ORIX Corporation (TSE: 8591; NYSE: IX)

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1 ORIX Corporation (TSE: 8591; NYSE: IX) Consolidated Financial Results First Quarter Consolidated Financial Results For the Three Month Period Ended April 1 June 30, 2012 Haruyuki Urata Shintaro Agata Takao Kato Deputy President & CFO Corporate Executive Vice President, Head of the Treasury Headquarters Corporate Senior Vice President, Head of the Accounting Headquarters Copyright 2012 ORIX Corporation All rights reserved.

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 27 and 28. 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 2012 ORIX Corporation All rights reserved. 1

4 I. Overview Achieved 34.8bn in Net Income, a 1.5 fold year on year increase and 35% of the full year target (JPY Bn) Net Income* and ROE *Net Income refers to Net Income Attributable to ORIX Corporation Copyright 2012 ORIX Corporation All rights reserved. 3

5 I. Overview Retail, Investment and Operation, and Corporate Financial Services segments significantly increased profits year on year (JPY Bn) Trend in Segment Profits Copyright 2012 ORIX Corporation All rights reserved. 4

8 II. Segment Performance 1. Corporate Financial Services 1Q Results New business volume grew 1.6 fold YoY Assets have bottomed out in the third quarter of the previous fiscal year Increased ROA Topics Executed large leasing contracts for incinerators, increased lease execution for construction equipment Focus on solar panel distribution Copyright 2012 ORIX Corporation All rights reserved. 7

9 II. Segment Performance 2. Maintenance Leasing 1Q Results Increase in base profit due to an increase in lease revenue and decrease in costs and SGA Continued high level of new business since second half of previous fiscal year and increase in assets since FY12.3 end Further increase in ROA Topics Rentec: Started tablet PC and industrial robot rentals Auto: Opened a truck rental location in Ishinomaki City, Miyagi Prefecture Copyright 2012 ORIX Corporation All rights reserved. 8

10 II. Segment Performance 3. Real Estate 1Q Results Base profit grew due to increased operating business revenue Increased profit despite YoY increase in impairments Continued steady asset reduction Topics Commenced construction of four large scale logistic centers Strong revenues from Kyoto and Sumida aquariums Copyright 2012 ORIX Corporation All rights reserved. 9

11 II. Segment Performance 4. Investment and Operation 1Q Results Loan servicer recorded large collection revenue Robust revenues from existing investments Significant increase in ROA Topics PE Investment: Invested in KINREI Energy and Environment: Entered into the mega solar business Copyright 2012 ORIX Corporation All rights reserved. 10

12 II. Segment Performance 5. Retail 1Q Results Recognized upfront costs for ORIX Bank card loan Recorded gains and increased assets due to consolidation of ORIX Credit Strong Life insurance premium and life insurance related investment income Topics Enhanced cooperation between ORIX Bank and ORIX Credit on card loan business Reached 1.5 million life insurance policies in force Copyright 2012 ORIX Corporation All rights reserved. 11

13 II. Segment Performance 6. Overseas Business 1Q Results YoY decrease of gains from municipal bond trading in the U.S. Steady increase of lease assets in Asia Maintained high level of ROA Topics China: Joint leasing company with a leading auto dealer Pang Da Group began operation Aircraft Leasing: 27 aircraft joint investment with Varde Partners Inc. Copyright 2012 ORIX Corporation All rights reserved. 12

14 II. Segment Performance Segment Total 6. Overseas Business Asia/Australia and Other are increasing, excluding the exchange rate effect By Region (USD Mil) Copyright 2012 ORIX Corporation All rights reserved. 13

15 III. Topics 1. Solar Panel Related Business Entry into the mega solar business (1) Mega solar business Expect to invest 100MW/30bn yen in the next 3 years Also look into raising nonrecourse loans and structuring fund (2) Rooftop solar power generation business Install in factories and warehouses owned by customers, or ORIX s facilities Expect 100MW/24bn yen in the next 3 years Enhancement of Solar Panel Distribution business Aimed toward power plants. ORIX will purchase the panels, arrange design and installation with engineering companies, and arrange finance Surge in inquiries from sales locations nationwide Copyright 2012 ORIX Corporation All rights reserved. 14

