Edgar Filing: ORIX CORP

Form 6-K

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 February, 2006.

ORIX Corporation

(Translation of Registrant’s Name into English)

Mita NN Bldg., 4-1-23 Shiba, Minato-Ku,

Tokyo, 108-0014, 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 x Form 40-F ¨

(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes ¨ No x

Table of Documents Filed


		Page
1.	ORIX’s Third Quarter Consolidated Financial Results (April 1, 2005 - December 31, 2005) filed with the Tokyo Stock Exchange on Tuesday, February 7, 2006.

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 8, 2006	By	/s/ Shunsuke Takeda
		Shunsuke Takeda
		Director
		Vice Chairman and CFO
		ORIX Corporation

Consolidated Financial Results

April 1, 2005 – December 31, 2005

February 7, 2006

In preparing its consolidated financial information, ORIX Corporation and its subsidiaries have complied with accounting principles generally accepted in the United States of America, except as modified to account for stock splits in accordance with the usual practice in Japan.

U.S. Dollar amounts have been calculated at Yen 118.07 to $1.00, the approximate exchange rate prevailing at December 31, 2005.

These documents may contain forward-looking statements about expected future events and financial results that involve risks and uncertainties. Such statements are based on our 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 annual report on Form 20-F filed with the United States Securities and Exchange Commission.

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

For further information please contact:

Corporate Communications

ORIX Corporation

Mita NN Bldg., 4-1-23 Shiba, Minato-ku, Tokyo 108-0014

JAPAN

Tel: +81-3-5419-5102 Fax: +81-3-5419-5901

E-mail: raymond_spencer@orix.co.jp

Consolidated Financial Results from April 1, 2005 to December 31, 2005

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


Corporate Name:		ORIX Corporation
Listed Exchanges:		Tokyo Stock Exchange (Securities No. 8591)
		Osaka Securities Exchange
		New York Stock Exchange (Trading Symbol : IX)
Head Office:		Tokyo JAPAN
		Tel: +81-3-5419-5102
		(URL http://www.orix.co.jp/grp/ir_e/ir_index.htm)

1. Performance Highlights for the Nine Months Ended December 31, 2005 and 2004, and the Year Ended March 31, 2005

(1) Performance Highlights - Operating Results (Unaudited)


	*(millions of JPY)1**
	Total Revenues	Year-on-Year Change		Operating Income	Year-on-Year Change		Income before Income Taxes*2	Year-on-Year Change
December 31, 2005	658,802	5.8	%	168,348	84.8	%	192,023	70.7	%
December 31, 2004	622,714	17.3	%	91,116	33.4	%	112,466	36.5	%
March 31, 2005	900,034	—		128,942	—		152,332	—

	Net Income	Year-on-Year Change		Basic Earnings Per Share			Diluted Earnings *Per Share3**
December 31, 2005	126,097	86.2	%	1,434.39			1,359.01
December 31, 2004	67,718	47.6	%	808.27			743.17
March 31, 2005	91,496	—		1,087.82			1,002.18


1. Equity in Net Income of Affiliates was a net gain of JPY 20,716 million for the nine months ended December 31, 2005, a net gain of JPY 17,803 million for the nine months ended December 31, 2004 and a net gain of JPY 20,043 million for the year ended March 31, 2005.
2. The average number of shares was 87,909,798 for the nine months ended December 31, 2005, 83,781,217 for the nine months ended December 31, 2004 and 84,110,243 for the year ended March 31, 2005.
3. Adoption of simplified accounting method	Yes ( x )	No ( )
4. Changes in Accounting Principles	Yes ( )	No ( x )	(except for adoptions of new accounting principles)
5. Changes in Numbers of Consolidated Subsidiaries and Affiliates	Yes ( x )	No ( )
Additions: Consolidated Subsidiaries 7, Affiliates 5	Deletions: Consolidated Subsidiaries 14, Affiliates 7


*Note 1:		Unless otherwise stated, all amounts shown herein are in millions of Japanese yen or millions of U.S. dollars, except for Per Share amounts which are in single yen.
*Note 2:		“Income before Income Taxes” as used throughout the report represents “Income before Discontinued Operations and Income Taxes.”
*Note 3:		Diluted earnings per share reflects application of accounting for the effect of contingently convertible instruments set forth in EITF Issue No.04-8.

(2) Performance Highlights - Financial Position (Unaudited)


	Total Assets	Shareholders’ Equity	Shareholders’ Equity Ratio		Shareholders’ Equity Per Share
December 31, 2005	6,686,456	898,828	13.4	%	10,099.03
December 31, 2004	5,873,033	641,332	10.9	%	7,642.86
March 31, 2005	6,068,953	727,333	12.0	%	8,322.96

1. The number of outstanding shares was 89,001,424 as of December 31, 2005, 83,912,548 as of December 31, 2004 and 87,388,706 as of March 31, 2005.

(3) Performance Highlights - Cash Flows (Unaudited)


	Cash Flows from Operating Activities	Cash Flows from Investing Activities		Cash Flows from Financing Activities	Cash and Cash Equivalents at End of Period
December 31, 2005	140,718	(466,715	)	315,286	135,931
December 31, 2004	73,554	(334,182	)	188,573	80,129
March 31, 2005	126,467	(408,004	)	274,343	145,380

2. Forecasts for the Year Ending March 31, 2006 (Unaudited)


Fiscal Year	Total Revenues	Income before Income Taxes	Net Income
March 31, 2006	900,000	245,000	155,000

Note : Basic Earnings Per Share is forecasted to be JPY 1,741.55.

Summary of Consolidated Financial Results

1. Nine Months Ended December 31, 2005

Financial Highlights


Income before Income Taxes*		192,023 million yen (Up 71% year on year)
Net Income		126,097 million yen (Up 86% year on year)
Earnings Per Share (Basic)		1,434.39 yen (Up 77% year on year)
Earnings Per Share (Diluted)		1,359.01 yen (Up 83% year on year)
Shareholders’ Equity Per Share		10,099.03 yen (Up 21% on March 31, 2005)
ROE (Annualized)		20.7% (December 31, 2004: 15.0%)
ROA (Annualized)		2.64% (December 31, 2004: 1.57%)

*	“Income before income taxes” refers to “income before discontinued operations and income taxes.”

Revenues: 658,802 million yen (Up 6% year on year)

Revenues increased 6% to 658,802 million yen in the first nine months of this fiscal year compared with the same period of the previous fiscal year. Although “real estate sales” decreased year on year, revenues from “direct financing leases,” “operating leases,” “interest on loans and investment securities,” “brokerage commissions and net gains on investment securities,” “life insurance premiums and related investment income,” “gains on sales of real estate under operating leases,” and “other operating revenues” were up compared to the same period of the previous fiscal year.

Furthermore, “transportation revenues,” which were recorded in the previous fiscal year, are recorded as “equity in net income of affiliates” during this fiscal year as shown in (Note 1) on page 2.

Revenues from “direct financing leases” increased 11% to 92,264 million yen compared to the same period of the previous fiscal year. In Japan, revenues from “direct financing leases” performed steadily overall and were up 10% year on year. Revenues from “direct financing leases” were up due to the larger contribution from the securitization of direct financing leases compared to the same period of the previous fiscal year and the operations of ORIX Kitakanto Corporation, which entered the ORIX Group during the previous fiscal year. Overseas, revenues were up 13% year on year. Although The Americas segment showed signs of improvement, revenues were lower as a result of a lower average balance of operating assets compared to the same period of the previous fiscal year, while the expansion of the leasing operations in the Asia, Oceania and Europe segment resulted in the higher overall revenues.

Revenues from “operating leases” increased 14% to 150,396 million yen compared to the same period of the previous fiscal year. In Japan, although revenues from the precision measuring and other equipment rental operations were down year on year, there was an increase in automobile and real estate operating leases that contributed to a 10% increase year on year. Overseas, revenues were up 26% year on year due to the expansion of automobile operating leases in the Asia, Oceania and Europe segment.

