Tokyo Century : Financial Results for FY2023

Consolidated Financial Results

For the Fiscal Year Ended March 31, 2024

May 14, 2024

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Progress of Medium-Term Management Plan 2027

Executive Summary	4
FY2023 Financial Highlights and FY2024 Forecast	5
FY2023 Net Income by Operating Segment	6
FY2024 Results Forecast	7
Results and Challenges of Each Operating Segment for	8
Achieving Medium-Term Management Plan 2027
Shareholder Returns (Dividend) Policy	9
Performance of NTT TC Leasing	10
Improved Profitability of Car Rental Business	11
ACG's Growth Strategies	12
CSI's Growth Strategies	13
Data Center Businesses with the NTT Group	14
Overseas Business Development Approach of	15
Environment-Related Businesses

Reference Material (1) Results by Operating Segment

Results of Equipment Leasing	17
Results of Automobility	18
Results of Specialty Financing	19
Results of International Business	20
Results of Environmental Infrastructure	21
Breakdown of YoY Changes in Net Income (Loss)	22
Ordinary Income by Operating Segment	23
Balance of Segment Assets by Operating Segment	24

Reference Material (2) Topics

Quarterly Changes in Results by Subsidiary and	26
Affiliate in Automobility
Aviation Business ACG's Earnings Power Changes	27
ACG's Financial Performance (1)	28
ACG's Financial Performance (2)	29

ACG's Capital Procurement Activities	30
ACG's Portfolio	31
Real Estate Business Portfolio Strategy	32
CSI's Performance	33
CSI's Global Strategies	34

Reference Material (3)

Actions for Realizing Management That Emphasizes Cost of Capital and Stock Price

ROE and P/B Ratio	36
Initiatives for Improving the P/B Ratio
37

Reference Material (4)

Promotion of Collaboration with Partner Companies

Status of Business Collaboration with the NTT Group	39
Collaboration with ITOCHU Corporation	40

Reference Material (5)

Highlights of Medium-Term Management Plan 2027

Management Targets Financial and Non-financial Targets	42
Balance Sheet Management	43
Reference Material (6) Financial Data
Statement of Income	45
Balance Sheet	46
Interest-Bearing Debt	47
Balance of Segment Assets and Transaction Volume in	48
Automobility
Balance of Segment Assets in Specialty Financing	49
Balance of Segment Assets in International Business	50
Breakdown of Ordinary Income	51
(Core earnings, gain on sales, impairment, etc.)
Breakdown of Ordinary Income by Operating Segment	52
(Core earnings, gain on sales, impairment, etc.)
Major Group Companies (Domestic)	53
Major Group Companies (Overseas)	54

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2

Progress of Medium-Term Management Plan 2027

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Executive Summary

Fiscal 2023

• Net income hit a record high of ¥72.1 billion (up ¥67.4 billion YoY), and the year-end dividend will be increased by ¥2 to ¥ 52 compared to the initial plan.
• Increased profits in all operating segments and started smoothly as the first year of Medium-Term Management Plan 2027.
• Ensured collaboration with the NTT Group-NCS and NTT TC Leasing achieved record-breaking earnings. Facilitated collaboration of data center businesses that are expected to expand the US market with AI.
• Initiatives for improving asset efficiency (ROA 1.2%) and capital efficiency (ROE 8.8%) remain challenges.

 Achieved a V-shaped recovery and will return to a growth track

Medium-Term Management Plan 2027

Strengthen investment for growth in all segments					Net income ¥100.0 billion
in light of Medium-Term Management Plan 2027 and its future
												Record high
Changes in net income attributable to owners of parent and P/B ratio				¥72.1 billion
Expanded profitability by actively				56.3	Impact of COVID-19 and
			Russia's invasion of Ukraine
investing in growth areas
Net income							1.8			1.6
(Billions of yen)		1.2	1.3	1.4
		1.2				1.2
23.6				1.1				0.8		0.9
									0.7
P/B ratio	0.9
0.9
(Times)
								0.7			4.8
2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025	2026	2027	(FY)
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FY2023 Financial Highlights and FY2024 Forecast

