Edgar Filing: ORIX CORP

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ORIX CORPORATION

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 October, 2004.

ORIX Corporation
(Translation of Registrant’s Name into English)

3-22-8 Shiba, Minato-Ku, Tokyo, 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 þ		Form 40-F o

(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 o		No þ

Table of Documents Filed


		Page
1.	ORIX’s Interim Consolidated Financial Results (April 1, 2004 - September 30, 2004) filed with the Tokyo Stock Exchange on Tuesday, October 26, 2004.

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: October 28, 2004	By:	/s/ Shunsuke Takeda
		Shunsuke Takeda
		Director Deputy President and CFO ORIX Corporation

Consolidated Financial Results April 1, 2004 — September 30, 2004

October 26, 2004

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 111.05 to $1.00, the approximate exchange rate prevailing at September 30, 2004.

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 expects that it will be a “passive foreign investment company” under the U.S. Internal Revenue Code. A U.S. holder of the shares of the Company is therefore subject to special rules of taxation in respect of certain dividend, gain or other income on such shares. 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
3-22-8 Shiba, Minato-ku, Tokyo 105-8683
JAPAN
Tel: (03) 5419-5102 Fax: (03) 5419-5901
E-mail: raymond_spencer@orix.co.jp

Consolidated Financial Results from April 1, 2004 to September 30, 2004
(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: (03) 5419-5102 (URL http://www.orix.co.jp/grp/ir_e/ir_index.htm)
Date Approved by Board of Directors:		October 26, 2004

1.		Performance Highlights for the Six Months Ended September 30, 2004 and 2003, and the Year Ended March 31, 2004

(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
September 30, 2004		402,351		17.5	%		56,608		28.1	%		69,175		24.2	%
September 30, 2003		342,539		2.8	%		44,182		30.4	%		55,709		49.5	%
March 31, 2004		719,132		—			83,978		—			101,360		—


						Basic		Diluted
			Year-on-Year			Earnings		Earnings
	Net Income		Change			Per Share		Per Share
September 30, 2004		42,688		35.9	%		509.74		477.96
September 30, 2003		31,419		38.0	%		375.42		353.65
March 31, 2004		54,020		—			645.52		607.52

1.		Equity in Net Income of Affiliates was a net gain of JPY 9,765 million for the six months ended September 30, 2004, a net gain of JPY 11,923 million for the six months ended September 30, 2003 and a net gain of JPY 17,924 million for the year ended March 31, 2004.
2.		The average number of shares was 83,743,749 for the six months ended September 30, 2004, 83,691,862 for the six months ended September 30, 2003 and 83,685,449 for the year ended March 31, 2004.
3.		Changes in Accounting Principles Yes ( ) No (x) (except for adoptions of new accounting principles)

*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, Extraordinary Gain and Income Taxes.”

(2)

Performance Highlights — Financial Position (Unaudited)


			Shareholders’		Shareholders’			Shareholders’
	Total Assets		Equity		Equity Ratio			Equity Per Share
September 30, 2004		5,724,771		619,249		10.8	%		7,389.48
September 30, 2003		5,684,598		541,078		9.5	%		6,465.22
March 31, 2004		5,624,957		564,047		10.0	%		6,739.64

The number of outstanding shares was 83,801,399 as of September 30, 2004, 83,690,699 as of September 30, 2003 and 83,691,007 as of March 31, 2004.

(3)

Performance Highlights — Cash Flows (Unaudited)


	Cash Flows		Cash Flows			Cash Flows			Cash and Cash Equivalents
	from Operating Activities		from Investing Activities			from Financing Activities			at End of Period
September 30, 2004		40,987		(95,526	)		23,747			121,891
September 30, 2003		71,813		117,408			(225,059	)		168,347
March 31, 2004		152,812		123,978			(328,284	)		152,235

(4)

Number of Consolidated Subsidiaries and Affiliates

(5)

Changes in Accounting Treatment

Additions to and deletions from consolidated subsidiaries and affiliates

			Additions: Consolidated Subsidiaries 6, Affiliates 3
			Deletions: Consolidated Subsidiaries 4, Affiliates 3

Forecasts for the Year Ending March 31, 2005 (Unaudited)

Total

Income before

Fiscal Year

Revenues

Income Taxes

Net Income

March 31, 2005

780,000

122,000

74,000

Note:

Basic Earnings Per Share is forecasted to be JPY 883.04.

In addition, ORIX has delisted from the Nagoya Stock Exchange on October 23, 2004.

Group Position

The main contents of each operation and the positioning of ORIX Corporation and its subsidiaries are given below.

The following classification is the same as that used in the classification of information by segment.

Operations in Japan

(1)		Corporate Financial Services

		This business centers on direct financing leases and installment loans, other than real estate loans, to corporate customers as well as the sale of a variety of financial products and other fee business.

		[Main related companies]

ORIX Corporation, ORIX Alpha Corporation, ORIX Auto Leasing Corporation, IFCO Inc., Nittetsu Lease Co., Ltd.

(2)		Rental Operations

		This business principally comprises the rental of precision measuring equipment and personal computers to corporate customers as well as automobile rental operations.

		[Main related companies]

ORIX Rentec Corporation, ORIX Rent-A-Car Corporation

(3)		Real Estate-Related Finance

		This business encompasses real estate loans to corporate customers and housing loans to individuals. ORIX is also expanding its business involving loan servicing, commercial mortgage-backed securities (CMBS) and REITs.

		[Main related companies]

ORIX Corporation, ORIX Trust and Banking Corporation, ORIX Asset Management & Loan Services Corporation

(4)		Real Estate

		This business consists principally of condominium development and office rental activities as well as the operation of such facilities as hotels, employee dormitories and training facilities.

		[Main related companies]

ORIX Corporation, ORIX Estate Corporation, ORIX Real Estate Corporation

(5)		Life Insurance

		This segment consists of direct and agency life insurance sales and related activities conducted by ORIX Life Insurance.

		[Main related companies]

ORIX Life Insurance Corporation

(6)		Other

		The other segment encompasses securities transactions, venture capital operations, consumer card loan operations and new businesses.

		[Main related companies]

ORIX Corporation, ORIX Credit Corporation, ORIX Capital Corporation, ORIX Securities Corporation, ORIX Baseball Club Co., Ltd., ORIX COMMODITIES Corporation, ORIX Investment Corporation

Overseas Operations

(1)		The Americas

		Principal businesses in the Americas segment are direct financing leases, corporate lending, securities investment, commercial mortgage-backed securities (CMBS) related business, real estate development, futures trading and reinsurance.

		[Main related companies]

ORIX USA Corporation, Stockton Holdings Limited

(2)		Asia and Oceania

		Principal businesses in Asia and Oceania involve direct financing leases, operating leases for precision measuring equipment and transportation equipment, corporate lending and securities investment.

		[Main related companies]

ORIX Investment and Management Private Limited, ORIX Asia Limited, ORIX Australia Corporation Limited,
ORIX Taiwan Corporation, PT. ORIX Indonesia Finance, ORIX Leasing Malaysia Berhad, ORIX Leasing Pakistan Limited,
ORIX Leasing Singapore Limited, INFRASTRUCTURE LEASING & FINANCIAL SERVICES LIMITED

(3)		Europe

		Principal businesses in Europe center on aircraft operating leases, corporate loans and securities investments.

		[Main related companies]

ORIX Europe Limited, ORIX Ireland Limited, ORIX Aviation Systems Limited

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Group Structure

The structure of principal business of the ORIX Group is as follows.

(GROUP STRUCTURE)

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Summary of Consolidated Financial Results

Management Policies

Objectives

We aim to optimize our corporate value and growth in shareholder value over the mid to long-term. We are striving to become a unique company that provides high value-added products and services that center on the field of financial services by using the accumulated knowledge and experience in the ORIX Group.

In Japan, ORIX’s activities encompass corporate financial services, rental operations, real estate-related finance, real estate, life insurance, and other activities. Overseas, we carry out our business activities in The Americas, Asia and Oceania, and Europe.

We plan to continue to focus on optimizing growth in corporate and shareholder value by concentrating on a management philosophy that considers the balance between profitability, growth, and the soundness of our operations.

Profit Distribution

We believe that we should use retained earnings mainly to invest in highly profitable areas in order to achieve continuous growth as we strive to achieve returns for shareholders by increasing our corporate value over the mid to long-term.

Lowering Investment Units

ORIX believes that it is necessary to take appropriate measures in reviewing its policy regarding the minimum investment unit for trading on the stock exchange to allow for a more broader investor participation.

ORIX will seek to consider demands of the requests from the market, expenses and effects of decreasing the size of the investment unit when making any such decision.

Themes for this Fiscal Year

ORIX will focus on the following four themes this fiscal year for its operations.

Expanding Existing Franchise Value

ORIX’s business focuses on cross-selling a wide range of financial products and services such as leases and loans to its core customer base of mainly small and medium-sized companies. In addition, we believe we have advanced to the point where we can offer our customers diverse solutions such as those related to helping companies restructure their businesses and strengthen their financial positions. As a result, we believe we have built up a solid foundation and these operations generate a substantial amount of our consolidated earnings.

Furthermore, in the process of developing this core business model of providing innovative solutions, we believe we have developed some unique specialized operations in peripheral areas that we are also attempting to expand. For example, we are proactively working to raise our profitability by focusing on businesses such as automobile maintenance leases and precision measuring equipment operating leases that incorporate a high degree of specialization and value-added services within the field of finance.

