ORIX Corporation...2013/10/31 · Corporate Financial Services Maintenance Leasing (JPY Bn) 1.1% 60...

ORIX CorporationORIX Corporationpp(TSE: 8591; NYSE: IX)(TSE: 8591; NYSE: IX)

Conference CallConference CallConference Call Conference Call Second Quarter Consolidated Financial Results

For the Six Month Period Ended April 1 – September 30 2013For the Six Month Period Ended April 1 September 30, 2013

October 31, 2013

Haruyuki Urata Deputy President & CFOShintaro Agata Corporate Executive Vice President,

Head of the Treasury HeadquartersTakao Kato Corporate Senior Vice President,

Head of the Accounting Headquarters

Copyright © 2013 ORIX Corporation All rights reserved.

Head of the Accounting Headquarters

Performance: Overview Achieved 80.4bn in Net Income, up 34% YoY

Net Income target revised upward from 135bn to 145bn

145 0

Net Income* and ROE(JPY Bn)

7.4%

9.5%

120

150 145.0

135.05.1%

6.2%90

66.083.5

111.980.4

30

60

011.3 12.3 13.3 14.3

Frist Half14.3

（Target）


（Target）

1

*Net Income refers to Net Income Attributable to ORIX Corporation Shareholders

Performance: Segment Profits and Assets

Increased profits in 5 segments by steadily and nimbly capturing changes in the environment g

Segment Profits(JPY Bn)

Segment Assets(JPY Bn)(JPY Bn)

1 1%1.5%

1.9%2.4%

120

140Corporate FinancialServicesMaintenance Leasing

(JPY Bn)

6,000

7,000

1.1%

60

80

100Real Estate

Investment andOperation

3 000

4,000

5,000

20

40

60 Retail

Overseas Business

Segment Assets ROA 1,000

2,000

3,000

011.3 1H 12.3 1H 13.3 1H 14.3 1H

（After Tax）0

11.3 12.3 13.3 13.9

* Goodwill and other intangible assets acquired in the business combination have been recognized as segment assets Previous period presented

Copyright © 2013 ORIX Corporation All rights reserved. 2

have been recognized as segment assets. Previous period presented have been reclassified due to this change

Performance: Service Related Revenues Significant increase of service related revenues driven by Robeco

acquisition and progress in “Finance + Services”

Service Related Revenues/ Percentage within Base Revenues

(JPY Bn)( )

60%

70%

150

200Corporate Financial Services

Maintenance Leasing

50%

60%

100

150Real Estate

Investment and Operation

40%50

Retail

Overseas Business

Percentage within BaseR *

* ”Base Revenues” = Base profit before deduction of SGA- Interest related revenues: Includes direct finance leases, interest on loans and investment securities, equity in net income (loss) of affiliates, etc.

Service related revenues: Includes operating leases life insurance premiums other operating revenues etc (corresponding expenses have been deducted)

30%011.3 1H 12.3 1H 13.3 1H 14.3 1H

Revenues*


- Service related revenues: Includes operating leases, life insurance premiums, other operating revenues, etc. (corresponding expenses have been deducted)- Interest expense is divided according to the proportion of interest related assets and service related assets and deducted from both revenues

Performance: Segment Profits(JPY Bn)

Maintain 900bn in assets, expect fee income to expand in the second halfCorporate Financial Services

15 Base Profits Segment ProfitsSegment Assets ROA (After Tax) Service related revenues

Interest related revenues

9

12

Base Profits Segment Profits1.6% 1.5%

600

800

1,000

46%


0

3

6

0

200

40054%

14 3 1H

Achieved increased assets while maintaining profitabilityMaintenance Leasing

013.3 1H 14.3 1H

013.3 1H 14.3 1H

14.3 1H

15

20

25 Base Profits Segment Profits

4.0% 4.2%

600

800

Segment Assets ROA (After Tax)

12%

Service related revenuesInterest related revenues

0

5

10

200

400

88%


013.3 1H 14.3 1H

013.3 1H 14.3 1H

14.3 1H

Performance: Segment Profits (JPY Bn)

1tn in assets within range, achieved 1% ROAReal Estate

20 Base Profits Segment Profits 1 500

Segment Assets ROA (After Tax) Service related revenuesInte est elated e en es

10

15

g1.0%

1,000

1,500

13%


0

50.3%

0

500

87%

14 3 1H

Investment and Operation Recognized larger profits than last FY that had large collection revenues, steady investments

013.3 1H 14.3 1H

013.3 1H 14.3 1H

25

14.3 1H

15

20


4.5%

6.2%

300

400

500Segment Assets ROA (After Tax) Service related revenues


5

10

100

200

30048%

52%

14 3 1H


013.3 1H 14.3 1H

013.3 1H 14.3 1H

14.3 1H

Performance: Segment Profits (JPY Bn)

