MTN 11 51.6 41.1 46.7 5.6 13.6%

Corporate bond 12 157.7 155.5 185.4 29.8 19.2%

Securitized lease assets 13 61.6 78.1 65.1 -13.0 -16.6%

Short-term borrowings 14 470.2 437.2 416.3 -20.8 -4.8%

Long-term borrowings 15 924.2 1,076.2 1,218.9 142.6 13.3%

Short-term funding ratio 16 53.6% 50.4% 47.3% -3.1pt

Direct funding ratio 17 42.4% 40.7% 40.2% -0.5pt

(Billions of yen)

# Mar. 31, 2015 Mar. 31, 2016 Mar. 31, 2017


Ordinary income: Steady performance towards a record high for nine consecutive periods (*) Dividend payout ratio: Up 0.4pt to 24.6% year on year

FY2017 Consolidated Results Forecast

* From the period just before the merger that is fiscal year ended March 31, 2009, ordinary income is expected to hit a nine-year record high.

976.1 980.0 3.9 0.4%

72.0 74.0 2.0 2.8%

73.5 76.0 2.5 3.4%

43.7 45.0 1.3 3.1%

¥413.51 ¥426.31 ¥12.80 3.1%

¥100 ¥105 ¥5 5.0%

24.2% 24.6% 0.4pt

Total dividends

Dividend payout ratio

% Change

Revenues

Operating income

Ordinary income

Net income attributable to owners of parent

Net income per share

FY2017 ForecastFY2016

Result Change

(Bill ions of yen)


Dividend and Dividend Payout Ratio

Aiming for a solid dividend increase by maintaining a good balance between growth investment and dividend


ROA (Return on Assets)

Ensuring to further improvement of ROA for the shift to a high-revenue business model

ROA (Return on Assets): Ordinary income / Operating assets (*1) x 100 annualized *1 Operating assets (simple average of beginning and end of term balance sheet figures) *2 Based on the simple aggregation of data of the former two companies

(*2)


2. Results by Operating Segment


Business Summary by Operating Segment

Equipment Leasing Specialty Financing

Structure and provide flexible financing programs in cooperation with manufacturers and dealers in addition with the financing subsidiaries of Fujitsu and IHI

Develop a marketing strategy incorporating a drastic differentiation approach, and also focus on establishing joint ventures with prime business partners

Promote various measures including green businesses that reuse and recycle resources and other measures, to create an environmentally-sound, sustainable economy and society

Nippon Car Solutions Co., Ltd. (mainly for corporate customers): Broaden corporate customer base by leveraging sales channels it shares. Promote to acquire multiple revenue opportunities

Nippon Rent-A-Car Service, Inc. (rental car services): Enhance corporate sales through alliance with Tokyo Century. Focus on capturing inbound visitors’ demand

Orico Auto Leasing Co., Ltd. (mainly for individuals): Strengthen its Koala Club, an agency organization. Cultivate relationships with large affiliated agencies

Shipping: Create new business opportunities along with core partners

Aviation: Expand leasing and financing businesses. Plan to increase operating assets from the current approximately ¥280 billion to ¥400 billion

Environment and Energy: Operate various energy businesses primarily solar power generation business through Kyocera TCL Solar

Real Estate: Build a portfolio of prime assets with strategic partners

Take advantage of the networks of Mizuho and ITOCHU Group to provide financial services that are centered on leasing information and communication equipment and wide range of property

Provide financial services for shipping, aviation, environment and energy, real estate, structured finance and other sectors, utilizing our highly specialized expertise

Operate automobile leasing for corporate customers and individuals, which boasts the leading lineup in the domestic market, to provide the best suited service depending on purpose

Provide specialized services to meet unique needs of overseas customers by promoting alliance strategies with local blue-chip companies and financial institutions and others

Domestic Automobile Financing International Business

Expand overseas networks across 37 countries and regions worldwide including East Asia, ASEAN, Americas, Europe and other countries

Provide high value-added IT equipment leasing by leveraging the CSI Leasing’s extensive network in North America, Central and South America and Europe

