these consolidated financial results are an english ... · fiscal 2014 ended march 31, 2015:...

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Consolidated Financial Results (Kessan Tanshin)

for the Fiscal Year Ended March 31, 2015

[Japan GAAP] May 12, 2015

Name of Listed Company: Century Tokyo Leasing Corporation Stock Exchange Listing: Tokyo

Securities Code: 8439

(URL: http://www.ctl.co.jp)

Representative: Shunichi Asada, President & CEO, Representative Director

Contact: Takeshi Honda, Senior Managing Executive Officer Phone: +81-3-5209-6710

Date of Annual General Shareholders’ Meeting: June 25, 2015

Scheduled Payment Date of Dividends: June 26, 2015

Scheduled Reportable Date of Securities Report: June 25, 2015

Preparation of Supplementary Reference Documents: Yes (Japanese Only)

Holding of Earnings Announcement: Yes (for institutional investors and analysts)

(Amounts less than one million yen are omitted.)

1. Consolidated Performance Fiscal 2013 Fiscal 2014 YoY

(Millions of yen) (Percentage change)

(1) Consolidated business results:

Revenues 828,558 882,976 6.6%

Operating income 51,416 58,443 13.7%

Ordinary income 55,167 60,668 10.0%

Net income 33,050 34,132 3.3%

Net income per share (Yen) 311.64 322.84

Diluted net income per share (Yen) 311.25 322.28

Return on equity (ROE) 13.9% 12.5%

Return on assets (ROA) 2.1% 2.0%

Operating income to revenues 6.2% 6.6%

(2) Consolidated financial condition:

Total assets 2,884,773 3,151,871

Net assets 285,484 336,537

Shareholders’ equity ratio 8.8% 9.3%

Net assets per share (Yen) 2,386.02 2,776.37

(3) Consolidated cash flows:

Cash flows from operating activities (28,314) (171,023)

Cash flows from investing activities 9,994 (18,682)

Cash flows from financing activities 54,486 156,885

Cash and cash equivalents at end of year 115,841 71,864

Notes:

Total comprehensive income

Fiscal 2014 ended March 31, 2015: ¥51,170 million (29.1%)

Fiscal 2013 ended March 31, 2014: ¥39,637 million (6.6%)

Equity in earnings of affiliates

Fiscal 2014 ended March 31, 2015: ¥513 million

Fiscal 2013 ended March 31, 2014: ¥3,047 million

Shareholders’ equity



These consolidated financial results are an English translation of excerpts from the Japanese “Kessan

Tanshin” including attachments filed with the Tokyo Stock Exchange, solely for the convenience of readers

outside Japan.

This report has been prepared in accordance with accounting principles and practices generally accepted in

Japan. Amounts less than ¥1 million have been omitted unless otherwise stated.

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2. Dividends Dividends per Share (Yen) Total Dividends

(Millions of yen)

Payout Ratio

(Consolidated)

Dividend on

Net Assets Ratio

(Consolidated)

First

Quarter

Second

Quarter

Third

Quarter Year-End Total

Fiscal 2013 － 26.00 － 26.00 52.00 5,507 16.7% 2.3%

Fiscal 2014 － 32.00 － 33.00 65.00 6,868 20.1% 2.5%

Fiscal 2015 (Forecast) － 35.00 － 35.00 70.00 20.2%

3. Consolidated Results Forecast for the Fiscal Year Ending March 31, 2016

(As of May 12, 2015) Full year YoY


Revenues 910,000 3.1%

Operating income 62,000 6.1%

Ordinary income 64,000 5.5%

Net income attributable to

Shareholders of Century Tokyo

Leasing Corporation

36,500 6.9%

Net income per share (Yen) 345.94 －

Notes

(1) Changes in status of significant subsidiaries during the fiscal year under review (changes in status of specified

subsidiaries resulting in change in scope of consolidation): Yes

New: One company Name: TC-CIT Aviation Ireland Limited

Exclusion: －company Name: －

(2) Changes in accounting policy, changing in accounting estimation, and retrospective restatement

1) Changes in accounting policy due to reforms of accounting standards: Yes

2) Changes in accounting policy other than item 1) above: None

3) Changes in accounting estimation: None

4) Retrospective restatement: None

(3) Number of shares of common stock issued

1) Number of shares issued at the end of the fiscal year (including treasury stock)

As of March 31, 2014: 106,624,620 shares


2) Number of shares of treasury stock at the end of the fiscal year

As of March 31, 2014: 821,663 shares


3) Average number of shares during the fiscal year

Fiscal year ended March 31, 2014: 106,055,624 shares

Fiscal year ended March 31, 2015: 105,723,942 shares

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(Reference: Outline of non-consolidated business results)

1. Non-consolidated Performance

Fiscal 2013 Ended

March 31, 2014

Fiscal 2014 Ended

March 31, 2015 YoY


(1) Non-consolidated business results:

Revenues 503,844 495,264 (1.7%)

Operating income 37,558 36,473 (2.9%)

Ordinary income 38,642 40,742 5.4%

Net income 23,075 26,403 14.4%

Net income per share (Yen) 217.57 249.74

Diluted net income per share (Yen) 217.30 249.30

As of March 31, 2014 As of March 31, 2015

(Millions of yen)

(2) Non-consolidated financial condition:

Total assets 2,000,356 2,174,228

Net assets 196,263 222,808

Shareholders’ equity ratio 9.8% 10.2%

Net assets per share (Yen) 1,852.02 2,107.05

Note:




Presentation of implementation status for auditing procedures

- The auditing procedure based on the Financial Instruments and Exchange Act does not apply to this

Consolidated Financial Results. The review procedures for this document based on the Act have not been

completed as of the release of this document.

Explanation related to forward-looking statements and other items warranting special mention

(Regarding forward-looking statements)

- Any statements in this document, other than those of historical facts, are forward-looking statements about the

future performance of Century Tokyo Leasing Corporation (“TC-Lease”) and its Group companies (collectively,

the “TC-Lease Group”), 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.

For the assumptions underlying the earnings forecasts presented and other information regarding the use of

such forecasts, refer to “1. Analysis of Results of Operations and Financial Conditions (1) Analysis of Results

of Operations” on page 4.

