SEC Form 6-K filed by Orix Corp

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2024

Commission File Number: 001-14856

 

 

ORIX Corporation

(Translation of Registrant’s Name into English)

 

 

World Trade Center Bldg., SOUTH TOWER, 2-4-1 Hamamatsu-cho, Minato-ku, Tokyo, JAPAN

(Address of Principal Executive Offices)

 

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F ☒  Form 40-F ☐

 

 

 

Table of Contents

Material Contained in this Report

 

1.		ORIX’s Second Quarter Consolidated Financial Results (April 1, 2024 –September 30, 2024) filed with the Tokyo Stock Exchange on Friday, November 8, 2024.
2.		Announcement Regarding Interim Dividend and Annual Dividend Forecast for the Fiscal Year Ending March 31, 2025.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

		ORIX Corporation
Date: November 8, 2024		By		/s/ Yasuaki Mikami
				Yasuaki Mikami
				Member of the Board of Directors Senior Managing Executive Officer Responsible for Corporate Function Unit Responsible for Work Style Reform Project ORIX Corporation

 

Consolidated Financial Results

April 1, 2024 - September 30, 2024

 

 

November 8, 2024

In preparing its consolidated financial information, ORIX Corporation (the “Company”) and its subsidiaries have complied with generally accepted accounting principles in the United States of America.

This document may contain forward-looking statements about expected future events and financial results that involve risks and uncertainties. Such statements are based on the Company’s current expectations and are subject to uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause such a difference include, but are not limited to, those described under “Risk Factors” in the Company’s most recent annual report on Form 20-F filed with the U.S. Securities and Exchange Commission.

The Company believes that it may have been a “passive foreign investment company” for U.S. federal income tax purposes in the year to which these consolidated financial results relate by reason of the composition of its assets and the nature of its income. In addition, the Company may be a PFIC for the foreseeable future. Assuming that the Company is a PFIC, a U.S. holder of the shares or American depositary shares of the Company will be subject to special rules generally intended to eliminate any benefits from the deferral of U.S. federal income tax that a holder could derive from investing in a foreign corporation that does not distribute all of its earnings on a current basis. Investors should consult their tax advisors with respect to such rules, which are summarized in the Company’s annual report.

For further information please contact:

Investor Relations and Sustainability Department

ORIX Corporation

World Trade Center Bldg., SOUTH TOWER, 2-4-1 Hamamatsu-cho, Minato-Ku, Tokyo, 105-5135

JAPAN

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

E-mail: [email protected]

 

Consolidated Financial Results from April 1, 2024 to September 30, 2024

(U.S. GAAP Financial Information for ORIX Corporation and its Subsidiaries)

 

Corporate Name:		ORIX Corporation
Listed Exchanges:		Tokyo Stock Exchange (Securities No. 8591)
		New York Stock Exchange (Trading Symbol: IX)
Head Office:		Tokyo JAPAN
		Tel: +81-3-3435-3121
		(URL https://www.orix.co.jp/grp/en/ir/)

1. Performance Highlights as of and for the Six Months Ended September 30, 2024

(1) Performance Highlights - Operating Results (Unaudited)

(millions of yen)

 

		Total Revenues				Year-on-Year Change				Operating Income				Year-on-Year Change				Income before Income Taxes				Year-on-Year Change				Net Income Attributable to ORIX Corporation Shareholders				Year-on-Year Change
September 30, 2024			1,403,633				3.2	%			196,972				20.0	%			256,991				39.3	%			182,946				42.8	%
September 30, 2023			1,359,956				(0.4	%)			164,164				8.1	%			184,467				11.0	%			128,100				4.7	%

“Comprehensive Income Attributable to ORIX Corporation Shareholders” was ¥59,896 million for the six months ended September 30, 2024 (year-on-year change was a 80.0% decrease) and ¥298,830 million for the six months ended September 30, 2023 (year-on-year change was a 9.9% decrease)

 

*Note 1:

The presentation of equity method investment has been changed since the fourth quarter of the fiscal year ended March 31, 2024(“fiscal 2024”). As a result, certain line items presented in our consolidated statements of income for the six months ended September 30, 2023 have been retrospectively reclassified for this change.

 

		Basic Earnings Per Share				Diluted Earnings Per Share
September 30, 2024			159.42				159.15
September 30, 2023			109.92				109.76

 

*Note 2:

Unless otherwise stated, all amounts shown herein are in millions of Japanese yen, except for per share and dividend amounts, which are in single yen.

(2) Performance Highlights - Financial Position (Unaudited)

 

		Total Assets				Total Equity				Shareholders’ Equity				Shareholders’ Equity Ratio
September 30, 2024			16,339,977				3,978,907				3,902,197				23.9	%
March 31, 2024			16,322,100				4,021,965				3,941,466				24.1	%

 

*Note 3:

“Shareholders’ Equity” refers to “Total ORIX Corporation Shareholders’ Equity.”

