6-K
Orix Corp (IX)
Table of Contents
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OFFOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2024
Commission File Number: 001-14856
ORIX Corporation
(Translation of Registrant’s Name into English)
World TradeCenter 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 ☐
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Table of Contents
Material Contained in this Report
| 1. | ORIX’s Third Quarter Consolidated Financial Results (April 1, 2023 –December 31, 2023) filed with the Tokyo Stock Exchange on Wednesday, February 7, 2024. |
|---|
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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 : February 7, 2024 | By | /s/ Yasuaki Mikami |
| Yasuaki Mikami | ||
| Member of the Board of Directors<br><br><br>Senior Managing Executive Officer<br><br><br>Responsible for Corporate Function Unit<br><br><br>Responsible for Work Style Reform Project<br><br><br>ORIX Corporation |
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Consolidated Financial Results
April 1, 2023 – December 31, 2023
February 7, 2024
In preparing its consolidated financial information, ORIX Corporation (the “Company”) and its subsidiaries havecomplied with generally accepted accounting principles in the United States of America.
This document may contain forward-lookingstatements 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 todiffer 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 onForm 20-F filed with the U.S. Securities and Exchange Commission.
The Company believesthat 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. Inaddition, 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 anybenefits 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 tosuch 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, 2-4-1Hamamatsu-cho, Minato-Ku, Tokyo, 105-5135
JAPAN
Tel: +81-3-3435-3121 Fax: +81-3-3435-3154
E-mail: [email protected]
Table of Contents
Consolidated Financial Results from April 1, 2023 toDecember 31, 2023
(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 Nine Months Ended December 31, 2023
(1) Performance Highlights - Operating Results (Unaudited)
(millions of yen)
| Total<br>Revenues | Year-on-Year<br>Change | Operating<br>Income | Year-on-Year<br>Change | Incomebefore<br>IncomeTaxes | Year-on-Year<br>Change | Net Income<br>Attributable to<br>ORIX Corporation<br>Shareholders | Year-on-Year<br>Change | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2023 | 2,037,860 | 2.2 | % | 260,198 | 8.5 | % | 310,007 | 8.4 | % | 219,205 | 3.4 | % | ||||||||
| December 31, 2022 | 1,994,844 | — | 239,861 | — | 286,026 | — | 211,920 | — |
“Comprehensive Income Attributable to ORIX Corporation Shareholders” was ¥333,131 million for the nine months ended December 31, 2023 (year-on-year change was a 3.6% increase) and ¥321,427 million for the nine months ended December 31, 2022.
| *Note 1: | Accounting Standards Update 2018-12 (“Targeted Improvements to<br>the Accounting for Long-Duration Contracts”—ASC 944 (“Financial Services—Insurance”)) (hereinafter, “LDTI”) has been adopted since April 1, 2023, with the transition date of April 1, 2021, using the<br>modified retrospective transition approach. Although figures for the nine months ended December 31, 2022 have been retrospectively restated, the year-on-year change<br>rate has not been presented. | |||
|---|---|---|---|---|
| Basic<br>Earnings Per Share | Diluted<br>Earnings Per Share | |||
| --- | --- | --- | --- | --- |
| December 31, 2023 | 188.68 | 188.39 | ||
| December 31, 2022 | 179.08 | 178.86 | ||
| *Note 2: | Unless otherwise stated, all amounts shown herein are in millions of Japanese yen, except for per share and<br>dividend amounts, which are in single yen. | |||
| --- | --- |
(2) Performance Highlights - Financial Position (Unaudited)
| Total<br>Assets | Total<br>Equity | Shareholders’<br>Equity | Shareholders’<br>Equity Ratio | ||||||
|---|---|---|---|---|---|---|---|---|---|
| December 31, 2023 | 15,769,189 | 3,805,016 | 3,727,404 | 23.6 | % | ||||
| March 31, 2023 | 15,289,385 | 3,614,322 | 3,543,607 | 23.2 | % | ||||
| *Note 3: | “Shareholders’ Equity” refers to “Total ORIX Corporation Shareholders’<br>Equity.” | ||||||||
| --- | --- |
“Shareholders’ Equity Ratio” is the ratio of “Total ORIX Corporation Shareholders’ Equity” to “Total Assets.”
LDTI standard has been adopted since April 1, 2023, with the transition date of April 1,2021, using the modified retrospective transition approach.
