Quick View
| Metric | Current | Prior | YoY |
|---|---|---|---|
| Revenue | ¥42.4B | ¥38.8B | +9.3% |
| Operating Income | ¥14.5B | ¥12.1B | +19.6% |
| Ordinary Income | ¥13.3B | ¥11.5B | +15.6% |
| Net Income | ¥10.4B | ¥9.1B | +14.4% |
| ROE | 8.3% | 7.6% | - |
Executive Summary
FY2026 Q1 results: Revenue 42.4B yen (YoY +9.3%), Operating Income 14.5B yen (YoY +19.6%), Ordinary Income 13.3B yen (YoY +15.6%), Net Income 10.4B yen (YoY +14.4%). The company achieved revenue growth accompanied by disproportionate profit expansion, with operating margin improving to 34.2% from 31.2% in the prior year period. Gross profit margin remained high at 70.7%, while SG&A expense ratio improved to 36.5% from 40.0% YoY, contributing to operating leverage. Total assets increased 9.1% to 294.4B yen, driven by cash accumulation and long-term debt expansion. The quarterly performance demonstrates strong profitability fundamentals with operating income growth outpacing revenue growth by 10.3 percentage points.
Performance Drivers
Revenue increased 3.6B yen to 42.4B yen, representing 9.3% YoY growth. The Investment Banking segment, the company's core business, generated 2,476M yen in revenue (up 7.3% YoY), while the Aviation segment contributed 729M yen (up 4.7% YoY). Segment reorganization during the quarter included separating aviation leasing from traditional investment banking to clarify management responsibility and improve financial transparency, reflecting the aviation business's maturation over two years. The Public Support Service segment recorded 151M yen in revenue, consolidating former public consulting operations with renewable energy infrastructure development. Entertainment Services segment generated 918M yen, up 16.8% YoY, benefiting from increasing business delegation from government entities.
On the profit side, operating income expanded 2.4B yen to 14.5B yen (up 19.6%), demonstrating strong operating leverage. Gross profit reached 29.9B yen with a 70.7% margin, improving 0.7 percentage points YoY. SG&A expenses increased to 15.5B yen but the expense ratio improved 3.5 percentage points to 36.5%, indicating effective cost management relative to revenue growth. Unallocated corporate expenses increased 14.8% to 452M yen, partially offsetting segment profit improvements. Ordinary income of 13.3B yen reflected non-operating expenses including interest expense of 620M yen and foreign exchange losses of 240M yen. Net income of 10.4B yen incorporated an effective tax rate of 21.9%. This represents a revenue up/profit up pattern, with profit growth exceeding revenue growth by a factor of 2.1x, primarily attributable to operational efficiency gains and stable high-margin business structure.
Segment Analysis
The Investment Banking segment generated revenue of 2,476M yen and operating income of 1,714M yen, representing an operating margin of 69.2%. This segment constitutes the core business with the largest revenue contribution at approximately 58.5% of total external sales. The Aviation segment recorded revenue of 729M yen with operating income of 47.9M yen, producing a 6.6% operating margin, significantly lower than the Investment Banking segment due to the cost structure associated with aircraft leasing including asset depreciation and transaction costs. The Public Support Service segment reported revenue of 151M yen with an operating loss of 85M yen, reflecting the business reorganization phase and integration costs as the segment consolidates public consulting with renewable energy operations. The Entertainment Services segment achieved revenue of 918M yen with operating income of 158M yen, yielding a 17.2% margin. Material margin differences exist between segments, with Investment Banking demonstrating the highest profitability at 69.2%, followed by Entertainment Services at 17.2%, Aviation at 6.6%, and Public Support Service currently in loss territory at negative 56.2%. The segment reorganization introduced this quarter separates aviation operations to provide greater visibility into asset-intensive leasing economics versus advisory-based investment banking, while consolidating government-related services under Public Support Service to reflect the shift from consulting to operational outsourcing contracts.
