Consolidated Financial Results

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2 Disclaimer 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 factors beyond 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 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 these materials on pages 34 to 35. 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 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 instrument, including securities issued by the Company or any affiliate thereof. Copyright 2013 ORIX Corporation All rights reserved. 1

3 Contents I. Overview P.3 II. III. Future Direction Segment Results and Strategies P5 P.5 P.7 IV. Major Investment Activities V. Real Estate t Segment VI. Asset Quality P.15 P.16 P.17 VII. Funding P.18 VIII. Summary P.21 Appendix Copyright 2013 ORIX Corporation All rights reserved. 2

4 I. Overview FY13.3 FY14.3 Achieved 111.9bn yen in Net Income, up 34%YoY Announced acquisition of Robeco Increase dividends from 90 to 130 yen Aim for 135bn yen in Net Income (21% increase) *Net Income refers to Net Income Attributable to ORIX Corporation Shareholders (Target) Per share data has been adjusted retrospectively to reflect the stock split on April 1 for all periods presented Copyright 2013 ORIX Corporation All rights reserved. 3

5 I. Overview Status of Shareholders Equity Approx. 100bn yen added due to conversion of convertible bonds Put to active and effective use as source for next growth Employed Capital Ratio and ROE (Forecast) Copyright 2013 ORIX Corporation All rights reserved. 4

6 II. Future Direction Acquisition of Robeco Acquisition of world s leading AM Company Acceleration of Finance + Services Further expansion of global business foundation Europe Americas ORIX Office Robeco Office Asia Middle East p Japan Copyright 2013 ORIX Corporation All rights reserved. 5

7 II. Future Direction Increase investments t that t match Finance + Services, both domestically and overseas Take good risks nimbly by enhancing expertise Create new market while shifting to new battleground Aim to achieve 10% ROE in FY16.3 Copyright 2013 ORIX Corporation All rights reserved. 6

8 III. Segment Results and Strategies Segment Profits All segments increased profits, Investment and Operation and Retail significantly grew profits in FY13.3 Trend in Segment Profits (Target) Copyright 2013 ORIX Corporation All rights reserved. 7

9 III. Segment Results and Strategies Segment Assets Increases in Maintenance Leasing, Retail, and Overseas Business Trend in Segment Assets (Forecast) Copyright 2013 ORIX Corporation All rights reserved. 8

10 III. Segment Results and Strategies 1. Corporate Financial Services Base Revenue Breakdown* (FY13.3) Examples of service related revenues - Solar panel sales - Insurance agency commission * 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) - Interest expense is divided according to the proportion of interest related assets and service related assets and deducted from both revenues Enhance Matrix Sales Continue to strengthen solar panel sales Copyright 2013 ORIX Corporation All rights reserved. 9

11 III. Segment Results and Strategies 2. Maintenance Leasing Base Revenue Breakdown (FY13.3) Examples of service related revenues - Maintenance revenues - Rental revenues Further expand customer base and scale Promote streamlining of operations and enhance cost control Maintain stable high profitability Copyright 2013 ORIX Corporation All rights reserved. 10

12 III. Segment Results and Strategies 3. Real Estate Base Revenue Breakdown (FY13.3) Examples of service related revenues - Real estate rental revenues - Facility operation revenues Increase base profit mainly through h real estate operating business Expand fee revenues leveraging expertise Maintain asset composition ratio of 15 20% Copyright 2013 ORIX Corporation All rights reserved. 11

13 III. Segment Results and Strategies 4. Investment & Operation Base Revenue Breakdown (FY13.3) Examples of service related revenues - Loan servicing fee - Solar panel sales Increase revenues from environment and energy business Expand active investment both domestically and overseas Promote mega solar business ahead of the original plan Copyright 2013 ORIX Corporation All rights reserved. 12

14 III. Segment Results and Strategies 5. Retail Base Revenue Breakdown (FY13.3) Examples of service related revenues - Life insurance premiums Increase card loan balance Expand sector and scale of life insurance operation Copyright 2013 ORIX Corporation All rights reserved. 13

15 III. Segment Results and Strategies 6. Overseas Business Base Revenue Breakdown (FY13.3) Examples of service related revenues - M&A advisory fee - Aircraft operating lease revenues U.S.: Continue to enhance fee business Asia: Expand assets, capture economic growth Securely close Robeco acquisition Copyright 2013 ORIX Corporation All rights reserved. 14

IV. Major Investment Activities July 2012 Japan August 2013 (Plan) Global April 2012 Japan Dec.

Manufacturing of Frozen Foods and Restaurant Operation E-Commerce Deferred Payment Clearance Service Dec.