2. Dividends (Unaudited)
| First<br>Quarter-end | Second<br>Quarter-end | Third<br>Quarter-end | Year-end | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2023 | — | 42.80 | — | 42.80 | 85.60 | |||||
| March 31, 2024 | — | 42.80 | — | — | — | |||||
| March 31, 2024 (Est.) | — | — | — | 51.20 | 94.00 |
3. Forecast for the Year Ending March 31, 2024 (Unaudited)
| Net Income<br>Attributable to<br>ORIX Corporation Shareholders | Year-on-Year<br>Change | ||||
|---|---|---|---|---|---|
| March 31, 2024 | 330,000 | 20.8 | % | ||
| *Note 4: | Although forward-looking statements in this document are based on information currently available to ORIX<br>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.<br> | ||||
| --- | --- |
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) Changes in Significant Consolidated Subsidiaries | 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 adoption of new accounting standards | Yes ( x ) No ( ) |
| 2. Other than those above | Yes ( ) No ( x ) |
(4) Number of Issued Shares (Ordinary Shares)
The number of issued shares, including treasury stock, was 1,234,849,342 as of December 31, 2023, and 1,234,849,342 as of March 31, 2023.
The number of treasury stock was 80,636,373 as of December 31, 2023, and 61,742,607 as of March 31,
The average number of outstanding shares was 1,161,753,483 for the nine months ended December 31, 2023, and 1,183,371,646 for the nine months ended December 31, 2022.
The Company’s shares held through the Board Incentive Plan Trust (2,800,866 shares as of December 31, 2023, and 2,800,866 shares as of March 31, 2023) 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, 2023 to December 31, 2023 are not subject to certified public accountant’s or audit firm’s quarterly review.
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1. Summary of Consolidated Financial Results
(1) Financial Highlights
Financial Results for theNine Months Ended December 31, 2023
| Nine months<br>ended<br>December 31, 2022 | Nine months<br>ended<br>December 31, 2023 | Change | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Amount | Percent | |||||||||
| Total Revenues | (millions of yen) | 1,994,844 | 2,037,860 | 43,016 | 2 | % | ||||
| Total Expenses | (millions of yen) | 1,754,983 | 1,777,662 | 22,679 | 1 | % | ||||
| Income before Income Taxes | (millions of yen) | 286,026 | 310,007 | 23,981 | 8 | % | ||||
| Net Income Attributable to ORIX Corporation Shareholders | (millions of yen) | 211,920 | 219,205 | 7,285 | 3 | % | ||||
| Earnings Per Share (Basic) | (yen) | 179.08 | 188.68 | 9.60 | 5 | % | ||||
| <br> (Diluted) | (yen) | 178.86 | 188.39 | 9.53 | 5 | % | ||||
| ROE (Annualized) *1 | (%) | 8.3 | 8.0 | (0.3 | ) | — | ||||
| ROA (Annualized) *2 | (%) | 1.96 | 1.88 | (0.08 | ) | — | ||||
| *Note 1: | ROE is the ratio of Net Income Attributable to ORIX Corporation Shareholders for the period to average ORIX<br>Corporation Shareholders’ Equity. | |||||||||
| --- | --- | |||||||||
| *Note 2: | ROA is calculated based on Net Income Attributable to ORIX Corporation Shareholders. | |||||||||
| --- | --- | |||||||||
| *Note 3: | Accounting Standards Update 2018-12 (“Targeted Improvements to<br>the Accounting for Long-Duration Contracts”—ASC 944 (“Financial Services—Insurance”)) (hereinafter, “LDTI”) has been adopted since April 1, 2023, with the transition date of April 1, 2021, using the<br>modified retrospective transition approach. | |||||||||
| --- | --- |
Overview of Business Performance (April 1, 2023 to December 31, 2023)
Total revenues for the nine months ended December 31, 2023 (hereinafter, “the third consolidated period”) increased 2% to ¥2,037,860 million compared to ¥1,994,844 million during the same period of the previous fiscal year due to increases in finance revenues, operating leases and life insurance premiums and related investment income despite a decrease in sales of goods and real estate.
Total expenses increased 1% to ¥1,777,662 million compared to ¥1,754,983 million during the same period of the previous fiscal year due to increases in interest expense and selling, general and administrative expenses despite a decrease in costs of goods and real estate sold.
Equity in net income of affiliates increased by ¥19,956 million to ¥38,231 million compared to the same period of the previous fiscal year, and gains on sales of subsidiaries and affiliates and liquidation losses, net decreased by ¥15,294 million to ¥11,578 million compared to the same period of the previous fiscal year.
Due to the above results, income before income taxes for the third consolidated period increased 8% to ¥310,007 million compared to ¥286,026 million during the same period of the previous fiscal year and net income attributable to ORIX Corporation shareholders increased 3% to ¥219,205 million compared to ¥211,920 million during the same period of the previous fiscal year.
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Segment Information
Total segment profits for the third consolidated period increased 9% to ¥319,236 million compared to the same period of the previous fiscal year.
Since April 1, 2023, segment profits have been calculated with a broadened scope of profit sharing for inter-segment collaboration. As a result, segment data for the nine months ended December 31, 2022 has been retrospectively restated.
LDTI standard has been adopted since April 1, 2023, with the transition date of April 1, 2021, using the modified retrospective transition approach. As a result of the adoption of LDTI, Insurance segment data for the previous fiscal year has been retrospectively restated. For further information, see “2. Financial Information (6) Changes in Accounting Policies - (Adoption of New Accounting Standards)”.