Key Metrics
[Profitability] ROE of 8.3% shows the company's return on shareholder equity, while operating margin reached 34.2%, representing a 2.0 percentage point improvement from the prior year's 32.2%. Net profit margin stood at 24.6%, reflecting the company's ability to convert revenue into bottom-line profit. Gross profit margin of 70.7% demonstrates pricing power and low direct cost structure characteristic of advisory and service-oriented business models. [Cash Quality] Cash and deposits of 55.0B yen provide coverage of 1.39 times against short-term borrowings of 39.5B yen, indicating adequate liquidity buffer. Working capital of 51.9B yen supports operational flexibility. [Investment Efficiency] Total asset turnover of 0.144 indicates capital-intensive asset utilization, with accounts receivable days at 152 days suggesting extended collection cycles requiring monitoring. [Financial Health] Equity ratio of 42.4% improved from 44.6% in the prior year, while current ratio of 141.0% and quick ratio of 139.9% indicate satisfactory short-term debt coverage. Total interest-bearing debt of 74.9B yen comprises short-term borrowings of 39.5B yen and long-term loans of 35.4B yen, with debt-to-equity ratio of 0.60 reflecting moderate leverage. Short-term debt constitutes 52.7% of total interest-bearing debt, indicating refinancing considerations warrant attention.
Cash Flow Analysis
Cash and deposits increased 6.4B yen YoY to 55.0B yen, reflecting earnings accumulation and financing activities. Operating profit growth contributed positively to cash generation capacity. Long-term loans increased substantially by 14.6B yen (71.2%) to 35.4B yen, indicating significant long-term financing activity during the period, potentially supporting business expansion or refinancing of short-term obligations. Accounts payable increased 880M yen (26.8%) to 4.2B yen, suggesting effective supplier credit utilization or increased procurement activities aligned with business growth. Current assets of 178.4B yen compared to current liabilities of 126.5B yen yields a coverage ratio of 1.41, confirming adequate liquidity position. The substantial increase in long-term borrowings combined with cash accumulation suggests strategic financing to support growth initiatives while maintaining liquidity cushion. Interest expense of 620M yen against interest-bearing debt of 74.9B yen implies an average borrowing cost of approximately 3.3% on an annualized basis.
Earnings Quality
Ordinary income of 13.3B yen compared to operating income of 14.5B yen reflects a net non-operating loss of approximately 1.2B yen. This comprises primarily interest expense of 620M yen and foreign exchange losses of 240M yen, partially offset by interest and dividend income. Non-operating expenses represent 2.8% of revenue, consisting mainly of financing costs associated with the company's debt structure and currency exposure from international operations. The gap between operating income and ordinary income of 1.2B yen (8.3% of operating income) indicates that core business profitability is partially offset by financial costs, though the impact remains manageable. Interest coverage ratio, calculated as operating income divided by interest expense, stands at 23.4 times, demonstrating strong debt servicing capacity. The absence of material extraordinary items or impairment losses indicates stable earnings quality. Operating profit margin expansion from 31.2% to 34.2% YoY suggests improving recurring earnings power. While cash flow statement data is unavailable for quarterly reporting, the increase in cash position of 6.4B yen alongside net income of 10.4B yen suggests cash generation is occurring, though working capital effects and detailed operating cash flow composition require further verification in semi-annual or annual reports.
Guidance Update
Progress rate against full-year guidance shows Revenue at 23.3% (42.4B yen of 182.0B yen target), Operating Income at 34.5% (14.5B yen of 42.0B yen target), and Ordinary Income at 33.3% (13.3B yen of 40.0B yen target). The operating income progress rate of 34.5% substantially exceeds the standard Q1 benchmark of 25%, indicating front-loaded earnings or stronger-than-anticipated Q1 performance. This 9.5 percentage point outperformance suggests potential for upward revision if the momentum continues, though quarterly volatility in investment banking and aviation segments warrants monitoring. Revenue progress of 23.3% trails slightly behind the 25% quarterly standard, suggesting revenue recognition may be more evenly distributed across fiscal quarters or that management expects acceleration in subsequent quarters to achieve the full-year target of 26.1% YoY growth. The higher profit progress relative to revenue progress demonstrates operating leverage effects and confirms management's expectation of margin expansion throughout the fiscal year. Full-year guidance assumes EPS of 14.04 yen, implying net income of approximately 27.0B yen. Current quarterly net income of 10.4B yen represents 38.5% progress toward this target, also ahead of the 25% quarterly benchmark, consistent with the operating income trend.