Retail Reached 2tn in assets, strong launch of new life insurance product

30 Base Profits Segment ProfitsSegment Assets ROA (After Tax)


15

20

251.6%

1.7%

1,500

2,000

2,500

39%

0

5

10

13 3 1H 14 3 1H 0

500

1,000 61%

14 3 1H

Completed Robeco acquisition, local Asian subsidiaries continues to show strong performanceOverseas Business

13.3 1H 14.3 1H13.3 1H 14.3 1H

40 S t A t ROA (Aft T )

14.3 1H

20

30


2.6% 2.8%

1,600

2,000

Segment Assets ROA (After Tax)

23%


10

20

400

800

1,200

77%

23%

14 3 1H


013.3 1H 14.3 1H

013.3 1H 14.3 1H

14.3 1H

Performance: Robeco AUM is stable even after acquisition announcement, steady fee revenues

(€bn)

Asset Under Management

-3 8 18 1

97 94150

200(€bn)

Net New Money

69 72

97

100

Institutional AUM

Retail AUM

81 78 92 103

0

50

10 12 11 12 12 12 13 910.12 11.12 12.12 13.9

10.12 11.12 12.12 13.9Net Fee Revenues 　(€mm) 656 616 677 510


Strategy: Towards 10% ROE

N t I d ROE

9.5%150

Net Income and ROE

145.0(JPY Bn)

6.2%7.4%120

111.9

135.05.1%

60

90

66.083.5

111.980.4

30

011.3 12.3 13.3 14.3

Frist Half14.3

（Target）


*Net Income refers to Net Income Attributable to ORIX Corporation Shareholders

Strategy: Towards 10% ROE Segment Asset ROA: 1.9% in 1H FY13.3 → 2.4% in 1H FY14.3

Make the next move towards 2.5% ROA

8%Change in Segment Profits, Assets and ROAROA（After Tax）

6%

8%Investment and Operation FY14.3

First Half

FY13.3First Half

4%

Maintenance LeasingOverseas Business • Diameter of the circle

represents profit size• Center of the circle

First Half

2%

Corporate Financial Real Estate

represents ROA, Assets

0%200 700 1,200 1,700 2,200

Corporate Financial Services Retail

Segment Assets（JPY Bn）


-2%

9

Strategy: Status of Shareholders’ Equity Ratio of employed capital close to 80% after Robeco acquisition Capital deployment status change in conjunction with portfolio turnover

Employed Capital Ratio and ROE Breakdown of D l d C i l

7 4%

9.5%

9.0%10.0%2,000

Employed Capital Ratio and ROE Deployed Capital(JPY Bn)

Corporate Financial Services/M i L i /

5.1% 6.2%

7.4%

6.0%7.0%8.0%9.0%

1,500Overseas(excl. Robeco)30％

14 3 1H

Maintenance Leasing/ Retail

21％

2 0%3.0%4.0%5.0%

500

1,000

Real Estate22％

Investment and Operation

14.3 1HRobeco

17％

0.0%1.0%2.0%

011.3 12.3 13.3 14.3 1H

C i l E l d C i l R ROE

22％Operation10％


Capital Employed Capital Reserve ROE

10

Strategy: Environment and Energy Business Solar panel sales expected to drive profit until FY15.3

Dramatic increase in assets driven by mega-solar operations and expansion of investmentexpansion of investment

Environment and Energy Business Asset Balance

Scale of Each Business*Asset Balance

(JPY Bn)300

500

Solar Panel SalesGeothermal/Wind Power, etc.Roof-top Power Generation

（MW）

200

250

300

400

Roof top Power GenerationMega Solar Projects

100

150

200

300

0

50

13.3 14.3 15.3 Plan 16.3 Plan 17.3 Plan0

100

13.3 14.3 Forecast 15.3 Plan 16.3 Plan 17.3 Plan


*Amounts of Mega-solar projects and rooftop power generation are calculated based on maximum cumulative volume for projects that have begun operation

Forecast

Strategy: Environment and Energy Business Capture wide-range of opportunities from energy to environmental field


Strategy: Summary

Achieved 80.4bn in Net Income, 9.5% ROE (annualized basis), ( )

Net Income target revised upward to 145bn

Aim for 10% ROE by improving ROA


Appendixpp


About ORIX Sustainable Growth

Continuous profitability for 48 years, achieving sustainable growth

Net Income Attributable to ORIX Corporation FY2009.3Collapse of L h B th

(JPY Bn)

2,000Lehman Brothers

FY2014.3145.0bn (Target)

200

1,500 FY2002.3Bursting of the IT Bubble

FY2013.3

(Target)