Segment information for the third consolidated period 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
| Nine months ended<br>December 31, 2022<br>(millions of yen) | Nine months ended<br>December 31, 2023<br>(millions of yen) | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Amount<br>(millions of yen) | Percent (%) | ||||||||
| Segment Profits | 58,166 | 59,187 | 1,021 | 2 | |||||
| As of March 31, 2023<br>(millions of yen) | As of December 31, 2023<br>(millions of yen) | Change | |||||||
| Amount<br>(millions of yen) | Percent<br>(%) | ||||||||
| Segment Assets | 1,514,070 | 1,505,679 | (8,391 | ) | (1 | ) |
Segment profits increased 2% to ¥59,187 million compared to the same period of the previous fiscal year due to an increase in gains on investment securities and dividends and an increase in operating leases revenues, despite an increase in selling, general and administrative expenses.
Segment assets decreased 1% to ¥1,505,679 million compared to the end of the previous fiscal year due to a decrease in installment loans, despite an increase in investment in operating leases.
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Real Estate : Real estate development, rental and management; facility operations; real estate asset management
| Nine months ended<br>December 31, 2022<br>(millions of yen) | Nine months ended<br>December 31, 2023<br>(millions of yen) | Change | ||||||
|---|---|---|---|---|---|---|---|---|
| Amount<br>(millions of yen) | Percent<br>(%) | |||||||
| Segment Profits | 24,536 | 51,434 | 26,898 | 110 | ||||
| As of March 31, 2023<br>(millions of yen) | As of December 31, 2023<br>(millions of yen) | Change | ||||||
| Amount<br>(millions of yen) | Percent<br>(%) | |||||||
| Segment Assets | 935,027 | 1,005,620 | 70,593 | 8 |
Segment profits increased 110% to ¥51,434 million compared to the same period of the previous fiscal year due to an increase in services income from operating facilities and an increase in equity in net income(loss) of affiliates.
Segment assets increased 8% to ¥1,005,620 million compared to the end of the previous fiscal year due to an increase in inventories.
PE Investmentand Concession : Private equity investment; concession
| Nine months ended<br>December 31, 2022<br>(millions of yen) | Nine months ended<br>December 31, 2023<br>(millions of yen) | Change | ||||||
|---|---|---|---|---|---|---|---|---|
| Amount<br>(millions of yen) | Percent<br>(%) | |||||||
| Segment Profits | 6,857 | 22,953 | 16,096 | 235 | ||||
| As of March 31, 2023<br>(millions of yen) | As of December 31, 2023<br>(millions of yen) | Change | ||||||
| Amount<br>(millions of yen) | Percent<br>(%) | |||||||
| Segment Assets | 605,471 | 800,829 | 195,358 | 32 |
Segment profits increased 235% to ¥22,953 million compared to the same period of the previous fiscal year due to an increase in equity in net income(loss) of affiliates at our three airports in Kansai in our concession business.
Segment assets increased 32% to ¥800,829 million compared to the end of the previous fiscal year due to an increase in installment loans and an increase in investment in securities in PE Investment.
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Environment and Energy : Domestic and overseas renewable energy; electric power retailing; ESCO services; sales of solar panels and battery energy storage system; recycling and waste management
| Nine months ended<br>December 31, 2022<br>(millions of yen) | Nine months ended<br>December 31, 2023<br>(millions of yen) | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Amount<br>(millions of yen) | Percent<br>(%) | ||||||||
| Segment Profits | 31,812 | 19,844 | (11,968 | ) | (38 | ) | |||
| As of March 31, 2023<br>(millions of yen) | As of December 31, 2023<br>(millions of yen) | Change | |||||||
| Amount<br>(millions of yen) | Percent<br>(%) | ||||||||
| Segment Assets | 773,617 | 845,999 | 72,382 | 9 |
Segment profits decreased 38% to ¥19,844 million compared to the same period of the previous fiscal year due to the absence of gains on the sale of shares of subsidiaries and affiliates resulting from the partial sale of an investee recorded in the previous fiscal year.
Segment assets increased 9% to ¥845,999 million compared to the end of the previous fiscal year, primarily due to foreign exchange effects.
Insurance : Life insurance
| Nine months ended<br>December 31, 2022<br>(millions of yen) | Nine months ended<br>December 31, 2023<br>(millions of yen) | Change | ||||||
|---|---|---|---|---|---|---|---|---|
| Amount<br>(millions of yen) | Percent<br>(%) | |||||||
| Segment Profits | 26,563 | 53,446 | 26,883 | 101 | ||||
| As of March 31, 2023<br>(millions of yen) | As of December 31, 2023<br>(millions of yen) | Change | ||||||
| Amount<br>(millions of yen) | Percent<br>(%) | |||||||
| Segment Assets | 2,050,412 | 2,205,723 | 155,311 | 8 |
Segment profits increased 101% to ¥53,446 million compared to the same period of the previous fiscal year due to a decrease in life insurance costs at ORIX Life Insurance Corporation as a result of reduced payouts to policy holders compared to the same period of the previous fiscal year.
