Tokyo Century : Consolidated Financial Results (Kessan Tanshin) for the Nine Months of Fiscal Year Ending March 31, 2023

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.

Consolidated Financial Results (Kessan Tanshin)

for the Nine Months of Fiscal Year Ending March 31, 2023

[Japan GAAP]

February 7, 2023

Name of Listed Company: Tokyo Century Corporation

Stock Exchange Listing: Tokyo

Securities Code: 8439

(URL: https://www.tokyocentury.co.jp/en/)

Representative: Koichi Baba, President & CEO, Representative Director

Contact: Tatsuya Hirasaki, Director and Managing Executive Officer

Phone: [phone]

Scheduled Reportable Date of Quarterly Securities Report: February 7, 2023

Scheduled Payment Date of Dividends: －

Preparation of Supplementary Reference Documents: Yes

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

(Amounts less than one million yen are omitted.)

1. Consolidated Performance

Nine Months Ended

Nine Months Ended

YoY

December 31, 2021

December 31, 2022

(Millions of yen)

(Percentage change)

(1) Consolidated business results:

Revenues

936,885

958,469

2.3%

Operating income

65,831

69,078

4.9%

Ordinary income

72,719

82,577

13.6%

Net income attributable to owners of

43,473

(10,169)

－%

parent

Basic earnings per share (Yen)

355.78

(83.12)

Diluted earnings per share (Yen)

354.22

－

Notes:

Total comprehensive income

For the nine months ended December 31, 2022:

¥180,803 million

80.0%

For the nine months ended December 31, 2021:

¥100,430 million

163.2%

As of March 31, 2022

As of December 31, 2022

(Millions of yen)

(2) Consolidated financial condition:

Total assets

5,663,787

6,201,804

Net assets

795,580

954,490

Shareholders' equity ratio

11.9%

13.4%

Reference:

Shareholders' equity

As of December 31, 2022:

¥827,954 million

As of March 31, 2022:

¥673,024 million

2. Dividends

Dividends per Share (Yen)

First

Second

Third

Year-End

Total

Quarter

Quarter

Quarter

Fiscal 2021

－

71.00

－

72.00

143.00

Fiscal 2022

－

71.00

－

Fiscal 2022 (Forecast)

72.00

143.00

Note: Revisions to the most recently announced forecast of dividends: None - 1 -

3. Consolidated Results Forecast for the Fiscal Year Ending March 31, 2023 (As of February 7, 2023)

		Full year	YoY
		(Millions of yen)	(Percentage change)
	Ordinary income	100,000	10.5%
	Net income attributable to	1,000	(98.0)%
	owners of parent
	Basic earnings per share (Yen)	8.18

Note: Revisions to the most recently announced forecast of consolidated results: None

Notes

1. Changes in status of significant subsidiaries during the period under review (changes in status of specified subsidiaries resulting in change in scope of consolidation): None
2. Adoption of special accounting treatments for quarterly consolidated financial statements: Yes
3. Changes in accounting policies, changes in accounting estimates, and retrospective restatements
4. 1. Changes in accounting policies due to reforms of accounting standards: Yes
   2. Changes in accounting policies other than item 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatements: None

Note: For details, please refer to "2. Consolidated Financial Statements and Primary Notes, (3) Notes to the Consolidated Financial Statements, Changes in Accounting Policies" on page 9 of the Attached Documents.

1. Number of shares of common stock issued
2. 1. Number of shares issued at the end of the period (including treasury stock)

As of March 31, 2022:	123,028,320 shares
As of December 31, 2022:	123,028,320 shares
2) Number of shares of treasury stock at the end of the period
As of March 31, 2022:	826,799 shares
As of December 31, 2022:	627,490 shares

1. Average number of shares during the period (cumulative from the beginning of the fiscal year) Nine months ended December 31, 2021: 122,192,451 shares
   Nine months ended December 31, 2022: 122,348,293 shares

These quarterly financial results are outside the scope of quarterly review by certified public accountant or audit firm.

Explanation related to forward-lookingstatements and other items warranting special mention(Regarding forward-looking statements)

The statements concerning future performance presented in this document are prepared based on currently available information and certain preconditions that Tokyo Century Corporation and its Group companies believe to be reasonable at the publication of this document. Actual results may be substantially different from any projections presented herein due to various factors.

(Methods for obtaining supplementary reference documents for quarterly financial statements)

The supplementary reference documents were disclosed on the TDnet on the same date as this document (Japanese only) and were also posted on the Company's website.

