Orix Corporation · TSE:8591

Orix — FY2015.3 Earnings Presentation

42 slides from Orix's earnings presentation, May 13, 2015

1. Slide 1: Consolidated Financial Results for the Fiscal Year Ended March 31, 2015

   ORIX Corporation C ti (TSE: 8591; NYSE: IX) Consolidated Financial Results For the Consolidated Fiscal Year Ended March 31,, 2015 May 13, 2015 Makoto Inoue President & CEO Haruyuki Urata Deputy President & CFO Copyright © 2015 ORIX Corporation All rights reserved.

2. Slide 2: FY2015.3 Overview (1)

   FY2015.3 Overview (1)  234.9bn yen in Net Income, a new record high and growth in six consecutive years  ROE achieved at 11.5%  Organic O i growthh and d gains i ffrom timely i l sales l off assets contributed ib d to NNet IIncome growth  Dividend up by 13 yen to 36 yen per share, payout ratio a

3. Slide 3: FY2015.3 Overview (2)

   FY2015.3 Overview (2)  Profits : Significant growth in Retail and Overseas Business; Solid contribution from Corporate Financial Services and Maintenance Leasing  Assets : Significant f increase in Retaill d due to acquisition off HLIKK; Reall Estate continues to downsize Segment Profits Segment A

4. Slide 4: FY2015.3 Overview (3)

   FY2015.3 Overview (3)  Services income generated by the non-finance businesses was the main driver behind the profit growth  Among the A th components t off services i iincome, assett managementt b business i contributed the most Gross Profits* Services Income* (JPY Bn) (JPY Bn) 900 400 300 600 20

5. Slide 5: FY2015.3 Overview (4)

   FY2015.3 Overview (4)  Operating cash flow excluding those generated from changes in current asset positions continues to increase steadily  Investing cash flow stays negative with new investments continuing to exceed cash inflow from asset sales CF from f Operating Activities CF from Investing Ac

6. Slide 6: Mid-Term Strategic Directions (1)

   Mid--Term Strategic Directions (1) Mid Progress in FY2015.3 Profits increase in six consecutive years, +25% profit Double Digits Profit Growth growth YoY Achieve a Stable ROE 10% ROE above 10% for two consecutive years Expansion of AM business Jointly established fund with Robeco and Asian Developme

7. Slide 7: Mid-Term Strategic Directions (2)

   Mid--Term Strategic Directions (2) Mid  Shifting from post-Lehman Crisis recovery phase to the new stage of stable growth  Mid-term strategic directions designed for such new stage Profit Growth Aim for full year net income of 300bn yen by FY2018.3 Capital Target ROE at 11% to 12% Efficiency Finan

8. Slide 8: Mid-Term Strategic Directions (3)

   Mid--Term Strategic Directions (3) Mid  Deepen ORIX’s strength and expertise to further expand revenues from non-finance businesses Expansion in Non-Finance Businesses Organic Growth Investment in Key Areas  Expansion xpansion of auto auto-business business both in  Environment and Energy Japan a

9. Slide 9: Mid-Term Strategic Directions (4)

   Mid--Term Strategic Directions (4) Mid  Position asset turnover as an important strategy  Continue to divest low profitability/low growth assets while making investments in new business areas Investment in Key Areas  Commence operation of the mega-solar projects we have already Environment and se

10. Slide 10: Mid-Term Strategic Directions (5)

    Mid--Term Strategic Directions (5) Mid  Ratio of employed capital* is controlled within the range meeting single A rating requirement  Divest i llow profitability/low fi bili /l growth h assets, and d turnover portfolio f li with ih growth potentials  Current market environment is favorable for a

11. Slide 11: Reinforcement of Corporate Governance Framework

    Reinforcement of Corporate Governance Framework  Internal control framework will be reinforced with a global perspective • Strengthen internal check-and-balance function among 1 overseas group companies i ini each h region i • Reinforcement of auditing function by utilizing external 2 consulting fi

12. Slide 12: Summary

    Summary New record high net income for FY2015.3, FY2015 3 profit growth in six consecutives years, ROE at 11.5% Expand non-finance business and build a business portfolio that generates stable annual net income of 300bn yen by FY2018.3 Interim dividend per share at 22 yen Copyright © 2015 ORIX Corpo