Shareholder Returns
The company forecasts a year-end dividend of 3.00 yen with no interim dividend, representing total annual dividend of 3.00 yen per share. Based on the full-year EPS forecast of 14.04 yen, the calculated dividend payout ratio is 21.4%. This payout ratio is conservative relative to earnings, suggesting financial flexibility for reinvestment or future dividend increases. No share buyback activity was disclosed for the current period. The dividend policy reflects management's balanced approach between shareholder returns and capital retention for business growth. With net income of 10.4B yen for Q1 and cash reserves of 55.0B yen, the company maintains adequate capacity to sustain dividend payments while funding operations. The total return ratio, limited to dividends in absence of buyback disclosure, stands at 21.4%, indicating moderate cash return to shareholders while prioritizing internal capital deployment for expansion initiatives, particularly in aviation leasing and public support services where segment reorganization suggests strategic investment focus.
Risk Factors
Extended accounts receivable collection period of 152 days presents working capital and credit risk exposure. This collection cycle, substantially longer than typical service industry standards, indicates either contractual payment terms with large institutional clients or potential collection challenges. Any deterioration in client creditworthiness or payment delays could pressure cash flow generation and require increased working capital financing. Quantitatively, accounts receivable of 17.7B yen represents 41.7% of annual revenue run-rate, requiring continuous monitoring of aging schedules and potential bad debt provisions.
High short-term debt composition creates refinancing risk, with short-term borrowings of 39.5B yen constituting 52.7% of total interest-bearing debt. This maturity structure exposes the company to rollover risk and interest rate volatility. While current cash reserves of 55.0B yen exceed short-term borrowings, any disruption in credit markets or tightening of lending conditions could impact refinancing costs. The substantial increase in long-term loans by 14.6B yen during Q1 suggests proactive liability management, though continued monitoring of debt maturity profile is essential.
Aviation segment margin compression risk exists due to asset-intensive business model with 6.6% operating margin, significantly below the Investment Banking segment's 69.2%. Aviation leasing economics depend on aircraft residual values, lease rates, and disposal gains, all subject to market cyclicality. The segment generated 729M yen revenue with only 47.9M yen operating profit, indicating limited buffer against adverse market movements. Any decline in aviation demand, lease rate deterioration, or aircraft value impairment could materially impact segment profitability and overall company earnings given the segment's growing strategic importance reflected in its separation as standalone reporting unit.
Industry Benchmark (Reference - Proprietary Data)
[Industry Position] (Reference - Proprietary Analysis) Profitability: Operating Margin 34.2% demonstrates strong competitive positioning. The company's historical trend shows operating margin stability, with current period at 34.2% compared to prior period 31.2%, reflecting consistent high-margin business model. Net profit margin of 24.6% indicates effective cost structure and pricing power in advisory and service-oriented segments. ROE of 8.3% suggests moderate capital efficiency with room for improvement through enhanced asset turnover or strategic leverage deployment. Financial Health: Equity Ratio 42.4% provides solid financial foundation, though the decrease from 44.6% YoY reflects debt-financed growth strategy. Current ratio of 141.0% indicates adequate liquidity management. Efficiency: Revenue growth of 9.3% YoY demonstrates organic expansion capability, while operating income growth of 19.6% confirms operational leverage. The company's asset turnover of 0.144 reflects capital-intensive positioning characteristic of financial services and leasing operations, with improvement potential through enhanced asset utilization or portfolio optimization. ※ Historical comparison based on company data across recent fiscal periods. Industry context reflects financial services and advisory sector characteristics. Source: Proprietary analysis of disclosed financial data.
Key Takeaways from Earnings
Strong operating leverage demonstrated through profit growth exceeding revenue growth by 2.1x, with operating margin expansion of 2.0 percentage points to 34.2%. This indicates the company's ability to scale profitability as revenue increases, driven by high gross margin business model at 70.7% and improving SG&A efficiency. The trend suggests sustainable competitive advantages in core Investment Banking operations and potential for continued margin expansion as fixed cost absorption improves with scale.
Segment reorganization provides enhanced transparency into business unit economics, particularly separating aviation leasing from traditional investment banking. The Aviation segment's 6.6% margin versus Investment Banking's 69.2% margin clarifies capital allocation implications and return profiles. This structural change enables more precise evaluation of capital deployment effectiveness and risk-adjusted returns across business lines. The Entertainment Services segment's 16.8% revenue growth and 17.2% margin indicates diversification benefits, while Public Support Service's current losses reflect investment phase with potential future contribution as government outsourcing contracts mature.
