creating added value in a changing world - オリックス ... corporation — annual report 2010...

Annual Report 2010

Creating Added Value in a Changing World

Fiscal year endedMarch 31, 2009

Collapse ofLehman Brothers


¥37.8 billion

Fiscal year endingMarch 31, 2011

¥57.0 billion

Fiscal year ended March 31,1989 (Interim Results)

Fiscal year endedSeptember 30, 1988

Black Monday


Second Oil Shock


First Oil Shock


Bursting ofthe IT Bubble

0

50

100

150

200

(Billions of yen)

1964 1975 1980 1985 1990 1995 2000 2005 2010 2011


Bursting ofthe Economic Bubble


Asian CurrencyCrisis

(Target)

ORIXCorporation—AnnualReport2010

1 Our Strengths

6 To Our ShareholdersA Message from CEO Yoshihiko Miyauchi —Medium-andlong-termmanagement

strategy

10 A Message from COO Yukio YanaseResultsforthefiscalyearendedMarch31,2010andmanagementpoliciesforthefiscalyearendingMarch31,2011

13 Special FeatureORIX’suniquestrategiesrespondtothechangingoperatingenvironment—DomesticStrategy—OverseasStrategy—CorporateActivities

19 Segment Overview

20 ORIX at a Glance

22 Segment Profits, Assets and ROA

23 Breakdown of Assets and Revenues by Segment

24 Corporate Financial Services

26 Maintenance Leasing

28 Real Estate

30 Investment Banking

32 Retail

34 Overseas Business

36 Management Organization —CorporatePhilosophy/ManagementPolicy/

ProfitDistributionPolicy

36 Management Team

42 Corporate Governance

47 Risk Management

52 An Interview with CFO Haruyuki Urata

53 ORIX and Society

54 ORIX and the Environment

55 Financial Section

64 Group Companies

66 Group Network

68 Share Information

69 Corporate Information / Website Guide

Forward-Looking StatementsThisdocumentmay contain forward-looking statements aboutexpectedfutureeventsandfinancialresultsthatinvolverisksanduncertainties. Suchstatementsarebasedonourcurrentexpectationsandaresubjecttouncertaintiesandrisksthatcouldcauseactualresultstodiffermateriallyfromthosedescribedintheforward-lookingstatements.Factorsthatcouldcause such a difference include, but are not limited to, those describedunder“RiskFactors”intheCompany’sannualreportonForm20-FfiledwiththeUnitedStatesSecuritiesandExchangeCommissionandunder“BusinessRisk” of the securities report (yukashoken houkokusho) filed with theDirectoroftheKantoLocalFinanceBureau.TheCompanymakesavailablefreeofchargeonorthroughitswebsite(www.orix.co.jp)itsannualreportonForm20-Fandotherreports.Reference to fiscal yearsInthisreport,“fiscal2009”referstothefiscalyearendedMarch31,2010.

ORIX is a financial services group that constantly seeks new business opportunities to provide advanced financial services to corporations and individuals. ORIX was established in 1964 as a pioneer of the leasing industry in Japan, and has subsequently spread the leasing busi-ness throughout Asia since expanding into Hong Kong in 1971. Today, ORIX operates in 27 countries and regions world-wide, developing diversified financial services centered on leasing, lending, rentals, automobile leasing and rentals, life insurance, trust and banking, and real estate. ORIX’s unique presence in the financial services industry is strongly recognized. 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 innovate products that create new value for customers.

Trend in Net Income Attributable to ORIX CorporationWith theexceptionofa loss shortlyafter its foundation,ORIXhasmaintainedprofitabilitydespiteavolatileeconomicenvironmentincludingtwooilshocks,thecollapseofJapan’seconomicbubbleandthebankruptcyofLehmanBrothers.

OurStrengthsAbout ORIX

Our StrengthS

COntentS

ORIX Corporation — Annual Report 2010 �




¥37.8 billion


¥57.0 billion



Black Monday


Second Oil Shock


First Oil Shock



0

50

100

150

200

(Billions of yen)

1964 1975 1980 1985 1990 1995 2000 2005 2010 2011





(Target)

CorporateFinancial ServicesLending, leasing, commissionbusiness for the sale of �nancialproducts and environment-related business

Maintenance LeasingAutomobile leasing and rentals,car sharing, and precisionmeasuring equipment andIT-related equipment rentalsand leasing

InvestmentBankingReal estate �nance,commercial real estateasset securitization, loanservicing (asset recovery),principal investment,M&A advisory, venture

capital and securitiesbrokerage

RetailLife insurance, trust and

banking business, card loanbusiness and online securitiesbrokerage

Overseas BusinessLeasing, lending, investment inbonds, investment banking, realestate-related operations, andship- and aircraft-relatedoperations

Client

Blend ofExpertise

ClientBase

GroupNetwork

Real EstateDevelopment and

rentals of commercial realestate, condominium

development and sales, hotel,golf course, and training

facility operation, seniorhousing development andoperation, REIT assetmanagement, and realestate investment andadvisory services

GainingSpeedforProfitRecoverytowardtheNextStage

ORIX aims for sound business and stable profit growth with further sophistication of expertise, enhanced financial stability and strengthened risk management.

Business StructureORIX consists of six independent segments:

Corporate Financial Services, Maintenance

Leasing, Real Estate, Investment Banking,

Retail and Overseas Business. ORIX capital-

izes on the superior expertise of its Group

companies, its solid domestic and interna-

tional client base and its extensive Group

network to promote “solutions with value-

added services” to solve the business chal-

lenges faced by its clients.P. 2~3

P. 6~18

OurStrengthsAbout ORIX

� ORIX Corporation — Annual Report 2010

Our StrengthS

MaintenanceLeasing

Real EstateCorporateFinancialServices

InvestmentBanking

OverseasBusiness

Retail

Networkin Japan

1,098 locations

OverseasNetwork

26 countries and regions

275 locations

Strong Individual Businesses and NetworkingContinuous growth blending specialist expertise from each business area and cross-segment synergies

Strong individual businesses and networking are ORIX’s greatest strengths. ORIX aims for continuous growth through combining its

diverse expertise with its solid client base.

Our Growth Foundation

ORIX’s strength is its ability to provide multiple products

and services by capitalizing on its sales network founded

on a solid client base consisting mainly of SMEs. Over-

seas, ORIX is involved in diverse financial businesses

utilizing its local partners to provide services to local

clients, and has established a secure position in the

Asian region.

ORIX aims to be a one-stop financial services provider

by strengthening communication and cooperation through

teamwork that extends beyond departments and regions

to provide valuable proposals to clients.

ORIX strives to meet the diverse needs of its customers by

constantly developing high quality services. Each business

has established a secure position in each respective

industry and has sufficient capacity to operate indepen-

dently. Each segment has the ability to generate high

profitability and has the potential for growth. Also, all

segments are able to provide each other with products

and services to meet any and all customer needs. ORIX is

able to provide clients with services that have high added

value by flexibly combining the specialist expertise accu-

mulated in each business area with the products and

services developed by Group companies.

Client BaseA solid client base in Japan and overseas together with diverse product and service proposals that meet client needs provide a competitive edge


Our Growth Foundation

Corporate Value that Creates

“ Blended Knowledge and Teamwork”

ORIX aims to further increase corporate value by providing diverse financial services that meet the needs of clients and the market while constantly pursuing new business.

ORIX is able to discover new revenue opportunities by maximizing synergies 1ORIX is able to provide solutions with value-added services that meet client needs2ORIX is able to steadily increase revenues from its widely-diversified business portfolio3


Shareholders’Equity Ratio

0

5

10

15

20

25(%)

16.78

13.9514.1014.5513.1711.98

8.25 7.91 8.5210.03

01/3 10/309/308/307/306/305/304/303/302/3

01/3 10/309/308/307/306/305/304/303/302/3

(%)

0

5

10

15

20

25

3.061.80

13.78

18.30

19.80

14.17

10.10

6.008.367.70

ROE Debt/Equity Ratio(Times)

0

2

4

6

8

10

3.404.504.574.22

4.795.24

6.32

7.878.868.44

01/3 10/309/308/307/306/305/304/303/302/3

Our StrengthS

Group Performance

Millions of yen, unless otherwise stated

2006 2007 2008 2009 2010 % change

Total revenues ¥ 906,944 ¥1,115,482 ¥1,135,338 ¥1,053,521 ¥ 932,841 (11)

Total expenses 694,589 834,830 949,784 1,000,166 903,270 (10)

Income before income taxes, discontinued operations and extraordinary gain 247,141 314,565 246,119 8,687 55,608 540

Net income attributable to ORIX Corporation 166,388 196,506 169,597 21,924 37,757 72

ORIX Corporation shareholders’ equity 953,646 1,194,234 1,267,917 1,167,530 1,298,684 11

Total assets 7,242,455 8,207,187 8,994,970 8,369,736 7,739,800 (8)

ROE (%) 19.80 18.30 13.78 1.80 3.06

ROA (%) 2.50 2.54 1.97 0.25 0.47

ORIX Corporation shareholders’ equity ratio (%) 13.17 14.55 14.10 13.95 16.78

Debt/Equity ratio *1 (times) 4.79 4.22 4.57 4.50 3.40

Interest-bearing debt *2 ¥4,925,753 ¥5,483,922 ¥6,263,017 ¥5,919,639 ¥5,263,104 (11)

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

(Basic) 1,883.89 2,177.10 1,860.63 246.59 370.52 50

(Diluted) 1,790.30 2,100.93 1,817.81 233.81 315.91 35

ORIX Corporation shareholders’ equity per share (yen) 10,608.97 13,089.83 14,010.62 13,059.59 12,082.56 (7)

Cash dividends *3 (yen) 90 130 260 70 75

Number of employees 15,067 16,662 18,702 18,920 17,725

* 1. Debt/Equity ratio: Interest-bearing debt except deposits / ORIX Corporation shareholders’ equity 2. Interest-bearing debt: Short- and long-term debt and deposits 3. Dividends applicable to the fiscal year

Financial HighlightsYears ended March 31


Highlights for the Fiscal Year Ended March 31, 2010 (Month Announced)

May2009 Sumitomo Mitsui Banking Corporation and ORIX Credit Corporation Join Forces

Fifty-one percent of ORIX Credit Corporation shares were transferred to Sumitomo Mitsui Banking Corporation

(SMBC) to start a joint venture. The market for consumer loans is forecast to shrink due to revisions to the Money

Lending Law and increased competition. Swiftly responding to the changing environment, a joint venture was

formed with SMBC with the aim of future growth.

July 2009 Public Offering

Based on the policy of “Fortification of Financial Stability” announced in early 2009, ORIX made its first public offering

in almost eight years (approx. ¥83.4 billion) to adapt to the global economic slowdown and credit crunch.

ORIX announced that it would capitalize on its accumulated operating and client bases to focus on providing

SME solutions, real estate-related business and diversification of its Asian operations.

Oct.2009 Monex Group and ORIX Announce a Merger of their Securities Subsidiaries and Capital Alliance

A capital alliance was concluded by way of share exchange where ORIX Securities Corporation was transferred

to Monex Group Inc. with ORIX taking a 22.5% stake in Monex Group Inc. Through this arrangement ORIX has

become the major shareholder of Monex Group, Inc., which has become an equity-method affiliate of ORIX. A

merger of Monex, Inc. and ORIX Securities Corporation was concluded in May 2010. Through this alliance, both

companies are aiming to promote cooperation and steadily increase corporate value.

Jan.2010 Chinese Headquarters Established

ORIX (China) Investment Co., Ltd. was established as a headquarters for ORIX operations in China. In addition to

furthering the existing leasing and rental business, the Chinese Headquarters will also enhance diversified finan-

cial services such as automobile and aircraft leasing. ORIX (China) Investment Co., Ltd. will also begin full-scale

lending and investment activities and accelerate business expansion in China.

Performance Highlights

Net Income Attributable to ORIX Corporation Increased 72% to ¥ 37.8 billionThe initial forecast of ¥30 billion was surpassed by 26%

Achieved a Debt/Equity Ratio of 3.4timesShareholders’ equity increased through a public offering and financial stability improved

Total Assets Decreased by ¥629.9billion from ¥8,370 billion on March 31, 2009Total assets decreased 7.5% over one year

Joint press conference with Sumi-tomo Mitsui Banking Corporation

Joint press conference with Monex, Group, Inc.

Signing ceremony for the stra-tegic partnership agreement with Dalian City


tO Our SharehOlderS—a MeSSage frOM CeO YOShihikO MiYauChi

OverviewofPerformanceDuringFiscal�009(thefiscalyearendedMarch��,�0�0)

ClearSignsoftheNextGrowthStageORIX’s net income for fiscal 2009 rose 72% from the previous fiscal year to ¥37.8 billion, exceeding our

initial forecast of ¥30.0 billion by 26%.

This bottom line figure indicates a significant recovery in terms of year-on-year performance and results

versus forecast, but it still has not recovered to pre-crisis levels. Nevertheless, two consecutive years of

solid profit is a significant achievement, the result of ORIX’s swift and proactive measures to address key

issues in a difficult operating environment. Although we are far from satisfied with the current level of

earnings, by scaling back total assets and lowering our debt/equity ratio as we outlined at the beginning

of the fiscal year, we have succeeded in further enhancing financial stability throughout the year, and we

saw clear signs that we are moving toward the next growth stage.

Sustainable Growth through Increased Expertise and Risk ManagementORIX responded to the unprecedented financial crisis with determination and a sense of urgency and made efforts toward “Strengthening the Corporate Structure” and “Opera-tional Realignment” to enhance our financial stability. Thanks to these actions we achieved steady results, managing to maintain profitability in fiscal 2008 and achieving earnings for fiscal 2009 that exceeded our initial forecasts. This is the result of ORIX’s long standing commitment to “Business and Funding Diversification,” a key practice since our foundation. Although the business outlook remains opaque, we will continue with our efforts to increase our expertise in all of our businesses and to cultivate new areas, as well as fortify financial stability and enhance risk management. Through these measures we expect to maintain sound businesses and steady growth.

Yoshihiko Miyauchi Chairman and CEO

insight&action Creating Added Value in a Changing World


TheNatureofORIX’sStrengths

BusinessandFundingDiversificationORIX was established as a pioneer in Japan’s leasing business in 1964. We have proceeded to expand not

only in terms of items that we lease, but also by developing expertise in related operations, including

loan-related, operating leases and real estate-related businesses, as well as life insurance and banking

operations. Through the steady growth of these individual operations we have diversified our business.

We have also pursued regional expansion to areas including Asia, North America and the Middle East,

and today we have offices in 27 countries and regions around the world.

We have also diversified our funding sources. While the capital markets expanded, we have been

careful not to rely too heavily on capital market funding, and instead maintained a roughly 50-50 balance

between direct and indirect funding. Our indirect funding sources include more than 200 financial institu-

tions. This is one of the reasons that we were able to weather the financial crisis.

ORIX has faced numerous crises over its 46-year history, including two oil shocks, the collapse of

Japan’s economic bubble, the Asian currency crisis, the collapse of the IT bubble and now the current

financial crisis. However, even in the midst of such difficult operating environments, our diversified busi-

ness portfolio and balanced funding have allowed us to overcome these challenges. Moreover, with the

exception of one instance shortly after our establishment, ORIX has never once posted a loss, and has

consistently achieved sustained growth.

StrongIndividualBusinessesandMutualNetworkingORIX has built its business portfolio over many years by expanding into related fields in which it had

sufficient expertise, and through mergers and acquisitions with highly specialized businesses. As ORIX’s

expertise and proficiency in each business evolved, the number of stand-alone businesses increased. As

a result we now have a range of operations in business fields of differing characteristics, effectively

providing risk diversification. Another characteristic of ORIX is that each individual business has basically

established its own secure position, with a combination of solid profitability and growth. These busi-

nesses have grown by taking advantage of synergies, such as by providing each other with products and

services. This combination of strong individual businesses and mutual networking is one of ORIX’s

greatest strengths.

ProperRiskManagementfortheMacroeconomicEnvironmentIn addition to a strong business foundation, ORIX’s capacity for risk management allows prompt and bold

action to keep it a step ahead of changes in the macroeconomic environment. We began to slow our

asset expansion as early as December 2007, well before Lehman Brothers filed for bankruptcy. In fiscal

2009 we started to particularly scale back real estate assets and to enhance risk management. History

teaches that no matter how strong a business foundation may be, continued expansion of leverage with

no heed to financial conditions or demand trends does not improve financial stability. We will continue

to focus on deepening risk management with the goal of achieving earnings growth.

Another factor that we believe has allowed us to overcome the numerous difficulties over the years is

our suitable control of business risks within the amount of shareholders’ equity in a changing environment.



tO Our SharehOlderS—a MeSSage frOM CeO YOShihikO MiYauChi

ManagementStrategiesfortheFuture

FutureGrowthAreasWhere should we seek the source of future growth? The simplest answer is through the growth of our

existing businesses. We believe that each business has the potential for further growth. At the same time,

we are also focusing on the following growth areas, growth regions and new areas. Growth areas, such

as “Finance + Services,” are where ORIX is able to leverage its extensive experience and expertise. In

these areas ORIX can cultivate new fee-based businesses in Japan and overseas, and broaden its stable

earnings base over the short- to medium-term by providing added value without increasing asset levels.

Next, in growth regions, we are focusing our efforts on Asia, where we can expand the diversified

businesses we have developed in Japan. We are stepping up efforts to sow the seeds for business expan-

sion in China and other major countries in the region, while diversifying risk by strengthening relationships

with local partners. We expect these businesses in Asia to begin contributing to earnings within a

relatively short time.

Finally, there are new areas such as the environment and energy. ORIX has been involved in the envi-

ronment-related business since the mid-1990s. This area allows ORIX to display its unique strengths,

represented by our operation of Japan’s most advanced private-sector waste treatment facility. We

expect to show achievements while making a long-term commitment in this area.

SustainableGrowthORIX has concluded its crisis response measures, taking steps to regain a growth track, and we believe

that fiscal 2010 will be critical for this transition. The macroeconomic environment behind our business

activities gives us little cause for optimism. The global economy has emerged from the worst of the crisis,

but employment, mainly in developed countries, and other factors remain opaque. Moreover, the poten-

tial remains for renewed financial instability as the European fiscal crisis has shown. That is to say, the

financial and capital markets will not return to their previous state.

We have learned much from the experience of the financial crisis. Considering that it is impossible to

have complete faith in the functioning of the financial markets, proper corporate management in the

future requires that earnings growth be achieved while maintaining financial stability and exercising thor-

ough risk management. This is what can be called sustainable growth. As I mentioned earlier, ORIX plans

to increase its expertise, fortify its financial stability and enhance its risk management with the aim of

maintaining sound business operations and achieving steady growth. Accordingly, for the fiscal year

ending March 2011 we are aiming for profitability in all segments, with a net income attributable to ORIX

Corporation of ¥57.0 billion (up 50% year on year). We have also set a target for return on equity (ROE),

one of the main management indicators, of 10% over the medium term.

MessagetoShareholders

CreatingNewValueORIX has sought to create new value under our corporate slogan “ORIX, The Only Answer.” In essence,

growth for ORIX will be based on satisfying society by providing the services and products that people

have unconsciously desired. At the same time, we believe that our true contribution to society as a

corporate group is to maintain our ability to provide services and products that add recognizable value.

ORIX Corporation — Annual Report 2010 9

ORIXManagementOrganization

ProgressiveCorporateGovernanceAs a corporate group, ORIX wants to be lauded for its

progressive approach, not only in business but in corpo-

rate governance. ORIX has actively built and strengthened

an organizational structure that clearly separates over-

sight functions from business execution. Since establishing

an Advisory Board in 1997, we have introduced outside

directors, adopted a “Company with Committees” board

model, and established a Nominating Committee and

Compensation Committee composed entirely of outside

directors. All outside directors meet the requirements

for independence established by ORIX’s Nominating

Committee. This demonstrates how ORIX has stayed

ahead of regulations on independent officers, which the

Tokyo Stock Exchange started to require for all listed

companies from the start of fiscal 2010.

Personnel

PromotingtheConceptof“KeepMixed”We believe that our greatest driver for growth is our exceptional human resources and we seek to create

a workplace in which all employees are able to utilize their talents and expertise to the fullest extent

possible, regardless of age, gender, education or nationality under the concept of “Keep Mixed.” We will

continue to strive to ensure that as many employees as possible feel that they made the right choice in

joining ORIX, and derive sufficient sense of accomplishment by contributing to corporate growth, society

and shareholders.

ORIX conducts its business with the aim of satisfying shareholders by increasing corporate value. To this end

we will continue to leverage our expertise and teamwork built on originality and flexibility.

July 2010

Yoshihiko Miyauchi

Director, Representative Executive OfficerChairman and Chief Executive Officer

�0 ORIX Corporation — Annual Report 2010

a MeSSage frOM COO YukiO YanaSe

ReviewofFiscal�009

EnhancedFinancialStability,StrengthenedCorporateStructureandallNumericalTargetsAchievedWe remained defensive in fiscal 2009, yet we achieved all of the numerical performance targets that we

set at the start of the year in terms of profits, enhanced financial stability and strengthened risk manage-

ment. The successes of the year have generated confidence leading into fiscal 2010.

Against the backdrop of an unprecedented credit crunch said to be a once in a hundred years financial

crisis, our main focus during fiscal 2009 was to thoroughly eliminate risk factors that could have affected

our operating base, and to focus on enhancing our financial stability and strengthening the corporate

structure to adapt to the tightening of credit. We accelerated initiatives to strengthen the balance sheet

by reducing assets and liabilities, enhancing credit monitoring of major investee companies and mini-

mizing the risk of major write-downs in our investment securities portfolio.

Moving to the next Stage having restored trust I have two main missions as COO of ORIX. The first is to improve the sound-ness of operations while flexibly adapting to challenging economic condi-tions. The second is to identify and act upon important business opportunities, and to steadily incorporate them into our operating base as drivers to generate future sustainable growth. In fiscal 2009, we achieved increased profits that significantly surpassed our initial forecast while enhancing financial stability and strengthening our corporate structure. We will continue this momentum in fiscal 2010, and we also plan to focus our collective efforts on developing new earnings sources for the medium-to-long term to place ORIX firmly back on a growth trajectory.

Photograph: i-MiEV electric vehicle used for car sharing

Yukio Yanase President and COO



Initially we thought that it would take time for the financial and real estate markets to normalize and

that the recession would become more apparent at the macroeconomic level. We announced specific

performance targets for ORIX based on these assumptions and strove to restore trust in the company. As

shown in the table below, we met all of our numerical targets in terms of reducing the debt/equity ratio,

decreasing assets and controlling credit costs. We recorded a consolidated net income of ¥37.8 billion, a

72% increase year on year and 26% higher than our initial forecast.

In terms of segment performance, four of the six segments recorded a profit in fiscal 2009. Two

segments posted losses: the Corporate Financial Services segment, where we had to make significant

provisions for doubtful receivables and probable loan losses, and the Investment Banking segment, which

was affected by the bankruptcy filing of JOINT CORPORATION. In contrast, the Overseas Business

segment delivered strong results in the United States and Asia, and the Retail segment recorded signifi-

cantly higher profits than the initial forecast.

Restored market confidence in ORIX is evidenced by a higher share price and lower yields on our

corporate bonds. As COO, I am sincerely grateful to all ORIX executives and employees for their ability to

respond quickly and for their exceptional hard work. I am extremely proud of ORIX’s underlying strength

to maintain and expand our operating base, which allowed us to maintain ORIX’s untarnished record of

delivering profits every year except for the year it was first established.

Key Financial Results for Fiscal 2009

Main Items Fiscal 2009 (fiscal year end)

Fiscal 2009 (initial forecast) Results

① Net Income *1 ¥ 37.8 billion ¥ 30.0 billion Upward Revision

*1. Net income attributable to ORIX Corporation

2. Excluding deposits 3. Total segment assets

② Debt/Equity Ratio *2 3.4 times Below 4 times Achieved

③ Asset Reduction *3 ¥748.7 billion ¥ 432.7 billion Achieved

④ Reduction of Real Estate- Related Assets

¥370.1 billion ¥ 291.2 billion Achieved

⑤ Credit Cost ¥ 71.5 billion ¥ 78.0 billion Below Forecast

TwoKeyChallengesinFiscal2010

AcceleratingContinuedGrowthandtheCreationofaNewRevenueBaseThe critical issue for fiscal 2010 is to maintain the momentum we established in fiscal 2009 and demon-

strate that the recovery in the performance of ORIX is genuine. Since we expect the business environment

surrounding finance to remain severe both in Japan and overseas, we plan to achieve profit growth while

continuing to enhance financial stability and strengthen risk management.

We are acutely aware that the current earnings level is not satisfactory compared with the record high

of ¥196.5 billion in net income in fiscal 2006. On the other hand, we face the reality that the operating

environment has drastically changed. Therefore, in fiscal 2010 we are not merely aiming to achieve our

performance targets: we will also focus on continuing to develop new revenue sources to underpin

sustainable growth in fiscal 2011 and beyond. I see the year ahead as one in which we must return ORIX

to a firm medium- to long-term growth trajectory.

�� ORIX Corporation — Annual Report 2010

July 2010

Yukio Yanase

Director, Representative Executive OfficerPresident and Chief Operating Officer

a MeSSage frOM COO YukiO YanaSe

SeizingBusinessOpportunitiesGeneratedbyThreeMajorParadigmShifts

CapitalizingonaStrongOperatingBasetotakeonBusinessOpportunitiesOneStepAheadoftheCompetitionSo what are these new sources of earnings? I believe the key to answering that question lies in three

structural changes in the global economy.

The first change is a shift in the drivers of global economic growth—specifically, the emergence of

developing markets. Demand in developing markets led by China and India has already surpassed that of

mature developed markets. Going forward, rapid economic growth is expected to continue within the

developing world in what has been dubbed the Asian century.

The second change is a shift within the finance industry of developed markets. The importance of

value-added businesses is increasing. Large financial institutions are being forced to tackle the challenges

of balance sheet reduction, recapitalization and new financial regulations. There is increasing demand for

the finance business to evolve from a debt to an equity model and to shift towards “Finance + Services.”

The third change is a shift in global economic growth itself—specifically, the emergence of eco-service

businesses. Current times call for environmental protection, and many companies are seeking to develop

profitable businesses addressing environmental problems. We believe that this momentous structural

shift represents a major long-term business opportunity.

These three structural changes in the economy provide ORIX with major business opportunities. The

first opportunity is in Asia. In December 2009, we established a headquarters in Dalian for ORIX’s Chinese

operations to capture profitable business opportunities arising from the growth of Asia, and China in

particular. The second opportunity is our ongoing development of “Finance + Services.” Rather than just

supplying financial functions, we aim to promote high value-added services based on the specialist exper-

tise and know-how that we have acquired across a range of business areas. The third opportunity is in new

business areas such as the environment and energy. For instance, we are seeing new shoots of growth such

as the car sharing business and the sale of electric power across all our business segments. At ORIX, we

have the business base we need to firmly grasp these opportunities and increase their scale as businesses.

We plan to make full use of this base to build new revenues sources that will lead to sustainable growth.