Segment assets increased 8% to ¥2,205,723 million compared to the end of the previous fiscal year due to an increase in investment in securities.
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Banking and Credit : Banking; consumer finance
| Nine months ended<br>December 31, 2022<br>(millions of yen) | Nine months ended<br>December 31, 2023<br>(millions of yen) | Change | ||||||
|---|---|---|---|---|---|---|---|---|
| Amount<br>(millions of yen) | Percent<br>(%) | |||||||
| Segment Profits | 24,868 | 26,911 | 2,043 | 8 | ||||
| As of March 31, 2023<br>(millions of yen) | As of December 31, 2023<br>(millions of yen) | Change | ||||||
| Amount<br>(millions of yen) | Percent<br>(%) | |||||||
| Segment Assets | 2,698,747 | 2,750,529 | 51,782 | 2 |
Segment profits increased 8% to ¥26,911 million compared to the same period of the previous fiscal year due to an increase in finance revenues and an increase in gains on investment securities and dividends, despite an increase in the provision for credit losses.
Segment assets increased 2% to ¥2,750,529 million compared to the end of the previous fiscal year due to an increase in installment loans.
Aircraft and Ships : Aircraft investment and management; ship-related finance and investment
| Nine months ended<br>December 31, 2022<br>(millions of yen) | Nine months ended<br>December 31, 2023<br>(millions of yen) | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Amount<br>(millions of yen) | Percent<br>(%) | ||||||||
| Segment Profits | 17,007 | 16,118 | (889 | ) | (5 | ) | |||
| As of March 31, 2023<br>(millions of yen) | As of December 31, 2023<br>(millions of yen) | Change | |||||||
| Amount<br>(millions of yen) | Percent<br>(%) | ||||||||
| Segment Assets | 742,890 | 866,074 | 123,184 | 17 |
Segment profits decreased 5% to ¥16,118 million compared to the same period of the previous fiscal year due to the absence of operating leases revenues in our ship-related business resulting from the sale of owned vessels recorded in the previous fiscal year.
Segment assets increased 17% to ¥866,074 million compared to the end of the previous fiscal year due to an increase in investment in operating leases and an increase in investment in affiliates resulting from foreign exchange effects.
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ORIX USA : Finance, investment and asset management in the Americas
| Nine months ended<br>December 31, 2022<br>(millions of yen) | Nine months ended<br>December 31, 2023<br>(millions of yen) | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Amount<br>(millions of yen) | Percent<br>(%) | ||||||||
| Segment Profits | 33,032 | 27,832 | (5,200 | ) | (16 | ) | |||
| As of March 31, 2023<br>(millions of yen) | As of December 31, 2023<br>(millions of yen) | Change | |||||||
| Amount<br>(millions of yen) | Percent<br>(%) | ||||||||
| Segment Assets | 1,462,067 | 1,451,242 | (10,825 | ) | (1 | ) |
Segment profits decreased 16% to ¥27,832 million compared to the same period of the previous fiscal year due to a decrease in gains on investment securities and dividends, despite an increase in services income.
Segment assets decreased 1% to ¥1,451,242 million compared to the end of the previous fiscal year due to a decrease in installment loans, despite an overall increase due to foreign exchange effects.
ORIX Europe : Asset management of global equity and fixed income
| Nine months ended<br>December 31, 2022<br>(millions of yen) | Nine months ended<br>December 31, 2023<br>(millions of yen) | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Amount<br>(millions of yen) | Percent<br>(%) | ||||||||
| Segment Profits | 35,893 | 20,815 | (15,078 | ) | (42 | ) | |||
| As of March 31, 2023<br>(millions of yen) | As of December 31, 2023<br>(millions of yen) | Change | |||||||
| Amount<br>(millions of yen) | Percent<br>(%) | ||||||||
| Segment Assets | 417,941 | 444,895 | 26,954 | 6 |
Segment profits decreased 42% to ¥20,815 million compared to the same period of the previous fiscal year due to an increase in interest expense related to the investment in ORIX Corporation Europe N.V.
Segment assets increased 6% to ¥444,895 million compared to the end of the previous fiscal year, primarily due to foreign exchange effects.
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Asia and Australia : Finance and investment businesses in Asia and Australia
| Nine months ended<br>December 31, 2022<br>(millions of yen) | Nine months ended<br>December 31, 2023<br>(millions of yen) | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Amount<br>(millions of yen) | Percent<br>(%) | ||||||||
| Segment Profits | 34,457 | 20,696 | (13,761 | ) | (40 | ) | |||
| As of March 31, 2023<br>(millions of yen) | As of December 31, 2023<br>(millions of yen) | Change | |||||||
| Amount<br>(millions of yen) | Percent<br>(%) | ||||||||
| Segment Assets | 1,395,096 | 1,558,524 | 163,428 | 12 |
Segment profits decreased 40% to ¥20,696 million compared to the same period of the previous fiscal year due to the absence of gains on the sales of subsidiaries and affiliates due to the sale of certain investees recorded in the same period of the previous fiscal year and an increase in credit loss expense.