Revenues from “interest on loans and investment securities” increased 20% to 117,987 million yen compared to the same period of the previous fiscal year. In Japan, “interest on loans and investment securities” increased 18% year on year. The increase in revenues was due mainly to an expansion of revenues associated with loans to corporate customers, including non-recourse loans, and the loan servicing operations. Overseas, revenues were up 26% year on year, due to the contribution from loans to corporate customers in The Americas segment.

- 1 -

Revenues from “brokerage commissions and net gains on investment securities” increased 37% to 28,200 million yen compared to the same period of the previous fiscal year. Brokerage commissions were up 91% year on year due to an increase in the level of trading volume on the stock market in Japan. Net gains on investment securities were up 27% year on year due to the sale of securities mainly associated with our venture capital operations and corporate rehabilitation fund investments in Japan and securities investments in The Americas segment.

“Life insurance premiums and related investment income” were up 1% year on year to 98,175 million yen. Life insurance premiums were flat year on year, while life insurance related investment income increased year on year.

“Real estate sales” decreased 22% year on year to 53,459 million yen. Although revenues associated with the sales of residential condominiums to buyers increased compared to the same period of the previous fiscal year, there was no sale of office buildings and other real estate developments in the first nine months of this fiscal year that was recorded in the same period of the previous fiscal year. Furthermore, residential condominiums developed through certain joint ventures were accounted for by the equity method, and are included as a net of revenues and selling costs in “equity in net income of affiliates.” The revenues from the aforementioned joint ventures were 1,656 million yen.

“Gains on sales of real estate under operating leases” were up almost nine-fold year on year to 9,433 million yen due to the increase in sales of rental purpose office buildings and other real estate.

“Other operating revenues” increased 33% year on year to 108,888 million yen due to the increase in revenues associated with companies in which we invested as part of our corporate rehabilitation business in the previous fiscal year that contributed from the beginning of this fiscal year and increase in revenues associated with our integrated facilities management operations.

(Note 1)

“Transportation revenues” and “costs of transportation revenues” associated with the operations of Footwork Express Co., Ltd. in which we invested as part of our corporate rehabilitation business, were included in the same period of the previous fiscal year based on a three-month lag basis as permitted under U.S. GAAP. However, ORIX’s share in Footwork Express Co., Ltd. was reduced in December 2004 due to an increase in capital whereby the substantive participating rights of a minority shareholder were increased. As a result, ORIX no longer has a controlling financial interest in the company and accounted for this company as an equity method affiliate at the end of the fiscal year ended March 31, 2005. ORIX has started recording its proportionate share of net income or loss of the company by the equity method from the beginning of the fiscal year ending March 31, 2006 instead of recording “transportation revenues” and “costs of transportation revenues.”

Expenses: 490,454 million yen (Down 8% year on year)

Expenses were down 8% to 490,454 million yen compared with the same period of the previous fiscal year. Although “interest expense,” “costs of operating leases,” “other operating expenses,” and “selling, general and administrative expenses” increased, “life insurance costs,” “costs of real estate sales,” “provision for doubtful receivables and probable loan losses,” “write-downs of long-lived assets,” and “write-downs of securities” were down year on year. For details on “costs of transportation revenues,” please see (Note 1) shown above.

“Interest expense” was up 14% year on year to 46,242 million yen. In Japan, “interest expense” increased due to the higher average debt levels, and “interest expense” also increased overseas due to the higher interest rates despite the lower average debt levels.

“Costs of operating leases” were up 11% year on year to 101,281 million yen accompanying the increase in revenues from “operating leases.”

“Life insurance costs” decreased 5% year on year to 82,976 million yen due mainly to lower insurance payments.

- 2 -

“Costs of real estate sales” were down 26% year on year to 46,013 million yen accompanying the decrease in “real estate sales.” Furthermore, 5,230 million yen in selling costs associated with residential condominiums developed through certain joint ventures were accounted for by the equity method.

“Other operating expenses” were up 35% year on year to 66,307 million yen accompanying the increase in “other operating revenues.”

“Selling, general and administrative expenses” were up 5% year on year to 132,310 million yen. Although there were no expenses associated with Footwork Express Co., Ltd., which became an equity method affiliate ((Note 1) on page 2), an increase in costs, which were included from the beginning of this fiscal year, associated with an increase in the number of consolidated companies in the previous fiscal year and expansion of business scope led to the higher expenses.

Despite an increase in operating assets, “provision for doubtful receivables and probable loan losses” was down 56% year on year to 11,987 million yen due to a lower level of non-performing assets.

“Write-downs of long-lived assets” were down year on year to 521 million yen.

“Write-downs of securities” were down 3% year on year to 3,878 million yen as we recorded write-downs associated mainly with equity investments made by our venture capital operations in Japan.

Net Income: 126,097 million yen (Up 86% year on year)

“Operating income” was up 85% year on year to 168,348 million yen.

“Equity in net income of affiliates” was up 16% to 20,716 million yen compared to the same period of the previous fiscal year due to the steady performance of equity method affiliates in both Japan and overseas. Included in “equity in net income of affiliates” are earnings on investments in operating companies accounted for by the equity method and earnings on investments in residential condominiums developed through certain joint ventures, which are also accounted for by the equity method. The “equity in net income of affiliates” associated with residential condominium joint ventures was a loss of 3,574 million yen, which is primarily attributable to the upfront recognition of advertising expenses, associated with some large-scale residential condominium development projects, preceding the revenue recognition of completed sales upon title transfer to buyers.

“Gains on sales of subsidiaries and affiliates and liquidation loss” were down 17% year on year to 2,959 million yen.

“Income before discontinued operations and income taxes” increased 71% year on year to 192,023 million yen.

“Discontinued operations, net of applicable tax effect” (Note 2) were up 150% year on year to 13,221 million yen.

As a result, “net income” increased 86% year on year to 126,097 million yen.

(Note 2)

Subsidiaries, businesses, and real estate under operating leases that have been sold or that are to be disposed for which there is no significant continuing involvement, are reclassified to discontinued operations. Income and expenses generated by such subsidiaries, businesses, and real estate under operating leases are retroactively reclassified.

Operating Assets: 5,611,344 million yen (Up 9% on March 31, 2005)

Operating assets were up 9% on March 31, 2005 to 5,611,344 million yen as all operating asset categories were up.

- 3 -

Segment Information (“Segment Profits” refer to income before income taxes)

Segment profits were up year on year for the “Corporate Financial Services,” “Automobile Operations,” “Real Estate-Related Finance,” “Real Estate,” “Life Insurance,” “Other,” “The Americas,” and “Asia, Oceania and Europe” segments, while the “Rental Operations” segment was lower compared to the same period of the previous fiscal year.

The results of the reported segments from April 1, 2005 reflect the revised operating structure following the reorganization of the Company. Accordingly, the real estate-related equity investment operations and the REIT asset management operations, which had been included in the “Real Estate-Related Finance” segment, were included in the “Real Estate” segment from the first quarter of this fiscal year (Please refer to (Note 1) on page 14 of the Segment Information).

Operations in Japan

Corporate Financial Services Segment:

Segment revenues were up 22% year on year to 74,671 million yen due to the expansion of loans to corporate customers, an increase in contribution from direct financing leases compared to the same period of the previous fiscal year, and due to the recognition of gains from securitization.

Segment profits increased 35% to 38,445 million yen compared to 28,556 million yen in the same period of the previous fiscal year due to the increase in segment revenues and the lower “provision for doubtful receivables and probable loan losses” as a result of the lower level of non-performing assets.

Segment assets increased 9% on March 31, 2005 to 1,639,685 million yen due to an increase in loans to corporate customers despite the lower level of direct financing leases as a result of securitization.

Automobile Operations Segment:

Segment revenues increased 9% year on year to 72,706 million yen. Although the automobile rental operations were lower compared to the same period of the previous fiscal year, the automobile leasing operations expanded.

Segment profits increased 14% to 18,590 million yen in line with the increase in segment revenues compared to 16,247 million yen in the same period of the previous fiscal year.