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1. Analysis of Results of Operations and Financial Conditions

(1) Analysis of Results of Operations The Japanese economy in the fiscal year ended March 31, 2015 was on a gradual recovery trend overall, as corporate earnings and the employment and income environment continued to see steady improvement backed by ongoing yen depreciation and strong stock prices, despite a temporary economic setback associated with the increase in the consumption tax rate. Under these circumstances, the TC-Lease Group entered the second year of its second three-year medium-term management plan, which started in fiscal 2013 with the aim of becoming a “robust comprehensive financial services enterprise,” and moved ahead with initiatives to further reinforce our sales base and management base.

1) Strengthen the sales base

[Enhance competitiveness in the leasing business] - We enhanced our comprehensive proposal capabilities using the TC-Lease Group’s resources, and

further promoted differentiated sales that provide optimal solutions. - We decided to establish a joint venture with Orient Corporation specializing in leases partnering with

merchandise dealers.

[Bolster the financing business] - In the environment and energy field, we expanded the solar power sales business including initiatives by

Kyocera TCL Solar LLC (established jointly with KYOCERA CORPORATION) toward the world’s largest (as of December 22, 2014) floating mega solar power plant business (approximately 13.4MW mega solar power generating system at Yamakura Dam in Ichihara City, Chiba Prefecture).

- In the aircraft field, we began joint development of an aircraft leasing business in partnership with CIT Group Inc., a major finance and leasing company in the U.S., and established joint venture (consolidated subsidiaries) in the U.S. and Ireland. This joint venture will be a platform for further growth in the Company’s aircraft business.

[Expand the overseas businesses] - TISCO Tokyo Leasing Co., Ltd. (hereinafter, TTL), our overseas subsidiary in Thailand, was made into

a consolidated subsidiary of TC-Lease. - We acquired from the Bank of the Philippine Islands, a major bank in the Philippines, 49% of the

outstanding shares of its wholly owned subsidiary BPI Leasing Corporation (present name “BPI Century Tokyo Lease & Finance Corporation”), and made it an equity-method affiliate.

- We acquired 35% of the shares of CSI Leasing, Inc., the largest American independent leasing company, which mainly handles information and communications equipment, and made it an equity-method affiliate. With this acquisition, we have dramatically expanded our global network by adding the CSI Leasing, Inc. to our platform, which is strong in North America, Central and South America, and Europe, to the TC-Lease Group’s strength in Asia.

[Reinforce activities in the automobile financing business both in Japan and overseas] - Tong-Sheng Finance Leasing Co., Ltd., an automobile leasing company, was established in China as a

wholly owned subsidiary of President Tokyo Corporation, our overseas subsidiary in Taiwan.

2) Strengthen the management base

[Enhance and reinforce the financial base] - We have been promoting reinforcement of our financial base by diversifying our fund procurement

methods including the continuous issuance of unsecured bonds (with limited inter-bond pari passu clause).

- In an effort to meet increased demand for funds in Thailand, TTL issued baht-denominated unsecured straight bonds.

With regard to the business results, new transactions volume for the consolidated fiscal year under review was ¥1,474,070 million, up 4.6% from the previous consolidated fiscal year. In terms of profits and losses, revenues for the consolidated fiscal year under review amounted to ¥882,976 million, up 6.6% from the previous consolidated fiscal year. Operating income increased 13.7% to ¥58,443 million, ordinary income increased 10.0% to ¥60,668 million and net income increased 3.3% to ¥34,132 million.

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Summary of Operations by Business Segment

The results of operations by business segment are as follows:

1) Leasing and installment sales

In leasing and installment sales, new transactions volume for the consolidated fiscal year under review

was ¥794,801 million, down 1.0% from the previous consolidated fiscal year. Revenues amounted to

¥840,590 million, up 5.8%. Segment income amounted to ¥46,439 million, up 6.6%.

2) Finance

In finance, new transactions volume for the consolidated fiscal year under review was ¥673,529 million,

up 12.3% from the previous consolidated fiscal year. Revenues amounted to ¥22,921 million, up 15.0%.

Segment income amounted to ¥13,993 million, up 22.1%.

3) Other

In other, new transactions volume for the consolidated fiscal year under review was ¥5,739 million, down

17.5% from the previous consolidated fiscal year. Revenues amounted to ¥19,464 million, up 35.5% from

the previous consolidated fiscal year. Segment income amounted to ¥4,800 million, up 33.2%.

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(2) Analysis of Financial Conditions

Assets, Liabilities, and Net Assets

1) Assets

Total assets at the end of the consolidated fiscal year increased ¥267,098 million, or 9.3%, to ¥3,151,871

million from total assets at the end of the previous consolidated fiscal year, mainly due to increased

operating assets.

○ Operating assets

The balance of operating assets at the end of the consolidated fiscal year under review increased ¥268,116

million, or 10.3%, to ¥2,865,593 million from the balance at the end of the previous consolidated fiscal

year.

The balance of operating assets by segment is as follows: ¥2,154,340 million for Leasing and

installment sales, ¥699,232 million for Finance and ¥12,019 million for Other.

2) Liabilities

Total liabilities at the end of the consolidated fiscal year under review increased ¥216,045 million, or

8.3%, to ¥2,815,334 million from the end of the previous consolidated fiscal year, mainly due to

increased interest-bearing debts.

○ Interest-bearing debts

Total interest-bearing debts increased ¥208,183 million, or 9.4%, to ¥2,419,856 million from the end of

the previous consolidated fiscal year. A breakdown of interest-bearing debts shows that, in short-term

funds procurement, interest-bearing debts increased ¥60,648 million, or 4.9%, to ¥1,297,267 million from

the end of the previous consolidated fiscal year. Meanwhile, in long-term funds procurement,

interest-bearing debts increased by ¥147,534 million, or 15.1%, to ¥1,122,588 million from the end of the

previous consolidated fiscal year.

3) Net assets

Total net assets increased ¥51,052 million, or 17.9%, to ¥336,537 million from the end of the previous

consolidated fiscal year, mainly because retained earnings increased ¥29,043 million.