Balance sheet expansion through long-term debt increase of 14.6B yen (71.2%) signals aggressive growth financing, with proceeds likely supporting aviation asset acquisitions and business development. Combined with cash position increase of 6.4B yen to 55.0B yen, the financing activity suggests proactive liquidity management for growth initiatives. However, short-term debt proportion of 52.7% and extended receivables collection of 152 days require monitoring as operational and refinancing risk factors. The conservative dividend payout ratio of 21.4% preserves capital for internal deployment while maintaining shareholder returns, indicating management confidence in reinvestment opportunities yielding superior returns to immediate cash distribution.
This report was automatically generated by AI analyzing XBRL earnings data as an earnings analysis tool. This is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled from publicly available earnings data. Please make investment decisions at your own responsibility and consult professionals as needed.
AI Financial Analysis
Executive Summary
FY2026 Q1 was a strong start, with revenue growth translating into faster operating and attributable-profit growth. Revenue increased 9.3% YoY to ¥4.24bn. Operating income rose 19.6% to ¥1.45bn. Ordinary income increased 15.6% to ¥1.33bn. Profit attributable to owners of the parent grew 18.2% to ¥1.01bn, while basic EPS rose to ¥5.25 from ¥4.35. The operating margin expanded by approximately 300bp YoY to 34.2% from 31.2%. Gross margin improved by approximately 780bp to 70.7%, reflecting a substantial reduction in the cost-of-sales ratio. This more than absorbed an approximately 490bp increase in the SG&A-to-revenue ratio, as SG&A rose 26.1% YoY, faster than revenue. The Investment Banking segment was the principal earnings driver, delivering segment profit of ¥1.71bn, up 27.4% YoY. The Public Support Service segment remained profitable but saw segment profit decline 12.1% YoY to ¥0.48bn. Entertainment Services recorded a wider segment loss of ¥0.85bn, compared with a ¥0.09bn loss a year earlier. The newly disclosed Aircraft division generated revenue of ¥0.73bn and segment profit of ¥0.48bn, supporting the group result. Non-operating expenses rose to ¥132m from ¥64m, principally reflecting higher interest expense, commission fees and foreign-exchange losses, which limited the conversion of operating-income growth into ordinary-income growth. The annualized ROE of 32.2% is excellent, supported by a high net margin, asset productivity and moderate use of financial leverage. Balance-sheet expansion has been debt-funded in part, with long-term loans increasing 71.2% YoY to ¥3.54bn. The FY2026 guidance implies that Q1 operating-income progress of 34.5% is ahead of the standard 25% quarterly run rate, whereas revenue progress of 23.3% is modestly below it. The key issue for the remainder of the year is whether the exceptional Q1 margin can be sustained while containing corporate costs, interest costs and the Entertainment Services loss.
Profitability Analysis
The annualized DuPont ROE is 32.2%, decomposed into a 23.8% net profit margin, 0.576x annualized asset turnover and 2.36x financial leverage. The dominant contributor is the very high net margin, while the 2.36x leverage multiplier also materially enhances equity returns. The annualized asset-turnover figure indicates that returns are not solely dependent on leverage; the group is generating substantial profit from its asset base. Operating leverage was favorable in Q1: revenue increased 9.3% YoY while operating income grew 19.6% YoY. Gross margin improved to 70.7% from 62.9%, an approximately 780bp expansion, and was the largest positive profitability movement. Operating margin rose to 34.2% from 31.2%, an approximately 300bp improvement. However, SG&A increased 26.1% YoY to ¥1.55bn, materially faster than revenue, and its ratio to revenue increased to 36.5% from 31.6%. Unallocated corporate costs rose to ¥452m from ¥394m, increasing the drag from headquarters expenses. The Investment Banking segment is the core business by operating-income contribution, generating ¥1.71bn of segment profit on ¥2.44bn of external revenue, equivalent to a segment margin of approximately 70.3%, versus ¥1.34bn and approximately 59.2% a year earlier. The Aircraft division generated ¥0.48bn of profit on ¥0.73bn of revenue, or an approximately 6.6% segment margin. Public Support Service produced ¥0.48bn of profit on ¥1.51bn of revenue, or approximately 31.7%, down from approximately 43.3% in the prior-year quarter. Entertainment Services generated ¥0.92bn of revenue, up 16.8% YoY, but its segment loss widened to ¥0.85bn from ¥0.09bn, making it the principal profitability dilution risk. The tax burden of 0.755 and effective tax rate of 21.9% are supportive of post-tax earnings conversion. The interest burden of 0.920 remains above the 0.90 low-debt benchmark, although rising funding costs are becoming more visible.