“Shareholders’ Equity Ratio” is the ratio of “Total ORIX Corporation Shareholders’ Equity” to “Total Assets.”

2. Dividends (Unaudited)

 

		First Quarter-end				Second Quarter-end				Third Quarter-end				Year-end				Total
March 31, 2024			—				42.80				—				55.80				98.60
March 31, 2025			—				62.17				—				—				—
March 31, 2025 (Est.)			—				—				—				—				98.60

 

*Note 4:

Revision from the previously announced dividend forecast: Yes

Regarding the interim dividend for the fiscal year ending March 31, 2025, we have decided the dividend per share of ¥62.17 by applying the dividend payout ratio of 39% to earnings per share for the six months ended September 30, 2024.

For the fiscal year ending March 31, 2025, the annual dividend is at the higher of either payout ratio of 39% or ¥98.60 per share and the minimum dividend has been stated in the above table.

The annual dividend will be determined in accordance with the progress to the consolidated earnings forecast which is net income attributable to ORIX Corporation Shareholders of ¥390 billion. We will promptly announce the forecast for the annual dividend as soon as it is updated.

3. Forecast for the Year Ending March 31, 2025 (Unaudited)

 

		Net Income Attributable to ORIX Corporation Shareholders				Year-on-Year Change
March 31, 2025			390,000				12.7	%

 

*Note 5:

Although forward-looking statements in this document are based on information currently available to ORIX Corporation and are based on assumptions deemed reasonable by ORIX Corporation, actual financial results may differ materially due to various factors. Readers are urged not to place undue reliance on such forward-looking statements.

Factors causing a result that differs from forward-looking statements include, but are not limited to, those described under “Risk Factors” in our Form 20-F submitted to the U.S. Securities and Exchange Commission.

4. Other Information

 

(1) Significant Changes in Scope of Consolidation			Yes ( )  No ( x )
Addition - None (        )			Exclusion - None (        )
(2) Adoption of Simplified Accounting Method			Yes ( )  No ( x )
(3) Changes in Accounting Principles, Procedures and Disclosures
1. Changes due to adoptions of new accounting standards			Yes ( x )  No ( )
2. Other than those above			Yes ( )  No ( x )

(4) Number of Issued Shares (Ordinary Shares)

1. The number of issued shares, including treasury stock, was 1,214,961,054 as of September 30, 2024, and 1,214,961,054 as of March 31, 2024.

2. The number of treasury stock was 69,962,232 as of September 30, 2024, and 60,748,162 as of March 31, 2024.

3. The average number of outstanding shares was 1,147,474,112 for the six months ended September 30, 2024, and 1,165,399,765 for the six months ended September 30, 2023.

The Company’s shares held through the Board Incentive Plan Trust (3,535,096 shares as of September 30, 2024, and 2,727,686 shares as of March 31, 2024) are not included in the number of treasury stock as of the end of the periods, but are included in the average number of shares outstanding as treasury stock that are deducted from the basis of the calculation of per share data.

* These consolidated financial results from April 1, 2024, to September 30, 2024, are not subject to certified public accountant’s or audit firm’s interim review.

 

- 1 -

1. Summary of Consolidated Financial Results

(1) Financial Highlights

Financial Results for the Six Months Ended September 30, 2024

 

				Six months ended September 30, 2023				Six months ended September 30, 2024				Change
												Amount				Percent
Total Revenues		(millions of yen)			1,359,956				1,403,633				43,677				3	%
Total Expenses		(millions of yen)			1,195,792				1,206,661				10,869				1	%
Income before Income Taxes		(millions of yen)			184,467				256,991				72,524				39	%
Net Income Attributable to ORIX Corporation Shareholders		(millions of yen)			128,100				182,946				54,846				43	%
Earnings Per Share (Basic)		(yen)			109.92				159.42				49.50				45	%
(Diluted)		(yen)			109.76				159.15				49.39				45	%
ROE (Annualized) *1		(%)			7.0				9.3				2.3				—
ROA (Annualized) *2		(%)			1.65				2.24				0.59				—

 

*Note 1:

ROE is the ratio of Net Income Attributable to ORIX Corporation Shareholders for the period to average ORIX Corporation Shareholders’ Equity.

*Note 2:

ROA is calculated based on Net Income Attributable to ORIX Corporation Shareholders.

*Note 3:

The presentation of equity method investment has been changed since the fourth quarter of fiscal 2024. As a result, certain line items presented in our consolidated statements of income for the six months ended September 30, 2023 have been retrospectively reclassified for this change.

Overview of Business Performance (April 1, 2024 to September 30, 2024)

Total revenues for the six months ended September 30, 2024 increased 3% to ¥1,403,633 million compared to ¥1,359,956 million during the same period of the previous fiscal year due to increases in operating leases revenues, sales of goods and real estate and services income, offset by decreases in life insurance premiums and related investment income.