Concluded agreements with local blue-chip companies including Lippo Group, Indonesia’s leading conglomerate, and Grab, a ridesharing provider in Southeast Asia


Balance of Operating Assets by Operating Segment

Note: Figures presented in Specialty Financing and International Business as of the end of March 2016 and 2015 have been rectified due to intersegment business transfer in this fiscal year

Steady increase in operating assets mainly due to the consolidation of CSI Leasing

CSI

ConsolidationForex Impact

Other Existing

Businesses

Balance of operating assets 2,231.4 2,597.5 2,865.6 2,991.1 3,216.0 224.9 159.1 -29.2 95.0

Equipment Leasing 1,495.7 1,532.2 1,534.7 1,492.0 1,450.6

Percentage 67.0% 59.0% 53.6% 49.9% 45.1%

Specialty Financing 488.1 537.4 702.9 836.7 884.1

Percentage 21.9% 20.7% 24.5% 28.0% 27.5%

Automobile Financing 114.2 357.9 379.9 409.7 458.3

Percentage 5.1% 13.8% 13.3% 13.7% 14.2%

International Business 133.4 170.0 248.1 252.7 423.0

Percentage 6.0% 6.5% 8.6% 8.4% 13.2%

-10.4

－－

159.1 -18.7170.3 29.9

47.4 57.8

48.6 48.6

-41.4 -41.3－ -0.1

－

(Bill ions of yen)

ChangeMar. 31,

2017

Mar. 31,

2016

Mar. 31,

2015

Mar. 31,

2014

Mar. 31,

2013


Rise of Gross Profit from New Transactions (Non-Consolidated)

Promoting a differentiation-focused business strategy

Business Partnership with Blue-Chip Companies

Robot dispatch (rental) business together with Kawasaki Heavy Industries

Biomass power generation business jointly with IHI and 7 other investing companies

FY2016 Results of Major Consolidated Subsidiaries

A woody biomass power generation company was established in a land held by IHI in Kagoshima City, Kagoshima Prefecture (hold a 25.1% stake in the company）

Operate industrial robot dispatch (rental) business jointly with Kawasaki Heavy Industry and provide with services to the companies facing labor shortage

Kawasaki Heavy Industries’ robot, “duAro”

Equipment Leasing Business 1-1

Change Change Change

Revenues 126.7 3.7 8.2 2.2 3.4 2.9

Gross profit 5.7 0.8 0.9 0.1 0.4 0.3

Ordinary income 3.5 0.8 0.6 0.1 0.2 0.3

(Bill ions of yen)

Orico Business LeasingIHI Finance SupportFujitsu Leasing


Increase in shipping & aviation, environment & energy and real estate

Specialty Financing Business 2-1 Balance of Operating Assets

Notes: 1. Figures presented in “Shipping and Aviation“ at the end of March 2016 and 2015 have been rectified due to intersegment business transfer in this fiscal year. 2. “Other” includes factoring and securitization of receivables, etc.

Mar. 31, 2013 Mar. 31, 2014 Mar. 31, 2015 Mar. 31, 2016 Mar. 31, 2017

Change % Change

Balance of operating assets 488.1 537.4 702.9 836.7 884.1 47.4 5.7%

Shipping and Aviation 130.1 202.9 358.2 423.7 453.7

Percentage 26.7% 37.8% 51.0% 50.6% 51.3%

Environment and Energy 7.9 15.7 23.4 37.3 53.7

Percentage 1.6% 2.9% 3.3% 4.5% 6.1%

Real estate 279.2 236.7 240.1 292.2 309.6

Percentage 57.2% 44.0% 34.2% 34.9% 35.0%

Other 70.9 82.1 81.2 83.5 67.1

Percentage 14.5% 15.3% 11.5% 10.0% 7.6%

(Bill ions of yen)