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In the future, we also seek to further boost the share of our profitability that stems from such services as building maintenance, which we are strategically expanding at this time. In this way, we are attempting to expand the services that we can provide, even when the services are not strictly within the scope of financial services, in an effort to expand franchise value.

Creating New Franchise Value

The second theme relates to the new business opportunities and customer needs that have emerged as a result of macroeconomic changes and progress in implementing structural reforms in Japan. We have developed various businesses in recent years and we want to create new franchise value as we continue to add these to our core operations.

We believe the benefits of this strategy are currently emerging in such financial fields as real estate-related finance, which has grown strongly in Japan, as well as such investment banking operations as corporate rehabilitation services.

Taking on Challenges in Overseas Operations

Performance in ORIX’s business segments in the Americas and the Asia and Oceania regions has generally improved, and we intend to take the steps required to ensure that our overseas operations once again increase their contribution to overall earnings.

Strengthening Risk Management

We consider the management of risk such as credit risk, market risk, and other risks essential to conducting our businesses and to increasing our shareholder value.

Accordingly, we have designed our risk management system to identify, analyze, evaluate, and measure our risks, and to set appropriate policies and limits to manage and hedge such risks. Our risk management system has been established through the development of what we consider to be reliable administrative and information systems and other policies and programs. ORIX will continue to optimize its risk management structure as we further expand our business in the future.

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Corporate Governance Policy and Implementation

(EVOLUTION OF CORPORATE GOVERNNANCE)

Corporate Governance Policy

ORIX has endeavored to strengthen its corporate governance system in order to more objectively ensure that business activities are being carried out to fulfill our social responsibilities and maximize corporate value.

Implementation of Corporate Governance at ORIX

[Strengthening of Corporate Governance]

ORIX established an Advisory Board in 1997 made up of experienced individuals from outside the Company, introduced a Corporate Executive Officer system in 1998, and welcomed outside directors to the Board and set up the Executive Nomination and Compensation Committee in 1999. In order to further strengthen its corporate governance structure, ORIX received approval from shareholders at the 40th Annual General Meeting of Shareholders in June 2003 to adopt a “Company with Committees” board model, which became possible on April 1, 2003 as a result of revisions to the Japanese Commercial Code.

At the meeting of the Board of Directors following the 41st Annual General Meeting of Shareholders in June 2004, ORIX added another outside director to its Board, thus bringing the total number of outside directors to five. With the inclusion of the seven internal directors, the Board has a total of 12 members.

[Structure of Corporate Governance]

In compliance with the Commercial Code, ORIX’s Audit Committee includes three directors. Two of these directors are considered outside directors under the Commercial Code. The Audit Committee receives quarterly performance reports from the executive officer responsible for the Accounting

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Department, reports from the independent public accountants concerning audits, and business summary reports from the COO (Chief Operating Officer). It also receives internal audit report results and other reports related to internal control systems from the executive officer responsible for the Compliance Coordination Office, which is a unit that supports the committee. Moreover, the Audit Committee nominates and empowers its inside director member to conduct operational studies and report on the studies to the committee, and the committee also may instruct executive officers to present reports on the units for which they are responsible. The committee discusses the various reports and evaluates the performance of executive officers and the internal control system.

As stipulated in the Commercial Code, the Nominating Committee is authorized to nominate director candidates as well as to participate in the selection of executive officers.

As stipulated in the Commercial Code, the Compensation Committee is authorized to determine policies regarding the remuneration of directors and executive officers as well as the monetary remuneration of each individual director and executive officer.

ORIX is working to improve its disclosure of information to investors and the function of its investor relations. In order to further improve this function, we have established the Disclosure Committee that oversees the management and dissemination of information to the public.

[Compliance]

We believe that compliance is a crucial foundation for sound corporate governance. We have established the Compliance Coordination Office and are proactively promoting compliance under “EC21” which has “Business Conduct Principles” and “Employee Conduct Principles” as its basis.

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Financial Results

1.		Six Months Ended September 30, 2004

		Economic Environment

		The world economy has continued to recover over the last six-month period, but the recovery appears to be slowing. The U.S. economy did not show strong signs of recovery as seen in the slowdown in production and the less than positive employment situation against the backdrop of a sharp rise in the price of crude oil. The Asian economy performed steadily centering on China, and growth also continued in ASEAN countries as a result of the increase in exports. In Europe, although the British economy has maintained its growth with support from consumer spending, the Eurozone’s economy saw a weak recovery as a result of its high reliance on exports and the trend seen in the U.S. may cause further downward pressure.

		On the other hand, the Japanese economy has started to show signs of slowdown due to the lower growth of industrial output and the slowdown of capital expenditure. Although the employment situation is improving, there are also concerns regarding the sharp rise in crude oil prices. As a result, the economy will likely see a slight adjustment but recovery will continue at a slightly slower pace.

		Financial Highlights


Income before Income Taxes*		69,175 million yen (Up 24% year on year)
Net Income		42,688 million yen (Up 36% year on year)
Earnings Per Share (Basic)		509.74 yen (Up 36% year on year)
Earnings Per Share (Diluted)		477.96 yen (Up 35% year on year)
Shareholders’ Equity Per Share		7,389.48 yen (Up 10% on March 31, 2004)
ROE (Annualized)		14.4% (September 30, 2003: 12.0%)
ROA (Annualized)		1.50% (September 30, 2003: 1.08%)

*“Income before Income Taxes” refers to “Income before Discontinued Operations, Extraordinary Gain and Income Taxes.”

			Revenues: 402,351 million yen (Up 17% year on year)

			Although revenues from “direct financing leases,” “residential condominium sales,” and “gains on sales of real estate under operating leases” decreased year on year, revenues from “operating leases,” “interest on loans and investment securities,” “brokerage commissions and net gains on investment securities,” “life insurance premiums and related investment income,” and “other operating revenues” were up compared to the same period of the previous fiscal year. As a result, total revenues increased 17% to 402,351 million yen in the first half of this fiscal year compared with the same period of the previous fiscal year.

			In Japan, revenues from “direct financing leases” were flat year on year. The automobile leasing operations performed steadily. In addition, other direct financing leases generated about the same amount of revenues as in the same period of the previous fiscal year as we continued to carefully select new assets and focus on the profitability of each transaction. Overseas, revenues were down 11% due mainly to the reduction in assets of a leasing subsidiary in the U.S. compared to the same period of the previous fiscal year and the appreciation of the yen against the dollar. As a result, revenues from “direct financing leases,” decreased 2% to 55,661 million yen compared with the same period of the previous fiscal year.

			In Japan, revenues for “operating leases” increased 29% year on year due to the expansion of the

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			precision measuring and other equipment rental operations and due to an expansion of automobile operating leases with the acquisition of JAPAREN Co., Ltd. in October 2003. As a result, overall revenues from “operating leases” increased 22% to 74,270 million yen compared with the same period of the previous fiscal year.

			In Japan, “interest on loans and investment securities” increased 17% year on year due to the steady performance of loans to corporate customers, including non-recourse loans, and contribution from the loan servicing operations. Overseas, revenues were down 10% year on year due to the reduction in assets and the appreciation of the yen against the dollar. As a result, “interest on loans and investment securities,” increased 11% to 65,854 million yen compared with the same period of the previous fiscal year.

			Brokerage commissions increased 20% year on year due to the recovery of stock trading volume. Net gains on investment securities increased 90% year on year due to the sale of securities associated with our venture capital operations in Japan and securities investment operations in the U.S. As a result, “brokerage commissions and net gains on investment securities” increased 73% to 13,087 million yen compared with the same period of the previous fiscal year.

			“Life insurance premiums and related investment income” increased 2% to 66,341 million yen compared with the same period of the previous fiscal year as we continued to shift to more profitable life insurance products.

			“Residential condominium sales” revenue decline is consistent with the plan for the fiscal year and reflects a reduction in the number of condominiums sold to buyers, as compared to the previous fiscal year. This reduced volume of sales resulted in a decrease of 23% in “residential condominium sales” to 32,962 million yen compared to the same period of the previous fiscal year. An increase in condominium sales to buyers is expected in the second half of this fiscal year, however the overall level of condominium sales expected for the fiscal year will be less than that of the previous fiscal year.

			“Gains on sales of real estate under operating leases” were down 84% to 1,281 million yen year on year as a majority of revenues associated with the sales of office buildings were reclassified in “discontinued operations.”

			“Other operating revenues” were up due to the increase in revenues associated with companies in which we invested in as part of our corporate rehabilitation business in the second half of the previous fiscal year. In addition, revenues from our building maintenance operations were steady and servicing fees and arrangement fees also contributed to earnings. As a result, “other operating revenues” increased 122% to 92,895 million yen compared with the same period of the previous fiscal year.

			Expenses: 345,743 million yen (Up 16% year on year)

			Although “interest expense,” “costs of residential condominium sales,” “provision for doubtful receivables and probable loan losses” and “foreign currency transaction loss, net” were down, “depreciation-operating leases,” “life insurance costs,” “other operating expenses,” “selling, general and administrative expenses,” “write-downs of long-lived assets” and “write-downs of securities” increased. As a result, expenses were up 16% to 345,743 million yen in the first half of this fiscal year compared with the same period of the previous fiscal year.

			“Interest expense” was down 11% year on year to 28,277 million yen due mainly to the lower average debt levels in Japan and overseas.

			“Depreciation-operating leases” increased 14% year on year to 46,661 million yen due to the increase in operating assets compared to the same period of the previous fiscal year.

			“Life insurance costs” increased 3% year on year to 59,919 million yen in line with the rise in life insurance premiums.

