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Annual Report 2012

ORIX has consistently evolved as a financial service group, creating new businesses through ongoing devel-

opment of advanced products and services. Since its establishment in 1964, the Company started with the

leasing business, and then acquired expertise in a variety of areas as it has ventured into neighboring fields.

From the beginning, ORIX has held a steadfast DNA of “self-reliance” and “a spirit of willingness to

take on new challenges.” This DNA which threads through the Group is ORIX’s defining feature and the

cornerstone that supports its unique business model.

Driven by this willingness to take on new challenges, we are accelerating the pace of business

development and the shift from “debt to equity, and then on to operations” as a part of efforts to

secure further growth.

Leasing

• Machinery and equipment leasing

• Automobile leasing

• Leasing and rental of precision mea-

suring and IT-related equipment

• Ship/Aircraft leasing

Lending

• Corporate finance

• Housing loans

• Card loansDebt

Equity

Operations

Accelerating Growth with a DNA of Continual Innovation

ORIX Corporation Annual Report 2012

Life Insurance

Banking

Corporate Philosophy

ORIX is constantly anticipating market needs and

working to contribute to society by developing

leading financial services on a global scale and

striving to offer innovative products that create

new value for customers.

Lending

• Corporate finance

• Housing loans

• Card loans

Ships/Aircraft

• Asset management

• Ship/Aircraft investment

Environment/Energy

• Waste disposal and recycling

• Energy-saving measures

• Sale of solar power systems

• Electric business

Investment Banking

• M&A advisory

• Fund management

Automobiles

• Car rental

• Maintenance services

• Vehicle management

• Car sharing

Real Estate

• Development and rental

• Facilities operation

• Asset management

• Investment and advisory services

Investment

• Principal investment

• Business rehabilitation support

• Bond investment

• Venture capital

Servicer

• Loan servicing

• Non-performing loan investment

ORIX Corporation Annual Report 2012 1

0

50

100

150

200

(Billions of yen)

1964 1975 1980 1985 1990 1995 2000 2005 2010 20132012

Trend in Net Income*

One of ORIX’s core strengths is its ability to adapt to change. Overcoming dramatic fluctuations in the

operating environment, from oil shocks to the bursting of the bubble economy and more recently

Lehman shock, the Company consistently generates a steady stream of profits.

Working toward a new stage of profit growth, ORIX is targeting net income of 100 billion yen in fiscal

2013. To this end, the Company will continue to pursue its medium- to long-term management strate-

gies of increasing the pace of “Finance + Services” and embracing growth in emerging markets such as

Asia. At the same time, we will constantly review and rebuild our existing business foundation while

increasingly taking up the challenge of capturing new business opportunities and sustainable growth.


Fiscal year ended September 1974First Oil Shock

Fiscal year ended September 1979Second Oil Shock

Fiscal year ended September 1988Black Monday

Fiscal year ended March 1989(Interim Results)

*Net Income Attributable to ORIX Corporation

2 ORIX Corporation Annual Report 2012

0

50

100

150

200

(Billions of yen)

1964 1975 1980 1985 1990 1995 2000 2005 2010 20132012

Trend in Net Income*

Fiscal Year Ended March 1993

Bursting of the Economic

Bubble


Asian Currency

Crisis


Bursting of the IT Bubble


Lehman Shock


¥86.2 billion

Fiscal Year Ending March 2013

¥100.0 billion

(Target)


ORIX is made up of six business segments: Corporate Financial Services, Maintenance Leasing, Real

Estate, Investment and Operation, Retail and Overseas Business. While each business makes full use of its

individual strengths, every measure is taken to promote mutual cooperation and development of an exten-

sive Group-wide operating foundation through the common sharing of customer base and information.

Currently, the Company operates in 27 countries and regions worldwide and maintains a strong net-

work and customer base abroad.

ORIX’s ongoing business development is underpinned by its sophisticated risk management and

stable financial base. Swift action is determined based on a risk assessment that takes into consider-

ation changes in operating conditions as well as the condition of each business segment.

Sophisticated

risk management

and a stable

financial base

Balanced funding structure and diversified funding sources

Focus on longer term funding and optimal liquidity control

Business

expertise and

Group-wide capability

Sophisticated expertise in each business segment

Group network linking each business segment

The ability to adapt to changes in the environment through

portfolio diversification

Expansive

domestic and

overseas network

Over 40 year history of business overseas

A policy of “Localization and Partnership” together with

leading partners

Products and services that address the needs of each country

and region



Contents 6 Financial Highlights

8 To Our Shareholders —A Message from CEO Yoshihiko Miyauchi Attaining the Next Growth Stage:

Advancing from Debt to Equity, and then on to Operations

12 An Interview with COO Makoto Inoue While adapting to an ever-changing business environment,

we will actively transform our business model

16 Segment at a Glance

18 Segment Topics — Introducing Kyuko-Lease Inc. into the Group and build-

ing a partnership with Kyudenko Corporation

— Aiming to combine the collective Group strength and expand the Bank’s card loan activities

— Leveraging expertise to expand the facilities operation business

— Striving to provide new products and services in a growing world

24 Segment Overview 24 Corporate Financial Services

26 Maintenance Leasing

28 Real Estate

30 Investment and Operation

32 Retail

34 Overseas Business

36 An Interview with CFO Haruyuki Urata Risk Management and Financial Strategies that

Support Future Growth

38 Risk Management

44 Corporate Governance 44 Management Team

49 Corporate Governance System

54 Comments from Outside Directors

57 Financial Section

68 About ORIX 68 Group Companies

70 Group Network

72 Corporate Information/Share Information


Financial Highlights

Performance for the Fiscal Year 2012

Group Performance Highlights Achieved ¥86.2 billion in Net Income, up 28% year on year

Increased profit in all segments excluding Retail, achieving steady growth

ORIX achieved ¥86.2 billion in net income during the fiscal year ended March 31, 2012, exceeding the initial forecast of ¥77.5 billion

and achieving a 28% increase from the previous fiscal year. Segment profit increased for all segments excluding the Retail segment.

Contributions from increases in the Corporate Financial Services and Maintenance Leasing segments were particularly strong.

Despite continued asset reductions in the Real Estate segment, assets increased in the Maintenance Leasing, Retail and

Overseas Business segments centered on automobile leasing, lending through ORIX Bank, and new investment and expanded

local subsidiary leasing operations in Asia, respectively.

Segment asset ROA (after tax) rose to 1.4% from 1.1% in the previous fiscal year as a result of the accumulation of quality assets

and continued asset replacement.

Key Performance IndicatorsMillions of yen

2008 2009 2010 2011 2012

Total revenues ¥1,112,485 ¥1,015,696 ¥ 890,552 ¥ 946,878 ¥ 972,884

Total expenses 927,574 962,509 860,378 871,582 847,689

Income before income taxes, discontinued operations and extraordinary gain 245,459 11,043 56,057 93,301 130,484

Net income attributable to ORIX Corporation 169,597 21,924 37,757 67,275 86,150

ORIX Corporation shareholders’ equity 1,267,917 1,167,530 1,298,684 1,319,341 1,396,137

Total assets 8,994,970 8,369,736 7,739,800 8,581,582 8,354,874

ROE (%) 13.8 1.8 3.1 5.1 6.3

ROA (%) 1.97 0.25 0.47 0.82 1.02

ORIX Corporation shareholders’ equity ratio (%) 14.1 14.0 16.8 15.4 16.7

Debt/Equity ratio (excl. Deposits)*1 (times) 4.6 4.5 3.4 3.8 3.4

Adjusted Debt/Equity ratio (excl. Deposits)*2 (times) 4.3 4.2 3.2 3.0 2.7

Interest-bearing debt*3 6,263,017 5,919,639 5,263,104 6,075,076 5,828,967

Per share for net income attributable to ORIX Corporation (yen)

(Basic) 1,860.63 246.59 370.52 625.88 801.33

(Diluted) 1,817.81 233.81 315.91 527.75 670.34

ORIX Corporation shareholders’ equity per share (yen) 14,010.62 13,059.59 12,082.56 12,273.11 12,984.69

Cash dividends*4 (yen) 260 70 75 80 90

Number of employees 18,702 18,920 17,725 17,578 17,488

*1. Consolidated Financial Statement (Short- and Long-term Debt (excluding Deposits) / ORIX Corporation Shareholders’ Equity)

*2. Adjusted basis (Short- and Long-term Debt (excluding Deposits) / ORIX Corporation Shareholder’s Equity): This ratio is calculated by long-term liabilities excluding liabilities in line with securitized

transactions (ABS, CMBS), and ORIX Corporation Shareholder’s Equity which excludes the effect on retained earnings of applying the new accounting standards for the consolidation of VIEs

effective April 1, 2010. For a presentation of the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP and a quantitative reconciliation of the U.S.

GAAP and Non-GAAP financial measures, please see pages 66 and 67.

*3. Short- and Long-term Debt and Deposits

*4. Dividend applicable to the fiscal year per share


Segment Performance

Millions of yen

2009 2010 2011 2012

Segment Revenues

Corporate Financial Services ¥ 105,021 ¥ 84,167 ¥ 79,305 ¥ 72,449

Maintenance Leasing 242,572 226,179 225,830 231,951

Real Estate 303,030 215,001 217,590 222,631

Investment and Operation 84,199 87,318 89,595 73,293

Retail 181,997 155,491 148,768 160,071

Overseas Business 167,635 185,906 176,875 187,240

Total 1,084,454 954,062 937,963 947,635

Segment Profits

Corporate Financial Services (10,361) (19,481) 10,035 21,532


Real Estate 59,185 138 54 1,349

Investment and Operation (74,558) (2,350) 13,212 15,983

Retail 9,573 31,104 23,777 21,825


Total 31,920 69,860 118,920 145,167

Segment Assets

Corporate Financial Services 1,487,585 1,140,251 968,327 898,776


Real Estate 1,833,653 1,677,402 1,539,814 1,369,220

Investment and Operation 546,798 511,333 506,011 471,145

Retail 1,448,804 1,578,758 1,653,704 1,738,454


Total 6,879,043 6,284,275 6,142,818 6,002,139

Segment Asset ROA (%)*

Corporate Financial Services (0.37) (0.88) 0.56 1.36

Maintenance Leasing 2.62 2.44 3.04 3.94

Real Estate 1.87 0.00 0.00 0.05

Investment and Operation (6.78) (0.26) 1.54 1.93

Retail 0.40 1.21 0.87 0.76

Overseas Business 1.19 2.42 2.94 3.00

Segment Asset ROA (after tax) (%)** 0.30 0.57 1.08 1.42

* {Segment Profits × (1−Standard Tax Rate)} / Average Segment Assets

** Net Income Attributable to ORIX Corporation / Average Segment Assets (total)

150

100

50

0

-100

(Billions of yen) (Billions of yen)7,000 2.1

6,000 1.8

5,000 1.5

4,000 1.2

3,000 0.9

2,000 0.6

1,000 0.3

0 0.0

(%)

09/3 10/3 11/3 12/3

Segment Assets/Segment Asset ROASegment Profits

� Corporate Financial Services � Maintenance Leasing � Real Estate� Investment and Operation � Retail � Overseas Business

� Corporate Financial Services � Maintenance Leasing � Real Estate� Investment and Operation � Retail � Overseas Business � Segment Asset ROA (after tax)

09/3 10/3 11/3 12/3


8

To Our Shareholders—A Message from CEO Yoshihiko Miyauchi

Attaining the Next Growth Stage: Advancing from Debt to Equity, and then on to Operations


9

Overview of Performance in Fiscal 2012Net income attributable to ORIX Corporation for fiscal 2012 (the fiscal year ended March 31, 2012) improved

28% compared with the previous fiscal year to ¥86.2 billion. This was 11% higher than our initial forecast of

¥77.5 billion.

Despite a year of prolonged uncertainty due to such factors as instability in Europe, ORIX positioned fiscal

2012 as period in which it would reconfirm its growth trajectory. While continuing to maintain a degree of pru-

dence, ORIX increasingly incorporated an aggressive stance toward ongoing business development.

The profit levels that we have generated to date still fall well short of our full potential. I am convinced, howev-

er, that strengthening and expanding our business with the aim of increasing the pace of “Finance + Services”

and embracing growth in emerging markets such as Asia is driving us to attain the next growth stage.

The ORIX Business ModelORIX Corporation was established in 1964 as Japan’s first fully fledged leasing company. Guided by the underlying

principle of self-reliance and the spirit to take on new challenges, we have continued to adopt a flexible approach

toward business development that extends beyond conventional leasing to expand into neighboring fields in the

search for new added value. As a result, ORIX remains active across a wide range of business fields including cor-

porate finance; automobiles; real estate; equity investment; life insurance; banking; and marine vessels and air-

craft. Outside of Japan, and in similar fashion to our domestic operations, we are engaging in activities across a

broad spectrum of business fields and geographic regions throughout Asia, the Middle East and North America. In

this manner, ORIX has established its diversified portfolio through a natural evolution and has grown to become a

company with the capability to connect each of its businesses into a larger network. Conscious of the impediment

that vertical barriers between businesses place on growth, we focus on fostering a culture that facilitates mutual

collaboration and the creation of synergistic effects. In adopting a multi-directional approach toward business

development, we have continued to acquire specialist expertise across a wide range of fields.

ORIX is currently engaged in a broad variety of businesses. The ORIX Group strives diligently to establish a firm

foothold and standing in a number of areas. However, the Group is not a multitude of independent businesses

such as a conglomerate. Each business seeks to develop cross-sectional ties in an effort to create value for each

business in addition to the ability to create a different, newer value. By promoting the management of various busi-

nesses as a single corporate entity, we are working through a business model that strives to deliver “Answers,

Custom Fit” that other companies are unable to emulate. This is what places us in a truly unique position.

Moving forward, ORIX will continue to pursue business opportunities in neighboring fields while further

enhancing our specialist expertise. At the same time, we will bolster collaboration between businesses within

the Group as a part of our effort to create new added value. In this manner, we will not only secure higher levels

of profitability, but also further diversify our business portfolio. This in turn will help secure increased stability par-

ticularly from a risk management perspective.

Business activities are never-ending and ORIX currently stands at a single point in its ongoing development.

With this in mind, we are motivated by the aspiration to continue to become a better company as we carry out

our day-to-day management. Taking these factors into consideration, I sense that ORIX is on track to put in

place a one-of-a-kind business model. Moving forward, we will continue to pursue this endeavor and to contin-

ue our ongoing evolution.

Future DirectionEconomic instability throughout Europe is expected to continue for several years. Despite the impact of this

instability, growth remains robust in emerging markets primarily in Asia. Also, buoyed further by full-fledged

reconstruction demand in Japan, we project relatively high rates of growth for the next few years.


In the aftermath of the financial crisis, finance markets have contracted, undergoing significant change.

During this period, we took steps to respond flexibly to this change, working to lower our debt ratio. Taking a

long-term look into the future, the finance industry will likely face increased regulation with little likelihood of a

return to former days. Given this context, ORIX cannot expect to return to its former state. Moving forward,

maintaining a low leverage ratio will become an increasingly essential requirement to business, which will in turn

place significant pressure on finding innovative ways to employ capital. At the same time, focusing solely on the

traditional finance functions of credit creation and lending operations is unlikely to generate higher growth. It will

become increasingly vital to pursue new types of businesses that optimally link finance with additional services.

Under these circumstances, we will look to accelerate the pace of our business flow from debt to equity and

then on to operations. We will increase profitability with the strategy of further developing our debt and lending

operations, and reinvigorating our investment activities. Then, we will capitalize on our expertise in operation

businesses.

Rather than withdraw from debt and lending operations, we will channel our energies toward the pursuit of

profitability. We will increasingly utilize ORIX Bank’s deposit base in our general debt and lending. In other lending

operations, we will pursue higher returns with the support of the specialist knowledge inherent throughout other

Group companies. We will also shift business flows from domestic to overseas operations and from finance lease

to maintenance lease transactions. Put simply, we will accelerate our efforts to both enter markets that exhibit

higher rates of growth and to deliver higher added value. Moreover, we will promote businesses that provide ser-

vices that draw on our expertise in accepting third party capital in the form of funds and joint investment.

Equity and investment activities are areas where we have both a track record and expertise such as domestic

and overseas private equity investment, in addition to ship and aircraft-related operations. We will continue to

focus on each of these areas while pursuing every possible opportunity for growth. Potential areas of investment

activity include private equity investments in Asia, business rehabilitation investment in Japan and finance busi-

ness-related investments in emerging markets.

The operation business requires a high degree of specialist expertise. We will use the expertise nurtured in our

debt and equity businesses to promote our own businesses. To date, ORIX has established a variety of businesses

such as equipment rental (ORIX Rentec Corporation), automobile leasing and car sharing (ORIX Auto Corporation)

and property management including hotels, Japanese inns, aquariums and golf courses (ORIX Real Estate

Corporation). Moving forward, we will continue to nurture new businesses while creating added value.

Taking into consideration the uncertainty that is expected to cloud the business environment for the foresee-

able future, we recognize the need to maintain a certain measure of caution, yet proceed with an aggressive

stance toward business development. In the fiscal year ending March 31, 2013, we will work to strengthen both

stability and profitability with the ultimate aim of raising our capabilities and potential as a corporate entity to a

higher level. Accordingly, in the current fiscal year, we will work toward achieving net income of ¥100 billion, a

year-on-year increase of 16%.

From a medium-term perspective, we target an ROE of 10%. We do not, however, believe that it is prudent to

set a specific time frame for achieving this single benchmark given the current dramatic fluctuations in our

“Finance + Services”

Debt Thoroughly pursue profitability in the debt and lending business

Equity Capture growth potential through equity and investment activity

Operations Capitalize on expertise to pursue own operations and create added value

To Our Shareholders—A Message from CEO Yoshihiko Miyauchi


business environment. Nonetheless, we have witnessed a steady improvement in ROE over recent years and

will continue with efforts to achieve the 10% target going forward.

Corporate GovernanceSince implementing an Advisory Board in 1997, ORIX has been progressive in its separation of the executive

and oversight functions, introduced an outside director system and shifted toward a company-with-committees

structure. These and other measures are aimed at enhancing management transparency and building a robust

corporate governance system.

In the context of its outside director system, all outside directors meet the specific conditions for director

independence as set forth by the Nominating Committee. Moreover, the Nominating, Audit and Compensation

committees are each comprised solely of outside directors.

ORIX has continued to proactively strengthen those functions aimed at monitoring management. By putting in

place a stringent mechanism of appropriate checks and balances, benefits accrue not only to management, but

also ORIX as a whole.

Shareholders ReturnsIn determining the amount of cash dividends per share for the fiscal year ended March 31, 2012, ORIX took into

consideration such factors as the almost 30% improvement in year-on-year earnings. With respect to the return

of profits to shareholders, we therefore declared an annual per-share dividend of ¥90, up ¥10 from the ¥80 paid

in fiscal 2011. Retained earnings will be utilized to realize steady growth from fiscal 2013.

ORIX’s management continually seeks to manage the Company with the aim of ensuring medium-to-long-

term soundness and achieving future growth. It is our hope that shareholders will follow ORIX’s growth with

a medium-to-long-term perspective.

Together with Stakeholders—Corporate Management that Allows People to Fulfill Their PotentialManagement recognizes the critical importance of people, goods and capital in the ongoing operations of any cor-

porate entity. As such, every effort is made to maximize the value and mix of these vital management resources.

Of these, enhancing the value of people is of the utmost importance in increasing corporate value. ORIX

maintains the concept of “Keep Mixed,” under which it seeks to create a workplace where all employees are

able to utilize their talents and expertise to the fullest possible extent, regardless of nationality, age, gender or

employment history. In addition, and with the cooperation of employees and a spirit to consistently take up new

challenges, we go about our daily tasks with the common goal of creating ongoing benefits for ORIX. This in

turn translates into benefits for society. Not only do we therefore strive for corporate growth in concert with each

and every employee, but also the growth of society. Looking ahead, we will continue to engage in activities that

deepen our sense of contribution to society and shareholders.

ORIX remains committed to satisfying the expectations of shareholders by further increasing corporate value.

July 2012

Yoshihiko Miyauchi

Director, Representative Executive Officer

Chairman and Chief Executive Officer


An Interview with COO Makoto Inoue

While adapting to an ever-changing business environment, we will actively transform our business model


Q: Please provide us with your overview of fiscal 2012.

Reflecting on the year as a whole

Fiscal 2012 (the fiscal year ended March 31, 2012) was a year

in which we implemented measures focusing mainly on

increasing the pace of “Finance + Services” while “Embracing

Growth in Asia.” Both in Japan and overseas, business condi-

tions were affected by various events and factors. Globally, the

debt crisis in Europe cast a significant shadow over economic

activity. In Japan, the fiscal year began in turmoil following the

Great East Japan Earthquake later recovering on the back of

reconstruction demand. Despite dramatic change in the busi-

ness environment, ORIX achieved a year-on-year increase of

28% in net income to ¥86.2 billion, well above its initial fore-

cast of ¥77.5 billion set at the beginning of the period.

Turning to our earnings by business segment, ORIX recorded

steady year-on-year improvements across all of its operations

with the exception of the Retail segment. Corporate Financial

Services and Maintenance Leasing, in particular, provided sub-

stantial contributions to earnings. From a segment asset per-

spective, total assets as of the end of the fiscal 2012 decreased

2% to ¥6.0 trillion. While continuing to streamline assets in the

Real Estate segment, we took steps to build up its portfolio with

new quality assets. As a result, segment asset ROA climbed

from 1.1% in fiscal 2011 to 1.4% on an after-tax basis.

Looking at our financial position, ORIX maintained its share

of long-term debt at the high level of 88%. As a part of our

efforts to further diversify funding sources, we issued first

straight bonds denominated in Korean Won and Thai Baht.

Results by Segment

In the Corporate Financial Services segment, we acquired the

shares of Kyuko-Lease Inc., which helped ensure firm trends in

revenues from direct financing leases, while fee income also

increased. Steps were also taken over the past few years to

rebuild relationships with certain customers who have defected

during the financial crisis. This has resulted in a steady growth

in our client base and an increase in transaction opportunities.

ORIX placed particular emphasis on providing its customers

with high level of expertise and service in the Maintenance

Leasing segment. This helped establish a solid platform for

stable earnings. Shortages in the supply of new vehicles due

mainly to the earthquake disaster put adverse affect on new

business volumes in the beginning of the fiscal 2012. With

recovery of new auto supply, new business volumes increased

and segment assets surpassed levels recorded in fiscal 2011.

In the Real Estate segment, efforts to streamline assets were

completed at a pace that exceeded initial plans. As a result, the

balance of Real Estate segment assets as of March 31, 2012

stood at ¥1,370 billion, well within the original target balance of

¥1,450 billion. While steadily cutting back the level of assets

held, ORIX continued to maintain stable yields together with low

vacancy rates. In our facilities operation business activities,

trends for each facility remained robust. In addition to complet-

ing business rehabilitation at Naruko Hotel (Japanese inn), we

successfully opened both the Kyoto Aquarium and Sumida

Aquarium and commenced operations at the ORIX Theater in

Osaka. These facilities are welcome additions to our existing

strong operating portfolio.

In the Investment and Operation segment, we recorded sta-

ble contributions to earnings from the loan servicing business

through collection and fee income. Turning to our investment-

related activities, we benefited from profits derived from

DAIKYO INCORPORATED, gains of sales of shares of Aozora

Bank, Ltd., while we also made new investments.

In the Retail segment, segment profits declined compared

with the previous fiscal year. This was largely attributable to the

write-down of our investment in Monex Group, Inc. and

despite steady trends in each of the life insurance and banking

business operations. Life insurance premiums contributed to

earnings on the back of an increase in the number of policies

in force. In addition to ongoing support from individual home

loan transactions, result in our banking business benefited

from contributions from corporate lending. Endeavoring to

establish a third pillar of earnings in its business, ORIX Bank

Corporation entered the card loan business in March 2012.

Initial results augur well for a bright future.

The underlying strength of our Overseas Business segment

in fiscal 2012 was derived from direct financing leases in Asia,


automobile and aircraft operating leases as well as fee income

and strong gains on sales of municipal bonds in the United

States. Despite decreases in the balance of municipal bonds

and loans receivable in the United States, segment assets

increased year on year. This mainly reflected new investments

in Asia, specifically China and Korea, the consolidation of an

automobile-related service company in India and local subsid-

iary lease asset growth.

Looking back on the fiscal year ended March 31, 2012, I am

confident that our performance was sound across each busi-

ness segment.

Q. What do you consider to be the key issues as you progress to the next stage of growth?

In the aftermath of the financial crisis, ORIX is placing consider-

able emphasis on lifting ROA by efficiently managing its assets,

while controlling its leverage ratio, we believe that this will lead

to further growth and achievement of our medium-term target

of 10% ROE. Critical to these efforts, however, is the need to

evolve our existing business model. At the same time, we must

increase profitability by providing added-value and promote the

replacement of assets that match with risks.

In the finance business for example, difficulties exist in laying

out a growth strategy for developed countries. For emerging

countries, however, we see considerable promise in such areas

as microfinance and consumer finance. I am confident that

numerous areas remain where ORIX can, on a global scale,

harness the financial expertise it has nurtured over many years.

20

15

0

10

5

(%)

2003 04 05 06 07 08 09 10 11 12

ROE

6.0

10.1

14.2

19.8

18.3

13.8

1.8

3.1 5.16.3

3

2

0

1

(%)ROA

2003 04 05 06 07 08 09 10 11 12

0.490.93

1.56

2.50 2.54

1.97

0.25

0.470.82

1.02

Recognizing the difficulties in pursuing a business line that

revolves solely around finance in Japan, ORIX has revised its

business model and its promoting a “Finance + Services”

approach. It is therefore imperative that we place additional

weight on the shift toward services. More importantly, it is vital

that we transform our business model to focus on services that

only ORIX can provide. Outside of Japan, we have adopted a

pioneering approach to build a leasing network that provides a

stable earnings platform. Despite our endeavors, we still lack

the ability to capture the dynamic demand present in emerging

markets. It is therefore vital that we set the bar high and take up

the challenge of establishing a “mini ORIX” that is able to pro-

vide diversified products and services in response to changing

business environment and customer needs in each country.

While investment opportunities abound, competition is

extremely fierce. It is critical that we thoroughly review each pro-

posal and aggressively pursue opportunities that offer good risk.

ORIX boasts inherent expertise across each of its business

activities. While honing this expertise as a matter of course, it is

important that we identify and draw out synergies to generate

value added.

Q. What are your performance targets for fiscal 2013? And, what specific measures do you plan to implement going forward?

In the fiscal year ending March 31, 2013, we are targeting a

year-on-year increase of 16% in net income to ¥100 billion.

In Japan, we will strengthen collaboration between the

An Interview with COO Makoto Inoue


8

4

2

6

0

(Times)Debt/Equity Ratio

2003 04 05 06 07 08 09 10 11 12

7.6 6.25.2 4.7

4.0 4.3 4.23.2 3.0 2.7

Corporate Financial Services and the Maintenance Leasing

segment. By putting in place an optimal mix that combines the

client base and solutions proposal capabilities of the Corporate

Financial Services segment with the high expertise of the

Maintenance Leasing business, we will focus on identifying

customer issues and addressing needs. Moreover, we plan to

ensure that new products, services and businesses translate

into increasingly solid relations with customers.