17.4 6.0%

-16.4 -19.6%

30.0 7.1%

16.4 44.0%


Operating solar power generation plants in 52 locations

Operating Assets and Output of Kyocera TCL Solar

Sales Revenues from Electric Power Sales through Kyocera TCL Solar

• Solar power generation plants are in operation

in 52 locations as of March 31, 2017

• Expected to start operating large-sized power

generation plant gradually in 2017

Operations Outlook

Specialty Financing Business 2-2 Solar Power Generation Business

* Sales revenues (Gross profit before deducting funding cost)


Aircraft Leasing Business Outlook of Aviation Business

Accelerating the growth speed in operating assets towards ¥400 billion

In October 2014, established aircraft leasing joint venture (JV) companies with US-based CIT Group (CIT). Operated aircraft leasing with 33 fleet of aircraft in two years.

Through the engagement in the JV, developed a high degree of expertise in the aircraft leasing business including human resource education

Remain focusing on the aviation business, since the market is expected to expand

+ Tokyo Century’s expertise

on aviation business Strategic business alliance

and partnership

Plan to increase operating assets

Current Target Approx. ¥280 billion => Approx. ¥400 billion

JV aircraft leasing companies became wholly owned subsidiaries after Tokyo Century acquired 30% shares of the companies from CIT in March 2017

Specialty Financing Business 2-3 Aviation Business


Three automobile companies gained profits and revenues due to continuing organic growth

Domestic Automobile Financing Business 3-1. Results by Subsidiary

FY2015

Result

FY2016

Result

FY2015

Result

FY2016

Result

FY2015

Result

FY2016

ResultFY2015 Result FY2016 Result % Change

Revenues 170.3 178.0 39.3 46.6 28.0 31.6 237.6 256.2 7.8%

Gross profit 22.8 23.4 2.9 3.6 5.4 5.8 31.1 32.8 5.5%

Ordinary income 9.2 10.0 1.1 1.6 2.0 2.2 12.3 13.8 12.2%

Mar. 31, 2016 Mar. 31, 2017 Mar. 31, 2016 Mar. 31, 2017 Mar. 31, 2016 Mar. 31, 2017 Mar. 31, 2016 Mar. 31, 2017 % Change

Balance of operating assets (*) 292.5 311.6 96.1 122.4 28.3 30.5 416.9 464.5 11.4%

FY2015

Result

FY2016

Result

FY2015

Result

FY2016

Result

FY2015

Result

FY2016

ResultFY2015 Result FY2016 Result % Change

ROA（Return on assets) 3.2% 3.3% 1.3% 1.5% 7.0% 7.5% 3.1% 3.1% －

Total of Three Companies

(Bill ions of yen)

Nippon Car Solutions

(NCS) <Consolidated>

Orico Auto Leasing

(OAL) <Non-consolidated>

Nippon Rent-A-Car Service

(NRS) <Non-consolidated>

Note: Balance of operating assets in Domestic Automobile Financing Business as of Mar. 31, 2017 (¥458.3 billion) = Total figures of the above three companies (¥464.5 billion) - Intercompany transaction amount (¥6.2 billion) Total of Three Companies = Simple sum of three automobile companies' figures


Fleet of vehicles under management raised to approximately 600 thousand

Domestic Automobile Financing Business 3-2 Fleet of Vehicles under Management

Change

Duplication adjustment -61 -75 -93 -18

Domestic Automobile Financing Vehicles

under Management in Total539 565 595 30

Nippon Rent-A-Car Service 38 Tokyo Century: 81.1%

Orico Auto Leasing 63 Tokyo Century: 50.0%

Orico: 50.0%

40

80

2

17

37

52

Automobile financing company Mar. 31, 2016 (Major Shareholders)

Nippon Car Solutions 539 Tokyo Century: 59.5%

NTT: 40.5%

Mar. 31, 2017

568 29

Mar. 31, 2015

511

(Thousand)


Business expansion in the U.S. due to the consolidation of CSI Leasing

Ratio of Operating Assets by Region

International Business 4-1 Balance of Operating Assets

Note: Figures presented in USA, Total in International Business and Total of each region as of the end of March 2016 and 2015 have been rectified due to intersegment business transfer in this fiscal year.