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			“Costs of residential condominium sales” were down 19% year on year to 30,522 million yen in line with the decrease in “residential condominium sales.”

			“Other operating expenses” were up 194% year on year to 63,919 million yen in line with the rise in “other operating revenues.”

			“Selling, general and administrative expenses” were up 13% year on year to 87,471 million yen due to the costs, which were included from the start of this fiscal year, associated with an increase in consolidated companies in the second half of the previous fiscal year.

			“Provision for doubtful receivables and probable loan losses” were down 30% year on year to 16,687 million yen due to a lower level of non-performing assets.

			The majority of the “write-downs of long-lived assets” were associated with a building in Japan that was previously classified under “office facilities.” This building was reclassified to rental purpose, after it was decided that the building would be rebuilt. We tested for impairment for the purpose of rental asset use and consequently wrote the building down by 7,705 million yen to its fair value. As a result, “write-downs of long-lived assets” were up 118% year on year to 9,165 million yen.

			“Write-downs of securities” were up 34% year on year to 2,763 million yen mainly as a result of write-downs associated with investments in stocks in our venture capital operations and securities investment operations in the U.S.

			Net Income: 42,688 million yen (Up 36% year on year)

			“Operating income” grew 28% year on year to 56,608 million yen. On the other hand, “equity in net income of affiliates” was down compared to the same period of the previous fiscal year. While “equity in net income of affiliates” in the same period of the previous fiscal year included the recognition of deferred tax assets of 5,380 million yen for Korea Life Insurance Co., Ltd. (KLI) attributable to a change in tax rules in Korea, the first half of this fiscal year only included the contribution from KLI’s regular operations. “Income before discontinued operations, extraordinary gain and income taxes” rose 24% year on year to 69,175 million yen as a result of contributions from the “gains on sales of affiliates.”

			“Discontinued operations, net of applicable tax effect” was 3,792 million yen. “Income from discontinued operations, net” of 6,372 million yen and “gains on sales of real estate under operating leases” of 1,281 million yen totaled 7,653 million yen, a decrease of 2,788 million yen compared to the same period of the previous fiscal year.

			As a result, “net income” rose 36% compared to the same period of the previous fiscal year to 42,688 million yen.

			Operating Assets: 4,921,378 million yen (Up 1% on March 31, 2004)

			Operating assets were up 1% on March 31, 2004 to 4,921,378 million yen.

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

			Segment profits for “Corporate Financial Services,” “Rental Operations,” “Real Estate-Related Finance,” “Real Estate,” “Life Insurance,” “Other” and “The Americas” were up with “Europe” moving back into the black compared to the first half of the previous fiscal year, while “Asia and Oceania” was down year on year.

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		Operations in Japan

		Corporate Financial Services (Segment name changed from “Corporate Finance” to “Corporate Financial Services”): The automobile leasing operations performed steadily. While installment loans for corporate customers expanded, direct finance leases other than those associated with our automobile leasing operations in which we continued to carefully select new assets and focus on the profitability of each transaction were flat. In addition, “provision for doubtful receivables and probable loan losses” were down year on year. As a result, segment profits increased 25% to 27,352 million yen from 21,919 million yen in the same period of the previous fiscal year.

		Rental Operations (Segment name changed from “Equipment Operating Leases” to “Rental Operations”): The precision measuring and other equipment rental operations recovered thanks to the pickup in capital expenditure of customers. In addition, the operating leases for automobiles were up along with the acquisition of JAPAREN Co., Ltd. As a result, segment profits increased 70% to 5,881 million yen compared to 3,456 million yen in the same period of the previous fiscal year.

		Real Estate-Related Finance:

		The housing loan operations and corporate loans including non-recourse loans performed steadily, and the loan servicing operations also made a larger contribution to segment profits. As a result, segment profits increased 61% to 14,710 million yen compared to 9,119 million yen in the same period of the previous fiscal year.

		Real Estate:

		“Residential condominium sales” revenue decline is consistent with the plan for this fiscal year and reflects a reduction in the number of condominiums sold to buyers, as compared to the previous fiscal year. In addition, an increase in condominium sales to buyers is expected in the second half of this fiscal year, however the overall level of condominium sales expected for the fiscal year will be less than that of the previous fiscal year. Furthermore, profits from the sale of office buildings were down, but “write-downs of long-lived assets” were lower than in the same period of the previous fiscal year. As a result, segment profits increased 27% to 8,011 million yen compared to 6,329 million yen in the same period of the previous fiscal year.

		Life Insurance:

		Segment profits increased 59% to 3,992 million yen compared to 2,507 million yen in the same period of the previous fiscal year due to a shift to more profitable life insurance products and the recognition of “gains on sales of affiliates” in the first quarter of this fiscal year.

		Other:

		The contribution from the consumer card loan operations decreased year on year as a result of a stricter credit screening process that led to a lower loan balance and subsequent lower interest on loans. However, “provision for doubtful receivables and probable loan losses” were down which had a slightly positive impact on segment profits. On the other hand, brokerage commissions at our securities brokerage expanded due to the increase of trading volume on the stock market. In addition, “net gains on investment securities” were up at our venture capital operations and “equity in net income of affiliates” also increased. As a result, segment profits increased 317% to 11,800 million yen compared to 2,828 million yen in the same period of the previous fiscal year.

		Overseas Operations

		The Americas:

		Net gains on investment securities increased due mainly to the sale of some CMBS’ (commercial mortgage-backed securities) and the sale of some real estate also contributed to segment profits. “Provision for doubtful receivables and probable loan losses” were down thanks to the reduction in non-performing assets. However, an equity method affiliate went from a gain in the first half of

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the previous fiscal year to a loss in the first half of this fiscal year. As a result, segment profits increased 21% to 4,725 million yen compared to 3,912 million yen in the same period of the previous fiscal year.

		Asia and Oceania:

		Automobile leasing and corporate lending of a number of companies in the region performed steadily as did the ship-related operations. However, “equity in net income of affiliates” in the same period of the previous fiscal year included the recognition of deferred tax assets of 5,380 million yen for KLI attributable to a change in tax rules in Korea, in addition to the contribution from regular operations. As a result, segment profits decreased 29% to 9,908 million yen compared to 13,939 million yen in the same period of the previous fiscal year.

		Europe:

		Segment profits were 1,025 million yen compared to a segment loss of 1,899 million yen in the same period of the previous fiscal year as this segment recorded losses on certain equity method investments in the same period of the previous fiscal year from which we withdrew last fiscal year.

2. Summary of Cash Flows (Six Months Ended September 30, 2004)

Cash and cash equivalents decreased by 30,344 million yen to 121,891 million yen compared to March 31, 2004.

“Cash flows from operating activities” provided 71,813 million yen in the first half of the previous fiscal year and 40,987 million yen in the first half of this fiscal year despite the outflow associated with the increase in restricted cash and increase in inventories.

“Cash flows from investing activities” provided 117,408 million yen in the first half of the previous fiscal year due to inflows associated with “proceeds from sales of available-for-sale securities.” “Cash flows from investing activities” in the first half of this fiscal year used 95,526 million yen due to the increase in “installment loans made to customers” and “purchases of available-for-sale securities.”

“Cash flows from financing activities” in the first half of the previous fiscal year used 225,059 million yen due to the repayment of debt accompanying the decrease of operating assets. “Cash flows from financing activities” in the first half of this fiscal year provided 23,747 million yen due to the increase in debt that accompanied the increase in operating assets.

3. Summary of Second Quarter (Three Months Ended September 30, 2004)

In the second quarter revenues increased 35,859 million yen year on year. Although direct financing lease assets decreased, revenues from “direct financing leases” were at the same level as the second quarter of the previous fiscal year due to the higher profitability of transactions. Revenues from “operating leases” and “interest on loans and investment securities” were up in line with the increase in operating assets. “Brokerage commissions and net gains on investment securities” were up due to the increase in brokerage commissions and net gains on the sale of securities at our venture capital operations in Japan and security investment operations in the U.S. “Life insurance premiums and related investment income” were up year on year due to the increase in the number of new contracts. “Residential condominium sales” increased year on year, as more condominiums were sold to buyers in the second quarter of this fiscal year compared to the second quarter of the previous fiscal year. “Gains on sales of real estate under operating leases” were down as a majority of revenues associated with the sales of office buildings were reclassified in “discontinued operations.” “Other operating revenues” were up due to the increase in revenues associated with companies in which we invested in as part of our corporate rehabilitation business mainly from the third quarter of the previous fiscal year.

-11-

On the other hand, overall expenses were up 33,548 million yen compared to the second quarter of the previous fiscal year. “Interest expense” decreased as a result of the decline in the average balance of operating assets. “Depreciation-operating leases” increased along with the increase in operating assets as compared to the second quarter of the previous fiscal year. “Life insurance costs,” “costs of residential condominium sales,” and “other operating expenses” increased in line with the increase in associated revenues in the second quarter of this fiscal year. “Selling, general and administrative expenses” were up due to the cost associated with the increase in the number of consolidated companies from the third quarter of the previous fiscal year. While “provision for doubtful receivables and probable loan losses” were down year on year, “write-downs of long-lived assets,” and “write-downs of securities” increased compared to the second quarter of the previous fiscal year.

This resulted in an increase in “operating income” by 2,311 million yen to 25,484 million yen compared with the second quarter of the previous fiscal year.