Source: IMF1985 2010 Forecast

JapanUnited StatesChina

2005200019951990

(Billions of USD)

0

3,000

6,000

9,000

12,000

15,000

Nominal GDP Shift in Japan, the United States and China

ORIX Corporation — Annual Report 2010 ��

ORIX’sUniqueStrategiesRespondtotheChangingOperatingEnvironment

SpeCial feature

CreatingaNewStrategy

Domestic Strategy

From “Finance” to “Finance plus”, and entry into “new areas such as the environment and energy”Creating new products and services in addition to its finance business based on the policy of

enhancing the synergies and expertise of business areas in which ORIX excels.

1

Overseas Strategy

“Localization and Partnership”Expanding operations in China and other Asian countries that show high growth potential based

on the policy of promoting strategic business alliances with ORIX’s prominent local partners.

2

From “Finance” to “Finance plus”, and entry into “new areas such as the environment and energy”Latent Demand is a Goldmine for ORIXORIX will achieve sustainable growth not only by providing customers with what they want now, but also by creating new services and businesses that they will want.


SpeCial feature

Domestic Strategy

Hiroaki Nishina Director, Deputy President, Group Corporate Sales, Investment Banking, Group Osaka Representative, Chairman, ORIX Real Estate Corporation, President, ORIX Baseball Club Co., Ltd.

The worst seems to have passed for the domestic operating environment surrounding ORIX. Do you still feel that you cannot be optimistic toward the future outlook?

The business climate is clearly a tough one for lending and

other forms of finance. In the finance business, where compet-

itiveness is based on the ability to get funding and reduce

funding cost, I don’t think that the demand for funding in Japan

has recovered sufficiently to allow for adequate growth in the

financial industry excluding banks.

However, ORIX’s position is basically different from that of

major financial institutions and other players in the finance

industry. ORIX has utilized its nationwide sales network of 1,098

locations to focus on business with major SMEs throughout

Japan. Only a minority of our clients want us to simply provide

financing. The majority appreciate the extras that they cannot

usually get from major banks, such as services, business manage-

ment, and related expertise. I see these extras as the lifeline of

the ORIX Group—a veritable gold mine that will be the source

of our sustainable growth going forward. Looking at the oper-

ating environment in terms of this “Finance plus” concept, I think

that there is unlimited demand that is waiting to be met.

Can you go into more detail about this “Finance plus” concept?

Probably the clearest example is ORIX Auto’s Automobile

Management Outsourcing. Through this business we provide

not just vehicle leasing, but all conceivable related services for

company vehicles, including arranging for insurance, mainte-

nance, issuing cards for fuel and the ETC (electronic toll collec-

tion) system, as well as assessing fuel efficiency and other

aspects of environmentally-friendly driving. We provide these

services and have commercialized them.

ORIX Rentec, which provides rental services for IT equip-

ment and precision measuring equipment, is also highly

regarded for providing additional services ranging from user

support to equipment calibration that really meets our clients’

needs. Today, ORIX Rentec has the largest market share in the

industry, with 675,000 pieces of rental equipment.

One example of “Finance plus” easily visible to individual

customers is the aquarium operation business performed by

ORIX Real Estate. In 2004 we renovated the aging Enoshima

Aquarium utilizing a private finance initiative (PFI) scheme. As a

result of in-depth market research, we successfully revitalized

the facility into a new

popular aquarium that

combines elements of

education and enter-

tainment.

Where will you develop the next “Finance plus” additional services?

One example is logistics. It is not widely known that ORIX Real

Estate is in fact one of the industry’s major investors in logistics

ORIX Rentec Tokyo Technology Center


facilities. The company draws on the site selection capabilities

it has acquired through the residential housing development

and other businesses to place tenants best suited to a particular

region or that fit with local needs, following a “local production

for local consumption” format. We will continue to develop

extremely efficient logistics facilities throughout Japan.

For logistics, commercial facilities and other areas of the

leasing business, the ability to place tenants is the factor that

has the greatest influence on future earnings. ORIX differenti-

ates itself from major investment banks and pure real estate

firms by having dedicated tenant promotion teams within its

sales departments and we will adopt an integrated, cross-

functional sales approach that connects this high-level exper-

tise with our domestic sales network.

What are the important factors involved in accelerating the spread of the “Finance plus” concept? Also, what measures are you taking to accommodate it?

The two most important factors are reforming awareness and

improving the framework for conveying information. As you

have probably surmised, the “plus” component of “Finance

plus” is ultimately additional services and businesses. The

expertise and skills in particular fields that are vital to devel-

oping such services and businesses already exist within ORIX.

However, while certain areas have been exploited, some areas

are still dormant. In this sense, it is first of all important to

reform awareness by uncovering these capabilities. Also, no

matter how great the awareness, it is useless if information

cannot be acquired smoothly, and that information is not

passed along to key functions of each business.

In order to avoid this, ORIX integrated its sales headquar-

ters in January 2009, which had previously been separated

along regional lines such as Tokyo, Kinki and other areas, into

a single Domestic Sales Administrative Headquarters. This

consolidation has created a framework for central manage-

ment of information obtained from each field, and for chan-

neling such information to the business unit that has the ability

to utilize it most effectively. This system is now up and running.

Looking ahead, we plan to expand the role of the Domestic

Sales Administrative Headquarters to the greatest extent

possible, making it a sales hub and platform for acquiring

revenues for Group companies.

Other areas where ORIX is focusing on future growth are

new areas such as the environment and energy. We have been

involved in the environment-related business since the mid-

1990s, and today are nurturing many new young and growing

businesses such as car sharing and sales of electricity. We will

integrate businesses in these new areas across the organiza-

tion as quickly as possible.

Simply responding to what the customer wants is not

enough for us to differentiate ourselves. ORIX intends to

provide services and businesses that customers may not have

been aware of, but will find useful and be appreciative of. Such

demand may represent niche businesses individually, but when

combined they can become something huge, and this is a

goldmine for ORIX.

Capitalizing on ORIX’s Sales Network to Propose the “Best Match” Retail Store Development and Promotion Department, Domestic Sales Administrative Headquarters

ORIX’s construction and leasing of retail facili-ties is one example of “Finance plus”. ORIX capitalizes on its nationwide sales network for real estate information to propose sites that suitably match the client’s needs. One example is the O2-Park Commercial Complex in the Inage ward of Chiba city. This project got off the ground when the Energy and Eco Services Department contacted the Retail Store Development and Promotion Department with the information that a major corporation with which it was dealing was having difficulty developing a retail facility on property that it owned. Both ORIX’s proposal and its ability to

promote the business were well received and ORIX took charge of planning, tenant selection and invitation, and negotiating layout changes with existing tenants. The facility opened for business in May 2009. The combination of a prime location along a major highway in addi-tion to synergies between the tenant compa-nies has resulted in a bustling shopping center. ORIX aims to increase revenues by creating unique services through this combination of corporate credit, financial and legal know-how accumulated in the finance industry with expertise in location and business evaluation, planning, and tenant invitation.

“O2-Park” Commercial Complex in Inage ward, Chiba city (Opened in May 2009)O2-Park is a leased commercial complex consisting of a K’s Denki electronic store, GEO Multimedia rental store, Gokurakuyu Bath & Spa, Sega Game Center, Daiichi Kosho Karaoke and four restau-rants including a Saizeriya Italian Restaurant. Floor space: 30,712m2, Parking lot: 400 parking spaces.

“Localization and Partnership”ORIX will capitalize on growth in Asia while maintaining its traditional overseas business platform with a main focus on China.


SpeCial feature

Overseas Strategy

Why are you focusing on Asia now?

We aren’t looking to expand business simply because of the

high economic growth in Asia in recent years. We have aimed

for overseas expansion when the company was established in

1964, and we entered into Hong Kong in 1971, less than 10

years after ORIX’s foundation. Since then, we have mainly

developed the leasing business with local partners in ASEAN

and other Asian countries. Over the last 40 years, we have

responded to differences in regulations, culture and client

needs, and have built a solid revenues base by focusing on our

strategy of providing financial services to local clients with local

partners and local management. As the global presence of

China and other Asian countries is dramatically increasing,

ORIX will capitalize on this large potential to expand business.

What is your basic policy of Asian business expansion?

As I have just mentioned, there is potential, but this alone is not

a reason to increase investment in the region. We need to

exploit this potential by using the expertise we have accumu-

lated in Japan to differentiate our financial services and equity

investments after thoroughly considering the risks. Furthermore,

Asia is a difficult market to enter from the outside and start a

business from both a regulatory and business practice stand-

point. Our “inside approach” using local partners and local

management for each business in each region is key for business

expansion that matches the distinct identity of each country.

What challenges does ORIX face in Asia?

ORIX’s business in Asia was severely impacted by the Asian

Currency Crisis during the late 1990s. Although many Japanese

financial institutions withdrew from Asia, we managed to main-

tain the majority of our operations. As a result, we became

strong enough to maintain a stable revenue base even during

the current financial crisis and global recession. Presently, our

current operating base in Asia focuses on small-scale finance.

Although we intend to organically capitalize on the economic

growth of Asian countries, there is a limit to the growth possible

only by conventional small-scale finance. In order to fully capi-

talize on economic growth in Asia, we need to shift from

finance to equity investment and change our focus from small–

scale businesses with an investment size of several hundred

million yen to medium-scale businesses with an investment

size of several billion yen.

Local management of ORIX METRO Leasing and Finance Corporation in the Philippines.

Makoto InoueDirector, Deputy President

Global Business & Alternative Investment Headquarters


Putting Localization into Practice Global Business & Alternative Investment Headquarters, Corporate Finance Group, Korea Team

The Korea Team was inaugurated in January 2008 and is made up of four Korean nationals. The hallmark of this team is its specialization in Principal Investment. It was ORIX’s investment in Korea Life Insurance that raised the compa-ny’s visibility in the principal investment field. ORIX and the Hanwha Group made a joint investment in the failed Korea Life Insurance in December 2002 and made an exit after reha-bilitating the company. ORIX’s presence in the industry has since increased with new transac-tions coming through various channels, leading to the investment achievement in the STX Group. The Korea team is under the direct

control of the Head of the Global Business & Alternative Investment Headquarters and its greatest strengths are quick decision-making and flexibility. The team’s achievements are a direct result of the comprehensive strength of the team members who are familiar with local business practices and regulations, and who are working to expand the business based on an understanding of ORIX’s organization and business strategies. These achievements have created a positive cycle that leads to the next investment opportunity. ORIX aims to capi-talize on this unique positioning to undertake distinctive investment opportunities in Korea.

How will you address these challenges?

I would like to start by explaining what we have achieved so far.

Korea is a good example. Korea and Japan have similar systems

and this is partly why we have had successful investments such

as our investment in Korea Life Insurance. Our investment in

Korea Life Insurance gained ORIX recognition in Korea as one of

the major players in the principal investment business field. We

will continue to make achievements in other regions, but it will

not be easy as each country has a different legal system. We

need to capitalize on our existing business network in each

region to cultivate reliable business partners who have a deep

understanding of the local market movements.

What is your strategy in China?

We established our Chinese Headquarters in Dalian at the end

of 2009, which has since become a holding company. As a

holding company, it has improved credibility as it is a local

company and the ability to raise funds in Chinese Renminbi

has increased significantly. China is now opening its doors to

the outside world and there are many opportunities where we

can capitalize on our expertise such as leasing, ship- and

aircraft- related finance, equity investment and the environ-

ment. However, we do not intend to conduct business 100%

by ourselves since we as foreigners cannot handle everything

alone when considering the risks involved. On that premise,

we are currently in discussions with potential partners who are

major players in each business area.

How will you expand business in Asia going forward?

Regionally speaking, China will be the top priority, followed by

India, Indonesia and Vietnam. We need to prepare for new

business opportunities including financial services and equity

investments in India and Indonesia, where we already have

a leasing base, in addition to Vietnam, which is a new region

of focus.

Business in Asian countries will not be successful unless

local people play a central role. In fact, Korean staff played a

central role in the equity investments that have shown a

measure of success in Korea. The market in Asia holds unlim-

ited business opportunities. Our top-class human resources

have accumulated knowledge of the leasing business in each

country, and we will build a system to capitalize on new busi-

ness opportunities by training them to shift to financial services

and equity investments.

Global Business & Alternative Investment Headquarters, Corporate Finance GroupFrom Left:Manager Park Jong SunManaging Director Lee Jong CholSenior Vice President Kim ShinwanAssistant Manager Kim Najeong


SpeCial feature

Corporate Activities

The following is a summary of recent corporate activities by segment (April 2009–June 2010).Please visit the ORIX website for additional press releases (http://www.orix.co.jp/grp/prs_e/).

Segment Date Announced Details

Corporate Financial Services

June 4, 2010 ORIX acquired 95% of Tsukuba Lease Co., Ltd. shares

May 7, 2010 ORIX established “ORIX Electric Power”

February 15, 2010 ORIX formed an alliance with Mercer Japan, Ltd. for the corporate pension business

October 1, 2009 Concluded distributor contract with Salesforce.com, Co., Ltd.

Maintenance Leasing May 20, 2010 ORIX Auto car sharing members exceed 10,000

December 21, 2009ORIX Auto entered into a car sharing collaboration with convenience store chain FamilyMart Co., Ltd.

September 30, 2009 ORIX Auto started “Auto Bid” service for corporate sales of automobiles

April 30, 2009ORIX Rentec and ORIX Eco Services launched “Eco-Rental” service business with Hewlett–Packard Japan, Ltd.

Real Estate June 1, 2010 Operations began for ORIX Real Estate’s Minato Mirai Center Building

March 31, 2010Construction began for advanced development of the Osaka Station North Yard project by ORIX Real Estate

December 15, 2009ORIX Real Estate announced the “Sumida Aquarium” (tentative name), an urban aquarium in the Tokyo Sky Tree® complex

July 29, 2009 ORIX Real Estate announced the full-scale operation of the Sakai Logistics Center

Investment Banking June 23, 2010Announcement Regarding Capital and Business Alliance between ORIX and The Tokyo Star Bank, Limited

March 23, 2010Standard and Poor’s maintained “Strong” rating for ORIX Asset Management & Loan Services commercial loan primary, master and special servicers

May 22, 2009Merger of three condominium maintenance companies in which ORIX had invested (New name: Global Community Co., Ltd.)

April 16, 2009 Collaboration with The Akita Bank, Ltd. to guarantee loans with cars as collateral

Retail June 10, 2010 ORIX Life Insurance launched new family support insurance “Keep”

January 25, 2010 ORIX Life Insurance launched new cancer insurance “Believe”

December 10, 2009 ORIX Trust and Banking announced “Education” and “General Purpose” loans

May 18, 2009 ORIX Trust and Banking began “Corporate eDirect Term Deposits”

Overseas Business June 8, 2010DI Asian Industrial Fund L.P., a fund targeting promising companies in Vietnam, began operation

May 10, 2010 ORIX USA purchase of RED Capital Group, a major U.S. loan servicing company

April 12, 2010Strategic alliance in the environment field with the Chinese Academy of Science announced

October 7, 2009Business matching contract concluded between ORIX China and the Tokyo Branch of China Construction Bank Corporation

1 ORIX Electric Power website 2 Car sharing station in front of a FamilyMart convenience store 3 South Building, Sakai Logistics Center 4 ORIX Asset Management & Loan Services ratings 5 Cancer insurance “Believe” logo 6 Signing ceremony for the conference document promoting a strategic alliance with the Chinese Academy of Science

P. 25

P. 29

P. 33

P. 35

P. 29

3

5

2

6

4

MasterServicer

PrimaryServicer

Strong

SpecialServicer

1

P. 27

ORIX Corporation — Annual Report 2010 �9

20 ORIX at a Glance

22 Segment Profits, Assets and ROA

23 Breakdown of Assets and Revenues by Segment

24 Corporate Financial Services

26 Maintenance Leasing

28 Real Estate

30 Investment Banking

32 Retail

34 Overseas Business

Segment Overview

SegMent Overview


SegMent Overview

ORIX at a Glance


Main Business

Lending, leasing, commission business for the sale of financial products and environment-related business

Main Group Companies

• ORIX

• ORIX Eco Services

• NS Lease

• ORIX Environmental Resources Management

Number of Employees

2,616

Overview of OperationThe Corporate Financial Services segment has its origin in the leasing busi-

ness developed at the time of ORIX’s establishment in 1964, and even today

this segment serves as the foundation for the entire ORIX Group.

Operating through a nationwide network of 82 offices, ORIX provides capital

through loans and leasing for capital investment and other needs to its core

customer base of domestic small and medium 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.

During the year, ORIX established new specialty departments within this

segment to connect and promote sales throughout the Group, and these new

departments have started activities that are expected to become the foundation

for new revenues in the areas of development and promotion of retail facilities,

domestic and overseas sales, in addition to the environment and energy business.

Maintenance Leasing

Main Business

Automobile leasing and rentals, car sharing, and precision measuring equipment and IT-related equipment rentals and leasing


• ORIX Auto

• ORIX Rentec

Number of Employees

3,335

Overview of Operation

This segment consists of ORIX’s automobile and rental operations. The automobile operations began with automobile leasing in 1973, and expanded to automobile rental in 1985. Since 2002, the ORIX Group has also operated a car sharing business. Automobile leasing opera-tions started by offering to corporate clients leases that included main-tenance services, and today provides a complete range of specialized vehicle management outsourcing services. The segment also offers a

wide range of services to address the vehicle needs of both corporate and individual clients. ORIX entered the rental business in 1976 with leasing of precision measuring equipment to corporate clients. Today, the rental business covers a broad range of services, including IT-related equipment rentals, technical support, calibration and asset management.

Real Estate Main Business

Development and rentals of commer-cial real estate, condominium devel-opment and sales, hotel, golf course, and training facility operation, senior housing development and operation, REIT asset management, and real estate investment and advisory services


• ORIX

• ORIX Real Estate

• ORIX Asset Management

• ORIX Golf Management

• ORIX Living

• ORIX Real Estate Investment Advisors

Number of Employees

3,704


The Real Estate segment began with corporate dormitory rental opera-tions in 1986, and started developing residential condominiums in 1993. Real estate operations gained momentum in 1999 with the establish-ment of ORIX Real Estate Corporation. Today, the ORIX Group is involved in development and leasing of properties, such as office buildings and

commercial facilities; residential condominium development; develop-ment and operation of hotels, golf courses, training facilities and senior housing; and asset management and administration, including Japanese real estate investment trusts.

Investment Banking Main Business

Real estate finance, commercial real estate asset securitization, loan servicing (asset recovery), principal investment, M&A advisory, venture capital and securities brokerage


• ORIX

• ORIX Capital

• ORIX Investment

• ORIX Asset Management & Loan Services

• ORIX M&A Solutions

• ORIX Wholesale Securities

Number of Employees

2,011


This segment consists principally of the real estate-related finance busi-ness and the investment banking business that ORIX began developing during the late 1990s and early 2000s. Operations include a venture capital business established in 1983; a real estate-related finance busi-ness, including non-recourse loans, established in 1999; a loan servicing

business that invests in non-performing loans and CMBS management and collection; a principal investment business initiated in 2000; a secu-ritization business; and a mergers and acquisitions and financial advisory business established in 2003.

Retail Main Business

Life insurance, trust and banking busi-ness, card loan business and online securities brokerage


• ORIX Life Insurance

• ORIX Trust and Banking

• ORIX Credit

Number of Employees

1,170


This segment consists of four businesses that primarily serve individual customers. The four businesses are the life insurance business, handled by ORIX Life Insurance, which was founded in 1991 and operates mainly through representative and mail-order sales; the trust and banking busi-ness, handled by ORIX Trust and Banking, which is centered on the housing loan business started by ORIX in 1980 and is also engaged in corporate lending and other services; the card loan business, which was

started with ORIX Credit in 1979 and is currently being managed as a joint venture with Sumitomo Mitsui Banking Corporation pursuant to an alliance established in July 2009; and the securities business, which we entered by bringing ORIX Securities into the ORIX Group in 1986 and which now centers on online securities brokerage operations. ORIX Securities merged with Monex, Inc. in May 2010 after a share exchange between ORIX and Monex Group, Inc. in January 2010.

Overseas Business Main Business

Leasing, lending, investment in bonds, investment banking, real estate-related operations, and ship- and aircraft-related operations


• ORIX

• ORIX USA

• ORIX Australia

• ORIX Asia

• ORIX Leasing Malaysia Berhad

• PT. ORIX Indonesia Finance

Number of Employees

3,209


This segment consists of leasing, lending, investment in bonds, invest-ment banking, real estate-related operations, and ship- and aircraft-related operations in the United States, Asia and the Pacific, and Europe. Since expanding to Hong Kong in 1971, ORIX has built a broad over-seas network spanning the United States, Asia and the Pacific, the

Middle East, North Africa and Europe. Its main operations include equipment leasing, automobile leasing, corporate financial services, and ship- and aircraft-related operations. Recently, ORIX has also expanded into principal investment, investments in non-performing loans and M&A advisory services.



Main Business

Lending, leasing, commission business for the sale of financial products and environment-related business


• ORIX

• ORIX Eco Services

• NS Lease

• ORIX Environmental Resources Management

Number of Employees

2,616

Overview of OperationThe Corporate Financial Services segment has its origin in the leasing busi-

ness developed at the time of ORIX’s establishment in 1964, and even today

this segment serves as the foundation for the entire ORIX Group.

Operating through a nationwide network of 82 offices, ORIX provides capital

through loans and leasing for capital investment and other needs to its core

customer base of domestic small and medium 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.

During the year, ORIX established new specialty departments within this

segment to connect and promote sales throughout the Group, and these new

departments have started activities that are expected to become the foundation

for new revenues in the areas of development and promotion of retail facilities,

domestic and overseas sales, in addition to the environment and energy business.

Maintenance Leasing

Main Business

Automobile leasing and rentals, car sharing, and precision measuring equipment and IT-related equipment rentals and leasing


• ORIX Auto

• ORIX Rentec

Number of Employees

3,335


This segment consists of ORIX’s automobile and rental operations. The automobile operations began with automobile leasing in 1973, and expanded to automobile rental in 1985. Since 2002, the ORIX Group has also operated a car sharing business. Automobile leasing opera-tions started by offering to corporate clients leases that included main-tenance services, and today provides a complete range of specialized vehicle management outsourcing services. The segment also offers a

wide range of services to address the vehicle needs of both corporate and individual clients. ORIX entered the rental business in 1976 with leasing of precision measuring equipment to corporate clients. Today, the rental business covers a broad range of services, including IT-related equipment rentals, technical support, calibration and asset management.

Real Estate Main Business

Development and rentals of commer-cial real estate, condominium devel-opment and sales, hotel, golf course, and training facility operation, senior housing development and operation, REIT asset management, and real estate investment and advisory services


• ORIX

• ORIX Real Estate

• ORIX Asset Management

• ORIX Golf Management

• ORIX Living

• ORIX Real Estate Investment Advisors

Number of Employees

3,704


The Real Estate segment began with corporate dormitory rental opera-tions in 1986, and started developing residential condominiums in 1993. Real estate operations gained momentum in 1999 with the establish-ment of ORIX Real Estate Corporation. Today, the ORIX Group is involved in development and leasing of properties, such as office buildings and

commercial facilities; residential condominium development; develop-ment and operation of hotels, golf courses, training facilities and senior housing; and asset management and administration, including Japanese real estate investment trusts.

Investment Banking Main Business

Real estate finance, commercial real estate asset securitization, loan servicing (asset recovery), principal investment, M&A advisory, venture capital and securities brokerage


• ORIX

• ORIX Capital

• ORIX Investment

• ORIX Asset Management & Loan Services

• ORIX M&A Solutions

• ORIX Wholesale Securities

Number of Employees

2,011


This segment consists principally of the real estate-related finance busi-ness and the investment banking business that ORIX began developing during the late 1990s and early 2000s. Operations include a venture capital business established in 1983; a real estate-related finance busi-ness, including non-recourse loans, established in 1999; a loan servicing

business that invests in non-performing loans and CMBS management and collection; a principal investment business initiated in 2000; a secu-ritization business; and a mergers and acquisitions and financial advisory business established in 2003.

Retail Main Business

Life insurance, trust and banking busi-ness, card loan business and online securities brokerage


• ORIX Life Insurance

• ORIX Trust and Banking

• ORIX Credit

Number of Employees

1,170


This segment consists of four businesses that primarily serve individual customers. The four businesses are the life insurance business, handled by ORIX Life Insurance, which was founded in 1991 and operates mainly through representative and mail-order sales; the trust and banking busi-ness, handled by ORIX Trust and Banking, which is centered on the housing loan business started by ORIX in 1980 and is also engaged in corporate lending and other services; the card loan business, which was

started with ORIX Credit in 1979 and is currently being managed as a joint venture with Sumitomo Mitsui Banking Corporation pursuant to an alliance established in July 2009; and the securities business, which we entered by bringing ORIX Securities into the ORIX Group in 1986 and which now centers on online securities brokerage operations. ORIX Securities merged with Monex, Inc. in May 2010 after a share exchange between ORIX and Monex Group, Inc. in January 2010.

Overseas Business Main Business

Leasing, lending, investment in bonds, investment banking, real estate-related operations, and ship- and aircraft-related operations


• ORIX

• ORIX USA

• ORIX Australia

• ORIX Asia

• ORIX Leasing Malaysia Berhad

• PT. ORIX Indonesia Finance

Number of Employees

3,209


This segment consists of leasing, lending, investment in bonds, invest-ment banking, real estate-related operations, and ship- and aircraft-related operations in the United States, Asia and the Pacific, and Europe. Since expanding to Hong Kong in 1971, ORIX has built a broad over-seas network spanning the United States, Asia and the Pacific, the

Middle East, North Africa and Europe. Its main operations include equipment leasing, automobile leasing, corporate financial services, and ship- and aircraft-related operations. Recently, ORIX has also expanded into principal investment, investments in non-performing loans and M&A advisory services.


Corporate Finan-cial Services

Maintenance Leasing Real Estate Investment

Banking Retail Overseas Business

Fiscal Year Ended March 31, 2010

Segment PerformanceThe Overseas Business and Retail segments significantly surpassed initial forecasts and four of the six segments recorded profits. Provi-sions for doubtful receivables and probable loan losses remained high in the Corporate Financial Services segment and the bank-ruptcy of an investee company in the Investment Banking segment resulted in losses.


Segment PerformanceProfits significantly decreased in all six segments resulting from the impact of tightened credit in the global financial and capital markets. Especially, the Corporate Financial Services and Investment Banking segments recorded losses due to increased provisions for doubtful receivables and probable loan losses and losses on investments. While Overseas Business segment profits decreased, operations in the U.S., which were at the epicenter of the financial crisis, remained profitable.


Segment PerformanceGains on sales of real estate under operating leases and profits from the condominium business in the Real Estate segment made signifi-cant profit contributions. Profits were recorded from exits on corporate investments, sales of real estate and the ship-related business in the Asia and Pacific region of the Overseas Business segment, resulting from a focus on business diversification.

Note: Segment profit appearing in “Segment Overview” pages 22–35 is segment income before income taxes.