East Asia 11.8%

ASEAN 33.7%

USA 54.5%

Mar. 31, 2017 ¥388.5 Billion

East Asia

27.8%

ASEAN 52.6%

USA 19.6%

Mar. 31, 2013 ¥89.2 Billion

Change % Change

East Asia 24.8 31.0 44.8 52.5 45.9 -6.6 -12.6%

ASEAN 46.9 66.6 123.3 121.5 130.8 9.3 7.6%

Total of East Asia & ASEAN (a) 71.7 97.6 168.1 174.0 176.6 2.7 1.5%

USA (b) 17.5 29.1 35.2 38.2 211.9 173.7 454.8%

Global vender 44.2 43.3 44.8 40.5 34.4 -6.1 -15.0%

133.4 170.0 248.1 252.7 423.0 170.3 67.4%

except CSI non-recourse loan 133.4 170.0 248.1 252.7 285.6 32.9 13.0%

Total of each region (a)＋(b) 89.2 126.7 203.3 212.2 388.5 176.3 83.1%

(Bill ions of yen)

Mar. 31, 2017Mar. 31, 2016Mar. 31, 2015Mar. 31, 2014Mar. 31, 2013

Total in International Business


Providing the world top-class service in IT equipment leasing

×

CSI Leasing’s Financial Results US Largest Independent Leasing Company

Business Outlook

International Business 4-2 About CSI Leasing

Develop the world top-class global network Greatly strengthen the support system for the

companies’ close IT vendors both in Japan and overseas for their needs of sales finance

Provide the world first-class service in IT equipment leasing

* CSI Leasing became wholly owned subsidiary in June 2016

2014 2015 2014 2015

1 1 CSI Leasing 984.2 1,048.8

2 2 Great America Financial Services 737.7 816.2

3 3 Ascentium Capital 440.0 686.3

5 4 LEAF Commercial Capital 321.1 388.1

10 5 ENGS Commercial Finance 206.0 267.0

(USD million)

RankingCompany

Annual transaction volume

Source: Monitor

FY2015 FY2016Result Result

Revenues 441.9 466.5 24.6 5.6%

Gross profit 178.8 183.7 4.9 2.7%

Ordinary income 23.1 25.9 2.8 12.1%

Net income 13.4 16.6 3.2 23.9%

Operating assets of leasing 1,387 1,456 69 5.0%

ROA (except non-recourse) 9.7% 11.3% 1.6pt

ROA 1.7% 1.8% 0.1ptROA (except non-recourse) = Ordinary income/(operating assets – non-recourse loan)

ROA = Ordinary income/operating assets

* CSI Leasing became wholly owned subsidiary in June 2016

(USD mill ion)

Change % Change


International Business 4-3 Results by Region

Achieving steady results in overseas subsidiaries without Forex impact

Malaysia Singapore

Indonesia

Expand business in East Asia and ASEAN: 7 countries*1

Consolidated subsidiary: 11 companies Equity-method affiliate: 7 companies

Thailand

China

Philippines

Taiwan

USA Consolidated subsidiary: 2 companies

CSI Leasing, Inc.

*1 Hong Kong is included in China and Taiwan is counted as one.

Tokyo Century (USA) Inc.

Forex

Impact

Without

Forex

Impact

Forex

Impact

Without

Forex

Impact

Gross profit 5.6 5.4 -0.2 -0.8 0.6 Gross profit 1.8 12.4 10.7 -0.2 10.9

Ordinary income 3.5 3.8 0.3 -0.5 0.8 Ordinary income 1.3 2.6 1.3 -0.1 1.4

(Bill ions of yen) (Bill ions of yen)

ＵＳＡ

Change

East Asia & ASEAN

FY2015

Result

FY2016

ResultChange

FY2015

Result

FY2016

Result


Consolidation of CSI Leasing contributed to the growth in global asset ratio

Global Assets Ratio

Notes: 1. Global operating assets: Total of the following (1), (2) and (3) (1) Operating assets of International Business (2) Operating assets of affiliates belong to International Business x Ownership ratio (3) Operating assets from foreign transactions of other operating segments (mainly shipping and aviation business) 2. Global assets ratio: An indicator to measure the ratio of overseas business Global assets / (Consolidated operating assets + Operating assets of affiliates belong to International Business x Ownership ratio)

3. Figures at the end of March 2016 and 2015 have been rectified due to the change of certain standards for calculating totals for “Shipping and aviation etc.” and intersegment business transfer in this fiscal year.