“Equity in net income of affiliates” was down due to the aforementioned reason associated with KLI’s operations. While “losses on sales of affiliates” was recorded in the second quarter of the previous fiscal year, “gains on sales of affiliates” was recorded in the second quarter of this fiscal year. “Income before discontinued operations, extraordinary gain and income taxes” increased by 1,142 million yen to 32,458 million yen compared to the second quarter of the previous fiscal year.

“Discontinued operations, net of applicable tax effect” added 857 million yen and “net income” for the second quarter of this fiscal year rose by 1,840 million yen to 19,161 million yen compared with a “net income” of 17,321 million yen in the second quarter of the previous fiscal year.

4. Outlook and Forecasts for the Fiscal Year Ending March 31, 2005

For the fiscal year ending March 31, 2005 we have revised our original forecast as follows. “Revenues” 780,000 million yen (up 8% compared with the fiscal year ended March 31, 2004), “income before income taxes” of 122,000 million yen (up 20%), and “net income” of 74,000 million yen (up 37%).

Millions of Yen


			Income before
	Total Revenues		Income Taxes*		Net Income
Previous Forecast (A)		760,000		109,000		60,000
New Forecast (B)		780,000		122,000		74,000
Change (B-A)		20,000		13,000		14,000
Change (%)		2.6		11.9		23.3
(Reference) Fiscal 2004 results		719,132		101,360		54,020

*“Income before Income Taxes” refers to “Income before Discontinued Operations, Extraordinary Gain and Income Taxes.”

-12-

Consolidated Financial Highlights
(For the Six Months Ended September 30, 2004 and 2003, and the Year Ended March 31, 2004)
(Unaudited)

(millions of JPY, except for per share data)


				Change			Year						Year						Year
				from			-on-						-on-						-on-
	September 30,			March 31,			year			September 30,			year			March 31,			year
	2004			2004			Change			2003			Change			2004			Change
Operating Assets
Investment in Direct Financing Leases		1,465,856			101	%		95	%		1,542,172			92	%		1,453,575			92	%
Installment Loans		2,254,387			101	%		101	%		2,224,486			96	%		2,234,940			98	%
Investment in Operating Leases		536,489			100	%		110	%		487,613			106	%		536,702			101	%
Investment in Securities		591,714			107	%		100	%		589,918			82	%		551,928			81	%
Other Operating Assets		72,932			101	%		101	%		72,502			60	%		72,049			94	%

Total		4,921,378			101	%		100	%		4,916,691			93	%		4,849,194			94	%
Operating Results
Total Revenues		402,351			—			117	%		342,539			103	%		719,132			106	%
Income before Discontinued Operations, Extraordinary Gain and Income Taxes		69,175			—			124	%		55,709			150	%		101,360			227	%
Net Income		42,688			—			136	%		31,419			138	%		54,020			179	%
Earnings Per Share
Net Income
Basic		509.74			—			136	%		375.42			138	%		645.52			179	%
Diluted		477.96			—			135	%		353.65			138	%		607.52			178	%
Shareholders’ Equity Per Share		7,389.48			110	%		114	%		6,465.22			108	%		6,739.64			112	%
Financial Position
Shareholders’ Equity		619,249			110	%		114	%		541,078			108	%		564,047			112	%
Number of Outstanding Shares (’000)		83,801			100	%		100	%		83,691			100	%		83,691			100	%
Long- and Short-Term Debt and Deposits		3,912,797			101	%		98	%		3,977,021			90	%		3,859,180			91	%
Total Assets		5,724,771			102	%		101	%		5,684,598			94	%		5,624,957			95	%
Shareholders’ Equity Ratio		10.8	%		—			—			9.5	%		—			10.0	%		—
Return on Equity (annualized)		14.4	%		—			—			12.0	%		—			10.1	%		—
Return on Assets (annualized)		1.50	%		—			—			1.08	%		—			0.93	%		—
New Business Volumes
Direct Financing Leases
New Receivables Added		398,951			—			100	%		398,545			71	%		801,787			80	%
New Equipment Acquisitions		355,848			—			100	%		354,928			70	%		713,240			80	%
Installment Loans		704,040			—			133	%		529,423			78	%		1,124,276			89	%
Operating Leases		95,814			—			129	%		74,532			121	%		189,737			109	%
Investment in Securities		105,578			—			152	%		69,477			73	%		122,066			53	%
Other Operating Transactions		55,783			—			72	%		77,018			152	%		186,265			160	%

-13-

Condensed Consolidated Statements of Income
(For the Six Months Ended September 30, 2004 and 2003, and the Year Ended March 31, 2004)
(Unaudited)

(millions of JPY, millions of US$)


				Year					Year					Year
	Six months			-on-		Six months			-on-					-on-
	ended			year		ended			year		Year ended			year		U.S. dollars
	September 30,			Change		September 30,			Change		March 31,			Change		September 30,
	2004			(%)		2003			(%)		2004			(%)		2004
Total Revenues:		402,351			117		342,539			103		719,132			106		3,623

Direct Financing Leases		55,661			98		56,865			90		112,372			91		501
Operating Leases		74,270			122		61,057			105		128,955			106		669
Interest on Loans and Investment Securities		65,854			111		59,577			93		116,744			89		593
Brokerage Commissions and Net Gains on Investment Securities		13,087			173		7,569			95		26,025			240		118
Life Insurance Premiums and Related Investment Income		66,341			102		65,135			91		134,154			97		597
Residential Condominium Sales		32,962			77		42,535			143		98,034			138		297
Gains on Sales of Real Estate under Operating Leases		1,281			16		7,894			488		9,116			280		12
Other Operating Revenues		92,895			222		41,907			114		93,732			116		836

Total Expenses:		345,743			116		298,357			100		635,154			99		3,113

Interest Expense		28,277			89		31,618			87		60,145			84		255
Depreciation — Operating Leases		46,661			114		41,037			107		83,537			105		420
Life Insurance Costs		59,919			103		58,243			90		119,653			95		539
Costs of Residential Condominium Sales		30,522			81		37,673			147		88,679			146		275
Other Operating Expenses		63,919			294		21,740			120		52,551			127		575
Selling, General and Administrative Expenses		87,471			113		77,470			111		161,835			112		788
Provision for Doubtful Receivables and Probable Loan Losses		16,687			70		23,843			95		49,592			91		150
Write-downs of Long-Lived Assets		9,165			218		4,202			29		12,345			24		83
Write-downs of Securities		2,763			134		2,057			36		5,240			37		25
Foreign Currency Transaction Loss, Net		359			76		474			45		1,577			130		3

Operating Income		56,608			128		44,182			130		83,978			231		510

Equity in Net Income of Affiliates		9,765			82		11,923			355		17,924			289		88
Gains (Losses) on Sales of Affiliates		2,802			—		(396	)		—		(542	)		—		25

Income before Discontinued Operations, Extraordinary Gain and Income Taxes		69,175			124		55,709			150		101,360			227		623

Provision for Income Taxes		30,279			116		26,041			154		51,215			250		273

Income from Continuing Operations		38,896			131		29,668			146		50,145			208		350

Discontinued Operations
Income from Discontinued Operations, Net		6,372					2,547					5,510					57
Provision for Income Taxes		(2,580	)				(1,039	)				(2,244	)				(23	)

Discontinued Operations, Net of Applicable Tax Effect		3,792			251		1,508			337		3,266			321		34

Extraordinary Gain, Net of Applicable Tax Effect		—			—		243			—		609			19		—

Net Income		42,688			136		31,419			138		54,020			179		384

Note:	1.	The Company recognized an “Extraordinary Gain, Net of Applicable Tax Effect” in the previous fiscal year due to the excess of the proportionate fair value of the net assets over the purchase price of the affiliate paid by the Company (“Negative Goodwill”).

	2.	At previous fiscal year end, “Gains on Sales of Real Estate under Operating Leases” was reclassified as a separate account from “Operating Leases.” Accordingly, “Gains on Sales of Real Estate under Operating Leases” in the six months ended September 30, 2003, has been reclassified.

	3.	Net income from real estate under operating leases considered to be discontinued operations were reclassified as “Discontinued Operations.” Accordingly, certain amounts in previous year have been reclassified to conform to the presentation for this fiscal year.

	4.	“Interest Income on Deposits” had been disclosed separately until the previous fiscal year. Starting from this fiscal year, “Interest Income on Deposits” was included in “Other Operating Revenues” because it became insignificant.