13. Slide 13: Appendix

    Appendix pp Copyright © 2015 ORIX Corporation All rights reserved. 12

14. Slide 14: About ORIX: Sustainable Growth

    About ORIX Sustainable Growth  Maintaining profitable for the past 50 years and achieving sustainable profit growth Net Income Attributable to ORIX Corporation FY2015.3 Record Net Income JPY Bn FY2009 3 FY2009.3 250 Collapse of Lehman Brothers 200 FY2002.3 Bursting of the IT Bubble FY1998.3 150 Asi

15. Slide 15: About ORIX: Business expertise and Group-wide capability

    About ORIX Business expertise and Group-wide capability ORIX evolved by advancing into neighboring areas while increasing its finance and asset expertise Credit Screening and Banking Asset Management Finance Capability Life Insurance Investment Lending Principal investment Business revitalization

16. Slide 16: About ORIX: Assets by Segment

    About ORIX Assets by Segment  Maximizing core competencies of each segment while creating group synergy Corporate Financial Services Lending, Leasing, fee businesses Overseas Business 12% Leasing, Lending, Investment 24% Maintenance Leasing in bonds, Investment banking, 7% Asset management, g , Seg

17. Slide 17: About ORIX: Extensive Overseas Network

    About ORIX Extensive Overseas Network  Expanded its global reach starting with Hong Kong in 1971, using knowhow developed in Japan  Not N t as ambitious biti as tto callll it a globalization, l b li ti b butt rather th it iis a way off eliminating barriers that exist in Japan 36 Countries and Regi

18. Slide 18: Appendix(1) Performance overview

    Appendix(1) Performance overview （ （JPY ） Bn） FY13.3 FY14.3 FY15.3 Change Total Revenues 1 052 5 1,052.5 1 375 3 1,375.3 2 174 3 2,174.3 158% Net Income *1 111.9 187.4 234.9 125% Segment Assets 6,382.7 7,267.8 9,170.2 126% T t lA Total Assets t 8 439 7 8,439.7 9 067 0 9,067.0 11 443 6 11,443.6 126%

19. Slide 19: Appendix(2) Profits by Segment

    Appendix(2) Profits by Segment （ （JPY ） Bn） FY13.3 FY14.3 FY15.3 Change Corporate Financial Services 25 9 25.9 24 9 24.9 25 5 25.5 103% Maintenance Leasing 34.9 37.1 40.4 109% Real Estate 56 5.6 18 0 18.0 35 3.5 19% Investment and Operation 34.9 95.8 42.4 44% Retail 43.2 49.9 120.6 242% Overseas Bus

20. Slide 20: Appendix(3) Assets by Segment

    Appendix(3) Assets by Segment （ （JPY ） Bn） FY13.3 FY14.3 FY15.3 Change Corporate Financial Services 943 3 943.3 992 1 992.1 1 132 5 1,132.5 114% Maintenance Leasing 549.3 622.0 662.9 107% Real Estate 1 133 2 1,133.2 962 4 962.4 835 4 835.4 87% Investment and Operation 444.3 552.2 660.0 120% Retail ,

21. Slide 21: Appendix(4) Income Statement Data

    Appendix(4) Income Statement Data （ （JPY ） Bn） FY13.3 FY14.3 FY15.3 Change Finance revenues 213 7 213.7 191 7 191.7 186 9 186.9 97% Gains on investment securities and dividends 34.8 27.2 56.4 207% Operating leases 107.7 114.0 124.9 110% Life insurance premiums and related investment income 40.1 47.1

22. Slide 22: Appendix(5) Funding

    Appendix(5) Funding （ （JPY ） Bn） Funding FY13.3 FY14.3 FY15.3 Change CP 151.5 101.0 89.6 -11.4 Borrowings from Financial Institutions 2,368.0 2,631.4 2,882.6 251.2 Bonds / MTN 1,283.0 1,174.8 1,153.9 -20.9 Deposits 1,078.6 1,206.4 1,287.4 81.0 Short-term Debt, Debt Long-term Debt and Deposits (excl.

