Answers, Custom Fit.

1ORIX Corporation Annual Report 2014

At ORIX Group, certain things are naturally inherited, regardless of the passage of time or personnel changes.
One of these unchanging factors is our approach to “breakthroughs.”
It is our innate approach to think through a problem to provide an answer that matches our clients’ needs.
We share this approach with all customers, and it is manifested in our brand slogan, “Answers, Custom Fit.”

Contents
01 Celebrating the 50th Anniversary
03
05
07

The History of ORIX
Trend in Net Income and Business Field Expansion
A Message from the Senior Chairman

09 Financial Highlights for the Year Ended March 31, 2014
11 A Message from the CEO
15 ORIX Value Creation
1519
21

5 Concepts of Value Creation
A Look at Our Balance Sheets
A Look at Our Assets and ROA

23 A Message from the CFO
25 Segment Overview
39 Corporate Governance
39
41
45
47

Management Team: Directors
Corporate Governance at ORIX
Comments from Outside Directors
Management Team: Executive Officers and Group Executives

49 Risk Management
57 For a Sustainable Society, Organization and Environment
63 Financial Section
75 About ORIX

ORIX Corporation Annual Report 2014

2Celebrating the 50th Anniversary

The History of ORIX

Unchanged for the Past 50 Years
Creating New Value

Standing on Our Own Two Feet

“Creating New Value” and “Standing on Our Own Two Feet”: These are the qualities that characterize ORIX, andwill continue to be integral elements that comprise the ORIX DNA.
In addition to tackling new challenges, we will always aspire to look ahead of time and seek out new market.
To fortify the unique “ORIX” business model, by continually seeking creative destruction,
we will endeavor to make the ORIX of tomorrow better than the ORIX of today.

Corporate Philosophy
ORIX is constantly anticipating market needs and working to contribute tosociety by developing leading financial services on a global scale and striving tooffer innovative products that create new value for customers.

Management Policy1	ORIX strives to meet the diverse needs of its customers and to deepen trust by constantly providing superior services.
2	ORIX aims to strengthen its base of operations and achieve sustained growth by integrating its resources
to promote synergies amongst different units.
3	ORIX makes efforts to develop a corporate culture that shares a sense of fulfillment and pride by developing personnel resources through corporate programs and promoting professional development.
4	ORIX aims to attain stable medium- and long-term growth in shareholder value by implementing theseinitiatives.

Action Guidelines
Creativity

Integration

Develop the flexibility and foresight to constantly
take actions that are creative and innovative.

Enhance ORIX Group strength by actively exchanging
knowledge, ideas, and experiences.

Answers, Custom Fit. 50 Years of ORIX

1964 Orient Leasing Co., Ltd. (now ORIX Corporation)
was established
Introduction of the new financing method of“leasing” in Japan3ORIX Corporation Annual Report 2014

a local subsidiary in Singapore
1972 EstablishedSingapore’s first leasing company, jointly

established with local financial institutions

1973 Listed on the First Sections of the Tokyo Stock

Exchange and the Osaka Securities Exchange
Only three years after being listed on the Second
Section of the Osaka Securities Exchange

1973 Established Orient Auto Leasing (nowORIX Auto Corporation)
Offering of a vehicle management
service in addition to the conventional
auto leasing service

The components essential to corporate management, including “pool of human capital,” “financialsoundness,” and “breadth, strength and profoundness of the network” have been all built up to theutmost strength during the past 50 years of our history.

1964Foundation

1989*

2014

Change of theCompany Name

The 50thAnniversary

Net Income—¥13.6¥186.8

Shareholders’Equity¥100¥136.2¥1,918.7

Employees

13

4,010

25,977

GlobalNetwork

1

millioncountry

billionbillion19

countries
and regions

Celebrating the 50th Anniversary

Changes over the Past 50 Years

billionbillion36

countries
and regions* As of September 30, 1988

leveraged leases for the first1985 Structured
time in Japan
Established the business framework,
while soliciting domestic investors

the real estate market
1986 Entered
Accumulated know-how, starting with thebusiness of leasing company dormitories

a local subsidiary in Pakistan
1986 EstablishedA foothold to expand business in the Middle
East market

the company name to ORIX
1989 Changed
Corporation

Acquired a professional baseball team in theprevious year, which enhanced theCompany’s name recognition significantly