-14-

Condensed Consolidated Statements of Income
(For the Three Months Ended September 30, 2004 and 2003)
(Unaudited)

(millions of JPY, millions of US$)


				Year
	Three Months			-on-		Three Months
	ended			year		ended			U.S. dollars
	September 30,			Change		September 30,			September 30,
	2004			(%)		2003			2004
Total Revenues :		209,475			121		173,616			1,886

Direct Financing Leases		28,262			100		28,349			254
Operating Leases		38,426			125		30,703			346
Interest on Loans and Investment Securities		35,950			115		31,263			324
Brokerage Commissions and Net Gains on Investment Securities		7,927			183		4,323			71
Life Insurance Premiums and Related Investment Income		36,133			105		34,552			325
Residential Condominium Sales		20,059			104		19,359			181
Gains on Sales of Real Estate under Operating Leases		83			4		2,345			1
Other Operating Revenues		42,635			188		22,722			384

Total Expenses :		183,991			122		150,443			1,657

Interest Expense		14,125			91		15,508			127
Depreciation — Operating Leases		23,604			114		20,656			212
Life Insurance Costs		31,954			111		28,917			288
Costs of Residential Condominium Sales		18,719			108		17,301			168
Other Operating Expenses		28,309			246		11,526			255
Selling, General and Administrative Expenses		48,397			121		39,981			436
Provision for Doubtful Receivables and Probable Loan Losses		7,892			66		11,875			71
Write-downs of Long-Lived Assets		9,165			218		4,202			83
Write-downs of Securities		1,295			235		551			12
Foreign Currency Transaction (Gain) Loss, Net		531			—		(74	)		5

Operating Income		25,484			110		23,173			229

Equity in Net Income of Affiliates		5,011			59		8,539			45
Gains (Losses) on Sales of Affiliates		1,963			—		(396	)		18

Income before Discontinued Operations, Extraordinary Gain and Income Taxes		32,458			104		31,316			292

Provision for Income Taxes		14,154			95		14,842			127

Income from Continuing Operations		18,304			111		16,474			165

Discontinued Operations
Income from Discontinued Operations, Net		1,445					1,020			13
Provision for Income Taxes		(588	)				(416	)		(5	)

Discontinued Operations, Net of Applicable Tax Effect		857			142		604			8

Extraordinary Gain, Net of Applicable Tax Effect		—			—		243			—

Net Income		19,161			111		17,321			173

-15-

Condensed Consolidated Balance Sheets
(As of September 30, 2004 and 2003, and March 31, 2004)
(Unaudited)

(millions of JPY, millions of US$)


										U.S. dollars
	September 30,			September 30,			March 31,			September 30,
	2004			2003			2004			2004
Assets
Cash and Cash Equivalents		121,891			168,347			152,235			1,098
Restricted Cash		50,176			27,698			35,621			452
Time Deposits		996			534			677			9
Investment in Direct Financing Leases		1,465,856			1,542,172			1,453,575			13,200
Installment Loans		2,254,387			2,224,486			2,234,940			20,301
Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses		(125,309	)		(130,015	)		(128,020	)		(1,128	)
Investment in Operating Leases		536,489			487,613			536,702			4,831
Investment in Securities		591,714			589,918			551,928			5,328
Other Operating Assets		72,932			72,502			72,049			657
Investment in Affiliates		174,805			158,122			157,196			1,574
Other Receivables		142,901			140,399			142,711			1,287
Inventories		145,107			104,894			121,441			1,307
Prepaid Expenses		45,684			44,318			44,139			411
Office Facilities		66,347			74,440			71,196			597
Other Assets		180,795			179,170			178,567			1,627

Total Assets		5,724,771			5,684,598			5,624,957			51,551

Liabilities and Shareholders’ Equity
Short-Term Debt		922,427			967,182			903,916			8,306
Deposits		317,235			282,116			292,545			2,857
Trade Notes, Accounts Payable and Other Liabilities		290,130			242,227			279,852			2,614
Accrued Expenses		93,087			78,995			96,668			838
Policy Liabilities		559,815			607,591			592,782			5,041
Current and Deferred Income Taxes		160,960			165,374			153,937			1,449
Deposits from Lessees		88,733			72,312			78,491			799
Long-Term Debt		2,673,135			2,727,723			2,662,719			24,071

Total Liabilities		5,105,522			5,143,520			5,060,910			45,975

Common Stock		52,315			52,067			52,068			471
Additional Paid-in Capital		70,268			70,002			70,015			633
Retained Earnings:
Legal Reserve		2,220			2,220			2,220			20
Retained Earnings		521,686			458,490			481,091			4,698
Accumulated Other Comprehensive Loss		(19,396	)		(33,438	)		(33,141	)		(175	)
Treasury Stock, at cost		(7,844	)		(8,263	)		(8,206	)		(71	)

Total Shareholders’ Equity		619,249			541,078			564,047			5,576

Total Liabilities and Shareholders’ Equity		5,724,771			5,684,598			5,624,957			51,551


										U.S. dollars
	September 30,			September 30,			March 31,			September 30,
	2004			2003			2004			2004
Note 1: Accumulated Other Comprehensive Loss
Net unrealized gains on investment in securities		29,282			15,674			25,048			264
Minimum pension liability adjustments		(7,742	)		(3,910	)		(7,967	)		(70	)
Foreign currency translation adjustments		(38,527	)		(40,033	)		(45,629	)		(347	)
Net unrealized losses on derivative instruments		(2,409	)		(5,169	)		(4,593	)		(22	)

Certain inventories included in “Advances” and “Other Operating Assets” were reclassified to a separate account “Inventories” from previous fiscal year end. In addition, the remaining amount in “Advances” after the reclassification to “Inventories” has been included in “Other Assets.” Accordingly, such amounts as of September 30, 2003 are reclassified.

-16-

Condensed Consolidated Statements of Shareholders’ Equity
(For the Six Months Ended September 30, 2004 and 2003, and the Year Ended March 31, 2004)
(Unaudited)

(millions of JPY, millions of US$)


	Six months			Six months
	ended			ended			Year ended			U.S. dollars
	September 30,			September 30,			March 31,			September 30,
	2004			2003			2004			2004
Common Stock:
Beginning balance		52,068			52,067			52,067			469
Issuance during the year		247			—			1			2

Ending balance		52,315			52,067			52,068			471

Additional Paid-in Capital:
Beginning balance		70,015			70,002			70,002			631
Issuance during the year and other, net		253			—			13			2

Ending balance		70,268			70,002			70,015			633

Legal Reserve:
Beginning balance		2,220			2,220			2,220			20

Ending balance		2,220			2,220			2,220			20

Retained Earnings:
Beginning balance		481,091			429,163			429,163			4,333
Cash dividends		(2,093	)		(2,092	)		(2,092	)		(19	)
Net income		42,688			31,419			54,020			384

Ending balance		521,686			458,490			481,091			4,698

Accumulated Other Comprehensive Loss:
Beginning balance		(33,141	)		(39,747	)		(39,747	)		(299	)
Net change of unrealized gains on investment in securities		4,234			13,757			23,131			38
Net change of minimum pension liability adjustments		225			272			(3,785	)		2
Net change of foreign currency translation adjustments		7,102			(10,114	)		(15,710	)		64
Net change of unrealized losses on derivative instruments		2,184			2,394			2,970			20

Ending balance		(19,396	)		(33,438	)		(33,141	)		(175	)

Treasury Stock:
Beginning balance		(8,206	)		(8,247	)		(8,247	)		(74	)
Increase (decrease), net		362			(16	)		41			3

Ending balance		(7,844	)		(8,263	)		(8,206	)		(71	)

Total Shareholders’ Equity:
Beginning balance		564,047			505,458			505,458			5,080
Increase, net		55,202			35,620			58,589			496

Ending balance		619,249			541,078			564,047			5,576

Summary of Comprehensive Income:
Net income		42,688			31,419			54,020			384
Other comprehensive income		13,745			6,309			6,606			124

Comprehensive income		56,433			37,728			60,626			508

-17-

Condensed Consolidated Statements of Cash Flows
(For the Six Months Ended September 30, 2004 and 2003, and the Year Ended March 31, 2004)
(Unaudited)

(millions of JPY, millions of US$)


	Six months			Six months						U.S. dollars
	ended			ended			Year ended			Six months
	September 30,			September 30,			March 31,			ended September 30,
	2004			2003			2004			2004
Cash Flows from Operating Activities:
Net income		42,688			31,419			54,020			384
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		65,104			58,595			121,530			586
Provision for doubtful receivables and probable loan losses		16,687			23,843			49,592			150
Decrease in policy liabilities		(32,967	)		(962	)		(15,771	)		(297	)
Gains from securitization transactions		(2,706	)		(276	)		(446	)		(24	)
Equity in net income of affiliates		(9,765	)		(11,923	)		(17,924	)		(88	)
(Gains) losses on sales of affiliates		(2,802	)		396			542			(25	)
Extraordinary gain		—			(243	)		(609	)		—
Gains on sales of available-for-sale securities		(11,236	)		(2,275	)		(8,728	)		(100	)
Gains on sales of real estate under operating leases		(1,281	)		(7,894	)		(9,116	)		(12	)
Write-downs of long-lived assets		9,165			4,202			12,345			83
Write-downs of securities		2,763			2,057			5,240			25
Increase in restricted cash		(14,379	)		(9,349	)		(17,393	)		(129	)
Increase in inventories		(20,856	)		(3,981	)		(18,197	)		(188	)
Increase in prepaid expenses		(1,461	)		(2,773	)		(1,974	)		(13	)
Increase (decrease) in accrued expenses		(3,880	)		(2,360	)		7,481			(35	)
Increase (decrease) in deposits from lessees		10,211			(6,597	)		683			92
Other, net		(4,298	)		(66	)		(8,463	)		(40	)

Net cash provided by operating activities		40,987			71,813			152,812			369

Cash Flows from Investing Activities:
Purchases of lease equipment		(436,304	)		(423,989	)		(873,248	)		(3,929	)
Principal payments received under direct financing leases		322,727			348,787			731,702			2,906
Net proceeds from securitization of lease and loan receivables		72,711			15,212			35,704			655
Installment loans made to customers		(703,820	)		(529,363	)		(1,130,986	)		(6,338	)
Principal collected on installment loans		627,482			540,238			1,092,698			5,650
Proceeds from sales of operating lease assets		48,362			81,724			116,531			435
Investment in and dividends received from affiliates, net		(836	)		2,297			5,822			(8	)
Purchases of available-for-sale securities		(94,411	)		(59,988	)		(90,527	)		(850	)
Proceeds from sales of available-for-sale securities		53,843			110,309			164,860			485
Maturities of available-for-sale securities		28,648			41,990			88,601			258
Purchases of other securities		(11,184	)		(10,313	)		(32,707	)		(101	)
Proceeds from sales of other securities		2,589			1,118			12,648			23
Purchases of other operating assets		(2,851	)		(5,357	)		(8,966	)		(26	)
Proceeds from sales of other operating assets		2,074			7,822			10,468			19
Acquisitions of subsidiaries, net of cash acquired		(6,044	)		(7,339	)		(8,861	)		(54	)
Sales of subsidiaries, net of cash disposed		—			—			24			—
Other, net		1,488			4,260			10,215			15