The Retail segment has grown and today accounts for 30%

of all segment assets. Moving forward, we will pursue growth

that ensures a stable earnings platform for the Group. ORIX

Life Insurance’s products continue to attract wide market

acclaim. With this in mind, we will work to develop increasingly

high quality products which will in turn provide the impetus for

scale growth. In our banking operations, we will promote inte-

grated management following the acquisition of all shares in

ORIX Credit Corporation in June 2012. Our goal in this area is

to strengthen our card loan business.

We will continue to streamline assets in the Real Estate seg-

ment. By improving the profitability of each property in our

facility operations activities which encompass hotels, Japanese

inns, aquariums and golf courses, we will establish a stable

earnings platform. As a part of our real estate development

and rental operations, we will adopt a joint investment and

fund approach toward third-party capital held to focus on the

provision of services. Our intentions are to shift increasingly

toward fee-based income.

In the Investment and Operation segment, we will pursue

investments in environment and energy-related fields both in

Japan and overseas. Striving to become an “integrator” that

delivers comprehensive energy services in Asia, we will also

work to capture growth in such renewable energy markets as

solar power in Japan. Looking ahead, we aim to shift the profit

structure of this segment over the medium term from one that

has been centered on servicing business in recent years to a

three-pronged approach that also includes the environment

and energy-related business and equity investment.

Turning our attention to horizons that extend beyond Japan,

in the Overseas Business segment we will seek to promote fur-

ther evolution of our local overseas leasing subsidiaries and

expand our activities in peripheral financial areas. From a new

investment perspective, we will focus our endeavors on such

countries as China, India and Indonesia. Taking full advantage

of our expertise in each of the aircraft and ship businesses, we

will ramp up both our proprietary investment and asset man-

agement activities. In the United States, we continue to wit-

ness progress in our “Finance + Services” endeavors. Drawing

on this progress, we will expand these efforts into other

regions including South America.

An operating environment that is in the throes of substantial

change offers numerous and varied opportunities. To date,

ORIX has consistently converted fluctuations in its operating

environment into steadfast growth. Moving forward, we will

continue to leverage and combine the collective expertise of

the Group to again secure growth irrespective of our business

environment. On a personal note, I intend to take the initiative

and help drive ORIX forward bringing to fruition the next growth

stage.

July 2012

Makoto Inoue

Director, Representative Executive Officer

President and Chief Operating Officer

Note: Adjusted basis (Short- and Long-term Debt (excluding Deposits) / ORIX Corporation

Shareholder’s Equity): This ratio is calculated by long-term liabilities excluding liabilities in

line with securitized transactions (ABS, CMBS), and ORIX Corporation Shareholder’s

Equity which excludes the effect on retained earnings of applying the new accounting

standards for the consolidation of VIEs effective April 1, 2010. For a presentation of the

most directly comparable financial measures calculated and presented in accordance

with U.S. GAAP and a quantitative reconciliation of the U.S. GAAP and Non-GAAP

financial measures, please see pages 66 and 67.


Business Segments Main Business Group Companies Number of Employees Segment Profit/Base Profit Segment Assets/Segment Asset ROA Segment Performance

Corporate Financial Services

Lending, leasing, commission busi-

ness for the sale of financial products

P ORIX Corporation

P NS Lease Co., Ltd.

2,143 Base profit trend has been stable primarily due to leasing and

installment loan revenues. The segment experienced a loss

for the fiscal year ended March 2010 due to large provisions,

however, the segment profit has been increasing as provi-

sions have declined. ROA continues to grow due to an

increase in profit raised without using the assets, such as fee

income.

Maintenance Leasing

Automobile leasing and rentals, car

sharing, and precision measuring

equipment and IT-related equipment

rentals and leasing

P ORIX Auto Corporation

P ORIX Rentec Corporation

3,000 Segment profit is stable due to leasing and rental revenues,

as well as service revenues such as maintenance. Stable level

of high ROA has been maintained.

Real Estate Real estate development, rentals and

financing, facility operation, REIT

asset management, real estate

investment and advisory services

P ORIX Corporation

P ORIX Real Estate Corporation

P ORIX Golf Management LLC

P ORIX Living Corporation

P ORIX Asset Management

Corporation

P ORIX Real Estate Investment

Advisors Corporation

4,079 The segment has steadily reduced the assets. Even though

segment profit is minimal due to the effects of impairments

and provisions, leasing revenues from real estate under oper-

ating lease and revenues from operating facilities are steadily

increasing.

Investment and Operation

Loan servicing, principal investment,

venture capital and environment and

energy-related business

P ORIX Corporation

P ORIX Asset Management and

Loan Services Corporation

P ORIX Capital Corporation

P ORIX Investment Corporation

P ORIX Eco Services Corporation

P ORIX Environmental Resources

Management Corporation

922 Although the segment experienced a loss due to a loss from

equity method affiliate in the fiscal year ended March 2010,

ROA continues to grow due to stable profits mainly servicer

revenues.

Retail Life insurance, banking and card

loan business

P ORIX Life Insurance Corporation

P ORIX Bank Corporation

P ORIX Credit Corporation

1,258 Segment profit increased due to gains from sales of equities

of its card loan and security brokerage business in the fiscal

year ended March 2010. Segment profit decreased due to

write-down of Monex Group, Inc. securities in the fiscal year

ended March 2012. Excluding these effects, life insurance

and banking business have both recorded stable base profits.

Overseas Business Leasing, lending, investment in

bonds, investment banking, and

ship- and aircraft-related operations

P ORIX CorporationP ORIX USA CorporationP ORIX Asia LimitedP ORIX Leasing Malaysia BerhadP PT. ORIX Indonesia FinanceP ORIX Taiwan CorporationP ORIX Australia Corporation LimitedP ORIX Aviation Systems LimitedP ORIX (China) Investment Co., Ltd.

4,860 Segment profit is stable due to profit from new investments and

stable profit contribution from local subsidiaries in Asia, and

robust trend in fee income, as well as gains from sales of munici-

pal bonds in the fiscal year ended March 2012, in the United

States. Stable level of high ROA has been maintained.

Segment at a Glance


Business Segments Main Business Group Companies Number of Employees Segment Profit/Base Profit Segment Assets/Segment Asset ROA Segment Performance


Lending, leasing, commission busi-

ness for the sale of financial products

P ORIX Corporation

P NS Lease Co., Ltd.

2,143 Base profit trend has been stable primarily due to leasing and

installment loan revenues. The segment experienced a loss

for the fiscal year ended March 2010 due to large provisions,

however, the segment profit has been increasing as provi-

sions have declined. ROA continues to grow due to an

increase in profit raised without using the assets, such as fee

income.

Maintenance Leasing

Automobile leasing and rentals, car

sharing, and precision measuring

equipment and IT-related equipment

rentals and leasing

P ORIX Auto Corporation

P ORIX Rentec Corporation

3,000 Segment profit is stable due to leasing and rental revenues,

as well as service revenues such as maintenance. Stable level

of high ROA has been maintained.

Real Estate Real estate development, rentals and

financing, facility operation, REIT

asset management, real estate

investment and advisory services

P ORIX Corporation

P ORIX Real Estate Corporation

P ORIX Golf Management LLC

P ORIX Living Corporation

P ORIX Asset Management

Corporation

P ORIX Real Estate Investment

Advisors Corporation

4,079 The segment has steadily reduced the assets. Even though

segment profit is minimal due to the effects of impairments

and provisions, leasing revenues from real estate under oper-

ating lease and revenues from operating facilities are steadily

increasing.


Loan servicing, principal investment,

venture capital and environment and

energy-related business

P ORIX Corporation

P ORIX Asset Management and

Loan Services Corporation

P ORIX Capital Corporation

P ORIX Investment Corporation

P ORIX Eco Services Corporation

P ORIX Environmental Resources

Management Corporation

922 Although the segment experienced a loss due to a loss from

equity method affiliate in the fiscal year ended March 2010,

ROA continues to grow due to stable profits mainly servicer

revenues.

Retail Life insurance, banking and card

loan business

P ORIX Life Insurance Corporation

P ORIX Bank Corporation

P ORIX Credit Corporation

1,258 Segment profit increased due to gains from sales of equities

of its card loan and security brokerage business in the fiscal

year ended March 2010. Segment profit decreased due to

write-down of Monex Group, Inc. securities in the fiscal year

ended March 2012. Excluding these effects, life insurance

and banking business have both recorded stable base profits.

Overseas Business Leasing, lending, investment in

bonds, investment banking, and

ship- and aircraft-related operations

P ORIX CorporationP ORIX USA CorporationP ORIX Asia LimitedP ORIX Leasing Malaysia BerhadP PT. ORIX Indonesia FinanceP ORIX Taiwan CorporationP ORIX Australia Corporation LimitedP ORIX Aviation Systems LimitedP ORIX (China) Investment Co., Ltd.

4,860 Segment profit is stable due to profit from new investments and

stable profit contribution from local subsidiaries in Asia, and

robust trend in fee income, as well as gains from sales of munici-

pal bonds in the fiscal year ended March 2012, in the United

States. Stable level of high ROA has been maintained.

1,200

800

0

-400

3

2

400 1

0

-1

(Billions of yen) (%)

10/3 11/3 12/3

30

20

0

-20

10

-10

(Billions of yen)

10/3 11/3 12/3� Segment Profit � Base Profit � Segment Assets � Segment Asset ROA

600

500

0

6

5

100 1

200 2

300 3

400 4

0


10/3 11/3 12/3

40

30

0

20

10

(Billions of yen)


2,000

1,500

0

0.4

0.3

500 0.1

1,000 0.2

0.0


10/3 11/3 12/3

20

15

0

10

5

(Billions of yen)


600

400

-200

3

2

0 0

200 1

-1


10/3 11/3 12/3

30

20

-10

10

0

(Billions of yen)


2,000

1,500

0

2.0

1.5

500 0.5

1,000 1.0

0.0


10/3 11/3 12/3

40

30

0

20

10

(Billions of yen)


1,000

800

0

5

4

200 1

600 3

0


10/3 11/3 12/3

50

30

40

0

20

10

(Billions of yen)

10/3 11/3 12/3

400 2

� Segment Profit � Base Profit � Segment Assets � Segment Asset ROA

Base profit=Segment profit-Capital gains-(Provisions+Impairments) For more information, please see pages 66 and 67.


Growing while Constantly Creating New Value and Evolving

In November 2011, ORIX reached an agreement to promote an alli-

ance with Kyudenko Corporation as a strategic partner and subscribe

to the shares issued by Kyuko-Lease Inc., a wholly owned subsidiary

of Kyudenko. In January 2012, ORIX acquired 90% of Kyuko-Lease’s

outstanding shares and is continuing to deepen its relationship with

Kyudenko, who retained a 10% share in Kyuko-Lease.

Since its establishment in 1988 as a Kyudenko Group company,

Kyuko-Lease has been providing services centered on equipment and

automobile leasing mainly in Kyushu region (the third largest island of

Japan) where the company has built a stable customer base. Kyuko-

Lease also maintains strong business ties with the Kyudenko Group,

the Kyushu Electric Power Group and governmental bodies in the

Kyushu region.

Since its establishment in 1944, Kyudenko has diversified its busi-

ness from electric and equipment construction to include environment

and energy-related and information and communication-related in addi-

tion to disaster prevention systems, wind and solar power generation.

[Corporate Financial Services Segment]

Introducing Kyuko-Lease Inc. into the Group and building a partnership with Kyudenko Corporation—Expanding Business Centered on Environment and Energy Fields—

Kyuko-Lease is working to provide solutions that take full advantage of ORIX’s high value-added financial services to

address the diverse needs of our customers as well as Kyudenko’s. At the same time, the company is delivering val-

ue-added products such as automobile maintenance leasing, telematics services, precision measuring equipment

and PC rental to further upgrade, expand and strengthen its services. Through these means, Kyuko-Lease is deep-

ening its already robust ties with customers.

In addition, ORIX and Kyuko-Lease are placing considerable emphasis on creating new business opportunities

particularly in environment and energy fields by combining the financial service know-how of ORIX with the business

base and technological capabilities of Kyudenko. In specific terms, efforts are being channeled toward mega solar,

solar and wind power generation, ESCO*, water, waste processing and recycling. Moreover, greater weight will also

be placed in the future on expanding business activities beyond the Kyushu region in cooperation with Kyudenko.

* ESCO (Energy Service Company) business provides comprehensive services pertaining to energy efficiency.

Kazuo GotoRepresentative Director and PresidentKyuko-Lease Inc.

Guided by a medium-term management strategy that entails increasing the pace of “Finance + Services” and embracing growth in emerging markets such as Asia, ORIX is progressing to the next growth stage by creating new value.

Increasing the Pace of “Finance + Services”

In light of structural changes to the finance-sector busi-

ness environment, the ability to provide high value-added

services is becoming an increasingly vital requirement to

boost profitability in the existing finance market. ORIX

already maintains a proven track record in such high val-

ue-added businesses as maintenance leasing and loan

servicing. Moving forward, the Company will strive to

enter new area of business activity and provide services

that meet the diverse needs of customers by capitalizing

its broad client base in Japan and overseas and its

knowledge and expertise.

Embracing Growth in Emerging Markets such as Asia

Taking into consideration the remarkable paces of expan-

sion enjoyed by emerging countries, ongoing efforts to

develop business in such countries including Asia are

essential to corporate growth. Since opening its first over-

seas office in Hong Kong in 1971, ORIX has continued to

build a network of local subsidiaries as well as relationships

with leading local partners in emerging markets focusing

mainly on Asia. Leveraging its investment track record and

established client base, the Company will strive to further

expand its overseas business and capture a substantial

share of this regional growth.

Segment Topics


Growing while Constantly Creating New Value and Evolving

Expanding the card loan business through integrated manage-

ment with ORIX Credit Corporation

ORIX Corporation, ORIX Bank’s parent company, fully consolidated

ORIX Credit Corporation in June 2012. ORIX Credit maintains an edge

over other companies based on its 25 years of experience managing

the ORIX VIP Loan Card. ORIX is confident that by integrating the

efforts of ORIX Bank and ORIX Credit, the Group as a whole is better

positioned to capture new demand in the consumer finance market

and to expand its card loan business.

Endeavoring to become a more profitable bank

Breaking free from the traditional mindset of the banking industry, ORIX

Bank aspires to address customer needs with a growing spirit of inno-

vation. In addition to providing tailor-made housing loans that match

the life plans of individual borrowers as well as corporate loans that

deliver solutions to key management issues, ORIX Bank will channel its

energies toward building a third pillar by offering the card loan business

that match individual customer needs in terms of interest rates and

lending limits. Through these endeavors, ORIX Bank will strive to

become a unique and highly profitable bank.

ORIX Bank began as ORIX Group’s trust bank in 1998. In the ensuing

period, the bank has continued to develop its business by providing

appealing financial products and services while ensuring that infra-

structure costs are held to an absolute minimum. As a bank that does

not maintain an office network, ORIX Bank has focused on fields in

which it excels as opposed to the provision of comprehensive services.

In recent years, mail-order and Internet-based time deposit, housing

loans and corporate lending transactions have taken up a growing pro-

portion of overall banking activities. With the balance of deposits hitting

¥1 trillion in March 2011, the decision was made to change the com-

pany’s name to bring it more in line with the actual nature of activities

and to build greater affinity with its wide range of customers. As a

result, ORIX Trust and Banking Corporation changed its name to ORIX

Bank Corporation.

Entering the card loan business in March 2012

ORIX Bank believes that along with housing loans, unsecured loans to

individual customers are important sources of funds supporting the

daily lives of consumers. As a result, the Bank began offering “ORIX

Bank Card Loans” in March 2012. Moving forward, the Bank will strive

to expand this business as one of its core businesses alongside hous-

ing loans and corporate loans. The introduction of regulations placing

limits on aggregate lending amounts, caused the consumer finance

market to contract. However, the reimbursement claims for overpaid

interest are calming and the decrease in outstanding loan balances are

bottoming out, and ORIX Bank believes there to be significant room for

recovery given the substantial contraction of the market.

Akio UshioPresidentORIX Bank Corporation

[Retail Segment]

Aiming to combine the collective Group strength and expand the Bank’s card loan activities


Segment Topics

In its Real Estate segment, ORIX maintains considerable specialist

expertise in real estate development, rental, and finance. Drawing on

these specialist skills, the Company is expanding its business into the

high value-added asset management and facilities operation fields. In

this context, ORIX is looking to rebuild its earnings base from its tangi-

ble assets (real estate business linked closely with market conditions)

to intangible assets (facilities operation business by capitalizing its spe-

cialist expertise and know-how). In specific terms, ORIX Real Estate

Corporation is active in the operation of a variety of facilities. Making

the most of this accumulated operating know-how, steps are being

taken to open new facilities. On this basis, the business is expected to

expand, providing a stable earnings base.

Japanese Inns: Operation and Business Rehabilitation Know-How Beginning with the Suginoi Hotel in Oita Prefecture in September 2002, ORIX has to date provided support activities in the reorganization and rehabilitation of five well-established and renowned Japanese inns across the country. In addi-tion to putting forward wide-ranging operating and marketing initiatives, ORIX has provided management advice while overseeing new capital investment. In each case, the inn has been transformed into a facility with increased customer appeal. ORIX began providing support to the Naruko Hotel in Miyagi Prefecture from November 2006. On completing its support activities in October 2011, the hotel was re-acquired by its former management team. More recently, and after providing support from September 2011, the Tateshina Grand Hotel Taki-no-yu reopened in April 2012. While retaining its ambiance as a traditional hot-spring inn, new initiatives including a lobby fireplace, large spa facility with views of the local waterfall, and a buffet restaurant featuring local delights, all provide additional guest appeal.

Dome and Theater: Hall Operation Know-HowORIX commenced operating management of the Kyocera Dome Osaka in Osaka Prefecture from September 2006. This facility not only serves as the home ground for the ORIX Buffaloes professional baseball team, but also as a venue for concerts, exhibitions, fairs as well as sporting and other events. In April 2012, the old Osaka Welfare Pension Great Hall was completely renewed and opened as ORIX Theater. Employing the latest in audio and lighting equipment, ORIX Theater is used for a myriad of purposes including popular, rock and classical concerts as well as musicals, operas and theatrical shows.

Aquariums: Exhibition and Attraction Know-HowORIX has operated the Enoshima Aquarium, a PFI*1 with the Kanagawa Prefectural Government, since April 2004. The aquarium features a large tank that reproduces the environment of the Sagami Bay for an 8,000-strong school of sar-dines. A popular feature of the aquarium is its night tours, which allow visitors to view marine life at night. In March 2012, the Kyoto Aquarium in Kyoto Prefecture opened as Japan’s first*2 large-scale inland aquarium. The aquarium is made up of nine zones that recreate the connection of life from the source of Kyoto’s rivers to the sea. Kyoto Aquarium is designed to cater to the interest of a wide range of customers and aspires to be an “edutainment” *3 oriented facility where visitors can learn about nature and the local ecosystem while having fun in Kyoto. In May 2012, the Sumida Aquarium opened in Tokyo. Located in an urban area, the facility is open until 9:00 in the evening to cater to office workers who wish to visit after work.

*1 PFI: Private Finance Initiative—a funding method for major public-sector capital investments where private firms are contracted to complete and manage the project utilizing private-sector management skills and technological capabilities.

*2 Source: ORIX Real Estate. A large-scale inland aquarium is defined as an aquarium that is 50km from the coast with a total floor space of more than 10,000 m2.

*3 Edutainment is a word that combines “education” and “entertainment.” It has become a popular expression in recent years for learn-ing while having fun at museums, art galleries and similar facilities.

Tateshina Grand Hotel Taki-no-yu

ORIX Theater

[Real Estate Segment]

Leveraging expertise to expand the facilities operation business

Located inside TOKYO SKY TREE TOWN®, the Sumida Aquarium is home to Japan’s largest indoor open pool tank.

This tank allows visitors to view up close penguins and fur seals. The Tokyo Main Tank reproduces the seas sur-

rounding the Ogasawara Islands, a World Natural Heritage Site, letting visitors experience the beauty of the islands

1,000km away from Tokyo. The aquarium employs an artificial seawater production system developed by TAISEI

CORPORATION. Following in the footsteps of the Kyoto Aquarium, also operated by ORIX, this is the second facility

in Japan to apply this system for all tank water (excluding freshwater tanks). In addition to reducing inland operating

costs, this system eliminates the need for seawater which in turn helps to reduce CO2 emissions associated with

transportation.

Masahiko TaumiDirector Sumida Aquarium

Kyoto Aquarium


[Overseas Business Segment]

Striving to provide new products and services in a growing worldBased on the principle of “Localization and Partnership,” ORIX’s Overseas Business segment has expanded its leasing-based business globally

through partnerships with leading local business partners, and has created a diverse client base. Through this platform, ORIX strives to provide new

products and services that meet the diverse needs of its customers, especially those in emerging markets with a rapidly changing business environ-

ment.

OLM’s strategy in pursuing new businesses is principally predicated

upon leveraging and tapping synergies from the business platform we

have established over the years through the provision of various prod-

ucts and services. As the needs of our customers progressively change

in line with and/or in response to business maturation, new business

trends, and the country’s economic development, we will look to the

further evolution of our existing suite of products and services as well as

the development of new ones to meet these changing needs. The

development of new product and service offerings are underpinned by

our long experience and familiarity with our customers’ businesses and

industries in addition to our knowledge of the local markets.

As an example, our MNC and large corporation clients have, as a

result of the outsourcing business trend, increasingly embraced the

maintenance leasing of movable assets such as automobiles and IT

Malaysia

Supporting capital investment nationwide and actively seeking new businesses

Lim Beng ChorManaging Director & CEO, ORIX Leasing Malaysia Berhad (OLM)

Joined OLM in 1979. Managing Director of OLM since 2003.

equipment. As such companies, in an extension of this trend, pursue

an asset-light strategy of maintaining only core assets such as produc-

tion plants and machinery while seeking to divest non-core assets,

principally land and buildings, we see an opportunity to venture into

the new, but in a way related, business area of industrial real estate

investment.

Additionally, as OLM has long experience and knowledge of palm oil

sector accumulated through years of supporting capital investments

therein, we see a good platform for venturing into oil palm cultivation

ourselves as a new business activity. And with the Malaysian govern-

ment’s strong promotion of biomass principally palm, green technology

and renewable energy, there are also new business opportunities for

financing capital investments as well as investing in projects like green

palm oil milling and solar photovoltaic electricity generation.

ORIX Leasing Malaysia Berhad (OLM)

OLM was established in 1973 and is a pioneer in the asset financing and leasing industry in Malaysia. Beginning with finance leasing and a focus on the small and medium-sized enterprise (SME) sector, OLM offers a range of corporate financial services centered on hire-purchase and finance leasing of a multitude of equipment, as well as automobile and IT equipment maintenance leasing to a wide range of customers from local SMEs to large corporations and multi-national corporations (MNC) in industries and businesses spanning almost the entire spectrum of the Malaysian economy. Presently, OLM operates the largest leasing network in the country, with 15 branches nationwide and a staff force of over 650 employees.

Singapore

Embrace regional growth as a finance hub in the ASEAN region

Joanne LiauManaging Director, ORIX Leasing Singapore Limited (OLS)

Joined OLS in 2004. Managing Director of OLS since 2007.

ORIX Leasing Singapore Limited (OLS)

OLS was established in 1972. Today, OLS’s activities include leasing, hire-purchase, lending, and a vendor financing program. OLS has been able to operate successfully, by focusing on its niche activities while offering financial solutions to SMEs. It is one of the leading non-bank provid-ers of financing for SMEs in Singapore and our customers are involved in such varied and diverse industries as construction, logistics, manufac-turing, services and retail, among others.


With an eye toward expanding ORIX’s operations in Taiwan, OTC

established its Corporate Finance Department in 2001 as a means for

proactive involvement in project finance to help listed Taiwanese com-

panies expand into mainland China. Since then, OTC entered into the

NPL business through a joint venture with an investment bank in

October 2002 in response to government policy aimed at decreasing

the banking sector’s NPL ratio, culminating in 2004 with the establish-

ment of OAMC as a separate entity to handle this business. Today,

OAMC is a top-tier asset management company in Taiwan, having

invested a total of USD 3 billion in NPL.

In order to differentiate itself from other local and overseas asset

management companies in Taiwan, OAMC also looks beyond the NPL

business to new and attractive business opportunities.

OAMC is now constructing a “J-T-C” platform, integrating ORIX’s

expertise and networks in Taiwan, providing Taiwanese companies

with financial support and services to enter into the prosperous main-

land China market. In addition, OAMC continues to focus on its advi-

sory business to help Japanese companies enter the Taiwanese

market. Going forward, OAMC will begin exploring private equity

investments and ways to expand its fee income.

Taiwan

Creating a “J-T-C”* platform to support customers’ entrance into Taiwan and Mainland China(*J-T-C: Japan-Taiwan-China)

Segment Topics

ORIX Taiwan Asset Management Company (OAMC)

ORIX Taiwan Asset Management Company (OAMC) was established in 2004 and focuses on corporate finance, non-performing loans (“NPL”), real estate, and other investment banking businesses. ORIX began operations in Taiwan in 1982, and currently has three companies. In addition to OAMC, ORIX Taiwan Corporation (OTC) provides equipment leasing and ORIX Auto Leasing Taiwan Corporation (OALT) provides the auto leasing.

Algol LeePresident, ORIX Taiwan Asset Management Company (OAMC)

Joined OTC in 2001. Appointed Head of the Corporate Finance Department and NPL Department in 2003. President of OAMC since 2004.

Algol Lee (center), Ryoji Nishimura (left, OAMC), Alex Chen (right, OAMC)

Singapore is a small but open, competitive and mature market. The market

for financing activities is dominated by banks. In order to thrive and grow in

this extremely competitive market, constant and radical changes are need-

ed to restructure and transform existing OLS businesses.

The ASEAN region with its relatively young markets, large population

and economic potential presents tremendous business opportunities

and potential for growth. It is a generally accepted fact that with the

economic problems in the United States and Europe, Asia and ASEAN

will increasingly play a major role and contribute more significantly

towards global trade and economic growth. As ORIX’s finance hub in

the ASEAN region, OLS is in an ideal position to capture new opportu-

nities including the development of new products and investments

both in finance and non-finance related areas. Opportunities exist in

the ORIX’s existing markets in ASEAN as well as new markets such as

Vietnam and Myanmar.

We believe that with the ORIX’s core competence, vast network, and

strong knowledge of its customers’ businesses, OLS can be the cata-

lyst to tap the numerous business opportunities and growth potential

that ASEAN has to offer. This business transformation will place OLS in

good stead as a preferred partner for SMEs in ASEAN in providing

solutions for financing and equity investment, in addition to offering a

platform for business alliances, investments and joint ventures in

ASEAN.


The Saudi Arabian financial market is gradually opening, but it takes

time to fully understand the market. One characteristic is the difficulty

in processing non-performing loans. At SOLC we have accumulated

credit screening know-how, allowing us to minimize non-performing

loans, giving us a competitive advantage.

Saudi Arabia has been relatively unscathed by the financial crisis and

its economy has grown strongly in 2011 with a real GDP growth of 7%

with a projected growth rate of 5% for the next few years. The

Kingdom is actively investing in infrastructure such as universities and

hospitals, increasing construction-related leasing demand. The govern-

ment is promoting the creation of employment in sectors other than

the oil industry and the creation of SMEs, increasing the expectations

of leasing companies as financiers.