Segment Profits, Assets and ROA(Years ended March 31)

SegMent Overview

–17.6

–1.2% –1.0%

3.6%

0.8%2.0%

21.7

860.8

9.4

–12.0

31.137.1

4.1%561.5

1,079.31,166.7

1,578.8

1,236.9

–25

0

25

50

75

100

0

500

1,000

1,500

2,000

(Billions of yen ) (Billions

of yen )

35.4

1.8%

3.1%5.8%

8.4%

1.9%

37.2

1,037.3

83.1

47.5

27.5

57.9

5.3%649.8

1,077.6

1,698.5

1,450.2

1,993.4

0

25

50

75

100

0

500

1,000

1,500

2,000


of yen )

–10.5 –0.6%

–4.2%

3.9% 4.5%

0.6%

25.6

949.950.5

–63.4

9.6

201

2.0%

648.3

1,175.41,321.5

1,554.01,583.6

–75

0

25

50

75

100

0

500

1,000

1,500

2,000


of yen )

Segment Profits (left) Segment Assets (right) ROA


(Billions of yen)

Corporate Finan-cial Services

Maintenance Leasing Real Estate Investment

Banking Retail Overseas Business Total

Segment Assets 1,237 561 1,079 1,167 1,579 861 6,484

Investment in direct financing leases 308 229 13 0 29 178 756

Installment loans 826 0 1 553 821 262 2,462

Investment in operating leases 27 329 549 137 45 126 1,212

Investment in securities 15 1 4 384 517 179 1,099

Other operating assets 18 1 131 30 0 6 186

Inventories 18 0 106 9 0 21 153

Advances for investment in operating leases 7 0 194 0 0 3 204

Investment in affiliates 19 1 81 55 167 87 410

Segment Revenues 114 223 190 90 156 186 958

Direct financing leases 20 14 2 0 0 15 51

Interest on loans and investment securities 34 0 0 41 34 26 135

Operating leases 26 148 50 7 0 53 284

Brokerage commissions and net gains (losses) on investment securities 1 0 0 1 4 18 23

Life insurance premiums and related investment income 0 0 0 0 116 0 116

Real estate sales 0 0 41 0 0 0 41

Gains on sales of real estate under operating leases 0 0 17 0 0 0 18

Other operating revenues 34 61 79 40 2 74 290

Notes: 1. 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.

2. The figures in the above table are in billions and may not add up to the totals in the consolidated financial statements due to rounding.

Breakdown of Assets and Revenues by Segment(Fiscal Year Ended March 31, 2010)

ConcerningtheBreakdownofAssetsandRevenuesbySegment

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.”



SegMent Overview

SegmentPerformanceSegment revenues were down 17% to ¥113.7 billion compared

to the previous fiscal year as a result of restrictions placed on

new transactions and asset reductions, particularly loans to

real estate companies.

The segment recorded a loss of ¥17.6 billion compared to a

loss of ¥10.5 billion in the previous fiscal year due to a continued

high level of provisions for doubtful receivables and probable

loan losses.

Segment assets decreased 22% compared to March 31,

2009 to ¥1,236.9 billion due to a decline in the balances of

investment in direct financing leases and installment loans.

OperatingEnvironmentThere is lingering uncertainty toward the business environment

of SMEs, the segment’s core client base. Against the backdrop

of a generally stagnant economy, the Japanese government

implemented economic stimulus policies, including funding

support for SMEs, which contributed to a decrease in the

number of corporate bankruptcies in the second half of 2009.

Even though large companies have seen improvement in their

fund raising opportunities, the severe operating environment

surrounding SMEs has continued due to a conservative approach

to lending by domestic financial institutions.

Meanwhile, the Japanese government is emphasizing the

environment and energy as growth areas to be driven by

Japan’s strengths in its “New Growth Strategy”, with the objec-

tive of creating over ¥50 trillion in new markets and approxi-

mately 1.4 million new jobs within these growth areas by 2020.

The main policies include the expansion of renewable energy

and turning homes and offices into zero-emissions structures,

and other measures aimed at increasing markets by concen-

trating investment to create an eco-friendly society.

OperatingStrategySales personnel in the Corporate Financial Services segment

develop and deliver optimal solutions based on a deep under-

standing of its customers, their specific needs and their

management issues, gained through day-to-day transactions,

and supported where necessary by team efforts centered

around the ORIX Group’s high levels of expertise.

Moving forward, this segment will seek to expand and

accelerate the provision of “Finance + Services” as a sales plat-

form for the ORIX Group and to broaden its client base by

strengthening cooperation among Group companies in order

to leverage ORIX’s specialized expertise in areas such as the

automobile and rental businesses. The automobile and rental

businesses have accumulated know-how through business

diversification and are currently providing high value-added

services to their customers in the areas of vehicle and IT asset

management. By capitalizing on this specialized expertise, this

segment will endeavor to fulfill the needs of various industries

and uncover new business opportunities with a broader poten-

tial client base.

In addition, as an offshoot to this segment’s leasing busi-

ness, which includes the collection and disposal of end-of-

lease assets, ORIX has been involved in the environment and

energy-related business for more than ten years. The ORIX

Group will focus on making propositions with regards to the

usage of energy-saving measures and renewable energy in

addition to proposals related to waste disposal and recycling,

which have already been established.

Kazuo KojimaCorporate Executive Vice PresidentDomestic Sales Administrative Headquarters

Katsutoshi KadowakiExecutive OfficerDomestic Sales Administrative Headquarters: Head of District Sales

Katsunobu KameiExecutive OfficerDomestic Sales Administrative Headquarters: Head of Kinki SalesGroup Osaka Deputy Representative


This segment has focused on credit management and will

work to maintain asset quality while aiming to build a healthy

base of small and diversified assets through detailed and

prompt measures and close monitoring.

Overview of Business Strategies Expand “Finance + Services”

Expand the client base by enhancing cooperation with ORIX Auto and ORIX Rentec

Capitalize on expertise to exploit the needs of various industries and uncover new business opportunities

Diffusion Index*

10/409/408/407/406/405/40.0

20.0

10.0

30.0

40.0

50.0

60.0(DI)

Source: Cabinet Of�ce Economy Watchers Survey (released on May 13, 2010）* Respondents rate the economic outlook on a 1–5 scale ranging from“better”

to“worse.”Responses are assigned points from 0 to 1 and the diffusion indexis calculated by multiplying the points by the component ratio of each category.

Segment Results(Billions of yen)

2008/3 2009/3 2010/3

Segment revenues 139.9 137.7 113.7

Segment profits 35.4 (10.5) (17.6)

Segment assets 1,993.4 1,583.6 1,236.9

ROA (%) 1.8 (0.6) (1.2)

LNG satellite tank installed at a pharmaceutical company production plant by an LNG fuel conversion ESCO business.

Establishment of new company “ORIX Electric Power Corporation” ORIX and DAIKYO Incorporated established “ORIX Electric Power” (OEP) through a joint investment in May 2010. OEP is developing services that decrease the cost of electricity through bulk discount by contracting an entire building to receive power from the electric company instead of the building management association or each resident contracting individually. OEP handles all aspects of design, construction, administration and maintenance, so

the customer does not need to worry about complicated paperwork or fees. OEP also measures electricity usage, bills for electricity and handles customer inquiries. The implementation of this service is under consideration for newly developed ORIX Real Estate and DAIKYO condominiums. OEP will look to expand environmentally conscious services such as the instal-lation of solar panels on condominiums and smart-grid capability.

Electric Company(Electric Power Supplier)

ORIX Electric Power

Bulk contract for inexpensive,high voltage electricity


Maintenance Leasing

SegMent Overview

SegmentPerformanceDespite the severe operating environment, this segment has

maintained relatively stable revenues by capitalizing on ORIX’s

position as industry leader in terms of market share and by

providing high value-added services. Segment revenues decreased

6% to ¥223.0 billion compared to the previous fiscal year.

Segment profits decreased 15% to ¥21.7 billion compared to

¥25.6 billion during the previous fiscal year due to increased depre-

ciation expenses caused by conservative residual value estimates

reflecting a stagnant secondary auto market, despite a decrease in

segment expenses from reduced selling, general and administra-

tive expenses resulting from internal cost reduction programs.

Segment assets were down 13% compared to March 31, 2009

at ¥561.5 billion due to a decrease in new transactions from

weakening demand and the sales of low performing assets.

OperatingEnvironmentIn corporate automobile leasing operations, demand is slug-

gish due to decreased automobile investment and pressure to

reduce costs. The secondary market is also stagnant.

On the other hand, companies have increased their needs

for vehicle cost reductions and improvement of fleet operating

efficiency and their interest in areas such as compliance and

safety. Furthermore, ORIX expects that heightened awareness

of environmental issues will stimulate demand for leasing

services for hybrid and electric vehicles. An increase is also

expected in the number of car sharing participants.

The precision measuring equipment rental industry has

comparatively high entry barriers because of significant initial

investment requirements and the difficulty of recruiting and

retaining personnel with the requisite specialist knowledge.

As a result, the competitive landscape in the domestic

measuring equipment rental market has been relatively stable.

However, decreased capital expenditures resulting from the

economic downturn has suppressed demand for rentals,

particularly among the major electronics manufacturers.

With respect to the market for IT equipment rentals, going

forward, the cloud computing market is expected to grow due

to lower running costs and system flexibility. IT investments by

client companies will shift from hardware ownership to hard-

ware use as a part of IT service. As a result, growing demand is

expected for IT rental companies to provide IT services that can

lead to improvements in operating efficiency and the reduction

of costs by clients, particularly in the information security area.

OperatingStrategyThe Maintenance Leasing segment will promote Group-wide

measures to further expand its high value–added services and

augment its fee-businesses such as “Comprehensive Auto

Management Service” in the automobile operations and “IT Asset

Management Service”. At the same time, the segment will capi-

talize on know-how acquired in Japan and enhance the provision

of value-added services overseas with the aim of improved

performance in the Asian market, particularly in China.

In the automobile leasing business, the segment will utilize the

networks of the Corporate Financial Services segment and Group

companies to promote services that combine leasing, automobile

rental, and car sharing to provide optimal and low-cost vehicle

solutions to current and potential clients. As of March 31, 2010,

automobiles under management totaled approximately 835,000.

The corporate automobile leasing operation aims to maintain

profitability and clients by addressing all aspects of outsourcing

Eiji MitaniGroup Senior Vice PresidentPresident, ORIX Auto Corporation

Keiji ItoGroup ExecutivePresident, ORIX Rentec Corporation


ORIX Rentec Technology CenterThe Tokyo and Kobe Technology Centers are the back-bone of ORIX Rentec’s high level of quality control and technical service. ORIX Rentec has an overwhelmingly industry-leading rental equipment lineup consisting of 675,000 pieces of equipment spanning 22,000 types that are individually managed at Japan’s largest automated warehouse. Sales branches nationwide can track rental equipment inventory, shipping and expected delivery information in real-time to respond

to client requests in a prompt and precise manner. Since its beginning as Japan’s first precision measuring equipment rental company in 1976, ORIX Rentec has created new added value from its unsur-passed expertise acquired in the rental business. ORIX Rentec provides calibration services, measure-ment consulting, technical services and asset management services that contribute to the creation of new corporate value for client companies.

Car Sharing Membership

0

6,000

3,000

9,000

12,000

15,000

18,000(Number of people)

Car sharing members in Japan *1

ORIX Auto car sharing members *2

862 1,0002,000

4,350

9,000

1,7122,512

3,245

6,396

16,177

20102009200820072006

*1. Source: Foundation for Promoting Personal Mobility and Ecological Transportation (January of each year)2. Total ORIX Auto members (March 31 of each year)

Note: ORIX Auto car sharing members exceeded 10,000 as of May 1, 2010

needs related to vehicle management. Also, ORIX is responding

to the increasingly specialized and complex needs of its clients by

strengthening its consulting services for the needs of legal compli-

ance, environmental services, and vehicle management-related

risk management (such as accidents and legal restrictions). ORIX

will also continue to create business frameworks that deliver high

added value for clients, such as sophisticated vehicle manage-

ment and adjustment of administrative operations, through which

ORIX expects to differentiate itself from its competitors.

In leasing automobiles to individual clients, ORIX will

continue to promote products such as My Car Lease and Car

Sharing. Especially in the car sharing business, ORIX will seek to

create a new business platform by strengthening relationships

with local authorities and public transportation systems.

ORIX will continue to expand the types of equipment it

handles in the rental business, while working to enhance ancil-

lary services such as IT equipment asset management. In addi-

tion, ORIX expects to maintain its large market share and

efficiently turnover assets with the aim of generating stable

growth. As of March 31, 2010, the rental business owned more

than 675,000 units of equipment spanning about 22,000 types.

ORIX will also work to expand its rental operations of IT

equipment to cover pre-installed information security counter-

measures and further develop its fee-business from technical

support services such as the operation and management of IT

equipment. ORIX will also seek continued growth in its used

rental equipment resale business.* Total volume under management including leasing, automobile rental, car sharing and automobiles for which ORIX provides telematics.

Overview of Business Strategies Promote Group-wide cross-functional collaboration, target further expansion

Venture into Asia while actively promoting ORIX Auto’s “Comprehensive Auto Management Service” and ORIX Rentec’s “IT Asset Management Service”


2008/3 2009/3 2010/3


Segment profits 37.2 25.6 21.7

Segment assets 649.8 648.3 561.5

ROA (%) 5.8 3.9 3.6

Automated Warehouse, Tokyo Technology Center


Real Estate

SegMent Overview

SegmentPerformanceSegment revenues decreased 30% year on year to ¥189.5

billion compared to the previous fiscal year due to decreases

in real estate sales and gains on sales of real estate under

operating leases.

Segment profits were down 81% to ¥9.4 billion compared to

¥50.5 billion during the previous fiscal year chiefly due to a

significant decline in equity in net income (loss) of affiliates

related to condominium joint ventures

Segment assets decreased 8% compared to March 31, 2009

to ¥1,079.3 billion mainly resulting from decreases in invento-

ries related to the condominium development business.

OperatingEnvironmentDespite the dramatic downturn in the domestic real estate

market in the wake of the global financial crisis, liquidity has

been improving as demonstrated by a resumption of public

offerings and issuances of investment corporation bonds by

REITs. Accordingly, real estate transactions have shown green

shoots of recovery, for example, stabilization of expected

investor capitalization rates.

However, office vacancy continues to hover at a high rate,

reflecting the continuing economic stagnation. Competition to

attract tenants is intensifying and rent levels continue to be ad-

justed. In light of these circumstances, in order to succeed, real

estate companies will need to demonstrate strong leasing capa-

bilities crucial to maintaining property value as well as the exper-

tise and capability to develop environmentally-friendly properties.

In the residential condominium market, some positive signs

have emerged, such as improvement in contract completion

rates nearing the key benchmark level of 70% in the Tokyo

metropolitan area in 2009. Additionally, a favorable environment

for revived demand has been developing due to government

policies encouraging home buying including an expansion of tax

deductions on housing loans, an increased gift tax exemption

for loans to certain family members that are used to purchase

a residence and an “eco-point” system for energy-efficient

housing and fixtures, as part of broader economic measures, as

well as falling purchase prices due to lower construction costs.

The facilities operation business, which includes the opera-

tion of hotels, golf courses and training facilities, faces difficult

conditions due to corporate cost cutting and waning consumer

confidence. However, facilities that can provide high quality

service meeting the needs of end users shows strong demand

from domestic and overseas clients.

OperatingStrategyEven in a sluggish real estate market, ORIX expects to secure

stable revenue sources by managing and reducing business risks,

through capitalizing on its expertise in the areas of diversified

small and medium-sized property investment, cash flow focus

and risk sharing with business partners through joint ventures.

The strengths of this segment are its real estate value chain

functions, including leasing, asset management and property

management, as well as the ORIX Group’s client base. ORIX

will aim to maintain and improve the value of its real estate

assets and promote the turnover of properties in its portfolio

by capitalizing on these strengths.

In the real estate development and rental business, ORIX

will strive to improve the occupancy rates and rental income by

leveraging the characteristics of its small and diversified rental

property portfolio and its leasing capabilities. Although real

Yoshiyuki YamayaCorporate Executive Vice PresidentReal Estate HeadquartersPresident, ORIX Real Estate CorporationChairman, ORIX Golf Management Corporation

Tetsuo MatsumotoGroup Senior Vice PresidentReal Estate HeadquartersDeputy President ORIX Real Estate Corporation


Aquarium Business IntroductionORIX Real Estate has operated the Enoshima Aquarium, a Private Finance Initiative with the Kanagawa Prefectural Government, since April 2004. This community-based aquarium is gaining popularity by actively hosting events, shows and hands-on learning programs. The renovated aquarium opened in 2004 with a record yearly attendance of 1.8 million, 6 times that of the previous year. Visitor numbers continue to be strong. Currently, ORIX only operates the Enoshima

Aquarium, but there are plans to open the “Sumida Aquarium” (tentative name) in the Tokyo Sky Tree® complex in the spring of 2012, and the “Kyoto Aquarium” (tentative name) in Kyoto’s Umekouji Park. ORIX will use the operating know-how from the Enoshima Aquarium to provide a center for a new lifestyle for the local populace emphasizing “culture, interaction and recreation” in addition to a place for “environmental education” that extends beyond the classroom. Sumida Aquarium (Artistic Rendering)

estate transactions have not seen a full-scale recovery, ORIX

will pursue various exit strategies to promote asset turnover.

For its residential condominium development business,

ORIX can flexibly respond to changes in the business environ-

ment as it outsources the sales of its residential condominiums

to other companies. Since the second half of 2007, ORIX has

been reducing its condominium supply ahead of its competi-

tors; however, since late 2009 ORIX has steadily resumed the

development of suspended projects and new land purchases

in response to recovery in consumer demand. After thorough

market research, ORIX will supply condominiums mainly within

a price range that meets consumer needs.

In its facilities operation business, ORIX will establish a

unique position in the market by providing a wide range of

services in response to diversified needs and aging customers.

ORIX has seen an increase in opportunities to invest in Japa-

nese inns and golf courses with strong brand recognition, as

achievement from investments in operating facilities have

been well received. Specifically, ORIX expects to diversify its

customer base and increase profitability by setting a clear

customer target and concept for each facility.

ORIX Real Estate Investment Advisors is expanding its asset

management business, targeting increased fee-based revenue.

In addition to managing Group assets, ORIX will also address

the asset management needs outside the Group by forming

private real estate funds to win large-scale property projects.

Moreover, ORIX will create new value by promoting large-

scale projects such as the North Yard, a redevelopment project

next to Osaka Station.

Overview of Business Strategies Capitalize on leasing expertise to make use of the distinctive small and diversified rental property portfolio to increase occupancy and yields

Seek various exit strategies, promote asset turnover

Increase fee-income by expanding the asset management business

Create new value by promoting large projects


2008/3 2009/3 2010/3



Segment assets 1,077.6 1,175.4 1,079.3

ROA (%) 8.4 4.5 0.8

Left: Minato Mirai Center Building opened in June 2010Right: T-soleil daylight system naturally lights the interior


Investment Banking

SegMent Overview

SegmentPerformanceSegment revenues decreased 5% to ¥89.6 billion compared to

the previous fiscal year as a result of asset reductions and

limited new transactions in the real estate finance business.

The segment recorded a loss of ¥12.0 billion compared to a

loss of ¥63.4 billion during the previous fiscal year due to an

increase in provisions for doubtful receivables and probable

loan losses mainly from non-recourse loans and the recogni-

tion of write-downs of securities, despite an improvement in

the amount of loss recorded for equity in net income (loss) of

affiliates compared to the previous fiscal year.

Segment assets decreased 12% compared to March 31,

2009 to ¥1,166.7 billion due to a decrease in the balances of

installment loans and investment securities.

OperatingEnvironmentThe global financial crisis triggered a significant change in the

operating environment surrounding the Investment Banking

segment. Japan’s economic recovery has been slow and uncer-

tainties in the financial and capital markets are expected to

continue. Investments need to be stringently selected as signs

of improvement in liquidity are yet to be seen.

The risk tolerance of investors decreased in the wake of

the global recession precipitated by the Lehman Brothers

bankruptcy in September 2008, which lead to a dramatic

decline in the volume of real estate transactions and a

contraction in the domestic real estate related non-recourse

loan market. Although liquidity provided by financial institu-

tions is essential for market recovery, their conservative

approach to lending has not changed despite improvements

seen in the market.

Moreover, a large amount of CMBS loans in Japan will reach

maturity in 2010 and involved parties are currently seeking

possible measures upon maturity, such as refinancing or collec-

tion through the sales of collateralized properties.

Opportunities for investment in non-performing loans are

limited as financial institutions continue to reduce their

disposals of large-scale assets. However, investment opportu-

nities are expected to arise as foreign corporations withdraw

from Japan, funds are divested and the selection and concen-

tration of companies accelerates.

The domestic M&A market has seen a contraction in the

number of transactions, reflecting the uncertain economic

outlook and the impact of the financial crisis; however, such

trend is starting to subside. As listed companies are under-

taking restructuring and engaging in strategic de-listing of

subsidiaries and, as SMEs are undergoing business succession,

the use of M&A as a corporate management strategy has

become increasingly widespread in Japan. ORIX sees this as an

opportunity to promote its financial advisory services and

other corporate advisory services.

OperatingStrategyThe Investment Banking segment is focusing on preserving and

enhancing the value of existing loans and portfolio companies

while taking advantage of investment opportunities presented

by the changing environment.

In Japan, ORIX believes there are business opportunities

related to CMBS loans reaching maturity. In particular, ORIX

sees this as a great opportunity for its Investment Banking

segment, which has accumulated knowledge and expertise in

arranging loan refinancing as well as loan servicing to expand its

Mitsuo NishiumiCorporate Senior Vice PresidentInvestment Banking HeadquartersSecuritization and Capital Markets Office President, ORIX Capital Corporation

Hisayuki KitayamaExecutive OfficerInvestment Banking Headquarters President, ORIX Asset Management and Loan Services CorporationPresident, ORIX Wholesale Securi-ties Corporation

Hiroshi YasudaExecutive OfficerInvestment Banking Headquarters


Business RehabilitationORIX is involved in the corporate rehabilitation business. ORIX increases corporate value by providing various management support services capitalizing on its high level of acquired expertise.

Example of Management Support Services This service mainly centers on ORIX Asset Management & Loan Services, which arranges the optimal capital structure for the disposal or assignment of loans held by financial institutions. ORIX then proposes a plan to increase core business profitability, imple-ments the plan and assists in the sale of non-core businesses.

ORIX arranges finance such as syndicated loans for a company under-going rehabilitation. ORIX may also acquire a stake or participate as an investor in the rehabilitating company.

This service mainly centers on ORIX M&A Solutions and supports corporate divestitures, transfers and sponsor company invitations.

fee-based business. ORIX Asset Management & Loan Services

Corporation (OAMLS), the first Japanese servicer to simultane-

ously receive all three servicer ratings (master, primary and

special servicer), in addition to receiving the highest rating

(Strong) from S&P, has expertise in CMBS servicing and a wide

information network for CMBS through its real estate-related

finance business. Capitalizing on these strengths, ORIX will

expand its fee-based business by acting as intermediary in the

sales of collateralized properties and as a special servicer while

seeking investment opportunities. This segment is also expected

to arrange co-investments and serve as an investment platform

among its relations with domestic and international investors.

For the investment banking business, this segment will

provide management support such as business succession and

corporate rehabilitation (restructuring, transfer and funding

arrangement). ORIX will also be actively involved in developing

promising businesses as an investor.

For the real estate finance business, in light of the significant

changes in the real estate market, ORIX will deal with each

transaction individually and cautiously. ORIX is monitoring the

terms of individual transactions as well as the condition of

underlying assets, and otherwise strive to maximize collections

while continuously reducing asset balances. ORIX believes that

under the current real estate market conditions, there are cases

where revenues can be maximized from a mid- to long-term

perspective by holding acquired real estate as rental proper-

ties, in which case, revenues and risk can be controlled. There-

fore, ORIX will aim to maximize profit and focus on increasing

the value of acquired real estate with capitalization of group

synergy by collaborating with other segments, mainly the Real

Estate segment, until the market sees a full-scale recovery.

Capitalizing on its network of partner financial institutions,

ORIX will also seek opportunities for new fee-based busi-

nesses such as providing credit evaluation and servicing.

Overview of Business Strategies Capitalize on the high-rated servicer function with a large market share for CMBS-related profit opportunities and strengthen the corporate rehabilitation business

Actively pursue selective equity investment


2008/3 2009/3 2010/3


Segment profits 47.5 (63.4) (12.0)

Segment assets 1,698.5 1,321.5 1,166.7

ROA (%) 3.1 (4.2) (1.0)

Financial Institutions ORIXTransfer ofcredit obligation

Business transfer

Loan

Financial Institutions

ORIX

Company to be Rehabilitated Rehabilitated Company

Core BusinessCore Business

Non-core Business→Divestiture

RehabilitationSupport

1M&A Advisory3

FinanceArrangement

2


Retail

SegMent Overview

SegmentPerformanceSegment revenues declined 15% to ¥155.9 billion compared to the

previous fiscal year due to the change in status of the card loan

and securities brokerage businesses as equity method affiliates.

Segment profits more than tripled to ¥31.1 billion compared

to ¥9.6 billion during the previous fiscal year due to contribu-

tions from gains on sales of subsidiaries and decreased

expenses such as life insurance costs and provisions for

doubtful receivables and probable loan losses.

Segment assets increased 2% to ¥1,578.8 billion compared

to March 31, 2009 due to increased assets in the trust and

banking and life insurance businesses, although the balance of

installment loans from the card loan business decreased.

OperatingEnvironmentIn the life insurance market, demand for distinctive “third

sector” (medical and cancer insurance) products has been

increasing most likely due to Japan’s low birthrate and rela-

tively high longevity. The introduction of “third sector” products

has intensified competition. Moreover, sales channels have

diversified with the expansion into retail stores by major joint

agencies, availability of complete clearance of insurance sales

at bank counters and the arrival of pure-Internet-play insur-

ance companies.

As individual funds continue to flow into deposits instead of

investment, ORIX Trust and Banking has steadily expanded its

deposits. Separately, opportunities for corporate lending busi-

ness have also expanded as the value of indirect corporate

financing, such as increased support for SME funding, has been

revaluated. Even in a stagnated real estate market, demand

remains firm in the market for investment rental condominium

units, a key engine behind the housing loan business, which

continues to perform strongly.

In the card loan market, consumer finance companies are

finding it difficult to maintain their conventional high-margin

business models as the upper limit on interest rates has been

lowered and a ceiling on total debt has been created. As a

result, the industry has been undergoing restructuring, with

large firms forming alliances with banks.

The securities market regained some stability due to successful

financial and economic policies implemented by economic

powers. Due to heightened expectations for improved company

performance, Japan’s securities market has been on the recovery

trend and retail investor confidence is expected to improve.

OperatingStrategyIn this segment, ORIX expects to maintain its policy of devel-

oping new markets for individuals by offering products and

services that provide a high level of customer satisfaction and by

increasing its unique expertise and efficiency in niche markets.