Net cash provided by (used in) investing activities		(95,526	)		117,408			123,978			(860	)

Cash Flows from Financing Activities:
Net increase (decrease) in debt with maturities of three months or less		(33,465	)		36,481			50,109			(301	)
Proceeds from debt with maturities longer than three months		793,755			821,106			1,640,244			7,148
Repayment of debt with maturities longer than three months		(755,004	)		(1,100,187	)		(2,051,777	)		(6,799	)
Net increase in deposits due to customers		24,690			19,649			30,078			222
Issuance of common stock		492			—			8			4
Dividends paid		(2,093	)		(2,092	)		(2,092	)		(19	)
Net increase (decrease) in call money		(5,000	)		—			5,000			(45	)
Other, net		372			(16	)		146			4

Net cash provided by (used in) financing activities		23,747			(225,059	)		(328,284	)		214

Effect of Exchange Rate Changes on Cash and Cash Equivalents		448			(492	)		(948	)		4

Net Decrease in Cash and Cash Equivalents		(30,344	)		(36,330	)		(52,442	)		(273	)
Cash and Cash Equivalents at Beginning of Period		152,235			204,677			204,677			1,371

Cash and Cash Equivalents at End of Period		121,891			168,347			152,235			1,098

-18-

Segment Information
(For the Six Months Ended September 30, 2004 and 2003, and the Year Ended March 31, 2004)
(Unaudited)

(millions of JPY)


	Six months ended September 30, 2004									Six months ended September 30, 2003								Year ended March 31, 2004
				Income (Loss)								Income (Loss)									Income (Loss)
				before								before									before
				Income			Operating					Income			Operating						Income			Operating
	Revenues			*Taxes1**			Assets			Revenues		Taxes			Assets			Revenues			Taxes			Assets
Operations in Japan
Corporate Financial Services		69,281			27,352			1,878,231			64,262		21,919			1,845,251			128,355			43,787			1,806,686
Rental Operations		42,055			5,881			148,535			34,697		3,456			140,987			74,370			9,342			147,231
Real Estate-Related Finance		37,376			14,710			944,867			23,948		9,119			879,964			54,792			18,102			909,019
Real Estate		70,366			8,011			321,126			67,160		6,329			275,967			143,451			6,244			309,558
Life Insurance		66,306			3,992			565,021			64,563		2,507			570,013			133,391			5,382			582,473
Other		67,422			11,800			421,744			32,629		2,828			406,076			73,986			10,079			412,505

Sub-Total		352,806			71,746			4,279,524			287,259		46,158			4,118,258			608,345			92,936			4,167,472
Overseas Operations
The Americas		22,922			4,725			446,231			23,229		3,912			541,036			47,294			7,601			472,595
Asia and Oceania		26,636			9,908			442,765			26,671		13,939			434,584			53,694			17,848			413,041
Europe		5,045			1,025			56,661			5,327		(1,899	)		64,524			10,708			(1,252	)		56,634

Sub-Total		54,603			15,658			945,657			55,227		15,952			1,040,144			111,696			24,197			942,270

Segment Total		407,409			87,404			5,225,181			342,486		62,110			5,158,402			720,041			117,133			5,109,742

Difference between Segment totals and Consolidated Amounts		(5,058	)		(18,229	)		(303,803	)		53		(6,401	)		(241,711	)		(909	)		(15,773	)		(260,548	)

Consolidated Amounts		402,351			69,175			4,921,378			342,539		55,709			4,916,691			719,132			101,360			4,849,194

(millions of US$)


	U.S. dollars September 30, 2004
				Income (Loss)
				before
				Income			Operating
	Revenues			Taxes			Assets
Operations in Japan
Corporate Financial Services		624			246			16,913
Rental Operations		379			53			1,338
Real Estate-Related Finance		337			132			8,508
Real Estate		634			72			2,892
Life Insurance		597			36			5,088
Other		606			107			3,798

Sub-Total		3,177			646			38,537
Overseas Operations
The Americas		206			43			4,018
Asia and Oceania		240			89			3,987
Europe		46			9			511

Sub-Total		492			141			8,516

Segment Total		3,669			787			47,053

Difference between Segment totals and Consolidated Amounts		(46	)		(164	)		(2,736	)

Consolidated Amounts		3,623			623			44,317

*Note 1:		“Income (Loss) before Income Taxes” represents “Income before Discontinued Operations, Extraordinary Gain and Income Taxes.”

2:		Results of discontinued operation are included in “Revenues” and “Income (Loss) before Income Taxes” of each segment, if any.

		Such amounts are eliminated in “Difference between Segment totals and Consolidated Amounts.”

-19-

Basis of presentation and significant accounting policies

In preparing the accompanying consolidated financial statements, ORIX Corporation (the Company) and its subsidiaries have followed 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.

Some areas of potential significant differences between U.S. and Japanese accounting policies and practices are as follows: Accounting for direct financing leases, accounting for the impairment of long-lived assets and long-lived assets to be disposed of, the use of the straight-line method of depreciation for operating lease equipment, deferral of life insurance policy acquisition costs and the calculation of policy liabilities, accounting for derivative instruments and hedging activities, accounting for goodwill and intangible assets resulting from business combinations, accounting for pension plans, and a reflection of the income tax effect on such adjustments. Segment information is prepared in accordance with FASB Statement No. 131. The basis of presentation and significant accounting policies are as follows.

1. Consolidated subsidiaries

The accompanying consolidated financial statements include the accounts of the Company, 118 domestic subsidiaries and 84 overseas subsidiaries (total of 202 subsidiaries).

The consolidated financial statements also include variable interest entities to which the Company and its subsidiaries are primary beneficiaries pursuant to FASB Interpretation No.46 (revised December 2003) (FIN46® (“Consolidation of Variable Interest Entities”).

Major subsidiaries are ORIX Auto Leasing Corporation, ORIX USA Corporation and others.

2. Affiliates accounted for by the equity method

Investment in 49 domestic affiliates and 25 overseas affiliates (total of 74 affiliates) are accounted for by using the equity method. Major affiliates are The Fuji Fire and Marine Insurance Company Limited, Stockton Holdings Limited, Korea Life Insurance Co., Ltd., and others.

3. The date of subsidiaries fiscal closing

Certain subsidiaries have an interim closing date that differs from that of the Company. However, these subsidiaries close their books and make necessary adjustments for consolidation purposes as of the Company’s interim closing date. For certain subsidiaries whose fiscal periods end at a date that is less than three months from our consolidated interim closing date, we use the most recent fiscal period end of those subsidiaries in our consolidated financial results.

4. Accounting policies

(1) Use of estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(2) Recognition of revenues

Direct financing leases—The excess of aggregate lease rentals plus the estimated unguaranteed residual value over the cost of the leased equipment constitutes the unearned lease income to be taken into income over the lease term using the interest method. Certain direct lease origination costs are being deferred and amortized over the lease term as a yield adjustment.

-20-

Operating leases—Revenues from operating leases are recognized on a straight-line basis over the contract terms. Operating lease assets are recorded at cost and are depreciated over their estimated useful lives mainly on a straight-line basis.

Insurance premium and expenses—Premium income from life insurance policies are recognized as earned premiums when due. Life insurance benefits are recorded as expenses when they are incurred. Policy liabilities for future policy benefits are established by the net level premium method, based on actuarial estimates of the amount of future policyholder benefits. Certain costs associated with writing insurance are deferred and amortized over the respective policy periods in proportion to anticipated premium revenue.

(3) Investment in securities

Trading securities are reported at fair value with unrealized gains and losses included in income. Available-for-sale securities are reported at fair value, and unrealized gains or losses are recorded through accumulated other comprehensive income (loss), net of applicable income taxes. However, the Company and its subsidiaries recognize losses related to securities for which the market price has been significantly below the acquisition cost and not considered temporary in nature. Held-to-maturity securities are recorded at amortized cost.

(4) Inventories

Inventories include advance and/or progress payments for development of residential condominiums for sale and completed residential condominiums.

Advances and/or progress payments for sales are carried at cost less any impairment losses and finished goods are stated at the lower cost or market.

(5) Impairment of long-lived assets

Long-lived assets and certain identifiable intangibles to be held and used by the Company and its subsidiaries are reviewed for impairment, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the sum of undiscounted future cash flows expected to be generated by the assets is less than the carrying amount of the assets, impairment losses are recognized based on the fair value of the assets.

(6) Allowance for doubtful receivables on direct financing leases and probable loan losses

The allowance for doubtful receivables on direct financing leases and probable loan losses is maintained at a level which, in the judgment of management, is adequate to provide for probable losses on lease and loan portfolios that can be reasonably anticipated.

(7) Prepaid benefit cost (Accrued benefit liability)

The Company and its subsidiaries adopt FASB Statement No. 87 (“Employer’s Accounting for Pensions”), and the costs of pension plans are accrued based on amounts determined using actuarial methods.

(8) Foreign currencies translation

The Company and its subsidiaries maintain their accounting records in their functional currency. Transactions in foreign currencies are recorded in the entity’s functional currency based on the prevailing exchange rates on the transaction date.