Cash Flows

(Millions of yen)

Fiscal 2013 Fiscal 2014

Change

(increase/decrease)

Cash flows from operating activities (28,314) (171,023) (142,708)

Cash flows from investing activities 9,994 (18,682) (28,676)

Cash flows from financing activities 54,486 156,885 102,399

Cash and cash equivalents at end of year 115,841 71,864 (43,977)

1) Cash flows from operating activities Net cash used for operating activities amounted to ¥171,023 million (in the previous consolidated fiscal year, net cash used for operating activities was ¥28,314 million), mainly due to the following factors. Income before income taxes and minority interests amounted to ¥59,707 million. Depreciation and amortization of leased assets amounted to ¥70,832 million. Loss on disposal of leased assets and cost of sale of leased assets amounted to ¥18,236 million. Meanwhile, cash used for purchases of leased assets amounted to ¥177,131 million. Cash used for the increase in loans receivable amounted to ¥64,761 million. Cash used for the increase in operational investment securities amounted to ¥46,900 million, among other factors.

2) Cash flows from investing activities

Net cash used in investment activities amounted to ¥18,682 million (in the previous consolidated fiscal year, net cash provided by investment activities was ¥9,994 million), due to the following and other factors. Proceeds from sales/redemptions of investments in securities amounted to ¥5,252 million. Meanwhile, purchases of investments in securities amounted to ¥24,192 million. Purchases of own assets in use amounted to ¥3,297 million.

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3) Cash flows from financing activities

Net cash provided by financing activities amounted to ¥156,885 million (in the previous consolidated fiscal year, net cash provided by financing activities was ¥54,486 million), due to the following and other factors. Net cash used for repayment of long-term debt amounted to ¥304,989 million and redemption of bonds amounted to ¥73,616 million. Meanwhile, net cash provided by proceeds from long-term debt amounted to ¥407,236 million. Net cash provided by proceeds from issuance of bonds amounted to ¥96,770 million. Cash provided by increase in short-term borrowings, net amounted to ¥24,830 million.

Due to the factors mentioned above, cash and cash equivalents at the end of the consolidated fiscal year under review decreased ¥43,977 million to ¥71,864 million from the previous consolidated fiscal year.

Outlook for Fiscal 2015

The management environment surrounding us is expected to progress on a recovery track as the domestic economy sees a trend toward a recovery in exports and expansion of corporate earnings after the impact of the consumption tax increase has run its course, despite uncertainty in the world economic situation reflecting sluggish growth in Chinese economy, the European debt crisis, and interest trends in the U.S.

In response to this outlook, TC-Lease will continuously reduce funding cost and the cost of credit, as well as enhance competitiveness in the leasing business, bolster the financing business, expand the overseas businesses, and reinforce the domestic and overseas automobile financing business, in an effort to improve profitability.

Based on the above, as our forecast of business performance for the next fiscal year ending March 31, 2016, we expect to achieve revenues of ¥910,000 million, up 3.1% from the previous consolidated fiscal year, operating income of ¥62,000 million, up 6.1%, ordinary income of ¥64,000 million, up 5.5%, and net income of ¥36,500 million, up 6.9%.

(3) Basic Policy on Distribution of Profits, as well as Dividends for both the Fiscal Year under Review and the

Next Fiscal Year

The TC-Lease Group believes that an ongoing commitment to the expansion of business content and the

reinforcement of its business structure should gain higher corporate value. In this context, TC-Lease complies

with a basic policy of stably distributing profits to its shareholders over the long term with due consideration

given to increasing its retained earnings. Internal reserve funds will be effectively appropriated in the future by corporate management to, for example, be

used as funds to purchase high-quality operating assets. As for dividends in the fiscal year under review, at the beginning of the year, TC-Lease forecasted a dividend of

¥56 per share (interim dividend of ¥28, year-end dividend of ¥28). As announced in the “Announcement of Surplus Dividend and Revised Forecast for Year-end Dividend” dated November 4, 2014, the interim dividend was increased by ¥4 per share from the initially forecasted interim dividend to ¥32 per share. As for the year-end dividend, we intend to increase the year-end dividend by ¥1 per share from the forecasted year-end dividend on November 4, 2014, to ¥33 per share. With this increase, we intend to pay an annual dividend of ¥65 per share.

For the fiscal year ending March 31, 2016, TC-Lease intends to ensure an annual dividend of ¥70 per share, which will consist of a ¥35 per share interim dividend and a ¥35 per share year-end dividend, based on the above policy of distributing profits to shareholders and in appreciation of the support of the shareholders.

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2. TC-Lease Group of Companies

The TC-Lease Group is comprised of TC-Lease, 209 subsidiaries, and 17 affiliated companies, mainly engaged in

the IT-related equipment, communication equipment, and machinery facilities leasing and installment sales, and in

performing business activities such as services related to these businesses.

In addition to those mentioned above, it is affiliated with one other company (ITOCHU Corporation).

The following are major businesses of the TC-Lease Group, with a classification identical to that of business

segments in the segment information.

(1) Leasing and installment sales : Leasing and installment sales of information equipment and office

equipment, industrial machinery, transportation use equipment,

commercial and service use machinery, etc. (including sales of assets

thereof pertaining to maturity and/or cancellation before maturity of

leasing transactions)

(2) Finance : Money-lending business and investment business such as capital

investments in operational investment securities and silent partnerships

(3) Other : Commission transactions, solar power sales business, and other

businesses.

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The following is a diagram of business operations which represents the positioning of each major business in the

TC-Lease Group.

Users

Cen

tury

To

ky

o L

easing

Co

rpo

ration

Leasing and installment sales/Finance/Other

Consolidated

subsidiary

Non-consolidated

subsidiary Equity-Method

Affiliates Other affiliated

company

Assignment of receivables TLC Red Pine Co., Ltd. and other companies: total

of 5 companies

Lending of funds/loan guarantee

Subcontracting TC Business Service Corporation

TC Business Experts Corporation

Nippon Car Solutions Co., Ltd.

Orico Auto Leasing Co., Ltd.

Nippon Rent-A-Car Service, Inc.

Fujitsu Leasing Co., Ltd.

IHI Finance Support Corporation

S.D.L Co., Ltd.

TCI Finance Corporation

ITEC Leasing Co., Ltd.

TC Agency Corporation

Kyocera TCL Solar LLC

Leasing of equipment, etc.

Sales of assets for rent, etc. TRY, Inc.