Segment assets increased 12% on March 31, 2005 to 504,276 million yen due to the expansion of the automobile leasing operations.

Rental Operations Segment:

Segment revenues were down 3% year on year to 49,178 million yen as the precision measuring and other equipment rental operations had fewer orders from electronics and communications equipment manufacturers despite an increase in revenues from transactions being accounted for as direct financing leases.

Segment profits decreased 10% to 6,612 million yen compared to 7,314 million yen in the same period of the previous fiscal year. Although gains on investment securities were recorded, the reduction in segment revenues resulted in the lower profits.

Segment assets were up 2% on March 31, 2005 to 120,962 million yen.

Real Estate-Related Finance Segment:

Segment revenues increased 10% year on year to 51,333 million yen due to the expansion of revenues associated with corporate loans, including non-recourse loans, the loan servicing operations, and gains on investment securities.

- 4 -

Segment profits increased 96% to 26,770 million yen compared to 13,664 million yen in the same period of the previous fiscal year due to the increase in segment revenues and reduction in non-performing assets, which resulted in a lower “provision for doubtful receivables and probable loan losses.”

Segment assets increased 7% on March 31, 2005 to 1,027,610 million yen due mainly to the increase in corporate loans.

Real Estate Segment:

Segment revenues increased 17% year on year to 146,845 million yen. Lower “real estate sales” were recorded as there were no revenues associated with the sale of real estate developments, such as office buildings, in the first nine months of this fiscal year that were recorded in the same period of the previous fiscal year despite an increase in revenues associated with the sales of residential condominiums. On the other hand, the increase in gains associated with sales of real estate under operating leases and revenues associated with our integrated facilities management operations led to the higher segment revenues.

Segment profits increased 40% to 26,011 million yen compared to 18,623 million yen in the same period of the previous fiscal year due to the increase in gains associated with the sales of real estate under operating leases, despite the recognition of advertising expenses that were incurred preceding the revenue recognition of completed sales for residential condominiums upon title transfer to buyers.

Segment assets increased 11% on March 31, 2005 to 556,675 million yen due to the purchase of some rental purpose real estate despite the reclassification of some assets to “office facilities” upon a change in their use.

Life Insurance Segment:

Segment revenues were up 1% year on year to 97,650 million yen. Although life insurance premiums were flat year on year, life insurance related investment income increased year on year.

Segment profits increased 79% year on year to 10,324 million yen compared to 5,765 million yen in the same period of the previous fiscal year due mainly to the lower insurance payments.

Segment assets were down 8% on March 31, 2005 to 523,272 million yen due to a reclassification of some assets as a result of a change in their use to “office facilities” and a decrease in the investment portfolio associated with the maturity of some endowment insurance policies.

Other Segment:

Segment revenues decreased 23% year on year to 78,539 million yen. Although there were contributions to revenues from companies that we invested in the previous fiscal year, as part of our corporate rehabilitation business, and from the securities operations and gains on investment securities, revenues from the card loan operations were flat year on year and the change in the accounting treatment of “transportation revenues” to “equity in net income of affiliates,” as previously described on the (Note 1) on page 2, led to the lower revenues.

Segment profits increased 86% to 30,268 million yen compared to 16,286 million yen in the same period of the previous fiscal year due to the aforementioned contributing factors to segment revenues and the lower “provision for doubtful receivables and probable loan losses” associated with the card loan operations.

Segment assets were up 34% on March 31, 2005 to 654,042 million yen. The increase in segment assets was due to a change in the cardholder membership agreement at the card loan operations whereby the balance of certain card loans that were previously accounted for as off-balance sheet assets no longer meet the requirements for such accounting treatment and were accounted for as on-balance sheet assets from the third quarter of this fiscal year and due to the increase in loans related to margin trading at the securities brokerage.

- 5 -

Overseas Operations

The Americas Segment:

Segment revenues were up 27% year on year to 46,625 million yen. Although there was a decrease in revenues associated with direct financing leases and operating leases, revenues from interest on loans to corporate customers and sales on real estate increased year on year. In addition, there was also a contribution from the gain on the sale of the primary and master servicing business.

Segment profits more than doubled to 27,591 million yen compared to 12,207 million yen in the same period of the previous fiscal year due to the increase in segment revenues and reductions in the “provision for doubtful receivables and probable loan losses” and “selling, general and administrative expenses.”

Segment assets were up 7% on March 31, 2005 to 431,659 million yen. Although there was a withdrawal from an investment in an affiliate accompanying its termination, segment assets were up due to the increase in loans to corporate customers and the effect of a depreciation of the yen against the dollar.

Asia, Oceania and Europe Segment:

Segment revenues were up 25% year on year to 67,476 million yen due to the steady performance of automobile and machine equipment leasing and increase in revenues from the ship-related operations.

Segment profits increased 55% to 27,100 million yen compared to 17,517 million yen in the same period of the previous fiscal year due to an increase in segment revenues as described above, the steady performance of “equity in net income of affiliates,” and the contribution from the gain on the sale of an affiliate.

Segment assets were up 12% on March 31, 2005 to 559,701 million yen due mainly to the increase in direct financing leases and the depreciation of the yen against the dollar.

2. Summary of Cash Flows (Nine Months Ended December 31, 2005)

Cash and cash equivalents decreased by 9,449 million yen to 135,931 million yen compared to March 31, 2005.

“Cash flows from operating activities” provided 140,718 million yen in the first nine months of this fiscal year and provided 73,554 million yen in the same period of the previous fiscal year due primarily to inflows associated with the increase in net income.

“Cash flows from investing activities” used 466,715 million yen in the first nine months of this fiscal year compared to 334,182 million yen in the same period of the previous fiscal year. Outflows exceeded inflows as the “purchases of lease equipment” exceeded the sum of “principal payments received under direct financing leases” and “proceeds from sales of operating lease assets,” and “installment loans made to customers” exceeded “principal collected on installment loans.”

“Cash flows from financing activities” provided 315,286 million yen in the first nine months of this fiscal year compared to 188,573 million yen in the same period of the previous fiscal year, due to the increase in debt accompanying the increase in operating assets.

3. Summary of Third Quarter (Three Months Ended December 31, 2005)

In the third quarter revenues increased 9,539 million yen year on year. Revenues from “direct financing leases” were up compared to the third quarter of the previous fiscal year due to the increase in the average balance of direct financing leases and the contribution from gains on securitization. Revenues from “operating leases” and “interest on loans and investment securities” were up due to the increase in the average balance of the associated operating assets compared with the third quarter of the previous fiscal year. “Brokerage commissions and net gains on investment securities” were up due to the increase in brokerage commissions despite the decrease in net gains on investment securities. “Life insurance premiums and related investment income” were down compared to the same period of the previous fiscal year due to the lower life insurance related investment income although life insurance premiums were flat year on year. “Real estate sales” decreased year on year as sales of office buildings recorded in the third quarter of the previous fiscal year were absent in the current period. “Losses on sales of real estate under operating leases,” associated with office buildings that are not accounted for under discontinued operations were recorded. “Other operating revenues” were up year on year due mainly to the contribution to revenues associated with companies in which we invested as part of our corporate rehabilitation business from the fourth quarter of the previous fiscal year.

- 6 -

On the other hand, expenses were down 8,727 million yen compared to the third quarter of the previous fiscal year. “Interest expense” increased year on year as a result of the increase in the average balance of operating assets. “Costs of operating leases” were up year on year in line with the increase in revenues from “operating leases.” “Life insurance costs” were down compared with the same period of the previous fiscal year due mainly to the lower insurance payments. “Costs of real estate sales” decreased in line with the lower “real estate sales.” “Other operating expenses” increased in line with the increase in associated revenues in the third quarter of this fiscal year. “Selling, general and administrative expenses” were up year on year despite the change in accounting for Footwork Express Co., Ltd. (please refer to (Note 1) on page 2 for details) which went from being accounted for as a consolidated company to an equity method affiliate, as there was an increase in costs associated with the increase in the number of consolidated companies from the fourth quarter of the previous fiscal year and due to the expansion of business scope. The “provision for doubtful receivables and probable loan losses” was down compared to the third quarter of the previous fiscal year due to a lower level of non-performing assets. There were no “write-downs of long-lived assets” in the third quarter of this fiscal year and “write-downs of securities” were down year on year.