23. Slide 23: Appendix(6) Corporate Financial Services

    Appendix(6) Corporate Financial Services （ （JPY ） Bn） FY13.3 FY14.3 FY15.3 Change Finance revenues 39.6 37.2 35.6 96% Operating leases 24.5 25.6 24.5 95% Services income 13.9 14.9 22.0 148% Segment Revenues 78.4 78.8 85.5 108% Segment Expenses 53 5 53.5 54 6 54.6 60 6 60.6 111% Segment Profits 25.9

24. Slide 24: Appendix(7) Maintenance Leasing

    Appendix(7) Maintenance Leasing （ （JPY ） Bn） FY13.3 FY14.3 FY15.3 Change Finance revenues 9.1 9.5 11.1 117% Operating leases 161.8 177.1 185.7 105% Services income 58.4 60.3 62.5 104% Segment Revenues 234.7 251.3 263.5 105% S Segment t EExpenses 199 9 199.9 214 3 214.3 223 0 223.0 104% Segment Profi

25. Slide 25: Appendix(8) Real Estate(1)

    Appendix(8) Real Estate(1) （ （JPY ） Bn） FY13.3 FY14.3 FY15.3 Change Operating leases 69.4 66.6 63.8 96% Gains on Rental Property Sales 10.3 13.8 14.9 108% SServices i iincome 94 9 94.9 101 8 101.8 104 1 104.1 102% Sales of goods and real estate and other 43.9 28.8 10.4 36% Segment Revenues 219.6 203

26. Slide 26: Appendix(9) Real Estate(2)

    Appendix(9) Real Estate(2) （ （JPY ） Bn） ■Breakdown of Real Estate Segment Assets FY13.3 FY14.3 FY15.3 Change Rental Property 754.4 665.8 566.9 85% Under Lease 603.4 536.9 471.5 88% Under Development 151.0 128.9 95.4 74% Condo Assets 55 4 55.4 31 1 31.1 16 5 16.5 53% NRL / Specified Bonds 113.4 48.8

27. Slide 27: Appendix(10) Investment and Operation

    Appendix(10) Investment and Operation （ （JPY ） Bn） FY13.3 FY14.3 FY15.3 Change Finance revenues 23.9 18.4 15.7 85% Gains on investment securities and dividends 18.8 9.7 9.3 96% Sales of goods and real estate 36.3 120.6 371.4 308% Services income 43.1 86.1 260.4 303% Segment Revenues 123.7 236.9 666.

28. Slide 28: Appendix(11) Retail

    Appendix(11) Retail （ （JPY ） Bn） FY13.3 FY14.3 FY15.3 Change Finance revenues 45.8 50.4 52.5 104% Life insurance premiums and related investment income 139.5 155.8 352.5 226% Gains on investment securities and dividends and other 3.5 5.4 20.9 389% Segment Revenues 188.8 211.6 426.0 201% Segment Expe

29. Slide 29: Appendix(12) Overseas Business(1)

    Appendix(12) Overseas Business(1) FY13.3 FY14.3 FY15.3 Change （JPY （ ） Bn） Finance revenues 55.0 57.3 63.3 110% Gains on investment securities and dividends 13.7 15.8 30.5 193% Operating leases 61.5 76.6 82.1 107% Services income 72.7 228.8 321.5 141% Segment Revenues 203.5 412.2 561.9 136% Segment

30. Slide 30: Appendix(13) Overseas Business(2)

    Appendix(13) Overseas Business(2) ■Overseas Business segment assets breakdown （JPY Bn） By Region FY13.3 FY14.3 FY15.3 Change Americas 475.9 518.1 776.2 150% Asia / Australia 492.4 655.6 591.5 90% Greater China 180.4 196.6 249.2 127% Middle East / Europe 15.9 41.9 43.1 103% Robeco - 375.1 346.3 92% O

31. Slide 31: Appendix(14) Reconciliation Table of Non-GAAP Financial Measurement

    Appendix(14) Reconciliation Table of Non-GAAP Financial Measurement These materials include certain financial measures presented on a basis not in accordance with U.S. GAAP, or non-GAAP measures, including total assets and long-term liabilities excluding liabilities in line with securitized transact

32. Slide 32: Appendix(15) Reconciliation Table of Non-GAAP Financial Measurement

    Appendix(15) Reconciliation Table of Non-GAAP Financial Measurement (JPY Bn) Key Ratio FY13.3 FY14.3 FY15.3 Total Assets （a） 8,439.7 9,067.0 11,443.6 Deduct: Payables under Securitized Leases, Loan Receivables and 679 8 679.8 253 8 253.8 291 6 291.6 Investment in Securities Adjusted Total Assets （b）