2013 Mongolia March 2013 Japan May 2013 Japan (Plan) STX Energy Energy Business The Mongolia

16 IV. Major Investment Activities July 2012 Japan August 2013 (Plan) Global April 2012 Japan Dec Japan ORIX Credit Robeco KINREI Net Protections Card Loan Business Asset Management Business Manufacturing of Frozen Foods and Restaurant Operation E-Commerce Deferred Payment Clearance Service Dec Korea Feb Mongolia March 2013 Japan May 2013 Japan (Plan) STX Energy Energy Business The Mongolia Opportunities FundⅠ Investment in Mining and Infrastructure Asahi Fiber Glass 1 st Holdings Manufacturing of Glass Fiber Planning, Development, and Maintenance of Software Copyright 2013 ORIX Corporation All rights reserved. 15

17 V. Real Estate Segment Accounts for approx. 18% of total segment assets Control percentage between 15-20% going forward Trend in Segment Assets Trend in Base Profit 1, , , , Copyright 2013 ORIX Corporation All rights reserved. 16

VI. Asset Quality Non-performing ratio decreased d to 6.

92% Trend in Non-Performing Ratio* Coverage Ratio of Loans Individually Evaluated for Impairment * (90+ Days Past-Due Direct

Impairment)/(Investment in Direct Financing Leases + Installment Loans) *Sum of amount expected to be fully collected

18 VI. Asset Quality Non-performing ratio decreased d to 6.4% Coverage ratio against loans individually evaluated for impairment is approx. 92% Trend in Non-Performing Ratio* Coverage Ratio of Loans Individually Evaluated for Impairment * (90+ Days Past-Due Direct Financing Leases Days Past-Due Loans Not Individually Evaluated for Impairment + Loans Individually Evaluated for Impairment)/(Investment in Direct Financing Leases + Installment Loans) *Sum of amount expected to be fully collected through collaterals from loans individually evaluated for impairment (38.0) and amount expected dto be collected dthrough hcollaterals l from impaired loans requiring valuation allowance (77.9). Copyright 2013 ORIX Corporation All rights reserved. 17

VII. Funding Funding Structure, Trend in Share of

structure Pursue stable and lengthened maturities for

Mar.31 2013 / Excluding ABS, CMBS) Trend in Long-Term

19 VII. Funding Funding Structure, Trend in Share of Long-Term Debt, Funding Cost Well-balanced funding structure Pursue stable and lengthened maturities for each funding option Breakdown of Funding Sources (As of Mar / Excluding ABS, CMBS) Trend in Long-Term Debt Share and Funding Cost Copyright 2013 ORIX Corporation All rights reserved. 18

20 VII. Funding Liquidity on-hand/ Maturity Ladder Continue to maintain ample liquidity on-hand Expect to issue bonds within maturity amount Liquidity vs. Short-term Liabilities Straight Bond Maturity Ladder (as of Mar.31, 2013) Copyright 2013 ORIX Corporation All rights reserved

21 VII. Funding Bond Issuances Issued Amount Term (year) Issued to Coupon T Spread ORIX /Domestic Bond 160 Apr 25,2012 JPY 20 bil 5 Retail Investors 1.060% 76bp 161 Jun 18,2012 JPY 30 bil 5 Retail Investors 0.902% 67bp 162 Jun 7,2012 JPY 10 bil 5 Institutional Investors 0.902% 67bp 163 Aug 7,2012 JPY 15 bil 5 Institutional Investors 0.746% 56bp 164 Aug 7,2012 JPY 10 bil 7 Institutional Investors 1.146% 75bp 165 Sep 12,2012 JPY 40 bil 5 Retail Investors 0.777% 54bp 166 Dec 7,2012 JPY 35 bil 5 Retail Investors 0.725% 53bp 167 Mar 7,2013 JPY 15 bil 5 Institutional Investors 0.508% 39bp 168 Mar 7,2013 JPY 10 bil 7 Institutional Investors 0.849% 53bp 169 Mar 28,2013 JPY 25 bil 5 Retail Investors 0.513% 39bp FY 2013 JPY 210 bil (Institutional Investors: JPY 60 bil Retail Investors: JPY 150 bil ) 170 Apr 30,2013 JPY 15 bil 5 Retail Investors 0.475% 29bp 171 Apr 30,2013 JPY 20 bil 10 Retail Investors 1.126% 57bp 172 Apr 17,2013 JPY 10 bil 5 Institutional Investors 0.566% 29bp 173 Apr 17,2013 JPY 15 bil 7 Institutional Investors 0.840% 45bp FY 2014 JPY 60 bil (Institutional Investors: JPY 25 bil Retail Investors: JPY 35 bil ) ORIX /Foreign Currenncy Dominated Bond AUD Notes Jul 23,2012 AUD 130mil (JPY 12.7 bil) 3 Retail Investors 4.28% - Local Subsidiary /MTN Bond Thai Baht Bond Apr 4,2012 THB 500mil (JPY 1.6 bil) 3 Institutional Investors 4.45% - Korea Won Bond Jul 24,2012 KRW 30,000mil (JPY 2.5 bil) 2 Institutional Investors 3.87% - Korea Won Bond Sep 26,2012 KRW 30,000mil (JPY 2.5 bil) 2 Institutional Investors 3.63% - Thai Baht Bond Nov 30,2012 THB 500mil (JPY 1.6 bil) 2 Institutional Investors 3.63% - Thai Baht Bond Nov 30,2012 THB 1,000mil (JPY 3.2 bil) 4 Institutional Investors 3.99% - Copyright 2013 ORIX Corporation All rights reserved. 20