Total expenses increased 1% to ¥1,206,661 million compared to ¥1,195,792 million during the same period of the previous fiscal year due to increases in costs of operating leases, costs of goods and real estate sold, services expense and selling, general and administrative expenses, offset by decreases in life insurance costs.

Equity in net income of equity method investments increased by ¥11,841 million to ¥28,516 million compared to the same period of the previous fiscal year, and gains on sales of subsidiaries and equity method investments and liquidation losses, net increased by ¥27,875 million to ¥31,503 million compared to the same period of the previous fiscal year.

Due to the above results, income before income taxes for the six months ended September 30, 2024 increased 39% to ¥256,991 million compared to ¥184,467 million during the same period of the previous fiscal year and net income attributable to ORIX Corporation shareholders increased 43% to ¥182,946 million compared to ¥128,100 million during the same period of the previous fiscal year.

 

- 2 -

Segment Information

Total segment profits for the six months ended September 30, 2024 increased 29% to ¥287,769 million compared to the same period of the previous fiscal year.

The presentation of equity method investment has been changed since the fourth quarter of fiscal 2024. As a result, segment data for the six months ended September 30, 2023 have been retrospectively reclassified.

Since April 1, 2024, the interest expense allocation method for each segment was changed to include a part of interest expenses in corporate profits (losses) in the reconciliation of segment profits to the condensed consolidated financial statement amounts. As a result, segment data for the six months ended September 30, 2023 have been retrospectively reclassified.

Since April 1, 2024, the scope of segment assets was changed to include cash and cash equivalents, trade notes, accounts and other receivable, and others. As a result, segment data as of the end of fiscal 2024 have been retrospectively reclassified.

Segment information for the six months ended September 30, 2024 is as follows:

Corporate Financial Services and Maintenance Leasing: Finance and fee business; leasing and rental of automobiles, electronic measuring instruments and ICT-related equipment

 

		Six months ended  September 30, 2023 (millions of yen)				Six months ended  September 30, 2024 (millions of yen)				Change
										Amount   (millions of yen)				Percent   (%)
Segment Profits			41,373				45,566				4,193				10
		As of March 31, 2024 (millions of yen)				As of September 30, 2024 (millions of yen)				Change
										Amount (millions of yen)				Percent (%)
Segment Assets			1,777,320				1,806,160				28,840				2

Segment profits increased 10% to ¥45,566 million compared to the same period of the previous fiscal year due to an increase in operating leases revenues and an increase in gains on sales of subsidiaries and equity method investments.

Segment assets increased 2% to ¥1,806,160 million compared to the end of the previous fiscal year due to an increase in installment loans.

 

- 3 -

Real Estate: Real estate development, rental and management; facility operations; real estate asset management

 

		Six months ended  September 30, 2023 (millions of yen)				Six months ended  September 30, 2024 (millions of yen)				Change
										Amount   (millions of yen)				Percent   (%)
Segment Profits			27,510				50,357				22,847				83
		As of March 31, 2024 (millions of yen)				As of September 30, 2024 (millions of yen)				Change
										Amount (millions of yen)				Percent (%)
Segment Assets			1,110,087				1,111,185				1,098				0

Segment profits increased 83% to ¥50,357 million compared to the same period of the previous fiscal year due to an increase in operating leases revenues and an increase in services income.

Segment assets totaled ¥1,111,185 million, remaining relatively unchanged compared to the end of the previous fiscal year.

PE Investment and Concession: Private equity investment; concession

 

		Six months ended  September 30, 2023  (millions of yen)				Six months ended  September 30, 2024  (millions of yen)				Change
										Amount   (millions of yen)				Percent   (%)
Segment Profits			9,925				46,997				37,072				374
		As of March 31, 2024 (millions of yen)				As of September 30, 2024 (millions of yen)				Change
										Amount (millions of yen)				Percent (%)
Segment Assets			1,066,647				988,286				(78,361	)			(7	)

Segment profits increased 374% to ¥46,997 million compared to the same period of the previous fiscal year due to an increase in gains on sales of subsidiaries and equity method investments resulting from the sale of investees and an increase in equity in net income (loss) of equity method investments.

Segment assets decreased 7% to ¥988,286 million compared to the end of the previous fiscal year due to a decrease in cash and cash equivalents and a decrease in investment in securities.

 

- 4 -

Environment and Energy: Domestic and overseas renewable energy; electric power retailing; ESCO services; sales of solar panels; recycling and waste management

 

		Six months ended  September 30, 2023  (millions of yen)				Six months ended  September 30, 2024  (millions of yen)				Change
										Amount   (millions of yen)				Percent   (%)
Segment Profits			12,128				2,346				(9,782	)			(81	)
		As of March 31, 2024 (millions of yen)				As of September 30, 2024 (millions of yen)				Change
										Amount (millions of yen)				Percent (%)
Segment Assets			976,434				1,046,312				69,878				7

Segment profits decreased 81% to ¥2,346 million compared to the same period of the previous fiscal year due to an increase in services expense and in selling, general and administrative expenses, and a decrease in equity in net income (loss) of equity method investments.

