Orix Corporation · TSE:8591

Orix — H1 FY2017.3 Earnings Presentation

45 slides from Orix's earnings presentation, Oct 27, 2016

1. Slide 1: Second Quarter Consolidated Financial Results

   ORIX Corporation Second Quarter Consolidated Financial Results For the Six-Month Period Ended September 30, 2016 Makoto Inoue President & CEO Kazuo Kojima Deputy President & CFO October 27, 2016 Copyright © 2016 ORIX Corporation(TSE: 8591; All rights NYSE: IX) reserved.

2. Slide 2: Overview (1)

   Overview（1）  142.2bn yen in net income, down by 12% YoY  Annualized ROE at 12.2% Net Income* and ROE (JPY Bn) 14.7% 180 14.3% 160 12.2% 140 120 100 80 141.3 161.3 60 142.2 40 20 0 15.3 H1 16.3 H1 17.3 H1 Net Income ROE (annualized) *Net Income refers to Net Income Attributable to ORIX Corporation

3. Slide 3: Overview (2)

   Overview（2）  Segment profits at 214bn yen, down by 13% YoY  Positive profit growth in Investment and Operation, Retail and Real Estate  Overseas Business resulted lower profits YoY due to gains from Houlihan Lokey’s IPO last year, and a stronger yen Segment Profits (JPY Bn) 300 244.8 250 214.0 Ov

4. Slide 4: Overview (3)

   Overview（3）  Segment assets at 8,536.2bn yen, down by 5% YTD  Overseas Business assets decreased by 10% due to a stronger yen  Segment Assets ROA maintained above 3% Segment Assets and ROA (JPY Tn) 10 3.4% 3.6% 3.8% 3.2% 3.3% 8 2.9% 2.8% Overseas Business Retail 6 2.3% Investment and Operation 1.

5. Slide 5: Overview (4)

   Overview（4）  Pretax profits: 31.5bn yen decrease YoY (▲13%)  Recent strong yen reduced pretax profits by 7.3bn yen YoY  Houlihan Lokey’s IPO boosted pretax profits last year by 39.6bn yen; higher gains on sales of Real Estate assets YoY  Segment assets: 436.2bn yen decrease YTD (▲5%)  More than

6. Slide 6: Segment Performance (1) (Corporate Financial Services)

   Segment Performance（1） （Corporate Financial Services）  Segment profits: 19.9bn yen, down by 1.7bn yen YoY (▲8%)  Finance revenues decreased due to lower installment loan balance  Services income continued to increase steadily  Segment assets: 1,034.4bn yen, down by 15.5bn yen YTD (▲1%)  Install

7. Slide 7: Segment Performance (2) (Maintenance Leasing)

   Segment Performance（2） （Maintenance Leasing）  Segment profits: 19.7bn yen, down by 3.5bn yen YoY (▲15%)  Gains on sales of used car decreased by 1.3bn yen YoY  Segment assets: 724.2bn yen, down by 7.2bn yen YTD (▲1%)  Assets decreased due to securitization (37.5bn yen) Segment Revenues/Profits S

8. Slide 8: Segment Performance (3) (Real Estate)

   Segment Performance（3） （Real Estate）  Segment profits: 35.4bn yen, up by 1.7bn yen YoY (+5%)  Realized capital gains from well-timed sales of RE assets  Segment assets: 705.1bn yen, down by 34.5bn yen YTD (▲5%)  Assets decreased due to rental property sales Segment Revenues/Profits Segment Asset

9. Slide 9: Segment Performance (4) (Investment and Operation)

   Segment Performance（4） （Investment and Operation）  Segment profits: 52bn yen, up by 15.6bn yen YoY (+43%)  Profit growth largely driven by exit of PE investments and services income growth in Environment and energy business  Segment assets: 695.8bn yen, down by 8.4bn yen YTD (▲1%)  While assets

10. Slide 10: Segment Performance (5) (Retail)

    Segment Performance（5） （Retail）  Segment profits: 35.5bn yen, up by 3.4bn yen YoY (+11%)  Life insurance premiums and related investment income improved; Finance revenues from banking business also increased  Segment assets: 3,325.4bn yen, down by 137.4bn yen YTD (▲4%)  Increase in banking asset

11. Slide 11: Segment Performance (6) (Overseas Business)

    Segment Performance（6） （Overseas Business）  Segment profits: 51.5bn yen, down by 46.4bn yen YoY (▲47%)  7.3bn yen decrease due to a stronger yen; there were gains (39.6bn yen) from Houlihan Lokey’s IPO last year  Higher profits contributed by Aircraft-related operations  Segment assets: 2,051.5b