Investments in associations, etc. A total of 10 other non-consolidated

subsidiaries

ITOCHU Corporation

TC Maritime Corporation,

and other companies: total of 6

companies

Lending of funds, etc.

TC Property Solutions Corporation Management of real estates, etc.

Leasing and installment sales

Finance

Other



Other


TLC Capital Co., Ltd. and other

companies: total of 76 companies


Finance

Purchase of equipment, etc.


Cu

stom

ers

Cen

tury

To

ky

o L

easing

Co

rpo

ration

Century Tokyo Leasing China Corporation

Century Tokyo Factoring China Corporation

Century Tokyo Leasing (Singapore) Pte. Ltd.

Century Tokyo Capital (Malaysia) Sdn. Bhd.

PT. Century Tokyo Leasing Indonesia

PT. TCT Indonesia

TISCO Tokyo Leasing Co., Ltd.

Tokyo Leasing (Hong Kong) Ltd.

Century Tokyo Leasing (USA) Inc.

TC Aviation Capital Ireland Ltd.

TC-CIT Aviation U.S., Inc.

TC-CIT Aviation Ireland Ltd.

Tokyo Leasing (UK) Plc

HTC Leasing Co., Ltd.

and other companies: total of 100 other companies

President Tokyo Corporation

GA Telesis, LLC

BPI Century Tokyo Lease & Finance Corp.

CSI Leasing, Inc.

Chikugin Lease, Co., Ltd.

and other companies: total of 15 companies



Finance


Finance

Other



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3. Management Policies

(1) Basic Management Policies

TC-Lease formulates its management philosophy and policies as described below and will proactively

fulfill its corporate responsibility to society.

Management Philosophy

Century Tokyo Leasing Group will grow alongside its customers and contribute to society as a

comprehensive financial services enterprise that continually challenges itself.

Management Policies

- We will strive to raise customer satisfaction and earn customer trust by collaborating with business

partners and uniting the TC-Lease Group’s overall strengths to provide the best products and

services.

- We will increase corporate value and achieve sustainable growth through sound and highly

transparent management.

- We will develop a culture that nurtures human resources and self-improvement, and build a

company where all officers and employees can experience growth and a sense of pride.

- As a corporation, we will always be mindful of our social responsibility and conduct business with

sincerity.

(2) Target Management Indices

Management has set management targets for fiscal 2015, the final year of the second Medium-Term

Management Plan that commences in fiscal 2013.

Consolidated targets for

fiscal 2015

Ordinary income ¥50 billion or more

Operating assets ¥2.6 trillion

Shareholders’ equity ratio 10.0%

Actual results for fiscal 2014 (the consolidated fiscal year under review), the second year of the second

medium-term management plan, were as follows.

- Ordinary income amounted to ¥60,668 million and the management targets were achieved.

- Operating assets amounted to ¥2,865,593 million and the management targets were achieved.

- Shareholders’ equity ratio was 9.3%.

Based on the actual results achieved in fiscal 2014, we will strive to further improve business results in

fiscal 2015, the final year of the second medium-term management plan.

(3) Medium-Term Management Strategy and Tasks to Be Addressed

TC-Lease intends to strengthen its sales base and management base under the following basic policies in

the second three-year medium-term management plan which starts in fiscal 2013, thereby aiming to

achieve a further leap forward and to grow.

Basic Policies of the Second Medium-Term Management Plan

“To become a robust comprehensive financial services enterprise and realize further innovative

changes as well as sustainable growth”

TC-Lease will seek to become a “robust comprehensive financial services enterprise” and grasp

businesses from a lofty viewpoint without being bound by previous business models. In doing so,

TC-Lease will strive to expand income by steadily and swiftly executing management strategies while

making the most of its strengths to achieve sustained growth as a leading company in the industry.

Management Strategy

1) Strengthen the sales base

- Enhance competitiveness in the leasing business

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- Bolster the financing business

- Expand overseas businesses

- Reinforce activities in the automobile financing business

2) Strengthening of management base

- Strengthen consolidated management

- Enhance and reinforce the financial base

- Bolster human resource development

- Promote increased sales administration efficiency

- Engage in increasingly advanced risk control

(4) Other Important Management Issues Not applicable

4. Basic Stance on Selection of Accounting Standards

We judge that our consolidated financial statements based on Japan GAAP appropriately reflect the Company’s

results of operations and financial conditions. Furthermore, with regard to the selection of accounting standards,

having considered the costs and benefits from various points of view such as streamlining of financial reporting,

ensuring comparability, and impact on funding procurement, we deem it suitable at this time to apply Japan

GAAP.

Our policy is to continue to closely observe trends in IFRS and Japanese accounting system and standards, and

to respond appropriately with regard to selection of accounting standards.

- 12 -

5. Consolidated Financial Statements

(1) Consolidated Balance Sheets

(Millions of yen)


Assets

Current assets

Cash on hand and in banks 79,840 70,560

Accounts receivable-installment sales 225,937 252,946

Lease receivables and investment assets 1,461,053 1,485,017

Loans 474,155 535,842

Operational investment securities 111,965 161,790

Other operating assets 5,097 ―

Accounts receivable-leases 17,612 18,630

Short-term investment securities 25,140 2,760

Inventories 1,455 880

Deferred tax assets 4,377 5,943

Other current assets 62,191 56,804

Allowance for doubtful accounts (3,410) (3,787)

Total current assets 2,465,415 2,587,387

Non-current assets

Property and equipment, at cost less accumulated depreciation

Leased assets 322,535 429,659

Advances for purchases of property for lease 586 8,424

Other operating assets 6,770 12,019

Own assets in use 8,061 9,219

Property and equipment, net 337,954 459,322

Intangible assets

Computer programs leased to customers 290 273

Goodwill 4,871 4,139

Other intangible assets 5,416 4,646

Total intangible assets 10,578 9,059

Investments and other assets

Investments in securities 42,511 67,344

Claims provable in bankruptcy or rehabilitation 4,305 2,239

Deferred tax assets 3,895 3,575

Long-term loans and other assets 23,040 24,314

Allowance for doubtful accounts (2,929) (1,372)

Total investments and other assets 70,824 96,101

Total non-current assets 419,357 564,483

Total assets 2,884,773 3,151,871

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(Millions of yen)