Segment assets increased 7% to ¥1,046,312 million compared to the end of the previous fiscal year, primarily due to foreign exchange effects.

Insurance: Life insurance

 

		Six months ended  September 30, 2023  (millions of yen)				Six months ended  September 30, 2024  (millions of yen)				Change
										Amount   (millions of yen)				Percent   (%)
Segment Profits			37,451				40,857				3,406				9
		As of March 31, 2024 (millions of yen)				As of September 30, 2024 (millions of yen)				Change
										Amount (millions of yen)				Percent (%)
Segment Assets			2,921,927				2,901,167				(20,760	)			(1	)

Segment profits increased 9% to ¥40,857 million compared to the same period of the previous fiscal year due to a decrease in life insurance costs, offset by a decrease in life insurance premiums and related investment income.

Segment assets decreased 1% to ¥2,901,167 million compared to the end of the previous fiscal year due to a decrease in investment in securities.

 

- 5 -

Banking and Credit: Banking; consumer finance

 

		Six months ended  September 30, 2023  (millions of yen)				Six months ended  September 30, 2024  (millions of yen)				Change
										Amount   (millions of yen)				Percent   (%)
Segment Profits			16,802				13,107				(3,695	)			(22	)
		As of March 31, 2024 (millions of yen)				As of September 30, 2024 (millions of yen)				Change
										Amount (millions of yen)				Percent (%)
Segment Assets			2,934,217				2,921,424				(12,793	)			(0	)

Segment profits decreased 22% to ¥13,107 million compared to the same period of the previous fiscal year due to a decrease in finance revenues as a result of ORIX Credit Corporation becoming an equity method investee due to the partial sale of its shares in the fourth quarter of fiscal 2024.

Segment assets totaled ¥2,921,424 million, remaining relatively unchanged compared to the end of the previous fiscal year.

Aircraft and Ships: Aircraft investment and management; ship-related finance and investment

 

		Six months ended  September 30, 2023  (millions of yen)				Six months ended  September 30, 2024  (millions of yen)				Change
										Amount   (millions of yen)				Percent   (%)
Segment Profits			18,794				32,011				13,217				70
		As of March 31, 2024 (millions of yen)				As of September 30, 2024 (millions of yen)				Change
										Amount (millions of yen)				Percent (%)
Segment Assets			1,169,641				1,221,976				52,335				4

Segment profits increased 70% to ¥32,011 million compared to the same period of the previous fiscal year due to an increase in operating leases revenues as a result of a new acquisition of a subsidiary in the fourth quarter of fiscal 2024.

Segment assets increased 4% to ¥1,221,976 million compared to the end of the previous fiscal year due to an increase in investment in operating leases, offset by a decrease resulting from foreign exchange effects.

 

- 6 -

ORIX USA: Finance, investment and asset management in the Americas

 

		Six months ended  September 30, 2023  (millions of yen)				Six months ended  September 30, 2024  (millions of yen)				Change
										Amount   (millions of yen)				Percent   (%)
Segment Profits			21,491				16,607				(4,884	)			(23	)
		As of March 31, 2024 (millions of yen)				As of September 30, 2024 (millions of yen)				Change
										Amount (millions of yen)				Percent (%)
Segment Assets			1,694,484				1,540,075				(154,409	)			(9	)

Segment profits decreased 23% to ¥16,607 million compared to the same period of the previous fiscal year due to a decrease in gains on investment securities and dividends and an increase in selling, general and administrative expenses, offset by an increase in gains on sales of subsidiaries and equity method investments.

Segment assets decreased 9% to ¥1,540,075 million compared to the end of the previous fiscal year, primarily due to foreign exchange effects and a decrease in installment loans.

ORIX Europe: Asset management of global equity and fixed income

 

		Six months ended  September 30, 2023  (millions of yen)				Six months ended  September 30, 2024  (millions of yen)				Change
										Amount   (millions of yen)				Percent   (%)
Segment Profits			19,536				20,797				1,261				6
		As of March 31, 2024 (millions of yen)				As of September 30, 2024 (millions of yen)				Change
										Amount (millions of yen)				Percent (%)
Segment Assets			662,139				662,997				858				0

Segment profits increased 6% to ¥20,797 million compared to the same period of the previous fiscal year due to an increase in services income, offset by an increase in selling, general and administrative expenses.

Segment assets totaled ¥662,997 million, remaining relatively unchanged compared to the end of the previous fiscal year.