The Company holds an earnings call (audio conference) for institutional investors and analysts on Wednesday, February 8, 2023.

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1. Qualitative Information Concerning Financial Results for the Nine Months of Fiscal Year Ending March 31, 2023

• In this section 1 "Qualitative Information Concerning Financial Results for the Nine Months of Fiscal Year Ending March 31, 2023," the amounts expressed in units of millions have been rounded off to the nearest hundred million.

(1) Explanation of Results of Operations

During the nine months ended December 31, 2022, revenues increased ¥21,600 million, or 2.3%, to ¥958,500 million, and gross profit increased ¥17,900 million, or 11.9%, to ¥168,300 million respectively from the same period of the previous consolidated fiscal year. This was due to increases in the Specialty Financing segment and the Mobility & Fleet Management segment, despite the recording of a loss on operational investment securities in the International Business segment.

Selling, general and administrative expenses increased ¥14,700 million, or 17.4%, to ¥99,200 million from the same period of the previous consolidated fiscal year. This was mainly due to increases in personnel expenses and non-personnel expenses in the International Business segment and the Specialty Financing segment.

Non-operating income and expenses increased ¥6,600 million, or 96.0%, to an income of ¥13,500 million from the same period of the previous consolidated fiscal year. This was mainly caused by an increase in equity in earnings of affiliates.

Due to the factors mentioned above, ordinary income increased ¥9,900 million, or 13.6%, to ¥82,600 million from the same period of the previous consolidated fiscal year.

Aviation Capital Group LLC (hereinafter, "ACG"), a consolidated subsidiary of the Company, complied with the relevant economic sanctions by the United States, the European Union (EU), and other countries affected by Russia's invasion of Ukraine and terminated all aircraft leased to Russian airline companies. However, the effect of Russian countermeasures to these economic sanctions has made it difficult to estimate future cash flows with regard to such aircraft with terminated leases. Furthermore, the Company had initially judged that the recovery of ACG's financing and loan guarantee to one Russian-registered airline would be possible by transferring the collateralized aircraft out of Russia and restructuring the financing structure. However, due in part to the prolonged invasion of Ukraine, there has subsequently been a delay in the procedure of transferring the aircraft out of Russia and no progress in the approval process on the Russian side, making the recovery prospect uncertain. In response to this situation, the Group recorded ¥77,100 million as Russia-related losses in extraordinary losses, consisting of an impairment loss of ¥48,900 million for such aircraft and a bad debt expense of ¥28,200 million for such financing and loan guarantee. Mainly due to this, extraordinary income and losses decreased ¥74,900 million, a decrease of ¥74,500 million compared to the same period of the previous consolidated fiscal year.

Income taxes decreased ¥11,800 million, or 54.1%, to ¥10,100 million, and net income attributable to non- controlling interests increased ¥900 million, or 12.3%, to ¥7,800 million, respectively from the same period of the previous consolidated fiscal year.

As a result, net loss attributable to owners of parent amounted to ¥10,200 million, a decrease of ¥53,600 million in income from the same period of the previous consolidated fiscal year.

Average exchange rate during the period for the preparation of consolidated financial statements for the major overseas subsidiaries and affiliates closing accounts in December is ¥128.30/US$ for the first nine months of the fiscal year ended December 31, 2022 (January to September 2022), ¥108.58/US$ for the first nine months of the fiscal year ended December 31, 2021 (January to September 2021).

(Overview of Business Results by Segment) Business results by segment were as follows.

Revenues for each segment represent "revenues from customers," and segment income or loss represents the amount for the reportable segment.

Equipment Leasing

Revenues decreased ¥24,500 million, or 6.4%, to ¥361,000 million, but segment income increased ¥200 million, or 1.0%, to ¥24,000 million, respectively from the same period of the previous consolidated fiscal year. The increase in segment income was mainly due to an increase in equity in earnings of affiliates NTT TC Leasing Co., Ltd. and NITTSU Lease & Finance Co., Ltd. The balance of segment assets decreased ¥66,900 million, or 4.8%,

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to ¥1,312,800 million from the end of the previous consolidated fiscal year.

Mobility & Fleet Management

Revenues increased ¥10,000 million, or 3.9%, to ¥265,300 million, and segment income increased ¥9,100 million, or 67.0%, to ¥22,800 million, respectively from the same period of the previous consolidated fiscal year. The increase in segment income was mainly because of improved earnings due to a recovery in sales in the car rental business, as well as expanded gains on sales of lease and rental vehicles resulting from a flexible response to the used vehicle market situation. The balance of segment assets increased ¥3,700 million, or 0.6%, to ¥615,500 million from the end of the previous consolidated fiscal year.