This resulted in an increase in “operating income” by 18,266 million yen to 53,177 million yen compared with the third quarter of the previous fiscal year.

“Equity in net income of affiliates” was down year on year due to the lower contribution from an equity method affiliate in The Americas segment that performed well in the same period of the previous fiscal year and due to the recording of “gains on sales of subsidiaries and affiliates.” “Income before discontinued operations and income taxes” increased by 15,751 million yen compared to the third quarter of the previous fiscal year to 59,445 million yen.

“Discontinued operations, net of applicable tax effect” added 7,419 million yen and “net income” in the third quarter of this fiscal year rose by 17,113 million yen to 42,143 million yen compared with a “net income” of 25,030 million yen in the third quarter of the previous fiscal year.

4. Outlook and Forecasts for the Fiscal Year Ending March 31, 2006

For the fiscal year ending March 31, 2006 we have revised our consolidated results forecast made at the interim results announcement on November 8, 2005 as follows. “Revenues” 900,000 million yen (flat compared with the fiscal year ended March 31, 2005), “income before income taxes” of 245,000 million yen (up 61%), and “net income” of 155,000 million yen (up 69%).


	Millions of Yen
	Total Revenues	Income before Income Taxes*	Net Income
Previous Forecast (A)	890,000	230,000	140,000
New Forecast (B)	900,000	245,000	155,000
Change (B-A)	10,000	15,000	15,000
Change (%)	1.1	6.5	10.7
(Reference)
Fiscal 2005 Results	900,034	152,332	91,496

*	“Income before income taxes” refers to “income before discontinued operations and income taxes.”

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Consolidated Financial Highlights

(For the Nine Months Ended December 31, 2005 and 2004, and the Year Ended March 31, 2005)

(Unaudited)


	(millions of JPY, except for per share data)
	December 31, 2005		Change from March 31, 2005		Year-on-year Change		December 31, 2004		Year-on-year Change		March 31, 2005		Year-on-year Change
Operating Assets
Investment in Direct Financing Leases	1,495,765		103	%	101	%	1,480,526		96	%	1,451,574		100	%
Installment Loans	2,727,640		114	%	117	%	2,328,427		105	%	2,386,597		107	%
Investment in Operating Leases	621,492		100	%	108	%	576,621		116	%	619,005		115	%
Investment in Securities	669,748		114	%	111	%	605,511		111	%	589,271		107	%
Other Operating Assets	96,699		117	%	118	%	81,885		116	%	82,651		115	%

Total	5,611,344		109	%	111	%	5,072,970		104	%	5,129,098		106	%

Operating Results
Total Revenues	658,802		—		106	%	622,714		117	%	900,034		122	%
Income before Discontinued Operations and Income Taxes	192,023		—		171	%	112,466		136	%	152,332		148	%

Net Income	126,097		—		186	%	67,718		148	%	91,496		169	%
Earnings Per Share
Net Income
Basic	1,434.39		—		177	%	808.27		147	%	1,087.82		169	%
Diluted	1,359.01		—		183	%	743.17		146	%	1,002.18		167	%
Shareholders’ Equity Per Share	10,099.03		121	%	132	%	7,642.86		116	%	8,322.96		123	%

Financial Position
Shareholders’ Equity	898,828		124	%	140	%	641,332		116	%	727,333		129	%
Number of Outstanding Shares (’000)	89,001		102	%	106	%	83,913		100	%	87,389		104	%
Long-and Short-Term Debt and Deposits	4,518,350		109	%	111	%	4,060,447		103	%	4,146,322		107	%
Total Assets	6,686,456		110	%	114	%	5,873,033		104	%	6,068,953		108	%
Shareholders’ Equity Ratio	13.4	%	—		—		10.9	%	—		12.0	%	—
Return on Equity (annualized)	20.7	%	—		—		15.0	%	—		14.2	%	—
Return on Assets (annualized)	2.64	%	—		—		1.57	%	—		1.56	%	—

New Business Volumes
Direct Financing Leases
New Receivables Added	670,853		—		111	%	601,777		98	%	863,137		108	%
New Equipment Acquisitions	601,120		—		112	%	536,022		98	%	767,672		108	%
Installment Loans	1,254,454		—		114	%	1,098,271		133	%	1,545,517		137	%
Operating Leases	184,571		—		104	%	177,600		150	%	248,327		131	%
Investment in Securities	163,190		—		98	%	165,745		185	%	244,600		200	%
Other Operating Transactions	87,740		—		87	%	101,346		96	%	129,604		70	%

- 8 -

Condensed Consolidated Statements of Income

(For the Nine Months Ended December 31, 2005 and 2004, and the Year Ended March 31, 2005)

(Unaudited)


	(millions of JPY, millions of US$)
	Nine Months ended December 31, 2005		Year-on-year Change (%)	Nine Months ended December 31, 2004		Year-on-year Change (%)	Year ended March 31, 2005		Year-on-year Change (%)	U.S. dollars December 31, 2005
Total Revenues :	658,802		106	622,714		117	900,034		122	5,580

Direct Financing Leases	92,264		111	83,381		99	113,514		101	781
Operating Leases	150,396		114	132,018		110	178,803		109	1,274
Interest on Loans and Investment Securities	117,987		120	98,532		113	135,458		117	999
Brokerage Commissions and Net Gains on Investment Securities	28,200		137	20,588		145	33,905		130	239
Life Insurance Premiums and Related Investment Income	98,175		101	97,045		104	137,004		102	832
Real Estate Sales	53,459		78	68,197		99	123,162		126	453
Gains on Sales of Real Estate under Operating Leases	9,433		869	1,086		12	1,554		17	80
Transportation Revenues	—		—	39,715		—	55,339		—	—
Other Operating Revenues	108,888		133	82,152		154	121,295		152	922

Total Expenses :	490,454		92	531,598		115	771,092		118	4,154

Interest Expense	46,242		114	40,737		90	55,428		94	392
Costs of Operating Leases	101,281		111	91,634		104	122,971		103	858
Life Insurance Costs	82,976		95	87,058		105	122,896		103	703
Costs of Real Estate Sales	46,013		74	61,802		99	113,830		128	390
Costs of Transportation Revenues	—		—	34,051		—	46,594		—	—
Other Operating Expenses	66,307		135	49,111		165	76,141		167	561
Selling, General and Administrative Expenses	132,310		105	126,216		112	176,276		113	1,121
Provision for Doubtful Receivables and Probable Loan Losses	11,987		44	26,996		82	39,530		83	101
Write-downs of Long-Lived Assets	521		6	9,165		218	11,713		95	4
Write-downs of Securities	3,878		97	3,999		100	4,930		94	33
Foreign Currency Transaction Loss (Gain), Net	(1,061	)	—	829		95	783		50	(9	)

Operating Income	168,348		185	91,116		133	128,942		151	1,426

Equity in Net Income of Affiliates	20,716		116	17,803		122	20,043		112	175
Gains on Sales of Subsidiaries and Affiliates and Liquidation Loss	2,959		83	3,547		—	3,347		—	25

Income before Discontinued Operations and Income Taxes	192,023		171	112,466		136	152,332		148	1,626

Provision for Income Taxes	79,147		158	50,032		133	68,023		133	670

Income from Continuing Operations	112,876		181	62,434		140	84,309		162	956

Discontinued Operations:
Income from Discontinued Operations, Net	21,700			8,882			12,052			184
Provision for Income Taxes	(8,479	)		(3,598	)		(4,865	)		(72	)

Discontinued Operations, Net of Applicable Tax Effect	13,221		250	5,284		540	7,187		476	112

Net Income	126,097		186	67,718		148	91,496		169	1,068


Note:		1. Pursuant to FASB Statement No. 144 (“Accounting for the Impairment or Disposal of Long-Lived Assets”), the results of operations which meet the criteria for discontinued operations are reported as a separate component of income, and those related amounts that had been previously reported are reclassified.

