Orix Corporation · TSE:8591

Orix — Q3 FY2014.3 Earnings Presentation

39 slides from Orix's earnings presentation, Jan 30, 2014

  1. Slide 1: ORIX Corporation Conference Call

    ORIX Corporation (TSE: 8591; NYSE: IX) Conference Call Third Quarter Consolidated Financial Results For the Nine Month Period Ended April 1 – December 31, 2013 January 30, 2014 Haruyuki Urata Deputy President & CFO Shintaro Agata Corporate Executive Vice President, Head of the Treasury Headquarters

  2. Slide 2: Performance Overview

    Performance Overview  118.2bn in Net Income, up 31% year on year  Achieved 82% of 145bn full year target Net Income* and ROE （JPY Bn） 200 9 0% 9.0% 7.4% 150 Full Year 6 2% 6.2% Target 145.0 bn 100 111.9 118.2 50 83.5 0 12.3 13.3 14.3 3Q *Net income refers to Net Income Attributable to ORIX Corpora

  3. Slide 3: Performance: Segment Profits

    Performance: Segment Profits  Increased profits in four segments including Overseas Business, Real Estate, Retail and Maintenance Leasing Segment Profits （JPY Bn） 180 Corporate Financial Services Maintenance Leasing g 140 Real Estate 100 Investment and Operation 60 Retail 20 Overseas Business 12.3

  4. Slide 4: Performance: Segment Assets

    Performance: Segment Assets  Assets increased in Overseas Business, Retail and Maintenance Leasing segments, while ROA also increased Segment Assets* （JPY Tn) 7 2.3% 2.5% Corporate Financial Services 6 2.0% Maintenance Leasing 1.8% 5 Real Estate 1.3% 1.5% 4 Investment and 3 1.0% Operation Retail 2

  5. Slide 5: Segment Performance 1. Corporate Financial Services

    Segment Performance 1. Corporate Financial Services （JPY Bn） 12.3 13.3 13.3 3Q 14.3 3Q Change Base Profits 26.1 26.1 18.5 15.5 84% Capital Gains 0.4 0.3 0.2 1.8 - Provisions -2.5 -0.3 0.4 0.7 - I Impairments i t -1.1 11 -0.1 01 -0.1 01 00 0.0 - Segment Profits 23.0 25.9 19.0 18.0 94% Segment Assets

  6. Slide 6: Segment Performance 2. Maintenance Leasing

    Segment Performance 2. Maintenance Leasing （JPY Bn） 12.3 13.3 13.3 3Q 14.3 3Q Change Base Profits 33.1 34.9 26.1 30.6 117% Capital Gains 0.0 0.0 0.0 0.0 - Provisions 0.2 0.1 -0.2 -0.4 - Impairments 00 0.0 -0.1 01 -0.1 01 00 0.0 - Segment Profits 33.3 34.9 25.8 30.3 117% S Segment t Assets A t 490 9

  7. Slide 7: Segment Performance 3. Real Estate

    Segment Performance 3. Real Estate （JPY Bn） 12.3 13.3 13.3 3Q 14.3 3Q Change Base Profits 18.3 25.0 19.1 21.0 110% Capital Gains 14.2 16.5 10.2 17.0 - Provisions -3.0 0.4 0.5 -1.9 - Impairments -28.2 28 2 -36.4 36 4 -25.6 25 6 -20.3 20 3 - Segment Profits 1.3 5.6 4.2 15.7 379% Segment Assets 1,390.5

  8. Slide 8: Segment Performance 4. Investment and Operation

    Segment Performance 4. Investment and Operation （JPY Bn） 12.3 13.3 13.3 3Q 14.3 3Q Change Base Profits 22.4 29.1 24.6 24.0 97% Capital Gains 5.3 19.0 16.4 8.5 - Provisions -7.5 -5.5 -2.6 -1.7 - I Impairments i t -4.2 42 -7.6 76 -5.8 58 -0.9 09 - Segment Profits 16.0 34.9 32.7 29.9 91% Segment Assets