12. Slide 12: Performance in Three Categories

    Performance in Three Categories  “Investment”, which recognized capital gains from PE investment exits and sales of RE assets, was a major driver behind the overall profits growth  “Finance” and “Operation” also achieved steady profits growth if FX impacts were disregarded Segment Profits (3 Categ

13. Slide 13: Mid-Term Strategic Direction

    Mid-Term Strategic Direction  Continue to implement growth strategy and identify business opportunities amid uncertain macro environment  Focus on expanding stable earning streams and developing brand new businesses FY17.3 H1 Progress Businesses Major Progress Infrastructure • Kansai Airports oper

14. Slide 14: Share Buybacks

    Share Buybacks  Despite solid financial performance, ORIX share price stays below PBR 1X  Buybacks will be implemented when share price deviates significantly from its intrinsic value  Buybacks can contribute to efficient capital allocation and enhance long-term shareholder value Number of share

15. Slide 15: Dividends

    Dividends  Interim dividend at 23 yen per share; Year end dividend forecast at 28 yen per share  Full year dividend forecast at 51 yen per share implies a 11% increase YoY  Dividend payout ratio target for FY2017.3 at 25%  Target stable dividend growth inline with sustainable profit growth Divid

16. Slide 16: Summary

    Summary Net income at 142.2bn yen, annualized ROE at 12.2% Despite a YoY decrease in net income, overall results still considered solid With a focus on “Operation” and “Investment”, continue to develop new businesses and further strengthen stable earning streams Copyright © 2016 ORIX Corporation All

17. Slide 17: Appendix

    Appendix Copyright © 2016 ORIX Corporation All rights reserved. 16

18. Slide 18: About ORIX: Proven Track Record of Profitability

    About ORIX Proven Track Record of Profitability  ORIX has maintained profitability for the past 51 consecutive years Net Income Attributable to ORIX Corporation Shareholders Copyright © 2016 ORIX Corporation All rights reserved. 17

19. Slide 19: About ORIX: Evolving and Dynamic Portfolio

    About ORIX Evolving and Dynamic Portfolio ORIX leverages its operational know-how to evolve, diversify and adapt its portfolio to take advantage of changing macroeconomic conditions Infrastructure Copyright © 2016 ORIX Corporation All rights reserved. 18

20. Slide 20: About ORIX: Business by Segment

    About ORIX Business by Segment  Our highly diversified company contains many complementary businesses, providing ample opportunity for synergies and knowledge sharing Corporate Financial HL* 11% Lending, Leasing, Fee businesses Services 11% Automobile leasing and rentals, Car Segment Profits sharin

21. Slide 21: About ORIX: Global Network

    About ORIX Global Network  ORIX has spread its business globally by expanding operations in 37 countries and regions worldwide (As of 2016.3.31) Copyright © 2016 ORIX Corporation All rights reserved. 20

22. Slide 22: Appendix(1) Performance Overview

    Appendix(1) Performance Overview （JPY Bn） Change FY15.3 FY16.3 15.3 H1 16.3 H1 17.3 H1 (YoY) Total Revenues 2,174.3 2,369.2 955.6 1,170.2 1,221.1 104% Net Income *1 234.9 260.2 141.3 161.3 142.2 88% Segment Assets 9,170.2 8,972.4 9,118.9 8,766.0 8,536.2 97% Total Assets 11,439.9 10,992.9 11,205.9 11

23. Slide 23: Appendix(2) Profits by Segment

    Appendix(2) Profits by Segment （JPY Bn） Change FY15.3 FY16.3 15.3 H1 16.3 H1 17.3 H1 (YoY) Corporate Financial Services 25.5 42.4 12.6 21.6 19.9 92% Maintenance Leasing 40.4 42.9 21.5 23.1 19.7 85% Real Estate 3.5 42.9 15.8 33.7 35.4 105% Investment and Operation 42.4 57.2 14.5 36.5 52.0 143% Retail

24. Slide 24: Appendix(3) Assets by Segment

    Appendix(3) Assets by Segment （JPY Bn） Change 15.3 16.3 14.9 15.9 16.9 (YTD) Corporate Financial Services 1,132.5 1,049.9 983.6 1,068.5 1,034.4 99% Maintenance Leasing 662.9 731.3 656.1 699.3 724.2 99% Real Estate 835.4 739.6 885.2 753.9 705.1 95% Investment and Operation 660.0 704.2 596.8 599.0 695