Liabilities

Current liabilities

Notes and accounts payable-trade 222,505 202,880

Short-term borrowings 415,220 470,167

Current portion of bonds 71,616 91,099

Current portion of long-term debt 281,763 281,085

Commercial papers 739,300 754,600

Payables under fluidity lease receivables 63,398 57,800

Current portion of long-term payables under fluidity lease

receivables 628 1,087

Lease obligations 6,075 7,305

Accrued income taxes 14,781 10,160

Deferred tax liabilities 2,539 1,244

Deferred profit on installment sales 12,217 13,555

Provision for bonuses 2,096 2,554

Provision for directors’ bonuses 168 153

Other provision 328 450

Other current liabilities 41,679 49,075

Total current liabilities 1,874,318 1,943,221

Long-term liabilities

Bonds payable 106,905 118,203

Long-term debt 530,831 643,115

Long-term payables under fluidity lease receivables 2,009 2,697

Lease obligations 10,472 11,329

Deferred tax liabilities 918 3,381

Provision for directors’ retirement benefits 291 445

Allowance for automobile inspection costs 951 911

Net defined benefit liability 7,170 7,119

Other long-term liabilities 65,418 84,908

Total long-term liabilities 724,969 872,112

Total liabilities 2,599,288 2,815,334

Net assets


Common stock without par value 34,231 34,231

Capital surplus 5,537 5,537

Retained earnings 204,606 233,650

Treasury stock (1,999) (2,876)

Total shareholders’ equity 242,376 270,542

Accumulated other comprehensive income (loss)

Net unrealized holding gains on securities 10,338 16,439

Net unrealized gains (loss) on derivative instruments (761) (9)

Translation adjustments 1,057 6,026

Remeasurements of defined benefit plans (562) (64)

Total accumulated other comprehensive income 10,071 22,392

Share subscription rights 312 491

Minority interests 32,724 43,110

Total net assets 285,484 336,537

Total liabilities and net assets 2,884,773 3,151,871

- 14 -

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

Consolidated Statements of Income

(For the years ended March 31, 2014 and 2015)

(Millions of yen)


Revenues 828,558 882,976

Costs 731,229 759,298

Gross profit 97,329 123,678

Selling, general and administrative expenses 45,912 65,235

Operating income 51,416 58,443

Non-operating income

Interest income 115 138

Dividend income 866 826

Equity in earnings of affiliates 3,047 513

Gain on amortization of negative goodwill 589 ―

Foreign exchange gains 1,231 3,794

Other 454 445

Total non-operating income 6,304 5,718

Non-operating expenses

Interest expense 515 458

Expenses on derivatives other than for trading or

hedging 1,863 2,782

Other 174 251

Total non-operating expenses 2,553 3,493

Ordinary income 55,167 60,668

Extraordinary income

Gain on bargain purchase 1,411 667

Gain on sale of investments in securities 390 600

Other 91 19

Total extraordinary income 1,892 1,286

Extraordinary losses

Loss on devaluation of investments in securities ― 885

Expense involved in system integration ― 791

Office transfer expenses ― 330

Merger expenses of subsidiaries 371 ―

Loss on step acquisitions 241 ―

Other 1,376 241

Total extraordinary losses 1,989 2,247

Income before income taxes and minority interests 55,071 59,707

Income taxes-current 23,630 24,399

Income taxes-deferred (3,584) (2,792)

Income taxes 20,045 21,607

Income before minority interests 35,026 38,100


Net income 33,050 34,132

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Consolidated Statements of Comprehensive Income


(Millions of yen)


Income before minority interests 35,026 38,100

Other comprehensive income (loss)

Net unrealized holding gains on securities 992 6,136

Net unrealized losses on derivative instruments (945) 748

Translation adjustments 4,361 4,912

Remeasurements of defined benefit plans ― 667

Share of other comprehensive income of affiliates

accounted for using equity method 202 605

Total other comprehensive income 4,611 13,069

Comprehensive income 39,637 51,170

Comprehensive income attributable to:

Shareholders of Century Tokyo Leasing Corporation 37,404 46,453


- 16 -

(3) Consolidated Statements of Changes in Net Assets

(For the year ended March 31, 2014) (Millions of yen)

Shareholder’s equity

Common

stock

Capital

surplus

Retained

earnings

Treasury

stock

Total

shareholders’ equity

Balance at beginning

of year 34,231 5,538 176,865 (581) 216,052

Cumulative effects of

changes in accounting policies

―

Restated balance 34,231 5,538 176,865 (581) 216,052

Changes of items during the

period

Cash dividends (5,307) (5,307)

Net income for the year 33,050 33,050

Purchase of treasury stock (1,436) (1,436)

Disposal of treasury stock (0) (3) 19 16

Change of scope of

consolidation ―

Net changes of items other than shareholders’ equity

Total changes of items during the period

― (0) 27,740 (1,417) 26,323

Balance at end of year 34,231 5,537 204,606 (1,999) 242,376

Accumulated other comprehensive income

Share

subscription rights

Minority

interests

Total net

assets

Net

unrealized

holding gains

on securities

Net

unrealized

gains on derivative

instruments

Translation

adjustments

Remeasure-

ments of

defined benefit

plans

Total

accumulated

other comprehen-

sive income


of year 9,423 137 (3,282) ― 6,279 148 11,187 233,668

Cumulative effects of

changes in accounting policies

―

Restated balance 9,423 137 (3,282) ― 6,279 148 11,187 233,668


period

Cash dividends (5,307)

Net income for the year 33,050

Purchase of treasury stock (1,436)

Disposal of treasury stock 16

Change of scope of consolidation

―


914 (899) 4,339 (562) 3,791 164 21,536 25,492

Total changes of items during the period

914 (899) 4,339 (562) 3,791 164 21,536 51,815

Balance at end of year 10,338 (761) 1,057 (562) 10,071 312 32,724 285,484

- 17 -

(For the year ended March 31, 2015) (Millions of yen)

Shareholder’s equity

Common

stock

Capital

surplus

Retained

earnings

Treasury

stock

Total shareholders’

equity


of year 34,231 5,537 204,606 (1,999) 242,376

Cumulative effects of changes in accounting

policies

49 49

Restated balance 34,231 5,537 204,655 (1,999) 242,425


period

Cash dividends (6,137) (6,137)