Net income for fiscal 2024 is forecast to be a record-breaking ¥80.0 billion

							（Billions of yen）
	FY2022	FY2023	FY2023			FY2024
	Change		Change
	Result	Forecast	Result		Forecast
Ordinary income	106.2	110.0	117.3	11.1		125.0	7.7
Net income (loss) attributable	4.8	70.0	72.1	67.4		80.0	7.9
to owners of parent
EPS	¥9.74	¥142.97	¥147.32	¥137.58		¥163.38	¥16.06
Annual dividends	¥35.75	¥50.00	¥52.00	¥16.25		¥58.00	¥6.00
Payout ratio	367.1%	35.0%	35.3%	-331.8pt		35.5%	0.2pt
ROA (Net income / Total assets)	0.1%	-	1.2%	1.1pt
ROE（Net income / Shareholders' equity)	0.7%	-	8.8%	8.1pt
Average foreign exchange rate (USD1)	¥131.63		¥140.67 (Foreign exchange rate for January-December
				for major overseas subsidiaries)
	Mar. 31, 2023	Mar. 31, 2024	Mar. 31, 2024
	Forecast
	Change
Balance of segment assets	5,363.8	-	5,720.4	356.7
Shareholders' equity	761.6	-	872.2	110.6
Shareholders' equity ratio	12.5%	-	13.5%	1.0pt
Foreign exchange rate at quarter end (USD1)	¥132.70		¥141.82	(Foreign exchange rate for major overseas
				subsidiaries as of the end of December)

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FY2023 Net Income by Operating Segment

Net income increased ¥67.4 billion YoY primarily due to the recovery of Specialty Financing and International Business, as well as the growth of Automobility

	Net income attributable to owners of parent								ROA
											(Net income / Segment assets)
									（Billions of yen）
		FY2022		FY2023			FY2023			FY2023
		Result		Result	Change		Initial Forecast	% Achievement		Result	Change
	Equipment Leasing	22.9		24.2	1.3		24.0	101%		1.9%	0.2pt
				16.7						3.1%
	Automobility	12.1		4.5		13.0	128%		1.1pt
				30.0						1.1%
	Specialty Financing	-19.1		49.1		26.0	115%		-
				11.0						1.5%
	International Business	-5.9		16.9		14.0	78%		-
	Environmental	0.2		1.9	1.7		4.0	47%		0.7%	0.6pt
	Infrastructure
	Other	-5.4		-11.5	-6.1		-11.0	104%
	Total (Net income)	4.8		72.1	67.4		70.0	103%		1.3%	1.2pt
											ROA (Net income / Total assets)
											1.2%	1.1pt

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FY2024 Results Forecast

Seeking to set a new record high by accelerating profitability initiatives in all operating segments

Net income attributable to owners of parent

(Billions of yen)

	FY2023	FY2024
	Result	Forecast	Change	Major factors for change (Plan)
Equipment Leasing	24.2	25.0	0.8	(＋) Collaborative businesses with partners, accumulation of quality assets by
improving value of existing businesses
				(－) Dissipation of one-time factors in FY2023
				(＋) NRS's further increase in income (strategies for improving branches, increase in
Automobility	16.7	18.0	1.3	passenger demand, including inbound tourism)
(－) Dissipation of gain on sales of used vehicles in FY2023, decrease in income
				received from OAL
Specialty Financing	30.0	34.0	4.0	(＋) ACG's increase in income (increase in gain on sale of aircraft)
(－) Dissipation of gain on sales of vessels in shipping business in FY2023
International Business	11.0	13.0	2.0	(＋) Increase in income due to advancing CSI's global strategies
(－) Dissipation of gain on sales in FY2023, procurement cost burden of data centers
Environmental	1.9	2.5	0.6	(＋) Accumulation of new projects, dissipation of one-time losses in FY2023
(－) Cost burden associated with new overseas investment projects, output control
Infrastructure
			related to power generation businesses
Other	-11.5	-12.5	-1.0
Total	72.1	80.0	7.9

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Results and Challenges of Each Operating Segment for Achieving Medium-Term Management Plan 2027

Automobility achieved the planned amount due in part to NRS's contributions, and Specialty and International Business strive to further enhance earnings power