25. Slide 25: Appendix(4) Income Statement Data

    Appendix(4) Income Statement Data （JPY Bn） Change FY15.3 FY16.3 15.3 H1 16.3 H1 17.3 H1 (YoY) Finance revenues 186.9 200.9 91.2 101.2 96.6 95% Gains on investment securities and dividends 56.4 35.8 31.3 31.3 15.2 49% Operating leases 124.9 128.8 64.1 68.9 74.8 109% Life insurance premiums and relate

26. Slide 26: Appendix(5) Funding

    Appendix(5) Funding （JPY Bn） Change Funding 15.3 16.3 14.9 15.9 16.9 (YoY) CP 89.6 102.4 163.2 70.1 14.0 -56.1 Borrowings from Financial Institutions 2,881.6 2,970.6 2,684.4 2,874.1 2,769.1 -105.0 Bonds / MTN 1,151.5 938.1 1,109.4 1,086.2 942.5 -143.7 Deposits 1,287.4 1,398.5 1,218.2 1,332.7 1,490.2

27. Slide 27: Appendix(6) Corporate Financial Services

    Appendix(6) Corporate Financial Services （JPY Bn） Change FY15.3 FY16.3 15.3 H1 16.3 H1 17.3 H1 (YoY) Finance revenues 35.6 34.2 18.1 16.8 15.5 92% Operating leases 24.5 25.5 12.2 12.4 12.2 99% Services income 22.0 35.7 9.2 17.4 20.1 115% Sales of goods and real estate and 3.4 11.7 1.3 6.1 4.2 68% ot

28. Slide 28: Appendix(7) Maintenance Leasing

    Appendix(7) Maintenance Leasing （JPY Bn） Change FY15.3 FY16.3 15.3 H1 16.3 H1 17.3 H1 (YoY) Finance revenues 11.1 12.1 5.1 6.3 6.4 102% Operating leases 185.7 188.8 93.9 94.4 93.3 99% Services income 62.5 66.8 30.6 33.2 33.3 100% Segment Revenues 263.5 271.7 131.7 135.9 134.8 99% Segment Expenses 22

29. Slide 29: Appendix(8) Real Estate (1)

    Appendix(8) Real Estate (1) （JPY Bn） Change FY15.3 FY16.3 15.3 H1 16.3 H1 17.3 H1 (YoY) Finance revenues 4.1 6.7 2.2 5.5 0.8 15% Operating leases 63.8 60.3 34.4 36.7 43.3 118% Gains on Rental Property Sales 14.9 16.1 8.9 13.7 23.0 168% Services income 104.1 110.6 52.6 57.5 55.9 97% Sales of goods an

30. Slide 30: Appendix(9) Real Estate (2)

    Appendix(9) Real Estate (2) ■Breakdown of Real Estate Segment Assets （JPY Bn） Change 15.3 16.3 14.9 15.9 16.9 (YTD) Rental Property 566.9 493.4 600.9 510.1 415.7 84% Under Lease 471.5 406.1 498.7 416.8 353.6 87% Under Development 95.4 87.3 102.2 93.3 62.1 71% Condo Assets 16.5 5.9 24.0 8.6 5.5 93% N

31. Slide 31: Appendix(10) Investment and Operation

    Appendix(10) Investment and Operation （JPY Bn） Change FY15.3 FY16.3 15.3 H1 16.3 H1 17.3 H1 (YoY) Finance revenues 15.7 12.6 8.3 6.5 5.3 82% Gains on investment securities and dividends 9.3 10.3 4.6 9.7 6.2 64% Sales of goods and real estate 371.4 718.9 119.1 338.3 377.4 112% Services income 260.4 2

32. Slide 32: Appendix(11) Retail

    Appendix(11) Retail （JPY Bn） Change FY15.3 FY16.3 15.3 H1 16.3 H1 17.3 H1 (YoY) Finance revenues 52.5 55.3 26.0 27.2 28.9 106% Life insurance premiums and 352.5 190.8 138.0 71.2 116.4 164% related investment income Services income and others 20.9 8.2 18.0 4.1 5.8 142% Segment Revenues 426.0 254.3 18

33. Slide 33: Appendix(12) Overseas Business (1)

    Appendix(12) Overseas Business (1) （JPY Bn） Change FY15.3 FY16.3 15.3 H1 16.3 H1 17.3 H1 (YoY) Finance revenues 63.3 75.0 29.2 36.2 37.9 105% Gain on investment securities and dividends 30.5 16.1 9.8 15.7 5.6 36% Operating leases 82.1 92.0 38.8 44.0 43.5 99% Services income 321.5 250.1 141.7 138.0 1