		2. In the previous fiscal year, “Transportation Revenues” and “Costs of Transportation Revenues” were disclosed separately. However, as the logistics subsidiary became an affiliate, the proportionate share of the net income (loss) is recorded in “Equity in Net Income of Affiliates” by the equity method.

- 9 -

Condensed Consolidated Statements of Income

(For the Three Months Ended December 31, 2005 and 2004)

(Unaudited)


	(millions of JPY, millions of US$)
	Three Months ended December 31, 2005		Year-on-year Change (%)	Three Months ended December 31, 2004		Year-on-year Change (%)	U.S. dollars December 31, 2005
Total Revenues :	221,924		104	212,385		120	1,880

Direct Financing Leases	31,229		113	27,720		101	264
Operating Leases	50,768		115	43,975		105	430
Interest on Loans and Investment Securities	41,105		125	32,957		119	348
Brokerage Commissions and Net Gains on Investment Securities	7,784		104	7,502		114	66
Life Insurance Premiums and Related Investment Income	29,705		97	30,704		108	252
Real Estate Sales	22,083		84	26,298		100	187
Losses on Sales of Real Estate under Operating Leases	(12	)	6	(195	)	—	0
Transportation Revenues	—		—	12,788		—	—
Other Operating Revenues	39,262		128	30,636		176	333

Total Expenses :	168,747		95	177,474		115	1,430

Interest Expense	16,100		122	13,251		92	136
Costs of Operating Leases	34,577		114	30,402		105	293
Life Insurance Costs	24,737		91	27,139		109	210
Costs of Real Estate Sales	18,248		81	22,540		92	155
Costs of Transportation Revenues	—		—	10,652		—	—
Other Operating Expenses	23,869		120	19,821		186	202
Selling, General and Administrative Expenses	45,377		109	41,626		110	384
Provision for Doubtful Receivables and Probable Loan Losses	5,131		50	10,337		99	44
Write-downs of Long-Lived Assets	—		—	—		—	—
Write-downs of Securities	1,210		98	1,236		64	10
Foreign Currency Transaction Loss (Gain), Net	(502	)	—	470		118	(4	)

Operating Income	53,177		152	34,911		152	450

Equity in Net Income of Affiliates	5,109		64	8,038		297	43
Gains on Sales of Subsidiaries and Affiliates	1,159		156	745		—	10

Income before Discontinued Operations and Income Taxes	59,445		136	43,694		171	503

Provision for Income Taxes	24,721		124	19,925		172	209

Income from Continuing Operations	34,724		146	23,769		171	294

Discontinued Operations
Income from Discontinued Operations, Net	11,984			2,107			102
Provision for Income Taxes	(4,565	)		(846	)		(39	)

Discontinued Operations, Net of Applicable Tax Effect	7,419		588	1,261		226	63

Net Income	42,143		168	25,030		173	357

- 10 -

Condensed Consolidated Balance Sheets

(As of December 31, 2005 and March 31, 2005)

(Unaudited)


	(millions of JPY, millions of US$)
	December 31, 2005		March 31, 2005		U.S. dollars December 31, 2005
Assets
Cash and Cash Equivalents	135,931		145,380		1,151
Restricted Cash	91,796		53,193		777
Time Deposits	5,196		8,678		44
Investment in Direct Financing Leases	1,495,765		1,451,574		12,668
Installment Loans	2,727,640		2,386,597		23,102
Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses	(103,916	)	(115,250	)	(880	)
Investment in Operating Leases	621,492		619,005		5,264
Investment in Securities	669,748		589,271		5,672
Other Operating Assets	96,699		82,651		819
Investment in Affiliates	302,005		274,486		2,558
Other Receivables	156,741		160,263		1,328
Inventories	124,572		113,203		1,055
Prepaid Expenses	51,076		45,082		433
Office Facilities	96,282		65,410		815
Other Assets	215,429		189,410		1,825

Total Assets	6,686,456		6,068,953		56,631

Liabilities and Shareholders’ Equity
Short-Term Debt	1,011,487		947,871		8,567
Deposits	368,358		336,588		3,120
Trade Notes, Accounts Payable and Other Liabilities	319,750		270,737		2,708
Accrued Expenses	79,071		95,407		669
Policy Liabilities	505,716		550,880		4,283
Current and Deferred Income Taxes	225,444		179,859		1,909
Security Deposits	139,297		98,415		1,180
Long-Term Debt	3,138,505		2,861,863		26,582

Total Liabilities	5,787,628		5,341,620		49,018

Common Stock	82,560		73,100		699
Additional Paid-in Capital	100,747		91,045		854
Retained Earnings:
Legal Reserve	2,220		2,220		19
Retained Earnings	693,095		570,494		5,870
Accumulated Other Comprehensive Income (Loss)	25,849		(1,873	)	219
Treasury Stock, at Cost	(5,643	)	(7,653	)	(48	)

Total Shareholders’ Equity	898,828		727,333		7,613

Total Liabilities and Shareholders’ Equity	6,686,456		6,068,953		56,631


	December 31, 2005		March 31, 2005		U.S. dollars December 31, 2005
Note : Accumulated Other Comprehensive Income (Loss)
Net unrealized gains on investment in securities	51,487		40,150		436
Minimum pension liability adjustments	(1,121	)	(1,090	)	(9	)
Foreign currency translation adjustments	(25,335	)	(39,610	)	(215	)
Net unrealized gains (losses) on derivative instruments	818		(1,323	)	7

- 11 -

Condensed Consolidated Statements of Shareholders’ Equity

(For the Nine Months Ended December 31, 2005 and 2004, and the Year Ended March 31, 2005)

(Unaudited)


	(millions of JPY, millions of US$)
	Nine Months ended December 31, 2005		Nine Months ended December 31, 2004		Year ended March 31, 2005		U.S. dollars December 31, 2005
Common Stock:
Beginning balance	73,100		52,068		52,068		619
Issuance during the year	9,460		641		21,032		80

Ending balance	82,560		52,709		73,100		699

Additional Paid-in Capital:
Beginning balance	91,045		70,015		70,015		771
Issuance during the year and other, net	9,702		646		21,030		83

Ending balance	100,747		70,661		91,045		854

Legal Reserve:
Beginning balance	2,220		2,220		2,220		19

Ending balance	2,220		2,220		2,220		19

Retained Earnings:
Beginning balance	570,494		481,091		481,091		4,832
Cash dividends	(3,496	)	(2,093	)	(2,093	)	(30	)
Net income	126,097		67,718		91,496		1,068

Ending balance	693,095		546,716		570,494		5,870

Accumulated Other Comprehensive Income (Loss):
Beginning balance	(1,873	)	(33,141	)	(33,141	)	(16	)
Net change of unrealized gains on investment in securities	11,337		7,570		15,102		96
Net change of minimum pension liability adjustments	(31	)	266		6,877		0
Net change of foreign currency translation adjustments	14,275		(94	)	6,019		121
Net change of unrealized gains on derivative instruments	2,141		2,208		3,270		18

Ending balance	25,849		(23,191	)	(1,873	)	219

Treasury Stock:
Beginning balance	(7,653	)	(8,206	)	(8,206	)	(65	)
Net (increase) decrease	2,010		423		553		17

Ending balance	(5,643	)	(7,783	)	(7,653	)	(48	)

Total Shareholders’ Equity:
Beginning balance	727,333		564,047		564,047		6,160
Increase, net	171,495		77,285		163,286		1,453

Ending balance	898,828		641,332		727,333		7,613

Summary of Comprehensive Income :
Net income	126,097		67,718		91,496		1,068
Other comprehensive income	27,722		9,950		31,268		235