Segment assets increased 12% to ¥1,558,524 million compared to the end of the previous fiscal year due to overall foreign exchange effects and an increase in net investment in leases.
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(2) Consolidated Financial Condition
Summary of Assets, Liabilities, Shareholders’ Equity
| As of March 31,<br>2023 | As of December 31,<br>2023 | Change | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Amount | Percent | |||||||||
| Total Assets | (millions of yen) | 15,289,385 | 15,769,189 | 479,804 | 3 | % | ||||
| (Segment Assets) | 12,595,338 | 13,435,114 | 839,776 | 7 | % | |||||
| Total Liabilities | (millions of yen) | 11,674,118 | 11,962,328 | 288,210 | 2 | % | ||||
| (Short-term and Long-term Debt) | 5,718,519 | 5,980,619 | 262,100 | 5 | % | |||||
| (Deposits) | 2,246,345 | 2,228,454 | (17,891 | ) | (1 | )% | ||||
| Shareholders’ Equity *1 | (millions of yen) | 3,543,607 | 3,727,404 | 183,797 | 5 | % | ||||
| Shareholders’ Equity Per Share *2 | (yen) | 3,027.93 | 3,237.25 | 209.32 | 7 | % | ||||
| *Note 1: | Shareholders’ Equity refers to ORIX Corporation Shareholders’ Equity based on U.S. GAAP.<br> | |||||||||
| --- | --- | |||||||||
| *Note 2: | Shareholders’ Equity Per Share is calculated using total ORIX Corporation Shareholders’ Equity.<br> | |||||||||
| --- | --- | |||||||||
| *Note 3: | LDTI has been adopted since April 1, 2023, with the transition date of April 1, 2021, using the<br>modified retrospective transition approach. | |||||||||
| --- | --- |
Total assets increased 3% to ¥15,769,189 million compared to the end of the previous fiscal year due to increases in net investment in leases, investment in operating leases, investment in securities and investments in affiliates despite a decrease in cash and cash equivalents. In addition, segment assets increased 7% to ¥13,435,114 million compared to the end of the previous fiscal year.
Total liabilities increased 2% to ¥11,962,328 million compared to the end of the previous fiscal year due to increases in short- and long-term debt despite a decrease in trade notes, accounts and other payable.
Shareholders’ equity increased 5% to ¥3,727,404 million compared to the end of the previous fiscal year.
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2. Financial Information
(1) Condensed Consolidated Balance Sheets (Unaudited)
(millions of yen)
| Assets | As of December 31,2023 | |||||
|---|---|---|---|---|---|---|
| Cash and Cash Equivalents | 1,231,860 | 904,289 | ||||
| Restricted Cash | 135,048 | 140,806 | ||||
| Net Investment in Leases | 1,087,563 | 1,157,610 | ||||
| Installment Loans | 3,877,602 | 3,890,560 | ||||
| The amounts which are measured at fair value by electing the fair value option are as<br>follows: | ||||||
| March 31, 2023 | 197,041 million | |||||
| December 31, 2023 | 121,135 million | |||||
| Allowance for Credit Losses | (64,723 | ) | (68,031 | ) | ||
| Investment in Operating Leases | 1,537,178 | 1,723,133 | ||||
| Investment in Securities | 2,940,858 | 3,274,553 | ||||
| The amounts which are measured at fair value by electing the fair value option are as<br>follows: | ||||||
| March 31, 2023 | 22,874 million | |||||
| December 31, 2023 | 27,266 million | |||||
| The amounts which are associated to available-for-sale debt securities are as follows: | ||||||
| March 31, 2023 | ||||||
| Amortized Cost | 2,488,858 million | |||||
| Allowance for Credit Losses | (144) million | |||||
| December 31, 2023 | ||||||
| Amortized Cost | 2,866,811 million | |||||
| Allowance for Credit Losses | (594) million | |||||
| Property under Facility Operations | 620,994 | 661,337 | ||||
| Investment in Affiliates | 1,000,704 | 1,101,560 | ||||
| The amounts which are measured at fair value by electing the fair value option are as<br>follows: | ||||||
| March 31, 2023 | 2,511 million | |||||
| December 31, 2023 | 5,737 million | |||||
| Trade Notes, Accounts and Other Receivable | 441,803 | 381,522 | ||||
| Inventories | 169,021 | 231,186 | ||||
| Office Facilities | 253,649 | 249,468 | ||||
| Other Assets | 2,057,828 | 2,121,196 | ||||
| The amounts which are measured at fair value by electing the fair value option are as<br>follows: | ||||||
| March 31, 2023 | 4,676 million | |||||
| December 31, 2023 | 3,433 million | |||||
| Total Assets | 15,289,385 | 15,769,189 | ||||
| Liabilities and Equity | ||||||
| Short-term Debt | 508,796 | 646,903 | ||||
| Deposits | 2,246,345 | 2,228,454 | ||||
| Trade Notes, Accounts and Other Payable | 366,851 | 330,553 | ||||
| Policy Liabilities and Policy Account Balances | 1,832,057 | 1,858,493 | ||||
| The amounts which are measured at fair value by electing the fair value option are as<br>follows: | ||||||
| March 31, 2023 | 163,734 million | |||||
| December 31, 2023 | 157,813 million | |||||
| Current and Deferred Income Taxes | 454,262 | 509,011 | ||||
| Long-term Debt | 5,209,723 | 5,333,716 | ||||
| Other Liabilities | 1,056,084 | 1,055,198 | ||||
| Total Liabilities | 11,674,118 | 11,962,328 | ||||
| Redeemable Noncontrolling Interests | 945 | 1,845 | ||||