111.9bn

150

1,000

FY1998.3Asian Currency Crisis100

500

FY1993.3Bursting of the Economic Bubble

50

0


0

15

1964 1975 1980 1985 1990 1995 2000 2005 2013

About ORIX Business expertise and Group-wide capability

ORIX evolved by moving into neighboring areas while increasing its finance and asset expertise

Credit Screening and Finance Capability

Life Insurance

Banking

Investment

Asset Management

Principal investmentBusiness rehabilitation supportBond investmentVenture capitalL

Lending

Investment BankingCorporate financeHousing loansCard loan

Loan servicingNon-performing loan

Asset management Ship/Aircraft investment

M&A advisory

Leasin

g

Leasing Servicer Ships/Aircraft

Card loan

Machinery and equipment leasing Non-performing loan

investment Ship/Aircraft investment

T iblAutomobilesReal Estate Environment/Energy

equipment leasing Automobile leasing Leasing and rental of precision measuring and IT-related

i t

1964 2014

Car rental Maintenance services Vehicle managementCar sharing

Tangible Asset Expertise

Development and rental Facilities operation Asset management Investment and advisory

Waste disposal and recycling Energy conservation Renewable power Electric business Storage batteries

equipment Ship/Aircraft Leasing


1964 2014

16

Storage batteries

About ORIX Expansive Domestic and Overseas Network

Expanded its global reach starting with Hong Kong in 1971, using knowhow developed in Japan

“Not as ambitious as to call it a globalization but rather it is a way of Not as ambitious as to call it a globalization, but rather it is a way of eliminating barriers that exist in Japan”

34 Countries and Regions Overseas

(As of 2013.9.30)( )

1971 Hong Kong1972 Singapore1973 Malaysia

1994 Oman1995 Poland

B

1975 Indonesia1977 Philippines1978 Thailand1980 Sri Lanka1986 Pakistan Australia

1995 Poland1997 Egypt2001 Saudi Arabia, South Korea2002 United Arab Emirates2004 China

1981 Established ORIX USA1997 Launched Commercial Mortgage-Backed

Securities (CMBS) servicing business2006 Acquired investment bank (Houlihan Lokey)

usiness Netw

Developm

en

JapanAsia Oceania and Europe North America and South America

1986 Pakistan, Australia1988 New Zealand1991 Taiwan, Ireland1993 India

2005 Kazakhstan2010 Vietnam2013 Bahrain, Netherlands

Mongolia

2006 Acquired investment bank (Houlihan Lokey)2010 Acquired loan servicing business (RED Capital)2010 Acquired fund management company (Mariner Investment)2012 Established Brazilian Subsidiary

work

nt


JapanAsia, Oceania, and Europe North America and South America

Appendix(1) Trend in Performance

(JPY Bn)

12.3 13.3 13.3First Half

14.3First Half

Total Revenue 968.9 1,064.5 508.5 614.1

Net Income *1 83.5 111.9 59.8 80.4

Segment Assets 6,123.9 6,382.7 6,226.3 6,748.8

T t l A t 8 332 8 8 439 7 8 186 5 8 430 0Total Assets 8,332.8 8,439.7 8,186.5 8,430.0

Shareholders' Equity 1,380.7 1,643.6 1,416.0 1,759.6

Shareholders' Equity Ratio *2 18.8% 21.4% 19.2% 21.9%

*1 Net Income Attributable to ORIX Corporation Shareholders

q y

D/E Ratio *2 2.8x 2.3x 2.6x 2.1x

1 Net Income Attributable to ORIX Corporation Shareholders

*2 Performance indicators shown are Non-GAAP financial measures. For a qualitative reconciliation of the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP, please see page 33 and 34.


Appendix(2) Profit by Segment

(JPY Bn)

12.3 13.3 13.3First Half

14.3First Half Change

Corporate Financial Services 21.5 24.8 11.8 10.8 92%

Maintenance Leasing 34.7 36.1 17.8 21.1 119%

Real Estate 1.3 5.6 3.0 8.8 294%

Investment and Operation 16.0 34.9 16.4 22.2 135%

Retail 19.4 43.2 23.6 28.4 120%

Overseas Business 49 8 52 8 22 7 34 2 151%

The Company evaluates the performance of segments based on income before income taxes and discontinued

Overseas Business 49.8 52.8 22.7 34.2 151%

Total Segment Profit 142.7 197.3 95.2 125.5 132%

The Company evaluates the performance of segments based on income before income taxes and discontinued operations, adjusted for results of discontinued operations, net income attributable to the noncontrolling interests and net income attributable to the redeemable noncontrolling interests before applicable tax effect.