ORIX Life Insurance, which concentrates mainly on devel-

oping and selling products for individuals, has experienced a

substantial increase in the number of policies in force. ORIX has

focused on expanding products such as its medical insurance

“Cure”, as well as its cancer insurance “Believe”, which were

originally introduced to the individual market in September

2006 and March 2010 respectively. As other companies have

entered the market with similar products, competition has

grown increasingly fierce. ORIX Life Insurance will continue to

develop products that meet the needs of its customers and

enhance its product lineup. Moreover, ORIX Life Insurance will

expand its customer base by strengthening agent sales channels,

Izumi MizumoriGroup Senior Vice PresidentPresident, ORIX Life Insurance Corporation

Masatoshi KemmochiGroup ExecutivePresident, ORIX Credit Corporation

Akio UshioPresident, ORIX Trust and Banking Corporation


ORIX Life Insurance: Combining organizational power to continuously create differentiated products

The development concept of ORIX Life Insurance is “simplicity”. ORIX Life Insurance develops simple products that are easy for customers to under-stand. The flagship product “Medical Insurance Cure” embodies this concept and is well received by customers and professionals alike. It was ranked the No. 1 “Medical Insurance the Pros Want” by a special March 20, 2010 edition of a Japanese weekly magazine. In March 2010, a new product “Cancer Insurance Believe” was released, featuring a generous lump-sum payment upon a

diagnosis of cancer. The product is already favor-ably received, as the premium is more reasonable than indemnity insurance. ORIX Life Insurance products can be purchased through insurance agencies and allied bank tellers such as Sumitomo Mitsui Banking Corporation, as well as direct sales via the Internet from the ORIX Life Insurance website. ORIX Life Insurance will continuously develop and provide distinguished products that meet customer needs.

and achieve stable revenue growth. The importance of the

insurance business to the overall ORIX Group has been dramat-

ically increasing, and ORIX will aim to realize profit growth.

In line with this growth in individual oriented business, ORIX

Trust and Banking began handling deposits via the Internet for

corporate customers in May 2009. On the investment side, in

addition to its housing loan business, ORIX seeks to establish

a well-balanced portfolio of lending by focusing on corporate

lending, cultivating a new customer base and strengthening its

relationship with trusted clients. As the business grows, ORIX

will also work to strengthen risk management and internal

control structure.

In the card loan business and online securities brokerage

business, ORIX has recently formed alliances with trusted busi-

ness partners under the policy of “Operational Realignment”.

With investment from the Sumitomo Mitsui Banking Corpo-

ration, ORIX Credit will target a stable and increased operating

base by attracting different types of customers via the ORIX

Group network and greater diversification in its fundraising

options, based on its major product, the VIP Loan Card.

The combined Monex, Inc. and ORIX Securities became one

of the largest Internet based securities companies in Japan

through the joint venture between ORIX and Monex Group, Inc.

The new company will further strengthen the bases of both

corporate groups and continue to expand its products and

services for customers.

Overview of Business Strategies Life Insurance: Expand business by developing distinctive “third sector” (medical and cancer insur-ance) products and enhancing the agencies channel

Trust and Banking: Continue to expand corporate lending

Capitalize on strong partner platforms to expand the Card Loan business and online Securities Brokerage business


2008/3 2009/3 2010/3



Segment assets 1,450.2 1,554.0 1,578.8

ROA (%) 1.9 0.6 2.0

Trend in ORIX Trust and Banking Loan andDeposit Balances

0

250

500

750

1,000(Billions of yen)

06/3 10/309/308/307/3

352.7439.2 445.4 461.5 470.4

518.5

667.2605.3

841.7736.4

Deposit Balance Loan Balance


SegmentPerformanceSegment revenues increased 11% to ¥185.9 billion as a result of

realized gains on investment securities and increased fee

income from Houlihan Lokey Howard & Zukin (Houlihan Lokey)

in the United States, despite decreased operating and direct

financing lease revenues in Asia and the Pacific from stringent

transaction selection during the first half of the fiscal year.

Segment profits increased 85% to ¥37.1 billion compared to

¥20.1 billion during the previous fiscal year mainly due to

profits recognized in the principal investment business in Asia.

Segment assets decreased 9% to ¥860.8 billion compared

to March 31, 2009 as a result of decreased investment in direct

financing leases and installment loans.

OperatingEnvironmentIn the United States, a succession of bankruptcies, including

the collapse of the prominent investment bank Lehman

Brothers and the realignment of other major financial institu-

tions, dealt a tremendous blow to the world’s financial and

capital markets. The ensuing deterioration in global financial

liquidity triggered a sharp contraction in credit, leading to a

significant decline in the operating environment. Despite a

slow economic recovery in the United States, unemployment

levels have remained high and recovery in consumer spending

and the housing market still faces challenges. The U.S. finan-

cial market continues to de-leverage as regional financial insti-

tutions are still facing a severe operating environment and

with decreased lending capacity. There is also concern that

the impending implementation of financial regulations may

further impact the operating environment.

In Asia and the Middle East, where ORIX has extensive busi-

ness operations, the economies of emerging countries have

recovered rapidly despite the effects of the global financial

crisis. As a result of high economic growth in recent years,

Asia’s economy has reached the stage where it consumes a

wide range of business, products and services from developed

countries such as Japan, which should lead to various business

opportunities. China is a particularly attractive country in terms

of economic scale and has garnered global attention as a

promising market despite structural problems such as inflation

and increasing domestic economic disparities.

OperatingStrategyIn the United States, ORIX is engaged in investment and financing

operations, such as corporate finance and investments in CMBS

and other marketable securities, and investment banking opera-

tions, including advisory services in the areas of mergers and

acquisitions, corporate financial restructuring and enterprise

valuation. Although the United States was the epicenter of the

financial crisis, the expertise ORIX has been able to accumulate

there has allowed it to expand its profits even under the turmoil

of the current economy. Going forward, ORIX aims to focus on

cultivating opportunities to expand “Finance + Services” based

on its expertise. For example, in May 2010, ORIX USA acquired

RED Capital Group, a company that arranges specialty loans for

real estate companies and obtains fees through loan servicing.

This is a typical example of acquiring fee-based revenue without

using the balance sheet.

Investment banking operations are carried out by Houlihan

Lokey, which has maintained a strong reputation in the United

States for decades in financial advisory services, financial opinion

Overseas Business

SegMent Overview

Makoto InoueDeputy PresidentGlobal Business & Alternative Investment Headquarters

Yuki OshimaExecutive OfficerChairman, ORIX USA Corporation

Hideo IchidaExecutive OfficerGlobal Business & Alternative Investment Headquarters

James R. ThompsonPresident and CEO, ORIX USA Corporation


services and financial restructuring services. In the midst of the

global recession, Houlihan Lokey has increased earnings opportu-

nities in its corporate financial restructuring advisory operations.

In Asia, the Pacific, the Middle East and Europe, ORIX con-

tinues to focus on leasing, lending and other financial services

closely tied to local communities. ORIX believes that it can

expect stable growth in its existing leasing operations, particu-

larly in Asia. ORIX will embrace growth of the Asian region by

increasing earnings through adding value to existing financial

services, while capitalizing on its expertise such as mainte-

nance leasing developed in Japan.

ORIX will strengthen investment and financing operations in

the fields of financial related, automobile, ships and aircraft

especially in China. As a part of this, ORIX established its

Chinese Headquarters in Dalian in December 2009 and inte-

grated existing businesses under a holding company structure.

ORIX is aiming to cultivate trusted clients in China. For other

areas, ORIX will further expand its client and business partner

network, which already spans numerous countries. Moreover,

ORIX is working to enhance its resources for supporting Japa-

nese companies looking to move into overseas markets, as

well as foreign companies entering Japan.

The Purchase of RED Capital GroupORIX USA Corporation (OUC), a U.S. subsidiary of ORIX acquired RED Capital Group in May 2010. RED Capital Group arranges specialty loans for commercial real estate developers to develop multifamily and senior living proj-ects, sells the loans to a public entity (such as Fannie Mae) and obtains fee-based revenues through loan servicing. RED Capital Group has a high market share and has been ranked in the top 10 in terms of amount of yearly loan structuring since 1998. OUC has a long history of providing servicing for securitized commercial real estate loans, and the purchase of RED Capital Group will allow OUC to capitalize on both companies’ servicing know-how to expand its profit base in the United States.

Overview of Business Strategies United States: Expand “Finance + Services” based on accumulated high expertise and aggressively expand operations, including future M&As

Asia: Embrace growth in Asia. Seek out high-profit initiatives, especially in China led by the Chinese headquarters in Dalian


2008/3 2009/3 2010/3



Segment assets 1,037.3 949.9 860.8

ROA (%) 5.3 2.0 4.1Makoto InoueDeputy PresidentGlobal Business & Alternative Investment Headquarters

Yuki OshimaExecutive OfficerChairman, ORIX USA Corporation

Hideo IchidaExecutive OfficerGlobal Business & Alternative Investment Headquarters

James R. ThompsonPresident and CEO, ORIX USA Corporation

Financial Restructuring Advisory OperationsHoulihan Lokey has been commended for its No 1. financial restruc-turing advisory in each area including global, the United States and Europe / Middle East and Africa.Source: Thomson Reuters

Five Largest Bankruptcies from 2000 to 2009

Contracted four advisory operations not including Washington Mutual, Inc.

Total pre-bankruptcy assets(Billions of dollars) Failed firm

$691 Lehman Brothers Holdings, Inc.

$328 Washington Mutual, Inc.

$104 WorldCom, Inc.

$ 91 General Motors Corporation

$ 80 CIT Group Inc.

Source: BankruptcyData.com

M&A Advisory OperationsM&A Advisory Ranking (2009: US)

Transaction amount: Under $3 billion

Ranking Advisory Number of cases

1 Houlihan Lokey 71

2 Goldman Sachs Group 70

3 Bank of America Merrill Lynch 66

4 JP Morgan 62

5 Morgan Stanley 59

Source: Thomson Reuters


Management Team(As of June 22, 2010)

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.

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 syner-gies 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 stability, and leading to increased shareholder value.

Regarding dividends, ORIX responds to shareholder expectations through increasing shareholder value through mid- to long-term growth and steady distribution of profit.

ManageMent OrganizatiOn—ManageMent teaM


1 23 46 7512 10 13118 9

Committees

Board of Directors(6 Outside Directors / 7 Internal Directors)

Nominating Committee (5 members)

Audit Committee(3 members)

Compensation Committee(5 members)

Takeshi Sasaki* Eiko Tsujiyama* Yoshinori Yokoyama*

Yoshinori Yokoyama Yoshinori Yokoyama Hirotaka Takeuchi

Hirotaka Takeuchi Takeshi Sasaki Takeshi Sasaki

Robert Feldman Eiko Tsujiyama

Takeshi Niinami Takeshi Niinami

Directors

1 Yoshihiko Miyauchi

2 Yukio Yanase

3 Hiroaki Nishina

4 Haruyuki Urata

5 Makoto Inoue

6 Kazuo Kojima

7 Yoshiyuki Yamaya

8 Yoshinori Yokoyama

9 Hirotaka Takeuchi

10 Takeshi Sasaki

11 Eiko Tsujiyama

12 Robert Feldman

13 Takeshi Niinami

Directors and Executive Officers

Yoshihiko MiyauchiRepresentative Executive Officer,Chairman and Chief Executive Officer

Yukio YanaseRepresentative Executive Officer,President and Chief Operating Officer

Hiroaki NishinaDeputy PresidentGroup Corporate SalesInvestment BankingGroup Osaka RepresentativeChairman, ORIX Real Estate CorporationPresident, ORIX Baseball Club Co., Ltd.

Haruyuki UrataDeputy President and Chief Financial OfficerCorporate Planning Department, Corporate Communications DepartmentFinancial Control Headquarters

Makoto InoueDeputy PresidentGlobal Business & Alternative Investment Headquarters

Kazuo KojimaCorporate Executive Vice PresidentDomestic Sales Administrative Headquarters

Yoshiyuki YamayaCorporate Executive Vice PresidentReal Estate HeadquartersPresident, ORIX Real Estate CorporationChairman, ORIX Golf Management Corporation

Note: Each of ORIX’s three committees is currently composed entirely by outside directors.

*Chairperson

38 ORIXCorporation—AnnualReport2010

Introduction of ORIX Outside Directors

Yoshinori YokoyamaChairperson of the Compensation Committee

OutsideDirector,SumitomoMitsuiFinancialGroup,Inc.OutsideDirector,SumitomoMitsuiBankingCorporation

YoshinoriYokoyamaobtainedanMBAfromtheSloanSchoolofManagementat

MIT in1975and joinedMcKinsey&Company, Inc.whereheservedasDirector

from1987to2002.YokoyamaalsoservedasSeniorFellowattheResearchInstitute

ofEconomy,TradeandIndustry,IAIfrom2002to2004.

YokoyamafirstbecameamemberofORIXCorporation’sAdvisoryBoardin1997

beforebecomingaDirectorinJune2002.Hehasawealthofexperienceandknowl-

edgeasabusinessconsultant,andisindependentfromthemanagementengaged

in operations. As Chairperson of the Compensation Committee, he currently

contributestotheCompanybyleadingdiscussionsanddeliberationsoncompen-

sation structures and compensation levels for Directors and Executive Officers

whicharedesignatedtoenhanceincentivesformid-tolong-termgrowth.

Hirotaka Takeuchi

Professor,HarvardBusinessSchoolOutsideDirector,TrendMicro,Inc.

Hirotaka Takeuchi joined McCann-Erickson Advertising Co., Ltd. in 1969 before

takingapositionasResearchAssistantattheGraduateSchoolofBusinessAdmin-

istrationattheUniversityofCalifornia,BerkeleyandthenbecomingaLecturerand

AssistantProfessorattheGraduateSchoolofBusinessAdministrationatHarvard

University. In 1987, he became Professor at Hitotsubashi University’s School of

Commerce.HeservedasDeanattheGraduateSchoolofInternationalCorporate

Strategyfrom1998toMarch2010.

TakeuchibecameanOutsideAuditorofORIXCorporationinJune2000,resigned

inJune2003,andwasthenappointedOutsideDirectorin2004.Hehasprofound

knowledge of corporate strategy, and is independent from the management

engaged in operations. As Chairperson of the Nominating Committee until June

2010,hecontributedtotheCompanybyleadingdiscussionsanddeliberationson

membersoftheBoardofDirectorsandExecutiveOfficerssuitablefortheCompa-

ny’s operations. In discussions of the Board of Directors and committees, he

providescommentsfromanoverallstrategicperspective.

Takeshi SasakiChairperson of the Nominating Committee

Professor,GakushuinUniversity,FacultyofLaw,DepartmentofPoliticalStudiesOutsideDirector,EastJapanRailwayCompanyOutsideDirector,ToshibaCorporation

TakeshiSasakibecamearesearchassistantatTheUniversityofTokyoFacultyof

Law in 1965 after graduating from the same faculty andheld several positions

within the university until he was appointed president in April 2001 where he

presideduntilMarch2005.InJune2003,asChairpersonoftheJapanAssociation

ofNationalUniversities,Sasakiwasinvolvedasthepersoninchargeoftheincor-

poration of national universities. In December 2004, Sasaki was selected as a

memberofTheAdvisoryCouncilontheImperialHouseLaw.

SasakiwasmadeanadvisortoORIXCorporationinJuly2005andwasappointed

OutsideDirectorinJune2006.Hehasawealthofexperienceinuniversityreform,

isknowledgeableinawiderangeofissuesinpoliticsandsocietyingeneralthat

affect the company’s management, and is independent from the management

engaged in operations. He contributes to the Company by pointing out major

issuesoftheCompanymanagementatthemeetingsoftheBoardofDirectorsand

othercommittees.

ManageMent organization—ManageMent teaM


Eiko TsujiyamaChairperson of the Audit Committee New Director

Professor, Waseda University Faculty of Commerce andGraduate School of CommerceOutside Auditor, Mitsubishi Corporation

Eiko Tsujiyama became an Assistant Professor at Ibaraki University (Faculty of

Humanities) in August 1980. She later became an Assistant Professor at Musashi

University (Faculty of Economics), and was appointed Dean of Musashi University’s

Faculty of Economics and Chairperson of the Graduate School of Economics in April

1996. In April 2003, Tsujiyama became a Professor at Waseda University Faculty of

Commerce and Graduate School of Commerce. In June 2004, Tsujiyama became

Chairperson of the National Tax Council. Tsujiyama has served on review commit-

tees of governments and other organizations in Japan and overseas related to finan-

cial accounting. Tsujiyama was appointed as an Outside Director of ORIX Corporation

in June 2010 based on her previous experience, in-depth knowledge as an expert in

accounting and independence from the management engaged in operations.

ORIX expects Eiko Tsujiyama to lead discussions as Chairperson of the Audit

Committee based on her wealth of experience and standpoint as a specialist.

Robert FeldmanNew Director

Managing Director, Head of Japan Economic ResearchMorgan Stanley MUFG Securities Co., Ltd.

Robert Feldman joined Nomura Research Institute, Ltd. in 1973. In 1981 he became

a Visiting Scholar at the Bank of Japan (now the Bank of Japan Institute for Monetary

and Economic Studies), followed by Economist at the International Monetary Fund.

In 1990 Feldman became Chief Economist at Solomon Brothers Asia Limited (now

Citigroup Global Markets Japan Inc.). Feldman joined Morgan Stanley Japan Securi-

ties Co., Ltd. (now Morgan Stanley MUFG Securities Co., Ltd.) in 1998 as Managing

Director and Chief Economist Japan and currently serves as Managing Director and

Head of Japan Economic Research.

Feldman was appointed as an Outside Director of ORIX Corporation in June 2010

based on his in-depth knowledge as an economist of the environment and events in

Japan and overseas that affect the corporate business environment and his indepen-

dence from the management engaged in operations.

ORIX expects Robert Feldman to supervise and provide advice to the Company’s

management from a broader point of view based on his wealth of experience.

Takeshi NiinamiNew Director

President and CEO, Lawson, Inc.Outside Director, ACCESS CO., LTD.

Takeshi Niinami joined Mitsubishi Corporation in 1981. In 1995 he was appointed

President of Sodex Corporation (now LEOC JAPAN Co., Ltd.). Niinami was named

Unit Manager of Lawson Business and Mitsubishi’s Dining Logistical Planning Team,

Consumer Industry Division, Mitsubishi Corporation in 2001. Niinami became

President and Chief Executive Officer of Lawson, Inc. in 2002, before assuming the

role of President and CEO in 2005. Niinami became a Director at ACCESS CO., LTD.

in 2006.

Niinami was appointed as an Outside Director of ORIX Corporation in June 2010

based on his broad knowledge of corporate management and his independence

from the management engaged in operations.

ORIX expects Takeshi Niinami to direct and advise management with his experi-

enced business judgment.


Executive Officers

ManageMent OrganizatiOn—ManageMent teaM

Corporate Executive Vice President

Tamio UmakiChief Information Officer, Human Resources & Corporate Administration Headquarters, IT Planning Office

Corporate Senior Vice President

Mitsuo NishiumiInvestment Banking HeadquartersSecuritization and Capital Markets Office, President, ORIX Capital Corporation

Executive Officer

Yuki OshimaChairman, ORIX USA Corporation

Executive Officer

Katsutoshi KadowakiDomestic Sales Administrative Headquarters: Head of District Sales

Executive Officer

Hisayuki KitayamaInvestment Banking Headquarters, President, ORIX Asset Manage-ment & Loan Services CorporationPresident, ORIX Wholesale Securities Corporation

Executive Officer

Hiroshi YasudaInvestment Banking Headquarters

Executive Officer

Katsunobu KameiDomestic Sales Administrative Headquarters: Head of Kinki Sales, Group OsakaDeputy Representative

Executive Officer

Kenichi MiyauchiRisk Management Headquarters

Executive Officer

Yuichi NishigoriFinancial Control Headquarters

Executive Officer

Takao KatoFinancial Control Headquarters, President, ORIX Management Information Center Corporation

Executive Officer

Kazutaka ShimouraRisk Management Headquarters

Executive Officer

Komei IkebukuroLegal and Compliance Department, Internal Audit Department

Executive Officer

Hideo IchidaGlobal Business & Alternative Investment Headquarters


Group Executives

Group Senior Vice President

Eiji MitaniPresident, ORIX Auto Corporation


Tetsuo MatsumotoReal Estate Headquarters, Deputy President, ORIX Real Estate Corporation


Izumi MizumoriPresident, ORIX Life Insurance Corporation

Group Executive

Yoshitaka FujisawaPresident, ORIX Computer Systems Corporation

Group Executive

Masatoshi KemmochiPresident, ORIX Credit Corporation

Group Executive

Keiji ItoPresident, ORIX Rentec Corporation


Corporate Governance System Flowchart (As of June 22, 2010)

General Meeting of Shareholders

Board of Directors

Directors

6 Outside Directors

Nominating Committee: 5 Members (Outside: 5)

Audit Committee: 3 Members (Outside: 3)

Compensation Committee: 5 Members (Outside: 5)

Independent Public Accountants

Audit CommitteeSecretariat

Inte

rnal

Aud

itD

epar

tmen

t

Oth

erin

tern

alco

ntro

lre

late

dde

part

men

ts

7 Internal Directors

CEO, COO, CFO

DisclosureCommittee

17 Executive Of�cers6 Group Executives

(Excluding CEO, COO, and CFO)

Investment and Credit CommitteeGroup Executive Of�cers Committee

Monthly Strategy MeetingManagement Informatization Committee

Executive Of�cers

Lega

land

Com

plia

nce

Dep

artm

ent

Risk

Man

agem

entH

eadq

uart

ers

Gro

upC

ompa

nies

Sale

sSu

ppor

tD

epar

tmen

ts

Sale

sH

eadq

uart

ers

Internal Control-Related Operations

Reporting

Reporting

Reporting

Reporting

Supervision

Instructions/Requests

Instructions/Requests

Financial AuditingReporting / Supervision

Instructions

Mo

nito

ring

DisclosureControl

Corporate Governance

(1) Basic Corporate Governance PolicyORIX considers corporate governance to be important to enable the promo-

tion of business activities in line with its management policy (See P.36). While

examining best practices in Japan and worldwide, ORIX aims to construct a

corporate governance system with a high degree of transparency.

(2) Strengthening Corporate GovernanceProgress in Strengthening Corporate GovernanceSince the establishment in June 1997 of an Advisory Board, which included

experienced and resourceful individuals from outside the Company, ORIX

has strengthened its corporate governance framework with the aim of

objectively determining whether its business activities are emphasizing the

interests of its shareholders.

In June 1998, ORIX introduced a Corporate Executive Officer system to

help separate strategic decision-making functions from day-to-day admin-

istrative operations. In June 1999, ORIX reduced the number of members

on its Board of Directors, arranged for three Advisory Board members to

fill two positions as independent directors and one position as an advisor

to the Board, and phased out the Advisory Board. In addition, the Nomi-

nating Committee and the Compensation Committee were established to

operate as support units for the Board of Directors.

To ensure the more effective separation and speedy execution of the

decision-making and monitoring functions of the Board of Directors and

the executive function of management, ORIX adopted a “Company with

Committees” board model in June 2003, following the April 2003 imple-

mentation of revisions to the former Commercial Code of Japan that

permitted this model. In line with the new board model, Nominating,

Audit, and Compensation committees were set up. When the Companies

Act took effect on May 1, 2006, ORIX became a company with a revised

“Company with Committees” board model under that law.

There are six outside directors after the June 22, 2010 General Meeting

of Shareholders. All five seats on the Nominating Committee have been

filled by outside directors since June 2007. As a result, all three committees

including the Nominating, Audit, and Compensation committees are cur-

rently composed entirely of outside directors. The Nominating Committee

determines the conditions necessary for director independence. Presently,

all outside directors meet such conditions. Additionally, all outside direc-

tors are designated independent directors as required by the Tokyo Stock

Exchange to ensure general shareholder protection. ORIX believes that

opinions from outside directors based on his/her expertise and having no

material interest with ORIX, will promote increased management transpar-

ency and objectivity.

Corporate Governance SystemThe Corporate Governance System after the June 22, 2010 General Meeting

of Shareholders is as follows.

(a) Business Execution Bodies

Board of Directors: The Board of Directors makes decisions regarding items

that cannot, under legislation and the Articles of Incorporation, be delegated

to executive officers, as well as items stipulated by Regulations of the Board

of Directors as important to ORIX. The Board of Directors is responsible for

approving and monitoring on a regular basis ORIX’s policies which includes

corporate planning such as capital management, fund procurement and

1. Basic Policy and Progress in Strengthening Corporate Governance

ManageMent OrganizatiOn—COrpOrate gOvernanCe


personnel strategies. Aside from such items, the Board of Directors dele-

gates decision making regarding operational execution to Representative

Executive Officers. The Board of Directors also receives reports from execu-

tive officers and committees regarding the status of business execution.

From April 1, 2009 through March 31, 2010, the Board of Directors met

eight times. The attendance rate of directors for these meetings was 97%.

The Board of Directors includes 13 members, six of whom are outside

directors.

Executive Officers: Certain important business execution decisions specified

by internal rules are made by Representative Executive Officers based on

deliberations of the Investment and Credit Committee and other groups.

The executive officers execute operations in accordance with the decisions

of the Board of Directors, the business execution decisions of the Represen-

tative Executive Officers, and various internal rules. The following units

handle important decision making processes, monitoring, discussion, and

information sharing related to operational execution.

Investment and Credit Committee

The ICC, which includes members of the top management and the execu-

tive officer in charge of investment and credit meets on average three times

a month primarily to deliberate and decide on credit transactions and

investments that exceed certain specified investment or credit amounts,

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 our operations are decided on by the ICC

and reported to the board of directors as appropriate.

Group Executive Officer Meetings

Group Executive Officer Meetings, in which executive officers and group

executives of the Company participate, are held on a monthly basis to share

important information related to the business execution of the ORIX Group.

Monthly Strategy Meetings

The monthly strategy meetings include meetings between top manage-

ment and the individuals in charge of individual departments and business

units to discuss matter such as the state of achievement of strategic targets

and changes in the business environment. The meetings are held in prin-

ciple monthly depending on the nature of the business. Matters of key

importance are decided by the ICC and reported to the Board of Directors

as necessary.

Information Technology Management Committee

The Information Technology Management Committee includes members of

the top management and the executive officer in charge of information tech-

nology (“IT”) systems, and meets once a month to deliberate and approve

important matters concerning fundamental policies for IT operations and IT

systems. The committee determines the needs of and priorities for IT invest-

ment based on the ORIX Group’s fundamental IT strategies. This method

enables ORIX to ensure that IT decisions are consistent with its business

strategies. Furthermore, this enables ORIX to pursue its goal of making IT

investments that contribute to business growth and help reduce risk.

Disclosure Committee

The Disclosure Committee, which plays a key role in ORIX’s disclosure

control, is chaired by the CFO and consists of the executive officers in

charge of various departments, including: Corporate Planning Department

The Financial Control Headquarters, Risk Management Headquarters, Legal

and Compliance Department, Human Resources and Corporate Administra-

tion Headquarters, and Corporate Communication Department. Upon

receiving material information from an executive officer of ORIX, or the

person in charge of an ORIX company department, the committee discusses

whether or not any timely disclosure is necessary, and takes steps to

provide appropriate disclosure of such information.

(b) Decision-Making Functions for Nominating, Audit, and Compensation Issues

Nominating Committee: The Nominating Committee is authorized to

propose the slate of director appointments or dismissals 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 Share-

holders. In addition, the Nominating Committee deliberates on the

appointment or dismissal of executive officers and Group executives,

although this is not required under the Companies Act.

From April 1, 2009 through March 31, 2010, the Nominating Committee

met five times. The attendance rate of these meetings was 88%.

Following the annual general meeting of Shareholders held on June 22,

2010, the Nominating Committee’s five members include Takeshi Sasaki

(Chairman), Yoshinori Yokoyama, Hirotaka Takeuchi, Robert Feldman and

Takeshi Niinami. All five members are outside directors.