| Commitments and Contingent Liabilities | ||||||
| Common Stock | 221,111 | 221,111 | ||||
| Additional Paid-in Capital | 233,169 | 233,750 | ||||
| Retained Earnings | 3,054,448 | 3,173,754 | ||||
| Accumulated Other Comprehensive Income | 156,135 | 269,896 | ||||
| Treasury Stock, at Cost | (121,256 | ) | (171,107 | ) | ||
| Total ORIX Corporation Shareholders’ Equity | 3,543,607 | 3,727,404 | ||||
| Noncontrolling Interests | 70,715 | 77,612 | ||||
| Total Equity | 3,614,322 | 3,805,016 | ||||
| Total Liabilities and Equity | 15,289,385 | 15,769,189 |
All values are in Japanese Yen.
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| Note 1: | Breakdown of Accumulated Other Comprehensive Income (Loss) | |||||
|---|---|---|---|---|---|---|
| As of March 31,2023 | As of December 31,2023 | |||||
| --- | --- | --- | --- | --- | --- | --- |
| Accumulated Other Comprehensive Income (Loss) | ||||||
| Net unrealized gains (losses) on investment in securities | (183,034 | ) | (236,108 | ) | ||
| Impact of changes in policy liability discount rate | 164,516 | 229,182 | ||||
| Debt valuation adjustments | 275 | 126 | ||||
| Defined benefit pension plans | (3,617 | ) | (3,695 | ) | ||
| Foreign currency translation adjustments | 155,912 | 261,378 | ||||
| Net unrealized gains on derivative instruments | 22,083 | 19,013 | ||||
| Total | 156,135 | 269,896 | ||||
| Note 2: | LDTI standard has been adopted since April 1, 2023, with the transition date of April 1, 2021,<br>using the modified retrospective transition approach. | |||||
| --- | --- |
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(2) Condensed Consolidated Statements of Income (Unaudited)
(millions of yen)
| Nine months<br>endedDecember 31, 2022 | Nine months<br>endedDecember 31, 2023 | ||||
|---|---|---|---|---|---|
| Revenues : | |||||
| Finance revenues | 237,008 | 258,839 | |||
| Gains on investment securities and dividends | 19,168 | 16,617 | |||
| Operating leases | 368,760 | 391,436 | |||
| Life insurance premiums and related investment income | 356,317 | 394,012 | |||
| Sales of goods and real estate | 316,979 | 261,439 | |||
| Services income | 696,612 | 715,517 | |||
| Total Revenues | 1,994,844 | 2,037,860 | |||
| Expenses : | |||||
| Interest expense | 88,631 | 138,594 | |||
| Costs of operating leases | 249,541 | 266,402 | |||
| Life insurance costs | 287,792 | 300,798 | |||
| Costs of goods and real estate sold | 272,979 | 187,249 | |||
| Services expense | 421,259 | 410,379 | |||
| Other (income) and expense | 12,373 | 187 | |||
| Selling, general and administrative expenses | 412,287 | 458,936 | |||
| Provision for credit losses | 7,707 | 14,212 | |||
| Write-downs of long-lived assets | 1,807 | 643 | |||
| Write-downs of securities | 607 | 262 | |||
| Total Expenses | 1,754,983 | 1,777,662 | |||
| Operating Income | 239,861 | 260,198 | |||
| Equity in Net Income of Affiliates | 18,275 | 38,231 | |||
| Gains on Sales of Subsidiaries and Affiliates and Liquidation Losses, net | 26,872 | 11,578 | |||
| Bargain Purchase Gain | 1,018 | 0 | |||
| Income before Income Taxes | 286,026 | 310,007 | |||
| Provision for Income Taxes | 68,836 | 92,382 | |||
| Net Income | 217,190 | 217,625 | |||
| Net Income (Loss) Attributable to the Noncontrolling Interests | 5,247 | (1,645 | ) | ||
| Net Income Attributable to the Redeemable Noncontrolling Interests | 23 | 65 | |||
| Net Income Attributable to ORIX Corporation Shareholders | 211,920 | 219,205 | |||
| Note: | LDTI standard has been adopted since April 1, 2023, with the transition date of April 1, 2021,<br>using the modified retrospective transition approach. | ||||
| --- | --- |
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(3) Condensed Consolidated Statements of Comprehensive Income (Unaudited)
| (millions of yen) | ||||||
|---|---|---|---|---|---|---|
| Nine months<br>endedDecember 31, 2022 | Nine months<br>endedDecember 31, 2023 | |||||
| Net Income : | 217,190 | 217,625 | ||||
| Other comprehensive income (loss), net of tax: | ||||||
| Net change of unrealized gains (losses) on investment in securities | (182,383 | ) | (53,066 | ) | ||
| Impact of changes in policy liability discount rate | 169,383 | 64,666 | ||||
| Net change of debt valuation adjustments | 12 | (149 | ) | |||
| Net change of defined benefit pension plans | (192 | ) | (84 | ) | ||
| Net change of foreign currency translation adjustments | 107,330 | 106,651 | ||||
| Net change of unrealized gains (losses) on derivative instruments | 21,177 | (3,012 | ) | |||
| Total other comprehensive income | 115,327 | 115,006 | ||||
| Comprehensive Income | 332,517 | 332,631 | ||||
| Comprehensive Income (Loss) Attributable to the Noncontrolling Interests | 11,065 | (639 | ) | |||
| Comprehensive Income Attributable to the Redeemable Noncontrolling Interests | 25 | 139 | ||||
| Comprehensive Income Attributable to ORIX Corporation Shareholders | 321,427 | 333,131 | ||||
| Note: | LDTI standard has been adopted since April 1, 2023, with the transition date of April 1, 2021,<br>using the modified retrospective transition approach. | |||||
| --- | --- |