The financial statements of overseas subsidiaries and affiliates are translated into Japanese yen by applying the exchange rates in effect at the end of each fiscal year to all assets and liabilities. Income and expenses are translated at the average rates of exchange prevailing during the fiscal year.

-21-

(9) Hedge accounting

The Company and its subsidiaries adopt FASB Statement No. 133 (“Accounting for Derivative Instruments and Hedging Activities”), as amended by FASB Statement No. 138 (“Accounting for Certain Derivative Instruments and Certain Hedging Activities—an amendment of FASB Statement No. 133”). All derivatives are recorded on the balance sheet at fair value.

(10) Goodwill and intangible assets resulting from business combinations

Goodwill and intangible assets that have indefinite useful lives are not amortized. Impairment tests are required on an annual basis and between annual tests when events or circumstances indicate a potential impairment might exist.

(11) Income taxes

The Company, in general, determines its income tax provisions for interim periods by applying the current estimate of the effective tax rate to be applicable for the full fiscal year to the actual year-to-date pre-tax income amount. The estimated effective tax rate is determined by dividing total estimated income tax expense for the full fiscal year by total estimated pre-tax income for the full fiscal year.

5. Cash and cash equivalents in the accompanying consolidated statements of cash flows

Cash and cash equivalents include cash on hand, deposits placed with banks and short-term highly liquid investments with original maturities of three months or less.

Revenues from overseas customers

Revenues from overseas customers are as follows.

September 30, 2004


	Millions of JPY
	The			Asia and
	Americas			Oceania			Europe			Total
Overseas revenue		21,444			28,008			5,856			55,308

Consolidated revenue											402,351

The rate of the overseas revenues to consolidated revenue		5.3	%		6.9	%		1.5	%		13.7	%

September 30, 2003


	Millions of JPY
	The			Asia and
	Americas			Oceania			Europe			Total
Overseas revenue		21,855			27,809			6,035			55,699

Consolidated revenue											342,539
The rate of the overseas revenues to consolidated revenue		6.4	%		8.1	%		1.8	%		16.3	%

-22-

March 31, 2004


	Millions of JPY
	The			Asia and
	Americas			Oceania			Europe			Total
Overseas revenue		43,855			55,947			12,171			111,973

Consolidated revenue											719,132

The rate of the overseas revenues to consolidated revenue		6.1	%		7.8	%		1.7	%		15.6	%

September 30, 2004


	Millions of U.S. dollars
	The			Asia and
	Americas			Oceania			Europe			Total
Overseas revenue		193			252			53			498

Consolidated revenue											3,623

The rate of the overseas revenues to consolidated revenue		5.3	%		6.9	%		1.5	%		13.7	%

-23-

Investment in Securities

Investment in securities at September 30, 2004 and 2003, and March 31, 2004 consists of the following:


							Millions of
	Millions of JPY						U.S. dollars
	September 30,		September 30,		March 31,		September 30,
	2004		2003		2004		2004
Trading securities		34,917		14,256		26,354		314
Available-for-sale securities		411,894		445,053		386,797		3,709
Held-to-maturity securities		—		7,116		—		—
Other securities		144,903		123,493		138,777		1,305

		591,714		589,918		551,928		5,328

Other securities consist mainly of non-marketable equity securities and preferred capital shares carried at cost and investment funds accounted for under the equity method.

The amortized cost basis amounts, gross unrealized holding gains, gross unrealized holding losses and fair values of available-for-sale and held-to-maturity securities in each major security type at September 30, 2004 and 2003, and March 31, 2004 are as follows:

September 30, 2004


	Millions of JPY
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses			Fair Value
Available-for-sale:
Japanese and foreign government bond securities		13,861		34		(188	)		13,707
Japanese prefectural and foreign municipal bond securities		17,397		15		(79	)		17,333
Corporate debt securities		218,056		3,908		(2,264	)		219,700
Mortgage-backed and other asset-backed securities		106,684		11,261		(2,840	)		115,105
Equity securities		15,998		30,411		(360	)		46,049

		371,996		45,629		(5,731	)		411,894

-24-

September 30, 2003


	Millions of JPY
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses			Fair Value
Available-for-sale:
Japanese and foreign government bond securities		21,159		94		(119	)		21,134
Japanese prefectural and foreign municipal bond securities		18,621		43		(43	)		18,621
Corporate debt securities		230,468		1,724		(3,811	)		228,381
Mortgage-backed and other asset-backed securities		129,027		5,390		(3,206	)		131,211
Equity securities		21,655		25,808		(1,757	)		45,706

		420,930		33,059		(8,936	)		445,053

Held-to-maturity:
Asset-backed securities		7,116		329		(14	)		7,431

		7,116		329		(14	)		7,431

March 31, 2004


	Millions of JPY
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses			Fair Value
Available-for-sale:
Japanese and foreign government bond securities		14,520		87		(146	)		14,461
Japanese prefectural and foreign municipal bond securities		16,761		20		(115	)		16,666
Corporate debt securities		174,398		2,524		(2,977	)		173,945
Mortgage-backed and other asset-backed securities		124,398		5,169		(3,387	)		126,180
Equity securities		17,562		39,030		(1,047	)		55,545

		347,639		46,830		(7,672	)		386,797

September 30, 2004


	Millions of U.S. dollars
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses			Fair Value
Available-for-sale:
Japanese and foreign government bond securities		125		0		(2	)		123
Japanese prefectural and foreign municipal bond securities		157		0		(1	)		156
Corporate debt securities		1,963		35		(20	)		1,978
Mortgage-backed and other asset-backed securities		961		102		(26	)		1,037
Equity securities		144		274		(3	)		415

		3,350		411		(52	)		3,709

-25-

Key Quarterly Financial Data (Unaudited)

(millions of JPY)


	Fiscal 2004												Fiscal 2005
Balance Sheet Data	Q1 (03/4-6)			Q2 (03/7-9)			Q3 (03/10-12)			Q4 (04/1-3)			Q1 (04/4-6)			Q2 (04/7-9)
1) Investment in Direct Financing Leases		1,582,153			1,542,172			1,545,853			1,453,575			1,454,461			1,465,856
Japan		1,242,600			1,237,347			1,255,453			1,183,187			1,183,421			1,187,595
Overseas		339,553			304,825			290,400			270,388			271,040			278,261

2) Installment Loans		2,302,005			2,224,486			2,224,670			2,234,940			2,221,554			2,254,387
Japan		1,969,694			1,922,105			1,943,624			1,984,416			1,997,881			2,019,718
Overseas		332,311			302,381			281,046			250,524			223,673			234,669

3) Investment in Operating Leases		523,413			487,613			496,570			536,702			529,078			536,489
Japan		358,596			333,527			346,064			388,452			385,532			380,550
Overseas		164,817			154,086			150,506			148,250			143,546			155,939

4) Investment in Securities		697,926			589,918			544,021			551,928			579,193			591,714
Japan		528,184			440,598			394,784			399,463			423,111			446,026
Overseas		169,742			149,320			149,237			152,465			156,082			145,688

5) Other Operating Assets		75,065			72,502			70,556			72,049			68,004			72,932
Japan		65,803			64,300			63,008			64,993			61,071			64,772
Overseas		9,262			8,202			7,548			7,056			6,933			8,160

Total Operating Assets		5,180,562			4,916,691			4,881,670			4,849,194			4,852,290			4,921,378

Allowance for Doubtful Receivables on Direct Financing Leases and Probable Loan Losses		(134,740	)		(130,015	)		(130,851	)		(128,020	)		(128,726	)		(125,309	)
Allowance/Investment in Direct Financing Leases and Installment Loans		3.5	%		3.5	%		3.5	%		3.5	%		3.5	%		3.4	%


Total Assets		5,923,307			5,684,598			5,672,032			5,624,957			5,651,018			5,724,771

Short-Term Debt, Long-Term Debt and Deposits		4,232,175			3,977,021			3,941,826			3,859,180			3,876,782			3,912,797
Policy Liabilities		604,830			607,591			600,281			592,782			577,024			559,815

Total Liabilities		5,396,760			5,143,520			5,120,264			5,060,910			5,056,239			5,105,522

Shareholders’ Equity		526,547			541,078			551,768			564,047			594,779			619,249

Total Liabilities & Shareholders’ Equity		5,923,307			5,684,598			5,672,032			5,624,957			5,651,018			5,724,771


New Business Volumes	Q1 (03/4-6)		Q2 (03/7-9)		Q3 (03/10-12)		Q4 (04/1-3)		Q1 (04/4-6)		Q2 (04/7-9)
Direct Financing Leases: New receivables added		212,175		186,370		215,975		187,267		188,262		210,689
Japan		158,176		139,969		172,006		148,301		150,035		169,583
Overseas		53,999		46,401		43,969		38,966		38,227		41,106

Direct Financing Leases: New equipment acquisitions		188,194		166,734		192,336		165,976		166,937		188,911
Japan		138,479		121,963		151,787		129,688		130,715		148,909
Overseas		49,715		44,771		40,549		36,288		36,222		40,002

Installment Loans: New loans added		270,959		258,464		293,556		301,297		307,530		396,510
Japan		225,042		223,315		247,284		262,005		273,289		352,816
Overseas		45,917		35,149		46,272		39,292		34,241		43,694

Operating Leases: New equipment acquisitions		40,810		33,722		44,102		71,103		40,737		55,077
Japan		29,880		20,354		38,392		55,714		33,195		35,750
Overseas		10,930		13,368		5,710		15,389		7,542		19,327