Last year, ORIX introduced a Chinese heavy equipment manufacturer

to SOLC and we successfully structured and executed our first syndi-

cate lease. Chinese companies are increasing their presence in Saudi

Saudi Arabia

Expand as a financial solution provider in the Middle East rooted in the Islamic Region

Shaheen AminGeneral Manager, Saudi ORIX Leasing Company (SOLC)

Joined ORIX Leasing Pakistan (OLP) in 1986, transferred to Oman in 1993. Involved in the establishment of SOLC in 1999. General Manager of SOLC since 2001.

Arabia, and SOLC arranged a syndicate with a local financial institution

to break into a market segment that was previously not available. We

want to continue this type of cooperation with ORIX Tokyo in the future.

Our funding is primarily borrowings from financial institutions. Going

forward, we are engaged in the process of issuing our first SUKUK

(Islamic bonds) which will be listed on Saudi stock market and will help

to diversify our funding sources.

Saudi Arabia is the largest market in the Middle East and we believe

that it holds opportunities for new businesses. Our strategy is to take

full advantage of the growing economy by increasing SOLC’s footprint

by leveraging its market knowledge and strong shareholder relation-

ships. Currently we are looking beyond equipment leasing to attractive

areas such as aircraft and ship finance, and truck operating leases.

Looking ahead, our aim is to become a “mini ORIX”, by further evolving

our position as a financial solution provider of ORIX Group in the

Middle East.

Saudi ORIX Leasing Company (SOLC)

SOLC was incorporated in 2001 as the first leasing company in Kingdom of Saudi Arabia with investment from the IFC (International Finance Corporation, a member of the World Bank Group) and licensing by the Saudi Arabian Monetary Agency (SAMA). The Saudi Investment Bank (SAIB) and Trade Development & Investment Group, Ltd. (a Saudi private investment group) also participated in our establishment. In 2009, IFC sold their stake to SAIB after seeing SOLC’s growth as a leasing company after a period of eight years. ORIX Group currently has 29% share-holding in SOLC. SOLC is focusing on direct financing leases including factory machinery, automobiles, transportation equipment, construction equipment, office equipment, and real estate. In Saudi Arabia, there are only two licensed companies including SOLC, however there are many captives and finance companies not licensed by SAMA.

ORIX’s History in the MENA* and Central Asia *Middle East and North Africa

ORIX established ORIX Leasing Pakistan Limited (OLP) in 1986 with the view to establishing a foothold in the Islamic region. Thereafter, OLP

established Oman ORIX Leasing Company SAOG in 1994 with IFC, a lending partner of OLP. This was followed by the joint establishment of

ORIX Leasing Egypt SAE in 1997 and Saudi ORIX Leasing Company in 2001. In 2002, ORIX and OLP joined forces with a leading local firm to

establish MAF ORIX Finance PJSC in the United Arab Emirates. In 2005 ORIX invested in SK Leasing JSC, a leasing company in Kazakhstan.

Currently, ORIX is operating in six countries of the MENA and Central Asia.


Characteristic of the Segment —Group Platform—This segment is organized to gather information

such as successful customer examples through

its nationwide sales network and share them

with each Group company in order to quickly

provide solutions to customer needs. In addi-

tion, this segment has a special team that

works in conjunction with the Overseas Busi-

ness segment to respond to SME customer

needs when expanding overseas.

We implement Group Regional Represen-

tatives across six major areas of the country

(excluding Tokyo and Kanto area) in order to

strengthen the cross-function of the sales

framework of ORIX Group. We can respond

to client needs on a more sophisticated level

by improving Group strength.

Segment Results Billions of yen

2010/3 2011/3 2012/3

Segment Revenues 84.2 79.3 72.4

Segment Profits (19.5) 10.0 21.5

Segment Assets 1,140.3 968.3 898.8

Segment Asset ROA (%) (0.9) 0.6 1.4


Overview of Operation

The Corporate Financial Services segment has its origin in the leasing business developed at the time of ORIX’s establishment

in 1964, and even today this segment serves as the foundation for the entire ORIX Group’s sales activities.

Operating through a nationwide network, ORIX provides capital through loans and leasing for capital investment and other

needs to its core customer base of domestic small and medium-sized enterprises (SMEs). In order to maximize synergies, the

Corporate Financial Services segment functions as the central point of contact for the entire ORIX Group in responding to

needs of other segments, including business succession and overseas business development.

In addition to lending and leasing, this segment serves as a specialist department that engages in commercial facility devel-

opment and rental as well as construction equipment business. By promoting cross-functional tie ups with domestic and over-

seas business units, this segment promptly provides services backed by expertise to its clients nationwide.

Number of offices in each area1 Sapporo 2 Sendai

3 Tokyo, Kanto area

4 Nagoya 5 Osaka 6 Chugoku 7 Fukuoka

54 76 431 232 139 97 193

Broad Client Base

Ranging from Domestic

and Overseas SME to

Large Corporations

Answers, Custom Fit

Maintenance

Leasing

Retail

Real Estate

Investment

and

Operation

Corporate

Financial

Services

Needs

Solution

Proposal

Segment PerformanceSegment revenues decreased 9% to ¥72.4 billion compared with

¥79.3 billion during the previous fiscal year. Despite contributions

from the acquisition of Kyuko-Lease Inc. and solid trends in direct

financing lease revenues, this year-on-year downturn was largely

attributable to the drop in installment loan revenues, which in turn

reflect the decline in average balances of installment loans resulting

from ongoing selective new loan origination.

Segment expenses declined compared with the previous fiscal

year. This was mainly due to declines in the provision for doubtful

receivables and probable loan losses as well as interest expense.

Segment profits increased 115% to ¥21.5 billion compared with

¥10.0 billion in the previous fiscal year.

Segment assets contracted 7% compared with March 31, 2011

to ¥898.8 billion. Despite an increase in investment in direct financ-

ing leases, this was primarily the result of a decrease in the balance

of installment loans.

Segment Overview


2

3456

7

1


Operating EnvironmentWhile the business environment for domestic SMEs, the segment’s core client base, continued to reflect the direct and indirect effects of the Great East Japan Earthquake including plant and equipment dam-age as well as low production levels due to rolling blackouts, there were indications of a modest recovery during the fiscal year under review. An increase in capital expenditure was particularly obvious in the Tohoku area. Buoyed by such factors as firm personal consump-tion and burgeoning reconstruction demand, initial signs of positive turnaround in economic conditions especially in disaster-stricken areas are beginning to emerge. In contrast, the prolonged debt crisis in Europe, which continues to slow the pace of global economic growth, coupled with persistent appreciation in the value of the yen, is casting a shadow over the busi-ness environment. Notwithstanding little or no change in the number of corporate bankruptcies from year to year, there are concerns that as the positive effects of various policy initiatives including those under the SME Financing Facilitation Act come to an end, a considerable weight will again be placed on the results and recovery of the corporate sector.

2011Jun. 2 Expansion of Contractor Guarantee Factoring Service

Guarantee factoring is a service where support providers guarantee subcontractor accounts receivable. Under this service, ORIX, upon screening the prime contractor, guar-antees 100% of credit obligations such as construction expenses and accounts receivable of the prime contractor held by clients such as subcontractors and materials sup-pliers. ORIX will expand this service nationwide and increased the maximum underwriting amount from 30 mil-lion yen to 200 million yen.

Jul. 7 First Alliance with Bank for Contractor Guarantee Factoring ServiceThrough an alliance with Okayama Prefecture-based Tomato Bank, Ltd., ORIX aims to further expand the ser-vice as well as cultivate new clients and increase orders. ORIX has continued to form alliances with The Tohoku Bank, Ltd., The Bank of Iwate, Ltd., The Kiyo Bank, Ltd., and The Nishi-Nippon City Bank, Ltd.

Sep. 16 Alliance with Kanto-Shinetsu Federation of CPTAs Cooperative AssociationThe alliance enables approximately 6,800 certified tax accountants affiliated with these associations to recom-mend defined benefit corporate pension plans utilizing the Kanto-Shinetsu Federation of CPTAs Cooperative Association Corporate Pension Plan Fund to their SME cli-ents. Going forward, ORIX and the Federation will continue to provide high value-added services that address SME cli-ents’ pension issues and facilitate the implementation of employee welfare programs.

Oct. 18 Alliance with Radishbo-ya Co., Ltd. in Financial Services for Agricultural ProducersFinancial services by ORIX to agricultural producers include leases, rental services and hire purchase for introducing agricultural machinery and equipment, plastic greenhouses and other facilities to agricultural producers allied with Radishbo-ya Co., Ltd., enabling them to hold down initial costs of the machinery and equipment, thereby smoothing their costs.

Nov. 15 Announcement Regarding Subscription for Shares of Kyuko-Lease Inc. —Building a Partnership with Kyudenko Corporation—Please see page 18 of this Annual Report for details.

2012Feb. 17 Alliance with IIC Partners CO., LTD. for Corporate Pension

Business ORIX and IIC Partners CO., LTD. have formed a business alliance concerning ORIX’s corporate pension operation outsourcing service and IICP’s pension fund asset manage-ment consulting service. By complementing one another’s field of specialization, the two companies aim to expand the range of services provided to customers.

Operating StrategySales personnel in the Corporate Financial Services segment develop and deliver optimal solutions based on a deep understanding of their customers including their specific needs and management issues, gained through day-to-day transactions. Sales personnel are also sup-ported where necessary by team efforts centered on the ORIX Group’s high levels of expertise. As a sales platform for the Group, the Corporate Financial Services segment will continue to uncover new business opportunities in response to client needs while accelerating the pace of its “Finance + Services” strategy. To this end, the segment will leverage the Group’s high level of expertise built on the know-how accumulated through automobile and rental business diversification, the provision of credit and servicing functions, and the competitive life insurance operation. In order to address those mounting issues and needs that have arisen from customers’ efforts to expand overseas in recent years, the Corporate Financial Services segment is engaging in offshore market-ing, cultivating new sales channels and harnessing its overseas network to collect information and provide pertinent advice. At the same time, the segment is putting forward products and services that match each stage of an increasingly protracted reconstruction process in Japan. The Corporate Financial Services segment is committed to further expanding its client base by providing a broad spectrum of services to the Group’s customers as a whole. Moving forward, the segment will take steps to unify the goals and strategies of each Group company and to combine sales, marketing and operating know-how to engage in comprehensive activities that encompass the building of robust cus-tomer relationships, uncovering issues and providing solutions as a one-stop services provider.

Overview of Business Strategies

Increase the pace of “Finance + Services” Expand the client base through strengthened coop-eration with Group companies Capture business opportunities presented by the changing environment

Major News Releases



This segment consists of ORIX’s automobile and rental operations, both of which possess an extremely high level of expertise.

In its automobile leasing business, ORIX engages in leasing, automobile rental and car sharing activities. Automobile leasing

operations began by offering leases including maintenance services to corporate clients. Today, activities include a complete

range of specialized vehicle maintenance outsourcing services requiring increased expertise that encompasses solutions that

meet clients’ compliance, environmental and safety management needs. This segment also offers a broad spectrum of tailor-

made services that address both corporate and individual client needs.

ORIX entered the rental business in 1976 with the rental of precision measuring equipment to corporate clients. Today, the

rental business covers a diverse range of services, including IT-related equipment rentals, technical support, sales of software

packages, calibration and asset management.

Characteristic of the Segment—Evolution of the Automobile Leasing Business—Business expansion and evolution from direct finance leasing to maintenance services and vehicle administration

1980s 1990s 2000s 2010s1970s

•

Needs

Upgraded

Service in

Step with

the Times

•

•

•

•

Segment PerformanceSegment revenues continued to remain robust, increasing 3% to

¥232.0 billion compared with ¥225.8 billion during the previous fiscal

year. This largely reflected solid revenues from operating leases

including the sales of used automobiles.

Segment expenses remained flat year on year due to a reduction

in selling, general and administrative expenses offsetting the

increase in costs of operating leases.


¥26.2 billion during the previous fiscal year.

Segment assets increased 7% compared with March 31, 2011 to

¥537.8 billion owing mainly to increased investment in operating

leases and direct financing leases.


2010/3 2011/3 2012/3


Segment Profits 23.3 26.2 34.7

Segment Assets 515.7 502.7 537.8

Segment Asset ROA (%) 2.4 3.0 3.9


Segment Overview

Maintenance Leasing



Continue Group-wide sales activities Expand high value-added services and allocate resources to growth areas Improve profitability by streamlining operations and controlling costs

Operating EnvironmentDomestic corporate automobile operations are expected to confront continued sluggish demand from the persistent decrease in automo-bile investment as well as cost reductions in addition to the trend toward using smaller automobiles. Business opportunities, on the other hand, are increasing in line with changes in corporate attitudes toward vehicle management. In particular, the need for vehicle maintenance and administrative cost reductions has increased among corporations, as has interest in areas such as compliance and safety management. Furthermore, heightened awareness of environmental issues is stimulating demand for hybrid vehicles together with an increase in the number of car shar-ing participants. The domestic precision measuring equipment rental market is not expected to expand substantially due to such factors as the accelerat-ed outflow of companies overseas. At the same time, the competitive landscape remains relatively stable owing to comparatively high barri-ers to entry caused by the need for significant initial investment and difficulties in securing personnel with specialized know-how. In the IT-related equipment field, the cloud computing market continues to grow on the back of concerns surrounding system operating costs and the need for increased flexibility. Moreover, there are signs of a shift in corporate-sector IT investment from hardware ownership to service use.

Operating StrategyThe Maintenance Leasing segment will continue to engage in Group-wide sales activities in an effort to cultivate new clients and to meet cli-ent needs.

In the automobile leasing business, the segment will combine its leasing, automobile rental and car sharing products and services while putting forward proposals that cover modes of automobile use, which in turn lead to optimal and low-cost vehicle solutions. As of the end of the fiscal year 2012, the total number of automobiles under manage-ment amounted to approximately 950,000. The segment’s corporate automobile leasing operations provide solutions based on compliance, environmental response and safety management while at the same time encompassing complete busi-ness process outsourcing that draws on the segment’s high level of expertise and reliable operational quality. For example, ORIX Telematics Service offers vehicle dispatch control, a service that reduces fuel con-sumption, promotes efficient vehicle use and takes client employee safety into consideration, through consultations based on analysis of a broad spectrum of driving data. By actively promoting this type of high value-added business, the Maintenance Leasing segment is expanding fee income while differentiating ORIX from other companies. Moreover, we aim to streamline operations and enhance cost control to maintain profitability and competitiveness. We continue to promote products such as My Car Lease, automo-bile rentals and car sharing to retail clients. Especially in the car sharing business, where we lead the industry in memberships, we will seek to further increase the number of members by strengthening relationships with public offices, local government authorities, public transportation agencies, railway companies and parking lot operators. In the rental business such as precision measuring equipment, we will focus on maintaining our high market share while providing a broad scope of solutions, including technical support, sales of software pack-ages, calibration and asset management. We will expand our lineup of products in Japan to include the rental of medical and environmental analytic equipment as well as tablets and other terminals, and work to cultivate a new set of customers by capitalizing on our Group network, centering on the Corporate Financial Services seg-ment. Overseas, we will step up robot-related activities and the rental of chip mounter and other manufacturing equipment focusing mainly on China. As of March 31, 2012, the rental business owned more than 950,000 units of rental equipment spanning about 30,000 types.

2011Jun. 22 Alliance with SOFTBANK Creative Corp. on Digital

Signage* Service The first digital signage displays were installed in Hakata Port International Terminal. The service then expanded to a condominium gallery, supermarket stores and a built-to order housing showroom.* Digital signage is a service where data is sent through networks to displays

installed at places where people gather, such as train stations, retail facilities

and sightseeing spots.

Nov. 7 Rental Service Website for Medical FacilitiesORIX Rentec starts full-fledged expansion of a multi-vendor medical equipment rental service.

2012Apr. 2 Industrial Robot Rental Business Commences in China

ORIX Rentec opened the Shanghai Technical Center show-room through an alliance with YASKAWA ELECTRIC (CHINA) CO., LTD. By combining the industrial robotics technologies of YASKAWA Electric Corporation with the finance functions and property management expertise of ORIX Rentec, the two companies will collaborate to devel-op business in the expansive Chinese market.

May 30 Integration of 3 Rental Car Brands to Create a Network of 1,000 Rental Shops—Improving Customer Convenience by Enhancing Rental Shops Near Train Stations, Aiming to be the “Chosen Rental Car” Brand—ORIX Auto decided to integrate its 3 rental car brands (ORIX Rent-A-Car, JAPAREN Rent-A-Car and X Rent-A-Car) into the single ORIX Rent-A-Car brand.

Jun. 28 Tablet PC Usage Service “TabRen” BeginsTabRen is a one-stop service for corporate customers pro-viding total support for the use of tablet PCs in business from introduction to operation.

Major News Releases



2010/3 2011/3 2012/3



Segment Assets 1,677.4 1,539.8 1,369.2




This segment is mainly comprised of the real estate development and rental and facilities operation businesses.

In the real estate development and rental business, ORIX is involved in the development and leasing of properties (including

office buildings, commercial facilities, logistics centers and residential condominiums), asset management and real estate

finance. Together with this comprehensive value chain, ORIX boasts significant specialist expertise in each aspect of real estate.

The development and operation of such diverse properties as hotels, Japanese inns, aquariums, golf courses, training facili-

ties, nursing care facilities, a dome and a theater is an integral part of the facilities operation business.

Segment PerformanceSegment revenues increased 2% to ¥222.6 billion compared with

¥217.6 billion during the previous fiscal year. Despite a decrease in

gains on sales of real estate under operating leases, this increase

was largely due to an upswing in real estate sales from higher deliver-

ies of condominium units, an increase in operating business reve-

nues and increased operating lease revenues from enhanced leasing

activities. Segment expenses were up compared with the previous

fiscal year owing to increased costs of real estate sales as well as

operating business expenses, which more than offset decreases in

interest expense and write-downs of real estate-related securities.

Segment profits for the fiscal year were ¥1.3 billion compared with


Segment assets decreased 11% compared with March 31, 2011

to ¥1,369.2 billion. This mainly reflected the decrease in investment

in securities (including specified bonds), installment loans and real

estate under operating leases.

Segment Overview

Real Estate

Characteristic of the Segment —Expansion of the Operation Business—Starting in 1986 with golf course operations, the operation business has expanded in terms of know-how and facilities by responding to the dif-

ferent values and lifestyles of the customers. Currently, 92 facilities are in operation, generating stable revenue.

Trend in number of operating facilities

100

80

60

40

0

20

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Golf Courses

Hotels

Training Facilities

Japanese Inns

Aquariums

Dome and Theater

Nursing Care Facilities


Operating EnvironmentWhile there has been little or no movement in vacancy rates, rental rates continue to decrease in the office building market. In 2012, the completion of a significant number of properties is expected, placing existing and prospective tenants in an increasingly advantageous posi-tion. From a demand perspective, there are indications that a growing number of J-REITs and overseas investors are contemplating the acquisition of new properties. Looking at the leisure market and consumption patterns, which have a major impact on the Group’s facilities operation business, the market has now contracted for two consecutive years. This is placing increased pressure on the need to ensure distinctive products and ser-vices that are finely tuned to address customers’ requirements. Despite concerns of a slump in the residential condominium market following the Great East Japan Earthquake, the contract completion rate in both the Tokyo and Osaka metropolitan areas remains above the key benchmark level of 70%. Looking at property prices, trends indicate an ongoing modest decline.

Operating StrategyThe underlying strength of the Real Estate segment rests in its compre-hensive value chain that includes development, leasing, asset and property management as well as finance backed by the ORIX Group’s customer base. Moving forward, this segment will capitalize on and fur-ther expand its wide-ranging real estate–related expertise to increase the value of its assets while promoting the provision of new value. As one example, the segment will make full use of its value chain through such means as joint investment with outside investors to secure a high quality portfolio and to further bolster its asset manage-ment operations. Moreover, ORIX will endeavor to achieve balanced growth by controlling asset size and swiftly establishing a stable reve-nue base. To this end, particular emphasis will be placed on such areas as the facilities operation business that is not directly influenced by fluctuations in real estate market conditions. In the real estate development and rental business, continued efforts will be made to reduce assets. At the same time, this segment will strive to improve occupancy rates and rental income by leveraging the characteristics of its small and diversified rental property portfolio and leasing capabilities. Although real estate transactions have not seen a full-scale recovery, the segment will pursue various exit strategies such as sales to overseas investors to promote asset turnover. In the facilities operation business, the segment will establish a firm foothold within the market by developing a wide range of unique ser-vices in response to diversified needs from customers. With the open-ing of a large number of new facilities, the segment will continue to strengthen its ability to attract customers and increase profitability by setting a clear customer target and concept for each operating facility including hotels, Japanese inns, aquariums and golf courses.


Expand business based on the real estate value chain Expand the stable revenue base by improving the profitability of rental assets and strengthening the operating business Enhance the asset management business to expand fee-business and promote new joint-investment with third-party investors

2011Jun. 17 Announcement the opening “ORIX Theater” on

April 8, 2012 —Renew the old Osaka Welfare Pension Great Hall, oper-ate the theater as a foothold to send out culture of Osaka—Please see page 20 of this Annual Report for details.

Sep. 1 Acquisition and Start of Operations of the Tateshina Grand Hotel Taki-no-YuPlease see page 20 of this Annual Report for details.

Sep. 14 Commencement of GRAND FRONT OSAKA OWNER’S TOWER Condominium SalesA new large-scale condominium building with 48 floors, 525 units, and luxury hotel ambience will take shape in Osaka’s Umekita District.

Nov. 1 Naruko Hotel (Naruko Onsen) Rehabilitation Complete—The Previous Management Team Resumed Management—ORIX Real Estate transferred business rights and all shares of Naruko Hotel Management Corporation, holding the assets associated with the Naruko Hotel, a revered tradi-tional hot-spring inn under rehabilitation support, to Naruko Hotel Operations Corporation established by the former management team of the Naruko Hotel. The transfer marked the completion of rehabilitation efforts.

2012Feb. 13 Announcement the opening “KYOTO AQUARIUM” on

March 14, 2012 Please see page 20 of this Annual Report for details.

Mar. 19 Announcement the opening “SUMIDA AQUARIUM” in TOKYO SKY TREE TOWN® on May 22, 2012Please see page 20 of this Annual Report for details.

Apr. 18 Transfer of Banshutoyo Golf Club OperationsORIX Golf Management LLC (OGM) has reached agreement with TOYO KIGYO GREEN KAIHATSU KABUSHIKIGAISHA regarding the transfer of operations of the Banshutoyo Golf Club (Kasai City, Hyogo Prefecture). OGM has commenced operation on June 1, 2012.

Major News Releases



2010/3 2011/3 2012/3


Segment Profits (2.4) 13.2 16.0


Segment Asset ROA (%) (0.3) 1.5 1.9



This segment began with the establishment of a venture capital business in 1983. Its ensuing development has mirrored trends

in the business environment and includes a loan servicing business that invests in non-performing loans as well as commercial

mortgage-backed securities (CMBS) management and collection, a principal investment business, a securities brokerage and

a mergers and acquisitions and financial advisory business.

In the environment and energy-related business, which was incorporated into this segment during the second quarter of the

fiscal year ended March 31, 2012, ORIX has promoted the use of energy-saving measures and renewable energy in addition to

making waste disposal and recycling related proposals with respect to the collection and disposal of end-of-lease assets for

more than 10 years.

Segment Overview


Energy

Segment PerformanceSegment revenues decreased 18% to ¥73.3 billion compared with

¥89.6 billion in the previous fiscal year. This mainly reflected a

decrease in revenue in line with the sale of consolidated subsidiaries

during the previous fiscal year, which offset gains on investment

securities from the sale of Aozora Bank, Ltd. shares, as well as

robust collection and fee income in the servicing business.

Segment expenses declined compared with the previous fiscal

year due to the effects of the sale of consolidated subsidiaries and

lower write-downs of securities.


¥13.2 billion in the previous fiscal year. Despite a decrease in gains

on sales of subsidiaries, this was attributable to an increase in profits

from equity-method affiliates.

Segment assets contracted 7% compared with March 31, 2011 to

¥471.1 billion resulting mainly from a decrease in installment loans.

Characteristic of the Segment—Environment and Energy Related Businesses —Services provided in the field of energy, finance and service, and resources and waste

Electric Power

Electric Power Trading Business

Bulk Electric Power Purchasing Service

Renewable Energy

Solar Power System Integrator

Biomass Power Generation*1

Business

Resources and Waste

Area Recycling Systems

Sophisticated Waste ProcessingFacility (Gasification Furnace)

Industrial Waste Processing, Collection and Transportation

Finance and Services

Sales of Carbon Credits*3

Water-related Business

ESCO Fund

Carbon Offset Service

Tradable Green Certificates

Energy Conservation

ESCO*2 Business

Greater “Visibility” and Automatic Control of Electric Power

*1. Biomass power generation works by the use of biomass, which is renewable organic resources derived from biological matter other than fossil fuels.

*2. ESCO (Energy Service Company) business provides comprehensive services pertaining to energy efficiency.

*3. Carbon credits are marketable emission rights of CO2.


Mar. 27 Capital and Business Alliance between ORIX and The Towa Bank, Ltd.ORIX will form a business alliance with The Towa Bank, Ltd. (“Towa Bank”). ORIX will invest 1 billion yen in Towa Bank’s wholly-owned subsidiary The Towa Phoenix, Ltd., a company that engages business rehabilitation by way of non-voting preferred shares. ORIX will also dispatch per-sonnel and provide know-how relating to administrative improvement and business rehabilitation.

Apr. 4 Capital Participation in Restaurant Operator and Frozen Foods KINREI CORPORATIONORIX acquired all outstanding shares of KINREI CORPORATION (“KINREI”), a com-pany that operates a Japanese cuisine res-taurant chain and produces and distributes frozen foods. ORIX aims to capitalize on its expertise and business platform for the con-tinued expansion and growth of KINREI to support in increasing the corporate value.

Operating EnvironmentWhile efforts by Japan’s major banks to dispose of large-scale assets remain limited due to the effects of Japan’s SME Financing Facilitation Act, there are expectations that opportunities for investment in non-performing loans will rise as foreign corporations withdraw from Japan, funds are divested and the selection and concentration of companies accelerates. Activities in the M&A market are also anticipated to improve. In addi-tion to a significant resurgence in cross-border transactions by Japan’s corporate sector, positive operating conditions are attributable to restructuring initiatives by listed companies, the strategic de-listing of subsidiaries and business succession undertaken by SMEs. This is in turn projected to trigger increased demand for investment, finance and advisory services. In the environment and energy-related business, investment is fore-cast to remain robust in Japan and overseas particularly in energy related fields.

Operating StrategyIn this segment, ORIX is engaged in the three core activities of loan servic-ing, investment and the provision of environment and energy-related servic-es both in Japan and overseas.

ORIX Asset Management and Loan Services Corporation (OAMLS), the first Japanese servicer to simultaneously receive all three servicing ratings (master, primary and special servicer), in addition to receiving the highest rating (STRONG) from Standard & Poor’s in the area of CMBS, has expertise in financial arrangement and servicing and a wide ranging information network through its servicing business. Capitalizing on these strengths, the segment will take advantage of opportunities to further expand its fee-based business by acting as an intermediary in the sales of collateralized properties and as a special servicer. This segment will also provide management support in such areas as business succession and corporate rehabilitation (restructuring, transfer and funding arrangement) to its wide range of clients. Looking ahead, steps will be taken to put forward a broad spectrum of solu-tions that match the needs of financial institutions in areas including non-performing loan investment, corporate rehabilitation fund manage-ment and joint operations of corporate rehabilitation support based on a strategic capital alliance. In its proprietary investment activities, the segment will adopt a pru-dent approach toward the selection of businesses taking into consider-ation its established track record and an assessment of risk and return. In addition to rebuilding its portfolio, the segment will look to enhance the corporate value of those companies in which it invests. Particular emphasis will be placed on expansion as well as investments that com-plement the segment’s existing functions through such means as M&A. As a part of its ongoing environment and energy-related activities including provision of waste processing and recycling services, energy conservation services and the sale of solar power systems, as well as the development and operation of electric businesses, the segment will put forward innovative new ideas and proposals based on its accumu-lated know-how. Moreover, considerable energies will be channeled toward investments in and operation of water-related and mega-solar businesses at home and abroad.