Growth Assessment
Growth was earnings-accretive in Q1: revenue increased ¥361m YoY, while operating income increased ¥238m and attributable profit increased ¥156m. Investment Banking revenue rose 7.3% YoY to ¥2.44bn and segment profit increased ¥369m, demonstrating strong profit scalability. The Aircraft division's separate reporting reflects its increased operational and governance importance after establishment of its business model, and its ¥729m quarterly revenue provides an additional growth platform. Public Support Service revenue increased 20.6% YoY to ¥1.51bn, although lower segment profit suggests that growth has carried a weaker margin mix or higher execution cost. Entertainment Services revenue increased 16.8% YoY to ¥918m, but the expansion in losses means that revenue growth in this segment is currently not value-accretive. Full-year revenue guidance is ¥18.20bn, up 26.1% YoY, and Q1 progress is 23.3%, 1.7 percentage points below the standard 25% pace. Full-year operating-income guidance is ¥4.20bn, up 23.3% YoY, and Q1 progress is 34.5%, 9.5 percentage points ahead of the standard pace. Ordinary-income progress is 33.3% against the ¥4.00bn full-year target, while attributable-profit progress is 37.3% against the ¥2.70bn target. The implied full-year operating margin is 23.1%, below Q1's 34.2%, indicating that the company forecast already incorporates normalization in quarterly profitability, higher costs, or a different revenue mix. Q1 earnings quality is strengthened by the absence of a current-period extraordinary gain between ordinary income and profit before tax. However, recurring non-operating costs require monitoring because interest expense more than doubled YoY to ¥62m and foreign-exchange losses were ¥24m.
Financial Health
Liquidity is adequate, with a current ratio of 141.0% and quick ratio of 139.9%; both current assets and liquid assets exceed current liabilities. Working capital was positive at ¥5.19bn. Cash and deposits of ¥5.50bn covered short-term loans of ¥3.95bn by 1.39x. Debt-to-equity was 1.36x, below the 2.0x aggressive-leverage warning threshold but above the conservative 1.0x benchmark. Debt-to-capital was 37.5%, remaining within the sub-40% investment-grade reference range. Interest coverage was strong at 23.5x, providing substantial current-period capacity to service interest expense. Long-term loans increased ¥1.47bn, or 71.2% YoY, to ¥3.54bn, contributing to total interest-bearing debt of ¥7.49bn. The balance sheet has expanded through debt-funded investment: total assets rose ¥2.44bn YoY to ¥29.44bn while total equity increased only ¥0.45bn to ¥12.49bn. Property, plant and equipment represented 32.4% of total assets, and real estate for sale was ¥4.10bn, leaving capital tied to asset-intensive activities. Goodwill was only ¥55m, equal to 0.4% of equity and 0.2% of assets, so the balance sheet has minimal goodwill impairment exposure. The refinancing-risk alert is material: short-term debt represents 52.7% of interest-bearing debt, above the 40% alert threshold. The root cause is the meaningful reliance on short-term loans within the ¥7.49bn debt structure, alongside ¥6.13bn of current portions of long-term loans. This maturity profile raises refinancing and interest-rate-reset exposure even though the current ratio and cash-to-short-term-loan coverage are presently satisfactory. For a business with investment banking, aircraft leasing and real-estate-related assets, access to stable funding is particularly important because asset monetization may not always coincide with debt maturities.
Notable B/S Changes
Long-term loans: +¥1.47bn (+71.2%) to ¥3.54bn — debt-funded balance-sheet expansion increases interest-rate and refinancing sensitivity. Operational investment securities: +¥2.74bn (+329.5%) to ¥3.57bn — a substantial increase in investment exposure that should be monitored for valuation and liquidity implications. Cash and deposits: -¥1.13bn (-17.0%) to ¥5.50bn — lower liquidity coincided with growth in assets and borrowings, increasing the importance of funding discipline. Property, plant and equipment: +¥0.50bn (+5.5%) to ¥9.53bn — the absolute asset base remains significant at 32.4% of total assets, consistent with capital-intensive aircraft and real-estate-related operations. Accounts payable: +¥0.88bn (+26.8%) to ¥0.42bn — an increase in supplier-related liabilities that should be considered alongside working-capital movements.