 

- 7 -

Asia and Australia: Finance and investment businesses in Asia and Australia

 

		Six months ended  September 30, 2023  (millions of yen)				Six months ended  September 30, 2024  (millions of yen)				Change
										Amount   (millions of yen)				Percent   (%)
Segment Profits			18,520				19,124				604				3
		As of March 31, 2024 (millions of yen)				As of September 30, 2024 (millions of yen)				Change
										Amount (millions of yen)				Percent (%)
Segment Assets			1,709,233				1,707,973				(1,260	)			(0	)

Segment profits increased 3% to ¥19,124 million compared to the same period of the previous fiscal year due to an increase in operating leases revenues.

Segment assets totaled ¥1,707,973 million, remaining relatively unchanged compared to the end of the previous fiscal year.

 

- 8 -

(2) Consolidated Financial Condition

Summary of Assets, Liabilities, Shareholders’ Equity

 

				As of March 31, 2024				As of September 30, 2024				Change
												Amount				Percent
Total Assets		(millions of yen)			16,322,100				16,339,977				17,877				0	%
(Segment Assets) *1					16,022,129				15,907,555				(114,574	)			(1	)%
Total Liabilities		(millions of yen)			12,297,490				12,358,564				61,074				0	%
(Short-term and Long-term Debt)					6,200,471				6,239,117				38,646				1	%
(Deposits)					2,245,835				2,295,120				49,285				2	%
Shareholders’ Equity *2		(millions of yen)			3,941,466				3,902,197				(39,269	)			(1	)%
Shareholders’ Equity Per Share *3		(yen)			3,422.94				3,418.59				(4.35	)			(0	)%

 

*Note 1:

Since April 1, 2024, the scope of segment assets was changed to include cash and cash equivalents, trade notes, accounts and other receivable, and others. As a result, segment data as of the end of fiscal 2024 have been retrospectively reclassified.

*Note 2:

“Shareholders’ Equity” refers to “Total ORIX Corporation Shareholders’ Equity” based on U.S. GAAP.

*Note 3:

“Shareholders’ Equity Per Share” is calculated using “Total ORIX Corporation Shareholders’ Equity”.

Total assets remained relatively unchanged at ¥16,339,977 million compared to the end of the previous fiscal year due to increases in cash and cash equivalents, investment in operating leases and equity method investments, offset by decreases in installment loans, investment in securities and trade notes, accounts and other receivable. In addition, segment assets decreased 1% to ¥15,907,555 million compared to the end of the previous fiscal year.

Total liabilities remained relatively unchanged at ¥12,358,564 million compared to the end of the previous fiscal year due to increases in short-term debt and deposits, offset by decreases in trade notes, accounts and other payable and long-term debt.

Shareholders’ equity decreased 1% to ¥3,902,197 million compared to the end of the previous fiscal year.

 

- 9 -

2. Financial Information

(1) Condensed Consolidated Balance Sheets (Unaudited)

(millions of yen)

Assets				As of March 31, 2024				As of September 30, 2024
Cash and Cash Equivalents					1,032,810				1,168,945
Restricted Cash					152,497				134,675
Net Investment in Leases					1,155,023				1,159,348
Installment Loans					3,958,814				3,826,463
The amounts which are measured at fair value by electing the fair value option are as follows:
March 31, 2024		¥129,959 million
September 30, 2024		¥130,873 million
Allowance for Credit Losses					(58,110	)			(53,756	)
Investment in Operating Leases					1,868,574				2,006,000
Investment in Securities					3,263,079				3,185,088
The amounts which are measured at fair value by electing the fair value option are as follows:
March 31, 2024		¥35,696 million
September 30, 2024		¥42,409 million
The amounts which are associated to available-for-sale debt securities are as follows:
March 31, 2024
Amortized Cost		¥3,015,940 million
Allowance for Credit Losses		¥(634) million
September 30, 2024
Amortized Cost		¥3,029,912 million
Allowance for Credit Losses		¥(540) million
Property under Facility Operations					689,573				696,139
Equity method investments					1,313,887				1,362,461
Trade Notes, Accounts and Other Receivable					401,368				354,546
Inventories					227,359				216,911
Office Facilities					248,458				245,046
Other Assets					2,068,768				2,038,111
The amounts which are measured at fair value by electing the fair value option are as follows:
March 31, 2024		¥2,786 million
September 30, 2024		¥2,859 million
Total Assets					16,322,100				16,339,977
Liabilities and Equity
Short-term Debt					574,095				744,478
Deposits					2,245,835				2,295,120
Trade Notes, Accounts and Other Payable					362,504				297,336
Policy Liabilities and Policy Account Balances					1,892,510				1,930,730
The amounts which are measured at fair value by electing the fair value option are as follows:
March 31, 2024		¥167,207 million
September 30, 2024		¥151,331 million
Current and Deferred Income Taxes					570,724				550,235
Long-term Debt					5,626,376				5,494,639
Other Liabilities					1,025,446				1,046,026
Total Liabilities					12,297,490				12,358,564
Redeemable Noncontrolling Interests					2,645				2,506
Commitments and Contingent Liabilities
Common Stock					221,111				221,111
Additional Paid-in Capital					233,457				233,955
Retained Earnings					3,259,730				3,378,114
Accumulated Other Comprehensive Income					357,148				234,098
Treasury Stock, at Cost					(129,980	)			(165,081	)
Total ORIX Corporation Shareholders’ Equity					3,941,466				3,902,197
Noncontrolling Interests					80,499				76,710
Total Equity					4,021,965				3,978,907
Total Liabilities and Equity					16,322,100				16,339,977