Appendix(3) Assets by Segment & Region(JPY Bn)12.3 13.3 14.3

First HalfCorporate Financial Services 899.3 893.2 895.1Maintenance Leasing 538 1 599 4 634 7Maintenance Leasing 538.1 599.4 634.7Real Estate 1,390.5 1,133.2 1,045.5Investment and Operation 471.9 444.3 434.2Retail 1 742 9 1 994 1 2 056 6

■ Overseas Business Segment Assets by Region

Retail 1,742.9 1,994.1 2,056.6Overseas Business 1,081.2 1,318.4 1,682.6Total Segment Assets 6,123.9 6,382.7 6,748.8■ Overseas Business Segment Assets by Region

By Region 12.3 13.3 14.3First Half

America 425.0 475.9 436.7Asia / Australia 382.7 492.4 507.9Greater China 149.9 180.4 187.3Middle East / Europe 12.8 15.9 38.6Robeco 0.0 0.0 328.9Other 110.9 153.7 183.1Total 1,081.2 1,318.4 1,682.6


*From the second consolidated fiscal period, goodwill and other intangible assets acquired in business combinations have been included in segment assets. As a result of the foregoing, we have reclassified the segment information for the previous consolidated periods

Appendix(4) Segment Performance 1. Corporate Financial Services

（JPY Bn） 12.3 13.3 13.3First Half


Base Profits 24.5 24.8 11.9 10.0 84%

Capital Gains 0.3 0.2 0.2 0.5 -

Provisions -2.3 -0.1 -0.3 0.4 -

Impairments -1.1 -0.1 -0.1 0.0 -p

Segment Profits 21.5 24.8 11.8 10.8 92%

Segment Assets 899.3 893.2 898.3 895.1 -

First Half Performance 2Q Topics

Segment Assets 899.3 893.2 898.3 895.1

ROA (After Tax) 1.4% 1.7% 1.6% 1.5% -

First Half Performance

Asset increased compared to end of previous fiscal year

2Q Topics

Supply shortage of solar panels resolved p y

Recognized write-back of provisions Completed integration of sales branches with ORIX Auto


Appendix(4) Segment Performance 2. Maintenance Leasing



Base Profits 34.7 36.2 18.1 21.3 118%

Capital Gains 0.1 0.1 0.0 0.0 -

Provisions 0.0 -0.1 -0.3 -0.2 -

Impairments 0.0 -0.1 -0.1 0.0 -p

Segment Profits 34.7 36.1 17.8 21.1 119%

Segment Assets 538.1 599.4 569.5 634.7 -

2Q TopicsFirst Half Performance

Segment Assets 538.1 599.4 569.5 634.7

ROA (After Tax) 3.9% 3.9% 4.0% 4.2% -

Continued strong new transactions

Base profits remain at high levels due to

Opened new truck rental location in Fukuoka City. Set to open locations in Iwaki,


Base profits remain at high levels due to asset increase Sapporo and Osaka.

Began offering contract testing service of compact storage batteries


Appendix(4) Segment Performance 3. Real Estate



Base Profits 18.3 25.0 12.3 14.0 113%

Capital Gains 14.2 16.5 7.3 9.6 -

Provisions -3.0 0.4 0.6 0.0 -

Impairments -28.2 -36.4 -17.3 -14.8 -p

Segment Profits 1.3 5.6 3.0 8.8 294%

Segment Assets 1,390.5 1,133.2 1,291.0 1,045.5 -


Segment Assets 1,390.5 1,133.2 1,291.0 1,045.5

ROA (After Tax) 0.1% 0.3% 0.3% 1.0% -

Increased gains on sales of properties and decreased impairments in the

f l t t k t

Rented abandoned school to establish an artificial light plant factory to cultivate


process of real estate market recovery

Hotel and Japanese Inn operations continue to be strong

leaf lettuce

Acquired Asanomiya Golf course. Total of 41 golf courses now operated by ORIX


Appendix(4) Segment Performance 4. Investment and Operation



Base Profits 22.4 29.1 17.9 17.6 98%

Capital Gains 5.3 19.0 4.8 6.7 -

Provisions -7.5 -5.5 -1.6 -1.5 -

Impairments -4.2 -7.6 -4.7 -0.6 -p

Segment Profits 16.0 34.9 16.4 22.2 135%

Segment Assets 471.9 444.3 437.3 434.2 -


Segment Assets 471.9 444.3 437.3 434.2

ROA (After Tax) 1.9% 4.7% 4.5% 6.2% -

Contributions from profits from new investments and gains on sales of li t d t k

Acquired U.S. energy services company “Enovity”


listed stocks

Strong collections revenues and fee income from loan servicing business

Securing land for Mega-solar projects proceeding as planned


Appendix(4) Segment Performance 5. Retail



Base Profits 32.8 42.1 20.8 26.9 129%

Capital Gains 0.3 3.7 3.4 3.0 -

Provisions -1.1 -2.6 -0.5 -1.6 -

Impairments -12.7 0.0 0.0 0.0 -p

Segment Profits 19.4 43.2 23.6 28.4 120%

Segment Assets 1,742.9 1,994.1 1,966.0 2,056.6 -


Segment Assets 1,742.9 1,994.1 1,966.0 2,056.6

ROA (After Tax) 0.7% 1.4% 1.6% 1.7% -

Growth in base profits in line with increased life insurance policies in force

Number of applications for medical insurance “New Cure” and “New Cure Lady”