Capture profit opportunities capitalizing on servicer expertise and strengthen the corporate rehabilitation business Capture opportunities for new investment and rees-tablish the portfolio Invest in the energy and environmental field, and promote business operation

2011Aug. 12 Implement Solar Power Systems and Bulk Electric

Purchasing ServicesORIX Group will begin a new service to reduce electricity costs by combining its “Bulk Electric Purchasing Service” that lowers condominium’s electricity costs with a solar power system. This service enables saving energy and reducing electricity costs.

Sep. 29 Commencement of Wood Chip Biomass Power Plant OperationORIX has commenced operation of the Agatsuma Biomass Power Plant in Agatsuma-gun, Gunma Prefecture. The plant will be Japan’s third-largest wood chip-fired thermal power station in terms of power generation capacity.

2012Feb. 14 Capital Participation in Leading Liquor Wholesaler

Kawachiya CorporationAn agreement has been reached to acquire the shares of Kawachiya Corporation (“Kawachiya”), a leading liquor wholesaler. ORIX and Kawachiya’s founder and current executives aim for the further improvement of Kawachiya’s service, the establishment of a sophisticated management framework and solid positioning as a leading company in its sector.

Major News Releases



This segment consists of the life insurance business, the banking business and the card loan business. ORIX Life Insurance

Corporation was founded in 1991 and operates mainly through representative agencies and mail order sales. In the banking

business, ORIX began handling housing loans in 1980 and thereafter ORIX Bank Corporation expanded the business into cor-

porate lending and other services. More recently, ORIX Bank entered the card loan business in March 2012.

Established in 1979, ORIX Credit Corporation (ORIX Credit) was managed over a continuous three-year period as a joint

management with Sumitomo Mitsui Banking Corporation pursuant to an alliance established in July 2009. Since the purchase

of all of ORIX Credit’s shares, ORIX Credit now operates as a wholly owned subsidiary of ORIX.

Characteristic of the Segment—ORIX Life Insurance: Strengthening Development and Sales of Retail Products—


2010/3 2011/3 2012/3



Segment Assets 1,578.8 1,653.7 1,738.5



ORIX Life Insurance was ranked No.1 in the recommended life insurance company ranking by a popular Japanese weekly magazine.

Medical insurance “CURE” was ranked No.1 for four consecutive years since 2008.

Whole life medical insurance category “CURE” ranked No.1 for four consecutive years

Cancer insurance category “Believe” ranked No.2

Income insurance death security category “Keep” ranked No.2

Term life insurance category “FineSave” ranked No.3

Ranking in a special issue of a popular Japanese weekly magazine entitled, Reliable Insurance

2,000,000

0

500,000

1,000,000

1,500,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Apr. 2012 Over 1.5 million

Sep. 2010 Over 1 million

Mar. 2006 Over 410 thousand


¥148.8 billion in the previous fiscal year. This was largely due to the

increase of life insurance premiums and the increase revenues

resulting from steady growth of assets in banking business.

Impacted by the recognition of a write-down of the investment in

the equity-method affiliate Monex Group, Inc. together with an

increase in segment expenses including insurance-related as well as

selling, general and administrative expenses, segment profits

decreased 8% to ¥21.8 billion compared with ¥23.8 billion in the

previous fiscal year.

Segment assets climbed 5% compared with March 31, 2011 to

¥1,738.5 billion due to increases in installment loans and investment in

securities which more than offset the decrease in investment in affiliates.

Number of Insurance Policies in Force

Segment Overview

Retail


Operating EnvironmentTrends in the domestic life insurance market continue to reflect a shift toward small-lot individual insurance, an increase in the number of insurance policies and a decrease in the balance of remaining con-tracts. Demand is particularly sluggish for traditional life insurance products. On the other hand, customer needs are expanding for medi-cal insurance products classified as “third sector” products. Moreover, sales channels continue to diversify; for example sales at banks, pure Internet play insurance companies and retail stores. Turning to the investment environment, conditions continue to make securing yields challenging. This is largely attributable to the prolonged low level of long-term interest rates. In the banking industry, deposits continue to grow as savings attract stability-oriented individuals. Despite signs of a partial recovery in corpo-rate-sector capital expenditure demand, the need for capital in overall terms remains flat. However, even in a stagnant real estate market, capi-tal demand by individual investors remains firm in the market for invest-ment rental condominium units, which continue to perform strongly. In the card loan market, the number of finance providers has dropped dramatically. At the same time, there has been a continued move toward adopting a new business model. This is largely the result of the reduction in the upper limit placed on interest rates and the ceil-ing established on total debt. In contrast, there are indications that banks are expanding their individual unsecured lending activities.


Life Insurance: Develop distinctive new products and expand sales channels Banking: Create a balanced portfolio ORIX Credit: Expand business with current high-tier clients and pursue new guarantees

Operating StrategyThis segment will maintain its strategy of developing new markets for individuals by offering products and services that provide a high level of customer satisfaction and by increasing its unique expertise and effi-ciency of operation in niche markets. ORIX Life Insurance, which concentrates mainly on developing and selling products for individuals, has experienced a substantial increase in the number of policies in force. ORIX Life Insurance will continue to enhance its product lineup by developing products that meet the needs of its customers, such as its medical insurance “CURE” series, its cancer insurance “Believe” and its Internet-based insurance appli-cation service “Bridge,” a term insurance policy available only online. Moving forward, and in similar fashion to the launch of an Internet-based insurance application service last year, ORIX Life Insurance will work to expand sales channels and its operations, while strengthening operating efficiency and fortifying its business foundation. In line with its business expansion, ORIX Bank is steadily increasing deposits through “e-Direct Deposits,” an Internet-based fixed deposit service for retail and corporate customers. As of March 31, 2012, the deposit balance (including negotiable deposits) exceeded ¥1 trillion. On the lending side, ORIX Bank will continue to develop a well-bal-anced loan portfolio, seek to differentiate itself from other banks by fur-ther increasing its transactions with SMEs and offer consulting services that leverage the ORIX Group’s collective strength. In March 2012 ORIX Bank entered the card loan business in ear-nest. This initiative was completed by the conversion of ORIX Credit into a wholly owned subsidiary in June 2012. Looking ahead, the Group will continue to engage in unified management to steadily expand its activities in the individual lending market with the aim of establishing a significant pillar of business.

2011Sep. 5 ORIX Life Insurance Launches Whole Life Insurance

“RISE Support” ORIX Life Insurance launched whole life insurance “RISE Support”. “RISE Support” facilitates the enrollment of cus-tomers with pre-existing medical conditions or a prior record of hospitalization or surgery by limiting declarations and easing the underwriting conditions.

2012Feb. 22 ORIX Bank Launches “ORIX Bank Card Loan”

ORIX Bank began offering “ORIX Bank Card Loan” on March 1, 2012. “ORIX Bank Card Loan” is a card loan product that caters to a broad range of customers. The card features an extensive range of annual percentage rates, from the industry’s lowest of 3.0% to a maximum of 17.8%. It also offers a loan limit of up to 8 million yen, the industry’s highest.

Apr. 26 Transfer of the Shares of ORIX Credit Corporation from Sumitomo Mitsui Banking Corporation to ORIX and New Business Alliance Agreement between Four Companies Including Sumitomo Mitsui Financial Group, Inc.ORIX reached an agreement to transfer all shares of ORIX Credit held by Sumitomo Mitsui Banking Corporation (“SMBC”) to ORIX resulting in making ORIX Credit a wholly-owned subsidiary of ORIX. Moreover, a new business alli-ance agreement was concluded between the four companies of Sumitomo Mitsui Financial Group, Inc. (“SMFG”), SMBC, ORIX and ORIX Credit. SMFG Group and ORIX Group will continue the close relationship and increase the corporate value through new business alli-ance.

Major News Releases



2010/3 2011/3 2012/3







In the United States, this segment places asset management at the heart of efforts to expand “Finance + Services.” Boasting a

wealth of experience in a wide range of areas, the segment is also active in the corporate finance, securities investment, M&A

advisory, loan structuring and servicing as well as fund management fields.

Since first expanding into Hong Kong in 1971, ORIX has established a broad network that encompasses 290 bases spread

throughout 26 countries and regions. Underpinned by a leasing, automobile leasing and corporate finance operating base that

is aligned to the conditions of each country, this segment also engages in real estate-related, principal investment and non-per-

forming loan investment activities. Complementing these activities, the segment also undertakes ship and aircraft leasing, man-

agement, investment, intermediary and sales transactions.

Characteristic of the Segment —Overseas Network and Balanced Portfolio Established through Cooperation with Local Partners—


¥176.9 billion in the previous fiscal year due to direct financing leas-

es in Asia, automobile and aircraft operating leases, in addition to

continued strong gains on sales of investment securities in the

United States.

Segment expenses remained flat year-on-year owing to a

decrease in selling, general and administrative expenses offsetting

the increase in interest expenses.



Segment assets were essentially unchanged compared with

March 31, 2011 at ¥986.8 billion. This was mainly attributable to

sales of municipal bonds and loans receivable in the United States,

which offset investments in a water utility operator in China and a life

insurance company in South Korea, in addition to the consolidation

of an automobile-related service company in India.

26 Countries/290 Locations

United States (23)

Overseas Network Segment Assets by Region(Billions of yen)

Asia (217)Middle East, North Africa (22)

Europe (11)

Oceania (17)

United States344.2

Asia, Australia374.2

Greater China149.9

Middle East, Europe

12.8 Other105.8

(As of March 31, 2012)

Segment Overview

Overseas Business



United States: Continue to strengthen “Finance + Services” based on a high level of expertise Expansion of the leasing business and new invest-ment centered on Asia Accumulate quality assets in the ship- and aircraft-related businesses

Operating StrategyIn the United States, this segment has historically engaged in corpo-rate finance. Building on these activities, the segment is taking steps to ensure the stability of its investment operations which encompass CMBS and municipal bonds. In addition to advisory and enterprise val-uation, as well as loan structuring and servicing, the segment is draw-ing on its accumulated expertise in fund management to further bolster fee-based businesses on the provision of “Finance Services.” Houlihan Lokey, Inc. maintains a strong reputation in the United Sates with decades of experience in financial advisory services, financial opin-ion services and financial restructuring services. RED Capital Group arranges specialty loans for real estate companies and obtains fees through loan servicing. Mariner Investment Group is a major indepen-dent hedge fund manager. Both entities are quintessential examples of capturing fee revenue without using the balance sheet. Taking full advantage of its operations in the United States, ORIX will increase prof-itability by further expanding its services going forward. Moreover, ORIX is evaluating the possibility of re-entering the Central and South American market through the overseas business segment to seek busi-ness opportunities by leveraging the experience gained through its local business partnership developed from 1970s until 2000s. In Asia, Oceania, the Middle East and Europe, this segment contin-ues to secure stable revenues based on its platform of leasing, lending and other financial services closely tied to local communities, and will provide high value-added services utilizing expertise accumulated in Japan and overseas. In addition to further developing new businesses, this segment will assess opportunities to acquire assets through M&A as well as pur-chases from European financial institutions. Looking ahead, ORIX will continue to uncover high profitability investment in such fields as finan-cial service, automobiles, ships and aircraft. Again moving forward, this segment will work to further promote its business and capitalize on its global network by supporting Japanese companies looking to move into overseas markets and foreign compa-nies entering Japan, and through joint investment in Japanese real estate with overseas investors.

Operating EnvironmentBuoyed by government stimulus measures and a lull from the effects of the debt crisis in Europe, the United States economy is experiencing a modest recovery with signs that the market is more receptive to risk. The United States financial market, on the other hand, is expected to continue to de-leverage both in the corporate and household sectors for the foreseeable future. Despite a slowdown in the pace of growth due mainly to the crisis in Europe, Asia is expected to enjoy considerable expansion on the back of stable growth mainly in the ASEAN region. As a result of high eco-nomic growth in recent years, Asia’s economy has reached the stage where it consumes a wide range of products and services from devel-oped countries, which should lead to various business opportunities going forward. In the aircraft market, conditions reflect intense competition particular-ly in the leasing field. At the same time, aircraft prices continue to hover at a high level. The shipping industry has provided little or no indication of a recovery with persistent imbalance in demand and supply. Against this backdrop, financial institutions both in Japan and over-seas are adopting a wait-and-see attitude toward new investment.

2011May 13 The First Investment by the DI Asian Industrial Fund L.P.

DI Asian Industrial Fund L.P. (“DIAIF”), which is under co-operation by Dream Incubator Inc. acquired an approxi-mate 25% stake in Dong Tam Nutrition Food Joint-Stock Company, a Vietnam-based company, as their first invest-ment. DIAIF is a large-scale Japanese investment fund that targets Vietnam’s non-listed companies.

May 20 Investment in China’s Water Utility Operator, China Water Affairs Group LimitedORIX will acquire approximately 14.5% of the diluted shares of China Water Affairs Group Limited, which oper-ates its water and sewage business in mainland China, by receiving an allotment of third party rights.

Jun. 22 Launch of Largest Investment Fund Established by Japanese Company in South KoreaORIX will launch the largest private investment fund estab-lished by a Japanese company in South Korea, totaling 300 billion won (approximately 22.2 billion yen), to invest in Korean life insurance company, Mirae Asset Life Insurance Co., Ltd..

Sep. 21 Acquisition of Majority Stakes in India’s Automobile-related Services CompanyORIX executed a share purchase agreement with INFRASTRUCTURE LEASING & FINANCIAL SERVICES LIMITED (“IL&FS”) to acquire an additional stake of approxi-mately 70% of ORIX Auto Infrastructure Services Limited from IL&FS. With the acquisition, ORIX has made OAIS a consolidated subsidiary. ORIX aims to strengthen its auto-mobile-related service businesses in the Indian market.

2012Feb. 6 Second Investment by DI Asian Industrial Fund

DIAIF has agreed to acquire 31.1% of the shares of Japan Vietnam Medical Instrument Joint Stock Company, a major Vietnamese medical equipment sales company.

Apr. 5 Establishment of Joint Auto Leasing Company with China’s Largest Auto DealerORIX has entered into a strategic business alliance with PANG DA AUTOMOBILE TRADE CO., LTD., one of the largest auto sales companies in China, to establish a joint auto leasing company in China. ORIX will aim to expand the auto leasing business with maintenance in China, the largest market of new car sales.

Major News Releases


ORIX has continued to lower its leverage levels in response to

changes in financial and capital markets following the financial cri-

sis. We believe that market instability will continue into the foresee-

able future and as such will maintain our focus on controlling low

leverage levels while endeavoring to enhance funding stability.

In this regard, we will concentrate on the following four

points in promoting our funding policy.

(1) A balanced funding structure: ORIX maintains balanced funding

structure by diversifying funding methods, including borrowings

from financial institutions, deposits and access to capital mar-

ket (Bonds, MTN and Commercial Paper) (Graph 1).

(2) Lengthening of funding and smoothing of maturity ladder:

ORIX continues to promote and maintain a share of long-

term debt close to 90%. We intend to continue lengthening

each method of funding (Graph 2). In domestic bonds,

ORIX was able to successfully smooth out the maturity lad-

der, and the annual redemption currently stands at around

¥200 billion.

ORIX has nurtured a commonly shared, Group-wide corporate

culture that recognizes the importance of seeking out new

opportunities in the pursuit of growth while firmly identifying

associated risks. These dual concepts provide the foundations

for our risk management that supports ORIX’s growth.

Irrespective of the amount, whether large or small, invest-

ment and lending proposals are assessed and determined by

top management. With an established process that ensures

that the details of each proposal are shared between frontline

personnel and top management, ORIX maintains the ability to

take swift action even when a review of initial determinations is

required due to changes in the business environment.

Conducted at a variety of levels, ORIX holds meetings to

ensure that information is shared throughout the entire organi-

zation. Thoroughgoing discussions are undertaken at each

meeting, providing the impetus that drives ORIX’s spirit and

willingness to take on challenges. At the same time, ORIX’s

concept of identifying risks is not linked solely to the adoption

of a cautious approach. In its quest for growth, ORIX is fully

aware of the need to actively pursue and take up good risks.

We will therefore make significant effort to adopt the necessary

measures and modifications that will turn risks that are at first

glance considered difficult into good risks. This corporate cul-

ture that we have nurtured since our incorporation is both an

underlying strength as well as the wellspring for our continuous

desire to seek out new business challenges.

An Interview with CFO Haruyuki Urata

ORIX has continued to pursue the shift to peripheral business fields and has grown into a company that engages in wide-ranging and diverse activities. What kind of risk management do you employ to support this type of development?

Financial and capital markets have substantially changed since the financial crisis. Please tell us about your funding policies.Q

Q

Risk Management and Financial Strategies that Support Future Growth

Haruyuki UrataDirector, Representative Executive Officer

Deputy President and Chief Financial Officer


The First Japanese Company to Issue Offshore

RMB-Denominated Bonds

In July 2010, the Chinese government relaxed various controls and

regulations relating to the issue of offshore renminbi (RMB) denomi-

nated financial products through the offshore market in Hong Kong.

Shortly thereafter, McDonald’s Corporation became the first over-

seas company to issue RMB-denominated bonds in October 2010.

Amid widespread and growing interest among foreign companies,

ORIX commenced preparatory steps toward issuance through an

existing euro MTN program. Buoyed by strong investor demand for

RMB-denominated bonds and a favorable cost structure compared

with procurement methods using China’s onshore market, a total of

400 million RMB was successfully procured through the Hong Kong

market in March 2011. As the first Japanese company to issue

RMB-denominated bonds, ORIX significantly raised its profile as an

issuer in the Asian securities markets.

Building on this increased awareness among investors, ORIX was

able to undertake a second issue in quick succession in November

2011, despite weak market conditions as a result of the economic

crisis throughout Europe.

Activities Going Forward—Broadening and Diversifying the

Investor Base while Promoting a Balanced Funding Cost Structure

ORIX issued Baht-denominated Bonds in Thailand in March 2012.

The actual issue was undertaken by a Group subsidiary in Thailand.

Buoyed by its high local market profile, the issue was not only com-

pleted at a considerably favorable cost, but also helped to cultivate

new investors. Moving forward, ORIX will pursue the procurement

of funds in various countries throughout Asia including Malaysia,

Singapore, Australia and Indonesia.

Given the limited scale, transaction volume and investor base of

the local Asian securities market compared with its global counter-

part, the actual size of each issue is generally restricted. Looking at

inherent benefits, however, the Asian market can offer the opportu-

nity to procure funds at a favorable cost and is not always affected

by deterioration in market conditions in Europe and the U.S.

In addition to advancing an optimal funding strategy, ORIX will

pursue funding methods in line with efforts to expand its business

throughout Asia while broadening and diversifying its investor base.

At the same time, we will look carefully at the associated costs and

benefits, strive to engage in balanced funding and expand our

activities in the growing finance markets of Asia.

Expanding the Overseas Funding Platform in line with Overseas Business Expansion—Cultivating New Markets and Investors

(3) Diverse funding sources: ORIX maintains robust relation-

ships with a diverse range of financial institutions currently

numbering over 200. With respect to the issuance of bonds,

we focus mainly on the market in Japan. At the same time,

we work to strengthen access to individual investors while

promoting the funding from overseas markets in line with

efforts to increase assets outside of Japan. In the fiscal year

ended March 31, 2012, ORIX issued its first series of bonds

denominated in Korean Won and Thai Baht.

(4) Liquidity management: Taking into consideration the finan-

cial environment and other factors, the liquidity coverage

ratio with respect to marketable short-term debt was held

at the very high level of nearly 300% as of March 31, 2012

(Graph 3). Looking ahead, ORIX will ensure that it maintains

a substantially high level.

ORIX is currently following the direction of debt to equity,

and then on to operations. While anticipating continued uncer-

tainty with respect to its business environment, ORIX will take

steps to carefully identify risk and to actively capture good risks

for the future expansion of operations. Through these means,

we will steadfastly grow into a corporate group that is capable

of providing new added value.

* This ratio is calculated by long-term liabilities excluding liabilities in line with securitized transactions (ABS, CMBS). For a presen-tation of the most directly comparable financial measures cal-culated and presented in accordance with U.S. GAAP and a quantitative reconciliation of U.S. GAAP and Non-GAAP finan-cial measures, please see pages 66 and 67.

1,500

1,200

600

300

0

300

250

150

900 200

100

50

(Billion of yen) (%)

� Available commitment line (a)� Cash and cash equivalents (a)� Current redemptions (bonds / MTN) (b)� Commercial paper (b)� Liquidity coverage ratio (right axis) (a÷b)

Graph 3: Trends in Liquidity vs. Short-term Liabilities

08/3 09/3 10/3 11/3 12/3

Graph 1: Breakdown of Funding(As of March 31, 2012; excluding ABS, CMBS)

90

85

80

75

70

1.8

1.7

1.6

1.5

1.4

(%)(%)

� Share of long-term debt (left axis)*� Funding costs

08/3 09/3 10/3 11/3 12/3

Graph 2: Trends in the Share of Long-Term Debt and Funding Costs

Bonds/MTN 28%

CP 4%

Deposits 22%

Borrowings from financial institutions 46%


Risk Management

Main Risk Management

(a) Credit Risk Management

We define credit risk as uncertainty in future investment recov-

ery caused by the fluctuation of cash flow from debtors and

investees.

Credit risk management mainly consists of (i) credit evalua-

tion for each transaction, (ii) portfolio management and (iii)

implementation of corrective actions for the management of

problem assets.

Credit evaluation for each transaction is performed by peri-

odically monitoring such elements as performance, collateral

and progress of collection. As risk management of individual

debtors is especially important, we also emphasize credit eval-

uation prior to entering into each transaction and continuous

risk monitoring of individual credit after the transaction has

been made, with a focus on sufficiency of collateral and guar-

antees, liquidation of debt and the distribution of debtors and

their business fields.

In connection with each credit transaction, we perform a

comprehensive customer credit evaluation based on the rele-

vant customer’s business performance, financial position and

projected cash flow. The evaluation also covers the collateral

or guarantees, terms and conditions, and potential profitability

of the transaction. The profitability is based on the spread cal-

culated from investment yield, default rates, preservation situa-

tion, funding cost, capital cost and administrative cost, which

helps us to evaluate risk quantitatively.

Regular evaluation of individual debtors, and of our comprehen-

sive portfolio, as well as measures to set credit line limits, allow us

to control exposures to markets with potentially high risks.

Under the current business environment, taking prompt cor-

rective action for the management of problem assets is the

most important task. We seek to identify problem assets

quickly, and we respond promptly based on various conditions

of each transaction. Problem assets include credit extended to

debtors who have petitioned for bankruptcy or civil rehabilita-

tion, or other insolvency proceedings, whose bank transac-

tions are suspended, whose bills are dishonored, whose debts

are not collected for three months or more, and whose busi-

nesses have deteriorated or who are involved in fraud.

In making collections, we believe an early response is

extremely important. When information is received regarding

the emergence of problem assets, the relevant sales and mar-

keting departments, in cooperation with the Risk Management

Headquarters, take steps to secure collateral or other guaran-

tees and to begin the collection process. The Risk

Management Headquarters plays an important role in the col-

lection process by drawing on its accumulated experience and

by working closely with our sales and marketing departments.

The accumulated experience is reflected in our evaluation crite-

ria of each credit transaction and portfolio analysis.

ORIX allocates management resources by taking into account group-wide risk preference based on management strate-

gies as well as the strategy of individual business units. Our board of directors and executives regularly review the perfor-

mance of each business unit, evaluate the progress and profitability of each unit’s plan being carried out based on their

respective strategy, and take responsive measures they deem appropriate or necessary in light thereof. This process

enables us to control the balance sheet and to allocate more management resources to business units viewed as having

greater growth potential.

We view credit risk, market risk, business risk, risk related to fund procurement, legal risk and other operational risk as the

main risks facing us. Each risk is managed according to its individual characteristics.

Approach to monitoring of ORIX’s business

In addition to monitoring the business units, ORIX also monitors risk on an individual transaction and total portfolio basis. Further to

periodical reporting to the executives, if there had been a significant change in condition or strategy, we are equipped to take swift

response, after the necessary reporting to executives and discussions.

Individual Transactions: The operating environment, strategy, risk and profitability are evaluated prior to the transaction, and

changes to the operating environment and cash flow are monitored after execution.

Total Portfolio Basis: The following characteristics are monitored: client tier, region, transaction type, risk type, debt status and

concentration of major customers.

Business Unit Monitoring: In addition to the above, we conduct monitoring of each business unit according to its industry

characteristics. For more details, refer to “Individual Business Risk Management” page 41 to 43.


(b) Market Risk Management

We define market risk as the risk of negative impact on our

balance sheet caused by fluctuations in market conditions,

such as interest rates, exchange rates or stock prices.

We monitor risks in our portfolio by quantifying the risks

based on market fluctuations and defining acceptable risk lev-

els. We establish asset liability management (“ALM”) rules and,

after making quantitative and qualitative assessments of fluctu-

ation risks of the fair value of our assets and liabilities and

effects on our profit for the period caused by the volatility of

interest rate and exchange rate, we endeavor to keep the

overall amount of risks within a fixed range. Risks are quanti-

fied based on statistical methods including basis point value,

slope point value, value at risk (“VaR”), qualitative scenario

analyses, stress tests and sensitivity analyses. We analyze the

risks, report the results regularly to CFO and executive officers,

and take necessary actions.

We manage exchange rate risk by using foreign currency

loans, foreign exchange contracts, currency swaps and other

instruments to hedge the exchange rate fluctuation risks that

arise in connection with our business transactions in foreign

currencies and overseas investments. For unhedged foreign

currency-denominated assets and investments to overseas

subsidiaries, we employ the same risk monitoring and man-

agement procedures as are used in managing interest rate

risks, including utilizing VaR and other metrics.

We may use derivatives as hedges when we decide to

hedge interest rate risk and exchange rate risk according to

ALM. We use derivatives to mitigate or offset changes in cash

flow or the fair value of assets and liabilities. The use of deriva-

tives exposes us to credit risk on such derivative transactions.

We monitor the notional principal amounts, current prices,

transaction types and other variables for each counterparty.

Also, we set derivative transaction management rules and

guidelines for each of our group companies based on Group-

wide policies, and we have a system of internal controls for

derivative transactions.

Our investment departments in banking, life insurance busi-

ness and in the United States monitor monetary policies,

macro economic indicators and securities and financial market

trends related to the assets under management and manage

their portfolios analyzing on a daily basis individual security

price movements and profits and losses. Market volatility is

managed according to guidelines including loss-cutting and

reduction of positions. Our risk management departments

review and compare daily reports from investment depart-

ments against internal guidelines and macro- and microeco-

nomic conditions to ensure the guidelines.

(c) Business Risk Management

Various risks are inherent to our daily business, such as the

risks associated with our judgment in investments, our selec-

tion of new products for development and our competitors’

marketing strategies or pricing. We define business risk as

risks related to entry into the market, uncertainty of future busi-

ness performance caused by changes in business and com-

petitive environment and market fluctuation risks in such as the

used car and real estate markets.