34. Slide 34: Appendix(13) Overseas Business (2)

    Appendix(13) Overseas Business (2) ■Overseas Business segment assets breakdown （JPY Bn） Change By Region 15.3 16.3 14.9 15.9 16.9 (YTD) The Americas 776.2 787.2 697.4 733.2 703.0 89% Asia and Australia (Other than Greater China) 591.5 592.3 590.9 551.7 551.1 93% Greater China 249.2 260.3 225.5 253.3

35. Slide 35: Appendix(14) Business Portfolio in Three Categories

    Appendix(14) Business Portfolio in Three Categories Finance Operation Investment Main Risk Credit risk Operation/Business risk Market risk Categories Capital Low Medium High Requirement Environment/ Financial Maintenance Tangible Japan Ex-Japan Others Fixed Income Equity Infrastructure Services Serv

36. Slide 36: Reference Data

    Reference Data Copyright © 2016 ORIX Corporation All rights reserved. 35

37. Slide 37: Macro Economic Indicators

    Macro Economic Indicators National CPI (Ex Fresh Food) Trends in Machinery Orders (YoY Change) JPY Tn % Change 3.5 7.0 6.0 3.0 5.0 2.5 4.0 3.0 2.0 2.0 1.5 1.0 0.0 1.0 -1.0 0.5 -2.0 -3.0 0.0 12.6 13.6 14.6 15.6 16.6 12.6 13.6 14.6 15.6 16.6 Japan U.S China Private demand excl. volatile orders* Manufa

38. Slide 38: Japanese Corporate Indices

    Japanese Corporate Indices Corporate Bankruptcies Tankan Corporate Diffusion Index (Quarterly Basis) (Quarterly Basis) JPY Tn Cases 40 3.0 4,000 30 3,000 2.0 2,000 20 1.0 1,000 10 0.0 0 0 12.9 13.9 14.9 15.9 16.9 12.9 13.9 14.9 15.9 16.9 Large Medium Small Liabilities (left) Bankruptcies (right) Sou

39. Slide 39: Japanese Real Estate Indicators

    Japanese Real Estate Indicators Japan TSE REIT Index Office Rental Rates Yen per 3.3㎡ 2,000 20,000 1,500 16,000 1,000 12,000 500 8,000 12.9 13.9 14.9 15.9 16.9 12.9 13.9 14.9 15.9 16.9 Tokyo Avg. Rent Osaka Avg. Rent Source: Tokyo Stock Exchange Source: Miki Shoji Copyright © 2016 ORIX Corporation A

40. Slide 40: Domestic Lease Business Indicators

    Domestic Lease Business Indicators Private Equipment Investment New Car Sales JPY Tn 1,000 Units 100 12.0% 7,000 14.0% 10.0% 6,000 12.0% 80 8.0% 5,000 10.0% 60 4,000 8.0% 6.0% 40 3,000 6.0% 4.0% 2,000 4.0% 20 2.0% 1,000 2.0% 0 0.0% 04.3 06.3 08.3 10.3 12.3 14.3 16.3 0 0.0% 05.12 07.12 09.12 11.12 13

41. Slide 41: Other Domestic Indicators

    Other Domestic Indicators Number of condominium sold in the Domestic Shipping Amount of Solar Cell Tokyo metropolitan area No. of transactions MW 60,000 10,000 50,000 8,000 Others 40,000 Residential 6,000 30,000 4,000 20,000 10,000 2,000 0 0 09.9 10.9 11.9 12.9 13.9 14.9 15.9 16.9 10.3 11.3 12.3 13.

42. Slide 42: Other Domestic Indicators

    Other Domestic Indicators The number of M&A deals The number of the New Listed Companies OUT-IN 3,000 100 IN-OUT IN-IN 2,500 80 2,000 60 1,500 40 1,000 20 500 0 0 10.12 11.12 12.12 13.12 14.12 15.12 10.12 11.12 12.12 13.12 14.12 15.12 16.1-16.9 Source: RECOF Corporation Source: Tokyo Stock Exchange

43. Slide 43: 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 05.3 07.3 09.3 11.3 13.3 15.3 06.3 08.3 10.3 12.3 14.3 16.3 Source: Japan Statistics Bureau Source: Japan Financial Serv

44. Slide 44: 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,

45. Slide 45: ORIX Corporation

    For the current IR materials and archives of past financial data please access our website ORIX Website http://www.orix.co.jp/grp/en/ IR Section http://www.orix.co.jp/grp/en/ir/ ORIX Corporation Corporate Planning Department World Trade Center Building., 2-4-1, Hamamatsu-cho, Minato-ku, Tokyo 105-61

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