Growth in ORIX Bank housing loans contributed to asset increase

exceeded 40,000 in single month

3rd “e-Direct money trust” went on sale


Appendix(4) Segment Performance 6. Overseas Business



Base Profits 40.4 37.5 15.1 27.0 179%

Capital Gains 21.2 19.3 8.3 12.0 -

Provisions -3.8 -2.4 -0.5 -2.0 -

Impairments -8.0 -1.6 -0.2 -2.7 -p

Segment Profits 49.8 52.8 22.7 34.2 151%

Segment Assets 1,081.2 1,318.4 1,064.2 1,682.6 -


Segment Assets 1,081.2 1,318.4 1,064.2 1,682.6

ROA (After Tax) 2.7% 2.7% 2.6% 2.8% -

Increased base profits due to acquisition of Robeco

Indonesian local subsidiary chosen as best financial company from 168


Local subsidiaries’ non-performing ratio and provisions remained low

p ycompetitors


Appendix(5) Funding and Liquidity(JPY Bn)12.3 13.3 14.3

First HalfCP 180.4 151.5 100.0B i f Fi i l I tit ti 2 277 3 2 368 0 2 458 4Borrowings from Financial Institutions 2,277.3 2,368.0 2,458.4Bonds / MTN 1,393.0 1,283.0 1,200.8Deposits 1,103.5 1,078.6 1,109.6Subtotal 4,954.3 4,881.1 4,868.9, , ,ABS, CMBS 874.7 679.8 360.8Short-term Debt, Long-term Debt and Deposits 5,829.0 5,560.8 5,229.6

12 3 13 3 14.312.3 13.3 First HalfAvailable Commitment Line (1) 427.4 439.5 429.4

Cash and Cash Equivalents (2) 786.9 826.3 706.3

Liquidity (1+2) 1,214.3 1,265.8 1,135.7

Marketable Short-term Debt (3) *1 420.7 429.3 362.1

Liquidity Coverage Ratio (1+2)/(3) 289% 295% 314%

*1 Marketable Short-term Debt is the total of bonds and MTN expected to reach maturity within 1 year and the balance of CP.

*2 Performance indicator is a Non-GAAP financial measure. For a qualitative reconciliation of the most directly comparable financial measures calculated

Liquidity Coverage Ratio (1+2)/(3) 289% 295% 314%

Share of Long-Term Debt (excl. ABS, CMBS) *2 88% 89% 92%


e o a ce d cato s a o G a c a easu e o a qua tat e eco c at o o t e ost d ect y co pa ab e a c a easu es ca cu atedand presented in accordance with U.S. GAAP, please see page 33 and 34.

Appendix(6) Real Estate Portfolio(JPY Bn)■ Trend in Real Estate Segment Assets by Type

12.3 13.3 14.3First Half

Rental Property 876 3 754 4 718 6Rental Property 876.3 754.4 718.6　　Under Lease 705.9 603.4 595.4　　Under Development 170.4 151.0 123.2Condo Assets 87.3 55.4 43.3

*NRL / Specified Bonds 205.4 113.4 69.9Operating Facilities 153.4 161.4 164.3Other 68.1 48.6 49.4Total 1,390.5 1,133.2 1,045.5

■ NOI Yield and Vacancy Rate Trends*25.9bn of NRL/specified bonds held by domestic Group companies not included (13.9）

, , ,

12 3 13 3 14.312.3 13.3 14.3First Half

Assets Under Lease 705.9 603.4 595.4NOI Yield 5.2% 4.9% 4.9%Vacancy Rate 3 5% 3 8% 3 6%

■ Trend in Amount of Rental Property Sales

Vacancy Rate 3.5% 3.8% 3.6%

12.3 13.3 14.3First Half


Amount of Rental Property Sales 113.7 163.4 46.9

Appendix(6) Real Estate Portfolio

(JPY Bn)■ Rental Property Assets by Type (13.9)

B l NOI Yi ldProperty Type

Under Lease UnderDevelopment Total

Balance NOI YieldOffice Buildings 196.7 4.2% 63.5 260.2Logistics Centers 34.7 5.7% 0.4 35.1Commercial Facilities 138.7 6.5% 30.7 169.4

p y yp Development

Rental Condos 110.1 4.7% 4.9 115.0Other 115.2 4.2% 23.7 138.9Total 595.4 4.9% 123.2 718.6