 

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Note: Breakdown of Accumulated Other Comprehensive Income (Loss)

 

		As of March 31, 2024				As of September 30, 2024
Accumulated Other Comprehensive Income (Loss)
Net unrealized gains (losses) on investment in securities			(250,806	)			(305,550	)
Impact of changes in policy liability discount rate			257,785				260,526
Debt valuation adjustments			84				9
Defined benefit pension plans			9,670				9,145
Foreign currency translation adjustments			324,208				261,985
Net unrealized gains on derivative instruments			16,207				7,983
Total			357,148				234,098

 

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(2) Condensed Consolidated Statements of Income (Unaudited)

(millions of yen)

		Six months ended September 30, 2023				Six months ended September 30, 2024
Revenues :
Finance revenues			171,642				164,734
Gains on investment securities and dividends			10,850				6,550
Operating leases			259,949				310,848
Life insurance premiums and related investment income			285,738				233,808
Sales of goods and real estate			173,800				190,874
Services income			457,977				496,819
Total Revenues			1,359,956				1,403,633
Expenses :
Interest expense			90,891				83,717
Costs of operating leases			176,894				192,799
Life insurance costs			222,097				166,863
Costs of goods and real estate sold			124,795				139,155
Services expense			267,177				290,952
Other (income) and expense			2,503				10,902
Selling, general and administrative expenses			302,265				314,225
Provision for credit losses			8,616				7,319
Write-downs of long-lived assets			538				506
Write-downs of securities			16				223
Total Expenses			1,195,792				1,206,661
Operating Income			164,164				196,972
Equity in Net Income of Equity method investments			16,675				28,516
Gains on Sales of Subsidiaries and Equity method investments and Liquidation Losses, net			3,628				31,503
Income before Income Taxes			184,467				256,991
Provision for Income Taxes			53,827				74,862
Net Income			130,640				182,129
Net Income (Loss) Attributable to the Noncontrolling Interests			2,502				(973	)
Net Income Attributable to the Redeemable Noncontrolling Interests			38				156
Net Income Attributable to ORIX Corporation Shareholders			128,100				182,946

 

Note:

The presentation of equity method investment has been changed since the fourth quarter of fiscal 2024. As a result, certain line items presented in our consolidated statements of income for the six months ended September 30, 2023 have been retrospectively reclassified for this change.

 

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(3) Condensed Consolidated Statements of Comprehensive Income (Unaudited)

 

						(millions of yen)
		Six months ended September 30, 2023				Six months ended September 30, 2024
Net Income :			130,640				182,129
Other comprehensive income (loss), net of tax:
Net change of unrealized gains (losses) on investment in securities			(100,412	)			(54,756	)
Impact of changes in policy liability discount rate			110,576				2,741
Net change of debt valuation adjustments			(123	)			(75	)
Net change of defined benefit pension plans			(89	)			(526	)
Net change of foreign currency translation adjustments			163,583				(63,533	)
Net change of unrealized gains (losses) on derivative instruments			2,408				(8,229	)
Total other comprehensive income (loss)			175,943				(124,378	)
Comprehensive Income			306,583				57,751
Comprehensive Income (Loss) Attributable to the Noncontrolling Interests			7,553				(2,132	)
Comprehensive Income (Loss) Attributable to the Redeemable Noncontrolling Interests			200				(13	)
Comprehensive Income Attributable to ORIX Corporation Shareholders			298,830				59,896

(4) Assumptions for Going Concern

There is no corresponding item.

(5) Significant Changes in Shareholders’ Equity

There is no corresponding item.

(6) Changes in Accounting Policies

(Adoption of New Accounting Standards)

In March 2023, Accounting Standards Update 2023-02 (“Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method”) was issued as the amendments to ASC 323 (“Investments—Equity Method and Joint Ventures”). This update expands the investments eligible to elect to apply the proportional amortization method to tax equity investments in similar tax credit programs other than the low-income housing tax credit (LIHTC). This update is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company and its subsidiaries adopted this update on April 1, 2024, on a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings as of the fiscal year of adoption. The effects of adopting this update on the Company and its subsidiaries’ financial position at the adoption date were a decrease of ¥157 million in other assets and a decrease of ¥157 million in retained earnings in the consolidated balance sheets.

 

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(7) Segment Information (Unaudited)

The financial information about the operating segments reported below is that which is available for each segment and evaluated regularly by the chief operating decision maker in charge of resource allocation and performance assessment.