  9. Slide 9: Segment Performance 5. Retail

    Segment Performance 5. Retail （JPY Bn） 12.3 13.3 13.3 3Q 14.3 3Q Change Base Profits 32.8 42.1 31.6 38.7 122% Capital Gains 0.3 3.7 3.4 3.7 - Provisions -1.1 -2.6 -1.5 -2.8 - I Impairments i t -12.7 12 7 00 0.0 00 0.0 00 0.0 - Segment Profits 19.4 43.2 33.6 39.6 118% Segment Assets 1,742.9 1,994.1 1

  10. Slide 10: Segment Performance 6. Overseas Business

    Segment Performance 6. Overseas Business （JPY Bn） 12.3 13.3 13.3 3Q 14.3 3Q Change Base Profits 40.4 37.5 24.7 45.2 183% Capital Gains 21.2 19.3 11.8 13.4 - Provisions -3.8 -2.4 -1.1 -2.9 - I Impairments i t -8.0 80 -1.6 16 -1.1 11 -3.3 33 - Segment Profits 49.8 52.8 34.3 52.4 153% Segment Assets 1,

  11. Slide 11: Progress on Strategies

    Progress on Strategies  Steady build-up of investments that agree with direction of the strategies Acceleration of Shift from Debt to Equity, q y, “Finance + Services” and then on to Operations Robeco MEDGULF Mega-Solar, 300MW Target (¥250.7bn/Asset Management) (¥21.3bn/Insurance/Saudi Arabia) (App

  12. Slide 12: Summary

    Summary 118.2bn in Net Income,, 31% increase YoY 9% ROE on an annualized basis Establish new pillars of business, aim to maintain strong growth Copyright © 2014 ORIX Corporation All rights reserved. 11

  13. Slide 13: Appendix

    Appendix pp Copyright © 2014 ORIX Corporation All rights reserved. 12

  14. Slide 14: About ORIX: Sustainable Growth

    About ORIX Sustainable Growth  Continuous profitability for 48 years, achieving sustainable growth FY2009.3 (JPY Bn) Net Income Attributable to ORIX Corporation Collapse of L h Lehman Brothers B th 2,000 200 FY2014.3 145.0bn (Target) 1,500 150 FY2002.3 Bursting of FY2013.3 the IT Bubble 111.9bn FY1

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

    About ORIX Business expertise and Group-wide capability ORIX evolved by moving 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 rehabilitation su

  16. Slide 16: About ORIX: Expansive Domestic and Overseas Network

    About ORIX Expansive Domestic and Overseas Network  Expanded its global reach starting with Hong Kong in 1971, using knowhow developed in Japan  Not as ambitious as to call it a globalization globalization, but rather it is a way of eliminating barriers that exist in Japan 35 Countries and Regions

  17. Slide 17: Changing Balance Sheet Structure

    Changing Balance Sheet Structure  Improving profitability while strengthening financial soundness (Percentage of (ROA) （JPY Tn） Real Estate) 10 Real Estate Segment Others excl. Real Estate 40% Percentage of Real Estate Segment Asset ROA 8 30% 6 20% 4 10% 2 0 0% 07.3 08.3 09.3 10.3 11.3 12.3 13.3 13

  18. Slide 18: Changing Revenue Structure

    Changing Revenue Structure  Firm growth in base profits. Enhanced stable growth through Robeco acquisition （JPY Bn） 300 Base Profits Capital Gains 250 200 150 100 50 0 07.3 08.3 09.3 10.3 11.3 12.3 13.3 14.3 3Q Copyright © 2014 ORIX Corporation All rights reserved. 17

  19. Slide 19: Status of Shareholders' Equity

    Status of Shareholders’ Equity  Ratio of employed capital is 80% after Robeco acquisition  Capital deployment status change in conjunction with portfolio turnover Employed Capital Ratio and ROE Breakdown of Deployed Capital (JPY Bn) 2,000 9.0% 10.0% 7.4% 9.0% Corporate Financial Services/ 8 0% 8.0