(JPY Bn)■ Rental Property Assets by Region (13.9)

UnderLease

UnderDevelopment

TotalLease Development

Tokyo 234.8 65.2 300.0Kanto (excl. Tokyo) 72.4 12.4 84.8Osaka 124.4 19.1 143.5Kansai (excl. Osaka) 28.1 1.6 29.7Nagoya 30.9 3.7 34.6Sapporo, Sendai, Fukuoka 32.6 16.2 48.8Other 72.2 5.0 77.2


Total 595.4 123.2 718.6

Appendix(7) Robeco

(JPY Bn) 14.3 First half

Segment Profit 4.4

Segment Assets 328.9

ROA (After Tax) 3.3%( )

2012.1-12 * 2013.1-6 * 2013.7-9

188.9 192.5 197.1

18.4 0.8 0.1

12 3% 0 4% 0 1%

End of Period AUM (Billions of euro)

　Net New Money (Billions of euro)

NNM as % of BoP AUM 12.3% 0.4% 0.1%

96.8 94.9 94.3

92.1 97.6 102.8

　NNM as % of BoP AUM

　Institutional AUM (Billions of euro)

　Retail AUM (Billions of euro)

676.6 332.0 177.8

* Figures before acquisition and provided as a reference.

Net Fee Revenues (Millions of euro)


Appendix(8) Asset Quality(JPY Bn)■ Asset Quality (Adjusted **)

12.3 13.3 14.3First Half

Investment in Direct Financing Leases 728.0 826.4 864.7g

90+Days Past-Due Direct Financing Leases 17.4 15.8 14.9

Installment Loans 2,073.2 2,176.1 2,096.090+Days Past-Due LoansNot individually Evaluated for Impairment 8.6 7.7 7.3

Loans individually Evaluated for Impairment (a) 235.7 168.1 145.6

Amount expected to be fully collected through collateral (b) 51.3 38.0 31.6

Impaired Loans Requiring Valuation Allowance (a)-(b) 184.4 130.1 114.1

*1

*1 Of the 145 6bn in loans individually evaluated for impairment 90 1bn is fully covered by collaterals such as real estate Including 46 7bn in provisions 94 0% is fully covered

Amount expected to be collected through collateral (c) 108.3 77.9 67.3

Valuation Allowance (a)-(b)-(c） 76.1 52.2 46.7

Non-performing ratio *2 9.3% 6.4% 5.7%

(JPY Bn)■ Trend in Provisions and Provisioning Rate (Adjusted **)

*1 Of the 145.6bn in loans individually evaluated for impairment, 90.1bn is fully covered by collaterals such as real estate. Including 46.7bn in provisions, 94.0% is fully covered*2 (90+ Days Past-Due Direct Financing Leases + 90+ Days Past-Due Loans Not Individually Evaluated for Impairment ＋ Loans Individually Evaluated for Impairment)/(Investment in Direct Financing Leases ＋ Installment Loans)

12 3 13 3 14.3

* P i i (Adj t d)/ (A I t t i Di t Fi i L A I t t i I t ll t L )

12.3 13.3 14.3First Half

17.5 10.1 4.9

Provisioning Rate* 0.62% 0.34% 0.33%

Provisions for Doubtful Receivable and Probable Loan Losses


* Provisions (Adjusted)/ (Average Investment in Direct Financing Leases + Average Investment in Installment Loans)

**The above exclude the effects of adopting the accounting standards regarding the consolidation of VIEs.

Appendix(9) Reconciliation Table of Non-GAAP Financial Measurement

These materials include certain financial measures presented on a basis not in accordance with U.S. GAAP, or non-GAAP measures, including total assets and long-term liabilities excluding liabilities in line with securitized transactions (ABS, CMBS), as well as other measures or ratios calculated based thereon, presented on an adjusted basis, which excludes payables under securitized leases, loan receivables and investment in securities and reverses the cumulative effect on retained earnings of applying the accounting standards for the consolidation of VIEs effective April 1 2010retained earnings of applying the 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 June 30, 2013, as compared to prior periods. Effective April 1, 2010, we adopted ASU 2009-16 and ASU 2009-17 which changed the circumstances under which we are required to consolidateadopted ASU 2009 16 and ASU 2009 17, which changed the circumstances under which we are required to consolidate certain VIEs. Our adoption of these accounting standards caused a significant increase in our consolidated assets and liabilities and a decrease in our retained earnings without affecting the net cash flow and economic effects of our investments in such consolidated VIEs. Accordingly, our management believes that providing financial measures that exclude assets and liabilities attributable to consolidated 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 p pour historical financial and business trends without the large balance sheet fluctuation caused by our adoption of these accounting standards.