An overview of the operations for each of the ten operating segments follows below.

 

Corporate Financial Services and Maintenance Leasing		:		Finance and fee business; leasing and rental of automobiles, electronic measuring instruments and ICT-related equipment
Real Estate		:		Real estate development, rental and management; facility operations; real estate asset management
PE Investment and Concession		:		Private equity investment and concession
Environment and Energy		:		Domestic and overseas renewable energy; electric power retailing; ESCO services; sales of solar panels; recycling and waste management
Insurance		:		Life insurance
Banking and Credit		:		Banking and consumer finance
Aircraft and Ships		:		Aircraft investment and management; ship-related finance and investment
ORIX USA		:		Finance, investment and asset management in the Americas
ORIX Europe		:		Asset management of global equity and fixed income
Asia and Australia		:		Finance and investment businesses in Asia and Australia

The accounting policies of the segments are almost the same as accounting policies for interim condensed consolidated financial statements except for the treatment of income tax expenses, net income attributable to noncontrolling interests, and net income attributable to redeemable noncontrolling interests. The chief operating decision maker evaluates the performance of the segments based on the amount equivalent to income before income taxes, net income attributable to noncontrolling interests and net income attributable to redeemable noncontrolling interests before the applicable tax effects. Income taxes are not included in segment profits or losses because management evaluates segments’ performance on a pre-tax basis. Most of selling, general and administrative expenses, including compensation costs that are directly related to the revenue generating activities of each segment and excluding the expenses that should be borne by ORIX Group as a whole, have been accumulated by and charged to each segment. Gains and losses that management does not consider for evaluating the performance of the segments, such as certain interest expenses and write-downs of certain long-lived assets and certain foreign exchange gains or losses (included in other (income) and expense) are excluded from the segment profits or losses, and are regarded as corporate items.

Assets attributed to each segment are total assets except for certain cash and head office assets.

The presentation of equity method investment has been changed since the fourth quarter of fiscal 2024. As a result, segment data for the six months ended September 30, 2023 have been retrospectively reclassified.

Since April 1, 2024, the interest expense allocation method for each segment was changed to include a part of interest expenses in corporate profits (losses) in the reconciliation of segment profits to the condensed consolidated financial statement amounts. As a result, segment data for the six months ended September 30, 2023 have been retrospectively reclassified.

Since April 1, 2024, the scope of segment assets was changed to include cash and cash equivalents, trade notes, accounts and other receivable, and others. As a result, segment data as of the end of fiscal 2024 have been retrospectively reclassified.

 

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Segment information for the six months ended September 30, 2023 and six months ended September 30, 2024 is as follows:

 

		Millions of yen
		Six months ended September 30, 2023
		Corporate Financial Services and Maintenance Leasing				Real Estate				PE Investment and Concession				Environment and Energy				Insurance				Banking and Credit				Aircraft and Ships
Finance revenues			31,398				3,008				814				720				144				39,630				4,051
Gains on investment securities and dividends			2,167				479				228				(8	)			0				187				232
Operating leases			132,122				24,289				19,957				40				0				0				21,867
Life insurance premiums and related investment income			0				0				0				0				287,026				0				0
Sales of goods and real estate			2,135				52,514				114,149				1,658				0				0				97
Services income			52,421				139,003				38,128				79,562				1,416				3,111				2,999
Total Segment Revenues			220,243				219,293				173,276				81,972				288,586				42,928				29,246
Interest expense			2,699				1,427				1,690				5,046				0				2,608				5,089
Costs of operating leases			95,428				12,537				13,352				9				0				0				10,278
Life insurance costs			0				0				0				0				222,032				0				0
Costs of goods and real estate sold			1,681				40,754				79,379				1,005				0				0				97
Services expense			28,361				118,397				26,666				53,908				0				3,436				506
Other (income) and expense			8,326				(301	)			(605	)			963				(3	)			(276	)			(2,973	)
Selling, general and administrative expenses			43,938				20,611				42,498				9,036				29,105				16,041				4,936
Provision for credit losses, and write-downs of long-lived assets and securities			388				434				191				25				0				4,116				(0	)
Total Segment Expenses			180,821				193,859				163,171				69,992				251,134				25,925				17,933
Equity in Net income (Loss) of equity method investments and others			1,951				2,076				(180	)			148				(1	)			(201	)			7,481
Segment Profits			41,373				27,510				9,925				12,128				37,451				16,802				18,794
Significant non-cash items:
Depreciation and amortization			75,456				9,118				13,537				13,780				6,159				708				10,602
Increase in policy liabilities and policy account balances			0				0				0				0				100,338				0				0
Expenditures for long-lived assets			88,875				29,607				9,568				26,808				224				4				126,481
		Millions of yen
		Six months ended September 30, 2023
		ORIX USA				ORIX Europe				Asia and Australia				Total
Finance revenues			57,662				1,053				34,208				172,688
Gains on investment securities and dividends			4,591				1,889				375				10,140
Operating leases			699				0				58,496				257,470
Life insurance premiums and related investment income			0				0				0				287,026
Sales of goods and real estate			231				0				153				170,937
Services income			24,554				101,332				11,847				454,373
Total Segment Revenues			87,737				104,274				105,079				1,352,634
Interest expense			24,363				141				16,225				59,288
Costs of operating leases			104				0				43,447				175,155
Life insurance costs			0				0				0				222,032
Costs of goods and real estate sold			139				0				145				123,200
Services expense			1,535				25,938				7,365				266,112
Other (income) and expense			(1,400	)			(196	)			(1,047	)			2,488
Selling, general and administrative expenses			41,581				61,258				20,000				289,004
Provision for credit losses, and write-downs of long-lived assets and securities			1,005				0				3,009				9,168
Total Segment Expenses			67,327				87,141				89,144				1,146,447
Equity in Net income (Loss) of equity method investments and others			1,081				2,403				2,585				17,343
Segment Profits			21,491				19,536				18,520				223,530
Significant non-cash items:
Depreciation and amortization			1,859				3,221				42,083				176,523
Increase in policy liabilities and policy account balances			0				0				0				100,338
Expenditures for long-lived assets			340				130				89,850				371,887