Local group companies in the US and global vendors

Local group companies in East Asia & ASEAN

Shipping and aviation, etc.


3. Progress on the Third Medium-Term Management Plan


Summary of The Third Medium-Term Management Plan

Promote the shift to a high-revenue business model focused on asset efficiency in order to lay the foundation for sustainable growth

<Basic Policy>

<Management Targets>

The Third Medium-Term Management Plan

Targeting more than ¥80 billion in consolidated ordinary income for the fiscal year ending March 31, 2019

1st Year

(Mar. 31, 2017)

2nd Year

(Mar. 31, 2018)

Final Year

(Mar. 31, 2019)

FY2015

Result

FY2016

Result

FY2017

Plan

FY2018

Plan

Consolidated ordinary income ¥68.0 ¥73.5 ¥76.0 80.0 or above

Consolidated ROA（ordinary income/operating assets) 2.3% 2.4% - 2.3% or above

Consolidated shareholders' equity ratio 9.6% 9.9% - 11.0%

¥80.0 bn or above¥68.0 bn ¥73.5 bn ¥76.0 bn


Towards Shift to a High-Revenue Business Model

Aiming to be a company involved in business that lies in the area between domains handled by banks, trading companies and manufacturers

Becoming a non-banking financial services company by transitioning to a new business domain beyond leasing

Pioneer new business fields that combine finance, services and business expertise by advancing

these businesses

Aiming to be a company involved in business that lies in the area between

domains handled by banks, trading companies and manufacturers

<Strengthen the Sales Base> <Strengthen the Management Base>

(1) Transform to take on new business areas that transcend the conventional concept of leasing

(2) Create new values by integrating finance and business (3) Make a Group-wide effort to become first in the overall

ranking for the automobile finance business (4) Expand overseas businesses by promoting alliance

strategies (5) Engage in business planning and development aimed at

lasting corporate development

(1) Strengthen consolidated management

(2) Enhance and reinforce the financial base (3) Raise the level of risk control (4) Bolster development of human resources (5) Strengthen corporate governance

Management Strategies


Topic (1) Business Partnership with Indonesia’s Lippo Group (International Business)

Entering the digital and FinTech businesses

Business partnership with Lippo Group

1. Business alliance for the digital business 2. Business alliance for the FinTech business

including financial services using big data

FinTech Business

・E-commerce ・Electronic money services ・Point program services

About Lippo Group Lippo Group entered the e-commerce business by launching Matahari Mall in 2015

Lippo has already built up customer base through its brick-and-mortar stores including department stores, shopping malls and others

Strength of Lippo Group

The digital and FinTech businesses

Indonesia’s leading national consumer services conglomerate with businesses ranging from real estate, department stores, retailing, financial services, telecommunications, hospitality, healthcare, news media, and IT services. Over the past 60 years, it has established a model for growth, innovation and leadership in industries and new markets.