Compensation of Directors and Executive Officers during Fiscal 2009

Directors(Outside Directors) Executive Officers

Number of people

Amount paid(Millions of yen)

Number of people

Amount paid(Millions of yen)

Fixed compensation6

(5)67

(59) 24 768

Performance-linked ̶ ̶ 22 95

Stock options6

(5)10(8) 24 103

Stock compensation2

(2)6

(6) 4 58

Total ̶ 84(74) ̶ 1,026

Notes: 1. During fiscal 2009, 4 executive officers were newly appointed and 5 executive officers retired, for a total of 11 directors and 19 executive officers as of March 31, 2010. Figures for the number of officers remuner-ated and the remuneration amount include figures for the 1 director and 5 executive officers that retired during fiscal 2009.

2. In fiscal 2009 no persons serving concurrently as directors and executive officers were remunerated as directors. The total remuneration figure for the 6 persons serving concurrently as directors and executive officers is shown in the executive officer column/line.

3. Stock compensation indicated on the left is the amount for the 2 outside directors and 4 executive officers that retired during fiscal 2009 or by the end of the General Meeting of Shareholders held on June 23, 2010.

Stock compensation values are determined by points that are assigned to each executive officer based on internally determined standards. The compensation value paid at the time of retirement is calculated by multiplying the stock price on the retirement date by the number of accumulated points. This system requires the post-tax value of compensation paid to be used to purchase ORIX stock at the market price on the retirement date.

4. The Company did not provide stock options in the form of stock acquisition rights during fiscal 2009. The stock options indicated on the left are the expenses recognized during fiscal 2009 for new stock acquisi-tion rights provided until fiscal 2008.

5. Compensation of Group executives for fiscal year 2009 was determined based on the Company’s execu-tive officer compensation policies, and total fixed compensation amounted to ¥226 million for 10 Group executives, the total of performance-linked compensation amounted to ¥39 million, ¥33 million in stock option expenses were recognized, and stock compensation for the two people who retired amounted to ¥21 million.

6. Figures shown are rounded downward by discarding figures of less than ¥1 million.


The Nominating Committee determines whether the conditions neces-

sary for director independence have been met based on its appointment

criteria for directors. Presently, all outside directors meet the necessary

conditions which are as follows.

Conditions for Director Independence• No individuals, or any of their family members*, may receive a compen-

sation of more than ¥10 million annually excluding compensation as an

employee for family members, and excluding the individual’s compensa-

tion as outside directors, from ORIX or its subsidiaries.

• No individuals, or any of their family members*, may be a major share-

holder of ORIX (more than 10% of issued shares) or represent the inter-

ests of major shareholder.

• No individuals may have served as an executive officer or an employee

of ORIX or its subsidiaries within the past five years. None of their family

members* may have served as an executive officer of ORIX or its subsid-

iaries within the past five years.

• There must be no concurrent directorship relationship between the

company for which the individual is serving as executive office and

ORIX, defined as being a relationship in which the company for which

the individual is serving as an executive officer has a director that is also

an executive officer of ORIX or its subsidiaries.

• There must be no material conflict of interest or any possible 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 consanguinity or affinity, or other kin living with the outside director.

Audit Committee: The Audit Committee supervises the execution of duties

by directors and executive officers, and creates auditing reports. The Audit

Committee also has the right to propose the appointment or dismissal, or

to pass resolutions for refusing reappointment of the Company’s indepen-

dent certified public accountants at the annual general meeting of share-

holders. ORIX has established the Audit Committee Secretariat to assist

the Audit Committee with the execution of its duties.

The Audit Committee decides the person responsible in each depart-

ment who will report to the Audit Committee, and by capitalizing on the

high degree of independence as outside directors, it evaluates the admin-

istration of executive officers and internal controls of the Company by

considering the following five points: First, the Audit Committee confirms

the report related to the results of the audit and items indicated for

improvement prepared by the executive officer responsible for the corpo-

rate audit. Second, the Audit Committee engages in discussions, which are

the basis of ORIX’s business strategy, after receives explanations from the

heads of each business department and presidents of Group companies

that focus, in particular, on risk control. Third, the Audit Committee

confirms the business environment through reports, which it receives from

the executive officer responsible for the accounting department, which

covers the revenue composition of each department and any problem

areas related to the business. Fourth, the Audit Committee confirms the

quarterly reports regarding the direction of the Company and the execu-

tion of important business matters that it receives from the representative

executive officer. Fifth, the Audit Committee confirms 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 met eight times from April 1, 2009 through March

31, 2010. The attendance rate at these meetings was 91%. Following the

Annual General Meeting of Shareholders held on June 22, 2010, Eiko Tsuji-

yama (Chairman), Yoshinori Yokoyama, and Takeshi Sasaki comprise the

Audit Committee. All three members are outside directors.

Eiko Tsujiyama is qualified as a certified public accountant and has exten-

sive knowledge in finance and accounting as a professional accountant.

Compensation Committee: The Compensation Committee determines

policies regarding the compensation of individual directors and executive

officers, as well as the monetary remuneration, etc., of each individual

director and executive officer. The Compensation Committee has deter-

mined the following policies.

Policies of Determining Compensation of Directors and Executive OfficersORIX’s business objective is to increase shareholder value over the medium

and long term. ORIX believes in each director and executive officer respon-

sibly performing his or her duties and in the importance of cooperation among

different business units in order to achieve continued growth of ORIX.

The Compensation Committee at ORIX believes that in order to accom-

plish such business objectives, directors and executive officers should

place emphasis not only on performance during recent fiscal years, but

also on medium- to 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 consideration this basic policy, the following policies regarding

the compensation of directors and executive officers have been adopted.

Compensation Policy for Directors: The compensation policy for direc-

tors who are not also executive officers aims for a level and composition

of compensation that is effective in maintaining supervisory and oversight

functions of executive officers’ performance in business operations, which

is the main duty of directors.

Specifically, while aiming to maintain competitive compensation standards,

ORIX’s compensation structure consists of a fixed compensation component,

based on duties performed, and a shares component of compensation*.

Compensation Policy for Executive Officers: The compensation policy

for executive officers including those who are also directors aims for a

level of compensation that is effective in maintaining business operation

functions while incorporating in its composition a component that is

linked to the current period business performance.

Specifically, while aiming to maintain competitive compensation standards,

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 as described on P43.

* Stock compensation values are determined by points that are assigned to each executive officer based on internally determined standards. The compensation value paid at the time of retirement is calculated by multiplying the stock price on the retirement date by the number of accumulated points. This system requires the post-tax value of compensation paid to be used to purchase ORIX stock at the market price on the retirement date.

The Compensation Committee met four times from April 1, 2009 through

March 31, 2010. The attendance rate of these meetings was 88%.

Following the Annual General Meeting of Shareholders held on June 22,

2010, the Compensation Committee’s five members include Yoshinori

Yokoyama (Chairman), Hirotaka Takeuchi, Takeshi Sasaki, Eiko Tsujiyama,

and Takeshi Niinami. All five members are outside directors.



(1) Internal Control System ConceptORIX believes that an internal control system is vital to achieving business

objectives. An internal control framework has been constructed and is

managed for sound business management and appropriate and efficient

operation toward the achievement of business objectives. Furthermore,

ORIX is actively striving to revise and improve its internal control frame-

work to adapt to the changing business environment and the expansion

and diversification of the Company’s business.

Resolution of the Board of Directors Regarding the Internal Control System1) Overview of the Resolution of the Board of Directors Regarding

Those Necessary for the Execution of the Duties of the Audit Committee

(a) Directors and Employees Assisting Execution of the Audit

Committee Duties

An Audit Committee Secretariat (2 members) has been established to

assist executing the duties of the Audit Committee.

A member of the Audit Committee delegates the duties of assisting

the Audit Committee to the Audit Committee Secretariat, when it is

necessary to execute the duties.

(b) Independence of Directors and Employees in aforementioned (a)

above from Executive Officers

The appointment, evaluation, transfer and disciplinary action of the

Audit Committee Secretariat are undertaken with the agreement of the

Audit Committee.

(c) Framework for Executive Officers, Employees and Others to Report to

the Audit Committee

• When an executive officer or employee becomes aware of operations

that constitute a gross violation of the law and/or articles of incorpora-

tion, wrongdoing, or facts that may incur significant damage to the

Company, he or she shall report to the Audit Committee.

• When an executive officer or employee becomes aware of material viola-

tion of legislations or company regulations, or violation of commonly

accepted norms he or she shall report to and consults with the compli-

ance helpline. The helpline official, when the matter reported and con-

sulted is determined to be material, shall report to the Audit Committee.

An executive officer or employee shall report to the Audit Committee

or an Audit member nominated by the Audit Committee for matters

concerning accounting, accounting internal controls and auditing.

• An executive officer or employee shall report and explain its execution

of duties responding to a request from a selected member of the Audit

Committee.

• Group companies shall report operations upon a request from a

selected member of the Audit Committee.

(d) Framework to Ensure Efficacy of Other Audits by the

Audit Committee

• When conducting an internal audit, the Internal Audit Department (34

members) shall originate an audit plan and receive an approval of the

Audit Committee.

• The Internal Audit Department shall report internal audit results with

an Audit Result Report to the Audit Committee. The Internal Audit

Department shall also report to the Audit Committee on the status of

specified items that need improvement through such measures as a

follow-up audit of the necessary measures to be implemented.

• The Internal Audit Department shall continually cooperate with the

Audit Committee and comprehensively comply with an inquiry from an

Audit Committee member when necessary.

• The Audit Committee is able to use appropriate outside advisors,

lawyers and other experts in order to execute its duties.

2) Overview of the Resolution of the Board of Directors Regarding the Development of Systems Necessary to Ensure that the Execution of Duties by Executive Officers Complies with Laws and Regula-tions and the Articles of Incorporation, and Other Systems Neces-sary to Ensure the Properness of Operations of a Stock Company

(a) Systems Necessary to Ensure that the Execution of Duties by Execu-

tive Officers Complies with Laws and Regulations and the Articles of

Incorporation

• An Internal Audit Department has been established which monitors

the Internal Control System.

• A Risk Management Headquarters has been established which checks

transaction and product compliance through measures such as credit

and investment screening and monitoring.

• A Legal and Compliance Department has been established which

checks the operations to comply with laws, promotes the compliance

system and aims to maintain internal control.

• Compliance Regulations and a Compliance Manual are established, and

rules and standards of behavior are outlined for officers and employees to

act according to laws, company regulations and socially accepted norms.

ORIX Company Business Conduct Principles, which are included in the

Compliance Regulations and Compliance Manual, declare a rejection of

the involvement or association with unlawful or antisocial organizations.

• A Compliance Helpline has been established to receive reports and

provide consultation on legal violations, acts that violate company

regulations and socially accepted norms. This is expected to lead to

2. Internal Control System Condition

(3) Fundamental Policy Regarding Those Controlling Decisions on Financial and Business Policies

ORIX does not currently have a fundamental policy with regard to

measures in response to shareholders with sufficient voting rights to give

them control over corporate management. Moreover, ORIX has not

recently introduced defensive measures designed to control the acquisi-

tion of its stock. The Company plans to proceed with prudent consider-

ation of this issue in light of changes in relevant laws and regulations and

in the operating environment, with the intent of taking related measures,

if necessary.



early discovery of such violations and acts, which makes it possible to

prevent misconduct and take necessary measures for improvements

whereby strengthening the stability of the Company.

(b) Framework for the Storage and Management of Information in the

Exercise of Executive Function

• ORIX is pursuing a framework aiming for the effective information utiliza-

tion and to maintain confidentiality, by setting up rules for management,

storage and disposal of classified information based on separately

outlined regulations.

(c) Framework and Company Regulation for Managing the Risk of Loss

• ORIX accurately understands the risks associated with changes and

diversification in line with the changing operating environment and

business expansion. In response to these risks, the Risk Management

System (to be hereinafter described) has been established.

(d) Framework to Ensure Efficient Execution of Executive Officer Duties

• ORIX has selected a “Company with Committees” system, and strives

for efficient and swift operations through the resolution of the Board of

Directors to delegate decision on the execution of the operations to

executive officers within a scope of laws and regulations.

• Upon the administrative authority and decision-making rule, based on

separately outlined company regulations, the Investment and Credit

Committee, which includes members of the top management and

executive officer in charge of investment and credit meets on average

three times a month to deliberate and decide credit transactions and

investments that exceed certain specified investment or credit amounts,

important matters related to management of the Company and matters

that have been entrusted to executive officers by the Board of Directors.

For other matters, the Investment and Credit Committee specifies

the person responsible for approval in accordance to the importance of

the issue, and outlines the necessary operations to proceed efficiently.

• The Information Technology Management Committee includes

members of the top management and the executive officer in charge

of information technology (“IT”) systems, and meets once a month to

deliberate and approve important matters concerning fundamental

policies for IT operations and IT systems.

• In order for top management to monitor whether or not the operations

are in line with the initially established business plan, Monthly Strategy

Meetings are held in principle once a month by individual departments

and business units to discuss matters such as the state of achievement

of strategic targets, changes in the business environment and the

necessary changes in strategy are made.

• Group Executive Officer Meetings, in which executive officers and

group executives of the Company participate, are held on a monthly

basis with the aim of improving the efficiency of overall ORIX Group

operations through the exchange of important information related to

the business execution of the ORIX Group.

(e) System Necessary to Ensure the Properness of Operation of ORIX and

Group Companies that Constitute the ORIX Group

• In principal, the Company ensures the properness of operation, adminis-

tration and other matters of Group companies that constitute the ORIX

Group by specifying an individual for approval, consultation and reporting.

• ORIX has specified its corporate philosophy, policy, and action guidelines.

• In principal, the Company’s internal control-related department in (a)

above administers and supports not only sales-related departments of

ORIX but also Group companies.

• The Disclosure Committee is established as a framework for the

proper communication and administration in the case of material infor-

mation that will impact ORIX’s operations and finances, and for appro-

priate and timely disclosure of such information based on the

applicable laws and regulations.

• ORIX has established a framework for effective internal control over

financial reporting based on separately outlined company regulations

to ensure the credibility of the Company’s financial reporting.

The New York Stock Exchange Corporate Governance Listing Standards ORIX’s ADRs have been listed on the New York Stock Exchange (NYSE)

since 1998. ORIX is therefore required to comply with the NYSE’s new

corporate governance listing standards, Section 303A.11, approved by the

SEC in November 2003.

However, as a foreign issuer, ORIX is not required to follow several of the

NYSE listing standards. ORIX’s corporate governance practices differ in certain

significant respects from those that U.S. companies must adopt to maintain a

NYSE listing and, in accordance with Section 303A.11 of the NYSE’s Listed

Company Manual, ORIX provides a brief, general summary of such differences.

The composition of ORIX’s Board of Directors and committees of ORIX’s

Board differs significantly in terms of independence from the composition

requirements for boards and committees that U.S. companies must satisfy

to maintain a NYSE listing. ORIX is not required to meet the NYSE’s inde-

pendence requirements for individuals on its Board of Directors or its

Nominating, Audit, and Compensation committees. Under Japanese law,

a majority of the membership on ORIX’s committees must be “outside

directors” — a Japanese legal concept that shares similarities with the U.

S. concept of “independent director.” However, ORIX is not required to

include on its Board of Directors a majority of outside directors, nor is it

required to compose its committees exclusively from outside directors.

Six of ORIX’s 13 directors are considered outside directors. Under the

Commercial Code of Japan, an outside director is a director

(i) who does not execute the company’s business, (ii) who has not before

executed the business of the company or its subsidiaries in the capacity

of director, executive officer (shikkou-yaku), manager, or employee, and

(iii) who does not execute the business of any subsidiary of the company

in the capacity of director or executive officer of such subsidiary or in the

capacity of manager or any other employee of the company or any of its

subsidiaries. In addition to differences in composition requirements for

ORIX’s Board, ORIX is not required to:

• Make publicly available one or more documents that summarize all

aspects of its corporate governance guidelines or prepare a written

code that states the objectives, responsibilities, and performance evalu-

ation criteria of Nominating, Audit and Compensation Committees in a

manner that satisfies the NYSE’s requirements or

• Adopt a code of business conduct and ethics for its directors, officers,

and employees that addresses fully the topics necessary to satisfy the

NYSE’s requirements.


ORIX allocates management resources by taking into account Group-wide

risk preference based on management strategies as well as the strategy of

individual business units. Its board of directors and executives regularly

review the performance 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 neces-

sary in light thereof. This process enables ORIX to control the balance

sheet and to allocate more management resources to business units

viewed as having greater growth potential.

ORIX, in addition to the unit monitoring, also monitors risk on an indi-

vidual transaction and total portfolio basis.

For 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.

For new transactions requiring monitoring, transactions exceeding a

certain monetary amount or transactions for which there has been a

major change in circumstance or strategy, the responsible department

head, may, in his discretion, report the transaction to the appropriate

executive committee.

In analyzing a total portfolio, the following characteristics are monitored:

client tier, region, transaction type, risk type, debt status and concentration

of major debtors. Some of these are scrutinized and analyzed by each oper-

ating department according to its industry characteristics and some are

analyzed from a group perspective by the Risk Management Headquarters.

Monitoring results are regularly reported to the executive committee, and

measures are taken to rapidly understand and minimize all types of risk.

ORIX views credit risk, market risk, business risk, risk related to fund

procurement, legal risk and other operational risk as the main risks facing

ORIX. Each risk is managed according to its individual characteristics.

(1) Risk Management by Risk Type(a) Credit Risk ManagementORIX defines credit risk as uncertainty in future investment recovery

caused by the fluctuation of cash flow from debtors and investees. As its

main business is financial services, ORIX manages credit risk in almost all

of its business segments, in particular Corporate Financial Services, Invest-

ment Banking and Overseas Business.

Credit Risk Management mainly consists of (i) credit evaluation for each

transaction, (ii) portfolio management and (iii) implementation of correc-

tive actions for the management of problem assets.

Credit evaluation for each transaction is performed by periodically moni-

toring such elements as performance, collateral and progress of collection.

As risk management of individual debtors is especially important, ORIX also

emphasizes credit evaluation at the beginning of each transaction and

continuous risk monitoring of individual credit after the transaction has

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

tion of debt and the distribution of debtors and their business fields.

In connection with each credit transaction, the relevant sales and

marketing department and the Risk Management Headquarters each

performs a comprehensive customer credit evaluation based on the relevant

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 corporate value contribution spread (calculated from invest-

ment yield, default rates, preservation situation, funding cost, capital cost

and administrative cost), which helps ORIX to evaluate risk quantitatively.

Regular evaluation of individual debtors, and of its comprehensive port-

folio, as well as measures to set credit line limits, allow ORIX to control

exposures to the markets with potentially high risks.

Under the current business environment, taking prompt corrective

action for the management of problem assets is the most important task.

ORIX seeks to identify problem assets quickly, and ORIX responds

promptly based on various conditions of each transaction. Problem assets

include debtors who have petitioned for bankruptcy or civil rehabilitation,

or other insolvency proceedings, whose bank transactions are suspended,

whose bills are dishonored, whose debts are not collected for three

months or more, and whose businesses have deteriorated or who are

involved in fraud.

In making collections, ORIX believes an early response is extremely

important. When information is received regarding the emergence of

problem assets, the relevant sales and marketing departments, in coopera-

tion with the Risk Management Headquarters, take steps to secure collateral

or other guarantees and to begin the collection process. The Risk Manage-

ment Headquarters plays an important role in the collection process by

drawing on its accumulated experience and by working closely with its

sales and marketing departments. The accumulated experience is reflected

in its evaluation criteria of each credit transaction and portfolio analysis.

(b) Market Risk Management ORIX defines market risk as the risk of negative impact on its portfolio or

on the market value of its financial assets caused by variation in market

conditions, such as interest rates, exchange rates, stock prices, product

prices or credit spreads. For a further discussion regarding interest rate

risks and exchange rate risks related to fund procurement, please see “—

Risk Management Relating to Fund Procurement—Interest Rate Risk and

Exchange Rate Risk Management” below. ORIX manages market risks in

the following segments:

• Investment Banking: Private equity investment, venture capital invest-

ment, proprietary investment; and

• Retail: Investment in securities in its life insurance business; and

• Overseas Business: Investment in securities in the United States,

private equity investment.

Risk Management

1. Overview

2. Main Risk Management

ManageMent OrganizatiOn—riSk ManageMent



ORIX monitors risks in its portfolio by quantifying risks based on market

fluctuations and defining acceptable risk levels. Risks are quantified based

on statistical methods, qualitative scenario analyses, stress tests and

sensitivity analyses.

As non-trading assets are mainly impacted by credit risk, ORIX sets

appropriate market risk parameters based on types of assets or on specific

business portfolios and evaluate the impact of market fluctuation.

In connection with investments in securities by ORIX Life Insurance in Japan

and ORIX USA in the United States, its investment departments regularly

monitor interest rate policies, economic conditions and securities and

financial market trends. ORIX also analyzes on a daily basis price move-

ments of securities, profits and losses on each investment and financial

conditions of companies in which ORIX invest, as well as other factors. Its

risk management departments review and compare daily reports against

internal guidelines and macro- and microeconomic conditions.

(c) Business Risk ManagementVarious risks are inherent to its daily business, such as the risks associated

with its judgment in its investments, its selection of new products for

development and its competitors’ marketing strategies or pricing. ORIX

defines business risk as risks related to entry into the market, uncertainty

of future business performance caused by changes in business and

competitive environment and market fluctuation risks in the used car and

real estate markets.

ORIX monitors the scenario analyses and stress tests for each of its

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

from a business is also subject to monitoring.

ORIX manages market risks in the Maintenance Leasing and Real Estate

segments. A principal risk relating to operating leases in the Maintenance

Leasing segment is the risk of fluctuation in the residual value of the leased

properties. In order to control fluctuations in residual value, ORIX monitors

its inventories of leased items, market environments and the overall busi-

ness environment. ORIX primarily limits its 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.

ORIX monitors the market values of these ships and aircraft and sell assets

as necessary or desirable to reduce its exposure to downward trends in

the market or take advantage of upward trends.

The automobile industry has a well-established market for used cars, so

most of its vehicles are able to be sold. ORIX keeps current on 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.

(d) Risk Management Relating to Fund ProcurementORIX views liquidity risks, interest rate risks and exchange rate risks as

significant risks associated with fund procurement. ORIX establishes ALM

rules so that ORIX can maintain an accurate understanding of these risks

and appropriately respond to them. ORIX analyzes and understands the

risk management situation, and, Financial Control Headquarters reports

the results to the CFO and executive officers for taking necessary actions.

Liquidity Risk Management

Liquidity risk is the risk that ORIX will be unable to obtain the necessary

funds to meet its commitments and obligations, or be forced to procure

funds at unusually high interest rates, due to market turmoil or deteriora-

tion in its financial condition. The important objective of its liquidity risk

management is to create a liquidity structure that matches asset size and

structure to its management’s goals. In order to achieve this, ORIX places

emphasis on maintaining a highly flexible balance sheet. At the same time,

ORIX seeks to diversify funding sources to reduce refinancing risks, which

may be caused by large market fluctuations. Specifically, ORIX monitors

liquidity by projecting future cash flow from the maturity of assets and

liabilities, conducting liquidity risk analysis including future trends and

assuming such environmental stresses as financial market turmoil and a

reduction of ORIX’s credit ratings. Measures ORIX uses to manage liquidity

risk include diversifying funding sources, establishing committed credit

lines with financial institutions and adjusting the balance of short-term and

long-term debt, taking into account prevailing market conditions.

Interest Rate Risk and Exchange Rate Risk Management

Interest rate risk represents its exposure to assets and liabilities whose

values fluctuate with interest rates. For example, ORIX may incur a loss if

the fair value of its assets and liabilities declines due to a change in interest

rates, or earnings may decline if an increase in interest rates causes interest

expenses to increase by an amount greater than the increase in interest

received. ORIX analyzes these risks from a variety of perspectives, including

basis point value, slope point value, value at risk (“VaR”), as well as the

potential effect on income for a given period. After making quantitative

and qualitative assessments of interest rate risk, ORIX manages its busi-

ness to keep the overall amount of interest rate risk within a fixed range.

ORIX manages 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 its

business transactions in foreign currencies and overseas investments. For

unhedged foreign currency-denominated assets and investments to over-

seas subsidiaries, ORIX monitors and manage exchange rate risks as in

managing interest rate risks, in addition to utilizing VaR and other metrics.

Derivative Risk Management

ORIX may use derivatives as hedges if ORIX decides to hedge interest rate

risk and exchange rate risk after consulting its ALM rules. ORIX uses deriva-

tives to mitigate or offset changes in cash flow or the fair value of assets

and liabilities due to interest rate fluctuations. Derivatives used to hedge

interest rate risk include interest rate swaps and caps. To hedge exchange

rate risk accompanying its business transactions in foreign currencies and

overseas investments, ORIX employs currency swaps, foreign exchange

contracts and other derivatives. ORIX also uses foreign currency borrow-

ings to hedge these exchange rate risks.

The use of derivatives exposes ORIX to credit risk on such derivative

transactions. ORIX monitors the notional principal amounts, current

prices, transaction types and other variables for each counterparty on a

regular basis.


ORIX sets derivative transaction management rules and guidelines for

each of its group companies based on Group-wide policies, and ORIX has

a system of internal controls for derivative transactions.

(e) Legal Risk ManagementTransactional legal risk is a major type of legal risk that ORIX faces in its

business. Transactional legal risk includes the risk that the contracts into

which ORIX enters contain unintended conditions, are not legally effective

or the contemplated transactions cannot be carried out as stipulated in

the contract, or that the transactions in which ORIX participates involve

activities that violate, or are not in strict compliance with, applicable laws.

When ORIX considers a new transaction, new product development or

other new business activities, its risk management system requires an

examination of these types of legal risks.

In an attempt to prevent and mitigate such legal risks, in Japan ORIX

requires, in principle, that the Legal and Compliance Department and the

Risk Management Headquarters be involved in transactions from initial

consideration 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 its prescribed

rules and guidelines. The Legal and Compliance Department and the Risk

Management Headquarters are also involved in the process for the approval

of such contracts in accordance with its internal rules. Depending on the

size and importance of a given transaction, ORIX may also utilize the exper-

tise of outside lawyers. To ensure that proper legal procedures are followed

in connection with legal disputes and litigation, ORIX requires that the

Legal and Compliance Department and the Risk Management Headquar-

ters be involved in such disputes and litigation, including lawsuits that have

been, or are expected to be, brought against ORIX and lawsuits that ORIX

brings, or expect to brings, against third parties. The status of any lawsuits

is reported to the Group Executive Officer meetings regularly.

In addition to establishing internal regulations necessary to observe

applicable laws, ORIX also monitors potential changes in relevant laws, as

new information becomes available. As necessary or appropriate, ORIX

may also initiate preparatory measures to address the requirements of

new laws that are expected to take effect in the future and implement

steps to ensure that ORIX is, and continues 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 necessary, with the involve-

ment of outside lawyers and others.

In addition, the Legal and Compliance Department and the Risk Manage-

ment 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 ManagementAs its business has expanded in recent years, operational risk manage-

ment has become a significant component of its 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 operational risk management, ORIX is also continually seeking to

strengthen its internal control and compliance functions.

The Risk Management Headquarters conducts quantitative and qualita-

tive evaluation and regular monitoring of risk. ORIX Computer Systems

works to reduce operational risk by the maintenance and operational

administration of internal systems. The Internal Audit Department moni-

tors the effectiveness and efficiency and compliance with applicable rules

and regulations by its various operations; the status of improvements to

and compliance with its 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, ORIX evaluates the current status

of internal controls and make improvements as necessary.