(2) Our management believes that in comparing segment information as of June 30, 2013 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 regardingreceivables 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 accordance with U S GAAP and they should not be considered in isolation or as a substitute for the mostprepared in accordance with U.S. GAAP, and they should not be considered in isolation or as a substitute for the most directly comparable U.S. GAAP measures. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures presented in accordance with U.S. GAAP as reflected in our consolidated financial statements for the periods provided, are included in page 33and 34.



(JPY Bn)

Key Ratio 12.3 13.314.3

First HalfTotal Assets （a） 8,332.8 8,439.7 8,430.0, , ,Deduct: Payables under Securitized Leases, Loan Receivables andInvestment in Securities 874.7 679.8 360.8Adjusted Total Assets （b） 7,458.1 7,759.9 8,069.2Short-Term Debt 458.0 420.7 302.5Long-Term Debt （ｃ） 4,267.5 4,061.5 3,817.5Deduct: Payables under Securitized Leases, Loan Receivables andInvestment in Securities 874.7 679.8 360.8

Adjusted Long-Term Debt （ｄ） 3,392.8 3,381.8 3,456.8Long- and Short-Term Debt (excluding deposit) （e） 4 725 5 4 482 3 4 120 0Long and Short Term Debt (excluding deposit) （e） 4,725.5 4,482.3 4,120.0Adjusted Long- and Short-Term Debt (excluding deposit) （f） 3,850.7 3,802.5 3,759.3ORIX Corporation Shareholders' Equity （g） 1,380.7 1,643.6 1,759.6Deduct: The Cumulative Effect on Retained Earnings of Applying the AccountingStandards for the Consolidation of VIEs -19.2 -16.6 -5.8 under ASU 2009-16 and ASU 2009-17 Effective April 1, 2010

Adjusted ORIX Corporation Shareholders' Equity （h） 1,400.0 1,660.2 1,765.4ORIX Corporation Shareholders' Equity Ratio （g）/（a） 16.6% 19.5% 20.9%Adjusted ORIX Corporation Shareholders' Equity Ratio （h）/（b） 18.8% 21.4% 21.9%D/E Ratio (times)(Long- and Short-Term Debt/ORIX Corporation Shareholders' Equity)

（e）/（g） 3.4x 2.7x 2.3xAdjusted D/E Ratio (times)(Adjusted Long- and Short-Term Debt/ORIX Corporation Shareholders' Equity)

（f）/（h） 2.8x 2.3x 2.1x

Long-Term Debt Ratio (including ABS, CMBS) （c）/（e） 90% 91% 93%


Adjusted Long-Term Debt Ratio (excluding ABS, CMBS) （d）/（f） 88% 89% 92%


(JPY Bn)

Segment Profit DetailsCorporateFinancialServices

MaintenanceLeasing

Real EstateInvestment

andOperations

Retail OverseasBusiness

SegmentTotal

ConsolidatedFinancial

StatementAdjustment

Total

Base Profits *1 24.5 34.7 18.3 22.4 32.8 40.4 173.1 -14.2 159.0Capital Gains *2 0.3 0.1 14.2 5.3 0.3 21.2 41.5 0.3 41.8Provisions -2.3 0.0 -3.0 -7.5 -1.1 -3.8 -17.7 -1.5 -19.2Impairments *3 -1.1 0.0 -28.2 -4.2 -12.7 -8.0 -54.2 2.0 -52.3Segment Profits 21.5 34.7 1.3 16.0 19.4 49.8 142.7 -13.4 129.3

12.3

Base Profits *1 24.8 36.2 25.0 29.1 42.1 37.5 194.7 -17.3 177.5Capital Gains *2 0.2 0.1 16.5 19.0 3.7 19.3 58.8 -4.7 54.1Provisions -0.1 -0.1 0.4 -5.5 -2.6 -2.4 -10.4 0.4 -10.0Impairments *3 -0.1 -0.1 -36.4 -7.6 0.0 -1.6 -45.8 -3.4 -49.2Segment Profits 24.8 36.1 5.6 34.9 43.2 52.8 197.3 -25.0 172.3

13.3

Base Profits *1 11.9 18.1 12.3 17.9 20.8 15.1 96.2 -5.2 91.0Capital Gains *2 0.2 0.0 7.3 4.8 3.4 8.3 24.0 -2.9 21.2Provisions -0.3 -0.3 0.6 -1.6 -0.5 -0.5 -2.6 -0.2 -2.8Impairments *3 -0.1 -0.1 -17.3 -4.7 0.0 -0.2 -22.4 0.5 -21.9Segment Profits 11 8 17 8 3 0 16 4 23 6 22 7 95 2 -7 8 87 4

13.3First Half

Segment Profits 11.8 17.8 3.0 16.4 23.6 22.7 95.2 -7.8 87.4

Base Profits *1 10.0 21.3 14.0 17.6 26.9 27.0 116.8 11.3 128.1Capital Gains *2 0.5 0.0 9.6 6.7 3.0 12.0 31.9 -9.1 22.8Provisions 0.4 -0.2 0.0 -1.5 -1.6 -2.0 -4.9 -0.3 -5.2Impairments *3 0.0 0.0 -14.8 -0.6 0.0 -2.7 -18.2 -3.8 -22.0

14.3First Half

*1 Base Profit = Segment Profit – Capital Gains – Provisions – Impairments

*2 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 subsidiaries 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.