33. Slide 33: Reference Data

    Reference Data Copyright © 2015 ORIX Corporation All rights reserved. 32

34. Slide 34: Macro Economic Indicators

    Macro Economic Indicators National CPI (Ex Fresh Food) Trends in Machinery Orders (YoY Change) % Change JPY Tn Private demand excl. volatile orders* 10.0 10 0 3.5 3 5 Manufacturing industry 8.0 3.0 Non-manufacturing industry excl. volatile orders* 6.0 2.5 4.0 2.0 2.0 1.5 0.0 1.0 -2.0 0.5 -4.0 0.0 11

35. Slide 35: Japanese Corporate Indices

    Japanese Corporate Indices Corporate Bankruptcies Tankan Corporate Diffusion Index (Quarterly Basis) (Quarterly Basis) JPY Tn Cases 30 3.0 4,000 20 3,000 2.0 10 2,000 1.0 1,000 0 0.0 0 -10 11.3 12.3 13.3 14.3 15.3 11.3 12.3 13.3 14.3 15.3 Large Medium Small Liabilities (left) Bankruptcies (right) So

36. Slide 36: Japanese Real Estate Indicators

    Japanese Real Estate Indicators Japan p TSE REIT Index Office Rental Rates Yen per 3.3㎡ 20,000 2 000 2,000 16,000 1,500 ,500 12,000 1,000 500 8,000 11 3 11.3 12 3 12.3 13 3 13.3 14 3 14.3 15 3 15.3 11.3 12.3 13.3 14.3 15.3 Tokyo Avg. Rent Osaka Avg. Rent Source: Tokyo Stock Exchange Source: Miki Sho

37. Slide 37: Domestic Lease Business Indicators

    Domestic Lease Business Indicators Private Equipment Investment New Car Sales 1,000 Units JPY Tn 7,000 14.0% 100 12.0% 6 000 6,000 12 0% 12.0% 10.0% 80 5,000 10.0% 8.0% 4,000 8.0% 60 6.0% 3,000 6.0% 40 4.0% 2,000 4.0% 20 1,000 2.0% 2.0% 0 0.0% 0 0.0% 02.3 04.3 06.3 08.3 10.3 12.3 14.3 04.12 06.12 08

38. Slide 38: Other Domestic Indicators

    Other Domestic Indicators Number of condominium sold in the Domestic Shipping Amount of Solar Cell Tokyo metropolitan area Cases MW 70 000 70,000 10 000 10,000 60,000 8,000 Others 50,000 Residential 40,000 6,000 30,000 4,000 20,000 2,000 10,000 0 0 08.3 09.3 10.3 11.3 12.3 13.3 14.3 15.3 Source: Rea

39. Slide 39: Other Domestic Indicators

    Other Domestic Indicators The number of M&A The number of the New Listed Companies Cases OUT-IN Cases 2,500 IN-OUT 100 IN-IN 2,000 80 1,500 60 1,000 40 500 20 0 0 09.12 10.12 11.12 12.12 13.12 14.12 08 12 08.12 09 12 09.12 10 12 10.12 11 12 11.12 12 12 12.12 13 12 13.12 14 12 14.12 S Source: RECOF C

40. Slide 40: Other Domestic Indicators

    Other Domestic Indicators Premium Income for Individual Insurance Consumer Finance Loan Balance JPY Bn JPY Bn 25,000 15,000 20,000 12,000 15,000 9,000 10,000 6,000 5,000 3,000 0 0 04.3 06.3 08.3 10.3 12.3 14.3 04.3 06.3 08.3 10.3 12.3 14.3 S Source: JJapan St Statistics ti ti B Bureau S Source: JJap

41. Slide 41: Disclaimer

    Disclaimer  These materials have been prepared by ORIX Corporation (“ORIX” or the “Company”) solely for your information and are subject to change without notice. The information contained in these materials has not been independently verified and its accuracy is not guaranteed. No representations,

42. Slide 42: Additional Information

    Additional Information For annual and more historical data please access our website. A list of major disclosure materials is given below. ORIX Website: URL: http://www.orix.co.jp/grp/en/ IR Website: URL: http://www.orix.co.jp/grp/en/ir/ If you would like to be included on our e-mail list for major

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