(4) Assumptions for Going Concern
There is no corresponding item.
(5)Significant Changes in Shareholders’ Equity
There is no corresponding item.
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(6) Changes in Accounting Policies
(Adoption of New Accounting Standards)
In August 2018, Accounting Standards Update 2018-12 (“Targeted Improvements to the Accounting for Long-Duration Contracts”—ASC 944 (“Financial Services—Insurance”)) was issued, and the original effective date was deferred by two years by related amendments which were issued thereafter. These updates change the recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. These updates require an insurance entity to review and, if there is a change, update cash flow assumptions at least annually and to update the discount rate used for the liability for future policy benefits at each reporting date for nonparticipating traditional long-duration and limited-payment contracts. The effect of updating the discount rate is recognized in other comprehensive income (loss). These updates also require market risk benefits to be measured at fair value, and simplify amortization of deferred policy acquisition costs. Furthermore, these updates require additional disclosures for long-duration contracts. These updates are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early application is permitted. For the liability for future policy benefits and deferred policy acquisition costs, these updates are applied to contracts in force as of the beginning of the earliest period presented (hereinafter, “the transition date” of these updates) on a modified retrospective basis, and an insurance entity may elect to apply retrospectively. For the market risk benefits, these updates are applied retrospectively at the transition date, and the difference between fair value and carrying value requires an adjustment to retained earnings at the transition date. The cumulative effect of changes in the discount rates between contract inception date and the transition date should be recognized in accumulated other comprehensive income at the transition date. The Company and its subsidiaries adopted these updates on April 1, 2023, with the transition date of April 1, 2021, using the modified retrospective transition approach. Upon adoption of these updates, the measurement method of the liability for future policy benefits, etc. have been changed. In addition, as of the transition date, the effect of the adoption on the Company and its subsidiaries’ financial position was an increase of ¥28,937 million in policy liabilities and policy account balances and a decrease of ¥24,641 million in impact of changes in policy liability discount rate (accumulated other comprehensive income (loss)) on the consolidated balance sheet. These were due to changes in the applicable discount rate resulting from fluctuation in interest rates (mainly a decline in Japanese yen interest rates). The balance of deferred policy acquisition costs (included in other assets) immediately before the transition date were carried forward upon transition. As of and for the fiscal year ended March 31, 2022, the effect of the adoption of LDTI on the Company and its subsidiaries’ results of operations and financial position was an increase of ¥10,012 million in deferred policy acquisition costs (included in other assets), a decrease of ¥50,925 million in policy liabilities and policy account balances, an increase of ¥37,536 million in impact of changes in policy liability discount rate (accumulated other comprehensive income (loss)), and an increase of ¥5,241 million in retained earnings in the consolidated balance sheet, and a decrease of ¥4,571 million in life insurance costs in the consolidated statement of income. These were due mainly to changes in the applicable discount rate resulting from fluctuation in interest rates (mainly an increase in US dollar interest rates), and a change in the amortization period of deferred policy acquisition costs. Furthermore, as of and for the fiscal year ended March 31, 2023, the effect of the adoption of these updates on the Company and its subsidiaries’ results of operations and financial position was an increase of ¥23,194 million in deferred policy acquisition costs (included in other assets), a decrease of ¥233,309 million in policy liabilities and policy account balances, an increase of ¥164,516 million in impact of changes in policy liability discount rate (accumulated other comprehensive income (loss)), and an increase of ¥22,506 million in retained earnings in the consolidated balance sheet, and a decrease of ¥25,010 million in life insurance costs in the consolidated statement of income. These were due mainly to changes in the applicable discount rate resulting from fluctuation in interest rates (mainly an increase in US dollar interest rates), reversals of policy liabilities and policy account balances due to updated net insurance premium rates (resulting from variances between actual and expected benefits paid), and changes in the amortization period of deferred policy acquisition costs.