Comparison of FY2023 Result and FY2027 Forecast
(Net income attributable to owners of parent)				(Billions of yen)
	FY2023	FY2027
	Result	Plan		Change	Fiscal 2023 results and challenges for achieving the plan
Equipment Leasing	24.2	29.0		4.8	NTT TC Leasing's record-breaking income, portfolio transformation (PX)
	TC's standalone earnings power, joint businesses with partners
Automobility	16.7	16.0		-0.7	Achievement of the plan due to large profit contributions from NRS, PX
	NCS: Accumulation of quality assets with organic and non-organic methods
					NRS: Strategies for improving branches, capture of inbound demand
Specialty Financing	30.0	48.0		18.0	ACG's recovery, efficient asset management of shipping and real estate
	Aviation: Efficient asset management and high-quality portfolio
					Real estate: Active investment in logistics facility and data centers
International Business	11.0	21.0		10.0	Participation in data center businesses with the NTT Group in US
	CSI: Global strategies leveraging M&A
					Improvement of business models, including bolstering global partnerships
Environmental					Acquisition of UK's large solar power plants for growth over the long term
1.9	7.5		5.6	Earnings expansion from strategic M&A, overseas renewable energy,
Infrastructure		storage battery businesses
					Increase in new earnings opportunities using asset management services
Other	-11.5	-21.5		-10.0
Total	72.1	100.0		27.9

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Shareholder Returns (Dividend) Policy

• Provide stable, long-term returns to shareholders, which is our basic policy
• Maintain stable returns to shareholders during the period of the Medium-Term Management Plan 2027 while balancing with growth investment and financial base

	While adopting a progressive dividend policy as our basic stance, aim to increase dividends per
¥80.00	share with profit growth and target a payout ratio of approximately 35%

			Plan to increase dividends	120.0%
¥70.00			with profit gro	w	th
	Payout ratio	Dividends*				(Forecast)
				100.0%
	¥58.00
¥60.00
	* Conducted a 4-for-1 stock split of common stock effective January 1, 2024.	¥52.00
	Dividends shown in the graph below are figures after retroactively
¥50.00	applying the amendments resulting from the impact of the stock split.										80.0%

¥40.00													¥35.75	¥35.75
											¥34.00	¥34.50					60.0%
										¥31.00				367%
¥30.00									¥28.50
								¥25.00
																			40.0%
¥20.00							¥20.00
					¥16.25						34.2%	34.7%		35.3%	35.5%	35.0%	35.0%	35.0%
					¥13.00
		¥10.00	¥11.00	¥12.00					25.1%	25.9%								20.0%
¥10.00	¥8.00			20.1%	21.1%	24.2%	23.5%
18.0%	17.9%
		17.6%	16.7%
	13.4%
¥0.00																			0.0%
	FY2009	FY2010	FY2011	FY2012	FY2013	FY2014	FY2015	FY2016	FY2017	FY2018	FY2019	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025	FY2026	FY2027

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Performance of NTT TC Leasing

Consistent increases in NTT TC Leasing's segment assets and equity in earnings of affiliates

Financial Results (Fiscal Year Ended March 31, 2024)

			(billions of yen)
	FY2022	FY2023
	Result	Result	Change	% Change
Revenues	384.7	376.0	-8.8	-2%
Gross profit	34.2	38.0	3.7	11%
Operating income	17.4	20.0	2.5	14%
Ordinary income	18.6	21.4	2.9	15%
Net income attributable	12.8	15.0	2.2	17%
to owners of parent
Equity in earnings	6.3	7.5	1.1	18%
of affiliates(TC)
	Mar. 31,	Mar. 31,	Change	% Change
	2023	2024
Segment assets	1,780.7	1,962.0	181.3	10%

¥7.5 billion

¥6.3 billion ¥1.1 billion

FY2022	FY2023
Result	Result

Changes in Segment Assets

35,000
30,000
25,000	¥1,800	¥2,000
billion
	billion
20,000
¥1,200
15,000	billion
10,000
5,000
0

At the start of		March 31,		March 31,		In future
operations in		2023		2024
July 2020

Promotion of co-creation for expanding segment assets

Environment &	Real Estate	Global
Energy	Business
Financing for solar and	Enhancement of	Financing for overseas data
biomass power	relationship between	center businesses between
generation businesses	NTT and TC	the NTT Group and TC

In addition to low-cost fund procurement, NTL focuses on expanding its assets through business alliance

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