We monitor the scenario analyses and stress tests for each

of our business risks. The evaluation and verification of the cost

of withdrawal from a business is also subject to monitoring.

A principal risk relating to operating leases is the risk of fluc-

tuation in the residual value of the leased properties. In order to

control fluctuations in residual value, we monitor our invento-

ries of leased items, market environments and the overall busi-

ness environment.

The automobile industry has a well-established market for

used cars, so we are able to resell most of our vehicles. We

monitor current trends in the used car market by continuously

monitoring the ratio of residual value to purchase cost, selling

price trends and other indicators, thereby adjusting estimated

residual value in new transactions.

We primarily limit our ship and aircraft operating leases to

general-purpose ships and aircraft that are comparatively easy

to re-lease, as these operating lease items have high residual

value risks. We monitor the market values of these ships and

aircraft and sell assets as necessary or desirable to reduce our

exposure to downward trends in the market or take advantage

of upward trends.

(d) Risk Management Relating to Fund Procurement

We view liquidity risks as significant risks associated with fund

procurement.

Liquidity risk is the risk that we will be unable to obtain the

necessary funds to meet our commitments and obligations, or

that we will be forced to procure funds at unusually high inter-

est rates, due to market turmoil, deterioration in our financial

condition or other reasons. The important objective of our

liquidity risk management is to create a liquidity structure that

matches asset size and structure to our management’s goals.

To achieve this, we emphasize maintaining a highly flexible bal-

ance sheet. At the same time, we seek to diversify funding

sources to reduce refinancing risks, which may be caused by

large market fluctuations. Specifically, we monitor liquidity by

projecting future cash flow from the maturity of assets and lia-

bilities, conducting liquidity risk analysis including future trends

and assuming such environmental stresses as financial market


turmoil and a downgrade of ORIX’s credit ratings. Measures

we use to manage liquidity risk include diversifying funding

sources, establishing committed credit lines with financial insti-

tutions and adjusting the balance of short-term and long-term

debt, taking into account prevailing market conditions.

(e) Legal Risk Management

Transactional legal risk is a major type of legal risk that we face

in our business. Transactional legal risk includes the risk that

the contracts into which we enter contain unintended condi-

tions, are not legally effective or the contemplated transactions

cannot be carried out as stipulated in the contract, or that the

transactions in which we participate involve activities that vio-

late, or are not in strict compliance with, applicable laws. When

we consider a new transaction, new product development or

other new business activities, our risk management system

requires an examination of these types of legal risks.

In an attempt to avoid, prevent and mitigate such legal risks,

in Japan we require, in principle, that the Group Legal and

Compliance Department and the Risk Management

Headquarters be involved in transactions from initial consider-

ation through the documentation process in which transaction-

related contracts are prepared for internal review and final

approval. Contracts may not be approved internally unless

they follow our prescribed rules and guidelines. The Group

Legal and Compliance Department and the Risk Management

Headquarters are also involved in the process for the approval

of such contracts in accordance with our internal rules.

Depending on the size and importance of a given transaction,

we may also utilize the expertise of outside lawyers. To ensure

that proper legal procedures are followed in connection with

legal disputes and litigation, we require that the Group Legal

and Compliance Department and the Risk Management

Headquarters be involved in such disputes and litigation,

including lawsuits that have been, or are expected to be,

brought against us and lawsuits that we bring, or expect to

bring, against third parties. The status of any lawsuits is report-

ed to the Group Executive Officer Committee regularly.

In addition to establishing internal policies necessary to

observe applicable laws, we also monitor potential changes in

relevant laws, as new information becomes available. As nec-

essary or appropriate, we may also initiate preparatory mea-

sures to address the requirements of new laws that are

expected to take effect in the future and implement steps to

ensure that we are, and continue to be, in compliance with

new laws as they take effect.

Overseas, each Group company works to avoid, prevent

and mitigate risks through an in-house lawyer and, when nec-

essary, with the involvement of outside lawyers and others.

In addition, the Group Legal and Compliance Department

and the Risk Management Headquarters conduct monitoring

activities to prevent the violation of intellectual property rights,

and to quickly take necessary measures if and when violations

are discovered.

(f) Other Operational Risk Management

As our business has expanded in recent years, operational risk

management has become a significant component of our

overall risk management. Operational risk is defined as the risk

of loss resulting from inadequate or failed internal processes,

people and systems, or from external events. As part of opera-

tional risk management, we are also continually seeking to

strengthen our internal control and compliance functions.

The Risk Management Headquarters conducts quantitative

and qualitative evaluation and regular monitoring of risk. ORIX

Computer Systems works to reduce operational risk by the

maintenance and operational administration of internal sys-

tems. The Group Internal Audit Department monitors the effec-

tiveness and efficiency and compliance with applicable rules

and regulations by our various operations; the status of

improvements to and compliance with our internal rules; and

the status of each department’s self-examinations based on an

annual internal audit plan that focuses on material risks. As a

result of monitoring, we evaluate the current status of internal

controls and make improvements as necessary.

Additionally, in order to raise awareness of compliance

issues among employees, the Group Legal and Compliance

Department has produced a compliance manual and distribut-

ed it to all employees in Japan. The department also plans and

executes a compliance improvement plan for each Group

company in accordance with their respective business profiles,

which plans are based on annual Group-wide compliance poli-

cies. We consider the results to improve the effectiveness of

our compliance systems.

Regarding natural disaster risk, we have established Natural

Disaster Risk Management Policies. We respond to the situa-

tion in order to protect management resources and minimize

losses, while giving priority to the safety of our executives and

employees. We have developed a system in which the Human

Resources and Corporate Administration Headquarters super-

vises the coordination of recovery activities after the occur-

rence of a natural disaster in Japan, while the Global Business

Administrative Headquarters handles the overseas function. By

distributing a natural disaster manual to all executives and

employees in Japan and carrying out disaster drills in accor-

dance with these policies, we maintain a framework to

respond appropriately to a natural disaster.

Risk Management


(a) Corporate Financial Services Segment

Credit risk is the main risk of the Corporate Financial Services

segment.

We reduce risk by diversifying borrowers and industries and

by emphasizing credit screening at the beginning of each

transaction. After a transaction has been made, the sales

departments regularly monitor the performance, collateral and

progress of collection of customers whose balance exceeds a

certain level. The Risk Management Headquarters regularly

checks customers with large credit balances.

We analyze the current condition and outlook for specific

industries and sectors, and also analyze the potential impact

on the debtor while making decisions about future transactions

in that specific industry or sector.

We take appropriate actions by thoroughly analyzing the

condition of each problem asset. Specifically, in transactions

collateralized by real estate, we take various measures such as

capitalizing on the networks of our real estate-related depart-

ments to sell properties or introduce tenants.

(b) Maintenance Leasing Segment

The main risk of the Maintenance Leasing segment is business

risk.

For instance, this segment has market fluctuation risks for

property under operating leases. We continuously monitor

market environments and fluctuation in the resale value of

leased property, and adjust residual value estimates of leased

items in new transactions accordingly.

Cost fluctuation (prime cost) is the main risk of providing var-

ious services such as outsourcing. We analyze initial precondi-

tions and performance, monitor future forecasts, and control

costs at an appropriate level.

Additionally, there is the risk that the quality level of our ser-

vices may fall below the required level due to changes in the

operating environment or changes and diversification of client

needs. We monitor our service quality level quantitatively and

qualitatively, and continuously strive to improve our level of ser-

vice according to the operating environment.

We also conduct credit monitoring on individual transactions

to address credit risks.

(c) Real Estate Segment

In the Real Estate segment the main risk of business involving

real estate development, rental, and operation is business risk,

and the main risks of the real estate finance business are mar-

ket and credit risks.

We focus on cash flow when making investment or project

decisions. We reduce risk related to real estate price fluctua-

tions by comparing cash flow performance to the initial plan

and by improving the occupancy rate. We invest mainly in

small properties, and diversify risk by investing in large proper-

ties through joint ventures with partners. Furthermore, empha-

sis is placed on monitoring investment strategies and

schedules. The strategy is reevaluated in the case of a major

divergence from the initial forecast.

The following factors are considered for condominiums:

development and sales schedule, unit sales progress, and rate

of return. The following factors are considered in the case of

development and leasing properties: development and reten-

tion schedule and NOI yield. We capitalize on the Group’s net-

work in order to improve occupancy rates and promote sales.

We monitor occupancy rates and rates of return and focus

on creating manuals and educating employees in order to min-

imize operational risk in our operation business.

ORIX recognizes market risk and credit risk as the major

risks to the real estate finance business under a normal operat-

ing environment. Because of this, in our non-recourse loan

business we monitor the loan-to-value ratio, the debt-service

coverage ratio and other terms and conditions such as equity

provided by other companies, interest reserve and guarantees,

in addition to controlling risk through swift response to chang-

es in the market. However, in a stress-case such as a signifi-

cant drop in market liquidity, we diligently monitor the cash

flow from the properties to improve the terms and conditions of

our loans. In addition, capitalizing on our real estate expertise,

we can flexibly respond to the changing business environment

by taking on business risk as a profitable operation through the

acquisition and holding of the collateral.

Individual Business Risk Management

We perform complete and transparent monitoring and control according to the characteristics of each operation. The risk situa-

tion for each business unit is analyzed both quantitatively and qualitatively on both the individual transaction and portfolio levels,

and the necessary measures to minimize downside risk of profit are implemented. Contents of individual business unit level anal-

yses are shared throughout the Group, and risk related to profit volatility is controlled by capitalizing on a diverse business port-

folio through measures including managing risk through intra-business unit cooperation.


(d) Investment and Operation Segment

Credit risk, market risk and business risk are the main risks of

the principal investment business conducted by the Investment

and Operation segment.

When making our initial investment decision, we do a credit

evaluation, analyzing the company’s credit risk and assessing its

cash flow. Also, we perform a multi-faceted evaluation, engaging

administrative departments such as the accounting and legal

departments to consider the characteristics of the operation and

investment scheme. Specifically, we analyze the operating envi-

ronment, corporate strategy and method for increasing corpo-

rate value, and verify the adequacy of profitability, estimated

investment timeline and exit strategy scenarios.

After an investment has been made, our perspective of risk

management varies according to the stage of development.

Credit risk is important for companies for which we are raising

corporate value due to the focus on cash flow. We also pay

attention to market risk as time for collection nears, due to

measuring the corporate value by referencing the corporate

values of similar industries.

Each transaction is monitored for deviations in cash flow,

increased corporate value, exit strategy, corporate strategy

and business environment from the original scenario. The fre-

quency of monitoring has been increased during these times of

rapid changes in the business environment, and we are simul-

taneously verifying the adequacy of investment scenarios and

swiftly taking the necessary actions. We are working to

enhance the management of investments that have a signifi-

cant impact on the profitability of ORIX through such measures

as the dispatch of management personnel.

The servicer business performs appropriate risk manage-

ment for the collection and management of our own assets as

well as for servicing operations provided to third-parties, by

leveraging our know-how we have acquired over years in

investing in CMBS and distressed real estate-backed loans.

Specifically, we seek to reduce credit and operational risks by

conducting periodical internal auditing and monitoring, and by

implementing a business operation based on work procedures

in accordance with the guidance of regulatory authorities.

Moreover, we have formulated measures to mitigate legal risks

by quickly responding to potential legal issues. We also aim to

strengthen our legal and regulation compliance and, to this

end, have appointed an outside lawyer as a director who also

oversees legal and compliance department as a head of risk

management headquarters.

We manage to minimize operational risks in the environment

and energy related businesses by implementing appropriate

equipment and technology in addition to alliances with expert

operators for renewable energy, energy conservation, and

resource and waste processing operations. Furthermore, we

try to sustain a high level of risk management by arranging an

organizational structure that allows for flexible responses to

changes in the business environment.

(e) Retail Segment

The main risk in the life insurance business is business risk

associated with accepting insurance contracts.

Before finalizing insurance contracts, ORIX Life Insurance

takes thorough measures to prevent the acceptance of fraudu-

lent contracts by rigorously examining health condition decla-

rations and medical examination reports as well as by taking

steps to check the status of other insurance contracts. These

measures promote the fair and equitable treatment of policy-

holders and, because they are important determinants of

future insurance-related profitability, ORIX Life Insurance pro-

motes their effective execution by ensuring the hiring of suffi-

cient staff and encouraging staff to acquire specialized

know-how. ORIX Life Insurance also educates and instructs

representative branch staff and agents to enhance compliance

regarding the prevention of personal information leaks and

regarding the solicitation of insurance.

Credit risk is the main risk of the banking business.

The housing loan business (for the purchase of properties for

investment purposes) manages individual screenings, each of

which consists of a comprehensive evaluation including the

cash flows that can be derived from the property, collateral

value and the client’s potential to repay. Decision making for

corporate loans is based on a detailed investigation of the cli-

ent’s performance, business plan, purpose of the loan, source

of repayment as well as industry trends. In addition to individu-

al screenings when loans are arranged, we also reduce risks

by diversifying the industry and products of our portfolio.

The card loan business utilizes a proprietary scoring system

that utilizes a credit model. We set the levels of interest rates

and credit limits in line with each customer’s credit risk, after

Risk Management


evaluating customer creditworthiness based on an analysis of

customer attributes or past pay quality, as well as other diverse

factors that may affect the borrower’s ability to repay. Also, we

undertake subsequent credit evaluations at regular intervals to

monitor changes in the customers’ financial condition.

(f) Overseas Business Segment

Credit risk is the main risk of the leasing and loan businesses

operated by local subsidiaries mainly in Asia.

When making a transaction we emphasize credit evaluation

and require adequate guarantees and collateral, in addition to

diversifying small transactions. We monitor the portfolio by

industry, location and type of collateral. We regularly monitor

the performance of major credit exposure.

In addition, we take appropriate actions for problem assets

by thoroughly analyzing condition of each asset.

The Risk Management Headquarters monitors the country

risk of the overseas portfolio. In addition, it shares information

regarding the portfolios of local subsidiaries, performance of

major clients, condition of problem assets, and clients of par-

ticular concern.

Risk management in the principal investment business,

which is mainly in Asia, is conducted in a similar manner as the

Investment and Operation segment.

The main risk for the automobile, ship and aircraft related

business is the high volatility in the residual value of operating

lease assets. To address this risk, in addition to restricting leas-

es to automobiles, ships and aircraft with general versatility, we

constantly monitor the valuation of our portfolio and consider

the possibility of selling each assets based on prevailing mar-

ket conditions.

The main risks for the investment and finance business in the

United States are credit risk, market risk and operational risk.

At the time of origination, we assign an internal credit rating

for each investment and loan taking into consideration the

credit status of the borrower or company in which we are

investing and the collateral for the transaction. Subsequently

we monitor the credit status and periodically reevaluate the

internal credit ratings.

For investments and loans with a rating requiring attention,

we produce an objective evaluation regarding the possibility of

collection of such investments and loans, and decide manage-

ment policies such as provision and impairments.

Regarding market risk, we monitor on a daily basis the mar-

ket value and mark-to-market valuation of our investments and

loans. In addition, we proactively manage risk by referring to

the credit risk information for each investment and loan that we

acquired during the credit risk management process and by

conducting early exits to secure profits or minimize losses.

Regarding operational risk, finance providers and managers

are separated. Each acts independently according to the

financing process manual. Also, the internal audit department

regularly inspects the performance of our investing and lending

operations. In the advisory business, we comply with operating

standards set forth by authorities and managed through an

internal quality control committee, maintaining quality and

operational methods that meet such standards to provide high

quality advisory and evaluation services. In relation to the busi-

ness involving arrangement of financing for real estate compa-

nies by Fannie Mae and Federal Housing Administration (FHA)

and related loan servicing, as a delegated company of public

financial institutions, it is essential that we conduct our opera-

tion on the basis of designated operating procedures set forth

by these institutions, and that we monitor and manage service

quality through internal auditing. In regards to the asset man-

agement business, as an SEC-registered company, it is neces-

sary for us to abide by established compliance standards, and

monitor and manage our operations through an internal com-

pliance system based on such standards.


Corporate Governance

Management Team

Kazuo KojimaDirector and Corporate Executive Vice PresidentDomestic Sales Administrative HeadquartersChairman, ORIX Rentec CorporationChairman, ORIX Auto Corporation

Yoshiyuki YamayaDirector and Corporate Executive Vice PresidentReal Estate HeadquartersPresident, ORIX Real Estate CorporationChairman, ORIX Golf Management LLC

Tamio UmakiDirector and Corporate Executive Vice PresidentChief Information OfficerHuman Resources and Corporate Administration Headquarters

Yoshihiko MiyauchiDirector, Representative Executive Officer,Chairman and Chief Executive Officer

Makoto InoueDirector, Representative Executive Officer,President and Chief Operating Officer

Haruyuki UrataDirector, Representative Executive Officer,Deputy President and Chief Financial OfficerCorporate Planning DepartmentCorporate Communications Department

Hiroaki NishinaDirector and Vice ChairmanGroup Corporate SalesGroup Kansai RepresentativeChairman, ORIX Real Estate CorporationPresident, ORIX Baseball Club Co., Ltd.

Robert FeldmanOutside Director

Takeshi NiinamiOutside Director

Nobuaki UsuiOutside Director

Hirotaka TakeuchiOutside Director

Takeshi SasakiOutside Director

Eiko TsujiyamaOutside Director

Directors


Corporate Philosophy

ORIX is constantly anticipating market needs and working to contribute to society by developing leading financial servic-

es on a global scale and striving to offer innovative products that create new value for customers.

Management Policy

• ORIX strives to meet the diverse needs of its customers and to deepen trust by constantly developing superior services.

• ORIX aims to strengthen its base of operations and achieve sustained growth by integrating ORIX’s resources to promote

synergies amongst different units.

• ORIX makes efforts to maintain a corporate culture that encourages a sense of fulfillment and pride by developing personnel

resources through corporate programs and promoting professional development.

• ORIX aims to attain stable medium- and long-term growth in shareholder value by implementing these initiatives.

Profit Distribution Policy

• ORIX believes that securing profits from its businesses primarily as retained earnings, and utilizing them for strengthening its

base of operations and making investments for growth, assists in sustaining profit growth while maintaining financial stabili-

ty, leading to increased shareholder value.

• Regarding dividends, ORIX responds to shareholder expectations through increasing shareholder value through mid- to

long-term profit growth and steady distribution of profit.

1 Yoshihiko Miyauchi

2 Makoto Inoue

3 Tamio Umaki

4 Kazuo Kojima

5 Takeshi Sasaki

6 Hirotaka Takeuchi

7 Nobuaki Usui

8 Haruyuki Urata

9 Robert Feldman

J Hiroaki Nishina

K Yoshiyuki Yamaya

L Eiko Tsujiyama

M Takeshi Niinami

2

34

5 6

MLKJ97 8

1


Introduction of ORIX Outside Directors

Hirotaka TakeuchiMember of Nominating Committee, Compensation CommitteeProfessor, Harvard Business School

Hirotaka Takeuchi taught at the Graduate School of Business Administration at the

University of California, Berkeley, Harvard Business School and Hitotsubashi

University’s School of Commerce before he became the Dean at the Graduate School

of International Corporate Strategy in April 1998. He currently serves as Professor at

Harvard Business School, a position he assumed in July 2010.

Utilizing his profound knowledge relating to corporate strategy, he contributes to

management oversight by participating suitably in discussions and deliberations of

the Board of Directors and Committees from the standpoint of overall strategy.

Takeuchi served as a Corporate Auditor from June 2000 to June 2003, and was

appointed as an Outside Director in June 2004. He is independent from the manage-

ment engaged in operations, and is registered as an Independent Director as deter-

mined by the securities exchanges in Japan.

Eiko TsujiyamaMember of Audit Committee (Chairperson), Compensation CommitteeProfessor, Faculty of Commerce, Waseda UniversityDean and Professor, Graduate School of Commerce, Waseda UniversityCorporate Auditor, Mitsubishi CorporationCorporate Auditor, Lawson, Inc.Corporate Auditor, NTT DOCOMO, INC.Corporate Auditor, Shiseido Company, Limited

Eiko Tsujiyama served as an Assistant Professor at Ibaraki University, Faculty of

Humanities, Assistant Professor and Professor at Musashi University, Faculty of

Economics, before being appointed Dean of Musashi University’s Faculty of

Economics in April 1996. She currently serves as a Professor at Waseda University,

Faculty of Commerce and Graduate School of Commerce. In September 2010, she

became Dean of the Graduate School of Commerce, Waseda University. She also

serves on government and institutional finance and accounting councils both in Japan

and overseas.

She has extensive knowledge and profound experience as a specialist in account-

ing. As Chairperson of the Audit Committee, she contributes management oversight

by leading discussions on the effectiveness of the Company’s internal control system.

Tsujiyama was appointed as an Outside Director in June 2010. She is independent

from the management engaged in operations, and is registered as an Independent

Director as determined by the securities exchanges in Japan.

Takeshi SasakiMember of Nominating Committee (Chairperson), Audit Committee, Compensation CommitteeProfessor, Gakushuin University, Faculty of Law, Department of Political StudiesOutside Director, East Japan Railway Company

Takeshi Sasaki served as an Assistant Professor and Professor at The University of

Tokyo, Faculty of Law, and Professor at The University of Tokyo Graduate Schools for

Law and Politics before he was appointed President in April 2001. As Chairperson of

the Japan Association of National Universities, he was involved as the person in

charge of the incorporation of national universities. He has served as a Professor at

Gakushuin University, Faculty of Law, Department of Political Studies, since April 2005.

With a wealth of experience in university reform, he is knowledgeable in a wide

range of issues in politics and society in general that affect the Company’s manage-

ment. As Chairperson of the Nominating Committee, he contributes to management

oversight by leading discussions and deliberations on members of the Board of

Directors and Executive Officers suitable for the Company’s business operations.

Sasaki was appointed as an Outside Director in June 2006. He is independent from

the management engaged in operations, and is registered as an Independent Director

as determined by the securities exchanges in Japan.


Management Team


Introduction of ORIX Outside Directors

Robert FeldmanMember of Compensation Committee (Chairperson), Nominating CommitteeManaging Director, Head of Japan Economic ResearchMorgan Stanley MUFG Securities Co., Ltd.

Robert Feldman served as Economist at the International Monetary Fund, Chief

Economist at Salomon Brothers Asia Limited (now Citigroup Global Markets Japan

Inc.) and Managing Director, Co-Director of Japan Research and Chief Economist at

Morgan Stanley Japan Securities Co., Ltd. (now Morgan Stanley MUFG Securities

Co., Ltd.), where he has been serving as Managing Director and Head of Japan

Economic Research since December 2007.

He has in-depth knowledge and profound experience as an economist of the

environment and events in Japan and overseas that affect the corporate busi-

ness environment. He contributes to management oversight by participating suit-

ably in discussions and deliberations of the Board of Directors and Committees

from a broader perspective.

Feldman was appointed as an Outside Director in June 2010. He is independent



Nobuaki UsuiMember of Nominating Committee, Audit CommitteeCorporate Auditor, KONAMI CORPORATION

Nobuaki Usui served as the Director-General of the Tax Bureau, Commissioner of

National Tax Agency and Administrative Vice Minister of Ministry of Finance.

Thereafter, he also served as the Governor and CEO of National Life Finance

Corporation and Chairman of The Japan Research Institute, Limited.

Usui was newly appointed as an Outside Director in June 2012. ORIX expects him

to contribute to management oversight by utilizing his profound experience and exten-

sive knowledge as a specialist in finance and taxation.

Usui is independent from the management engaged in operations, and is registered

as an Independent Director as determined by the securities exchanges in Japan.

Takeshi NiinamiMember of Nominating Committee, Compensation CommitteePresident and CEO, Lawson, Inc.Outside Director, ACCESS CO., LTD.

Takeshi Niinami served at Mitsubishi Corporation, where he was named Unit Manager

of Lawson Business and Mitsubishi’s Dining Logistical Planning Team, Consumer

Industry Division. In May 2002, he became President and Executive Officer of Lawson,

Inc., before assuming the role of President and CEO in 2005.

He contributes to management oversight by participating suitably in discussions

and deliberations of the Board of Directors and Committees utilizing his management

decision-making abilities based on his broad knowledge and experience in corporate

management.

Niinami was appointed as an Outside Director in June 2010. He is independent




Executive Offi cers

Group Executives

Corporate Executive Vice President

Shintaro AgataTreasury Headquarters

Executive Offi cer

Yuichi NishigoriInvestment and Operation Headquarters

Executive Offi cer

Kazutaka ShimouraRisk Management Headquarters

Executive Offi cer

Komei IkebukuroGroup Legal and Compliance DepartmentGroup Internal Audit Department

Executive Offi cer

Hideo IchidaGlobal Business Administrative Headquarters

Executive Offi cer

Hideto NishitaniDeputy President, ORIX USA Corporation

Executive Offi cer

Yasuyuki IjiriDomestic Sales Administrative Headquarters: Head of Tokyo SalesPresident, NS Lease Co., Ltd.

Executive Offi cer

Shigeki SekiHuman Resources and Corporate Administration HeadquartersIT Planning Offi ce

Executive Offi cer

Satoru KatahiraDomestic Sales Administrative Headquarters: Head of OQL Business Headquarters, Regional Business Department, Administration Center and Call CenterPresident, ORIX Callcenter Corporation

Group Senior Vice President

Tetsuo MatsumotoVice Chairman, ORIX Real Estate Corporation

Group Senior Vice President

Katsunobu KameiPresident, ORIX Auto Corporation

Group Executive

Yoshitaka FujisawaPresident, ORIX Computer Systems Corporation

Group Executive

Masatoshi KenmochiPresident, ORIX Credit Corporation

Group Executive

Toshiyuki OhtoPresident, ORIX Life Insurance Corporation

Corporate Senior Vice President

Eiji MitaniDomestic Sales Administrative Headquarters: Head of Kinki SalesGroup Kansai Deputy Representative


Katsutoshi KadowakiDomestic Sales Administrative Headquarters: Head of District Sales


Takao KatoAccounting HeadquartersPresident, ORIX Management Information Center Corporation


Management Team


Corporate Governance System

Characteristics of ORIX’s Corporate Governance System

1. Separation of operation and oversight through a “Company with Committees” board model

2. Nominating, Audit and Compensation Committees each comprised solely of outside directors

3. All outside directors satisfy conditions for independence

4. Outside directors highly qualified in their respective fields

ORIX believes that swift execution of operations is vital in order

to effectively respond to changes in the business environment.

Furthermore, we believe that ORIX’s governance system pro-

motes improved management transparency by creating a sys-

tem in which outside directors with expertise in their respective

fields monitor, and advise on legal compliance and appropriate

execution of operations.

ORIX adopted the “Company with Committees” board model

in June 2003 followed by the new “Company with Committees”

board model in line with the enactment of the Companies Act

of Japan in May 2006, as outlined below, with the aim of further

enhancing management and operational oversight and to

accelerate management decision-making and operations.

Furthermore, oversight by directors is separated from the

execution of operations with the three committees

(Nominating, Audit and Compensation Committees) that form

the heart of the board of directors. Each committee is

composed solely of outside directors to help avoid conflicts of

interest with our shareholders.

In addition, all outside directors must meet the specific con-

ditions necessary for director independence as set forth by the

Nominating Committee (described below under “Conditions for

Director Independence” on page 50).