ORIX Corporation Annual Report 2014

4

Celebrating the 50th Anniversary

Trend in Net Income and Business Field Expansion

ORIX started as a leasing company in 1964. Since then, we have continued to address challenges andpromote innovation by accommodating diversifying customer needs and changing economicenvironments.
For the past 50 years, ORIX’s business portfolio has continued to evolve, expanding its business fields
and global developments.
Since the year following its foundation, ORIX has continued to achieve profits, surviving multiple
economic crises without recognizing losses. For the FY2015.3, we aim to achieve record net income of¥210 billion.
Toward the next 50 years and beyond, ORIX will challenge itself to create new value and evolve its
business portfolio.

1986

1978

1971

1964

Ships/Aircraft

Lending

1973

1983

Investment
FY1989.3(Interim Results)

Automobiles

Leasing

FY1974.9
Oil Crisis

1964

1970

1975

Real Estate

FY1988.9
Black Monday

FY1979.9
Second Oil Crisis

1980

1985

Answers, Custom Fit. 50 Years of ORIX

ORIX Omaha Life Insurance (now1991 Established
ORIX Life Insurance Corporation)
Offering of simple and reasonable insurance
products

5

ORIX Corporation Annual Report 2014

the first leasing company to execute
1992 Became
the liquidation of receivables
Diversification of funding meansin the wind power generation business1995 Invested
The first step to enter the environment andenergy business fieldon the New York Stock Exchange
1998 Listed
Further strengthening the corporate
governance1990

FY2015.3

Net Income¥210

billion (Target)

FY2014.3¥186.8 billion
2010

2006

Investment Banking

Loan Servicing

1999

1991

Asset Management

Celebrating the 50th Anniversary

Net Income

Life Insurance
1998

Banking
FY2009.3
Collapse ofLehman Brothers

1995

FY1993.3
Bursting of the
Economic Bubble

1990

1995

in the Suginoi Hotel in Oita
2002 Invested
Prefecture
Expansion of the facilities operationbusiness

Environment/Energy

FY1998.3
Asian Currency
Crisis2000

the U.S. investment bank Houlihan
2006 Acquired
Lokey
Acquisition of expertise in the investment
advisory services

2005

Robeco Groep N.V.
2013 Acquired
Acceleration of “Finance + Services” withenhanced asset management expertise2010