Comprehensive income	153,819		77,668		122,764		1,303

- 12 -

Condensed Consolidated Statements of Cash Flows

(For the Nine Months Ended December 31, 2005 and 2004, and the Year Ended March 31, 2005)

(Unaudited)


	(millions of JPY, millions of US$)
	Nine Months ended December 31, 2005		Nine Months ended December 31, 2004		Year ended March 31, 2005		U.S. dollars December 31, 2005
Cash Flows from Operating Activities:
Net income	126,097		67,718		91,496		1,068
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	96,890		97,219		132,158		821
Provision for doubtful receivables and probable loan losses	11,987		26,996		39,530		102
Decrease in policy liabilities	(45,164	)	(38,621	)	(41,902	)	(383	)
Gains from securitization transactions	(6,356	)	(2,744	)	(12,520	)	(54	)
Equity in net income of affiliates	(20,716	)	(17,803	)	(20,043	)	(175	)
Gains on sales of subsidiaries and affiliates and liquidation loss	(2,959	)	(3,547	)	(3,347	)	(25	)
Gains on sales of available-for-sale securities	(8,641	)	(14,333	)	(14,761	)	(73	)
Gains on sales of real estate under operating leases	(9,433	)	(1,086	)	(1,554	)	(80	)
Gains on sales of operating lease assets other than real estate	(5,833	)	(3,397	)	(4,746	)	(49	)
Write-downs of long-lived assets	521		9,165		11,713		4
Write-downs of securities	3,878		3,999		4,930		33
Increase in restricted cash	(38,225	)	(10,667	)	(17,517	)	(324	)
Increase in trading securities	(10,333	)	(15,432	)	(21,430	)	(88	)
Increase in inventories	(25,618	)	(29,176	)	(21,906	)	(217	)
Increase in prepaid expenses	(4,374	)	(2,212	)	(975	)	(37	)
Increase (decrease) in accrued expenses	(18,824	)	(7,872	)	8,255		(159	)
Increase in security deposits	38,904		12,883		19,567		329
Other, net	58,917		2,464		(20,481	)	499

Net cash provided by operating activities	140,718		73,554		126,467		1,192

Cash Flows from Investing Activities:
Purchases of lease equipment	(794,722	)	(696,071	)	(942,489	)	(6,731	)
Principal payments received under direct financing leases	483,285		468,106		633,724		4,093
Net proceeds from securitization of lease receivables, loan receivables and securities	151,116		74,315		191,976		1,280
Installment loans made to customers	(1,252,768	)	(1,098,051	)	(1,545,297	)	(10,610	)
Principal collected on installment loans	846,481		928,679		1,287,144		7,169
Proceeds from sales of operating lease assets	114,826		64,334		73,928		973
Investment in and dividends received from affiliates, net	(2,243	)	39		(48,257	)	(19	)
Purchases of available-for-sale securities	(137,612	)	(151,696	)	(219,890	)	(1,166	)
Proceeds from sales of available-for-sale securities	103,750		72,367		127,452		879
Maturities of available-for-sale securities	23,008		53,574		82,373		195
Purchases of other securities	(25,412	)	(14,049	)	(24,283	)	(215	)
Proceeds from sales of other securities	16,981		7,819		11,456		144
Purchases of other operating assets	(21,397	)	(6,868	)	(9,216	)	(181	)
Acquisitions of subsidiaries, net of cash acquired	(2,005	)	(5,799	)	(12,506	)	(17	)
Sales of subsidiaries, net of cash disposed	2,383		—		—		20
Other, net	27,614		(30,881	)	(14,119	)	233

Net cash used in investing activities	(466,715	)	(334,182	)	(408,004	)	(3,953	)

Cash Flows from Financing Activities:
Net increase (decrease) in debt with maturities of three months or less	110,729		16,832		(34,227	)	938
Proceeds from debt with maturities longer than three months	1,470,020		1,373,413		1,934,048		12,450
Repayment of debt with maturities longer than three months	(1,300,583	)	(1,223,032	)	(1,665,050	)	(11,015	)
Net increase in deposits due to customers	31,770		26,736		44,043		269
Issuance of common stock	4,829		1,279		2,052		41
Dividends paid	(3,496	)	(2,093	)	(2,093	)	(30	)
Net decrease in call money	—		(5,000	)	(5,000	)	—
Other, net	2,017		438		570		17

Net cash provided by financing activities	315,286		188,573		274,343		2,670

Effect of Exchange Rate Changes on Cash and Cash Equivalents	1,262		(51	)	339		11

Net Increase (Decrease) in Cash and Cash Equivalents	(9,449	)	(72,106	)	(6,855	)	(80	)
Cash and Cash Equivalents at Beginning of Period	145,380		152,235		152,235		1,231

Cash and Cash Equivalents at End of Period	135,931		80,129		145,380		1,151

- 13 -

Segment Information

(For the Nine Months Ended December 31, 2005 and 2004, and the Year Ended March 31, 2005)

(Unaudited)


	(millions of JPY)
	Nine months ended December 31, 2005					Nine months ended December 31, 2004					Year ended March 31, 2005
	Segment Revenues		Segment Profits		Segment Assets	Segment Revenues		Segment Profits		Segment Assets	Segment Revenues		Segment Profits		Segment Assets
Operations in Japan
Corporate Financial Services	74,671		38,445		1,639,685	61,027		28,556		1,532,659	87,708		43,848		1,506,311
Automobile Operations	72,706		18,590		504,276	66,755		16,247		453,153	89,404		21,088		451,715
Rental Operations	49,178		6,612		120,962	50,693		7,314		117,599	68,447		9,384		118,427
Real Estate-Related Finance	51,333		26,770		1,027,610	46,528		13,664		932,754	77,389		13,856		956,047
Real Estate	146,845		26,011		556,675	126,029		18,623		450,511	195,906		23,959		500,755
Life Insurance	97,650		10,324		523,272	97,027		5,765		572,742	136,857		7,223		567,023
Other	78,539		30,268		654,042	102,597		16,286		416,146	143,754		20,970		489,758

Sub-Total	570,922		157,020		5,026,522	550,656		106,455		4,475,564	799,465		140,328		4,590,036
Overseas Operations
The Americas	46,625		27,591		431,659	36,780		12,207		427,689	53,084		15,621		403,399
Asia, Oceania and Europe	67,476		27,100		559,701	54,009		17,517		487,579	73,089		22,133		498,855

Sub-Total	114,101		54,691		991,360	90,789		29,724		915,268	126,173		37,754		902,254

Segment Total	685,023		211,711		6,017,882	641,445		136,179		5,390,832	925,638		178,082		5,492,290

Difference between Segment totals and Consolidated Amounts	(26,221	)	(19,688	)	668,574	(18,731	)	(23,713	)	482,201	(25,604	)	(25,750	)	576,663

Consolidated Amounts	658,802		192,023		6,686,456	622,714		112,466		5,873,033	900,034		152,332		6,068,953


	(millions of US$)
	U.S. dollars December 31, 2005
	Segment Revenues		Segment Profits		Segment Assets
Operations in Japan
Corporate Financial Services	632		326		13,887
Automobile Operations	616		158		4,271
Rental Operations	417		56		1,025
Real Estate-Related Finance	435		227		8,703
Real Estate	1,244		220		4,715
Life Insurance	827		87		4,432
Other	665		256		5,539

Sub-Total	4,836		1,330		42,572
Overseas Operations
The Americas	395		234		3,656
Asia, Oceania and Europe	571		229		4,740

Sub-Total	966		463		8,396

Segment Total	5,802		1,793		50,968

Difference between Segment totals and Consolidated Amounts	(222	)	(167	)	5,663

Consolidated Amounts	5,580		1,626		56,631


*Note	1:	The results of the reported segments from April 1, 2005 reflect the revised operating structure following the reorganization of the Company. Accordingly, real estate-related equity investment operations and the REIT asset management operations, which had been included in the “Real Estate-Related Finance” segment, were included in the “Real Estate” segment from the first quarter of this fiscal year. Therefore, certain related amounts that had been previously reported are reclassified.