Business environment in Indonesia

Low rate of bank account holders High rate of smartphone users

Tokyo Century is engaged in new business operations primarily finance along with Lippo Group, which is attempting to merge brick-and-mortar and online stores

Digital Business

・Finance services


Entering into the ridesharing business growing ever faster in Southeast Asia

Business partnership with Grab

About Grab

Potentiality in ride-hailing service in ASEAN

Purpose of business alliance

Low transportation facility usage and automobile ownership

Topic (2) Partnership with Grab, Ride-hailing Service Provider (International Business)

Singapore Indonesia Philippines Malaysia Thailand Vietnam

Grab’s business locations

・Private car hailing ・Motorbike hailing ・Taxi hailing

・Ridesharing ・Goods and food delivery ・Food delivery ・Payment system and others

Core business Other business

1. Enter the fast-growing ridesharing business through the business partnership with Grab, the ridesharing market leader

2. Jointly promote the automobile leasing and rental businesses targeting the registered Grab drivers

Market size for the ride-hailing and ridesharing services are expected to expand

Providing ride-hailing services using an application in Southeast Asia

The largest ride-hailing service company in Southeast Asia

Concluded a strategic partnership agreement with Grab, a ride-hailing service company, to jointly work on automobile leasing and rental services


Topic (3) Business Alliance with China UnionPay Merchant Services (International Business)

Providing finance and services utilizing big data, through alliances with China UnionPay Merchant Services (China UMS)

Overview of the business alliance Purpose of the business alliance

・ Operate in 337 cities nationwide ・ 6.49 million participating merchants ・ 8.11 million POS terminals

The largest card payment service operator in China

About China UMS 1. Enhance the range of financial services available to China

UMS’s 6.49 million merchants 2. Tokyo Century will also introduce good and distinct

Japanese equipment and products on RICH platform in order to support Japanese companies doing business in China

Tokyo Century Leasing China Corporation, Tokyo Century’s subsidiary in China, will provide leasing services on RICH, China UMS’s online financial service platform for merchants

RICH, a financial service platform for merchants

China UMS’s e-commerce website

Provide leasing services

Leasing and finance services expertise

Tokyo Century China UMS

Big data owned by China UMS, including card

settlement information ×

Jointly provide equipment leasing and automobile leasing services over the Internet for China UMS merchants

Utilize the strengths of both companies and expand businesses


Topic (4) Joint Venture Establishment with China’s Dalian Bingshan Group (International Business)

Enhancing the financing system of Dalian Bingshan Group (DBG) core products

About the JV (new company) About Dalian Bingshan Group (DBG)

・Chinese government-affiliated company ・China’s largest refrigeration and air-conditioning equipment manufacturer

・Industrial refrigeration and freezing equipment ・Various air-conditioners ・Beverage vending machines

Customer Core product

Apart from local companies, the company deals with various Japanese companies including , ・Panasonic ・Fuji Electric

DBG and Tokyo Century’s subsidiary in China had businesses primarily on vending machine financing in the past

DBG planned to establish a new leasing company internally, to promote its own products

Established a joint venture company, for which Tokyo Century Group provides leasing and financing expertise

Background to the establishment

Provide with leasing and finance expertise

Tokyo Century

Core products

DBG

Promote sales of DBG’s core products

The new company is primarily engaged in vendor finance business

Vendor finance

Sale promotion

Tokyo Century Group acquired a 40% stake in the new company

Tokyo Century’s equity-method affiliate

Purpose of the establishment


Topic (5) Enhance Automobile Business in ASEAN (International Business)

Enhancing automobile business in Thailand and Malaysia

Acquired Automobile Leasing Business

from AEON Financial Service’s group company

Tokyo Century’s subsidiary in Malaysia carries out automobile leasing operations under the name of Nippon Rent-A-Car Leasing leveraging the Nippon Rent-A-Car brand

Leverage the Nippon Rent-A-Car brand to enhance the automobile leasing business

Acquired from ACSC

Acquired automobile leasing operations and others from ACS Capital Corporation (ACSC), a consolidated subsidiary of AEON Financial Service

Established a company dedicated to automobile leasing in Thailand to develop automobile leasing business in the country

Fleet of vehicles: Approximately 2,500

(including lease receivables)

Fleet of vehicles: Approximately 2,000

TISCO Tokyo Leasing’s automobile leasing business is to be transferred to the new automobile leasing company in the future

Fleet of vehicles under management has increased to a total of 4,500

Further enhance businesses in ASEAN, where continuous business growth is expected

Tokyo Century Capital (Malaysia) Sdn. Bhd.