2014 2015anniversary
2014 50thAspire to continue creating new value

ORIX Corporation Annual Report 20146

Celebrating the 50th Anniversary

A Message from the Senior Chairman

Continue Contributing to Economy andSociety with the “ORIX” Business Model

7

ORIX Corporation Annual Report 2014

ORIX started as a company with 13 employees and 100 million yen in capital.
Fifty years after its establishment, ORIX grew into a company with 26,000 employees and 1.9 trillion yen in shareholders’ equity in the FY2014.3. I believe thisoutcome was only achievable with the support and guidance provided by ourstakeholders including our shareholders, partners and customers, tremendous
contribution by our employees, and strong backing of society. Words cannot
sufficiently express my gratitude. Again, I would like to convey my profound appreciation to everyone.
Since its founding, ORIX has maintained two major concepts as its general policy;
one of which is “creating new value.” ORIX has its origin in providing leasing,which was a new business concept in Japan back when the Company was established. Although we have since then steered the Company into the direction ofdiversification and globalization, I have always managed the Company with a firm
mission in mind to constantly provide something new, that brings about newvalue to society.
The other concept that we have cherished is “standing on our own two feet,” orself-reliance. Maintaining autonomy involves a constant stream of tension that
if the management makes a mistake, a company may not survive. The environment surrounding ORIX has changed drastically over the past 50 years but wehave been fortunate to have always stayed profitable during these years excluding the first year in which the Company was established.
Creation of new value and self-reliance are the two major characteristics thatrepresent the “ORIX-way” and I hope that they will continue to be the core elements of the ORIX DNA going forward.
I have always believed contributing to the economy and society through corporate activities to be fundamental to corporate management. For this reason,
I have always emphasized originality and ingenuity, willingness to take on newchallenges, team play, and provision of fulfilling working environment.
I have also cherished a few things in regards to management policy, one of whichis to “conceptualize bold strategy while executing with caution and diligence.” I
have always tried to draw up a bold strategy, however, I have also been especially cautious with the execution of individual deals, and have developed eachbusiness in a careful manner.
I have also expanded the business in accordance with the philosophy of “venturinginto neighboring areas.” Currently, ORIX is comprised of six business segments
and different business units exist within each segment; however, we did nothave intentions to diversify our business at the beginning. Each business unit has
gradually been spreading into neighboring areas where they can maximize useof their own expertise. From its origin of leasing begun 50 years ago, ORIX has
strengthened its expertise to venture into the neighboring field and then developed a new expertise again to move onto the next nearby market to gradually
expand its business field. In short, the history of ORIX is essentially a repetition ofthese processes.
As a result, ORIX’s current businesses are widely diversified. Each of these businesses displays strong expertise that allows each of them to be self-sustainable.
However, individual segments are not considerably large. Rather, most of them
are still in their growth phase and are in the process of developing. At ORIX,
these businesses “Seamlessly coordinate” and exchange each others’ expertise
to deliver greater results and generate greater value. As a result, unlike conglomerates, ORIX is developing into a corporate group consisting of business units
with heightened expertise that coordinate in a multi-faceted way. I am firmly
convinced that we have no other comparable companies in the world, and that
we are developing a new business model of “ORIX.”I also believe that the most important assets at ORIX are our human resources.
ORIX currently has operations worldwide in 36 countries including Japan, but weare aiming to become a company that enables individual employees to demonstrate their capabilities and expertise to their fullest possible extent under theconcept of “Keep Mixed,” which promotes the creation of new value by melding
together of knowledge and expertise that come from diversity in nationality,age, sex, or previous work history.

Celebrating the 50th Anniversary

ORIX celebrated its 50th anniversary in April 2014. I have long been involved withthe management of the Company as CEO, but resigned as CEO and a Director
following the Annual General Meeting of Shareholders in June 2014 and assumed
the new role of Senior Chairman. It has been a true honor and privilege to have
served as an Executive and CEO for the majority of the Company’s 50-year history. Furthermore, I have been truly blessed to have the unflagging support fromour shareholders, which allowed me to carry out my duty to the fullest extent
and would like to express my sincere gratitude to all of our shareholders. As I
step down from CEO and a Director, I would like to reflect back on ORIX’s past,
while offering some of my insights into its future.

In its 50 year history, I believe ORIX is now in its strongest shape. It is in its bestform in various respects, including its financial condition, network in both Japanand overseas, human resources, and expertise, and is capable of aiming for a further growth. A business model developed by ORIX, which is centered on financebut also embraces the field of services, is a truly unique creation. Looking ahead,ORIX will venture into the next stage, leveraging this exceptional feature. The
Company’s next goal is to continue contributing to economic society that has
become global and hopefully become the leader in the global market.
I believe that a company will lose its significance unless it drives innovation. Moving dynamically and swiftly along with changes in the surrounding environment,and always looking ahead of time and seeking out new market in addition totackling new challenges are the qualities that will be necessary for ORIX to keep
growing in the next 50 years and the years after. The new management teamwill continue to strive to make the ORIX of tomorrow better than the ORIX of today by repeating creative destruction. The new management may bear a grave
responsibility to steer ORIX, which has grown into a company of a considerable
size. However, I have no doubt that the new management team possesses appropriate experience and ability to deliver to fulfill that responsibility and I hopethat you would provide an even stronger support to the Company. As for myself,
I wish to be of service from a new and different standpoint and will continue tosupport ORIX, which has begun to forge ahead into the next 50 years and towardfurther growth.
July 2014

Yoshihiko Miyauchi
Senior Chairman

ORIX Corporation Annual Report 20148