Net income for the year 34,132 34,132

Purchase of treasury stock (913) (913)

Disposal of treasury stock (7) 35 28

Change of scope of consolidation

1,006 1,006


Total changes of items

during the period ― ― 28,994 (877) 28,116

Balance at end of year 34,231 5,537 233,650 (2,876) 270,542

Accumulated other comprehensive income

Share subscription

rights

Minority

interests

Total net

assets

Net unrealized

holding gains

on securities

Net

unrealized

gains on derivative

instruments

Translation

adjustments

Remeasure- ments of

defined benefit

plans

Total

accumulated

other comprehen-

sive income


of year 10,338 (761) 1,057 (562) 10,071 312 32,724 285,484

Cumulative effects of changes in accounting

policies

49

Restated balance 10,338 (761) 1,057 (562) 10,071 312 32,724 285,534


period

Cash dividends (6,137)

Net income for the year 34,132

Purchase of treasury stock (913)

Disposal of treasury stock 28

Change of scope of

consolidation 1,006

Net changes of items other

than shareholders’ equity 6,101 752 4,969 498 12,321 179 10,386 22,886

Total changes of items

during the period 6,101 752 4,969 498 12,321 179 10,386 51,003

Balance at end of year 16,439 (9) 6,026 (64) 22,392 491 43,110 336,537

- 18 -

(4) Consolidated Statements of Cash Flows


(Millions of yen)


Cash flows from operating activities

Income before income taxes and minority interests 55,071 59,707

Depreciation and amortization of leased assets 49,859 70,832

Loss on disposal of leased assets 66,521 18,236

Depreciation of own-used assets, and

Loss on sales and retirement of own-used assets 3,401 3,692

Loss (gain) on devaluation of investments in securities ― 885

Foreign exchange gains (1,231) (3,794)

Decrease in allowance for doubtful accounts (1,315) (2,074)

Increase (decrease) in provision for bonuses (3) 391

Increase (decrease) in provision for retirement benefits (5,135) ―

Increase (decrease) in net defined benefit liability 6,296 299

Interest and dividend income (981) (964)

Interest expense 9,699 10,890

Equity in (earnings) losses of affiliates (3,047) (513)

Gain on sale of investments in securities (390) (600)

Increase in installment sales receivable 1,876 (11,526)

Increase in lease receivables and investment assets (92,544) 885

Increase in loans receivable (18,644) (64,761)

Increase in operational investment securities (8,703) (46,900)

Purchases of leased assets (111,539) (177,131)

Decrease (increase) in claims provable in bankruptcy or

rehabilitation 1,415 2,134

Increase in trade notes and accounts payable 27,031 (19,877)

Other, net 20,399 28,525

Subtotal (1,964) (131,663)

Interest and dividend income received 1,832 1,505

Interest expense paid (10,182) (11,093)

Income taxes paid (18,000) (29,772)

Net cash used in operating activities (28,314) (171,023)

Cash flows from investing activities

Proceeds from sales of own assets in use 236 1,455

Purchases of own assets in use (2,595) (3,297)

Proceeds from sales/redemptions of investments in securities 3,079 5,252

Purchases of investments in securities (791) (24,192)

Proceeds from purchase of investments in subsidiaries resulting

in change in scope of consolidation 11,765 ―

Collection of loans receivable 25 9

Other, net (1,726) 2,090

Net cash provided by (used in) investing activities 9,994 (18,682)

- 19 -

(Millions of yen)


Cash flows from financing activities

Increase in short-term borrowings, net 38,863 24,830

Net increase (decrease) in commercial papers 39,900 15,300

Proceeds from long-term debt 262,556 407,236

Repayment of long-term debt (332,031) (304,989)

Proceeds from debt securitization 6,698 2,000

Repayments of debt securitization (362) (6,451)

Proceeds from issuance of bonds 90,974 96,770

Redemption of bonds (46,700) (73,616)

Proceeds from stock issuance to minority shareholders 1,475 3,757

Cash dividends paid (5,307) (6,137)

Proceeds from sales of treasury stock 0 1

Purchase of treasury stock (1,436) (913)

Other, net (144) (902)

Net cash provided by financing activities 54,486 156,885

Effect of exchange rate changes on cash and cash equivalents (3,447) (13,151)

Net increase in cash and cash equivalents 32,718 (45,972)

Cash and cash equivalents at beginning of year 83,122 115,841

Increase in cash and cash equivalents from newly consolidated

subsidiary ― 1,995

Cash and cash equivalents at end of year 115,841 71,864

- 20 -

(5) Notes to the Consolidated Financial Statements

Notes on Going Concern Assumption

Not applicable

Significant Matters Forming a Basis for the Preparation of Consolidated Financial Statements

1. Changes in the scope of consolidation

9 companies including TC-CIT Aviation Ireland Limited have been included in the scope of consolidation due

to new establishment.

TISCO Tokyo Leasing Co., Ltd, which used to be an equity-method affiliate, has been included in the

scope of consolidation from the consolidated fiscal year under review as it satisfies the control criteria, and

other 14 companies have been included due to their increased significance.

4 companies including TLC Orchid Ltd. have been excluded from the scope of consolidation due to the

completion of their business purposes.

2. Changes in the scope of equity-method affiliates

TISCO Tokyo Leasing Co., Ltd. has been excluded from the scope of equity-method affiliates as it is now

included in the scope of consolidation from the consolidated fiscal year under review.

10 companies including BPI Century Tokyo Lease & Finance Corporation have been included in the scope

of equity-method affiliates due to the acquisition of their shares.

Changes in Accounting Policy

We have adopted the provisions set forth in the main clause of Paragraph 35 of the “Accounting Standard for

Retirement Benefits” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 26, May 17, 2012) and

the provisions set forth in the main clause of Paragraph 67 of the “Guidance on Accounting Standard for

Retirement Benefits” (ASBJ Guidance No. 25, March 26, 2015), effective the consolidated fiscal year under

review. Accordingly, we have revised the method of calculating retirement benefit obligations and service costs

and have changed its method of determining the discount rate, from the method in which the discount rate is

determined by reference to the yield of bonds whose remaining maturities approximate the average remaining

years of service of the employees to the method in which a single weighted average discount rate is used that

reflects the amount of benefit payment for each estimated payment period.