Additionally, in order to raise awareness of compliance issues among

employees, the Legal and Compliance Department has produced a

compliance manual and distributed 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. ORIX considers the results to improve the effectiveness of its compli-

ance systems.

Regarding natural disaster risk, ORIX has established Natural Disaster

Risk Management Regulations. ORIX has developed a system in which the

Human Resources and Corporate Administration Headquarters supervises

the coordination of recovery activities after the occurrence of a natural

disaster in Japan, while the Global Business and Alternative Investment

Headquarters handles the overseas function. By distributing a natural

disaster manual to all its employees in Japan and carrying out disaster

drills in accordance with these regulations, ORIX maintains a framework to

respond appropriately to a natural disaster.

(2) Individual Business Risk Management ORIX has a large portfolio, including financial service operations, and ORIX

performs complete and transparent monitoring and control according to

the characteristics of each operation. The risk situation for each business

unit is analyzed both quantitatively and qualitatively on both the individual

transaction and portfolio levels, and the necessary measures to minimize

changes in profitability are implemented. Contents of individual business

unit level analyses are shared throughout the Group, and risk related to

decreased profitability is controlled by capitalizing on a diverse business

portfolio through measures including managing risk through intra business

unit cooperation.



Corporate Financial Services Segment

Credit risk is the main risk of the Corporate Financial Services segment.

ORIX reduces 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 regu-

larly checks customers with large credit balances.

ORIX analyzes the current condition and outlook for specific indus-

tries and sectors, and also analyzes the potential impact on the debtor

while making decisions about future transactions in that specific industry

or sector.

ORIX takes appropriate actions by thoroughly analyzing the condi-

tion of each problem asset. Specifically, in transactions collateralized by

real estate, ORIX takes various measures such as capitalizing on the

networks of its real estate related departments to sell properties or

introduce tenants.

Maintenance Leasing Segment

The main risk of the Maintenance Leasing segment is business risk.

For instance, this segment has commodity market fluctuation risks for

property under operating leases. ORIX continuously monitors market envi-

ronments and fluctuation in the resale value of leased property, and adjusts

residual value estimates of leased items in new transactions accordingly.

Cost fluctuation (prime cost) is the main risk of providing various services

such as outsourcing. ORIX analyzes initial preconditions and performance,

monitor future forecasts, and control costs at an appropriate level.

Additionally, there is the risk that the quality level of its services may fall

below the required level due to changes in the operating environment or

changes and diversification of client needs. ORIX monitors its service

quality level quantitatively and qualitatively, and continuously strive to

improve its level of service according to the operating environment.

ORIX also conducts credit monitoring on individual transactions to

address credit risks.

Real Estate Segment

The main risk of the Real Estate segment is business risk.

ORIX focuses on cash flow when making investments or project deci-

sions. ORIX reduces risk related to real estate price fluctuations by

comparing cash flow performance to the initial plan and by improving the

occupancy rate.

ORIX invests mainly in small properties, and diversifies risk by investing

in large properties through joint ventures with partners.

Furthermore, emphasis is placed on monitoring investment strategies

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

gence 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

rental properties: development and retention schedule and NOI yield.

ORIX capitalizes on the Group’s network in order to improve occupancy

rates and promote sales.

ORIX monitors occupancy rates and rates of return and focuses on

creating manuals and educating employees in order to minimize business

and operational risk in its operating asset business.

Investment Banking Segment

ORIX recognizes market risk and credit risk as the major risks to the real

estate finance business under a normal operating environment.

Because of this, in its non-recourse loan business ORIX monitors 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

changes in the market. However, in a stress-case such as a significant drop

in market liquidity, ORIX diligently monitors the cash flow from the proper-

ties to improve the terms and conditions of its loans. In addition, capital-

izing on its real estate expertise, ORIX 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.

Credit risk and market risk are the main risks of the principal invest-

ment business conducted by the Investment Banking segment, which

varies according to the stage of development. Credit risk is high for

companies for which ORIX is raising corporate value due to the focus on

cash flow. Market risk increases as time for collection nears, due to

measuring the corporate value by referencing the corporate values of

similar industries.

When making its initial investment decision, ORIX does a credit evalua-

tion, analyzing the company’s credit risk and assessing its cash flow. Also,

ORIX performs a multi-faceted evaluation, engaging administrative depart-

ments such as the accounting and legal departments to consider the

characteristics of the operation and investment scheme. Specifically, ORIX

analyzes the operating environment, corporate strategy and method for

increasing corporate value, and verify the adequacy of profitability, esti-

mated investment timeline and exit strategy scenarios.

After an investment has been made, each transaction is monitored for

deviations in cash flow, increased corporate value, exit strategy, corporate

strategy, and business environment from the original scenario. The

frequency of monitoring has been increased during these times of rapid

changes in the business environment, and ORIX is simultaneously verifying

the adequacy of investment scenarios and swiftly taking the necessary

actions. ORIX is working to enhance the management of investments that

have a significant impact on the profitability of ORIX through such measures

as the dispatch of management personnel.

Retail Segment

Credit risk is the main risk of the trust and banking business.

The housing loan business (for the purchase of properties for self-occu-

pancy and investment purposes, and apartments) 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 client performance, business plan, purpose of the loan, source of repay-

ment as well as industry trends. In addition to individual screenings when


loans are arranged, ORIX also reduce risks by diversifying the industry and

products of its portfolio.

The main business risk in the life insurance business is risk associated

with accepting insurance contracts.

Before finalizing insurance contracts, ORIX Life Insurance takes thorough

measures to prevent the acceptance of fraudulent contracts by rigorously

examining health condition declarations 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 policyholders

and, because they are important determinants of future insurance-related

profitability, ORIX Life Insurance promotes their effective execution by

ensuring the hiring of sufficient staff and encouraging staff to acquire

specialized knowhow. 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.

Overseas Business Segment

Operations in Asia and the Pacific

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

local subsidiaries mainly in Asia.

When making a transaction, ORIX emphasizes credit evaluation and

require adequate guarantees and collateral, in addition to diversifying

small transactions. ORIX monitors the portfolio by industry, location and

type of collateral. ORIX regularly monitors the performance of major

credit exposure.

In addition, ORIX takes appropriate actions for problem assets by thor-

oughly analyzing condition of each asset.

The Risk Management Headquarters monitors the country risk of the

overseas portfolio. In addition, it shares information regarding the portfo-

lios of local subsidiaries, performance of major clients, condition of

problem assets, and clients of particular concern. Risk management in the

principal investment business, which is mainly in Asia, is conducted in a

similar manner as the Investment Banking segment.

The main risk for ship- and aircraft-related business is the high volatility

in the residual value of operating lease assets. To address this risk, in addi-

tion to restricting the lease to ships and aircrafts with general versatility,

ORIX constantly monitors the valuation of its portfolio and considers the

possibility of selling each vessel based on prevailing market conditions.

U.S. Operations

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, ORIX assigns an internal credit rating for

each investment and loan taking into consideration the credit status of

the borrower or company in which ORIX is investing and the collateral for

the transaction.

For investments and loans with a rating requiring attention, ORIX

produces an objective evaluation regarding the possibility of collection of

such investments and loans, and decides management policies such as

provisions and impairments.

Regarding market risk, ORIX monitors on a daily basis the market value

and mark-to-market valuation of its investments and loans. In addition,

ORIX proactively manages risk by referring to the credit risk information for

each investment and loan that ORIX acquired during the credit risk

management process and by conducting early exits to secure profits or

minimize losses.

Regarding operational risk, finance provider and manager are separated.

Each acts independently according to the financing process manual. Also,

the internal audit department regularly inspects the performance of its

investing and lending operations.

The main risk of Houlihan Lokey, which handles its investment banking

business in the United States, is operational risk.

Houlihan Lokey complies with operating standards set forth by

authorities responsible for overseeing the investment banking business

such as the U.S. Financial Industry Regulatory Authority (FINRA) and U.K.

Financial Services Authority (FSA). It is vital that the advice and evaluation

forms provided as a part of the investment banking business maintain

quality and operational methods that meet these standards. In order for

Houlihan Lokey to provide high-quality advisory and evaluation services

according to the appropriate methods, operational risk is managed

through such methods as an internal quality control committee.


　

What makes ORIX’s risk management unique?

ORIXissaidtobeacompanywithoutpeers,evenonthe

global level. Ibelievethatthis isan indicationoftherisk

culturethatwehavecultivatedsinceourestablishment.

Our risk culture is characterized both by a thorough

examination of each risk and our flexibility. A thorough

examinationleadstoanaccurateassessmentofrisk,which

hasallowedustoactivelytakegoodrisks.Asaresult,we

have established a broad-ranging portfolio consisting of

slightlydifferentriskprofiles.Theabilitytoassessriskand

respondflexiblyhasallowedustoactswiftlyandwithout

hesitationunderanybusinessenvironment,andhasproven

tobeakeyfactorofgrowth.Thisriskculturewillinevitably

continuetosupportthegrowthofORIX.

As CFO, what has been reaffirmed by the current financial crisis?

At ORIX, the top management shares even the smallest

detailsconcerningindividualtransactions.Evenduringthe

financial crisis, it was our method of thoroughly under-

standing each transaction that allowed us to assess the

risksinvolvedandtotaketheappropriateaction.Thedaily

exchange of information also allowed us to take swift

action.Itisn’teasyfortopmanagementtomakethislevel

ofcommitment,butthefinancialcrisisreaffirmedboththe

necessityandefficacyofourculture(method)ofthoroughly

lookingateachtransaction.

As we understand each transaction individually, we

wereabletoconsidermultipleapproachesfromdifferent

angles,andquicklyimplementthebeststrategytorespond

to the business environment. ORIX is involved in many

different businesses and as suchwewere able to apply

suchresourcesasexpertiseandknowledge.

Thebusinessenvironmentchangedatadizzyingpace

duringthefinancialcrisis.Themostnotablewasthevola-

tilityofthecapitalmarkets,whichwerespondedtowith

carefully controlled liquidity. The scenario was promptly

changed and the balance sheet was controlled by swift

response to the new scenario. While our methods of

managingeachkindofriskwereimportant,Ifeelthatwe

alsolargelyreliedonourorganizationalwillandabilityto

takeaction.Wesurpassedtheprofitandfinancialstability

targets that were announced at the beginning of fiscal

2009byshowingthetruestrengthofoursubstantiverisk

management capability that balances both quantitative

and qualitative elements. We have demonstrated our

abilitytocontrolthebalancesheetasweseefit,andthis

experiencewillbecomeadriverforfuturegrowth.

How will you manage risk specifically in the future?

Goingforward,ORIXwillfocuson“Finance+Services”and

furtherdevelopthevalue-addedservicesitprovidestoits

clients.Thisdevelopmentwillrequireustoenhanceboth

operational efficiencyandquality controlof the services

thatweprovide.Riskwilldiversifyasbothclientneedsand

partiesinvolvedwitheachtransactiondiversify.Theglobal

expansionofourserviceswillrequireustocreateaninfra-

structure that fully responds to the culture andbusiness

practices of each region. Although we will face different

risks thanwehad in thepast, themanagementof these

new risks is the key to sustainable growth. There is no

absolute answer for risk management; rather, one must

manageasoneseesfit.Wemustaskourselvesquestions

such as, ‘What is our aim as a corporate group?’ ‘What

risks should we take to achieve this?’ and ‘How will we

controltheserisks?’Byconsideringandrespondingtoeach

of these questions individually, we can further reinforce

properriskmanagement.ORIXwillachievesteadygrowth

byrefiningourability toassess risk, takingrisksbefitting

ORIXandmaintainingourflexibility.

Haruyuki UrataDeputyPresidentandCFO

ManageMent organization—an interview with CFo haruyuki urata

An Interview with CFO Haruyuki Urata


OriX and SOCietY

ORIX and Society

AssistanceActivitiesthroughtheORIXSocialFundORIX promotes its business with the aim of responding to

society’s need for new value and the environment. ORIX

established the ORIX Social Fund in April 2006 with the goal

of continued contribution to society in areas not reached by

its business activities including social welfare, support for

children and youth, music and the arts, environmental protec-

tion and international cooperation to contribute to a truly

affluent society.

ORIX and its employees will continue their support and

participation in assistance activities.

ActivitiesDuringFiscal�009SocialWelfare

DonationofAssistiveVehiclestoCentersforDisabledChildrenORIX donated assistive vehicles to the Aomori Prefectural

Hamanasu Rehabilitation Center in January 2010 and to the

Akita Prefectural Children’s Rehabilitation Center (currently the

Akita Prefectural Rehabilitation and Nursery Center) in February

2010. With the arrival of the vehicles, the children were able to

enjoy taking new routes on the way to and from the facilities.

Donations have been

made to 23 facilities since

the program started in

fiscal 2006. ORIX will

continue donations in the

coming year.

ChildandYouthSupport

InvitationofChildreninFosterCaretoBaseballGamesORIX invites children in foster care facilities to baseball games.

The children can experience the thrill of the sport and a sense

of togetherness by cheering with their friends. Employee volun-

teers participate, further engaging with the children. Participa-

tion was limited to approximately 300 children during fiscal

2009 due to the H1N1 flu, however, participation in previous

years reached around 500 children.

EnvironmentalProtection&ChildrenandYouthSupport

Children InvitedtoParticipate intheProjecttoSavetheCoralReefsofOkinawaandBuildStandsfortheCoralTransplantsORIX Real Estate has been inviting Okinawan children to partic-

ipate in the Project to Save the Coral Reefs of Okinawa since

2009. Fifteen children partici-

pated in the program on March

27, 2010 by trying their hands at

building stands for the coral

transplants and learning about

the ocean, sea life and coral

of Okinawa.

InternationalCooperation&ChildrenandYouthSupport

ORIX FOUNDATION SCHOLARSHIP Grants Scholar-shipstoElementaryandJuniorHighSchoolStudentsinThailandThroughMiswrittenPostcardsORIX, in cooperation with the international NGO Minsai Center

built and donated an ORIX Education Development Center

(library, computer lab) at two schools (Ban Huay Salao and

Ban Na Kae schools) in northeast Thailand in fiscal 2007 and

2008, respectively, as a part of international cooperation and

supporting youth who are the bearers of the future.

ORIX started collecting miswritten postcards in February

2010 and will use the cash amount of collected postcards

along with a matching contribution to grant scholarships

through the ORIX FOUNDATION SCHOLARSHIP to an esti-

mated 12 children in summer 2010.

CultureandSocialWelfare

Cooperation with an Art Exhibition for Children andPeoplewithDisabilitiesORIX participates in an art exhibition for children and people

with disabilities as a part of its activities supporting those with

societal disabilities. Each year the ORIX Award is presented to

two entries from approximately 800 submissions. The 2009

ORIX Award recipients are shown below.

Presentation of a ceremonial key to an assistive vehicle

Project to Save the Coral Reefs of Okinawa / Kid’s Program

The 2009 "ORIX Award" Winning Entries

Assistance Activities through the ORIX Social Fund


ORIX and the Environment

OriX and the envirOnMent

FundamentalPolicyORIX is promoting ECORIX2012, an environmental policy that

will guide its efforts through the year ending March 2012. ORIX

Group companies are also developing initiatives to contribute

to environmental protection.

ORIX Group Environmental Policy (Drafted September 25, 2008)

For the sake of our newest stakeholders, that means future generations, we aim to become a corporate group that encour-ages greater carbon efficiency by:

Contributing to the emergence of a low carbon society

Helping customers achieve low carbon operations

Promoting initiatives to lower our own carbon emissions

ECORIX2012 Action Targets

ContributingtotheemergenceofalowcarbonsocietyAs members of society, each ORIX Group employee takes every available opportunity to reduce environmental impact.

[Aims for March 2012]• Strive to develop new services for helping customers achieve low

carbon operations• Raise environmental awareness and knowledge among employees

through environmental seminars and other training courses• Actively take part in activities that promote low carbon house-

holds and communities

HelpingcustomersachievelowcarbonoperationsWe support efforts by customers to reduce their environmental impact and achieve low carbon operations through ORIX Group services and products.

[Aims for March 2012]• Provide customers with CO2 emissions data pertaining to services

and products to the maximum extent possible• Provide information on the effectiveness of services and product

usage in reducing CO2 emissions

Promoting initiatives to lower our own carbon footprintWe are taking steps to reduce CO2 generated by ORIX Group activities in order to achieve low carbon operations.

[Aims for March 2012]• Reduce CO2 emissions from ORIX Group business operations and

business activities by 10% compared to the fiscal year ended March 31, 2008

• Establish targets and promote activities tailored to each division (Promote activities in line with voluntary action plans in related industries where available)

• Reduce paper usage by 30% compared to the fiscal year ended March 31, 2008

ORIX’sEnvironmentalInitiativesGolfCourseActivitiestoSaveCoralReefsORIX Golf Management collects unwanted and lost golf balls

at all the golf courses and driving ranges it manages nationwide

and donates the proceeds from the sale of these balls for coral

planting activities.

ProfessionalBaseballEnvironmentalInitiatives• The ORIX Buffaloes held Eco Days at Kyocera Dome Osaka in

April and July 2009. A visitor participation carbon offset

program offsets CO2 emissions from the electricity used for

lighting during the game.

• ORIX Buffaloes team banners and uniforms were remade and

sold as eco-friendly bags. The proceeds from the sale of the

bags were used for elementary

school tree-planting activities,

which ORIX Buffaloes players

took part in with pupils in

January 2010.

SRIIndexInclusionORIX has been selected for inclusion in the Dow Jones

Sustainability Index (DSI Japan 40) global socially responsible

investment (SRI) index and the Morningstar Socially Responsible

Investment Index (MS-SRI), Japan’s first domestic SRI index.

Environmental Policy and Environmental Initiatives

ORIX aims to become an “Eco Services Integrator” that comprehensively

provides all the functions necessary to use eco products supplied by

manufacturers in line with customer needs. Please refer to the Environ-

mental Report 2009–2010 for more detail:

Environmental Report 2009–2010http://www.orix.co.jp/grp/co_e/environment/index.htm

Enhancing awareness among each and every employee

Promoting low carbon emissions in ORIX operations

Converting services offered by ORIX into low carbon services

Providing services that help customers achieve low carbon operations

Toward a lowcarbon society

Eco-friendly bags remade from ORIX Buffaloes team banners and uniforms


Financial Section

finanCial SeCtiOn

56 Eleven-Year Summary

58 Consolidated Balance Sheets

60 Consolidated Statements of Income

61 Consolidated Statements of Changes in Equity

62 Consolidated Statements of Cash Flows

63 Guide to ORIX’s Financial Statements

This annual report presents an abridged version of ORIX’s finan-cial information. 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 URL: http://www.orix.co.jp/grp/ir_e/library/20f.htm


Eleven-Year SummaryORIXCorporationandSubsidiariesYearsEndedMarch31

Millionsofyen

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Financial Position

InvestmentinDirectFinancingLeases ¥1,744,953 ¥1,657,709 ¥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

InstallmentLoans 1,791,439 1,846,511 2,273,280 2,288,039 2,234,940 2,386,597 2,926,036 3,490,326 3,766,310 3,304,101 2,464,251AllowanceforDoubtfulReceivablesonDirectFinancingLeasesandProbableLoanLosses (136,939) (141,077) (152,887) (133,146) (128,020) (115,250) (97,002) (89,508) (102,007) (158,544) (157,523)Allowance/InvestmentinDirectFinancingLeasesandInstallmentLoans 3.9% 4.0% 3.9% 3.4% 3.5% 3.0% 2.2% 1.9% 2.1% 3.8% 4.9%

InvestmentinOperatingLeases 397,576 451,171 474,491 529,044 536,702 619,005 720,096 862,049 1,019,956 1,226,624 1,213,223

InvestmentinSecurities 758,381 942,158 861,336 677,435 551,928 589,271 682,798 875,581 1,121,784 926,140 1,104,158

OtherOperatingAssets 68,943 98,175 245,897 76,343 72,049 82,651 91,856 152,106 197,295 189,560 186,396

TotalAssets ¥5,341,542 ¥5,591,311 ¥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

Short-TermDebt,Long-TermDebtandDeposits ¥4,010,468 ¥4,070,545 ¥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

ORIXCorporationShareholders’Equity ¥ 425,671 ¥461,323 ¥502,508 ¥505,458 ¥564,047 ¥727,333 ¥ 953,646 ¥1,194,234 ¥1,267,917 ¥1,167,530 ¥1,298,684

Revenues and Expenses

TotalRevenues ¥ 651,425 ¥617,758 ¥704,945 ¥732,873 ¥760,487 ¥ 880,734 ¥906,944 ¥1,115,482 ¥1,135,338 ¥1,053,521 ¥ 932,841

TotalExpenses 560,457 524,547 633,457 693,824 672,568 750,827 694,589 834,830 949,784 1,000,166 903,270

ProvisionforDoubtfulReceivablesandProbableLoanLosses 45,567 44,572 51,249 52,781 47,511 39,332 16,216 13,805 33,226 77,027 71,532IncomebeforeIncomeTaxes,DiscontinuedOperations,ExtraordinaryGainandCumulativeEffectofaChangeinAccountingPrinciple 50,679 56,473 71,158 47,254 105,301 152,926 247,141 314,565 246,119 8,687 55,608

IncomefromContinuingOperations 29,876 32,422 39,149 26,842 52,967 85,715 151,071 188,772 148,448 11,362 32,255

NetIncomeAttributabletoORIXCorporation 30,642 34,157 40,269 30,243 54,020 91,496 166,388 196,506 169,597 21,924 37,757

ROA 0.57% 0.62% 0.67% 0.49% 0.93% 1.56% 2.50% 2.54% 1.97% 0.25% 0.47%

ROE 8.13% 7.70% 8.36% 6.00% 10.10% 14.17% 19.80% 18.30% 13.78% 1.80% 3.06%

PerShareData:(yen)

NetincomeattributabletoORIXCorporation(basicearningspershare) ¥ 385.27 ¥417.77 ¥ 489.19 ¥361.44 ¥645.52 ¥1,087.82 ¥1,883.89 ¥2,177.10 ¥1,860.63 ¥ 246.59 ¥ 370.52

NetincomeattributabletoORIXCorporation(dilutedearningspershare) ¥ 377.02 ¥ 400.99 ¥ 467.11 ¥340.95 ¥ 601.46 ¥1,002.18 ¥1,790.30 ¥2,100.93 ¥1,817.81 ¥ 233.81 ¥ 315.91

ORIXCorporationshareholders’equitypershare ¥5,199.12 ¥5,646.11 ¥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

Operations

DirectFinancingLeases:

Newequipmentacquisitions ¥ 905,898 ¥723,330 ¥ 980,379 ¥895,848 ¥713,240 ¥767,672 ¥800,802 ¥636,723 ¥574,859 ¥ 364,734 ¥ 232,629

InstallmentLoans:

Newloansadded ¥807,477 ¥740,639 ¥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

OperatingLeases:

Newequipmentacquisitions ¥101,020 ¥ 143,158 ¥146,203 ¥173,567 ¥189,737 ¥248,327 ¥317,645 ¥348,561 ¥465,909 ¥426,715 ¥ 189,915

InvestmentinSecurities:

Newsecuritiesadded ¥ 333,249 ¥ 397,218 ¥ 348,347 ¥231,294 ¥ 122,066 ¥244,600 ¥ 235,932 ¥331,055 ¥688,148 ¥374,614 ¥ 519,769

OtherOperatingTransactions:

Newassetsadded ¥70,443 ¥ 128,984 ¥ 204,121 ¥116,736 ¥ 186,265 ¥129,604 ¥132,017 ¥215,409 ¥ 152,480 ¥ 76,269 ¥ 24,186

NumberofEmployees 9,503 9,529 11,271 11,833 12,481 13,734 15,067 16,662 18,702 18,920 17,725

Notes:1.Infiscal2002,newequipmentacquisitionsofdirectfinancingleases,newloansaddedandnewsecuritiesaddedincludedincreasesof¥252,436million,¥5,841millionand¥1,042million,respectively,asaresultoftheacquisitionofIFCOInc.(mergeintoORIXAutoCorp.).Inaddition,newloansaddedincluded¥132,127millioninhousingloansthatwerepurchasedfromAsahiMutualLifeInsuranceCompanyinfiscal2002.Infiscal2003,newequipmentacquisitionsofdirectfinancingleasesincludedanincreaseof¥112,605millionasaresultoftheacquisitionofNittetsuLeaseCo.,Ltd.(currentlyNSLeaseCo.,Ltd.).

2.Infiscal2001,theCompanyimplementeda1.2-for-1stocksplitonMay19,2000.Persharedatahavebeenadjustedforthisstocksplitretroactively. 3.Asaresultoftherecordingof“DiscontinuedOperations”inaccordancewithFASBAccountingStandardsCodification205-20(“PresentationofFinancial

Statements—DiscontinuedOperations”),theresultsofoperationswhichmeetthecriteriafordiscontinuedoperationsarereportedasaseparatecomponentofincome,andthoserelatedamountsthathadbeenpreviouslyreportedarereclassified.

4.PursuanttoFASBAccountingStandardsCodification810-10-65-1(“Consolidation—NoncontrollingInterestsinConsolidatedFinancialStatements”),netincomewasreclassifiedintonetincomeattributabletoORIXCorporation.