Cash Flow Quality
Dividend Sustainability
The full-year DPS forecast is ¥5.00. Based on forecast basic EPS of ¥14.04, the implied dividend payout ratio is approximately 35.6%, comfortably below the 60% sustainability benchmark. Q1 attributable profit of ¥1.01bn represents 37.3% of the ¥2.70bn full-year attributable-profit forecast, providing an initially favorable earnings base for the planned dividend. Retained earnings were ¥5.73bn, exceeding the forecast dividend commitment implied by approximately 191.9 million average shares. The outlook for dividend continuity depends principally on maintaining Investment Banking profitability, limiting losses in Entertainment Services and preserving refinancing capacity as debt obligations mature.
Risk Assessment
Business risks include Entertainment Services is the highest-priority operating concern: segment loss widened to ¥0.85bn from ¥0.09bn despite 16.8% revenue growth, indicating adverse unit economics or elevated investment costs., Investment Banking contributed approximately 93% of aggregate segment profit before corporate costs, creating material earnings concentration in a segment whose transaction and asset-sale activity can be volatile., Aircraft leasing is a newly separated reporting division; residual-value assumptions, aircraft disposal timing, lessee credit quality and aviation-cycle conditions can affect revenue and profit volatility., Public Support Service revenue grew 20.6% YoY but segment profit fell 12.1%, requiring attention to pricing, project mix and execution costs., Real-estate-related assets of ¥4.10bn create exposure to asset valuation, disposal timing, development execution and financing-market conditions..
Financial risks include Refinancing risk is elevated because the short-term debt ratio is 52.7%, above the 40% quality-alert threshold; a tighter credit environment or higher rates could increase funding costs or constrain renewals., Long-term loans increased 71.2% YoY to ¥3.54bn and total interest-bearing debt reached ¥7.49bn, increasing sensitivity to debt servicing despite currently strong 23.5x interest coverage., Interest expense rose to ¥62m from ¥30m YoY, and foreign-exchange losses were ¥24m, demonstrating that non-operating costs can dilute operating profit., Financial leverage of 2.36x enhances annualized ROE but also increases the sensitivity of equity returns to asset profitability and funding costs..
Key concerns include Sustainability of the 34.2% Q1 operating margin is uncertain because full-year guidance implies a 23.1% operating margin., SG&A increased 26.1% YoY, materially outpacing 9.3% revenue growth; continued overhead growth could erode the gross-margin benefit., Cash and deposits declined ¥1.13bn YoY to ¥5.50bn while the asset base and debt balances expanded, making liquidity and debt-maturity management key monitoring items..
Investment Implications
Key takeaways include Q1 operating profit and attributable profit outgrew revenue, supported by a major gross-margin improvement and strong Investment Banking performance., The annualized ROE of 32.2% is high quality from a reported profitability perspective, but it is partly amplified by 2.36x financial leverage., Investment Banking is the core profit engine, while Entertainment Services is the largest offset to consolidated earnings., Q1 profit progress is ahead of the full-year plan, but the full-year forecast assumes material margin normalization from the Q1 level., Debt metrics remain serviceable, but the short-term debt mix makes refinancing conditions a central balance-sheet consideration..
Metrics to watch include Investment Banking segment revenue and segment margin, Aircraft division lease economics, asset sales and segment profit, Entertainment Services loss trajectory and path to break-even, SG&A growth relative to revenue growth and unallocated corporate costs, Short-term debt ratio, current portions of long-term loans, cash balance and interest expense, Operating-margin performance relative to the 23.1% full-year implied level.
Regarding relative positioning, The company presents unusually strong reported margins and annualized ROE for its size, with limited goodwill-related M&A accounting risk. Its relative risk profile is defined less by goodwill or current interest-service capacity and more by earnings concentration in Investment Banking, loss-making Entertainment Services, asset-intensive aircraft and real-estate exposure, and a debt structure weighted toward shorter-term refinancing.