History of ORIX’s Corporate Governance System

June 1997 Established Advisory BoardJune 1998 Introduced Corporate Executive Officer SystemJune 1999 Introduced Outside DirectorsJune 2003 Adopted the “Company with Committees” board

modelMay 2006 Adopted the new “Company with Committees”

board model in line with the enactment of the Companies Act of Japan

June 2007 The three committees (Nominating, Audit and Compensation Committees) are composed solely of Outside Directors

ORIX believes that a robust corporate governance system is a vital element of effective enhanced management and there-

fore has established sound and transparent corporate governance to carry out appropriate business activities in line with

our core policies and ensure objective management.

Corporate Governance Framework

Board of Directors

General Meeting of Shareholders

Board of Directors

6 Outside Directors

Independent Public Accountants

Audit Committee Secretariat

7 Internal Directors

Nominating Committee: 5 Members (Outside: 5)

Audit Committee: 3 Members (Outside: 3)

Compensation Committee: 5 Members (Outside: 5)

CEO, COO, CFO

Executive Officers

Disclosure CommitteeInvestment and Credit Committee

Group Executive Officer CommitteeMonthly Strategy MeetingInformation TechnologyManagement Committee16 Executive Officers*

5 Group Executives(Excluding CEO, COO and CFO)

Internal Control-Related Operations

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(As of July 1, 2012)


Board of DirectorsThe board of directors carries out decisions related to items

that, either as a matter of law or pursuant our Articles of

Incorporation, cannot be delegated to executive officers, and

important items as determined by the regulations of the board

of directors. The board of directors is responsible for approving

and monitoring ORIX’s policies on a regular basis, which

include corporate planning such as capital management, fund

procurement and personnel strategies. Aside from such items,

the board of directors delegates decision-making regarding

operational execution to representative executive officers. The

board of directors also receives reports from executive officers

and committees regarding the status of business operations.

From April 1, 2011 through March 31, 2012, the board of

directors met eight times. The attendance rate of directors for

these meetings was 99%.

Nominating Committee

The Nominating Committee is authorized to propose the slate

of director appointment or dismissal to be submitted to the

annual general meeting of shareholders. Directors shall be

elected and dismissed by a resolution of the annual general

meeting of shareholders. In addition, the Nominating

Committee deliberates on the appointment or dismissal of our

executive officers, although this is not required under the

Companies Act of Japan.

The Nominating Committee determines whether the conditions

for director independence have been met in accordance with

nomination criteria for directors, which are listed below.

From April 1, 2011 through March 31, 2012, the Nominating

Committee met five times. The attendance rate of directors for

these meetings was 100%.

Membership (Outside Directors:5)

Takeshi Sasaki (Chairperson)

Hirotaka Takeuchi

Robert Feldman

Takeshi Niinami

Nobuaki Usui

Conditions for Director Independence

No individuals, or any of their family members*, may receive a

compensation of more than ¥10 million annually excluding

compensation as an employee for family members, and

excluding the individual’s compensation as outside directors,

from ORIX or its subsidiaries.

No individuals, or any of their family members*, may be a

major shareholder of ORIX (more than 10% of issued shares)

or represent the interests of a major shareholder.

No individuals may have served as an executive officer

(including operating officers, hereinafter the same) or an

employee of ORIX or its subsidiaries within the past five years.

No family members* may have served as an executive officer

of ORIX or its subsidiaries within the past five years.

No individuals may be a principal trading partner** or exec-

utive officer or an employee of a principal trading partner of

ORIX or its subsidiaries. If such circumstances existed in the

past, five years must have passed since that person’s retire-

ment from office or employment.

There must be no concurrent directorship relationship***

between the company for which the individual is serving as

an executive officer and ORIX.

No individuals may be directors, or executive officers of

organizations receiving donations or assistance of large

amounts (annual average of ¥10 million or higher over the

past three years) from ORIX or its subsidiaries.

There must be no material conflict of interest or any possi-

ble conflict of interest that might influence the individual’s

judgment in performing their duties as an outside director.

* Family members include a spouse, those related within the second degree by consan-

guinity or affinity, or other kin living with the outside director.

** A “principal trading partner” refers to an entity with a business connection with the ORIX

Group with a transaction amount equivalent to more than the greater of 2% of each con-

solidated total revenues of ORIX Group and the partner, or $1,000,000 in any fiscal year

of the previous three years.

*** Concurrent directorship relationship is defined as being a relationship in which the com-

pany for which the individual is serving as an executive officer has a director that is also

an executive officer of ORIX or its subsidiaries.




Audit Committee

The Audit Committee monitors the operational execution of the

directors and executives and creates audit reports. In addition,

the Audit Committee proposes the appointment or dismissal,

or the passage of resolutions refusing the reappointment of

ORIX’s independent certified public accountants to the annual

general meeting of shareholders. The Audit Committee

Secretariat (four people) was established to provide support to

the Audit Committee regarding the execution of its duties.

From April 1, 2011 through March 31, 2012, the Audit

Committee met eight times. The attendance rate of directors

for these meetings was 96%.

Membership (Outside Directors: 3)

Eiko Tsujiyama (Chairperson)

Takeshi Sasaki

Nobuaki Usui

* Eiko Tsujiyama, chairperson of the Audit Committee, is qualified as a certified public accoun-

tant and has extensive knowledge in finance and accounting as a professional accountant.

The Audit Committee’s cooperation with the internal audit department and its relationship with internal control-related departments

The Audit Committee decides the responsible person in cor-

porate audit department or each business who will report to

the Audit Committee, and it evaluates the administration of

executive officers and internal controls of ORIX by consider-

ing the following five points:

• The Audit Committee reviews the report related to the

results of the audit and items indicated for improvement

that has been prepared by the executive officer responsible

for the corporate audit. The Audit Committee is able to

instruct the Audit Committee Secretariat and internal audit

department to conduct an inspection as needed.

• The Audit Committee monitors the business environment

through reports, obtained from the executive officer responsi-

ble for the accounting department, which cover the revenue

composition of each department and any problem areas

related to the business from an accounting perspective.

• The Audit Committee reviews and discusses based on the

reports that it receives from the independent certified public

accountants regarding whether there are any material items

relating to the audit.

• The Audit Committee reviews and discusses based on

reports regarding the direction of ORIX and the execution of

important business matters that it receives from the repre-

sentative executive officer.

• The Audit Committee engages in discussions which are the

basis of our business strategy, after it receives explanations

from the heads of each business department and presidents

of group companies that focus, in particular, on risk control.

Compensation Committee

The Compensation Committee has the authority to set the pol-

icy for determining compensation for directors and executive

officers and to set the specific compensation for each individu-

al director and executive officer.

The Compensation Committee sets “Policy of Determining

Compensation of Directors and Executive Officers.” (See next

page.)

From April 1, 2011 through March 31, 2012, the Compensa-

tion Committee met six times. The attendance rate of directors

for these meetings was 97%.

Membership (Outside Directors: 5)

Robert Feldman (Chairperson)

Hirotaka Takeuchi

Takeshi Sasaki

Eiko Tsujiyama

Takeshi Niinami


Compensation of Directors, Executive Officers and Group Executives for the fiscal year ended March 31, 2012

Fixed CompensationPerformance-Linked

CompensationShare Component of

Compensation Total(Millions of yen)Number of

PeopleAmount Paid

(Millions of yen)Number of

PeopleAmount Paid

(Millions of yen)Number of

PeopleAmount Paid

(Millions of yen)

Directors 6 66 — — 1 7 74 (Outside Directors) (6) (66) (1) (7) (74)Executive Officers 22 740 22 149 2 40 930Group Executives 7 147 7 30 0 0 177

Notes: 1. In fiscal 2012, 4 executive officers were newly appointed, 3 executive officers retired and 1 group executive was newly appointed and 1 group executive retired, for a total of 13 directors (including 6 outside directors), 19 executive officers (including those serving concurrently as directors) and 5 group executives as of March 31, 2012. Figures for the num-ber of directors and executive officers remunerated and the remuneration amount include figures for the 3 executive officers and 1 group executive that retired in fiscal 2012.

2. In fiscal 2012, no persons serving concurrently as directors and executive officers were remunerated as directors. The total remuneration figure for 7 people serving concurrently as directors and executive officers is shown in the executive officers line.

3. Share compensation indicated above is the amount for the 1 director and 2 executive officers that retired in fiscal 2012 or by the end of the General Meeting of Shareholders held on June 25, 2012.

4. ORIX did not provide stock options in the form of stock acquisition rights in fiscal 2012. 5. Figures shown are rounded downward by discarding figures of less than ¥1 million.

Policy of Determining Compensation of Directors and Executive Officers

ORIX’s business objective is to increase shareholder value

over the medium and long term. ORIX believes in each direc-

tor and executive officer responsibly performing his or her

duties and in the importance of cooperation among different

business units in order to achieve continued growth of the

ORIX Group. The Compensation Committee believes that in

order to accomplish such business objectives, directors and

executive officers should place emphasis not only on perfor-

mance during the current fiscal year, but also on medium-

and long-term results. Accordingly, under the basic policy

that compensation should provide effective incentives, ORIX

takes such factors into account when making decisions

regarding the compensation system and compensation levels

for its directors and executive officers. Taking into consider-

ation this basic policy, ORIX has established separate policies

for the compensation of directors and that of executive offi-

cers in accordance with their respective roles.

Compensation Policy for Directors

The compensation policy for directors who are not also exec-

utive officers aims for a level and composition of compensa-

tion that is effective in maintaining supervisory and oversight

functions of executive officers’ performance in business oper-

ations, which is the main duty of directors. Specifically, while

aiming to maintain competitive compensation standards,

ORIX’s compensation structure consists of a fixed compen-

sation component based on duties performed, and a shares

component of compensation*.

Fixed compensation is, in principal, a certain amount that is

added to the compensation of the chairperson and member

of each committee. Share-based compensation reflecting

medium- to long-term performance is granted based on the

number of points earned by the individual while in office, and

the amount of the payment is decided according to the share

price at the time of an individual director’s retirement. In addi-

tion, ORIX strives to maintain a competitive level of compen-

sation with director compensation according to the role

fulfilled, and receives third party research reports on compen-

sation for this purpose.

Compensation Policy for Executive Officers

The compensation policy for executive officers, including

those who are also directors, aims for a level of compensa-

tion that is effective in maintaining business operation func-

tions, while incorporating in its composition a component that

is linked to current period business performance. Specifically,

while aiming to maintain competitive compensation stan-

dards, ORIX’s compensation structure consists of a fixed

compensation component based on positions and duties

performed, a performance-linked component, and a shares

component of compensation*.

Fixed compensation is decided for each individual based

on a standard amount for each position. Compensation

linked to business performance uses the level of achievement

of the net income target as a performance indicator, adjusting

the level-based standard amount within the range of 0% to

200%. Share-based compensation reflecting medium- to

long-term performance is granted as a certain number of

points while in office, and the amount of the payment is

decided according to the share price at the time of an individ-

ual executive officer’s retirement. In addition, and based on

the outcome of a third-party compensation research agency

investigation, ORIX strives to maintain a competitive level of

compensation with executive officer compensation function-

ing as an effective incentive.

* The shares component of compensation is a program in which points are annually allocat-

ed to directors and executive officers based upon prescribed standards and the compen-

sation provided is the amount equal to the accumulated number of points multiplied by the

stock price at the time of retirement. Under this program, directors and executive officers

have an obligation to purchase shares from ORIX at the stock price that prevails at the time

of their retirement using the after-tax compensation provided.




Executive OfficersThe representative executive officer makes ORIX’s important

business execution decisions after deliberations by the

Investment and Credit Committee (“ICC”) in accordance with

ORIX’s various regulations. The business execution duties of

executive officers are decided by the board of directors and

the representative executive officer and these duties are

carried out based upon ORIX’s various regulations. Group

executives are appointed by the board of directors from

among directors and executive officers of Group companies.

Important decision-making related to business execution,

monitoring, discussions, and information sharing is carried out

by the following bodies:

The different respects from New York Stock Exchange Corporate Governance Standards

Our ADRs have been listed on the New York Stock Exchange

(NYSE) since 1998. As an NYSE-listed company, we are required to

comply with certain corporate governance standards under Section

303A of the NYSE Listed Company Manual. However, as a foreign

private issuer, we are permitted to follow home country practice. Our

corporate governance practices differ in certain respects from those

that U.S. companies must adopt. A summary of these different

respects are as follows.

• We are not required to meet the NYSE’s independence require-

ments for individuals on our board of directors or our Nominating,

Audit, and Compensation Committees. In ORIX, Nominating

Committee sets “Conditions for Director Independence.”

• We are not required to include on our board of directors a majority

of outside directors, nor are we required to compose our commit-

tees exclusively from outside directors. In ORIX, six of our 13

directors are outside directors. In addition, each committee is

comprised solely of outside directors.

Please see the details in our Form 20-F.

Name (Basic Frequency of Meetings) Membership

Investment and Credit Committee (Thrice Monthly)

• Meets primarily to deliberate and decide on credit transactions and investments that exceed certain specified investment or credit amounts and important matters related to management of the Company and matters that have been entrusted to executive officers by the board of directors.

• Matters considered crucial to ORIX’s operations are decided on by the ICC and reported to the board of directors as appropriate.

Top management and the executive officer in charge of investment and credit

Group Executive Officer Committee (Once Monthly)

• Meets to share important information related to the business execution of the ORIX Group.

Executive officers and group executives

Monthly Strategy Meeting (Once Monthly)

• Meets to discuss matters such as the state of achievement of strategic targets and changes in the business environment.

• Matters of key importance discussed at Monthly Strategy Meeting are deliberated and decided by the ICC and reported to the board of directors as necessary.

Top management and individuals in charge of individual departments

Information Technology Management Committee (Once Monthly)

• Meets to deliberate and decide important matters concerning fundamental poli-cies for IT operations and IT systems.

• The committee determines the needs of and priorities for IT investment based on ORIX’s fundamental IT strategies at the top management level, enabling ORIX to ensure that IT decisions are consistent with its business strategies and helping ORIX to pursue its goal of making IT investments that contribute to business growth and help reduce risk.

Top management and the executive officer in charge of IT systems

Disclosure Committee (As Necessary)

• The committee discusses whether or not any timely disclosure is necessary, and takes steps to provide appropriate disclosure of such information upon receiving material information from individuals in charge of individual departments.

• The committee controls information disclosure that plays an important role in cor-porate governance and facilitates the appropriate and timely disclosure of informa-tion to investors.

CFO (Chairperson) and executive officers in charge of Treasury Headquarters, Accounting Headquarters, Risk Management Headquarters, Group Legal and Compliance Department , Human Resources and Corporate Administrat ion Headquarters, Corporate Planning Department and Corporate Communications Department


porates new ways of thinking about things. I think that this has

become the “DNA” of ORIX and is shared by its employees. A

look at the Board of Directors makes it readily apparent that

this “DNA” is successively passed along among its members.

I feel that ORIX’s executives are bright, independent thinkers

who actively communicate. Their sheer creativity in coming up

with new ideas in any environment is impressive, stemming

from a perspective closer to that of the customers rather than

that of the so-called “finance sector.” I think it is an organiza-

tion where the management values diversity and steadily incor-

With significant expertise and a wealth of experience across their respective fields, we asked three outside directors to

comment on the Company’s corporate governance.

breadth of discussion of each and every transaction. I believe

that this sort of corporate governance is making a positive contri-

bution to ORIX in a number of ways.

Even in situations outside the Board of Directors, such as

lunch after a meeting has ended, executive officers and out-

side directors have discussions while enjoying a meal. I feel

that the desire to capture opportunities to be creative flows

throughout the entire organization.

Its best aspect is not merely its large number of outside directors,

but rather the diversity of the portfolio. This array of outside direc-

tors from diverse fields and backgrounds allows us to consider

matters from diverse perspectives at Board of Directors meetings.

I think this may occasionally seem time-consuming and bother-

some from the perspective of the executive officers who listen to

these opinions. Nevertheless, an advantage of ORIX’s corporate

governance that is not enjoyed by other firms is the depth and

Regarding ORIX’s Corporate Governance

domestically but also overseas. I expect that from now on the

Company will be able to make a significant break from its past

image as a finance sector and demonstrate its abilities as a

solutions provider through operations and efforts that are

unique to ORIX.

It is precisely the existence of ORIX’s corporate culture that

allows the Company to act swiftly without adhering to the sta-

tus quo. I think that the firm establishment of a mechanism for

management decision-making has allowed for swiftly deter-

mining which chances to take.

When appearing before the Board of Directors, I try to state

opinions based on a “big picture” standpoint from corporate

management perspective. In particular, I regularly check that

management is such as to allow for continuous growth from a

corporate value-based perspective. For example, when exam-

ining operations, I make statements from a perspective that

takes into consideration whether a proposal is in line with

ORIX’s strategy, how exactly it will create unique corporate

value, and whether it will improve value in the medium- to

long-term.

I currently think that there are opportunities to dynamically

utilize the experience ORIX has gained thus far, not only

Perspectives Concerning and Future Expectations of the Board of Directors and Each Committee

Impressions of and Thoughts about ORIX


Comments from Outside Directors

Takeshi NiinamiPresident and CEO, Lawson, Inc. Offers broad knowledge and expe-rience in corporate management. Outside director since 2010. Member of the Nominating and Compensation Committees.


the company should distribute capital have been made with a

sense of urgency and consideration given to the finance busi-

ness. However, a sense of urgency is not the only factor in play;

rather, there is also the deliberate consideration of reasons for

and reasons against doing something before acting. In short,

organizations tend to have more and more reasons for not

doing things with the passage of time. However, only discuss-

ing this will of course not lead to a viable business. I feel that

ORIX has achieved a good balance in that respect.

Upon joining the Board of Directors, I felt that ORIX was an

extraordinarily flexible corporation. I became an outside director

in 2010 just after the world financial crisis began. The world

economy, especially the finance sector, was in a state of chaos.

In such times, flexibility and decision-making ability that allow

for skillful distribution of capital based on a close examination of

world trends are indispensable. I think that ORIX is a corpora-

tion in which shareholder profits are regularly considered, and

decisions concerning how best to create added value and how


Robert FeldmanManaging Director, Head of Japan Economic Research, Morgan Stanley MUFG Securities Co., Ltd. Boasts in-depth knowledge and profound experience as an econo-mist of the environment and events in Japan and overseas that affect the corporate business environ-ment. Outside director since 2010. Chairperson of the Compensation Committee and member of the Nominating Committee.

New ideas are created by a Board of Directors that consists of

a collection of individuals with myriad positions. These individu-

als have a frank exchange of ideas from their diverse perspec-

tives in an active atmosphere. Furthermore, the intermixing of a

variety of information has allowed for excellent openness of

communication in the corporation, and has resulted in what

can be called “checks.”

I think that rather than being an “institutional organization,”

ORIX’s corporate governance is an effective “system” in which

checks and balances work reliably thanks to the corporate

atmosphere, the membership of its directors, information shar-

ing, and the like. Also, when I was requested to accept

appointment as an outside director, I was told that it was actu-

ally desirable for me to say things that might seem outspoken.


finance and real estate via its business development to the

present, and will be able to make a variety of contributions with

respect to these issues. As an economist I am exposed to dif-

ferent ideas and perspectives from those of a corporation, and

I think that my ability to make statements from these perspec-

tives allows for my greatest contribution to the growth of ORIX.

I am involved in both the investor and economics spheres.

Thus, when something occurs here now and is applied to

ORIX, I make statements from a viewpoint that emphasizes

how we should think about it. Examination of the world reveals

that there are many important and complex issues. In the

world of economics, energy shortages are a major issue. I

think that ORIX has accumulated knowledge and expertise in



so-called finance sector. It truly is a corporation that provides

services centered on finance.

Finance is said to be the “lubricant” of society. I think that

ORIX has succeeded in steadily functioning as this sort of

“lubricant,” but that is not all; it also increases and cultivates

value by means of investment. ORIX passes along a current

business and moves on to investing in a new one capable of

adding value when the opportunity arises. In this way, ORIX is

always looking for segments of society that are lacking this

“lubricant.” I feel that this is very well expressed in ORIX’s cor-

porate philosophy.

In conducting its business, ORIX operates under the corporate

philosophy: “Constantly anticipate market needs” and

“Contribute to society by striving to offer innovative products

that create new value for customers.” Since joining the Board

of Directors, I have come to understand that each and every

one of the words of this corporate philosophy is very significant

to ORIX’s activities.

Therefore, I think it would be a mistake to view ORIX as part

of the finance sector. It has a diverse range of businesses,

beginning with leasing it has expanded its business areas and

has constructed a business model different from that of the


As shareholders cannot attend the Board of Directors meet-

ings, I think that it is important for us to keep this in mind and

speak on behalf of the shareholders.

In the future, I expect ORIX to further develop overseas busi-

ness and become a global operation. We must pay close

attention to the matter of increased risk in terms of governance

and compliance overseas. Responses that are the same as

those in Japan will of course not work well due to cultural dif-

ferences. I think this is an issue that is common to all corpora-

tions that develop business globally.

My main duty is that of the Audit Committee Chairperson, and

I endeavor to use my own accounting and finance related

expertise to make contributions in terms of settlements of

accounts and accounting audits. ORIX’s Audit Committee is

made up entirely of outside directors, but by closely communi-

cating with the Group Internal Audit Department and Group

Legal and Compliance Department to monitor the operation-

side’s daily activities, I contribute to the Board of Directors as

the Audit Committee Chairperson. I am also conscious of the

fact that outside directors are representatives of the shareholders.


on the business model. Prior to my appointment as an outside

director, I had an uneasy sense that although ORIX is known

as a “Company with Committees,” this might be true in name

only. However, I found this to be the contrary to my expecta-

tions. I think that ORIX is a successful example of a “Company

with Committees.”

ORIX’s Board of Directors is not at all bound by formalities.

Rather, it takes the stance of allowing for discussion starting

with no preconceived notions. Instead of just functioning as a

final check, the Board of Directors has been positioned as a

venue in which the opinions of outside directors are given with

utmost candor, and outside directors actively make statements


Eiko TsujiyamaProfessor, Faculty of Commerce, Waseda University; Dean and Professor, Graduate School of Commerce, Waseda University. Has extensive knowledge and consider-able experience as a specialist in accounting. Outside director since 2010. Chairperson of the Audit Committee and member of the Compensation Committee.


Comments from Outside Directors


Financial Section

Contents

58 Eleven-Year Summary

60 Consolidated Balance Sheets

62 Consolidated Statements of Income

63 Consolidated Statements of Changes in Equity

64 Consolidated Statements of Cash Flows

65 Breakdown of Assets and Revenues by Segment

66 Guide to Non-GAAP Financial Measurement

For more details, see ORIX’s Form 20-F filed with the United States Securities

and Exchange Commission.

Investor Relations IR Library US SEC Form 20-F:

http://www.orix.co.jp/grp/en/ir/library/20f/



Millions of yen

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Financial Position

Investment in Direct Financing Leases ¥1,658,669 ¥1,572,308 ¥1,453,575 ¥1,451,574 ¥1,437,491 ¥1,258,404 ¥1,098,128 ¥ 914,444 ¥ 756,481 ¥ 830,853 ¥ 900,886

Installment Loans 2,273,280 2,288,039 2,234,940 2,386,597 2,926,036 3,490,326 3,766,310 3,304,101 2,464,251 2,983,164 2,769,898

Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses (152,887) (133,146) (128,020) (115,250) (97,002) (89,508) (102,007) (158,544) (157,523) (154,150) (136,588)

Allowance/Investment in Direct Financing Leases and Installment Loans 3.9% 3.4% 3.5% 3.0% 2.2% 1.9% 2.1% 3.8% 4.9% 4.0% 3.7%

Investment in Operating Leases 474,491 529,044 536,702 619,005 720,096 862,049 1,019,956 1,226,624 1,213,223 1,270,295 1,309,998

Investment in Securities 861,336 677,435 551,928 589,271 682,798 875,581 1,121,784 926,140 1,104,158 1,175,381 1,147,390

Other Operating Assets 245,897 76,343 72,049 82,651 91,856 152,106 197,295 189,560 186,396 235,430 224,092

Total Assets ¥6,350,219 ¥5,931,067 ¥5,624,957 ¥6,068,953 ¥7,242,455 ¥8,207,187 ¥8,994,970 ¥8,369,736 ¥7,739,800 ¥8,581,582 ¥8,354,874

Short-Term Debt, Long-Term Debt and Deposits ¥4,679,566 ¥4,239,514 ¥3,859,180 ¥4,146,322 ¥4,925,753 ¥5,483,922 ¥6,263,017 ¥5,919,639 ¥5,263,104 ¥6,075,076 ¥5,828,967

ORIX Corporation Shareholders’ Equity ¥ 502,508 ¥ 505,458 ¥ 564,047 ¥ 727,333 ¥ 953,646 ¥1,194,234 ¥1,267,917 ¥1,167,530 ¥1,298,684 ¥1,319,341 ¥1,396,137

Revenues and Expenses

Total Revenues ¥ 704,945 ¥ 732,873 ¥ 760,330 ¥ 880,086 ¥ 905,158 ¥1,106,297 ¥1,112,485 ¥1,015,696 ¥ 890,552 ¥ 946,878 ¥ 972,884

Total Expenses 633,457 693,824 672,191 750,063 692,620 825,463 927,574 962,509 860,378 871,582 847,689

Provision for Doubtful Receivables and Probable Loan Losses 51,249 52,781 47,511 39,332 16,216 13,809 33,263 76,971 71,525 31,103 19,215

Income before Income Taxes and Discontinued Operations 71,158 47,254 105,521 153,042 247,324 314,747 245,459 11,043 56,057 93,301 130,484

Income from Continuing Operations 39,149 26,842 53,187 85,831 151,158 189,047 147,772 12,692 34,967 67,158 85,853

Net Income Attributable to ORIX Corporation 40,269 30,243 54,020 91,496 166,388 196,506 169,597 21,924 37,757 67,275 86,150

ROA 0.67% 0.49% 0.93% 1.56% 2.50% 2.54% 1.97% 0.25% 0.47% 0.82% 1.02%

ROE 8.4 % 6.0 % 10.1 % 14.2 % 19.8 % 18.3 % 13.8 % 1.8 % 3.1 % 5.1 % 6.3 %

Per Share Data (yen):

Net income attributable to ORIX Corporation (basic earnings per share) ¥ 489.19 ¥ 361.44 ¥ 645.52 ¥ 1,087.82 ¥ 1,883.89 ¥ 2,177.10 ¥ 1,860.63 ¥ 246.59 ¥ 370.52 ¥ 625.88 ¥ 801.33

Net income attributable to ORIX Corporation (diluted earnings per share) ¥ 467.11 ¥ 340.95 ¥ 601.46 ¥ 1,002.18 ¥ 1,790.30 ¥ 2,100.93 ¥ 1,817.81 ¥ 233.81 ¥ 315.91 ¥ 527.75 ¥ 670.34

ORIX Corporation shareholders’ equity per share ¥ 6,007.52 ¥ 6,039.43 ¥ 6,739.64 ¥ 8,322.96 ¥10,608.97 ¥13,089.83 ¥14,010.62 ¥13,059.59 ¥12,082.56 ¥12,273.11 ¥12,984.69

Operations

Direct Financing Leases:

New equipment acquisitions ¥ 980,379 ¥ 895,848 ¥ 713,240 ¥ 767,672 ¥ 800,802 ¥ 636,723 ¥ 574,859 ¥ 364,734 ¥ 232,629 ¥ 351,116 ¥ 405,660

Installment Loans:

New loans added ¥1,340,400 ¥1,268,170 ¥1,124,276 ¥1,545,517 ¥1,834,192 ¥2,226,282 ¥2,331,331 ¥1,055,014 ¥ 598,046 ¥ 721,189 ¥ 743,113

Operating Leases:


Investment in Securities:

New securities added ¥ 348,347 ¥ 231,294 ¥ 122,066 ¥ 244,600 ¥ 235,932 ¥ 331,055 ¥ 688,148 ¥ 374,614 ¥ 519,769 ¥ 791,054 ¥ 699,709

Other Operating Transactions:

New assets added ¥ 204,121 ¥ 116,736 ¥ 186,265 ¥ 129,604 ¥ 132,017 ¥ 215,409 ¥ 152,480 ¥ 76,269 ¥ 24,186 ¥ 40,763 ¥ 37,876

Number of Employees 11,271 11,833 12,481 13,734 15,067 16,662 18,702 18,920 17,725 17,578 17,488

Financial Section

Eleven-Year SummaryORIX Corporation and Subsidiaries

Years Ended March 31

Notes: 1. In fiscal 2002, new equipment acquisitions of direct financing leases, new loans added and new securities added included increases of ¥252,436 million, ¥5,841 million and ¥1,042 million,

respectively, as a result of the acquisition of IFCO Inc. (merge into ORIX Auto Corp.). In addition, new loans added included ¥132,127 million in housing loans that were purchased from

Asahi Mutual Life Insurance Company in 2002. In fiscal 2003, new equipment acquisitions of direct financing leases included an increase of ¥112,605 million as a result of the acquisition

of Nittetsu Lease Co., Ltd. (currently NS Lease Co., Ltd.).