Investment in Securities: New securities added		57,370		12,107		19,980		32,609		45,486		60,092
Japan		53,835		11,020		6,051		30,006		38,795		56,822
Overseas		3,535		1,087		13,929		2,603		6,691		3,270

Other Operating Transactions: New assets added		28,655		48,363		28,416		80,831		29,354		26,429
Japan		28,655		48,301		28,416		80,831		29,354		25,017
Overseas		—		62		—		—		—		1,412

-26-

(millions of JPY)


	Fiscal 2004											Fiscal 2005
Income Statement Data	Q1 (03/4-6)		Q2 (03/7-9)			Q3 (03/10-12)			Q4 (04/1-3)			Q1 (04/4-6)			Q2 (04/7-9)
Revenues
1) Direct Financing Leases		28,516		28,349			27,503			28,004			27,399			28,262
Japan		21,906		21,865			21,462			21,695			21,698			22,268
Overseas		6,610		6,484			6,041			6,309			5,701			5,994

2) Operating Leases		30,354		30,703			33,471			34,427			35,844			38,426
Japan		21,726		20,821			24,783			25,201			26,836			27,913
Overseas		8,628		9,882			8,688			9,226			9,008			10,513

3) Interest on Loans and Investment Securities		28,314		31,263			27,860			29,307			29,904			35,950
Interest on loans		25,729		29,001			25,820			26,940			27,204			33,371
Japan		21,082		23,958			21,706			22,549			23,383			29,195
Overseas		4,647		5,043			4,114			4,391			3,821			4,176
Interest on investment securities		2,585		2,262			2,040			2,367			2,700			2,579
Japan		173		295			165			252			264			313
Overseas		2,412		1,967			1,875			2,115			2,436			2,266

4) Brokerage Commissions and Net Gains on Investment Securities		3,246		4,323			6,595			11,861			5,160			7,927
Brokerage commissions		691		1,167			1,006			1,103			1,226			1,001
Net gains on investment securities		2,555		3,156			5,589			10,758			3,934			6,926

5) Life Insurance Premiums and Related Investment Income		30,583		34,552			28,463			40,556			30,208			36,133
Life insurance premiums		27,524		31,114			24,231			36,589			28,007			33,676
Related investment income		3,059		3,438			4,232			3,967			2,201			2,457

6) Residential Condominium Sales		23,176		19,359			26,329			29,170			12,903			20,059
Japan		23,176		19,359			26,329			29,170			12,903			20,059
Japan		—		—			—			—			—			—

7) Gains (Losses) on Sales of Real Estate under Operating Leases		5,549		2,345			1,121			101			1,198			83
Japan		5,464		2,317			981			109			1,198			83
Overseas		85		28			140			(8	)		—			—

8) Other Operating Revenues		19,185		22,722			21,701			30,124			50,260			42,635
Japan		17,057		19,733			18,875			27,712			47,207			40,134
Overseas		2,128		2,989			2,826			2,412			3,053			2,501

Total Revenues		168,923		173,616			173,043			203,550			192,876			209,475

Expenses
1) Interest Expense		16,110		15,508			14,588			13,939			14,152			14,125
2) Depreciation—Operating Leases		20,381		20,656			20,705			21,795			23,057			23,604
3) Life Insurance Costs		29,326		28,917			24,892			36,518			27,965			31,954
4) Costs of Residential Condominium Sales		20,372		17,301			24,463			26,543			11,803			18,719
5) Other Operating Expenses		10,214		11,526			12,779			18,032			35,610			28,309
6) Selling, General and Administrative Expenses		37,489		39,981			39,551			44,814			39,074			48,397
7) Provision for Doubtful Receivables and Probable Loan Losses		11,968		11,875			10,839			14,910			8,795			7,892
8) Write-downs of Long-Lived Assets		—		4,202			—			8,143			—			9,165
9) Write-downs of Securities		1,506		551			1,930			1,253			1,468			1,295
10) Foreign Currency Transaction (Gain) Loss, Net		548		(74	)		397			706			(172	)		531

Total Expenses		147,914		150,443			150,144			186,653			161,752			183,991

Operating Income		21,009		23,173			22,899			16,897			31,124			25,484
Equity in Net Income of Affiliates		3,384		8,539			2,707			3,294			4,754			5,011
Gain (Loss) on Sales of Affiliates		—		(396	)		(136	)		(10	)		839			1,963
Income before Discontinued Operations, Extraordinary Gain and Income Taxes		24,393		31,316			25,470			20,181			36,717			32,458
Provision for Income Taxes		11,199		14,842			11,818			13,356			16,125			14,154
Income from Continuing Operations		13,194		16,474			13,652			6,825			20,592			18,304
Discontinued Operations, Net of Applicable Tax Effect		904		604			821			937			2,935			857
Extraordinary Gain, Net of Applicable Tax Effect		—		243			—			366			—			—

Net Income		14,098		17,321			14,473			8,128			23,527			19,161


Key Ratios, Per Share Data, and Employees	Q1 (03/4-6)			Q2 (03/7-9)			Q3 (03/10-12)			Q4 (04/1-3)			Q1 (04/4-6)			Q2 (04/7-9)
Return on Equity (ROE)*		10.9	%		13.0	%		10.6	%		5.8	%		16.2	%		12.6	%
Return on Assets (ROA)*		0.95	%		1.19	%		1.02	%		0.58	%		1.67	%		1.35	%
Shareholders’ Equity Ratio		8.9	%		9.5	%		9.7	%		10.0	%		10.5	%		10.8	%
Debt-to-Equity Ratio (times)		8.0			7.4			7.1			6.8			6.5			6.3
Shareholders’ Equity Per Share (yen)		6,291.50			6,465.22			6,594.86			6,739.64			7,104.39			7,389.48
Basic EPS (yen)		168.45			206.96			172.94			97.14			281.05			228.73
Diluted EPS (yen)		158.71			194.94			162.72			91.33			263.42			214.50
Number of Employees		11,621			11,723			12,698			12,481			14,917			15,184

*annualized

-27-

(millions of JPY)


		Fiscal 2004											Fiscal 2005
Segment Information		Q1 (03/4-6)			Q2 (03/7-9)			Q3 (03/10-12)		Q4 (04/1-3)			Q1 (04/4-6)		Q2 (04/7-9)
Operations in Japan	Corporate Financial Services		30,993			33,269			31,086		33,007			33,865		35,416
	Rental Operations		16,980			17,717			18,647		21,026			20,377		21,678
	Real Estate-Related Finance		10,937			13,011			14,723		16,121			16,538		20,838
	Real Estate		37,239			29,921			35,429		40,862			37,238		33,128
	Life Insurance		30,590			33,973			27,978		40,850			30,260		36,046
	Other		16,231			16,398			18,614		22,743			32,772		34,650

	Sub-Total		142,970			144,289			146,477		174,609			171,050		181,756

Overseas Operations	The Americas		11,313			11,916			10,336		13,729			10,086		12,836
	Asia and Oceania		12,857			13,814			12,831		14,192			13,004		13,632
	Europe		2,606			2,721			3,133		2,248			2,265		2,780

	Sub-Total		26,776			28,451			26,300		30,169			25,355		29,248

Total Segment Revenues			169,746			172,740			172,777		204,778			196,405		211,004

Operations in Japan	Corporate Financial Services		9,345			12,574			11,592		10,276			13,040		14,312
	Rental Operations		1,520			1,936			2,072		3,814			2,302		3,579
	Real Estate-Related Finance		3,018			6,101			4,412		4,571			4,906		9,804
	Real Estate		8,160			(1,831	)		1,722		(1,807	)		6,515		1,496
	Life Insurance		(392	)		2,899			1,834		1,041			1,879		2,113
	Other		1,177			1,651			2,253		4,998			6,374		5,426

	Sub-Total		22,828			23,330			23,885		22,893			35,016		36,730

Overseas Operations	The Americas		2,131			1,781			2,123		1,566			1,210		3,515
	Asia and Oceania		4,204			9,735			2,446		1,463			5,679		4,229
	Europe		(258	)		(1,641	)		454		193			255		770

	Sub-Total		6,077			9,875			5,023		3,222			7,144		8,514

Total Segment Profits (Income before Income Taxes)			28,905			33,205			28,908		26,115			42,160		45,244

Operations in Japan	Corporate Financial Services		1,910,425			1,845,251			1,878,794		1,806,686			1,841,124		1,878,231
	Rental Operations		142,189			140,987			141,932		147,231			143,350		148,535
	Real Estate-Related Finance		932,999			879,964			901,501		909,019			929,378		944,867
	Real Estate		295,663			275,967			283,227		309,558			315,257		321,126
	Life Insurance		592,987			570,013			533,708		582,473			561,819		565,021
	Other		395,184			406,076			412,459		412,505			419,110		421,744

	Sub-Total		4,269,447			4,118,258			4,151,621		4,167,472			4,210,038		4,279,524

Overseas Operations	The Americas		604,167			541,036			517,134		472,595			451,032		446,231
	Asia and Oceania		461,345			434,584			419,775		413,041			412,171		442,765
	Europe		70,657			64,524			57,298		56,634			55,550		56,661

	Sub-Total		1,136,169			1,040,144			994,207		942,270			918,753		945,657

Total Segment Assets			5,405,616			5,158,402			5,145,828		5,109,742			5,128,791		5,225,181

-28-

Consolidated Subsidiaries

Non-consolidated Subsidiaries

Affiliates

(Of which 74 are accounted for by the equity method)