  20. Slide 20: Appendix(1) Trend in Performance

    Appendix(1) Trend in Performance (JPY Bn) 12.3 13.3 13.3 3Q 14.3 3Q Total Revenue 965.7 1,062.4 781.2 965.6 *1 Net Income 83 5 83.5 111 9 111.9 90 1 90.1 118 2 118.2 Segment Assets 6,123.9 6,382.7 6,327.2 7,029.0 Total Assets 8,332.8 8,439.7 8,241.8 8,673.6 Shareholders' Equity 1,380.7 1,643.6 1,479

  21. Slide 21: Appendix(2) Profit by Segment

    Appendix(2) Profit by Segment (JPY Bn) 12.3 13.3 13.3 3Q 14.3 3Q Change Corporate Financial Services 23.0 25.9 19.0 18.0 94% Maintenance Leasing 33.3 34.9 25.8 30.3 117% Real Estate 1.3 5.6 4.2 15.7 379% Investment and Operation 16 0 16.0 34 9 34.9 32 7 32.7 29 9 29.9 91% Retail 19.4 43.2 33.6 39.6

  22. Slide 22: Appendix(3) Assets by Segment & Region

    Appendix(3) Assets by Segment & Region 12.3 13.3 14.3 3Q (JPY Bn) Corporate Financial Services 946.5 943.3 954.6 Maintenance Leasing 490.9 549.3 596.2 Real Estate 1,390.5 1,133.2 1,008.0 Investment and Operation 471.9 444.3 444.6 Retail 1,742.9 1,994.1 2,096.9 Overseas Business 1,081.2 1,318.4 1,928

  23. Slide 23: Appendix(4) Funding and Liquidity

    Appendix(4) Funding and Liquidity (JPY Bn) 12.3 13.3 14.3 3Q CP 180.4 151.5 103.9 Borrowings from Financial Institutions 2,277.3 2,368.0 2,508.7 Bonds / MTN 1,393.0 1,283.0 1,253.4 Deposits 1,103.5 1,078.6 1,122.4 Subtotal 4,954.3 4,881.1 4,988.5 ABS, CMBS 874.7 679.8 293.4 Short-term Debt, Long-ter

  24. Slide 24: Appendix(5) Real Estate Portfolio

    Appendix(5) Real Estate Portfolio ■ Trend in Real Estate Segment Assets by Type (JPY Bn) 12.3 13.3 14.3 3Q Rental Property 876.3 754.4 689.1 Under Lease 705.9 603.4 567.7 Under Development 170.4 151.0 121.4 Condo Assets 87.3 55.4 38.0 NRL / S Specified ifi d B Bonds d 205 4 205.4 113 4 113.4 * 66.2

  25. Slide 25: Appendix(6) Real Estate Portfolio

    Appendix(6) Real Estate Portfolio (JPY Bn) ■ Rental Property Assets by Type (13.12) Under Lease Under Property Type Total B l Balance NOI Yield Yi ld Development D l t Office Buildings 185.1 4.1% 62.7 247.8 Logistics Centers 23.5 5.9% 1.3 24.8 Commercial Facilities 135.0 6.4% 28.0 163.0 Rental Condo

  26. Slide 26: Appendix(7) Robeco

    Appendix(7) Robeco (JPY Bn) 14.3 2Q 14.3 3Q Segment Profits 4.4 5.9 Segment Assets 328.9 365.0 ROA (After Tax, Quarterly Basis) 3.3% 4.2% 2012.1-12 * 2013.1-6 * 2013.7-9 2013.10-12 End of Period AUM (Billions of euro) 188 9 188.9 192 5 192.5 197 1 197.1 205 2 205.2 Net New Money (Billions of euro) 1