Segment Profits 10.8 21.1 8.8 22.2 28.4 34.2 125.5 -2.0 123.6


*3 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.

Reference Datae e e ce ata


Macro Economic IndicatorsNational CPI (Ex Fresh Food)

(YoY Change)

Source: Bloomberg


g

36

Japanese Corporate Indices

Tankan Corporate Diffusion Index

Corporate Bankruptcies(Q t l B i ) Diffusion Index(Quarterly Basis)

Source: Teikoku Databank, Ltd. Source: Bank of Japan


, p

Japanese Real Estate Indicators

Japan TSE REIT Index Office Rental Rates

Source: Tokyo Stock Exchange Source: CBRE


y g

38

Domestic Lease Business Indicators

Private Equipment Investment New Car Salesq p

Source: Japan Leasing Association Source: Japan Automotive Leasing Association


p g p g

39

Other Domestic Indicators

Trend in Domestic Supply of Domestic Shipping Amount of Solar CellRenewable Energy

（Primary Energy Supply Basis）

Source: Agency for Natural Resources and Energy Source: Japan Photovoltaic Energy Association


g y gy p gy

40


The number of M&A The number of the new listed companies

Source: RECOF Corporation Source: Tokyo Stock Exchange


Source: RECOF Corporation Source: Tokyo Stock Exchange

41


Consumer Finance LoansRetail Life Insurance

Source: Japan Statistics Bureau Source: Japan Financial Services Agency


Source: Japan Statistics Bureau Source: Japan Financial Services Agency

42

DisclaimerO C (“O “C ) f f These materials have been prepared by ORIX Corporation (“ORIX” or the “Company”) solely for your information and are subject to

change without notice. The information contained in these materials has not been independently verified and its accuracy is not guaranteed. No representations, warranties or undertakings, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness, or completeness, or correctness of the information or the opinions presented or contained in these materials.

These materials contain forward-looking statements that reflect the Company’s intent, belief and current expectations about future events and financial results. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” “intends,” or words of similar meaning. These forward-looking statements are not guarantees of future performance. They are based on a number of assumptions about the Company’s operations and are subject to risks, uncertainties and other factorsbeyond the Company’s control. Accordingly, actual results may differ materially from these forward-looking statements. Factors that could cause such differences include but are not limited to those described under “Risk Factors” in the Company’s most recentcould cause such differences include, but are not limited to, those described under Risk Factors in the Company s most recent annual report on Form 20-F filed with the U.S. Securities and Exchange Commission and under “Business Risk” of the securities report (yukashouken houkokusho) filed with the Director of the kanto local Finance Bureau.

Some of the financial information in these materials is unaudited.

These materials contain non-GAAP financial measures, including adjusted long-term and interest-bearing debt, adjusted total assets and adjusted ORIX Corporation shareholders‘ equity, as well as adjusted segment profit and other measures and ratios calculated on the basis thereof. These non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable financial measures included in our consolidated financial statements and presented in accordance with U.S. GAAP. Reconciliations of these non GAAP financial measures to the most directly comparable U S GAAP measures are included in theseReconciliations of these non-GAAP financial measures to the most directly comparable U.S. GAAP measures are included in these materials on pages 33 to 34.

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 consolidated 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 rulesits 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 summarized in the Company’s annual report.

Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security commodity or other


Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other instrument, including securities issued by the Company or any affiliate thereof.

Additional Information

ORIX W b it URL htt // i j / / /

For annual and more historical data please access our website. A list of major disclosure materials is given below.

ORIX Website: URL: http://www.orix.co.jp/grp/en/IR Website: URL: http://www.orix.co.jp/grp/en/ir/

If ld lik t b i l d d il li t f j tIf you would like to be included on our e-mail list for major news announcements, please send your request to the address below.

ORIX Corporation Corporate Planning Department

World Trade Center Building., 2-4-1,World Trade Center Building., 2 4 1, Hamamatsu-cho, Minato-ku,

Tokyo 105-6135, Japan

T l +81 3 3435 3121Tel: +81-3-3435-3121 Fax: +81-3-3435-3154

[email protected]


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