×

Purpose of the business alliance leveraging the Nippon Rent-A-Car brand

Nippon Rent-A-Car Leasing

1. Improve recognition of the automobile leasing business in Malaysia

2. Promote automobile leasing to inbound visitors including for sightseeing and on business from Malaysia


Promote Alliance Strategies with Local Blue-Chip Companies (International Business)

Expand overseas businesses by promoting alliance strategies with local partners

Taiwan: Leasing business with Uni-President Enterprises

Group, the largest food company

Philippines: Leasing business with BPI, a leading bank

Thailand: Leasing business with TISCO Group, a local

leading bank group

Indonesia: Concluded a strategic partnership agreement with Lippo Group, a major conglomerate, on the FinTech business and others

Thailand: Engage in vendor financing business along with

Hitachi Construction Machinery Group Concluded a strategic partnership with Grab Inc., the ride-hailing giant providing services across six countries in Southeast Asia, to enter into ridesharing service business

India: Leasing business in India with TATA Capital

Indonesia: Engage in vendor financing business along with Hitachi

Construction Machinery Group

Concluded a strategic business agreement with China UnionPay Merchant Services (China UMS), the largest card payment service operator in China. Jointly provide equipment leasing

and automobile leasing services with China UMS for China UMS merchants in the future Provide vendor finance subject to the major products of DBG and DBG Group,

China’s largest refrigeration and air-conditioning equipment manufacturer

Invested in a government-affiliated leasing company in Suzhou City, China


4. Appendix


Lease Transaction Volume by Type of Equipment

Consolidated (exclude overseas subsidiaries)

(Bill ions of yen)

IT-related OfficeIndustrial/

Machine ToolsConstruction Transportation Medical

Commerce/

ServicesOthers Total

Overseas

SubsidiariesTotal

257.0 20.9 35.4 5.6 208.9 6.8 38.4 62.7 635.7 160.7 796.4

Percentage 40% 3% 6% 1% 33% 1% 6% 10% 100%

4.9% 25.2% 23.0% -41.2% 14.7% -22.2% -0.5% -43.8% -0.8% 20.0% 2.8%

Reference: Leasing Industry Statistics (Capital investment financed by leasing, announced by Japan Leasing Association, Preliminary figure) (Bill ions of yen)

IT-related OfficeIndustrial/

Machine ToolsConstruction Transportation Medical

Commerce/

ServicesOthers Total

1,427.7 392.7 653.1 156.2 632.1 240.1 579.7 642.4 4,724.0

Percentage 30% 7% 14% 3% 13% 5% 12% 14% 100%

-2.4% -0.9% -9.0% 2.5% 9.8% 3.0% 2.7% 3.8% 0.1%

FY2016 Result

Y-o-Y Percentage

FY2016 Result

Y-o-Y Percentage


ROA and ROE

ROA (Return on Assets) ROE (Rate of Return on Equity)

ROA (Return on Assets) Ordinary income / Operating assets (Simple average of beginning

and end of term balance sheet figures) X 100, annualized

ROE (Rate of return on Equity) Net income attributable to owners of parent /

Shareholders’ equity (simple average of beginning and end of term balance sheet figures) X 100, annualized

2.1%

2.3%

2.2%

2.3%

2.4%

FY2012Result

FY2013Result

FY2014Result

FY2015Result

FY2016Result

ROA

14.0% 13.9%

12.5% 13.1% 12.9%

FY2012Result

FY2013Result

FY2014Result

FY2015Result

FY2016Result

ROE


Foreign Exchange Rates

Yen Exchange Rate (term average)

Yen Exchange Rate (end of term)

Change % Change

CNH 19.34 18.34 16.76 -1.58 -8.6%

SGD 91.10 85.35 80.62 -4.73 -5.5%

3.65 3.35 3.25 -0.10 -3.0%

IDR 0.0097 0.0088 0.0087 -0.0001 -1.1%

MYR 34.44 28.13 26.00 -2.13 -7.6%

120.53 120.54 116.53 -4.01 -3.3%

THB

USD

(Yen)

Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2016

Change % Change

CNH 17.18 19.23 16.36 -2.87 -14.9%

SGD 83.49 88.14 78.74 -9.40 -10.7%

3.26 3.54 3.08 -0.46 -13.0%

IDR 0.0089 0.0091 0.0082 -0.0009 -9.9%

MYR 32.34 31.18 26.27 -4.91 -15.7%

105.79 121.11 108.79 -12.32 -10.2%

THB

USD

(Yen)

FY2014

(Jan. - Dec.)