16 III. Topics 2. Aircraft Leasing Business Joint investment with the leading U.S. asset manager Varde Partners Inc. Acquire 27 aircraft, provide leasing to leading airlines in China and LCC in the U.S. Currently own and manage130 aircraft, customer base of 65 airlines in 30 different countries Aim for 200 aircraft and 100 airline companies Aircraft Leasing Value Chain Growth of Aircraft Leasing Market Marketing Accounting & Tax Aircraft Technical Service Aircraft Ownership Lease Admin IT Systems Legal & Contractual Services Investment Banking/ Advisory Global Aircraft Ranked by S&P for servicing, asset management earned top ranking of Strong Source: Ascend Copyright 2012 ORIX Corporation All rights reserved. 15

17 IV. Summary Achieved 34.8bn in net income, 35% of the full year target Segment assets are on an increasing trend Segment asset ROA increased to 2.3% and ROE increased to 10.0% Copyright 2012 ORIX Corporation All rights reserved. 16

Appendix(1) Trend in Performance (JPY Bn) *1 Net Income Attributable to ORIX Corporation *2 Performance indicators shown are Non-GAAP financial measures.

19 Appendix(1) Trend in Performance (JPY Bn) *1 Net Income Attributable to ORIX Corporation *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 pages 27 and 28. Copyright 2012 ORIX Corporation All rights reserved. 18

20 Appendix(2) Profit by Segment (JPY Bn) * Income from discontinued operations (before applicable tax effect), net income attributable to noncontrolling interests and net income attributable to redeemable noncontrolling interests are included Copyright 2012 ORIX Corporation All rights reserved. 19

Appendix(5) Liquidity (JPY Bn) *1 Marketable Short-term Debt is the total of bonds and MTN expected to reach maturity within 1 year and the balance of CP.

23 Appendix(5) Liquidity (JPY Bn) *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 pages 27 and 28. Copyright 2012 ORIX Corporation All rights reserved. 22

1bn of NRL/specified bonds held by domestic Group companies not included (12/6)

24 Appendix(6) Real Estate Portfolio Trend in Real Estate Segment Assets by Type (JPY Bn) * *67.1bn of NRL/specified bonds held by domestic Group companies not included (12/6) NOI Yield and Vacancy Rate Trends Gain on Sales of Real Estate Under Operating Lease Trend Copyright 2012 ORIX Corporation All rights reserved. 23

Appendix(7) Real Estate Portfolio Rental

8% is fully covered Trend in Provisions and Provisioning Rate * Provisions (Average Investment in Direct Financing Leases + Average

26 Appendix(8) Asset Quality Asset Quality (JPY Bn) * *Of the 227.2bn in loans individually evaluated for impairment, 143.5bn is fully covered by collaterals such as real estate. Including 67.3bn in provisions, 92.8% is fully covered Trend in Provisions and Provisioning Rate * Provisions (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 2012 ORIX Corporation All rights reserved. 25

27 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 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 June 30, 2012, 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 June 30, 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 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 27 and 28. Copyright 2012 ORIX Corporation All rights reserved. 26

Appendix(10) Reconciliation Table of Non-GAAP Financial

Appendix(11) Reconciliation Table of Non-GAAP Financial Measurement (JPY Bn) *1 (a) Base Profit = Segment Profit (b) Capital Gains (c) Provisions (d) Impairments *2 Brokerage commissions and net

29 Appendix(11) Reconciliation Table of Non-GAAP Financial Measurement (JPY Bn) *1 (a) Base Profit = Segment Profit (b) Capital Gains (c) Provisions (d) 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 2012 ORIX Corporation All rights reserved. 28

30 Additional Information For annual and more historical data please access our website. A list of major disclosure materials is given below. ORIX Website: IR Website: Financial Reports: URL: URL: URL: Five Year Financial Data: URL: If you would like to be included on our list for major news announcements, please send your request to the address below. ORIX Corporation Corporate Planning Department Mita NN Bldg., Shiba, Minato-ku, Tokyo , Japan Tel: Fax: gregory_melchior@orix.co.jp haruyasu_yamada@orix.co.jp Copyright 2012 ORIX Corporation All rights reserved. 29

ORIX Corporation (TSE: 8591; NYSE: IX)

ORIX Corporation (TSE: 8591; NYSE: IX) Consolidated Financial Results First Quarter Consolidated Financial Results For the Three Month Period Ended April 1 June 30, 2012 Haruyuki Urata Shintaro Agata Takao