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(7) Segment Information (Unaudited)
Segment Information by Sector
| (millions of yen) | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nine Months ended<br>December 31, 2022 | Nine Months ended<br>December 31, 2023 | March 31,2023 | December 31,2023 | |||||||||||
| Segment<br>Revenues | Segment<br>Profits | Segment<br>Revenues | Segment<br>Profits | Segment<br>Assets | Segment<br>Assets | |||||||||
| Corporate Financial Services and Maintenance Leasing | 321,647 | 58,166 | 331,794 | 59,187 | 1,514,070 | 1,505,679 | ||||||||
| Real Estate | 288,293 | 24,536 | 337,365 | 51,434 | 935,027 | 1,005,620 | ||||||||
| PE Investment and Concession | 312,090 | 6,857 | 269,064 | 22,953 | 605,471 | 800,829 | ||||||||
| Environment and Energy | 168,419 | 31,812 | 123,951 | 19,844 | 773,617 | 845,999 | ||||||||
| Insurance | 360,085 | 26,563 | 397,875 | 53,446 | 2,050,412 | 2,205,723 | ||||||||
| Banking and Credit | 62,324 | 24,868 | 65,059 | 26,911 | 2,698,747 | 2,750,529 | ||||||||
| Aircraft and Ships | 42,369 | 17,007 | 44,809 | 16,118 | 742,890 | 866,074 | ||||||||
| ORIX USA | 135,261 | 33,032 | 133,471 | 27,832 | 1,462,067 | 1,451,242 | ||||||||
| ORIX Europe | 157,653 | 35,893 | 164,419 | 20,815 | 417,941 | 444,895 | ||||||||
| Asia and Australia | 142,719 | 34,457 | 160,741 | 20,696 | 1,395,096 | 1,558,524 | ||||||||
| Segment Total | 1,990,860 | 293,191 | 2,028,548 | 319,236 | 12,595,338 | 13,435,114 | ||||||||
| Difference between Segment Total and Consolidated Amounts | 3,984 | (7,165 | ) | 9,312 | (9,229 | ) | 2,694,047 | 2,334,075 | ||||||
| Consolidated Amounts | 1,994,844 | 286,026 | 2,037,860 | 310,007 | 15,289,385 | 15,769,189 | ||||||||
| Note 1: | The Company evaluates the performance of segments based on income before income taxes, adjusted for net<br>income attributable to the noncontrolling interests and net income attributable to the redeemable noncontrolling interests before applicable tax effect. Tax expenses are not included in segment profits. | |||||||||||||
| --- | --- | |||||||||||||
| Note 2: | Since April 1, 2023, segment profits have been calculated with a broadened scope of profit<br>sharing for inter-segment collaboration. As a result, segment data for the nine months ended December 31, 2022 has been retrospectively restated. | |||||||||||||
| --- | --- | |||||||||||||
| Note 3: | LDTI standard has been adopted since April 1, 2023, with the transition date of April 1,<br>2021, using the modified retrospective transition approach. As a result of the adoption of LDTI, Insurance segment data for the previous fiscal year has been retrospectively restated. For further information, see “2. Financial Information<br>(6) Changes in Accounting Policies - (Adoption of New Accounting Standards)”. | |||||||||||||
| --- | --- | |||||||||||||
| Note 4: | Inter-segment transactions are included in segment revenues, and eliminations of inter-segment<br>transactions are included in the difference between segment total and consolidated amounts. | |||||||||||||
| --- | --- |
(8) Subsequent Events
Cancellation of Own Shares
The Company cancelled its own shares pursuant to the share cancellation policy approved at the Board of Directors meeting held on October 28, 2019. The details of the cancellation of the Company’s own shares subsequent to the balance sheet date are as follows:
| • Class of shares cancelled | Common shares |
|---|---|
| • Number of shares cancelled | 19,888,288 shares |
| • Cancellation date | January 19, 2024. |
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