2. As a result of the recording of “discontinued operations” in accordance with FASB Accounting Standards Codification 205-20 (“Presentation of Financial Statements - Discontinued

Operations”), results of operations that meet the criteria for discontinued operations, of which related amounts that had been previously reported, have been reclassified as discontinued

operations. Included in reported discontinued operations are the operating results of operations for the subsidiaries, the business units and certain properties sold or to be disposed of by

sale without significant continuing involvements.

3. In fiscal 2011, the Company and its subsidiaries adopted FASB Statement No. 166 (“Accounting for Transfers of Financial Assets an amendment of FASB Statement No. 140”), which was

codified by Accounting Standards Update 2009-16 (ASC 860 (“Transfers and Servicing”)) and FASB Statement No. 167 (“Amendment of FASB Interpretation No. 46(R)”), which was codi-

fied by Accounting Standards Update 2009-17 (ASC 810 (“Consolidation”)).

The effects of adopting these updates on the Company and its subsidiaries’ financial conditions at the initial adoption date was an increase of ¥1,147 billion on total assets, an increase of

¥1,169 billion on total liabilities and a decrease of ¥22 billion on retained earnings, net of tax, respectively, in the consolidated balance sheets.


Millions of yen

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Financial Position

Investment in Direct Financing Leases ¥1,658,669 ¥1,572,308 ¥1,453,575 ¥1,451,574 ¥1,437,491 ¥1,258,404 ¥1,098,128 ¥ 914,444 ¥ 756,481 ¥ 830,853 ¥ 900,886

Installment Loans 2,273,280 2,288,039 2,234,940 2,386,597 2,926,036 3,490,326 3,766,310 3,304,101 2,464,251 2,983,164 2,769,898

Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses (152,887) (133,146) (128,020) (115,250) (97,002) (89,508) (102,007) (158,544) (157,523) (154,150) (136,588)

Allowance/Investment in Direct Financing Leases and Installment Loans 3.9% 3.4% 3.5% 3.0% 2.2% 1.9% 2.1% 3.8% 4.9% 4.0% 3.7%

Investment in Operating Leases 474,491 529,044 536,702 619,005 720,096 862,049 1,019,956 1,226,624 1,213,223 1,270,295 1,309,998

Investment in Securities 861,336 677,435 551,928 589,271 682,798 875,581 1,121,784 926,140 1,104,158 1,175,381 1,147,390

Other Operating Assets 245,897 76,343 72,049 82,651 91,856 152,106 197,295 189,560 186,396 235,430 224,092

Total Assets ¥6,350,219 ¥5,931,067 ¥5,624,957 ¥6,068,953 ¥7,242,455 ¥8,207,187 ¥8,994,970 ¥8,369,736 ¥7,739,800 ¥8,581,582 ¥8,354,874

Short-Term Debt, Long-Term Debt and Deposits ¥4,679,566 ¥4,239,514 ¥3,859,180 ¥4,146,322 ¥4,925,753 ¥5,483,922 ¥6,263,017 ¥5,919,639 ¥5,263,104 ¥6,075,076 ¥5,828,967

ORIX Corporation Shareholders’ Equity ¥ 502,508 ¥ 505,458 ¥ 564,047 ¥ 727,333 ¥ 953,646 ¥1,194,234 ¥1,267,917 ¥1,167,530 ¥1,298,684 ¥1,319,341 ¥1,396,137

Revenues and Expenses

Total Revenues ¥ 704,945 ¥ 732,873 ¥ 760,330 ¥ 880,086 ¥ 905,158 ¥1,106,297 ¥1,112,485 ¥1,015,696 ¥ 890,552 ¥ 946,878 ¥ 972,884

Total Expenses 633,457 693,824 672,191 750,063 692,620 825,463 927,574 962,509 860,378 871,582 847,689

Provision for Doubtful Receivables and Probable Loan Losses 51,249 52,781 47,511 39,332 16,216 13,809 33,263 76,971 71,525 31,103 19,215

Income before Income Taxes and Discontinued Operations 71,158 47,254 105,521 153,042 247,324 314,747 245,459 11,043 56,057 93,301 130,484

Income from Continuing Operations 39,149 26,842 53,187 85,831 151,158 189,047 147,772 12,692 34,967 67,158 85,853

Net Income Attributable to ORIX Corporation 40,269 30,243 54,020 91,496 166,388 196,506 169,597 21,924 37,757 67,275 86,150

ROA 0.67% 0.49% 0.93% 1.56% 2.50% 2.54% 1.97% 0.25% 0.47% 0.82% 1.02%

ROE 8.4 % 6.0 % 10.1 % 14.2 % 19.8 % 18.3 % 13.8 % 1.8 % 3.1 % 5.1 % 6.3 %

Per Share Data (yen):

Net income attributable to ORIX Corporation (basic earnings per share) ¥ 489.19 ¥ 361.44 ¥ 645.52 ¥ 1,087.82 ¥ 1,883.89 ¥ 2,177.10 ¥ 1,860.63 ¥ 246.59 ¥ 370.52 ¥ 625.88 ¥ 801.33

Net income attributable to ORIX Corporation (diluted earnings per share) ¥ 467.11 ¥ 340.95 ¥ 601.46 ¥ 1,002.18 ¥ 1,790.30 ¥ 2,100.93 ¥ 1,817.81 ¥ 233.81 ¥ 315.91 ¥ 527.75 ¥ 670.34

ORIX Corporation shareholders’ equity per share ¥ 6,007.52 ¥ 6,039.43 ¥ 6,739.64 ¥ 8,322.96 ¥10,608.97 ¥13,089.83 ¥14,010.62 ¥13,059.59 ¥12,082.56 ¥12,273.11 ¥12,984.69

Operations

Direct Financing Leases:


Installment Loans:

New loans added ¥1,340,400 ¥1,268,170 ¥1,124,276 ¥1,545,517 ¥1,834,192 ¥2,226,282 ¥2,331,331 ¥1,055,014 ¥ 598,046 ¥ 721,189 ¥ 743,113

Operating Leases:


Investment in Securities:

New securities added ¥ 348,347 ¥ 231,294 ¥ 122,066 ¥ 244,600 ¥ 235,932 ¥ 331,055 ¥ 688,148 ¥ 374,614 ¥ 519,769 ¥ 791,054 ¥ 699,709

Other Operating Transactions:

New assets added ¥ 204,121 ¥ 116,736 ¥ 186,265 ¥ 129,604 ¥ 132,017 ¥ 215,409 ¥ 152,480 ¥ 76,269 ¥ 24,186 ¥ 40,763 ¥ 37,876

Number of Employees 11,271 11,833 12,481 13,734 15,067 16,662 18,702 18,920 17,725 17,578 17,488


Millions of yen

Millions ofU.S. dollars*

2011 2012 2012

ASSETS

Cash and Cash Equivalents ¥ 732,127 ¥ 786,892 $ 9,574

Restricted Cash 118,065 123,295 1,500

Time Deposits 5,148 24,070 293

Investment in Direct Financing Leases 830,853 900,886 10,961

Installment Loans ( The amount of ¥19,397 million ($236 million) of installment loans as of March 31, 2012 is measured at fair value by electing the fair value option under FASB Accounting Standards Codification 825-10.)

2,983,164 2,769,898 33,701

Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses (154,150) (136,588) (1,662)

Investment in Operating Leases 1,270,295 1,309,998 15,939

Investment in Securities 1,175,381 1,147,390 13,960

Other Operating Assets 235,430 224,092 2,726

Investment in Affiliates 373,376 331,717 4,036

Other Receivables 182,013 188,108 2,289

Inventories 108,410 79,654 969

Prepaid Expenses 44,551 39,547 481

Office Facilities 102,403 123,338 1,501

Other Assets 574,516 442,577 5,385

Total Assets ¥8,581,582 ¥8,354,874 $101,653

* The translations of the Japanese yen amounts into U.S. dollars are included solely using the prevailing exchange rate at March 31, 2012, which was ¥82.19 to $1.00.

Financial Section

Consolidated Balance SheetsORIX Corporation and Subsidiaries

As of March 31, 2011 and 2012


Millions of yen


2011 2012 2012

LIABILITIES

Short-Term Debt ¥ 478,633 ¥ 457,973 $ 5,572

Deposits 1,065,175 1,103,514 13,426

Trade Notes, Accounts Payable and Other Liabilities 304,354 290,465 3,534

Accrued Expenses 118,359 110,057 1,339

Policy Liabilities 398,265 404,586 4,923

Income Taxes:

Current 21,983 7,849 96

Deferred 160,518 97,353 1,184

Security Deposits 128,097 142,092 1,729

Long-Term Debt 4,531,268 4,267,480 51,922

Total Liabilities 7,206,652 6,881,369 83,725

Redeemable Noncontrolling Interests 33,902 37,633 458

Commitments and Contingent Liabilities

EQUITY

Common Stock: 143,995 144,026 1,752

Authorized 259,000,000 shares

Issued 110,245,846 shares in 2011 and

110,254,422 shares in 2012

Additional Paid-in Capital 179,137 179,223 2,181

Retained Earnings 1,141,559 1,217,851 14,818

Accumulated Other Comprehensive Income (Loss)

Net unrealized gains (losses) on investment in securities 11,503 16,145 196

Defined benefit pension plans (11,098) (14,343) (175)

Foreign currency translation adjustments (95,574) (95,692) (1,164)

Net unrealized gains (losses) on derivative instruments (1,011) (2,166) (26)

Sub-Total (96,180) (96,056) (1,169)

Treasury Stock, at Cost: (49,170) (48,907) (595)

2,747,344 shares in 2011 and

2,732,701 shares in 2012

Total ORIX Corporation Shareholders’ Equity 1,319,341 1,396,137 16,987

Noncontrolling Interests 21,687 39,735 483

Total Equity 1,341,028 1,435,872 17,470

Total Liabilities and Equity ¥8,581,582 ¥8,354,874 $101,653



Millions of yen


2010 2011 2012 2012

Revenues

Direct financing leases ¥ 49,893 ¥ 51,211 ¥ 50,934 $ 620

Operating leases 272,390 280,913 297,422 3,619

Interest on loans and investment securities 135,165 169,932 147,888 1,799

Brokerage commissions and net gains on investment securities 23,352 21,119 26,911 327

Life insurance premiums and related investment income 115,438 118,315 128,307 1,561

Real estate sales 40,669 54,741 61,029 743

Gains on sales of real estate under operating leases 6,841 5,103 2,215 27

Other operating revenues 246,804 245,544 258,178 3,141

Total revenues 890,552 946,878 972,884 11,837

Expenses

Interest expense 81,444 122,765 110,868 1,349

Costs of operating leases 189,574 186,740 189,333 2,304

Life insurance costs 92,292 91,426 95,353 1,160

Costs of real estate sales 46,757 58,930 59,534 724

Other operating expenses 135,755 142,241 150,071 1,826

Selling, general and administrative expenses 211,479 199,044 191,873 2,334

Provision for doubtful receivables and probable loan losses 71,525 31,103 19,215 234

Write-downs of long-lived assets 6,977 17,400 15,167 185

Write-downs of securities 23,632 21,747 16,470 200

Foreign currency transaction loss (gain), net 943 186 (195) (2)

Total expenses 860,378 871,582 847,689 10,314

Operating Income 30,174 75,296 125,195 1,523

Equity in Net Income of Affiliates 8,364 16,806 1,972 24

Gains on Sales of Subsidiaries and Affiliates and Liquidation Losses, net 17,519 1,199 3,317 41

Income before Income Taxes and Discontinued Operations 56,057 93,301 130,484 1,588

Provision for Income Taxes 21,090 26,143 44,631 543

Income from Continuing Operations 34,967 67,158 85,853 1,045

Discontinued Operations:

Income from discontinued operations, net 12,989 12,220 1,279 15

Provision for income taxes (7,019) (6,771) 1,410 17

Discontinued operations, net of applicable tax effect 5,970 5,449 2,689 32

Net Income 40,937 72,607 88,542 1,077

Net Income (Loss) Attributable to the Noncontrolling Interests 704 2,373 (332) (4)

Net Income Attributable to the Redeemable Noncontrolling Interests 2,476 2,959 2,724 33

Net Income Attributable to ORIX Corporation ¥ 37,757 ¥ 67,275 ¥ 86,150 $ 1,048

Note: Pursuant to FASB Accounting Standards Codification 205-20 (“Presentation of Financial Statements - Discontinued Operations”), the results of operations which meet the criteria for discontin-

ued operations are reported as a separate component of income, and those related amounts that had been previously reported are reclassified.

Yen U.S. dollars*

Amounts per Share of Common Stock

Basic:

Income from continuing operations ¥308.87 ¥574.83 ¥781.84 $9.51

Discontinued operations 61.65 51.05 19.49 0.24

Net income attributable to ORIX Corporation 370.52 625.88 801.33 9.75

Diluted:

Income from continuing operations 265.10 486.19 654.47 7.96

Discontinued operations 50.81 41.56 15.87 0.20

Net income attributable to ORIX Corporation 315.91 527.75 670.34 8.16

Cash Dividends 70.00 75.00 80.00 0.97


Financial Section

Consolidated Statements of IncomeORIX Corporation and Subsidiaries

For the Years Ended March 31, 2010, 2011 and 2012


Millions of yen

ORIX Corporation Shareholders’ Equity Total ORIX Corporation

Shareholders’ Equity

Noncontrolling Interests Total EquityCommon Stock

Additional Paid-in Capital Retained Earnings

Accumulated Other Comprehensive

Income (Loss) Treasury Stock

Balance at March 31, 2009 ¥102,216 ¥136,313 ¥1,071,919 ¥(92,384) ¥(50,534) ¥1,167,530 ¥18,067 ¥1,185,597Cumulative effect of applying accounting for “Contracts in entity’s own equity” 1,758 1,758 0 1,758

Balance at April 1, 2009 ¥102,216 ¥136,313 ¥1,073,677 ¥(92,384) ¥(50,534) ¥1,169,288 ¥18,067 ¥1,187,355

Issuance of common stock 41,677 41,347 83,024 0 83,024

Contribution to subsidiaries 0 2,473 2,473

Transaction with noncontrolling interests (32) (387) (419) 60 (359)

Comprehensive income (loss), net of tax: Net income 37,757 37,757 704 38,461

Other comprehensive income (loss) Net change of unrealized gains (losses) on

investment in securities13,497 13,497 2 13,499

Net change of defined benefit pension plans 7,129 7,129 (4) 7,125 Net change of foreign currency translation

adjustments(5,860) (5,860) (1,002) (6,862)

Net change of unrealized gains (losses) on derivative instruments

(1,454) (1,454) (6) (1,460)

Total other comprehensive income (loss) 13,312 (1,010) 12,302

Total comprehensive income (loss) 51,069 (306) 50,763

Cash dividends (6,261) (6,261) (2,517) (8,778)

Conversion of convertible bond 7 7 14 0 14

Exercise of stock options 39 38 77 0 77

Compensation cost of stock options 611 611 0 611

Acquisition of treasury stock (3) (3) 0 (3)

Disposal of treasury stock (531) 822 291 0 291

Other, net 377 137 479 993 0 993

Balance at March 31, 2010 ¥143,939 ¥178,661 ¥1,104,779 ¥(79,459) ¥(49,236) ¥1,298,684 ¥17,777 ¥1,316,461Cumulative effect of applying new accounting standards for the consolidation of variable interest entities

(22,495) (3,406) (25,901) 4,233 (21,668)

Balance at April 1, 2010 ¥143,939 ¥178,661 ¥1,082,284 ¥(82,865) ¥(49,236) ¥1,272,783 ¥22,010 ¥1,294,793


Transaction with noncontrolling interests 200 4 204 (2,450) (2,246)

Comprehensive income (loss), net of tax: Net income 67,275 67,275 2,373 69,648


investment in securities 7,605 7,605 58 7,663

Net change of defined benefit pension plans (2,006) (2,006) 0 (2,006)

Net change of foreign currency translation adjustments (18,118) (18,118) (715) (18,833)

Net change of unrealized gains (losses) on derivative instruments (800) (800) 18 (782)

Total other comprehensive income (loss) (13,319) (639) (13,958)

Total comprehensive income (loss) 53,956 1,734 55,690

Cash dividends (8,061) (8,061) (3,471) (11,532)



Compensation cost of stock options 142 142 0 142


Other, net 78 61 136 275 0 275

Balance at March 31, 2011 ¥143,995 ¥179,137 ¥1,141,559 ¥(96,180) ¥(49,170) ¥1,319,341 ¥21,687 ¥1,341,028


Transaction with noncontrolling interests 52 (20) 32 (502) (470)

Comprehensive income (loss), net of tax: Net income 86,150 86,150 (332) 85,818


investment in securities 4,642 4,642 479 5,121

Net change of defined benefit pension plans (3,245) (3,245) (2) (3,247)

Net change of foreign currency translation adjustments (98) (98) (979) (1,077)

Net change of unrealized gains (losses) on derivative instruments (1,155) (1,155) (15) (1,170)

Total other comprehensive income (loss) 144 (517) (373)

Total comprehensive income (loss) 86,294 (849) 85,445

Cash dividends (8,599) (8,599) (2,104) (10,703)




Other, net 4 (1,259) 264 (991) 0 (991)

Balance at March 31, 2012 ¥144,026 ¥179,223 ¥1,217,851 ¥(96,056) ¥(48,907) ¥1,396,137 ¥39,735 ¥1,435,872

Note: Changes in the redeemable noncontrolling interests are not included in the table.

Consolidated Statements of Changes in EquityORIX Corporation and Subsidiaries



Millions of yen


2010 2011 2012 2012

Cash Flows from Operating Activities Net income ¥ 40,937 ¥ 72,607 ¥ 88,542 $ 1,077 Adjustments to reconcile net income to net cash provided by

operating activities: Depreciation and amortization 164,821 166,484 168,233 2,047 Provision for doubtful receivables and probable loan losses 71,525 31,103 19,215 234 Increase (decrease) in policy liabilities (32,927) (11,692) 6,321 77 Deferred tax provision (benefit) (28,749) (18,790) 15,906 194 Equity in net income of affiliates (excluding interest on loans) (6,496) (14,337) (889) (11) Gains on sales of subsidiaries and affiliates and

liquidation losses, net (17,519) (1,199) (3,317) (41) Gains on sales of available-for-sale securities (6,907) (4,867) (8,918) (109) Gains on sales of real estate under operating leases (6,841) (5,103) (2,215) (27) Gains on sales of operating lease assets other than real estate (7,552) (9,968) (14,721) (179) Write-downs of long-lived assets 6,977 17,400 15,167 185 Write-downs of securities 23,632 21,747 16,470 200 Decrease (increase) in restricted cash 4,520 (6,659) (5,188) (63) Decrease (increase) in trading securities (29,725) (28,372) 55,173 671 Decrease in inventories 39,061 27,596 26,830 328 Decrease (increase) in other receivables (518) 16,006 (7,893) (96) Increase (decrease) in trade notes, accounts payable and

other liabilities (35,011) (22,042) 22,760 277

Other, net 30,083 (17,534) (58,482) (712) Net cash provided by operating activities 209,311 212,380 332,994 4,052Cash Flows from Investing Activities Purchases of lease equipment (389,413) (561,919) (603,060) (7,337) Principal payments received under direct financing leases 352,316 384,288 348,549 4,241 Net proceeds from securitization of lease receivables,

loan receivables and securities 28,305 0 0 0 Installment loans made to customers (589,814) (719,190) (741,570) (9,023) Principal collected on installment loans 937,895 1,130,718 918,565 11,176 Proceeds from sales of operating lease assets 162,988 159,369 174,139 2,119 Investment in affiliates, net (28,256) 36,945 17,808 217 Proceeds from sales of investment in affiliates 12,532 4,622 2,864 35 Purchases of available-for-sale securities (456,364) (742,816) (654,873) (7,968) Proceeds from sales of available-for-sale securities 181,033 340,634 279,367 3,399 Proceeds from redemption of available-for-sale securities 162,292 310,594 361,881 4,403 Purchase of held-to-maturity securities (43,748) 0 (182) (2) Purchases of other securities (19,656) (48,538) (44,654) (543) Proceeds from sales of other securities 26,034 25,614 24,832 302 Purchases of other operating assets (4,898) (14,219) (17,282) (210) Acquisitions of subsidiaries, net of cash acquired (10,218) (46,554) (9,252) (113) Sales of subsidiaries, net of cash disposed 123,613 12,685 7,554 92 Other, net (11,853) (20,635) (22,929) (280) Net cash provided by investing activities 432,788 251,598 41,757 508Cash Flows from Financing Activities Net decrease in debt with maturities of three months or less (121,399) (72,584) (59,769) (727) Proceeds from debt with maturities longer than three months 1,083,310 1,488,199 1,488,111 18,106 Repayment of debt with maturities longer than three months (1,678,649) (1,918,774) (1,782,081) (21,682) Net increase in deposits due to customers 185,076 166,012 40,288 490 Issuance of common stock 83,101 98 55 1 Cash dividends paid to ORIX Corporation shareholders (6,261) (8,061) (8,599) (105) Contribution from noncontrolling interests 0 0 20,258 246 Cash dividends paid to redeemable noncontrolling interests 0 (6,008) (1,079) (13) Net increase in call money (13,400) (8,000) (10,000) (122) Other, net 1,298 (4,472) (5,661) (69) Net cash used in financing activities (466,924) (363,590) (318,477) (3,875)Effect of Exchange Rate Changes on Cash and Cash Equivalents 3,943 (7,348) (1,509) (19)Net Increase in Cash and Cash Equivalents 179,118 93,040 54,765 666Cash and Cash Equivalents at Beginning of Year 459,969 639,087 732,127 8,908Cash and Cash Equivalents at End of Year ¥ 639,087 ¥ 732,127 ¥ 786,892 $ 9,574


Financial Section

Consolidated Statements of Cash FlowsORIX Corporation and Subsidiaries



Breakdown of Assets and Revenues by SegmentFiscal year ended March 31, 2012

Millions of yen


Maintenance

Leasing

Real Estate

Investment and

Operation

Retail

Overseas Business

Total

Segment Assets ¥898,776 ¥537,782 ¥1,369,220 ¥471,145 ¥1,738,454 ¥986,762 ¥6,002,139

Investment in direct financing leases 297,598 155,230 8,745 11,951 17,127 231,767 722,418

Installment loans 540,388 17,339 137,256 189,980 948,270 235,677 2,068,910

Investment in operating leases 29,783 361,089 694,470 12,389 45,317 160,751 1,303,799

Investment in securities 13,158 2,069 99,694 173,461 648,485 217,135 1,154,002

Other operating assets 624 135 183,443 21,588 0 18,285 224,075

Inventories 15 797 60,780 294 0 17,721 79,607

Advances for investment in operating leases 368 243 100,135 13 0 16,862 117,621

Investment in affiliates 16,842 880 84,697 61,469 79,255 88,564 331,707

Segment Revenues ¥ 72,449 ¥231,951 ¥222,631 ¥ 73,293 ¥ 160,071 ¥187,240 ¥ 947,635

Direct financing leases 18,286 11,612 1,560 1,065 (52) 16,286 48,757

Interest on loans and investment securities 19,710 333 10,619 21,664 28,894 30,999 112,219

Operating leases 23,131 157,772 60,993 1,252 0 57,583 300,731

Brokerage commissions and net gains (losses) on investment securities 300 68 1,395 5,383 345 19,398 26,889

Life insurance premiums and related investment income 0 0 0 0 128,979 0 128,979

Real estate sales 0 0 61,029 0 0 0 61,029

Gains on sales of real estate under operating leases 43 0 3,012 808 0 681 4,544

Other operating revenues 10,979 62,166 84,023 43,121 1,905 62,293 264,487

Note: Figures in the table above may vary from figures reported in the consolidated statements of income and the consolidated balance sheets because items considered as corporate assets and

revenues are not included.

Concerning the Breakdown of Assets and Revenues by Segment

• Operating revenues such as “Direct Financing Leases,” “Interest on Loans and Investment Securities” and “Operating Leases” are recorded

according to the operating transactions in “Investment in Direct Financing Leases,” “Installment Loans,” “Investment in Operating Leases” and

“Investment in Securities.”

• Life insurance business assets are included in each item of segment assets. Gains (Losses) from these assets are included as related investment

income under “Life Insurance Premiums and Related Investment Income.”

• Revenues from “Real Estate Sales” are derived from assets held under the consolidated balance sheet item “Inventories.”

• “Gains on Sales of Real Estate under Operating Leases” includes gains on sales of all leased real estate assets in “Investment in Operating

Leases.”


This Annual Report contains certain financial measures presented on a basis not in accordance with U.S. GAAP(commonly referred to as Non-GAAP financial measures), including (1) long-term debt, ORIX Corporation shareholders’ equity, as well as other measures or ratios calculated based on these measures, presented on an adjusted basis*, in addition, (2) adjusted segment profit. *The adjustment excludes payables under securitized leases, loan receivables and investment in securities and reverses the cumulative effect on retained earnings of applying the new accounting standards for the consolidation of VIEs, effective April 1, 2010. (1) Our management believes these non-GAAP financial measures may provide investors with additional meaningful comparisons between our financial condition as of March 31, 2012 as compared to prior peri-ods. Effective April 1, 2010, we adopted ASU 2009-16 and ASU 2009-17, which changed the circumstances under which we are required to consolidate certain VIEs. Our adoption of these new accounting stan-dards caused a significant increase in our consolidated assets and lia-bilities and a decrease in our retained earnings without affecting the net cash flow and economic effects of our investments in such consolidat-ed VIEs. Accordingly, our management believes that providing certain

financial measures that exclude assets and liabilities attributable to con-solidated VIEs as a supplement to financial information calculated in accordance with U.S. GAAP enhances the overall picture of our current financial position and enables investors to evaluate our historical finan-cial and business trends without the large balance sheet fluctuation caused by our adoption of these new accounting standards. (2) Our management believes that in comparing segment information as of March 31, 2012 as compared to prior periods, the provision of the non-GAAP financial measure of base profit that excludes capital gains, allowance for doubtful receivables and probable loan losses, and impairments may provide investors with additional meaningful insight regarding segment profit trends. We provide these non-GAAP financial measures as supplemental information to our consolidated financial statements prepared in accor-dance with U.S. GAAP, and they should not be considered in isolation or as a substitute for the most directly comparable U.S. GAAP mea-sures. The tables set forth below provide reconciliations of these non-GAAP financial measures to the most directly comparable financial measures presented in accordance with U.S. GAAP as reflected in this Annual Report for the periods provided.