FY2015

(Jan. - Dec.)

FY2016

(Jan. - Dec.)


Major Domestic Group Companies and Affiliates


Major Overseas Group Companies and Affiliates

Tokyo Century

TC Skyward Aviation U.S., Inc. Aviation leasing and finance 100%TC Realty Investments Inc. Real estate investment 100%

GA Telesis, LLC *Provider of products, services and solutions

to the commercial aerospace industry20%

TC Skyward Aviation Ireland Limited Aviation leasing and finance 100%TC Aviation Capital Ireland Limited Aviation financing business 100%

Tokyo Century

Tokyo Century Leasing China Corporation General leasing 80% ITOCHU Group: 20%Tokyo Century Factoring China Corporation Factoring services 100%Tong-Sheng Finance Leasing Co., Ltd. * Automobile and equipment leasing 49% Uni-President Enterprises Group: 51%Dalian Bingshan Group Hua Hui Da Financial Leasing Co., Ltd. * Finance and general leasing 40% Dalian Bingshan Group: 60%Suzhou New District Furui Leasing Co., Ltd. * Finance and general leasing 20% Suzhou government-affiliated companies: 75%

Hong Kong Tokyo Leasing (Hong Kong) Ltd. General leasing 100%Taiwan President Tokyo Corporation * Automobile leasing and general leasing 49% Uni-President Enterprises Group: 51%

Singapore Tokyo Century Leasing (Singapore) Pte. Ltd. General leasing 100%Malaysia Tokyo Century Capital (Malaysia) Sdn. Bhd. General leasing 100%

TISCO Tokyo Leasing Co., Ltd. General leasing 49% TISCO Financial Group: 49%HTC Leasing Co., Ltd. Construction equipment finance 70% Hitachi Construction Machinery Group: 30%TC Advanced Solutions Co., Ltd. Reverse factoring and other services 59%TC Car Solutions (Thailand) Co., Ltd. Financing and services related to automobiles 97%PT. Century Tokyo Leasing Indonesia General leasing 85% PT. Sinar Mas Multiartha Tbk.: 15%PT. TCT Indonesia General trading company 100%

PT. Hexa Finance Indonesia * Construction equipment finance 20%ITOCHU Group: 50%

Hitachi Construction Machinery Group: 30%

PT. Big Ecommerce Bersama * B-to-G and B-to-B e-commerce operation 20% Lippo Group: 80%Philippines BPI Century Tokyo Lease & Finance Corporation * General leasing 49% Bank of the Philippine Islands: 51%

CSI Leasing, Inc. IT equipment leasing 100%Tokyo Century (USA) Inc. General leasing 100%

* Equity-method affil iateColumns shown in blue were added this fiscal year

U.S.

Location

Location

Ireland

China

U.S.

Indonesia

Thailand

Specialty Financing

International Business

ShareholdersMain Business Operations

Main Business Operations ShareholdersOverseas Group Company

Overseas Group Company

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IR Office

Tel：+81-3-5209-6710

Web site: https://www.tokyocentury.co.jp/en/

Inquiries

Any statements in this document, other than those of historical facts, are forward-looking statements about the future performance of Tokyo Century Corporation and its Group companies, which are based on management’s assumptions and beliefs in light of information currently available, and involve risks and uncertainties. Actual results may differ materially from these forecasts. All numerical terms and names presented in this report conform to the “short scale” numerical system. (i.e., “billion” = “109” and “trillion” = “1012 ”)

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