Financial Section

ORIXCorporation—AnnualReport2010 57

Millionsofyen

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Financial Position

InvestmentinDirectFinancingLeases ¥1,744,953 ¥1,657,709 ¥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

InstallmentLoans 1,791,439 1,846,511 2,273,280 2,288,039 2,234,940 2,386,597 2,926,036 3,490,326 3,766,310 3,304,101 2,464,251AllowanceforDoubtfulReceivablesonDirectFinancingLeasesandProbableLoanLosses (136,939) (141,077) (152,887) (133,146) (128,020) (115,250) (97,002) (89,508) (102,007) (158,544) (157,523)Allowance/InvestmentinDirectFinancingLeasesandInstallmentLoans 3.9% 4.0% 3.9% 3.4% 3.5% 3.0% 2.2% 1.9% 2.1% 3.8% 4.9%

InvestmentinOperatingLeases 397,576 451,171 474,491 529,044 536,702 619,005 720,096 862,049 1,019,956 1,226,624 1,213,223

InvestmentinSecurities 758,381 942,158 861,336 677,435 551,928 589,271 682,798 875,581 1,121,784 926,140 1,104,158

OtherOperatingAssets 68,943 98,175 245,897 76,343 72,049 82,651 91,856 152,106 197,295 189,560 186,396

TotalAssets ¥5,341,542 ¥5,591,311 ¥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

Short-TermDebt,Long-TermDebtandDeposits ¥4,010,468 ¥4,070,545 ¥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

ORIXCorporationShareholders’Equity ¥ 425,671 ¥461,323 ¥502,508 ¥505,458 ¥564,047 ¥727,333 ¥ 953,646 ¥1,194,234 ¥1,267,917 ¥1,167,530 ¥1,298,684

Revenues and Expenses

TotalRevenues ¥ 651,425 ¥617,758 ¥704,945 ¥732,873 ¥760,487 ¥ 880,734 ¥906,944 ¥1,115,482 ¥1,135,338 ¥1,053,521 ¥ 932,841

TotalExpenses 560,457 524,547 633,457 693,824 672,568 750,827 694,589 834,830 949,784 1,000,166 903,270

ProvisionforDoubtfulReceivablesandProbableLoanLosses 45,567 44,572 51,249 52,781 47,511 39,332 16,216 13,805 33,226 77,027 71,532IncomebeforeIncomeTaxes,DiscontinuedOperations,ExtraordinaryGainandCumulativeEffectofaChangeinAccountingPrinciple 50,679 56,473 71,158 47,254 105,301 152,926 247,141 314,565 246,119 8,687 55,608

IncomefromContinuingOperations 29,876 32,422 39,149 26,842 52,967 85,715 151,071 188,772 148,448 11,362 32,255

NetIncomeAttributabletoORIXCorporation 30,642 34,157 40,269 30,243 54,020 91,496 166,388 196,506 169,597 21,924 37,757

ROA 0.57% 0.62% 0.67% 0.49% 0.93% 1.56% 2.50% 2.54% 1.97% 0.25% 0.47%

ROE 8.13% 7.70% 8.36% 6.00% 10.10% 14.17% 19.80% 18.30% 13.78% 1.80% 3.06%

PerShareData:(yen)

NetincomeattributabletoORIXCorporation(basicearningspershare) ¥ 385.27 ¥417.77 ¥ 489.19 ¥361.44 ¥645.52 ¥1,087.82 ¥1,883.89 ¥2,177.10 ¥1,860.63 ¥ 246.59 ¥ 370.52

NetincomeattributabletoORIXCorporation(dilutedearningspershare) ¥ 377.02 ¥ 400.99 ¥ 467.11 ¥340.95 ¥ 601.46 ¥1,002.18 ¥1,790.30 ¥2,100.93 ¥1,817.81 ¥ 233.81 ¥ 315.91

ORIXCorporationshareholders’equitypershare ¥5,199.12 ¥5,646.11 ¥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

Operations

DirectFinancingLeases:

Newequipmentacquisitions ¥ 905,898 ¥723,330 ¥ 980,379 ¥895,848 ¥713,240 ¥767,672 ¥800,802 ¥636,723 ¥574,859 ¥ 364,734 ¥ 232,629

InstallmentLoans:

Newloansadded ¥807,477 ¥740,639 ¥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

OperatingLeases:

Newequipmentacquisitions ¥101,020 ¥ 143,158 ¥146,203 ¥173,567 ¥189,737 ¥248,327 ¥317,645 ¥348,561 ¥465,909 ¥426,715 ¥ 189,915

InvestmentinSecurities:

Newsecuritiesadded ¥ 333,249 ¥ 397,218 ¥ 348,347 ¥231,294 ¥ 122,066 ¥244,600 ¥ 235,932 ¥331,055 ¥688,148 ¥374,614 ¥ 519,769

OtherOperatingTransactions:

Newassetsadded ¥70,443 ¥ 128,984 ¥ 204,121 ¥116,736 ¥ 186,265 ¥129,604 ¥132,017 ¥215,409 ¥ 152,480 ¥ 76,269 ¥ 24,186

NumberofEmployees 9,503 9,529 11,271 11,833 12,481 13,734 15,067 16,662 18,702 18,920 17,725

Notes:1.Infiscal2002,newequipmentacquisitionsofdirectfinancingleases,newloansaddedandnewsecuritiesaddedincludedincreasesof¥252,436million,¥5,841millionand¥1,042million,respectively,asaresultoftheacquisitionofIFCOInc.(mergeintoORIXAutoCorp.).Inaddition,newloansaddedincluded¥132,127millioninhousingloansthatwerepurchasedfromAsahiMutualLifeInsuranceCompanyinfiscal2002.Infiscal2003,newequipmentacquisitionsofdirectfinancingleasesincludedanincreaseof¥112,605millionasaresultoftheacquisitionofNittetsuLeaseCo.,Ltd.(currentlyNSLeaseCo.,Ltd.).

2.Infiscal2001,theCompanyimplementeda1.2-for-1stocksplitonMay19,2000.Persharedatahavebeenadjustedforthisstocksplitretroactively. 3.Asaresultoftherecordingof“DiscontinuedOperations”inaccordancewithFASBAccountingStandardsCodification205-20(“PresentationofFinancial

Statements—DiscontinuedOperations”),theresultsofoperationswhichmeetthecriteriafordiscontinuedoperationsarereportedasaseparatecomponentofincome,andthoserelatedamountsthathadbeenpreviouslyreportedarereclassified.

4.PursuanttoFASBAccountingStandardsCodification810-10-65-1(“Consolidation—NoncontrollingInterestsinConsolidatedFinancialStatements”),netincomewasreclassifiedintonetincomeattributabletoORIXCorporation.


Financial Section

Consolidated Balance SheetsORIXCorporationandSubsidiariesAsofMarch31,2009and2010

Millionsofyen

MillionsofU.S.dollars*

2009 2010 2010

ASSETS

CashandCashEquivalents ¥ 459,969 ¥ 639,087 $ 6,869

RestrictedCash 128,056 77,486 833

TimeDeposits 680 548 6

InvestmentinDirectFinancingLeases 914,444 756,481 8,131

InstallmentLoans 3,304,101 2,464,251 26,486

AllowanceforDoubtfulReceivablesonDirectFinancingLeases

andProbableLoanLosses(158,544) (157,523) (1,693)

InvestmentinOperatingLeases 1,226,624 1,213,223 13,040

InvestmentinSecurities 926,140 1,104,158 11,868

OtherOperatingAssets 189,560 186,396 2,003

InvestmentinAffiliates

(Theamountof¥10,245millionofinvestmentinaffiliatesatMarch31,2009ismeasuredatfairvaluebyelectingthefairvalueoptionunderFASBAccountingStandardsCodification825 -10.)

264,695 409,711 4,404

OtherReceivables 228,581 210,521 2,263

Inventories 197,960 153,256 1,647

PrepaidExpenses 34,571 45,420 488

OfficeFacilities 86,945 96,831 1,041

OtherAssets 565,954 539,954 5,802

TotalAssets ¥8,369,736 ¥7,739,800 $83,188

*ThetranslationsoftheJapaneseyenamountsintoU.S.dollarsareincludedsolelyusingtheprevailingexchangerateatMarch31,2010,whichwas¥93.04to$1.00.


Millionsofyen


2009 2010 2010

LIABILITIES

Short-TermDebt ¥ 798,167 ¥ 573,565 $ 6,165

Deposits 667,627 853,269 9,171

TradeNotes,AccountsPayableandOtherLiabilities 370,310 311,113 3,344

AccruedExpenses 96,662 101,917 1,095

PolicyLiabilities 442,884 409,957 4,406

IncomeTaxes:

Current 9,119 22,769 245

Deferred 151,239 160,905 1,729

SecurityDeposits 168,890 125,479 1,349

Long-TermDebt 4,453,845 3,836,270 41,233

TotalLiabilities 7,158,743 6,395,244 68,737

RedeemableNoncontrollingInterests 25,396 28,095 302

CommitmentsandContingentLiabilities

EQUITY

Commonstock:

Authorized 259,000,000shares

Issued 92,217,067sharesin2009and

110,229,948sharesin2010 102,216 143,939 1,547

Additionalpaid-incapital 136,313 178,661 1,920

RetainedEarnings 1,071,919 1,104,779 11,874

AccumulatedOtherComprehensiveIncome(Loss)

Netunrealizedgains(losses)oninvestmentinsecurities (5,615) 7,495 81

Definedbenefitpensionplans (16,221) (9,092) (98)

Foreigncurrencytranslationadjustments (71,791) (77,651) (835)

Netunrealizedgains(losses)onderivativeinstruments 1,243 (211) (2)

(92,384) (79,459) (854)

TreasuryStock,atCost:

2,816,847sharesin2009and

2,745,701sharesin2010 (50,534) (49,236) (529)

TotalORIXCorporationShareholders’Equity 1,167,530 1,298,684 13,958

NoncontrollingInterests 18,067 17,777 191

TotalEquity 1,185,597 1,316,461 14,149

TotalLiabilitiesandEquity ¥8,369,736 ¥7,739,800 $83,188


Consolidated Statements of IncomeORIXCorporationandSubsidiariesFortheYearsEndedMarch31,2008,2009and2010

Millionsofyen


2008 2009 2010 2010

Revenues: Directfinancingleases ¥78,197 ¥63,349 ¥ 50,115 $ 539 Operatingleases 284,064 285,384 277,217 2,980 Interestonloansandinvestmentsecurities 226,577 196,164 135,167 1,453 Brokeragecommissionsandnetgains(losses)on investmentsecurities 23,520 (12,330) 23,317 251 Lifeinsurancepremiumsandrelatedinvestmentincome 128,616 117,751 115,598 1,242 Realestatesales 88,445 71,088 40,669 437 Gainsonsalesofrealestateunderoperatingleases 16,756 24,346 6,841 74 Otheroperatingrevenues 289,163 307,769 283,917 3,050 Totalrevenues 1,135,338 1,053,521 932,841 10,026 Expenses: Interestexpense 105,254 102,522 82,503 887 Costsofoperatingleases 182,144 194,216 192,678 2,071 Lifeinsurancecosts 112,869 105,899 92,348 993 Costsofrealestatesales 81,057 79,058 46,757 503 Otheroperatingexpenses 172,405 185,121 162,839 1,750 Selling,generalandadministrativeexpenses 252,885 235,328 223,061 2,397 Provisionfordoubtfulreceivablesandprobableloanlosses 33,226 77,027 71,532 769 Write-downsoflong-livedassets 1,741 3,673 6,977 75 Write-downsofsecurities 8,290 18,631 23,637 254 Foreigncurrencytransactionloss(gain),net (87) (1,309) 938 9 Totalexpenses 949,784 1,000,166 903,270 9,708 OperatingIncome 185,554 53,355 29,571 318 EquityinNetIncome(Loss)ofAffiliates 48,343 (42,937) 8,550 92 Gains(Losses)onSalesofSubsidiariesandAffiliatesandLiquidationLosses,net 12,222 (1,731) 17,487 188 Income before Income Taxes, Discontinued Operations and Extraordinary Gain 246,119 8,687 55,608 598 ProvisionforIncomeTaxes 97,671 (2,675) 23,353 251 IncomefromContinuingOperations 148,448 11,362 32,255 347 DiscontinuedOperations: Incomefromdiscontinuedoperations,net 40,062 21,231 13,438 144 Provisionforincometaxes (15,944) (8,796) (4,756) (51) Discontinuedoperations,netofapplicabletaxeffect 24,118 12,435 8,682 93 IncomebeforeExtraordinaryGain 172,566 23,797 40,937 440ExtraordinaryGain,netofapplicabletaxeffect 933 — — —Net Income ¥173,499 ¥23,797 ¥ 40,937 $ 440 NetIncomeAttributabletoNoncontrollingInterests 1,952 1,175 704 8 NetIncomeAttributabletoRedeemableNoncontrollingInterests 1,950 698 2,476 26 Net Income Attributable to ORIX Corporation ¥169,597 ¥21,924 ¥ 37,757 $ 406

Yen U.S.dollars*

Amounts per Share of Common Stock:

Basic:

Incomefromcontinuingoperations ¥1,585.94 ¥107.61 ¥283.26 $3.04

Discontinuedoperations 264.45 138.98 87.26 0.94

Extraordinarygain 10.24 — — —

NetincomeattributabletoORIXCorporation 1,860.63 246.59 370.52 3.98

Diluted:

Incomefromcontinuingoperations 1,551.38 104.35 244.00 2.62

Discontinuedoperations 256.50 129.46 71.91 0.77

Extraordinarygain 9.93 — — —

NetincomeattributabletoORIXCorporation 1,817.81 233.81 315.91 3.40

CashDividends 130.00 260.00 70.00 0.75


Financial Section


Consolidated Statements of Changes in EquityORIXCorporationandSubsidiariesFortheYearsEndedMarch31,2008,2009and2010

MillionsofyenORIX Corporation Shareholders' Equity Total ORIX

Corporation Shareholders’

Equity

Noncontrolling Interests Total Equity

Common Stock Additional Paid-in Capital

Retained Earnings

Accumulated Other Comprehen-sive Income (Loss)

Treasury Stock

BalanceatMarch31,2007 ¥ 98,755 ¥119,402 ¥ 924,043 ¥ 55,253 ¥ (3,219) ¥1,194,234 ¥14,485 ¥1,208,719Contributiontosubsidiaries — 8,494 8,494Transactionwithnoncontrollinginterests — (3,910) (3,910)Comprehensiveincome(loss),netoftax:Netincome 169,597 169,597 1,952 171,549Othercomprehensiveincome(loss)Netchangeofunrealizedgains(losses)

oninvestmentinsecurities (36,708) (36,708) — (36,708)Netchangeofdefinedbenefitpensionplans (7,727) (7,727) — (7,727)Netchangeofforeigncurrency

translationadjustments (31,182) (31,182) 105 (31,077)Netchangeofunrealizedgains(losses)

onderivativeinstruments 1,069 1,069 — 1,069Totalothercomprehensiveincome(loss) (74,548) 105 (74,443)Totalcomprehensiveincome(loss) 95,049 2,057 97,106Cashdividends (11,863) (11,863) (3,897) (15,760)Conversionofconvertiblebond 2,361 1,848 4,209 — 4,209Capitaltransactionsofequity-methodinvestee 1,641 1,641 — 1,641Exerciseofstockoptions 991 986 1,977 — 1,977Compensationcostofstockoptions 2,150 2,150 — 2,150Shareswapmerger 10,215 10,215 — 10,215Acquisitionoftreasurystock (30,749) (30,749) — (30,749)Disposaloftreasurystock 190 190 — 190Other,net 558 21 285 864 — 864BalanceatMarch31,2008 ¥102,107 ¥135,159 ¥1,083,439 ¥(19,295) ¥(33,493) ¥1,267,917 ¥17,229 ¥1,285,146Contributiontosubsidiaries — 2,162 2,162Transactionwithnoncontrollinginterests — (1,426) (1,426)Comprehensiveincome(loss),netoftax:Netincome 21,924 21,924 1,175 23,099Othercomprehensiveincome(loss)Netchangeofunrealizedgains(losses)

oninvestmentinsecurities (41,901) (41,901) (5) (41,906)Netchangeofdefinedbenefitpensionplans (12,098) (12,098) — (12,098)Netchangeofforeigncurrency

translationadjustments (17,989) (17,989) (11) (18,000)Netchangeofunrealizedgains(losses)

onderivativeinstruments (1,101) (1,101) — (1,101)Totalothercomprehensiveincome(loss) (73,089) (16) (73,105)Totalcomprehensiveincome(loss) (51,165) 1,159 (50,006)Cashdividends (23,529) (23,529) (1,057) (24,586)Exerciseofstockoptions 109 108 217 — 217Compensationcostofstockoptions 1,370 1,370 — 1,370Acquisitionoftreasurystock (29,294) (29,294) — (29,294)Disposaloftreasurystock (533) (9,915) 12,043 1,595 — 1,595Other,net 209 210 419 — 419BalanceatMarch31,2009 ¥102,216 ¥136,313 ¥1,071,919 ¥ (92,384) ¥ (50,534) ¥1,167,530 ¥18,067 ¥ 1,185,597Cumulativeeffectofapplyingaccountingfor“Contractsinentity'sownequity” 1,758 1,758 — 1,758

BalanceatApril1,2009 ¥102,216 ¥136,313 ¥1,073,677 ¥ (92,384) ¥ (50,534) ¥1,169,288 ¥18,067 ¥1,187,355Issuanceofcommonstock 41,677 41,347 83,024 — 83,024 Contributiontosubsidiaries — 2,473 2,473 Transactionwithnoncontrollinginterests (32) (387) (419) 60 (359)Comprehensiveincome(loss),netoftax:Netincome 37,757 37,757 704 38,461 Othercomprehensiveincome(loss)Netchangeofunrealizedgains(losses)

oninvestmentinsecurities 13,497 13,497 2 13,499 Netchangeofdefinedbenefitpensionplans 7,129 7,129 (4) 7,125 Netchangeofforeigncurrency

translationadjustments (5,860) (5,860) (1,002) (6,862)Netchangeofunrealizedgains(losses)

onderivativeinstruments (1,454) (1,454) (6) (1,460)Totalothercomprehensiveincome(loss) 13,312 (1,010) 12,302 Totalcomprehensiveincome(loss) 51,069 (306) 50,763 Cashdividends (6,261) (6,261) (2,517) (8,778)Conversionofconvertiblebond 7 7 14 — 14 Exerciseofstockoptions 39 38 77 — 77 Compensationcostofstockoptions 611 611 — 611 Acquisitionoftreasurystock (3) (3) — (3)Disposaloftreasurystock (531) 822 291 — 291 Other,net 377 137 479 993 — 993 Balance at March 31, 2010 ¥143,939 ¥178,661 ¥1,104,779 ¥(79,459) ¥(49,236) ¥1,298,684 ¥17,777 ¥1,316,461

Note:Changesintheredeemablenoncontrollinginterestsarenotincludedinthetable.


Consolidated Statements of Cash FlowsORIXCorporationandSubsidiariesFortheYearsEndedMarch31,2008,2009and2010

Millionsofyen


2008 2009 2010 2010Cash Flows from Operating Activities: Netincome ¥ 173,499 ¥ 23,797 ¥ 40,937 $ 440 Adjustmentstoreconcilenetincometonetcashprovidedby

operatingactivities: Depreciationandamortization 168,767 189,215 167,266 1,798 Provisionfordoubtfulreceivablesandprobableloanlosses 33,226 77,027 71,532 769 Decreaseinpolicyliabilities (5,567) (43,495) (32,927) (354) Deferredtaxbenefit (10,472) (43,583) (27,814) (299) (Gains)lossesfromsecuritizationtransactions (3,481) 233 (331) (4) Equityinnet(income)lossofaffiliates(excludinginterestonloans) (48,343) 42,937 (6,682) (72) (Gains)lossesonsalesofsubsidiariesandaffiliatesand

liquidationlosses,net (12,222) 1,731 (17,487) (188) Extraordinarygain (933) — — — Gainsonsalesofavailable-for-salesecurities (7,563) (3,334) (6,907) (74) Gainsonsalesofrealestateunderoperatingleases (16,756) (24,346) (6,841) (74) Gainsonsalesofoperatingleaseassetsotherthanrealestate (15,217) (11,426) (7,552) (81) Write-downsoflong-livedassets 1,741 3,673 6,977 75 Write-downsofsecurities 8,290 18,631 23,637 254 Decrease(increase)inrestrictedcash (23,219) 23,661 4,520 49 Decrease(increase)inloansheldforsale (23,721) 8,740 1,052 11 Decrease(increase)intradingsecurities 3,275 20,048 (29,725) (319) Decrease(increase)ininventories (19,606) 9,332 39,061 420 Decrease(increase)inotherreceivables (53,975) 54,931 (518) (6) Increase(decrease)intradenotes,accountspayableand

otherliabilities 26,990 (36,185) (35,011) (376) Other,net 18,426 (2,808) 26,124 281 Netcashprovidedbyoperatingactivities 156,287 308,779 209,311 2,250Cash Flows from Investing Activities: Purchasesofleaseequipment (1,088,237) (857,126) (389,413) (4,185) Principalpaymentsreceivedunderdirectfinancingleases 546,964 431,984 352,316 3,787 Netproceedsfromsecuritizationofleasereceivables,

loanreceivablesandsecurities 174,922 30,859 28,305 304 Installmentloansmadetocustomers (2,267,527) (1,038,625) (589,814) (6,339) Principalcollectedoninstallmentloans 1,893,172 1,469,672 937,895 10,080 Proceedsfromsalesofoperatingleaseassets 229,065 161,645 162,988 1,752 Investmentinaffiliates,net (30,350) (17,919) (28,256) (304) Proceedsfromsalesofinvestmentinaffiliates 102,383 1,936 12,532 134 Purchasesofavailable-for-salesecurities (595,445) (301,030) (456,364) (4,905) Proceedsfromsalesofavailable-for-salesecurities 187,095 242,702 181,033 1,946 Proceedsfromredemptionofavailable-for-salesecurities 127,084 128,669 162,292 1,744 Purchaseofheld-to-maturitysecurities — — (43,748) (470) Purchasesofothersecurities (90,088) (73,578) (19,656) (211) Proceedsfromsalesofothersecurities 46,964 36,378 26,034 280 Purchasesofotheroperatingassets (38,922) (14,615) (4,898) (53) Proceedsfromsalesofotheroperatingassets 1,324 12,727 1,767 19 Acquisitionsofsubsidiaries,netofcashacquired (15,220) (752) (10,218) (110) Salesofsubsidiaries,netofcashdisposed 3,948 28 123,613 1,329 Other,net (25,463) (41,772) (13,620) (146) Netcashprovidedby(usedin)investingactivities (838,331) 171,183 432,788 4,652Cash Flows from Financing Activities: Netdecreaseindebtwithmaturitiesofthreemonthsorless (69,644) (237,544) (121,399) (1,305) Proceedsfromdebtwithmaturitieslongerthanthreemonths 2,777,541 2,091,575 1,083,310 11,643 Repaymentofdebtwithmaturitieslongerthanthreemonths (1,920,865) (2,343,124) (1,678,649) (18,042) Netincreaseindepositsduetocustomers 24,695 196,973 185,076 1,989 Issuanceofcommonstock 1,977 217 83,101 893 Dividendspaid (11,863) (23,529) (6,261) (67) Netincrease(decrease)incallmoney 21,500 9,900 (13,400) (144) Acquisitionoftreasurystock (30,749) (29,294) (3) (0) Other,net 374 239 1,301 14 Netcashprovidedby(usedin)financingactivities 792,966 (334,587) (466,924) (5,019)Effect of Exchange Rate Changes on Cash and Cash Equivalents (5,430) (6,061) 3,943 42Net Increase in Cash and Cash Equivalents 105,492 139,314 179,118 1,925Cash and Cash Equivalents at Beginning of Year 215,163 320,655 459,969 4,944Cash and Cash Equivalents at End of Year ¥ 320,655 ¥ 459,969 ¥ 639,087 $ 6,869


Financial Section


Guide to ORIX’s Financial Statements

ORIX’srevenuesareclassifiedtoreflectthediversenatureofbusinessdevelopmentandthecharacteristicsoftransactions. ORIX provides detailed consolidated statements of income for investors as required under U.S. GAAP, but, because the items arenumerous,theanalysisofORIX’sconsolidatedstatementsofincomecanbecomequitecomplex.Oneapproachtoanalyzingtheconsoli-datedfinancialstatementsistolookfirstatthethreemajoritemsofORIX’sstatementsofincome. Ofcourse,thisisnotintendedtobeasubstitutefortheconsolidatedstatementsofincomeunderU.S.GAAP,butitmayprovideanaidinanalyzingORIX’sconsolidatedstatementsofincome.

Three Major Items

1. Contributions to earnings from revenues, investment in affiliates, and others (coloredlightblueinthefollowingexamples)

2. Deductions from earnings for expenses, income taxes, and others (coloreddarkblueinthefollowingexamples)

3. Operating income, income before income taxes, net income and net income attributable to ORIX Corporation, and others (coloredgrayinthefollowingexamples)

Simplified Consolidated Statements of Income (Millionsofyen)

❶

Deduction(s)forExpensesCorrespondingDirectlytoRevenues

DirectFinancingLeases ¥50,115

OperatingLeases 277,217

CostsofOperatingLeases (192,678)

InterestonLoansandInvestmentSecurities 135,167

BrokerageCommissionsandNetGains(Losses)onInvestmentSecurities 23,317

LifeInsurancePremiumsandRelatedInvestmentIncome 115,598

LifeInsuranceCosts (92,348)

RealEstateSales 40,669

CostsofRealEstateSales (46,757)

GainsonSalesofRealEstateunderOperatingLeases 6,841

OtherOperatingRevenues 283,917

OtherOperatingExpenses (162,839)

OperatingIncomelessExpenses ¥438,219

❷ InterestExpense 82,503

❸ Selling,GeneralandAdministrativeExpenses 223,061

❹

ProvisionforDoubtfulReceivablesandProbableLoanLosses 71,532

Write-downsofLong-livedAssets 6,977

Write-downsofSecurities 23,637

ForeignCurrencyTransactionLoss(Gain),net 938

ProvisionforDoubtfulReceivablesandProbableLoanLosses,Write-downs,etc. 103,084

❺ OperatingIncome 29,571

❻

EquityinNetIncome(Loss)ofAffiliates 8,550

Gains(Losses)onSalesofSubsidiariesandAffiliatesandLiquidationLosses,net 17,487

Gains(Losses)onInvestmentinAffiliates 26,037

❼ IncomebeforeIncomeTaxes,DiscontinuedOperationsandExtraordinaryGain 55,608

❽ ProvisionforIncomeTaxes 23,353

IncomefromContinuingOperations 32,255

❾ DiscontinuedOperations,netofapplicabletaxeffect 8,682

10 NetIncome 40,937

11 NetIncomeAttributabletoNoncontrollingInterests 704

12 NetIncomeAttributabletoRedeemableNoncontrollingInterests 2,476

13 NetIncomeAttributabletoORIXCorporation 37,757

Five-step process to calculate net income attributable to ORIX Corporation

STEP

1 + ❶ Start with “Revenues, Net of Corresponding Expenses”

Revenueitemsfromtheconsolidatedstatementsofincomeminusexpensesitemsthatcorrespondtoparticularrevenues

STEP

2 －

❷ Subtract “Interest Expense” Directlyfromtheconsolidatedstatementsofincome

❸ Subtract “SG&A Expenses” Directlyfromtheconsolidatedstatementsofincome

❹Subtract “Provision for Doubtful Receivables and Probable Loan Losses, Write-downs, etc.”