 

- 15 -

		Millions of yen
		Six months ended September 30, 2024
		Corporate Financial Services and Maintenance Leasing				Real Estate				PE Investment and Concession				Environment and Energy				Insurance				Banking and Credit				Aircraft and Ships
Finance revenues			30,890				2,467				5,978				616				159				28,818				3,333
Gains on investment securities and dividends			1,460				845				586				(8	)			0				65				139
Operating leases			139,859				37,842				20,605				39				0				0				41,900
Life insurance premiums and related investment income			0				0				0				0				235,014				0				0
Sales of goods and real estate			1,812				61,793				122,384				1,481				0				0				196
Services income			54,783				157,232				31,473				86,834				(1	)			1,567				5,734
Total Segment Revenues			228,804				260,179				181,026				88,962				235,172				30,450				51,302
Interest expense			3,278				1,172				1,655				6,211				81				2,745				8,563
Costs of operating leases			98,878				11,941				13,072				9				0				0				17,581
Life insurance costs			0				0				0				0				166,834				0				0
Costs of goods and real estate sold			1,489				49,789				84,951				836				0				0				199
Services expense			29,522				125,059				21,928				65,705				0				4,433				2,151
Other (income) and expense			8,757				703				(449	)			562				(140	)			106				(2,543	)
Selling, general and administrative expenses			45,051				20,873				43,194				10,828				27,539				10,635				5,004
Provision for credit losses, and write-downs of long-lived assets and securities			1,060				60				93				238				1				308				(0	)
Total Segment Expenses			188,035				209,597				164,444				84,389				194,315				18,227				30,955
Equity in Net income (Loss) of equity method investments and others			4,797				(225	)			30,415				(2,227	)			(0	)			884				11,664
Segment Profits			45,566				50,357				46,997				2,346				40,857				13,107				32,011
Significant non-cash items:
Depreciation and amortization			77,763				9,494				12,910				16,713				14,842				326				13,728
Increase in policy liabilities and policy account balances			0				0				0				0				41,053				0				0
Expenditures for long-lived assets			100,876				40,706				7,941				21,293				77				0				174,188
		Millions of yen
		Six months ended September 30, 2024
		ORIX USA				ORIX Europe				Asia and Australia				Total
Finance revenues			53,163				1,990				37,885				165,299
Gains on investment securities and dividends			(280	)			3,821				(47	)			6,581
Operating leases			292				0				67,510				308,047
Life insurance premiums and related investment income			0				0				0				235,014
Sales of goods and real estate			235				0				246				188,147
Services income			22,255				120,866				12,016				492,759
Total Segment Revenues			75,665				126,677				117,610				1,395,847
Interest expense			22,225				373				20,972				67,275
Costs of operating leases			649				0				48,902				191,032
Life insurance costs			0				0				0				166,834
Costs of goods and real estate sold			151				0				229				137,644
Services expense			854				32,629				7,599				289,880
Other (income) and expense			(2,284	)			4,609				(621	)			8,700
Selling, general and administrative expenses			45,360				69,026				21,782				299,292
Provision for credit losses, and write-downs of long-lived assets and securities			1,617				115				4,555				8,047
Total Segment Expenses			68,572				106,752				103,418				1,168,704
Equity in Net income (Loss) of equity method investments and others			9,514				872				4,932				60,626
Segment Profits			16,607				20,797				19,124				287,769
Significant non-cash items:
Depreciation and amortization			1,736				3,202				47,103				197,817
Increase in policy liabilities and policy account balances			0				0				0				41,053
Expenditures for long-lived assets			878				480				86,152				432,591

 

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