Financial Section

Guide to Non-GAAP Financial Measurement

(1) Key RatiosYears ended March 31

Millions of yen

2003 2004 2005 2006 2007

Short-Term Debt ¥1,120,434 ¥ 903,916 ¥ 947,871 ¥1,336,414 ¥1,174,391

Long-Term Debt (a) 2,856,613 2,662,719 2,861,863 3,236,055 3,863,057

Deduct: Payables under Securitized Leases, Loan Receivables and Investment in Securities 123,396 97,707 60,281 106,333 260,529

Adjusted Long-Term Debt (b) 2,733,217 2,565,012 2,801,582 3,129,722 3,602,528

Short- and Long-Term Debt (excluding deposits) (c) 3,977,047 3,566,635 3,809,734 4,572,469 5,037,448

Adjusted Long- and Short-Term Debt (excluding deposits) (d) 3,853,651 3,468,928 3,749,453 4,466,136 4,776,919

ORIX Corporation Shareholders’ Equity (e) 505,458 564,047 727,333 953,646 1,194,234

Deduct: The Cumulative Effect on Retained Earnings of Applying the New Accounting Standards for the Consolidation of VIEs under ASU 2009-16 and ASU 2009-17, Effective April 1, 2010 0 0 0 0 0

Adjusted ORIX Corporation Shareholders’ Equity (f) ¥ 505,458 ¥ 564,047 ¥ 727,333 ¥ 953,646 ¥1,194,234

D/E Ratio (times) (c)/(e) 7.9 6.3 5.2 4.8 4.2

Adjusted D/E Ratio (times) (d)/(f) 7.6 6.2 5.2 4.7 4.0

Share of Long-Term Debt (a)/(c) 72% 75% 75% 71% 77%

Adjusted Share of Long-Term Debt (b)/(d) 71% 74% 75% 70% 75%

Millions of yen

2008 2009 2010 2011 2012

Short-Term Debt ¥1,330,147 ¥ 798,167 ¥ 573,565 ¥ 478,633 ¥ 457,973

Long-Term Debt (a) 4,462,187 4,453,845 3,836,270 4,531,268 4,267,480

Deduct: Payables under Securitized Leases, Loan Receivables and Investment in Securities 374,920 358,969 202,224 1,018,190 874,705

Adjusted Long-Term Debt (b) 4,087,267 4,094,876 3,634,046 3,513,078 3,392,775

Short- and Long-Term Debt (excluding deposits) (c) 5,792,334 5,252,012 4,409,835 5,009,901 4,725,453

Adjusted Long- and Short-Term Debt (excluding deposits) (d) 5,417,414 4,893,043 4,207,611 3,991,711 3,850,748

ORIX Corporation Shareholders’ Equity (e) ¥1,267,917 ¥1,167,530 ¥1,298,684 ¥1,319,341 ¥1,396,137

Deduct: The Cumulative Effect on Retained Earnings of Applying the New Accounting Standards for the Consolidation of VIEs under ASU 2009-16 and ASU 2009-17, Effective April 1, 2010 0 0 0 (21,947) (19,248)

Adjusted ORIX Corporation Shareholders’ Equity (f) 1,267,917 1,167,530 1,298,684 1,341,288 1,415,385

D/E Ratio (times) (c)/(e) 4.6 4.5 3.4 3.8 3.4

Adjusted D/E Ratio (times) (d)/(f) 4.3 4.2 3.2 3.0 2.7

Share of Long-Term Debt (a)/(c) 77% 84% 87% 90% 90%

Adjusted Share of Long-Term Debt (b)/(d) 75% 84% 86% 88% 88%


(2) Base Profit by SegmentYears ended March 31

Billions of yen

Segment


Maintenance Leasing Real Estate

Investment and

Operation RetailOverseas Business

Segment total

Consolidated financial

statement adjustment Total

2010 Segment Profit (a) ¥(19.5) ¥23.3 ¥ 0.1 ¥ (2.4) ¥31.1 ¥37.1 ¥ 69.9 ¥(13.8) ¥ 56.1

(b) Capital gains*1 0.7 0.5 23.6 1.1 20.1 20.0 65.9 (13.5) 52.3

(c) Provisions (40.5) (2.0) (9.5) (2.3) (9.3) (7.9) (71.5) 0.0 (71.5)

(d) Impairments*2 (0.6) (0.0) (23.0) (11.8) (0.3) (9.3) (45.0) 4.6 (40.4)

Base profit (e)=(a)-(b)-(c)-(d) ¥ 21.0 ¥24.9 ¥ 9.1 ¥10.6 ¥20.6 ¥34.3 ¥120.5 ¥ (4.9) ¥115.7

2011 Segment Profit (a) ¥ 10.0 ¥26.2 ¥ 0.1 ¥13.2 ¥23.8 ¥45.6 ¥118.9 ¥(25.6) ¥ 93.3

(b) Capital gains*1 0.4 0.1 22.5 10.9 0.0 13.9 47.8 (13.8) 34.0

(c) Provisions (12.7) (2.0) (1.1) (6.8) (1.4) (3.2) (27.2) (3.9) (31.1)

(d) Impairments*2 (0.3) (0.4) (32.9) (9.0) (2.2) (7.1) (51.8) (1.0) (52.9)

Base profit (e)=(a)-(b)-(c)-(d) ¥ 22.6 ¥28.4 ¥11.6 ¥18.1 ¥27.4 ¥42.1 ¥150.2 ¥ (6.9) ¥143.3

2012 Segment Profit (a) ¥ 21.5 ¥34.7 ¥ 1.3 ¥16.0 ¥21.8 ¥49.8 ¥145.2 ¥(14.7) ¥130.5

(b) Capital gains*1 0.3 0.1 14.2 5.3 0.3 21.2 41.5 (2.1) 39.4

(c) Provisions (2.3) (0.0) (3.0) (7.5) (1.1) (3.8) (17.7) (1.5) (19.2)

(d) Impairments*2 (1.1) (0.0) (28.2) (4.2) (12.7) (8.0) (54.2) 2.0 (52.3)

Base profit (e)=(a)-(b)-(c)-(d) ¥ 24.5 ¥34.7 ¥18.3 ¥22.4 ¥35.3 ¥40.4 ¥175.6 ¥(13.0) ¥162.6

*1 Brokerage commissions and net gains (losses) on investment securities, real estate sales (net of cost), gains (losses) on sales of real estate under operating leases, gains (losses) on sales of sub-

sidiaries and affiliates and liquidation losses, net, and equivalent amount of real estate joint-venture equity method profit for equity in net income (loss) of affiliates.

*2 Impairment losses for write-downs of long-lived assets, write-downs of securities, and equivalent amount of costs of real estate sales and equity in net income (loss) of affiliates.


About ORIX

Group CompaniesAs of March 31, 2012

Principal BusinessEstablished (Acquired)

Direct/Indirect Investment


ORIX Corporation Domestic Sales Administrative Headquarters

Leasing, Lending, Other Financial Services

Momiji Lease Corporation Leasing, Other Financial Services (Mar. 2002) 95%

NS Lease Co., Ltd. Leasing, Lending, Other Financial Services (Jul. 2002) 100%

ORIX Tokushima Corporation Leasing, Lending, Other Financial Services (Oct. 2005) 95%

Tsukuba Lease Corporation Leasing (Jun. 2010) 95%

Kyuko-Lease Inc. Leasing, Other Financial Services (Jan. 2012) 90%

Maintenance Leasing

ORIX Auto Corporation Automobile Leasing, Rental, Car Sharing and Sales of Used Automobiles

Jun. 1973 100%

ORIX Rentec CorporationRental and Leasing of Precision Measuring and IT-Related Equipment

Sep. 1976 100%

ORIX Rentec (Singapore) Pte. Limited (Singapore) Oct. 1995 100%

ORIX Rentec (Malaysia) Sdn. Bhd. (Malaysia) Jan. 1997 100%

ORIX Rentec (Korea) Corporation (South Korea) Apr. 2001 100%

ORIX Rentec (Tianjin) Corporation (China) Aug. 2004 100%

Real Estate

ORIX Corporation Real Estate Business Headquarters

Real Estate Development and Rental, Financing

BlueWave Corporation Hotel and Training Facility Management Aug. 1991 100%

ORIX Interior CorporationReal Estate Rental, Manufacture and Sale of Interior Furnishings, Interior Design and Installation, Driving School Management

Oct. 1998 100%

ORIX Real Estate Corporation Real Estate Development and Rental, Facilities Operation Mar. 1999 100%

ORIX Asset Management Corporation REIT Asset Management Sep. 2000 100%

ORIX Golf Management LLC Golf Course Management (Nov. 2004) 100%

ORIX Living Corporation Senior Housing Management Apr. 2005 75%

ORIX Real Estate Investment Advisors Corporation Real Estate Investment and Advisory Services Sep. 2007 100%

ORIX Aquarium Corporation Aquarium Operation Apr. 2011 100%


ORIX Corporation Investment and Operation Headquarters

Principal Investment

ORIX Capital Corporation Venture Capital Oct. 1983 100%

ORIX Investment Corporation Alternative Investment Jan. 1990 100%

ORIX Eco Services CorporationWaste Recycling Consultation, Environmental Management Support Services

Apr. 1998 100%

ORIX Asset Management and Loan Services Corporation Loan Servicing Apr. 1999 100%

ORIX Environmental Resources Management Corporation Waste Recycling Sep. 2002 100%

ORIX M&A Solutions CorporationM&A and Corporate Restructuring Advisory Services, Financial Advisory Services

Feb. 2003 100%

ORIX Loan Business Center Corporation Personal Loan Related Asset Management, Customer Relations May 2009 100%

ORIX Wholesale Securities Corporation Sale of Financial Products Feb. 2010 100%

ORIX Electric Power Corporation Provision of Electricity to Condominiums May 2010 86%

Ubiteq, INC. Electronic Equipment Business, Mobile and Ubiquitous Business (Jul. 2010) 60%

Retail

ORIX Credit Corporation Consumer Finance Services Jun. 1979 49%*

ORIX Life Insurance Corporation Life Insurance Apr. 1991 100%

ORIX Bank Corporation Banking (Apr. 1998) 100%

ORIX Headquarter Functions (Not included in Segment Financial Information)

ORIX Insurance Services Corporation Casualty and Life Insurance Agency Sep. 1976 100%

ORIX Computer Systems Corporation Software Engineering and Systems Management Mar. 1984 100%

ORIX Baseball Club Co., Ltd. Professional Baseball Team Management (Oct. 1988) 100%

ORIX Management Information Center Corporation Accounting and Administration Services Oct. 1999 100%

ORIX Callcenter Corporation Call Center Nov. 1999 100%

ORIX Business Support Corporation Business Support Services Apr. 2007 100%

* From June 2012, ORIX Group’s shareholding in ORIX Credit Corporation increased from 49% to 100%.


Countries (Area) Principal BusinessEstablished (Acquired)

Direct/Indirect Investment

Overseas Business

ORIX Corporation Global Business and Investment Headquarters* Global Business Administrative Headquarters*

JapanAdministration of Overseas Activities, Ship-Related Services, Aircraft-Related Services, Alternative Investment

ORIX Maritime Corporation* Japan Ship Charter and Ship Broker Service Nov. 1977 100%

ORIX Aircraft Corporation* Japan Aircraft Leasing May 1986 100%

ORIX USA Corporation USA Corporate Finance, Investment Banking Aug. 1981 100%

Houlihan Lokey, Inc. USA Investment Banking (Jan. 2006) 54%

RED Capital Group USA Loan Servicing (May 2010) 83%

Mariner Investment Group LLC USA Fund Operation and Management (Dec. 2010) 59%

ORIX Asia Limited Hong Kong Leasing, Automobile Leasing, Hire Purchase, Lending Sep. 1971 100%

ORIX Taiwan Corporation TaiwanLeasing, Hire Purchase, Insurance Brokerage, Precision Measuring and IT-Related Equipment Rentals

Sep. 1982 95%

ORIX Auto Leasing Taiwan Corporation Taiwan Automobile Leasing and Rentals Mar. 1998 100%

ORIX Taiwan Asset Management Company Taiwan NPL Investment, Loan Servicing Oct. 2004 95%

ORIX Capital Korea Corporation South Korea Leasing, Automobile Leasing, Hire Purchase, Lending Feb. 2004 100%

ORIX Private Equity Korea Corporation South Korea Fund Operation and Management Mar. 2010 100%

ORIX China Corporation China Leasing Aug. 2005 98%

CHINA RAILWAY LEASING CO., LTD. China Railway-Related Leasing (Jan. 2006) 25%

ORIX (China) Investment Co., Ltd. ChinaLeasing, Equity Investment, Other Financial Services

Dec. 2009 100%

ORIX Leasing Singapore Limited Singapore Leasing, Hire Purchase, Lending Sep. 1972 50%

ORIX Investment and Management Private Limited Singapore Equity Investment, Lending May 1981 100%

ETHOZ Group Ltd. Singapore Automobile Leasing and Rentals, Leasing Sep. 1981 45%

ORIX Leasing Malaysia Berhad Malaysia Leasing, Lending, Hire Purchase Sep. 1973 100%

ORIX Car Rentals Sdn. Bhd. Malaysia Automobile Rentals Feb. 1989 35%

ORIX Auto Leasing Malaysia Sdn. Bhd. Malaysia Automobile Leasing Oct. 2000 100%

ORIX Asset Management Malaysia Sdn.Bhd. Malaysia NPL Investment Jan. 2008 100%

PT. ORIX Indonesia Finance Indonesia Leasing, Automobile Leasing Apr. 1975 85%

ORIX METRO Leasing and Finance Corporation Philippines Leasing, Automobile Leasing, Lending Jun. 1977 40%

ORIX Auto Leasing Philippines Corporation Philippines Automobile Leasing Sep. 1989 40%

Thai ORIX Leasing Co., Ltd. ThailandLeasing, Automobile Leasing and Rentals, Hire Purchase

Jun. 1978 97%

Indochina Capital Corporation VietnamFund Operation and Management, Real Estate Development, Finance Arrangement, Advisory Services

(Nov. 2010) 25%

Lanka ORIX Leasing Company PLC Sri Lanka Leasing, Automobile Leasing, Hire Purchase, Lending Mar. 1980 30%

ORIX Leasing Pakistan Limited Pakistan Leasing, Automobile Leasing Jul. 1986 50%

INFRASTRUCTURE LEASING & FINANCIAL SERVICES LIMITED

IndiaCommercialization of Infrastructure Projects, Investment Banking, Corporate Finance

(Mar. 1993) 24%

ORIX Auto Infrastructure Services Limited India Automobile Leasing Mar. 1995 100%

Oman ORIX Leasing Company SAOG Oman Leasing, Automobile Leasing, Hire Purchase, Factoring Aug. 1994 18%

ORIX Leasing Egypt SAE Egypt Leasing, Automobile Leasing Jun. 1997 34%

Saudi ORIX Leasing Company Saudi Arabia Leasing, Automobile Leasing Jan. 2001 29%

MAF ORIX Finance PJSC UAE Leasing, Automobile Leasing Apr. 2002 38%

SK Leasing JSC Kazakhstan Leasing (Jun. 2005) 40%

ORIX Australia Corporation Limited Australia Automobile Leasing and Truck Rentals Jul. 1986 100%

ORIX New Zealand Limited New Zealand Leasing, Automobile Leasing and Rentals Dec. 1988 100%

ORIX Aviation Systems Limited IrelandAircraft Leasing, Asset Management, Aircraft-Related Technical Services

Mar. 1991 100%

ORIX Polska S.A. Poland Leasing, Automobile Leasing, Hire Purchase, Lending Oct. 1995 100%

* ORIX Corporation’s Global Business and Investment Headquarters and Global Business Administrative Headquarters as well as ORIX Maritime Corporation and ORIX Aircraft Corporation are

based in Japan, but are engaged in business activities centered on the Asia, Oceania and Europe regions.

Note: From May 2012, Pang Da ORIX Auto Leasing Co., Ltd. (China, automobile leasing, ORIX Group's shareholding: 50%) joined the ORIX Group.


About ORIX

Group NetworkAs of March 31, 2012

Network in JapanORIX’s extensive network in Japan includes 1,222 locations. The number of offices in each region is indicated in parentheses.

Hokkaido (54)

ORIX (1)

ORIX Auto (50)

ORIX Rentec (1)

BlueWave (1)

ORIX Life Insurance (1)

Tohoku (76)

ORIX (6)

ORIX Auto (66)

ORIX Rentec (1)

ORIX Real Estate (1)

ORIX Golf Management (1)


Tokyo (147)

ORIX (14)

ORIX Eco Services (2)

NS Lease (1)

Ubiteq (2)

Kyuko-Lease (1)

ORIX Auto (76)

ORIX Rentec (3)

BlueWave (6)

ORIX Interior (1)


ORIX Asset Management (1)


ORIX Living (7)

ORIX Real Estate Investment

Advisors (1)

ORIX Aquarium (1)

ORIX Capital (1)

ORIX Investment (2)

ORIX Asset Management and Loan

Services (1)

ORIX M&A Solutions (1)

ORIX Wholesale Securities (1)

ORIX Environmental Resources

Management (1)

ORIX Electric Power (1)


ORIX Bank (2)

Houlihan Lokey, Inc. (1)

ORIX Insurance Services (1)

ORIX Computer Systems (2)

ORIX Management Information

Center (6)

ORIX Business Support (1)

ORIX Maritime (1)

ORIX Aircraft (1)

Kanto (284)

ORIX (8)

Tsukuba Lease (1)

ORIX Auto (244)

ORIX Rentec (4)

BlueWave (2)


ORIX Living (4)

ORIX Environmental Resources

Management (1)



Chubu (232)

ORIX (11)

ORIX Auto (207)

ORIX Rentec (1)

BlueWave (1)





Kinki (139)

ORIX (8)

Ubiteq (1)

ORIX Auto (83)

ORIX Rentec (2)

BlueWave (2)

ORIX Interior (4)



ORIX Living (11)

ORIX Aquarium (1)


Services (1)

ORIX Loan Business Center (1)



ORIX Bank (1)

ORIX Baseball Club (6)

ORIX Business Support (1)

Chugoku (62)

ORIX (4)

Momiji Lease (2)

ORIX Auto (48)

ORIX Rentec (1)

BlueWave (1)



Shikoku (35)

ORIX (3)

ORIX Tokushima (1)

ORIX Auto (30)


Kyushu/Okinawa (193)

ORIX (8)

Kyuko-Lease (7)

ORIX Auto (158)

ORIX Rentec (2)

BlueWave (1)



Services (3)


ORIX Bank (2)

ORIX Callcenter (3)


Overseas NetworkORIX has a global network outside of Japan that spans 26 countries and regions worldwide. ORIX has 290 locations throughout the United States, Asia, Oceania, the Middle East and Northern Africa, and Europe. The number of offices in each region is indicated in parentheses and includes both subsidiaries and affiliates.

Ireland (1)

ORIX Aviation Systems Limited (1)

United Kingdom (1)


France (1)


Germany (1)


Poland (7)

ORIX Polska S.A. (7)

Egypt (2)

ORIX Leasing Egypt SAE (2)

Saudi Arabia (6)

Saudi ORIX Leasing Company (6)

United Arab Emirates (3)

MAF ORIX Finance PJSC (3)

Oman (6)

Oman ORIX Leasing Company SAOG (6)

Kazakhstan (5)

SK Leasing JSC (5)

Pakistan (33)

ORIX Leasing Pakistan Limited (33)

India (24)

INFRASTRUCTURE LEASING &

FINANCIAL SERVICES LIMITED (6)

ORIX Auto Infrastructure Services Limited (18)

Sri Lanka (31)

Lanka ORIX Leasing Company PLC (31)

⓮Malaysia (25)

ORIX Leasing Malaysia Berhad (15)

ORIX Car Rentals Sdn. Bhd. (4)

ORIX Rentec (Malaysia) Sdn. Bhd. (4)

ORIX Auto Leasing Malaysia Sdn. Bhd. (1)

ORIX Asset Management Malaysia Sdn. Bhd. (1)

Thailand (3)

Thai ORIX Leasing Co., Ltd. (3)

Singapore (6)

ORIX Leasing Singapore Limited (1)

ORIX Investment and Management

Private Limited (2)

ETHOZ Group Ltd. (1)

ORIX Rentec (Singapore) Pte. Limited (1)

Indochina Capital Corporation (1)

Vietnam (4)

ORIX Investment and Management

Private Limited (1)

Indochina Capital Corporation (3)

Hong Kong (2)

ORIX Asia Limited (1)


China (16)

ORIX Rentec (Tianjin) Corporation (7)

ORIX China Corporation (5)

CHINA RAILWAY LEASING CO., LTD. (2)

ORIX (China) Investment Co., Ltd. (2)

South Korea (9)

ORIX Rentec (Korea) Corporation (3)

ORIX Capital Korea Corporation (5)

ORIX Private Equity Korea Corporation (1)

Taiwan (7)

ORIX Taiwan Corporation (3)

ORIX Auto Leasing Taiwan Corporation (3)

ORIX Taiwan Asset Management Company (1)

Philippines (46)

ORIX METRO Leasing and

Finance Corporation (43)

ORIX Auto Leasing Philippines Corporation (3)

Indonesia (11)

PT. ORIX Indonesia Finance (11)

Australia (12)

ORIX Australia Corporation Limited (12)

New Zealand (5)

ORIX New Zealand Limited (5)

USA (23)

ORIX USA Corporation (4)


RED Capital Group (9)

Mariner Investment Group LLC (4)


About ORIX

Corporate Information / Share InformationAs of March 31, 2012

Corporate InformationCompany Name ORIX Corporation

Established April 17, 1964

Head Office 4-1-23 Shiba, Minato-ku, Tokyo 108-0014, Japan

Tel: +81-3-5419-5000 Fax: +81-3-5419-5903

Shareholders’ Equity (Consolidated)

¥1,396,137 million

Fiscal Year-End March 31

Consolidated Companies 721

Subsidiaries and Affiliates 96

Number of Employees (Consolidated)

17,488

Share InformationNumber of Shares

Total Number of Shares Authorized 259,000,000 shares

Total Number of Shares Issued and Outstanding 110,254,422 shares

Number of Shareholders 39,300

Major Shareholders

Name

Thousands %

Number of Shares Held

Percentage of Total Shares

in Issue

Japan Trustee Services Bank, Ltd. (Trust Account) 12,346 11.19

The Master Trust Bank of Japan, Ltd. (Trust Account) 12,105 10.97

Japan Trustee Services Bank, Ltd. (Trust Account 9) 4,798 4.35

SSBT OD05 OMNIBUS ACCOUNT-TREATY CLIENTS 4,140 3.75

The Chase Manhattan Bank 385036 3,985 3.61

State Street Bank and Trust Company 3,020 2.73

Mellon Bank, N. A. as Agent for its Client Mellon Omnibus US Pension

2,068 1.87

State Street Bank and Trust Company 505225 1,980 1.79

The Nomura Trust and Banking Co, Ltd. (Trust Account) 1,585 1.43

Northern Trust Company AVFC Re Fidelity Funds 1,561 1.41

Note: In addition to the above, ORIX Corporation holds 2,732 thousand shares of treasury stock.

Transfer Agent for Common SharesMitsubishi UFJ Trust and Banking CorporationTel: 0120-232-711 (toll-free in Japan)

Depositary Bank for ADRsCitibank, N.A. Shareholder Services, P.O. Box 43077,Providence, Rhode Island 02940-3077, U.S.A.Tel: +1-877-248-4237 (toll-free in the US)Fax: +1-201-324-3284E-mail: [email protected] 1 ADR = 0.5 common sharesNYSE: IX

Stock Exchange ListingsTokyo Stock Exchange First SectionOsaka Securities Exchange First Section Securities Code: 8591New York Stock Exchange Trading Symbol: IX

60,000

(Shareholders)

0

50,000

40,000

30,000

10,000

20,000

300

(Yen)

0

250

200

150

50

100

(%)

08/3 09/3 10/3 11/3 12/3

Trend in Number of ShareholdersComposition of Shareholders

08/3 09/3 10/3 11/3 12/3

Trend in Cash Dividends per Share

29,094

43,50540,602 39,300

59,313

260

75 8090

70

Financial Institutions

41.8Overseas Corporations

49.2

Individuals5.9

Other*3.1

* Includes 2,732 thousand shares of treasury stock. Note: fiscal year dividends after net profit distribution


Corporate InformationShareholders’ Equity (Consolidated)

¥1,396,137 million

Fiscal Year-End March 31

Consolidated Companies 721

Subsidiaries and Affiliates 96

Number of Employees (Consolidated)

17,488

Share InformationTransfer Agent for Common SharesMitsubishi UFJ Trust and Banking CorporationTel: 0120-232-711 (toll-free in Japan)

Depositary Bank for ADRsCitibank, N.A. Shareholder Services, P.O. Box 43077,Providence, Rhode Island 02940-3077, U.S.A.Tel: +1-877-248-4237 (toll-free in the US)Fax: +1-201-324-3284E-mail: [email protected] 1 ADR = 0.5 common sharesNYSE: IX

Stock Exchange ListingsTokyo Stock Exchange First SectionOsaka Securities Exchange First Section Securities Code: 8591New York Stock Exchange Trading Symbol: IX

ORIX Corporation

Corporate Planning Department

4-1-23 Shiba, Minato-ku, Tokyo, 108-0014, Japan

Tel: +81-3-5419-5042 Fax: +81-3-5419-5901

http://www.orix.co.jp/grp/en/

For inquiries about this annual report, please contact us at the address above.

Passive Foreign Investment Company Rules

The Company believes that it will be considered a “passive foreign investment company” for United States Federal income tax purpose in the year to which these consolidat-

ed financial results relate and for the foreseeable future by reason of the composition of its assets and the nature of its income. A U.S. holder of the shares or ADSs of the

Company is therefore subject to special rules generally intended to eliminate any benefits from the deferral of U.S. Federal income tax that a holder could derive from investing

in a foreign corporation that does not distribute all of its earnings on a current basis. Investors should consult their tax advisors with respect to such rules, which are summa-

rized under “UNITED STATES TAXATION” in the Company’s Form 20-F filed with the United States Securities and Exchange Commission.

Presentation of Financial Information

The Company’s fiscal year ends on March 31. The fiscal year ended March 31, 2012 is referred to throughout this Annual Report as “fiscal 2012,” and other fiscal years are

referred to in a corresponding manner.

Forward-Looking Statements

This document may contain forward-looking statements about expected future events and financial results that involve risks and uncertainties.

Such statements are based on our current expectations and are subject to uncertainties and risks that could cause actual results to differ materially from those described in the

forward-looking statements. Factors that could cause such a difference include, but are not limited to, those described under “Risk Factors” in the Company’s Form 20-F filed

with the United States Securities and Exchange Commission and under “Business Risk” of the securities report (yukashoken houkokusho) filed with the Director of the Kanto

Local Finance Bureau: The Company makes available free of charge on or through its website (http://www.orix.co.jp/grp/en) its annual report on Form 20-F and other reports.

Printed in Japan

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