22 VIII. Summary Increase investments that match Finance + Services, both domestically and overseas Take good risks nimbly by enhancing expertise Create new market while shifting to new battleground FY14.3 Net Income Target 135bn yen FY16.3 Aim to achieve 10% ROE Copyright 2013 ORIX Corporation All rights reserved. 21

24 Appendix(1) Trend in Performance *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 34. Copyright 2013 ORIX Corporation All rights reserved. 23

25 Appendix(2) Profit by Segment Change Corporate Financial Services % Maintenance Leasing % Real Estate % Investment and Oparation % Retail % Overseas Business % Total Segment Profit % 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. Copyright 2013 ORIX Corporation All rights reserved. 24

27 Appendix(4) Funding and Liquidity *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 and presented in accordance with U.S. GAAP, please see page 34. Copyright 2013 ORIX Corporation All rights reserved. 26

31 Appendix(8) Real Estate Portfolio Trend in Real Estate Segment Assets by Type * 40.8bn of NRL/specified bonds held by domestic Group companies not included (As of Mar. 2013) NOI Yield and Vacancy Rate Trends Trend in Amount of Rental Property Sales Copyright 2013 ORIX Corporation All rights reserved. 30

33 Appendix(10) Asset Quality Asset Quality (Adjusted **) *1 *1 Of the 168.1bn in loans individually evaluated for impairment, 104.0bn is fully covered by collaterals such as real estate. Including 52.2bn in provisions, 92.9% is fully covered *2 (90+ Days Past-Due Direct Financing Leases Days Past-Due Loans Not Individually Evaluated for Impairment + Loans Individually Evaluated for Impairment)/(Investment in Direct Financing Leases + Installment Loans) Trend in Provisions and Provisioning Rate (Adjusted **) * Provisions (Adjusted)/ (Average Investment in Direct Financing Leases + Average Investment in Installment Loans) **The above exclude the effects of adopting the new accounting standards regarding the consolidation of VIEs. Copyright 2013 ORIX Corporation All rights reserved. 32

34 Appendix(11) 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 new accounting standards for the consolidation of VIEs, effective April 1, (1) Our management believes these non-gaap financial measures may provide investors with additional meaningful comparisons between our financial condition as of March 31, 2013, as compared to prior periods. Effective April 1, 2010, we adopted ASU and ASU , which changed the circumstances under which we are required to consolidate certain VIEs. Our adoption of these new 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 our historical financial 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, 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 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 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 34 and 35. Copyright 2013 ORIX Corporation All rights reserved. 33

36 Appendix(13) Reconciliation Table of Non-GAAP Financial Measurement *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. *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. Copyright 2013 ORIX Corporation All rights reserved. 35

39 Japanese Corporate Indices Corporate Bankruptcies (Quarterly Basis) Tankan Corporate Diffusion Index (JPY Tn) (Cases) Source: Teikoku Databank, Ltd. Source: Bank of Japan Copyright 2013 ORIX Corporation All rights reserved. 38

41 Domestic Lease Business Indicators Private Equipment Investment New Car Sales (1,000 Units) 90, % 7, % 80,000 70,000 60, % 8.0% 6,000 5, % 10.0% 50, , % 4,000 3, % 6.0% 30,000 20,000 10, % 20% 2.0% 2, , % 20% 2.0% % % Private Equipment Inv. Share of Lease New Car Sales Share of Lease Source: Japan Leasing Association Source: Japan Automotive Leasing Association Copyright 2013 ORIX Corporation All rights reserved. 4040

Other Domestic Indicators Trend in Domestic Supply

Domestic Shipping Amount of Solar Cell (Petajoule)

Energy Source: Japan Photovoltaic Energy

42 Other Domestic Indicators Trend in Domestic Supply of Renewable Energy (Primary Energy Supply Basis) Domestic Shipping Amount of Solar Cell (Petajoule) (MW) Source: Agency for Natural Resources and Energy Source: Japan Photovoltaic Energy Association Copyright 2013 ORIX Corporation All rights reserved

44 Other Domestic Indicators Retail Life Insurance Consumer Finance Loans 25,000 20,000 15,000 10,000 5, Retail Life Insurance Premiums Source: Japan Statistics Bureau Source: Japan Financial Services Agency Copyright 2013 ORIX Corporation All rights reserved. 4343

45 Additional Information For annual and more historical data please access our website. A list of major disclosure materials is given below. ORIX Website: URL: / / / IR Website: URL: If you would like to be included d on our 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, Hamamatsu-cho, Minato-ku, Tokyo , Japan Tl+813 Tel: Fax: haruyasu_yamada@orix.co.jp Copyright 2013 ORIX Corporation All rights reserved. 44

Consolidated Financial Results

ORIX Corporation (TSE: 8591; NYSE: IX) Consolidated Financial Results For the Consolidated Fiscal Year Ended March 31, 2013 May 10, 2013 Haruyuki Urata Shintaro Agata Takao Kato Deputy President & CFO