Totalof“ProvisionforDoubtfulReceivablesandProbableLoanLosses,”“Write-downsofLong-livedAssets,”“Write-downsofSecurities,”and“ForeignCurrencyTransactionLoss(Gain),net”

= ❺ Operating Income Thesamefigureastheconsolidatedstatementsofincome

STEP

3 + ❻ Add (Subtract) “Investment in Affiliates, net”

“EquityinNetIncome(Loss)ofAffiliates”and“Gains(Losses)onSalesofSubsidiariesandAffiliatesandLiquidationLosses,net*

= ❼Income before Income Taxes, Discontinued Operations and Extraordinary Gain

Thesamefigureastheconsolidatedstatementsofincome

STEP

4－ ❽ Subtract "Provision for Income

Taxes"Directlyfromtheconsolidatedstatementsofincome

+ ❾Add (Subtract) “Discontinued Operations, net of applicable tax effect”

Directlyfromtheconsolidatedstatementsofincome

= 10 Net Income

STEP

5 －

11Add (Subtract) “Net Income Attributable to Noncontrolling Interests”


12Add (Subtract) “Net Income Attributable to Redeemable Noncontrolling Interests”


= 13 Net Income Attributable to ORIX Corporation


Principal Business Established(Acquired)

Direct/IndirectInvestment

Corporate Financial ServicesORIXCorporation DomesticSalesAdministrativeHeadquarters Leasing,Lending,OtherFinancialServices

Apr.1964

ORIXEcoServicesCorporation WasteRecyclingConsultation,EnvironmentalManagementSupportServices

Apr.1998 100%

ORIXInsurancePlanningCorporation AgencySales&DevelopmentofNon-LifeInsuranceProducts Sep.1999 50%

MomijiLeaseCorporation Leasing (Mar.2002) 95%

NSLeaseCo.,Ltd. Leasing,Lending,OtherFinancialServices (Jul.2002) 100%ORIXEnvironmentalResourcesManagementCorporation

WasteRecycling Sep.2002 100%

ORIXKitakantoCorporation Leasing,Lending,OtherFinancialServices (Jan.2005) 95%

ORIXTokushimaCorporation Leasing,Lending,OtherFinancialServices (Oct.2005) 95%

InternetResearchInstitute,Inc. ConsultingandInvestmentBusinesscenteredonIPTechnology (Nov.2007) 100%

FunabashiEcoServicesCorporation WasteDisposal (Mar.2008) 100%

Maintenance Leasing

ORIXAutoCorporation AutomobileLeasing,Rentals&CarSharing Jun.1973 100%

ORIXRentecCorporation RentalsandLeasingofTest,MeasurementandIT-RelatedEquipment Sep.1976 100%

ORIXRentec(Singapore)Pte.Limited(Singapore) Oct.1995 100%

ORIXRentec(Korea)Corporation(SouthKorea) Apr.2001 100%

ORIXRentec(Tianjin)Corporation(China) Aug.2004 100%

Real EstateORIXCorporation RealEstateBusinessHeadquarters

DevelopmentandRentalsofCommercialRealEstate,CondominiumDevelopmentandSales

Apr.1964

BlueWaveCorporation TrainingFacility&HotelManagement Aug.1991 100%ORIXInteriorCorporation RealEstateRentals,Manufacture&SaleofInteriorFurnishings,Interior

Design&Installation,DrivingSchoolManagement Oct.1998 100%

ORIXRealEstateCorporation RealEstateDevelopment&Management Mar.1999 100%

ORIXAssetManagementCorporation REITAssetManagement Sep.2000 100%

ORIXGolfManagementCorporation GolfCourseManagement (Nov.2004) 100%

ORIXLivingCorporation SeniorHousingManagement Apr.2005 75%

CROSSHOTELSCorporation ManagementofCROSSHOTELS (Mar.2006) 100%

ORIXRealEstateInvestmentAdvisorsCorporation RealEstateInvestmentandAdvisoryServices Sep.2007 100%

Investment BankingORIXCorporation InvestmentBankingHeadquarters

RealEstateFinance,CommercialRealEstateAssetSecuritization,PrincipalInvestment

Apr.1964

ORIXCapitalCorporation VentureCapital Oct.1983 100%

ORIXInvestmentCorporation AlternativeInvestment Jan.1990 100%

ORIXAssetManagement&LoanServicesCorporation LoanServicing Apr.1999 100%

ORIXM&ASolutionsCorporation M&A&CorporateRestructuringAdvisoryServices Feb.2003 100%

ORIXLoanBusinessCenterCorporation ProvidePersonalLoanRelatedAssetManagement,CustomerRelations May2009 100%

ORIXWholesaleSecuritiesCorporation SaleofFinancialProducts Feb.2010 100%

Retail

ORIXCreditCorporation ConsumerFinanceServices Jun.1979 49%

ORIXLifeInsuranceCorporation LifeInsurance Apr.1991 100%

ORIXTrustandBankingCorporation Trust&BankingServices (Apr.1998) 100%

ORIX Headquarter Functions (Not included in Segment Financial Information)

ORIXInsuranceServicesCorporation Casualty&LifeInsuranceAgency Sep.1976 100%

ORIXComputerSystemsCorporation SoftwareEngineering&SystemsManagement Mar.1984 100%

ORIXBaseballClubCo.,Ltd. ProfessionalBaseballTeamManagement (Oct.1988) 100%

ORIXManagementInformationCenterCorporation Accounting&AdministrationServices Oct.1999 100%

ORIXCallcenterCorporation CallCenter Nov.1999 100%

ORIXHumanResourcesCorporation OutplacementServices Feb.2002 100%

ORIXBusinessSupportCorporation BusinessSupportServices Apr.2007 100%

Group companieS (AsofMarch31,2010)


Country Principal Business Established(Acquired)

Direct/IndirectInvestment

Overseas BusinessORIXCorporation GlobalBusinessandAlternativeInvestment

Headquarters*Japan AdministrationofOverseasActivitiesShip-RelatedServices,

Aircraft-RelatedServices,AlternativeInvestment

Apr.1964

ORIXMaritimeCorporation* Japan ShipCharter&ShipBrokerService Nov.1977 100%

ORIXAircraftCorporation* Japan AircraftLeasing May1986 100%

ORIXUSACorporation USA CorporateFinance,InvestmentBanking,RealEstate(DebtInvestment,Development)

Aug.1981 100%

ORIXAsiaLimited HongKong Leasing,AutomobileLeasing,HirePurchase,Lending Sep.1971 100%

ORIXChinaCorporation China Leasing Aug.2005 98%

CHINARAILWAYLEASINGCO.,LTD. China Railway-RelatedLeasing (Jan.2006) 25%

ORIX(China)InvestmentCo.,Ltd. China Leasing,EquityInvestment,OtherFinancialServices Dec.2009 100%

ORIXLeasingSingaporeLimited Singapore Leasing,HirePurchase,Lending Sep.1972 50%

ORIXInvestmentandManagementPrivateLimited Singapore EquityInvestment May1981 100%

ORIXCARRENTALSPTE.LTD. Singapore AutomobileLeasing&Rentals,Leasing Sep.1981 45%

ORIXCapitalResourcesLimited Singapore ShipFinance Nov.1997 100%

ORIXShipResourcesPrivateLimited Singapore ShipFinance Nov.1997 100%

ORIXLeasingMalaysiaBerhad Malaysia Leasing,Lending,HirePurchase Sep.1973 100%

ORIXCarRentalsSdn.Bhd. Malaysia AutomobileRentals Feb.1989 35%

ORIXAutoLeasingMalaysiaSdn.Bhd. Malaysia AutomobileLeasing Oct.2000 100%

PT.ORIXIndonesiaFinance Indonesia Leasing,AutomobileLeasing Apr.1975 96%

ORIXMETROLeasingandFinanceCorporation Philippines Leasing,AutomobileLeasing,Lending Jun.1977 40%

ORIXAutoLeasingPhilippinesCorporation Philippines AutomobileLeasing Sep.1989 40%

ThaiORIXLeasingCo.,Ltd. Thailand Leasing Jun.1978 49%

ORIXAutoLeasing(Thailand)Co.,Ltd. Thailand AutomobileLeasing&Rentals (Aug.2001) 85%

AcapAdvisoryPublicCo.,Ltd. Thailand InvestmentBanking,AssetManagement,LoanServicing (Nov.2007) 20%

LankaORIXLeasingCompanyPLC. SriLanka Leasing,AutomobileLeasing,HirePurchase,Lending Mar.1980 30%

ORIXTaiwanCorporation Taiwan Leasing,HirePurchase,NPLInvestment Sep.1982 95%

ORIXAutoLeasingTaiwanCorporation Taiwan AutomobileLeasing Mar.1998 100%

ORIXTaiwanAssetManagementCompany Taiwan LoanServicing Oct.2004 95%

ORIXLeasingPakistanLimited Pakistan Leasing,AutomobileLeasing Jul.1986 50%

ORIXPropertiesPakistanPrivateLtd. Pakistan RealEstateDevelopmentandManagement Aug.2007 67%

ORIXAustraliaCorporationLimited Australia AutomobileLeasing&TruckRentals Jul.1986 100%

ORIXIrelandLimited Ireland CorporateFinance,Accounting&AdministrativeServices May1988 100%

ORIXAviationSystemsLimited Ireland AircraftLeasing Mar.1991 100%

ORIXNewZealandLimited NewZealand Leasing,AutomobileLeasing&Rentals Dec.1988 100%

INFRASTRUCTURELEASING&FINANCIALSERVICESLIMITED

India CommercializationofInfrastructureProjects,InvestmentBanking,CorporateFinance

(Mar.1993) 23%

ORIXAutoInfrastructureServicesLimited India AutomobileLeasing Mar.1995 42%

OmanORIXLeasingCompanySAOG Oman AutomobileLeasing,HirePurchase,Factoring Aug.1994 24%

ORIXPolskaS.A. Poland Leasing,AutomobileLeasing,HirePurchase,Lending Oct.1995 100%

ORIXLeasingEgyptSAE Egypt Leasing Jun.1997 34%

SaudiORIXLeasingCompany SaudiArabia Leasing,AutomobileLeasing Jan.2001 25%

MAFORIXFinancePJSC UAE Leasing Apr.2002 38%

ORIXCapitalKoreaCorporation SouthKorea AutomobileLeasing,Leasing,HirePurchase,Lending Feb.2004 100%

BTAORIXLeasingJSC Kazakhstan Leasing (Jun.2005) 40%

*ORIXCorporation'sGlobalBusinessandAlternativeInvestmentHeadquartersaswellasORIXMaritimeCorporationandORIXAircraftCorporationarebasedinJapanandareengagedinbusinessactivitiescenteredontheAsia,OceaniaandEuroperegion.


1

2

4

3

5

67

8

9

9

1 Hokkaido (60)

ORIX(1)ORIXAuto(55)ORIXRentec(1)BlueWave(1)CROSSHOTELS(1)ORIXLifeInsurance(1)

2 Tohoku (73)

ORIX(6)ORIXAuto(64)ORIXRentec(1)ORIXRealEstate(1)ORIXLifeInsurance(1)

3 Tokyo (128)

ORIX(12)ORIXEcoServices(2)NSLease(1)ORIXEnvironmentalResourcesManagement(1)InternetResearchInstitute(1)FunabashiEcoServices(1)ORIXAuto(69)ORIXRentec(4)BlueWave(5)ORIXInterior(1)ORIXRealEstate(1)ORIXAssetManagement(1)ORIXGolfManagement(1)ORIXLiving(3)CROSSHOTELS(1)ORIXRealEstateInvestmentAdvisors(1)ORIXCapital(1)ORIXInvestment(1)ORIXAssetManagement&LoanServices(1)ORIXM&ASolutions(1)ORIXWholesaleSecurities(1)ORIXLifeInsurance(5)ORIXTrustandBanking(2)ORIXInsuranceServices(1)ORIXComputerSystems(1)ORIXManagementInformationCenter(3)ORIXHumanResources(1)ORIXBusinessSupport(2)ORIXMaritime(1)ORIXAircraft(1)ORIXUSACorporation(1)

4 Kanto (275)

ORIX(6)ORIXEnvironmentalResourcesManagement(1)ORIXEcoServices(1)ORIXKitakanto(4)FunabashiEcoServices(1)ORIXAuto(231)ORIXRentec(5)BlueWave(2)ORIXGolfManagement(15)ORIXLiving(6)ORIXLifeInsurance(3)

5 Chubu (146)

ORIX(13)ORIXAuto(117)ORIXRentec(3)BlueWave(1)ORIXRealEstate(1)ORIXGolfManagement(8)ORIXLifeInsurance(3)

6 Kinki (143)

ORIX(11)ORIXEcoServices(1)NSLease(1)ORIXAuto(83)ORIXRentec(2)BlueWave(3)ORIXInterior(3)ORIXRealEstate(1)ORIXGolfManagement(11)ORIXLiving(10)CROSSHOTELS(1)ORIXAssetManagement&LoanServices(2)ORIXLoanBusinessCenter(1)ORIXLifeInsurance(4)ORIXTrustandBanking(1)ORIXBaseballClub(6)ORIXHumanResources(1)ORIXBusinessSupport(1)

7 Chugoku (62)

ORIX(4)MomijiLease(2)ORIXAuto(48)ORIXRentec(1)BlueWave(1)ORIXGolfManagement(4)ORIXLifeInsurance(2)

8 Shikoku (35)

ORIX(3)ORIXTokushima(1)ORIXAuto(30)ORIXLifeInsurance(1)

9 Kyushu/Okinawa (176)

ORIX(8)ORIXAuto(150)ORIXRentec(2)BlueWave(2)ORIXGolfManagement(5)ORIXAssetManagement&LoanServices(3)ORIXLifeInsurance(2)ORIXTrustandBanking(2)ORIXCallcenter(2)

Network In JapanORIX‘sextensivenetworkinJapanincludes1,098locations.Thenumberofofficesineachregionisindicatedinparentheses.

Group network (AsofMarch31,2010)


Overseas NetworkORIXhasaglobalnetworkoutsideofJapanthatspans26countriesandregionsworldwide.ORIXhas275locationsthroughouttheUnitedStates,Asia,thePacific,theMiddleEast,Europe,andNorthernAfrica.Thenumberofofficesineachregionisindicatedinparenthesesandincludesbothsubsidiariesandaffiliates.

1 Ireland (2)

ORIXIrelandLimited(1)ORIXAviationSystemsLimited(1)

2 United Kingdom (1)

ORIXUSACorporation(1)

3 France (1)


4 Germany (1)


5 Poland (8)

ORIXPolskaS.A.(8)

6 Egypt (2)

ORIXLeasingEgyptSAE(2)

7 Saudi Arabia (4)

SaudiORIXLeasingCompany(4)

8 United Arab Emirates (3)

MAFORIXFinancePJSC(3)

9 Oman (6)

OmanORIXLeasingCompanySAOG(6)

10 Kazakhstan (11)

BTAORIXLeasingJSC(11)

11 Pakistan (41)

ORIXLeasingPakistanLimited(40)ORIXPropertiesPakistanPrivateLtd.(1)

12 India (27)

INFRASTRUCTURELEASING&FINANCIALSERVICESLIMITED(5)ORIXAutoInfrastructureServicesLimited(22)

13 Sri Lanka (26)

LankaORIXLeasingCompanyLimited(26)

14 Malaysia (20)

ORIXLeasingMalaysiaBerhad(15)ORIXCarRentalsSdn.Bhd.(4)ORIXAutoLeasingMalaysiaSdn.Bhd.(1)

15 Thailand (5)

ThaiORIXLeasingCo.,Ltd.(1)ORIXAutoLeasing(Thailand)Co.,Ltd.(3)AcapAdvisoryPublicCompanyLimited(1)

16 Singapore (6)

ORIXLeasingSingaporeLimited(1)ORIXInvestmentandManagementPrivateLimited(1)ORIXCARRENTALSPTE.LTD.(1)ORIXRentec(Singapore)Pte.Limited(1)ORIXCapitalResourcesLimited(1)ORIXShipResourcesPrivateLimited(1)

17 Vietnam (1)

ORIXInvestmentandManagementPrivateLimited(1)

18 Hong Kong (1)

ORIXAsiaLimited(1)

19 China (14)

ORIXRentec(Tianjin)Corporation(6)ORIXChinaCorporation(5)CHINARAILWAYLEASINGCO.,LTD.(2)ORIX(China)InvestmentCo.,Ltd.(1)

20 South Korea (4)

ORIXRentec(Korea)Corporation(2)ORIXCapitalKoreaCorporation(2)

21 Taiwan (7)

ORIXTaiwanCorporation(3)ORIXAutoLeasingTaiwanCorporation(3)ORIXTaiwanAssetManagementCompany(1)

22 Philippines (42)

ORIXMETROLeasingandFinanceCorporation(33)ORIXAutoLeasingPhilippinesCorporation(9)

23 Indonesia (8)

PT.ORIXIndonesiaFinance(8)

24 Australia (14)

ORIXAustraliaCorporationLimited(14)

25 New Zealand (5)

ORIXNewZealandLimited(5)

26 USA (15)


1

26

2 4 5

310

6 7 89

11

12

13

25

24

23

1614

15 17

18

1920

21

22


SHare inFormation (AsofMarch31,2010)

Monthly Share Price Range (Tokyo Stock Exchange)(Stock price) (Yen)

(Monthly trading volume) (Thousands of shares)

4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 606/3 07/3 08/3 09/3 10/3 11/3

06/3 07/3 08/3 09/3 10/3 11/3

Number of Shares Total Number of Shares Authorized 259,000,000shares Total Number of Shares Issued and Outstanding 110,229,948sharesNumber of Shareholders 43,505

Major Shareholders (Thousands) (%)

Name Number of Shares Held

Percentage of Total Shares in Issue

JapanTrusteeServicesBank,Ltd.(TrustAccount) 11,718 10.63

TheMasterTrustBankofJapan,Ltd.(TrustAccount) 10,869 9.86

TheChaseManhattanBank385036 4,694 4.25

JapanTrusteeServicesBank,Ltd.(TrustAccount9) 4,123 3.74

StateStreetBankandTrustCompany 2,952 2.67

OD05OmnibusChinaTrinity808150 2,162 1.96

NatsCumco 2,032 1.84

MizuhoCorporateBank,Ltd. 1,500 1.36

NorthernTrustCo.AVFCReFidelityFunds 1,459 1.32

NipponLifeInsuranceCompany 1,385 1.25

Note:Inadditiontotheabove,ORIXCorporationholds2,745thousandsharesoftreasurystock.

Transfer Agent for Common SharesMitsubishiUFJTrustandBankingCorporationTel:0120-232-711(toll-freeinJapan)

Depositary Bank for ADRsCitibank,N.A.ShareholderServices,P.O.Box43077,Providence,RhodeIsland02940-3077,U.S.A.Tel: 1-877-248-4237(toll-freeintheUSA)Fax: 1-201-324-3284E-mail:[email protected]=0.5commonsharesNYSE:IX

Stock Exchange ListingsTokyo Stock Exchange FirstSectionOsaka Securities Exchange FirstSection SecuritiesCode:8591New York Stock Exchange TradingSymbol:IX

Composition of Shareholders(Shareholders) (Yen)

39.7%

50.5%

6.5% 3.3%

FinancialInstitutions

OverseasCorporations

Individuals Others*

* Includes 2,745 thousand shares of treasury stock. Note: Fiscal Year Dividends after Net Pro�t Distribution

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

300

250

200

150

100

50

006/3 07/3 08/3 09/3 10/3

12,89717,315

29,094

59,313

43,505

Trend in Number of Shareholders

06/3 07/3 08/3 09/3 10/3

90

130

260

70 75

Trend in Cash Dividends per Share





¥37.8 billion


¥57.0 billion



Black Monday


Second Oil Shock


First Oil Shock



0

50

100

150

200

(Billions of yen)

1964 1975 1980 1985 1990 1995 2000 2005 2010 2011





(Target)

COrpOrate InfOrmatIOn / WebSIte guIde

About ORIX: http://www.orix.co.jp/grp/co_e/index.htmOur History AshortreviewofthedevelopmentofORIXcoveringthelast46years

Financial Data Recentfinancialdataforyourexamination

Management AnintroductiontotheCompany’sdirectors,executiveofficersandgroupexecutives

Corporate Network DescriptionsandcontactinformationforORIXGroupcompaniesinJapanandoverseas

Corporate Governance Effortstakeninrecentyearstostrengthencorporategovernancesystemsandchartsexplainingthose

Compliance OutlineofORIX’sCompliancePolicyandConductPrinciplesunderEC21

Environmental Report OutlineofORIX'sreportsonenvironmentandenvironment-relateddata

Investor Relations: http://www.orix.co.jp/grp/ir_e/ir_index.htmCEO Message AnintroductionofORIX’sCEOmessagefromthecurrentannualreport

Who is ORIX? AnoverviewofORIX’sbusinesssegmentsandfinancialstatementsdesignedtoanswerthequestionsofpotentialinvestorsinORIX’sstock

IR Events Scheduleoffutureresultsbriefings,etc.,andvideoarchiveofpreviousbriefings

IR Library Thefollowingmaterialsareavailable

Annual Report IncludesCEO’smessage,overviewsofoperationsandperformance,financialdata,andotherinformation(TheFiscal2009AnnualReportisavailableinelectronicbookformat)

US SEC Form 20-F AnnualreportfiledwiththeUnitedStatesSecuritiesandExchangeCommission

Quarterly Financial Results Quarterlyfinancialinformation,withoutlineofquarterlyresultsandconsolidatedfinancialstatements

Quarterly Financial Results Informationprovidedquarterlyasasupplementto“QuarterlySupplementaryInformationSupplementay Information FinancialResults”

Meeting of Shareholders Informationrelatedtothemeetingofshareholders

Back Numbers Archiveofpreviouseditionsofvariousmaterials

Latest Financial Results Informationonthemostrecentconsolidatedaccountingperiod

Financial Data Overviewofperformanceinthepastfivefiscalyears

Stock & Bond Information Thefollowingmaterialsareavailable

Stock Information Basicstock-relatedinformationandotherkindsofdata

Stock Price Currentpricescanbeviewed

Analyst Coverage ListingofanalystswhocoverORIX

Corporate Bonds InformationontheperformanceoftheCompany’sbondissues

Corporate Ratings CreditratingsoftheCompany’sbondissues

Management Profiles AnintroductiontotheCompany’sdirectors,executiveofficersandgroupexecutives

FAQ FAQcoveringstock,corporateandfinancialdata

Contact ORIX IR Contactinformationandinformationrequestform

ORIX‘swebsiteisdividedintothreemainsectionsthatinclude:1.AboutORIX;2.InvestorRelations;and3.NewsReleases.“AboutORIX”and“InvestorRelations”areshownbelow.

Company Name ORIXCorporationEstablished April17,1964Head Office 4-1-23Shiba,Minato-ku,Tokyo,

108-0014,Japan Tel:+81-3-5419-5000Fax:+81-3-5419-5903

Shareholders’ Equity (Consolidated) ¥1,298,684millionFiscal Year-End March31Consolidated Companies 798Subsidiaries and Affiliates 104Number of Employees (Consolidated) 17,725

Website Guide

Corporate Information (AsofMarch31,2010)

Annualreportavailableasanelectronicbook

Passive Foreign Investment Company RulesIf,asexpected,weareaPFICforanyyearduringaU.S.Holder’sholdingperiodoftheSharesorADSs,andtheU.S.Holderhasnotmadethemark-to-marketelectionfortheSharesorADSs,asdescribedbelow,theholderwillbesubjecttospecialrulesgenerally intendedtoeliminateanybenefits fromthedeferralofU.S. federal incometaxthataholdercouldderivefrominvestinginaforeigncorporationthatdoesnotdistributeallofitsearningsonacurrentbasis.UponadispositionofSharesorADSs(includingundercertaincircumstances,apledge,andunderproposedTreasuryregulations,adispositionpursuanttoanotherwisetax-freereorganization)gainrecognizedbyaU.S.HolderwouldbeallocatedratablyoveritsholdingperiodfortheSharesorADSs.TheamountsallocatedtothetaxableyearofthesaleorotherexchangeandtoanyyearbeforetheCompanybecameaPFICwouldbetaxedasordinaryincome.Theamountallocatedtoeachothertaxableyearwouldbesubjecttotaxatthehighestrateineffectforindividualsorcorporationsforsuchyear,asappropriate,andaninterestchargewouldbeimposedonthetaxliabilityallocatedtosuchtaxableyear.SimilarruleswouldapplytoanydistributioninrespectofSharesorADSstotheextentitexceeds125percentoftheaverageoftheannualdistributionsonSharesorADSsreceivedduringtheprecedingthreeyearsortheU.S.Holder’sholdingperiod,whicheverisshorter.AnylossrealizedonadispositionofSharesorADSswillbecapitalloss,andwillbelong-termcapitallossiftheU.S.HolderheldtheSharesorADSsformorethanoneyear.TheamountofthelosswillequalthedifferencebetweentheU.S.Holder’staxbasisintheSharesorADSsdisposedofandtheamountrealizedonthedisposition,ineachcaseasdeterminedinU.S.dollars.SuchlosswillgenerallybeUS-sourcelossforforeigntaxcreditpurposes. IfweareaPFICforanyyearduringwhichaU.S.HolderholdsSharesorADSs,wegenerallywillcontinuetobetreatedasaPFICwithrespecttotheU.S.HolderforallsucceedingyearsduringwhichtheU.S.HolderholdsSharesorADSs,evenifweceasetomeetthethresholdrequirementsforPFICstatus.Undercertainattributionrules,ifweareaPFIC,U.S.HolderswillbedeemedtoowntheirproportionatesharesofoursubsidiariesthatarePFICsandwillbesubjecttoU.S. federalincometaxaccordingtotherulesdescribedaboveon(i)certaindistributionsbysubsidiaryPFICsand(ii)adispositionofsharesofasubsidiaryPFIC,eventhoughtheyhavenotreceivedtheproceedsofthosedistributionsordispositionsdirectly. IftheSharesorADSsare“regularlytraded”ona“qualifiedexchange,”aU.S.HolderofSharesorADSswouldbeeligible

tomakeamark-to-marketelectionthatwouldresultintaxtreatmentdifferent fromthegeneraltaxtreatmentforPFICsdescribedabove.TheSharesorADSswillbetreatedas“regularlytraded”inanycalendaryearinwhichmorethanademinimisquantityoftheSharesorADSsaretradedonaqualifiedexchangeonatleast15daysduringeachcalendarquarter.A“qualifiedexchange”includestheNYSEonwhichourADSsaretradedanda foreignexchangethatisregulatedbyagovernmentalauthorityinwhichtheexchangeislocatedandwithrespecttowhichcertainotherrequirementsaremet.TheInternalRevenueService(“IRS”)hasnotyetidentifiedspecificforeignexchangesthatare“qualified”forthispurpose.Undercurrentlaw,themark-tomarketelectionmaybeavailabletoholdersofADSsbecausetheADSswillbelistedontheNYSE,althoughtherecanbenoassurancethattheADSswillbe“regularlytraded”forpurposesofthemark-to-marketelection. IfaU.S.Holderiseligibleandmakesthemark-to-marketelection,theU.S.Holderwillincludeeachyear,asordinaryincome, theexcess, ifany,of the fairmarketvalueof theSharesorADSsat theendof thetaxableyearover theiradjustedbasis,andwillbepermittedanordinarylossinrespectoftheexcess,ifany,oftheadjustedbasisoftheSharesorADSsovertheirfairmarketvalueattheendofthetaxableyear(butonlytotheextentofthenetamountofpreviouslyincludedincomeasaresultofthemark-to-marketelection).IfaU.S.Holdervalidlymakestheelection,theholder’sbasisintheSharesorADSswillbeadjustedtoreflectanysuchincomeorlossamounts.AnygainrecognizedonthesaleorotherdispositionofSharesorADSsinayearwhentheCompanyisaPFICwillbetreatedasordinaryincome. WedonotintendtocomplywiththerequirementsnecessaryforaU.S.Holdertomakeadifferentelection(thequali-fiedelectingfundelection),whichissometimesavailabletoshareholdersofaPFIC. SpecialrulesapplytodeterminetheforeigntaxcreditwithrespecttowithholdingtaxesimposedondistributionsonsharesinaPFIC. IfaU.S.HolderownsSharesorADSsduringanyyearinwhichweareaPFIC,theU.S.Holdermustgenerallyfileanannualreportwithrespecttous,withtheholder’sfederalincometaxreturnforthatyear. WeurgeU.S.HolderstoconsulttheirtaxadvisorsconcerningourstatusasaPFICandthetaxconsiderationsrelevanttoaninvestmentinaPFIC,includingtheavailabilityandconsequencesofmakingthemark-to-marketelectiondiscussedabove.

Printed in Japan

ORIX Corporation Corporate Planning Department, Investor Relations4-1-23 Shiba, Minato-ku, Tokyo, 108-0014, Japan Tel: +81-3-5419-5042 Fax: +81-3-5419-5901http://www.orix.co.jp/grp/ir_e/ir_index.htmFor inquiries about this annual report, please contact us at the address above.

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