Specialty Financing

Revenues increased ¥10,600 million, or 4.9%, to ¥227,400 million, and segment income increased ¥15,300 million, or 47.8%, to ¥47,400 million, respectively from the same period of the previous consolidated fiscal year. The increase in segment income was mainly caused by increased gain on the sale of operational investment securities and a decline in the impairment loss recorded as costs in the aviation business. The balance of segment assets increased ¥559,300 million, or 24.2%, to ¥2,871,100 million from the end of the previous consolidated fiscal year due mainly to foreign exchange fluctuations.

International Business

Revenues increased ¥25,400 million, or 32.1%, to ¥104,200 million, and segment loss amounted to ¥5,000 million (decline of ¥16,200 million in income), respectively from the same period of the previous consolidated fiscal year. The decrease in segment income was mainly caused by the recording of a loss on operational investment securities. The balance of segment assets increased ¥112,600 million, or 20.2%, to ¥669,600 million from the end of the previous consolidated fiscal year due mainly to foreign exchange fluctuations.

(2) Explanation of Financial Conditions

Total assets at the end of the nine months under review increased ¥538,000 million, or 9.5%, to ¥6,201,800 million, and due mainly to foreign exchange fluctuations, segment assets increased ¥630,100 million, or 12.9%, to ¥5,509,500 million from the end of the previous consolidated fiscal year. Total liabilities increased ¥379,100 million, or 7.8%, to ¥5,247,300 million, and interest-bearing debts increased ¥367,800 million, or 8.7%, to ¥4,615,100 million, respectively from the end of the previous consolidated fiscal year.

Total net assets increased ¥158,900 million, or 20.0%, to ¥954,500 million from the end of the previous consolidated fiscal year. This was mainly caused by an increase in translation adjustments of ¥173,400 million, which offset a ¥27,700 million decrease in retained earnings due to the recording of a quarterly net loss and payment of dividends.

As a result, the shareholders' equity ratio increased 1.5 points compared with the end of the previous consolidated fiscal year to 13.4%.

Exchange rate at the end of the period for the preparation of consolidated financial statements for the major overseas subsidiaries and affiliates closing accounts in December is ¥144.81/US$ at the end of the third quarter of the fiscal year ended December 31, 2022 (September 30, 2022), ¥115.02/US$ at the end of the previous consolidated fiscal year (December 31, 2021).

(3) Explanation of Future Forecast Information such as Consolidated Results Forecast

Please refer to "Notice Concerning Recording of Extraordinary Loss and Revision of Consolidated Results Forecast for the Fiscal Year Ending March 31, 2023," which was announced on January 10, 2023.

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2. Consolidated Financial Statements and Primary Notes

1. Consolidated Balance Sheets

		(Millions of yen)
	As of March 31, 2022	As of December 31, 2022
Assets
Current assets
Cash on hand and in banks	240,800	178,859
Accounts receivable - installment sales	153,939	163,213
Lease receivables and investment assets	1,575,049	1,568,459
Loans	407,370	462,966
Operational investment securities	352,044	320,295
Accounts receivable - leases	77,358	77,196
Short-term investment securities	450	300
Inventories	13,341	23,346
Other current assets	150,858	184,251
Allowance for doubtful accounts	(7,640)	(8,066)
Total current assets	2,963,571	2,970,823
Non-current assets
Property and equipment
Leased assets	1,991,616	2,351,259
Advances for purchases of property for lease	55,862	85,354
Other operating assets	116,248	214,445
Construction in progress	84,596	5,081
Own assets in use	19,029	20,505
Total property and equipment	2,267,353	2,676,645
Intangible assets
Computer programs leased to customers	2,086	2,274
Goodwill	53,308	62,319
Other intangible assets	34,824	36,497
Total intangible assets	90,219	101,091
Investments and other assets
Investments in securities	234,951	327,418
Claims provable in bankruptcy or rehabilitation	17,045	11,132
Deferred tax assets	29,178	45,041
Retirement benefit asset	108	130
Other investments	68,554	74,896
Allowance for doubtful accounts	(10,284)	(8,038)
Total investments and other assets	339,555	450,580
Total non-current assets	2,697,129	3,228,317
Deferred assets	3,087	2,663
Total assets	5,663,787	6,201,804

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