	2:	Effective January 1, 2005, the Company integrated seven group companies, which were involved in automobile leasing and rental operations, into ORIX Auto Corporation, in order to control and manage the overall automobile operations under one company. The automobile leasing operations, which had been included in the “Corporate Financial Services” segment and the automobile rental operations that had been included in the “Rental Operations” segment were included in the “Automobile Operations” segment from the previous fiscal year. The “Rental Operations” segment included only the rental operations of precision measuring and other equipment. The Company changed the management of its overseas operations, whereby the “Europe” segment and the “Asia and Oceania” segment were combined and from the previous fiscal year the new segment was shown as the “Asia, Oceania and Europe” segment.

	3:	Since the Company evaluates the performance for the segments based on profits before income taxes, tax expenses are not included in the segment profits. In addition, results of discontinued operations are included in “Segment Revenues” and “Segment Profits” of each segment, if any. Such amounts are eliminated in “Difference between Segment totals and Consolidated Amounts.”

- 14 -

Key Quarterly Financial Data (Unaudited)


	(millions of JPY)
	Fiscal 2005								Fiscal 2006
Balance Sheet Data	Q1 (04/4-6)		Q2 (04/7-9)		Q3 (04/10-12)		Q4 (05/1-3)		Q1 (05/4-6)		Q2 (05/7-9)		Q3 (05/10-12)
1) Investment in Direct Financing Leases	1,454,461		1,465,856		1,480,526		1,451,574		1,470,338		1,462,354		1,495,765
Japan	1,183,421		1,187,595		1,212,340		1,183,791		1,186,866		1,164,647		1,174,590
Overseas	271,040		278,261		268,186		267,783		283,472		297,707		321,175

2) Installment Loans	2,221,554		2,254,387		2,328,427		2,386,597		2,440,842		2,491,927		2,727,640
Japan	1,997,881		2,019,718		2,100,661		2,153,949		2,211,360		2,258,906		2,469,362
Overseas	223,673		234,669		227,766		232,648		229,482		233,021		258,278

3) Investment in Operating Leases	529,078		536,489		576,621		619,005		574,801		591,056		621,492
Japan	385,532		380,550		425,178		466,489		425,815		439,063		466,059
Overseas	143,546		155,939		151,443		152,516		148,986		151,993		155,433

4) Investment in Securities	579,193		591,714		605,511		589,271		593,911		618,688		669,748
Japan	423,111		446,026		466,607		467,562		466,859		489,625		531,882
Overseas	156,082		145,688		138,904		121,709		127,052		129,063		137,866

5) Other Operating Assets	68,004		72,932		81,885		82,651		91,677		98,740		96,699
Japan	61,071		64,772		74,538		75,156		84,390		90,551		93,012
Overseas	6,933		8,160		7,347		7,495		7,287		8,189		3,687

Total Operating Assets	4,852,290		4,921,378		5,072,970		5,129,098		5,171,569		5,262,765		5,611,344

Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses	(128,726	)	(125,309	)	(120,508	)	(115,250	)	(110,689	)	(103,028	)	(103,916	)
Allowance/Investment in Direct Financing Leases and Installment Loans	3.5	%	3.4	%	3.2	%	3.0	%	2.8	%	2.6	%	2.5	%

Total Assets	5,651,018		5,724,771		5,873,033		6,068,953		6,185,171		6,333,055		6,686,456

Short-Term Debt, Long-Term Debt and Deposits	3,876,782		3,912,797		4,060,447		4,146,322		4,236,166		4,269,728		4,518,350
Policy Liabilities	577,024		559,815		554,161		550,880		537,746		519,849		505,716

Total Liabilities	5,056,239		5,105,522		5,231,701		5,341,620		5,420,568		5,511,635		5,787,628

Shareholders’ Equity	594,779		619,249		641,332		727,333		764,603		821,420		898,828

Total Liabilities & Shareholders’ Equity	5,651,018		5,724,771		5,873,033		6,068,953		6,185,171		6,333,055		6,686,456


New Business Volumes	Q1 (04/4-6)		Q2 (04/7-9)		Q3 (04/10-12)		Q4 (05/1-3)		Q1 (05/4-6)		Q2 (05/7-9)		Q3 (05/10-12)
Direct Financing Leases: New receivables added	188,262		210,689		202,826		261,360		196,181		219,254		255,418
Japan	150,035		169,583		160,378		220,748		153,585		169,741		207,371
Overseas	38,227		41,106		42,448		40,612		42,596		49,513		48,047

Direct Financing Leases: New equipment acquisitions	166,937		188,911		180,174		231,650		175,106		193,855		232,159
Japan	130,715		148,909		139,736		187,930		134,333		145,029		184,172
Overseas	36,222		40,002		40,438		43,720		40,773		48,826		47,987

Installment Loans: New loans added	307,530		396,510		394,231		447,246		363,952		419,662		470,840
Japan	273,289		352,816		351,053		417,336		329,457		374,084		411,923
Overseas	34,241		43,694		43,178		29,910		34,495		45,578		58,917

Operating Leases: New equipment acquisitions	40,737		55,077		81,786		70,727		48,932		62,979		72,660
Japan	33,195		35,750		70,626		62,193		30,794		44,201		58,066
Overseas	7,542		19,327		11,160		8,534		18,138		18,778		14,594

Investment in Securities: New securities added	45,486		60,092		60,167		78,855		51,178		60,532		51,480
Japan	38,795		56,822		58,932		76,261		49,603		59,867		47,863
Overseas	6,691		3,270		1,235		2,594		1,575		665		3,617

Other Operating Transactions: New assets added	29,354		26,429		45,563		28,258		30,376		25,189		32,175
Japan	29,354		25,017		45,386		27,888		30,376		25,189		32,175
Overseas	—		1,412		177		370		—		—		—

- 15 -


	(millions of JPY)
	Fiscal 2005							Fiscal 2006
Income Statement Data	Q1 (04/4-6)		Q2 (04/7-9)	Q3 (04/10-12)		Q4 (05/1-3)		Q1 (05/4-6)		Q2 (05/7-9)	Q3 (05/10-12)
Revenues
1) Direct Financing Leases	27,399		28,262	27,720		30,133		28,722		32,313	31,229
Japan	21,698		22,268	21,915		24,260		22,775		25,802	23,901
Overseas	5,701		5,994	5,805		5,873		5,947		6,511	7,328

2) Operating Leases	45,178		42,865	43,975		46,785		47,763		51,865	50,768
Japan	34,943		32,450	32,660		35,450		35,026		38,531	36,607
Overseas	10,235		10,415	11,315		11,335		12,737		13,334	14,161

3) Interest on Loans and Investment Securities	29,763		35,812	32,957		36,926		36,064		40,818	41,105
Interest on loans	27,063		33,233	30,549		34,476		33,287		37,874	37,882
Japan	23,383		29,195	26,591		29,537		28,588		32,302	32,257
Overseas	3,680		4,038	3,958		4,939		4,699		5,572	5,625
Interest on investment securities	2,700		2,579	2,408		2,450		2,777		2,944	3,223
Japan	264		313	268		336		423		544	551
Overseas	2,436		2,266	2,140		2,114		2,354		2,400	2,672

4) Brokerage Commissions and Net Gains on Investment Securities	5,159		7,927	7,502		13,317		8,443		11,973	7,784
Brokerage commissions	1,226		1,001	997		1,292		1,255		2,068	2,827
Net gains on investment securities	3,933		6,926	6,505		12,025		7,188		9,905	4,957

5) Life Insurance Premiums and Related Investment Income	30,208		36,133	30,704		39,959		30,229		38,241	29,705
Life insurance premiums	28,007		33,676	26,966		37,157		28,393		32,915	26,717
Related investment income	2,201		2,457	3,738		2,802		1,836		5,326	2,988

6) Real Estate Sales	21,840		20,059	26,298		54,965		19,214		12,162	22,083
Japan	21,840		20,059	26,298		54,965		19,214		12,162	22,083
Overseas	—		—	—		—		—		—	—