Additionally, certain consolidated subsidiaries have changed the method of attributing projected retirement

benefits from the straight-line attribution method to the benefit formula. Moreover, in accordance with the

tentative treatment provided for in Paragraph 37 of the Accounting Standard for Retirement Benefits, the

impact of the change in the method of calculating retirement benefit obligations and service costs has been

recognized as increases or decreases to retained earnings as of the beginning of the consolidated fiscal year

under review. As a result, as of April 1, 2014, net defined benefit liability decreased ¥166 million and retained

earnings increased ¥49 million. Operating income, ordinary income and income before income taxes and

minority interests increased ¥33 million, respectively, for the consolidated fiscal year under review.

Effects of the change on net assets per share, net income per share and diluted net income per share for the

consolidated fiscal year under review are immaterial.

Standards Issued But Not Yet Effective

- “Revised Accounting Standard for Business Combinations” (ASBJ Statement No. 21, September 13, 2013)

- “Revised Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22, September

13, 2013)

- “Revised Accounting Standard for Business Divestitures” (ASBJ Statement No. 7, September 13, 2013)

- “Revised Accounting Standard for Earnings Per Share” (ASBJ Statement No. 2, September 13, 2013)

- “Revised Guidance on Accounting Standard for Business Combinations and Accounting Standard for

Business Divestitures” (ASBJ Guidance No. 10, September 13, 2013)

- “Revised Guidance on Accounting Standard for Earnings Per Share” (ASBJ Guidance No. 4, September 13,

2013)

(1) Overview

Under these revised accounting standards, the accounting treatment for any changes in a parent’s ownership

interest in a subsidiary when the parent retains control over the subsidiary and the corresponding

accounting for acquisition -related costs were revised. In addition, the presentation method of net income

was amended, the reference to “minority interests” was changed to, “non-controlling interests,” and

transitional provisions for these accounting standards were also defined.

- 21 -

(2) Scheduled date of adoption

The Company expects to adopt these revised accounting standards and guidance from the beginning of the

fiscal year ending March 31, 2016. The Company expects to adopt provisional accounting measures after

business combinations which will be implemented after the beginning of the fiscal year ending March 31,

2016.

(3) Impact of adopting revised accounting standards and guidance

The Company is currently evaluating the effect of adopting these revised standards on its consolidated

financial statements.

Change in Presentation Method

(Consolidated Statements of Income)

Impairment loss in the amount of ¥1,218 million for the year ended March 31, 2014 which was presented as

“Impairment loss” was included in “Other” from the consolidated fiscal year under review since the amounts of

these accounts became insignificant.

(Consolidated Statements of Cash Flows)

Impairment loss in the cash flows from operating activities in the amount of ¥1,218 million for the year ended

March 31, 2014 which was presented as “Impairment loss” in “cash flows from operating activities” was included

in “Other, net” in “cash flows from operating activities” from the consolidated fiscal year under review since the

amounts of these accounts became insignificant.

Segment Information

1. Outline of reportable segments

The Company’s reportable segments shall be part of its organizational units whose financial information is

individually available, and shall be subject to regular review by its Board of Directors for the purpose of

deciding the allocation of its managerial resources and evaluating its business performance.

The Company is mainly engaged in leasing business and installment sales business as well as financing

service business relating to the main businesses. Therefore, “Leasing and Installment Sales,” “Finance” and

“Other” constitute the Company’s reportable segments.

“Leasing and Installment Sales” consists of leasing and installment sales of IT-related equipment and

office equipment, industrial machinery, transportation use equipment, commercial and service equipment, etc.

(including sales of assets thereof pertaining to maturity and/or cancellation before maturity of leasing

transactions). “Finance” consists of money-lending business and investment business such as capital

investments in operational investment securities and silent partnerships. “Other” consists of commission

transactions, solar power sales business, and other businesses.

2. Calculation Method for Amounts for Revenues, Profit or Loss, Assets, Liabilities and Other Items by

Reportable Segment

The accounting method for reportable business segments is the same as stated under “Significant Matters

Forming a Basis for the Preparation of Consolidated Financial Statements.”

- 22 -

3. Information of the amount of revenues, income/loss, assets, liabilities and other items by reportable segment

Fiscal 2013 (from April 1, 2013 to March 31, 2014)

(Millions of yen)

Leasing and

Installment Sales Finance Other Total

Revenues

Revenues from customers 794,252 19,938 14,368 828,558

Intersegment

revenues/transfer ― ― 677 677

Total 794,252 19,938 15,046 829,236

Segment income 43,550 11,457 3,604 58,612

Segment assets 2,094,524 612,768 17,250 2,724,544

Other

Depreciation and

amortization 49,859 ― 187 50,047

Increase in property and

equipment and intangible

assets 111,539 ― 6,958 118,497


(Millions of yen)

Leasing and

Installment Sales Finance Other Total

Revenues

Revenues from customers 840,590 22,921 19,464 882,976

Intersegment

revenues/transfer ― ― 740 740

Total 840,590 22,921 20,205 883,717

Segment income 46,439 13,993 4,800 65,233

Segment assets 2,276,399 723,028 22,749 3,022,177

Other

Depreciation and

amortization 70,832 ― 486 71,318



assets 177,131 ― 5,739 182,870

- 23 -

4. Difference between the total amount of reportable segments and the amounts reported in the financial

statements, as well as the main elements of the difference (the items regarding variance adjustment)

(Millions of yen)

Revenues Fiscal 2013 Fiscal 2014

Reportable segments total 829,236 883,717

Intersegment eliminations (677) (740)

Revenues reported in financial statements 828,558 882,976

(Millions of yen)

Income Fiscal 2013 Fiscal 2014

Reportable segments total 58,612 65,233

Intersegment eliminations (677) (740)

Corporate expenses (Note) (6,517) (6,050)

Operating income reported in financial statements 51,416 58,443

Note: Corporate expenses consist of general and administrative expenses, not attributing to reportable segments.

(Millions of yen)

Assets Fiscal 2013 Fiscal 2014

Reportable segments total 2,724,544 3,022,177

Corporate assets (Note) 160,229 129,694

Assets reported in financial statements 2,884,773 3,151,871

Note: Corporate assets mainly consist of deposits, etc., not attributing to reportable segments.