  27. Slide 27: Appendix(8) Asset Quality

    Appendix(8) Asset Quality ■ Asset Quality (Adjusted **) (JPY Bn) 12.3 13.3 14.3 3Q Investment in Direct Financing Leases 728.0 826.4 925.6 90+Days Past Past-Due Due Direct Financing Leases 17 4 17.4 15 8 15.8 15 4 15.4 Installment Loans 2,073.2 2,176.1 2,122.6 90+Days Past-Due Loans 8.6 7.7 6.9 Not

  28. Slide 28: Appendix(9) Reconciliation Table of Non-GAAP Financial Measurement

    Appendix(9) 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 transacti

  29. Slide 29: Appendix(10) Reconciliation Table of Non-GAAP Financial Measurement

    Appendix(10) Reconciliation Table of Non-GAAP Financial Measurement (JPY Bn) Key Ratio 12.3 13.3 14.3 3Q Total Assets （a） 8,332.8 8,439.7 8,673.6 Deduct: educt Payables ayab es uunder de Secu Securitized t ed Leases, eases, Loan oa Receivables ece ab es aand d Investment in Securities 874 7 874.7 67

  30. Slide 30: Appendix(11) Reconciliation Table of Non-GAAP Financial Measurement

    Appendix(11) Reconciliation Table of Non-GAAP Financial Measurement (JPY Bn) B ) Consolidated Corporate Investment Maintenance Overseas Segment Financial Segment Profit Details Financial Real Estate and Retail Total Leasing Business Total Statement Services Operations Adjustment Base Profits *1 26.1

  31. Slide 31: Reference Data

    Reference e e e ce Data ata Copyright © 2014 ORIX Corporation All rights reserved. 30

  32. Slide 32: Macro Economic Indicators

    Macro Economic Indicators National CPI (Ex Fresh Food) Trends in Machineryy Orders (YoY Change) (Indicator of Capital Expenditure) *Volatile orders: Orders from ships and electric power companies. Source: Bloomberg g Source: Cabinet Office,, Government of Japan p Copyright © 2014 ORIX Corporation Al

  33. Slide 33: Japanese Corporate Indices

    Japanese Corporate Indices Corporate Bankruptcies Tankan Corporate (Q t l Basis) (Quarterly B i ) Diffusion Index Source: Teikoku Databank Databank, Ltd Ltd. Source: Bank of Japan Copyright © 2014 ORIX Corporation All rights reserved. 32

  34. Slide 34: Japanese Real Estate Indicators

    Japanese Real Estate Indicators Japan TSE REIT Index Office Rental Rates Source: Tokyo y Stock Exchange g Source: CBRE Copyright © 2014 ORIX Corporation All rights reserved. 3333

  35. Slide 35: Other Domestic Indicators

    Other Domestic Indicators Trend in Domestic Supply of Domestic Shipping Amount of Solar Cell Renewable Energy （Primary Energy Supply Basis） Source: Agency g y for Natural Resources and Energy gy Source: Japan p Photovoltaic Energy gy Association Copyright © 2014 ORIX Corporation All rights reserved.

  36. Slide 36: Other Domestic Indicators

    Other Domestic Indicators The number of M&A The number of the New Listed Companies Source: RECOF Corporation Source: Tokyo Stock Exchange Copyright © 2014 ORIX Corporation All rights reserved. 3535

  37. Slide 37: Other Domestic Indicators

    Other Domestic Indicators Retail Life Insurance Consumer Finance Loans Source: Japan Statistics Bureau Source: Japan Financial Services Agency Copyright © 2014 ORIX Corporation All rights reserved. 3636

  38. Slide 38: Disclaimer

    Disclaimer  These materials have been prepared by ORIX O Corporation C (“O (“ORIX” or the “Company”) “C ) solely ffor your information f 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

  39. Slide 39: Additional Information

    Additional Information For annual and more historical data please access our website. A list of major disclosure materials is given below. ORIX W Website: b it URL: htt URL http://www.orix.co.jp/grp/en/ // i j / / / IR Website: URL: http://www.orix.co.jp/grp/en/ir/ If you would ld like lik tto b be

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