7) Gains (Losses) on Sales of Real Estate under Operating Leases	1,198		83	(195	)	468		5,820		3,625	(12	)
Japan	1,198		83	(195	)	468		5,820		3,625	(12	)
Overseas	—		—	—		—		—		—	—

8) Transportation Revenues	12,775		14,152	12,788		15,624		—		—	—
Japan	12,775		14,152	12,788		15,624		—		—	—
Overseas	—		—	—		—		—		—	—

9) Other Operating Revenues	25,952		25,564	30,636		39,143		33,307		36,319	39,262
Japan	24,113		24,306	29,408		38,027		32,247		34,653	37,811
Overseas	1,839		1,258	1,228		1,116		1,060		1,666	1,451

Total Revenues	199,472		210,857	212,385		277,320		209,562		227,316	221,924

Expenses
1) Interest Expense	13,719		13,767	13,251		14,691		14,498		15,644	16,100
2) Costs of Operating Leases	32,780		28,452	30,402		31,337		33,460		33,244	34,577
3) Life Insurance Costs	27,965		31,954	27,139		35,838		27,239		31,000	24,737
4) Costs of Real Estate Sales	20,543		18,719	22,540		52,028		16,664		11,101	18,248
5) Costs of Transportation Revenues	11,714		11,685	10,652		12,543		—		—	—
6) Other Operating Expenses	14,055		15,235	19,821		27,030		20,318		22,120	23,869
7) Selling, General and Administrative Expenses	37,607		46,983	41,626		50,060		41,886		45,047	45,377
8) Provision for Doubtful Receivables and Probable Loan Losses	8,793		7,866	10,337		12,534		4,725		2,131	5,131
9) Write-downs of Long-Lived Assets	—		9,165	—		2,548		—		521	—
10) Write-downs of Securities	1,468		1,295	1,236		931		1,800		868	1,210
11) Foreign Currency Transaction Loss (Gain), Net	(172	)	531	470		(46	)	(643	)	84	(502	)

Total Expenses	168,472		185,652	177,474		239,494		159,947		161,760	168,747

Operating Income	31,000		25,205	34,911		37,826		49,615		65,556	53,177
Equity in Net Income of Affiliates	4,754		5,011	8,038		2,240		7,263		8,344	5,109
Gains (Losses) on Sales of Subsidiaries and Affiliates and Liquidation Loss	839		1,963	745		(200	)	1,459		341	1,159
Income before Discontinued Operations and Income Taxes	36,593		32,179	43,694		39,866		58,337		74,241	59,445
Provision for Income Taxes	16,064		14,043	19,925		17,991		23,937		30,489	24,721
Income from Continuing Operations	20,529		18,136	23,769		21,875		34,400		43,752	34,724
Discontinued Operations, Net of Applicable Tax Effect	2,998		1,025	1,261		1,903		3,389		2,413	7,419

Net Income	23,527		19,161	25,030		23,778		37,789		46,165	42,143


Key Ratios, Per Share Data and Employees	Q1 (04/4-6)		Q2 (04/7-9)		Q3 (04/10-12)		Q4 (05/1-3)		Q1 (05/4-6)		Q2 (05/7-9)		Q3 (05/10-12)
Return on Equity (ROE)*	16.2	%	12.6	%	15.9	%	13.9	%	20.3	%	23.3	%	19.6	%
Return on Assets (ROA)*	1.67	%	1.35	%	1.73	%	1.59	%	2.47	%	2.95	%	2.59	%
Shareholders’ Equity Ratio	10.5	%	10.8	%	10.9	%	12.0	%	12.4	%	13.0	%	13.4	%
Debt-to-Equity Ratio (times)	6.5		6.3		6.3		5.7		5.5		5.2		5.0
Shareholders’ Equity Per Share (yen)	7,104.39		7,389.48		7,642.86		8,322.96		8,731.00		9,333.32		10,099.03
Basic EPS (yen)	281.05		228.73		298.51		280.13		432.08		525.69		476.76
Diluted EPS (yen)	258.14		211.02		270.41		255.48		409.74		498.00		453.01
Number of Employees	14,917		15,184		15,699		13,734		14,154		14,310		14,429

*annualized

- 16 -


	(millions of JPY)
	Fiscal 2005				Fiscal 2006
Segment Information	Q1 (04/4-6)	Q2 (04/7-9)	Q3 (04/10-12)	Q4 (05/1-3)	Q1 (05/4-6)	Q2 (05/7-9)	Q3 (05/10-12)
Operations in Japan
Corporate Financial Services	19,355	21,419	20,253	26,681	22,456	25,206	27,009
Automobile Operations	21,379	22,697	22,679	22,649	24,462	24,449	23,795
Rental Operations	19,623	15,358	15,712	17,754	15,765	17,873	15,540
Real Estate-Related Finance	11,376	15,318	19,834	30,861	15,493	19,372	16,468
Real Estate	44,302	40,590	41,137	69,877	51,495	46,523	48,827
Life Insurance	30,260	36,046	30,721	39,830	30,093	38,085	29,472
Other	32,786	34,664	35,147	41,157	24,589	25,330	28,620

Sub-Total	179,081	186,092	185,483	248,809	184,353	196,838	189,731

Overseas Operations
The Americas	11,172	12,848	12,760	16,304	12,773	13,720	20,132
Asia, Oceania and Europe	17,058	17,714	19,237	19,080	20,220	23,614	23,642

Sub-Total	28,230	30,562	31,997	35,384	32,993	37,334	43,774

Total Segment Revenues	207,311	216,654	217,480	284,193	217,346	234,172	233,505

Operations in Japan
Corporate Financial Services	7,909	9,364	11,283	15,292	11,379	12,445	14,621
Automobile Operations	5,022	5,894	5,331	4,841	6,280	7,145	5,165
Rental Operations	2,411	2,633	2,270	2,070	1,634	3,658	1,320
Real Estate-Related Finance	2,584	7,632	3,448	192	6,892	13,426	6,452
Real Estate	8,837	3,668	6,118	5,336	12,781	7,781	5,449
Life Insurance	1,879	2,113	1,773	1,458	1,632	6,121	2,571
Other	6,374	5,426	4,486	4,684	8,198	8,061	14,009

Sub-Total	35,016	36,730	34,709	33,873	48,796	58,637	49,587

Overseas Operations
The Americas	1,210	3,515	7,482	3,414	7,152	6,918	13,521
Asia, Oceania and Europe	5,934	4,999	6,584	4,616	7,569	12,178	7,353

Sub-Total	7,144	8,514	14,066	8,030	14,721	19,096	20,874

Total Segment Profits	42,160	45,244	48,775	41,903	63,517	77,733	70,461

Operations in Japan
Corporate Financial Services	1,441,748	1,467,823	1,532,659	1,506,311	1,544,319	1,602,587	1,639,685
Automobile Operations	426,706	441,202	453,153	451,715	461,148	489,313	504,276
Rental Operations	116,020	117,741	117,599	118,427	115,660	116,982	120,962
Real Estate-Related Finance	853,426	867,605	932,754	956,047	977,407	961,049	1,027,610
Real Estate	391,209	398,388	450,511	500,755	478,389	520,730	556,675
Life Insurance	561,819	565,021	572,742	567,023	548,898	521,022	523,272
Other	419,110	421,744	416,146	489,758	495,998	519,727	654,042

Sub-Total	4,210,038	4,279,524	4,475,564	4,590,036	4,621,819	4,731,410	5,026,522

Overseas Operations
The Americas	451,032	446,231	427,689	403,399	406,247	398,936	431,659
Asia, Oceania and Europe	467,721	499,426	487,579	498,855	514,018	527,255	559,701

Sub-Total	918,753	945,657	915,268	902,254	920,265	926,191	991,360

Total Segment Assets	5,128,791	5,225,181	5,390,832	5,492,290	5,542,084	5,657,601	6,017,882

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