(Millions of yen)

Other

Reportable segments total Adjustment

(Note)

Amount reported in

financial statements

Fiscal 2013 Fiscal 2014 Fiscal 2013 Fiscal 2014 Fiscal 2013 Fiscal 2014

Depreciation and

amortization 50,047 71,318 3,105 3,745 53,153 75,063



assets

118,497 182,870 2,864 3,596 121,361 186,466

Note: Adjustment consists of adjustment for corporate assets.

- 24 -

(Relevant Information)

1. Information by products and services


(Millions of yen)

Finance

lease

Operating

lease

Installment

sales Finance Other Total

Revenues from customers 580,667 126,816 86,768 19,938 14,368 828,558


(Millions of yen)

Finance

lease

Operating

lease

Installment

sales Finance Other Total

Revenues from customers 573,116 185,633 81,841 22,921 19,464 882,976

2. Information by geographic segments


(i) Revenues

Information by geographic segment is not disclosed since sales to third parties located in Japan represented

more than 90% of revenues in Consolidated Statements of Income.

(ii) Property and equipment

Information by geographic segment is not disclosed since the amount of property and equipment located in

Japan represented more than 90% of property and equipment in Consolidated Balance Sheets.


(i) Revenues

Information by geographic segment is not disclosed since sales to third parties located in Japan represented

more than 90% of revenues in Consolidated Statements of Income.

(ii) Property and equipment

(Millions of yen)

Japan Europe and North America

Asia Central and

South America Total

Ireland Other

319,774 84,553 28,530 3,058 23,405 459,322

(Notes) 1 Presented by country or geographic segment where the Company and its consolidated subsidiaries

are located.

2 Major countries or regions which belong to each of the geographic segment

Europe and North America: Ireland, U.S., Cyprus

Asia: Singapore, Malaysia, Thailand

Central and South America: Panama

3. Information by main customers

Fiscal 2013 (from April 1, 2013 to March 31, 2014) and Fiscal 2014 (from April 1, 2014 to March 31, 2015)

Information by main customers is not disclosed since none of the customer accounts for 10% or more of revenues

from customers in revenues of Consolidated Statements of Income.

(Information Concerning Impairment Loss on Fixed Assets by Reportable Segments)


Following a decision to dispose of the company housing, impairment loss was recognized on corporate assets not

attributable to reportable segments. An impairment loss of ¥1,218 million was recorded for the impairment loss.


Information is not disclosed since the significance of the amount is low.

- 25 -

(Information Concerning Amount of Amortization of Goodwill and its Unamortized Balance by Reportable

Segments)


¥740 million of amortization of goodwill, ¥4,871 million of unamortized balance, and ¥589 million of

amortization of negative goodwill are not allocated to the reportable segments for the year ended March 31, 2014.


¥766 million of amortization of goodwill, and ¥4,139 million of unamortized balance are not allocated to the

reportable segments for the year ended March 31, 2015.

(Information Concerning Gain on Bargain Purchase by Reportable Segments)


Gain on bargain purchase of ¥1,411 million recorded for the year ended March 31, 2014 was not allocated to

reportable segments.


Gain on bargain purchase of ¥667 million recorded for the year ended March 31, 2015 was not allocated to

reportable segments.

Per Share Information


Net assets per share ¥2,386.02 ¥2,776.37

Net income per share ¥311.64 ¥322.84

Diluted net income per share ¥311.25 ¥322.28

(Note) Basis for the calculation of net income per share and diluted net income per share are as follows.


Net income per share

Net income (millions of yen) 33,050 34,132

Amount not attributable to common

shareholders (millions of yen) ― ―

Net income attributable to common

shareholders (millions of yen) 33,050 34,132

Weighted average number of shares of

common stock during the year (thousand

shares)

106,055 105,723

Diluted net income per share

Adjustments to net income (millions of

yen) ― ―

Increase in number of shares of common

stock (thousand shares) 132 185

(of which number of stock acquisition

rights (thousand shares)) (132) (185)

Overview of dilutive shares not included

in the calculation of diluted net income

per share due to the absence of dilutive

effect, which had significant changes from

the previous consolidated fiscal year.

― ―

- 26 -

Significant Subsequent Events

The Company issued the 11th and 12th Unsecured Bonds (with limited inter-bond pari passu clause) on April 22,

2015.

Below is an overview of the issued Bonds.

11th Unsecured Bonds 12th Unsecured Bonds

Total amount of issuance ¥10,000 million ¥15,000 million

Issuance price ¥100 per face value of ¥100

Interest rate 0.140% annually 0.307% annually

Redemption amount 100 yen per face value of 100 yen

Maturity date April 20, 2018 (3-year bond) April 22, 2020 (5-year bond)

Redemption method Lump-sum redemption at maturity

Closing date April 22, 2015

Collateral There are no collaterals or guarantees on the Bonds and no assets are specifically

reserved for them.

Use of funds Capital expenditure including leased properties

- 27 -

6. Others

(1) New Transactions Volume (Millions of yen)

Classification

Fiscal 2014

Amount

Change over the

same period of the

previous year (%)

Leasing and Installment

Sales

Finance lease 511,587 88.4

Operating lease 177,131 158.8

Subtotal 688,718 99.7

Installment sales 106,083 94.7

Total 794,801 99.0

Finance 673,529 112.3

Other 5,739 82.5

Total 1,474,070 104.6

Note: For the “Installment sales,” the amounts of installment sales receivable, after deducting deferred profit on

installment sales, are presented.

(2) Balance of Operating Assets (Millions of yen)

Classification Fiscal 2013 Fiscal 2014

Amount Share (%) Amount Share (%)

Leasing and Installment

Sales

Finance lease 1,461,053 56.3 1,485,017 51.8

Operating lease 322,826 12.4 429,932 15.0

Subtotal 1,783,880 68.7 1,914,950 66.8

Installment sales 213,719 8.2 239,390 8.4

Total 1,997,600 76.9 2,154,340 75.2

Finance 593,105 22.8 699,232 24.4

Other 6,770 0.3 12,019 0.4

Total 2,597,476 100.0 2,865,593 100.0

Note: For the “Installment sales,” the amounts of installment sales receivable, after deducting deferred profit on

installment sales, are presented.

(Reference) (Millions of yen)


Business guarantees 49,305 48,602