Risk of Declining Business Investment Value and Additional Capital Contributions

「During the current consolidated fiscal year, in the Infrastructure Projects operating segment, a loss of ¥26,593 million was recognized through the application of the equity method in connection with impairment of assets held in the US oil and gas development-related business.」

「Quarterly profit was ¥36.4 billion, up ¥5.8 billion year on year, due mainly to the receipt of settlement proceeds on certain aircraft leased to Russian airlines in the US aircraft leasing business and higher earnings in the domestic real estate business.」

「The business plan for the US aircraft leasing business, updated at the end of the current consolidated fiscal year, assumes that the recovery from the temporary deterioration in performance caused by COVID-19 and the termination of aircraft leasing contracts with Russian airlines will continue, and that the business will continue to grow, driven by medium- to long-term growth in demand for air travel. Accordingly, it was determined that there were no indications of impairment in the investment in that business.」

「Forest Products: ¥12.5 billion decline in profit, due to impairment losses on investments in the domestic paper manufacturing and sales business」

「In the Finance and Leasing operating segment, a loss of ¥16,417 million was recognized through the application of the equity method in connection with impairment of aircraft assets held in the US aircraft leasing business, Aircastle. This was due mainly to the recognition of impairment losses on aircraft leased to Russian and Ukrainian airlines.」

「In the Finance and Leasing operating segment, with respect to the US aircraft leasing business, the deterioration in the business environment resulting from the spread of COVID-19 led to greater uncertainty over the likelihood of achieving the targets in the business plan over a certain period. As a result, a decline in expected future cash flows was anticipated, and an impairment loss of ¥42,113 million was recognized on the investment in the joint venture for that business.」

「Equity-method investment income was ¥94.4 billion, down ¥22.4 billion, or 19.1%, year on year. The main declines by operating segment were as follows: Power, down ¥9.5 billion, due mainly to impairment losses on investments in power IPP businesses; Metals, down ¥4.8 billion, due mainly to lower earnings from the Australian coal and steel products businesses; Infrastructure Projects, down ¥4.1 billion, due mainly to lower earnings from the US oil and gas development-related business; and Finance and Leasing, down ¥4.1 billion, due mainly to lower earnings from the US aircraft leasing business.」

「Equity in earnings of affiliates was ¥63.6 billion, down ¥18.3 billion, or 22.4%, from the same period of the previous fiscal year. The main declines by operating segment were as follows: Metals, down ¥11.4 billion, due to lower earnings from the Australian coal business, steel products business, and Chilean copper business; Financial & Leasing Business, down ¥2.3 billion, due to lower earnings from the US aircraft leasing business; Infrastructure Projects, down ¥2.2 billion, due to lower earnings from the US oil and gas development-related businesses and other operations.」

「Equity in earnings of affiliates was ¥24.5 billion, down ¥14.2 billion, or 36.7%, from the same period of the previous fiscal year. Financial & Leasing Business: down ¥2.6 billion. Decline in earnings from the US aircraft leasing business.」

「Equity in earnings of affiliates was a loss of ¥55.2 billion, a deterioration of ¥140.4 billion from the previous consolidated fiscal year, due mainly to the recognition of impairment losses on investments in the Chilean copper business, US aircraft leasing business, Philippine infrastructure business, US West Coast grain export business, UK offshore wind installation business, and LNG business in Papua New Guinea.」

「In the Food operating segment, it became necessary to review future business plans for the grain export business, including soybeans, on the US West Coast in light of a deterioration in the business environment, and a decline in forecast future cash flows was expected. Accordingly, an impairment loss of ¥30,079 million was recognized on the investment in the joint venture operating that business. In the Power & Plant operating segment, an impairment loss of ¥22,916 million was recognized on the investment in the joint venture operating a power generation business in Singapore, as a decline in forecast future cash flows was expected due to lower electricity prices and other factors.」

「Many of these business investments require substantial capital, and the Company and its consolidated subsidiaries may be unable to exit at the time or in the manner they desire, or may be required to provide additional funding.」

「Many of these business investments require substantial capital, and the Company and its consolidated subsidiaries may be unable to exit at the time or in the manner they desire, or may be required to provide additional funding.」